Cayman Islands*
|
001-39584
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98-1550961
|
||
(State or other jurisdiction of
incorporation or organization)
|
(Commission
File Number)
|
(I.R.S. Employer
Identification Number)
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Delaware
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3751
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87-4730333
|
||
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification Number)
|
Christian O. Nagler, Esq.
Wayne Williams, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Tel.: 212-466-4800
|
Ryan J. Maierson, Esq.
Jason Morelli, Esq.
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002
Tel.: 713-546-5400
|
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Sincerely, |
/s/ [●]
|
John Garcia |
Co-Chief
Executive Officer and Director
|
1. |
The Business Combination Proposal: To consider and vote upon a proposal by ordinary resolution to approve the Business Combination Agreement, dated as of December 12, 2021 (as it may be amended from time to time), a copy of which is attached to the accompanying proxy statement/prospectus as
Annex
A
, by and among ABIC, LW EV Holdings, Inc., a Delaware corporation and a direct, wholly owned subsidiary of ABIC (“
HoldCo
Business Combination
Business Combination Proposal
|
2. |
The Domestication Proposal: To consider and vote upon a proposal by special resolution to approve that ABIC be transferred by way of continuation to Delaware pursuant to Part XII of the Companies Act (Revised) of the Cayman Islands and Section 388 of the General Corporation Law of the State of Delaware and, immediately upon being deregistered in the Cayman Islands, ABIC be continued and domesticated as a corporation under the laws of the State of Delaware (the “
Domestication Proposal
|
3. |
The Charter Proposal: To consider and vote upon a proposal by special resolution to approve ABIC’s Amended and Restated Memorandum and Articles of Association adopted by special resolution, dated October 1, 2020, be amended and restated by the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws (Domesticated ABIC being a corporation incorporated in the State of Delaware, assuming the Domestication Proposal and the filing with and acceptance by the Secretary of State of Delaware of the Certificate of Corporate Domestication and Domesticated ABIC Certificate of Incorporation in accordance with Section 388 of the DGCL) (the “
Ch
arter Proposal
|
4. |
The Incentive Award Plan Proposal: To consider and vote upon a proposal by ordinary resolution to approve the LW EV Holdings, Inc. 2022 Incentive Award Plan (the “
Incentive Plan
Annex
H
), to be effective upon approval by ABIC’s shareholders (the “
Incentive Plan Proposal
|
5. |
The Adjournment Proposal: To consider and vote upon a proposal by ordinary resolution to approve the adjournment of the General Meeting to a later date or dates, if necessary, (i) to permit further solicitation and vote of proxies for the purpose of obtaining approval of the Required Shareholder Proposals, (ii) for the absence of a quorum, (iii) to allow reasonable additional time for filing or mailing of any legally required supplement or amendment to the proxy statement/prospectus or (iv) if the holders of Public Shares have elected to redeem such shares such that either (a) the shares of HoldCo Common Stock and HoldCo Warrants would not be approved for listing on the NYSE or (b) the Minimum Cash Condition would not be satisfied at Closing (the “
Adjournment Proposal
|
By Order of the Board of Directors |
/s/ [●]
|
John Garcia |
Co-Chief
Executive Officer and Director
|
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A-1 | ||||
ANNEX B FORM OF DOMESTICATED ABIC CERTIFICATE OF INCORPORATION
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B-1 | |||
ANNEX C FORM OF DOMESTICATED ABIC BYLAWS
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C-1 | |||
ANNEX D FORM OF PROPOSED HOLDCO CERTIFICATE OF INCORPORATION
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D-1 | |||
ANNEX E FORM OF PROPOSED HOLDCO BYLAWS
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E-1 |
Page
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||||
ANNEX F FORM OF STOCKHOLDERS AGREEMENT
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F-1 | |||
G-1 | ||||
ANNEX H FORM OF 2022 INCENTIVE AWARD PLAN
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H-1 | |||
I-1 | ||||
J-1 | ||||
K-1 | ||||
L-1 | ||||
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Q-1 | ||||
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S-1 | ||||
T-1 |
• |
audited combined financial statements of LiveWire as of December 31, 2020 and 2019, prepared in accordance with GAAP;
|
• |
the unaudited interim combined financial statements of LiveWire as of September 26, 2021 and for the nine months ended September 26, 2021 and September 27, 2020 (such unaudited interim combined financial statements prepared in accordance with GAAP);
|
• |
the audited financial statements of ABIC as of December 31, 2020 and for the period from July 29, 2020 (inception) through December 31, 2020, each prepared in accordance with GAAP;
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• |
the unaudited condensed financial statements of ABIC as of September 30, 2021 and for the three and nine months ended September 30, 2021 (such unaudited condensed financial statements prepared in accordance with GAAP); and
|
• |
the unaudited pro forma condensed combined financial information of LiveWire and ABIC as of and for the nine months ended September 26, 2021 and for the year ended December 31, 2020, prepared in accordance with Article 11 of SEC
Regulation S-X.
|
1. |
no Public Shareholders exercise their redemption rights in connection with the Closing, and the balance of the Trust Account as of the Closing is the same as its balance on September 30, 2021 of $400,252,880.20. Please see the section entitled “
General Meeting of ABIC Shareholders—Redemption Rights
|
2. |
all separated ABIC Units, together with the cancellation of all Class B Ordinary Shares, are exchanged for shares of Domesticated ABIC Common Stock which are exchanged for shares of HoldCo Common Stock at such time;
|
3. |
for purposes of the number of Class A Ordinary Shares redeemable, assuming Maximum Redemptions, the per share redemption price is $[10.01]; the actual per-share redemption price will be equal to the pro rata portion of the Trust Account calculated as of two business days prior to the consummation of the Business Combination;
|
4. |
the PIPE Investment is consummated in accordance with the terms of the Subscription Agreements, with HoldCo issuing a total of 20.0 million shares of HoldCo Common Stock to the PIPE Investors at $10.00 per share;
|
5. |
none of the Earn Out Shares have vested pursuant to the applicable terms of the Business Combination Agreement and are excluded from the outstanding share calculations unless expressly stated to the contrary;
|
6. |
none of the HoldCo Common Stock reserved for issuance under the Incentive Plan has been issued; and
|
7. |
none of the warrants to purchase HoldCo Common Stock have been exercised for shares of HoldCo Common Stock.
|
• |
LiveWire’s history of losses and expectation to incur significant expenses and continuing losses for the foreseeable future;
|
• |
LiveWire’s ability to execute its business model, including market acceptance of its planned electric vehicles;
|
• |
risks related to LiveWire’s limited operating history, the rollout of its business and the timing of expected business milestones, including LiveWire’s ability to develop and manufacture electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale;
|
• |
LiveWire’s financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;
|
• |
changes in LiveWire’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
|
• |
LiveWire’s ability to attract and retain a large number of customers;
|
• |
LiveWire’s future capital requirements and sources and uses of cash;
|
• |
LiveWire’s ability to obtain funding for its operations and manage costs;
|
• |
risks related to challenges LiveWire faces as pioneer into the highly-competitive and rapidly-evolving electric vehicle industry;
|
• |
LiveWire’s operational and financial risks if it fails to effectively and appropriately separate the LiveWire business from the H-D business;
|
• |
risks related to H-D making decisions for its overall benefit that could negatively impact LiveWire’s overall business;
|
• |
risks related to LiveWire’s relationship with H-D and its impact on LiveWire’s other business relationships;
|
• |
LiveWire’s ability to leverage contract manufacturers, including H-D and KYMCO Group, to contract manufacture its electric vehicles;
|
• |
risks related to retail partners being unwilling to participate in LiveWire’s go-to-market business model or their inability to establish or maintain relationships with customers for LiveWire’s electric vehicles;
|
• |
risks related to potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of LiveWire’s electric vehicles;
|
• |
risks related to building out LiveWire’s supply chain, including LiveWire’s dependency on its existing suppliers and LiveWire’s ability to source suppliers, in each case many of which are single-sourced or limited-source suppliers, for its critical components such as batteries and semiconductor chips;
|
• |
LiveWire’s ability to rely on third-party and public charging networks;
|
• |
LiveWire’s ability to attract and retain key personnel;
|
• |
LiveWire’s business, expansion plans and opportunities, including its ability to scale its operations and manage its future growth effectively;
|
• |
the effects on LiveWire’s future business of competition, the pace and depth of electric vehicle adoption generally and its ability to achieve planned competitive advantages with respect to its electric vehicles and products, including with respect to reliability, safety and efficiency;
|
• |
risks related to LiveWire’s business and H-D’s business overlapping and being perceived as competitors;
|
• |
LiveWire’s inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between LiveWire and H-D;
|
• |
LiveWire’s dependency on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it may require significant investment for LiveWire to build its own safety and testing facilities, or LiveWire may be required to obtain such services from another third-party at increased costs;
|
• |
risks related to any decision by LiveWire to electrify H-D products, or the products of any other company;
|
• |
LiveWire’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;
|
• |
potential harm caused by misappropriation of LiveWire’s data and compromises in cybersecurity;
|
• |
changes in laws, regulatory requirements, governmental incentives and fuel and energy prices;
|
• |
the impact of health epidemics, including the COVID-19 pandemic, on LiveWire’s business, the other risks it face and the actions it may take in response thereto;
|
• |
litigation, regulatory proceedings, complaints, product liability claims and/or adverse publicity;
|
• |
the possibility that LiveWire may be adversely affected by other economic, business and/or competitive factors; and
|
• |
other factors discussed in “
Risk Factors
|
Q.
|
Why am I receiving this proxy statement/prospectus?
|
A. |
You are receiving this proxy statement/prospectus in connection with the General Meeting of ABIC’s shareholders. ABIC is holding the General Meeting to consider and vote upon the Shareholder Proposals described below. Your vote is important.
You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.
|
Q.
|
When and where will the General Meeting be held?
|
A. |
The General Meeting will be held at 10:00 a.m., Eastern Time, on [●], 2022, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned. As part of our precautions regarding
COVID-19,
we are planning for the possibility that the meeting may be held virtually over the Internet. If we take this step, we will announce the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material. Only shareholders who hold ABIC Shares at the close of business on the Record Date will be entitled to vote at the General Meeting.
|
Q.
|
What is being voted on at the General Meeting?
|
A. |
At the General Meeting, the shareholders of ABIC are being asked to vote on the following Shareholder Proposals:
|
Q.
|
Are the Shareholder Proposals conditioned on one another?
|
A. |
Each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal (together, the “
Required Shareholder Proposals
|
other and each must be approved in order for ABIC to complete the Business Combination contemplated by the Business Combination Agreement. The Business Combination Proposal, the Incentive Plan Proposal, and the Adjournment Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. The Adjournment Proposal is not conditioned upon the approval of any of the other proposals. The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of at least
two-thirds
of the outstanding ABIC Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting.
|
Q.
|
Why is ABIC proposing the Business Combination?
|
A. |
ABIC was incorporated to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Since ABIC’s organization, the ABIC Board has sought to identify suitable candidates in order to effect such a transaction. In its review of LiveWire, the ABIC Board considered a variety of factors weighing positively and negatively in connection with the Business Combination. After careful consideration, the ABIC Board has determined that the Business Combination presents a highly attractive business combination opportunity and is in the best interests of ABIC’s shareholders. The ABIC Board believes that, based on its review and consideration, the Business Combination with LiveWire presents an opportunity to increase shareholder value. However, there can be no assurance that the anticipated benefits of the Business Combination will be achieved. Approval of the Business Combination by ABIC’s shareholders is required by the Business Combination Agreement and the Existing Organizational Documents.
|
Q.
|
What will happen in the Business Combination?
|
A. |
The Business Combination consists of a series of transactions pursuant to which (i) at least one day prior to the Merger Effective Time, ABIC will complete the Domestication, in connection with which all outstanding ABIC Shares will convert into shares of Domesticated ABIC Common Stock, par value $0.0001 per share, and each outstanding ABIC Warrant will convert into a Domesticated ABIC Warrant; (ii) prior to the Closing, on the Closing Date,
H-D
and LiveWire will consummate the separation of the LiveWire business and the other transactions contemplated by the Separation Agreement; (iii) prior to the Closing, on the Closing Date, the Merger will occur, in which Merger Sub will be merged with and into ABIC, with ABIC surviving the merger as a wholly owned direct subsidiary of HoldCo, and HoldCo will continue as the public company, with each share of Domesticated ABIC Common Stock being converted into the right of the holder thereof to receive one share of HoldCo Common Stock; and (iv) the Company Equityholder shall consummate the Exchange, pursuant to which HoldCo shall acquire from the Company Equityholder, and the Company Equityholder shall transfer, convey and deliver to HoldCo, all of the Company Equity and the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161 million shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future.
|
Q.
|
What consideration will be received in connection with the Business Combination?
|
A. |
The aggregate consideration to be paid in the Business Combination is derived from an aggregate transaction enterprise value of $1.765 billion, apportioned between cash and shares of HoldCo Common Stock, as more specifically set forth in the Business Combination Agreement. In addition to the consideration to be paid at Closing, the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161 million shares of HoldCo Common
|
Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future. For further details, see “
The Business Combination Agreement
—
Consideration
|
Q.
|
What are the U.S. federal income tax consequences of exercising my redemption rights?
|
Q.
|
What are the U.S. federal income tax consequences as a result of the Business Combination?
|
A. |
Subject to the limitations and qualifications described in “
Material Tax Considerations—U.S. Federal Income Tax Considerations to U.S. Holders,
tax-deferred
exchange for U.S. federal income tax purposes under Section 351 of the Code. In addition, subject to the limitations and qualifications described in “
Material Tax Considerations—
U.S. Federal Income Tax Considerations to U.S. Holders
tax-deferred
reorganization under Section 368(a)(2)(E) or Section 368(a)(1)(B) of the Code. If the Merger does not qualify as a
tax-deferred
reorganization under Section 368(a) then the exchange of Domesticated ABIC Warrants for HoldCo Warrants in the Merger would not qualify for
tax-deferred
treatment and would be taxable as further described in “
Material Tax Considerations—
U.S. Federal Income Tax Considerations to U.S. Holders
tax-deferred
exchange described in Section 351 of the Code and as a
tax-deferred
reorganization under Section 368(a) of the Code. However, there are significant factual and legal uncertainties as to whether the Merger will qualify as a
tax-deferred
reorganization under Section 368(a)(2)(E) or Section 368(a)(1)(B) of the Code. For example, under Section 368(a) of the Code, the acquiring corporation must continue, either directly or indirectly through certain controlled corporations, either a significant line of the acquired corporation’s historic business or use a significant portion of the acquired corporation’s historic business assets in a business. However, there is an absence of guidance
|
directly on point as to how the provisions of Section 368(a) of the Code apply in the case of an acquisition of a corporation with only investment-type assets, such as ABIC, and there are significant factual and legal uncertainties concerning the determination of this requirement. Moreover, qualification of the Merger as a
tax-deferred
reorganization under Section 368(a) of the Code is based on facts which will not be known until or following the closing of the Business Combination. The closing of the Business Combination is not conditioned upon the receipt of an opinion of counsel that the Business Combination will so qualify for the Intended Tax Treatment, and neither ABIC nor HoldCo intends to request a ruling from the IRS regarding the U.S. federal income tax treatment of the Business Combination. Accordingly, no assurance can be given that the IRS will not challenge the Intended Tax Treatment or that a court will not sustain a challenge by the IRS.
|
Q.
|
Why is ABIC proposing the Domestication?
|
A. |
The ABIC Board believes that it would be in the best interests of ABIC to effect the Domestication to enable HoldCo to avoid certain taxes that would be imposed on HoldCo if HoldCo were to conduct an operating business in the United States as a foreign corporation following the Business Combination. In addition, the ABIC Board believes Delaware provides a recognized body of corporate law that will facilitate corporate governance by HoldCo’s officers and directors following the Closing. Delaware maintains a favorable legal and regulatory environment in which to operate. For many years, Delaware has followed a policy of encouraging companies to incorporate there and in furtherance of that policy, has adopted comprehensive, modern and flexible corporate laws that are regularly updated and revised to meet changing business needs. As a result, many major corporations have initially chosen Delaware as their domicile or have subsequently reincorporated in Delaware in a manner similar to the procedures ABIC is proposing. Due to Delaware’s longstanding policy of encouraging incorporation in that state and consequently its prevalence as the state of incorporation, the Delaware courts have developed a considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing the DGCL and establishing public policies with respect to Delaware corporations. It is anticipated that the DGCL will continue to be interpreted and explained in a number of significant court decisions that may provide greater predictability with respect to HoldCo’s corporate legal affairs.
|
Q.
|
What is involved with the Domestication?
|
A. |
The Domestication will require ABIC to file certain documents in both the Cayman Islands and the State of Delaware. At the effective time of the Domestication, which will be at least one day prior to the consummation of the Merger, ABIC will cease to be a company incorporated under the laws of the Cayman Islands and in connection with the Business Combination, HoldCo (of which Merger Sub will be a wholly owned direct subsidiary) will continue as a Delaware corporation. The Existing HoldCo Certificate of Incorporation and the Existing HoldCo Bylaws will be replaced by the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws. As a result, your rights as a shareholder will cease to be governed by the laws of the Cayman Islands and will be governed by Delaware law.
|
Q.
|
When do you expect that the Domestication will be effective?
|
A. |
The Domestication is expected to become effective at least one day prior to the consummation of the Merger and Exchange.
|
Q.
|
How will the Domestication affect my securities of ABIC?
|
A. |
In connection with the Domestication, at least one day prior to the Merger Effective Time, (i) all outstanding ABIC Shares will convert into shares of Domesticated ABIC Common Stock, par value $0.0001 per share, (ii) each outstanding ABIC Warrant will convert into a Domesticated ABIC Warrant and (iii) each issued and outstanding ABIC Unit that has not been previously separated into the underlying Class A Ordinary Share and underlying ABIC Warrant upon the request of the holder thereof will be canceled and will entitle the holder thereof to one share of Domesticated ABIC Common Stock and
one-half
of one Domesticated ABIC Warrant. In the Merger, by operation of law and without further action on the part of ABIC’s shareholders, each share of Domesticated ABIC Common Stock will be converted on a
one-for-one
|
Q.
|
What are the U.S. federal income tax consequences of the Domestication?
|
A. |
As discussed more fully under “
Material Tax Considerations
,
tax-deferred
reorganization within the meaning of Section 368(a)(l)(F) of the Code. Subject to the application of Section 367 and the “
passive foreign investment company
PFIC
Material Tax Considerations
—
U.S. Federal Income Tax Considerations to U.S. Holders
Non-U.S.
Holders (as defined in “
Material Tax Considerations
—
U.S. Federal Income Tax Considerations to
Non-U.S.
Holders
tax-deferred
reorganization within the meaning of Section 368(a)(1)(F) of the Code, subject to the PFIC rules discussed below, U.S. Holders will be subject to Section 367(b) of the Code and, as a result of the Domestication:
|
• |
a U.S. Holder that holds Public Shares that have a fair market value of less than $50,000 on the date of the Domestication and that, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares, generally will not recognize any gain or loss and will not be required to include any part of ABIC’s earnings in income;
|
• |
a U.S. Holder that holds Public Shares that have a fair market value of $50,000 on the date of the Domestication or more and that, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares generally will recognize gain (but not loss) on the exchange of Public Shares for shares of Domesticated ABIC Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend deemed paid by ABIC the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its Public Shares, provided certain other requirements are satisfied; and
|
• |
a U.S. Holder that, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of ABIC Shares entitled to vote or 10% or more of the total value of all classes of ABIC Shares generally will be required to include in income as a deemed dividend deemed paid by ABIC the “all earnings and profits amount” attributable to its Public Shares. Any such U.S. Holder that is treated as a corporation for U.S. federal income tax purposes may, under certain circumstances, effectively be exempt from U.S. federal income taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).
|
Q.
|
What are the material differences, if any, in the terms and price of securities issued at the time of the IPO as compared to the securities that will be issued as part of the PIPE Financing at the Closing? Will the Sponsor or any of its directors, officers or affiliates participate in the PIPE Financing?
|
A. |
ABIC Units were the units issued at the time of the IPO consisting of Class A Ordinary Shares and Public Warrants, at an offering price per ABIC Unit of $10.00. At the Closing, the Class A Ordinary
|
Shares will convert into shares of HoldCo Common Stock and the Public Warrants will convert into HoldCo Warrants. The PIPE Investors will receive shares of HoldCo Common Stock at a price per share of $10.00 as part of the PIPE Financing at the Closing, and will therefore hold the same security as the holders of Class A Ordinary Shares immediately following the Business Combination, although the PIPE Investors as such will not receive any Public Warrants. The PIPE Financing will raise an aggregate of $200,000,000, of which $100,000,000 will be funded by the KYMCO Group and $100,000,000 will be funded by the Company Equityholder. |
Q.
|
What equity stake will current ABIC shareholders, the Company Equityholder and the KYMCO Group hold in HoldCo immediately after the Closing?
|
A. |
It is anticipated that, following the Closing, in a no redemption scenario: (i) the Company Equityholder will own approximately 74.0% of the outstanding shares of HoldCo Common Stock; (ii) the Public Shareholders will own approximately 17.4% of the outstanding shares of HoldCo Common Stock; (iii) the Sponsor Group will own approximately 4.3% of the outstanding shares of HoldCo Common Stock; and (iv) the KYMCO Group stockholders will own approximately 4.3% of the outstanding shares of HoldCo Common Stock. These levels of ownership assume (A) that prior to the Closing no ABIC Warrants will be exercised and (B) that at or after the Closing no HoldCo Warrants will be exercised. If all of the Private Placement Warrants and HoldCo Warrants were exercisable and immediately exercised upon completion of the Business Combination on a 1:1 basis for cash, ABIC’s Public Shareholders would receive in aggregate approximately 22.9% of the shares of HoldCo Common Stock on a fully diluted basis, and the Sponsor Group would receive in aggregate approximately 7.84% of the shares of HoldCo Common Stock on a fully diluted basis assuming that the Sponsor Group does not transfer any of the Private Placement Warrants prior to the Closing or Private Placement Warrants at or after the Closing; however, the Private Placement Warrants and the shares of HoldCo Common Stock are subject to restrictions on the timing of their exercise and may also be exercisable on a cashless basis by reference to the fair market value of the shares of HoldCo Common Stock, and these percentages are therefore indicative only. Therefore, the voting rights of such shareholders will slightly differ from the indicated ownership percentages.
|
Q:
|
What vote is required to approve the Shareholder Proposals presented at the General Meeting of ABIC’s shareholders?
|
A: |
Approval of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the approval of an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting. Abstentions and broker
non-votes
will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal.
|
Q:
|
What interests do the current
ABIC Shareholders
and
ABIC
’
s
other current officers and directors have in the
Business Combination
?
|
A: |
When you consider the recommendation of the ABIC Board in favor of approval of the Required Shareholder Proposals, you should keep in mind that the Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests include that the Sponsor as well as our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired or may acquire in the future), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.
|
• |
the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;
|
• |
the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by September 30, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $98.2 million, based upon the closing price of $9.87 per Class A Ordinary Share on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $7.1 million, based upon the closing price of $0.68 per Public Warrant on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, ABIC will cease all operations except for the purpose of winding up,
|
redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and
|
• |
the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $105,346,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on February 2, 2022.
|
Securities
held by Sponsor Group |
Sponsor Cost
at ABIC’s IPO ($) |
|||||||
Founder Shares
|
9,950,000 | $ | 25,000 |
(1)
|
||||
Private Placement Warrants
|
10,500,000 | $ | 10,500,000 | |||||
|
|
|||||||
Total
|
$
|
10,525,000
|
|
(1)
|
Includes cost for 50,000 Founder Shares held by the independent directors.
|
Securities
held by Sponsor Group Prior to Closing |
Value per
Security ($) |
Total Value ($)
|
||||||||||
Shares of HoldCo Common Stock Issued to Holders of Founder Shares
|
9,950,000 | $ | 9.87 | $ | 98,206,500 | |||||||
HoldCo Private Placement Warrants
|
10,500,000 | $ | 0.68 | $ | 7,140,000 | |||||||
|
|
|
|
|||||||||
Total
|
$
|
105,346,500
|
|
• |
the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any
out-of-pocket
out-of-pocket
out-of-pocket
|
• |
the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by September 30, 2022;
|
• |
the fact that the Stockholders Agreement and HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;
|
• |
the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents and in the Stockholders Agreement;
|
• |
the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the
lock-up
restrictions;
|
• |
the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;
|
• |
the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;
|
• |
the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any
out-of-pocket
|
• |
the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;
|
• |
the fact that John Garcia, who is currently the Executive Chairman,
Co-Chief
Executive Officer and Director of ABIC, owns 2,500,000 Class A Ordinary Shares; and
|
• |
the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and required LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.
|
Q:
|
Did the ABIC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?
|
A: |
No. The ABIC Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, ABIC’s management, the members of the ABIC Board and the other representatives of ABIC have substantial experience in evaluating the operating and financial merits of companies similar to LiveWire and reviewed certain financial information of LiveWire and compared it to certain publicly traded companies, selected based on the
|
experience and the professional judgment of ABIC’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the ABIC Board in valuing LiveWire’s business and assuming the risk that the ABIC Board may not have properly valued such business. |
Q.
|
Who will have the right to nominate or appoint directors to the HoldCo Board after the consummation of the Business Combination?
|
A. |
Subject to the Business Combination Agreement, each holder of shares of HoldCo Common Stock has the exclusive right to vote for the election of directors following the consummation of the Business Combination. In the case of election of directors, all matters to be voted on by stockholders must be approved by a plurality of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class.
|
Q.
|
What happens to the funds deposited in the Trust Account after consummation of the Business Combination?
|
A. |
Following the closing of the IPO on October 5, 2020, an amount equal to $400,000,000 ($10.00 per unit) from the net proceeds from the IPO and the sale of the Private Placement Warrants was placed in the Trust Account. At September 30, 2021, we had cash and investments held in the Trust Account of approximately $400.2 million. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, for the purposes of consummating an initial business combination (which will be the Business Combination should it occur). We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a 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.
|
Q.
|
What happens if a substantial number of the Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?
|
A. |
Our Public Shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the
|
funds available from the Trust Account and the number of Public Shareholders are reduced as a result of redemptions by Public Shareholders. |
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Shareholders
|
Ownership in
Shares |
Equity %
|
Ownership in
Shares |
Equity %
|
Ownership in
Shares |
Equity %
|
Ownership in
Shares |
Equity %
|
||||||||||||||||||||||||
Company Equityholder
(5)
|
171,000,000 | 74.0 | % | 181,000,000 | 81.9 | % | 181,000,000 | 89.0 | % | 181,000,000 | 89.8 | % | ||||||||||||||||||||
Public Shareholders
|
40,000,000 | 17.4 | % | 20,000,000 | 9.1 | % | 2,500,000 | 1.2 | % | 499,732 | 0.2 | % | ||||||||||||||||||||
Sponsor stockholders
(6)
|
10,000,000 | 4.3 | % | 10,000,000 | 4.5 | % | 10,000,000 | 4.9 | % | 10,000,000 | 5.0 | % | ||||||||||||||||||||
KYMCO Group stockholders
|
10,000,000 | 4.3 | % | 10,000,000 | 4.5 | % | 10,000,000 | 4.9 | % | 10,000,000 | 5.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Shares Outstanding Excluding HoldCo Warrants
|
231,000,000 | 100.0 | % | 221,000,000 | 100 | % | 203,500,000 | 100 | % | 201,499,732 | 100 | % |
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Additional Dilution Sources
|
Amount ($)
|
Equity %
(7)
|
Amount ($)
|
Equity %
(7)
|
Amount ($)
|
Equity %
(7)
|
Amount ($)
|
Equity %
(7)
|
||||||||||||||||||||||||
HoldCo Warrants
|
30,500,000 | [●] | % | 30,500,000 | [●] | % | 30,500,000 | [●] | % | 30,500,000 | [●] | % | ||||||||||||||||||||
Earn Out Shares
|
12,500,000 | [●] | % | 12,500,000 | [●] | % | 12,500,000 | [●] | % | 12,500,000 | [●] | % | ||||||||||||||||||||
Incentive Plan
|
[●] | [●] | % | [●] | [●] | % | [●] | [●] | % | [●] | [●] | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Additional Dilution Sources
|
[●] | [●] | % | [●] | [●] | % | [●] | [●] | % | [●] | [●] | % |
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Deferred Discount
|
Amount ($)
|
% of Trust
Account |
Amount ($)
|
% of Trust
Account |
Amount ($)
|
% of Trust
Account |
Amount ($)
|
% of Trust
Account |
||||||||||||||||||||||||
Effective Deferred Discount
(8)
|
$ | 14,000,000 | 3.5 | % | $ | 14,000,000 | 7.0 | % | $ | 14,000,000 | 56.0 | % | $ | 14,000,000 | 280.0 | % |
(1)
|
This scenario assumes that no Public Shares are redeemed by Public Shareholders.
|
(2)
|
This scenario assumes that 20,000,000 Public Shares are redeemed by Public Shareholders and that the Backstop is fully subscribed for.
|
(3)
|
This scenario assumes that 37,500,000 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,214,519 in the Trust Account as of September 30, 2021, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the Minimum Cash Condition and that the full Backstop is subscribed for.
|
(4)
|
This scenario assumes that 39,500,268 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,214,519 in the Trust Account as of September 30, 2021, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the Minimum Cash Condition, and that the full Backstop is subscribed for.
|
(5)
|
Excludes 12,500,000 shares of HoldCo Common Stock in estimated potential Earn Out Shares as the price threshold for each tranche has not yet been triggered.
|
(6)
|
Assumes that the Sponsor shall not forfeit and/or transfer any Founder Shares under the Investor Support Agreement.
|
(7)
|
The Equity % with respect to each Additional Dilution Source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator. For example, in the Illustrative Redemption Scenario, the Equity % with respect to the HoldCo Warrants would be calculated as follows: (a) 30,500,000 shares issued pursuant to the HoldCo Warrants (representing approximately 13.8% of the previously outstanding 221,000,000 shares); divided by (b) (i) 221,000,000 shares
|
(the number of shares outstanding prior to any issuance pursuant to the HoldCo Warrants) plus (ii) 30,500,000 shares issued pursuant to the HoldCo Warrants, 12,500,000 Earn Out Shares and [●] shares issued pursuant to the Incentive Plan. |
(8)
|
The level of redemption also impacts the effective underwriting fee incurred in connection with the IPO. In a no redemption scenario, based on the approximately $400.2 million in the Trust Account, ABIC’s $14.0 million in deferred underwriting fees represents an effective deferred underwriting fee of approximately 3.5% as a percentage of cash in the Trust Account. In an illustrative redemption scenario, based on the approximately $200.1 million in the Trust Account, the effective underwriting fee would be approximately 7.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a contractual maximum redemption scenario, based on the approximately $25.0 million in the Trust Account, the effective underwriting fee would be approximately 56.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a charter redemption limitation scenario, based on the approximately $5,000,001 in the Trust Account, the effective underwriting fee would be approximately 280.0% as a percentage of the amount remaining in the Trust Account following redemptions.
|
Q.
|
What conditions must be satisfied to complete the Business Combination?
|
A. |
The consummation of the Business Combination is subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, the following without limitation: (a) the approval and adoption of each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, and the Incentive Plan Proposal by ABIC shareholders and the transactions contemplated thereby; (b) the waiting period (or any extension thereof) applicable to the consummation of the transactions contemplated by the Business Combination Agreement shall have expired or been terminated; (c) there shall not be any applicable law in effect that makes the consummation of the transactions contemplated by the Business Combination Agreement illegal or any order in effect preventing the consummation of the transactions contemplated thereby; (d) the shares of HoldCo Common Stock to be issued in connection with the Business Combination having been approved for listing on the NYSE; (e) since September 26, 2021, there shall not have occurred a Company Material Adverse Effect (as defined in the Business Combination Agreement), the material adverse effects of which are continuing; (f) ABIC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act) remaining after the Closing; (g) the Minimum Cash Condition; and (h) this registration statement on Form
S-4
shall have become effective under the Securities Act, no stop order shall have been issued by the SEC suspending the effectiveness of such registration statement and no proceeding seeking such stop order has been threatened or initiated by the SEC that remains pending.
|
Q.
|
When do you expect the Business Combination to be completed?
|
A. |
It is currently expected that the Business Combination will be completed in the first half of 2022.
|
Q.
|
What happens if the Business Combination is not completed?
|
A. |
If a shareholder has tendered shares to be redeemed but the Business Combination is not completed, the redemptions will be canceled and the tendered shares will be returned to the relevant shareholders as appropriate. The current deadline set forth in the Existing Organizational Documents for ABIC to complete its initial business combination (which will be the Business Combination should it occur) is October 5, 2022 (24 months after the closing of the IPO).
|
Q.
|
What differences will there be between the current constitutional documents of ABIC and the Proposed HoldCo Certificate of Incorporation and the Proposed HoldCo Bylaws following the Closing?
|
A. |
The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, ABIC’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and replace our Existing Organizational Documents, in each case, under Cayman Islands law, with the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws. Following the Merger, the Proposed HoldCo Certificate of Incorporation and Proposed HoldCo Bylaws, which are substantially identical to the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws, will be in effect. The Proposed HoldCo Organizational Documents differ materially from the Existing Organizational Documents, which will govern following the Domestication and the Merger. For additional information, see “
Comparison of Corporate Governance and Shareholder Rights
|
Q.
|
Why is ABIC proposing the Adjournment Proposal?
|
A. |
ABIC’s shareholders are also being asked to consider and vote upon the Adjournment Proposal to approve the adjournment of the General Meeting to a later date or dates, including, if necessary, (i) to permit further solicitation and vote of proxies, (ii) for the absence of a quorum, (iii) to allow reasonable additional time for the filing or mailing of any legally required supplement or amendment to the proxy statement/prospectus or (iv) if the holders of Public Shares have elected to redeem such shares such that the shares of HoldCo Common Stock would not be approved for listing on the NYSE or the Minimum Cash Condition would not be satisfied. See the section titled “
Shareholder Proposal
5: The
Adjournment Proposal
|
Q.
|
Who is entitled to vote at the General Meeting?
|
A. |
ABIC has fixed [●], 2022 as the Record Date. If you are a shareholder of ABIC at the close of business on the Record Date, you are entitled to vote on matters that come before the General Meeting.
|
Q.
|
How do I vote?
|
A. |
If you are a record owner of your shares, there are two ways to vote your Class A Ordinary Shares at the General Meeting:
|
Q.
|
What if I do not vote my Class A Ordinary Shares or if I abstain from voting?
|
A. |
The approval of the Business Combination Proposal, the Adjournment Proposal and the Incentive Plan Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting. The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of at least
two-thirds
of the outstanding Class A Ordinary Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. Abstentions and broker
non-votes
will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Shareholder Proposals.
|
Q.
|
What Shareholder Proposals must be passed in order for the Business Combination to be completed?
|
A. |
The Business Combination will not be completed unless the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, and the Incentive Plan Proposal are approved. If ABIC does not complete an initial business combination (which will be the Business Combination should it occur) by October 5, 2022, ABIC will be required to dissolve and liquidate itself and return the monies held within its Trust Account to its Public Shareholders unless ABIC submits and its shareholders approve an extension.
|
Q.
|
How does the ABIC Board recommend that I vote on the Shareholder Proposals?
|
A. |
The ABIC Board unanimously recommends that the holders of ABIC Shares entitled to vote on the Shareholder Proposals, vote as follows:
|
Q.
|
How many votes do I have?
|
A. |
ABIC shareholders have one vote per each ABIC Share held by them on the Record Date for each of the Shareholder Proposals to be voted upon.
|
Q.
|
How will the Sponsor and ABIC officers and directors vote in connection with the Required Shareholder Proposals?
|
A. |
As of the Record Date, the ABIC Initial Shareholders owned of record an aggregate of 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25% of the issued and outstanding ABIC Shares. The Sponsor and ABIC’s officers and directors have agreed to vote the ABIC Shares owned by them in favor of the Required Shareholder Proposals. However, any subsequent purchases of Class A Ordinary Shares prior to the Record Date by the Sponsor or ABIC’s officers and directors in the aftermarket will make it more likely that the Required Shareholder
|
Proposals will be approved as such shares would be voted in favor of the Required Shareholder Proposals. As of the Record Date, there were 50,000,000 ABIC Shares outstanding. |
Q.
|
How do the Public Warrants differ from the Private Placement Warrants and what are the related risks for any holders of HoldCo Warrants following the Business Combination?
|
A. |
The Private Placement Warrants will be identical to the Public Warrants in all material respects, except that the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the initial business combination and they will not be redeemable by HoldCo so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. 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 HoldCo in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.
|
Q.
|
Do I have redemption rights with respect to my Class A Ordinary Shares?
|
A. |
Under Section 49.5 of the Existing Organizational Documents, prior to the completion of the Business Combination, ABIC will provide all of the Public Shareholders with the opportunity to have their shares redeemed upon the completion of the Business Combination, subject to certain limitations, for cash equal to the applicable redemption price (as defined in the Existing Organizational Documents); provided, however, that ABIC may not redeem such shares to the extent that such redemption would result in ABIC having net tangible assets (as determined under the Exchange Act) of less than $5,000,001 upon the completion of the Business Combination.
|
Q.
|
Can the Sponsor and the independent directors redeem their Founder Shares in connection with the consummation of the Business Combination?
|
A. |
The Sponsor and the independent directors have agreed, for no additional consideration, to waive their redemption rights with respect to their Founder Shares and any Public Shares they may hold in connection with the consummation of the Business Combination.
|
Q.
|
May the Sponsor, ABIC directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination?
|
A. |
The Sponsor and ABIC’s directors, officers, advisors or their affiliates may purchase Class A Ordinary Shares in privately negotiated transactions or in the open market either prior to or after the Closing, including from ABIC shareholders who would have otherwise exercised their redemption rights. However, the Sponsor, directors, officers and their affiliates have no current commitments or plans to engage in such transactions and have not formulated any terms or conditions for any such transactions at the date of this proxy statement/prospectus. If ABIC engages in such transactions, any such purchases will be subject to limitations regarding possession of any material nonpublic information not disclosed to the seller of such shares and they will not make any such purchases if such purchases are prohibited by Regulation M under the Exchange Act. Any such purchase after the Record Date would include a contractual acknowledgement that the selling shareholder, although still the record holder of Class A Ordinary Shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event the Sponsor or ABIC’s directors, officers or advisors or their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to
|
revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the
per-share
pro rata portion of the aggregate amount then on deposit in the Trust Account.
|
Q.
|
Is there a limit on the number of shares I may redeem?
|
A. |
Each Public Shareholder, together with any affiliate or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking a redemption right with respect to 15% or more of the Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 15% cap will not be redeemed by ABIC. Any Public Shareholder who holds less than 15% of the Public Shares may have all of the Public Shares held by him, her or it redeemed for cash.
|
Q.
|
How do I exercise my redemption right?
|
A. |
If you are a Public Shareholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern Time, on [●], 2022 (two business days before the General Meeting), that ABIC redeem your shares for cash, (ii) affirmatively certify in your request to ABIC’s Transfer Agent for redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in
Section 13d-3
of the Exchange Act) and (iii) submit your request in writing to ABIC’s Transfer Agent, at the address listed at the end of this section and deliver your shares to ABIC’s Transfer Agent physically or electronically using DTC’s DWAC system at least two business days prior to the vote at the General Meeting.
|
Q.
|
If I am a holder of ABIC Units, can I exercise redemption rights with respect to my ABIC Units?
|
A. |
No. Holders of issued and outstanding ABIC Units must elect to separate the ABIC Units into the underlying Public Shares and Public Warrants prior to exercising redemption right with respect to the Public Shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying Public Shares and Public Warrants, or if you hold units registered in your own name, you must contact the Transfer Agent directly and instruct them to do so. The redemption right includes the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. You are requested to cause your Public Shares to be separated and delivered to the Transfer Agent by 5:00 p.m., Eastern Time, on [●], 2022 (two business days before the General Meeting) in order to exercise your redemption right with respect to your Public Shares.
|
• |
Growing Electric Vehicle (“EV”) Market.
|
• |
ESG / Impact-Focused.
|
carbon emissions, improving air quality and minimizing noise pollution in urban environments and beyond, (ii) determining a path to achieve net zero emissions by 2035 by designing for sustainability, decarbonizing its supply chain and operations and becoming a market leader in influencing green electricity for consumers, (iii) promoting workplace flexibility and increasing diversity among employees, (iv) driving positive change in its communities and (v) aligning interests of its stakeholders with ESG reporting transparency.
|
• |
Leading the Transformation of Motorcycling.
|
• |
Transformative Go-to-Market Model.
H-D’s
traditional motorcycle dealer network and working with retail partners who possess a strong sales track record, presence in a priority market, commitment to LiveWire’s mission and expertise in the EV retail and service industry.
|
• |
Growing International Presence.
|
• |
Backed by World-Class Financial and Strategic Partners.
|
• |
Portfolio of Products to Drive Growth.
well-positioned
to, and has a clearly defined strategy to, capture increasing global market share and consumer adoption in the growing EV industry, following significant research and development investments to date. LiveWire has a demonstrated track record of research and development investments, providing breakthrough technologies and features for its premium electric motorcycle and is poised to extend its portfolio of products to include a range of middleweight applications. LiveWire is leveraging the latest technologies to address heavyweight motorcycles and anticipates future improvements in motorcycle range and charging capabilities.
|
Additionally, LiveWire is actively attracting new riders and building brand allegiance by offering premier electric bikes for kids and older kids (including STACYC, the all-electric balance bike for kids). Beyond its motorcycle sales, LiveWire has created multiple growth vectors, including through its software and subscription services consumer financing and protection services, general merchandising of apparel and equipment and parts and accessories related-services.
|
• |
Differentiated Expertise in Key Technologies.
|
• |
Mission-Driven Leadership Team with a Strong Track Record.
|
• |
Transaction Proceeds.
|
• |
Due Diligence.
|
• |
Financial Condition.
|
• |
Reasonableness of Consideration.
|
• |
Post-Closing Economic Interest in HoldCo.
|
• |
Lock-Up.
|
• |
Financing.
|
• |
Post-Business Combination Corporate Governance.
Management of HoldCo Following the Business Combination—Nominating and Corporate Governance Committee Information.
|
• |
Negotiated Transaction.
|
• |
Macroeconomic Risks.
|
• |
Redemption Risk.
|
• |
Exclusivity.
The Business Combination Agreement—Covenants of the Parties—Other Covenants of ABIC.
|
• |
Separation from the H-D Business.
|
with H-D in certain markets may affect LiveWire’s ability to build and maintain relationships with partners, dealers, suppliers and customers, (ii) LiveWire’s inability to maintain a strong relationship with H-D or to favorably resolve any disputes could result in a significant reduction of LiveWire’s revenue, (iii) following termination of the Contract Manufacturing Agreement to be entered into at Closing (pursuant to which H-D will continue to provide LiveWire with contracting manufacturing services for a proscribed period of time), LiveWire will need to engage a third-party contractor or build its own in-house manufacturing capability to make its products, which could result in significant cost and expense, (iv) the fact that LiveWire is dependent, and following completion of the Business Combination, will remain dependent on H-D for a number of services, including certain financial and accounting, IT-back of house operations, IP, quality safety and testing-related services, (v) the fact that H-D will retain certain assets utilized in the LiveWire business and (vi) the fact that H-D holds the direct contractual relationship with many key suppliers required for LiveWire to produce its EVs and disputes between H-D and such key suppliers may negatively impact LiveWire’s vehicle production.
|
• |
Stockholder Vote.
|
• |
Closing Conditions.
|
• |
Listing Risks.
|
• |
Fees and Expenses.
|
• |
Dilution; ABIC Shareholders Receiving a Minority Position in HoldCo.
|
• |
PIPE Financing.
|
• |
Litigation.
|
• |
Financial Opinion.
|
• |
COVID-19.
|
• |
Other Risks.
Risk Factors.
|
• |
Vote “FOR” the Business Combination Proposal;
|
• |
Vote “FOR” the Domestication Proposal;
|
• |
Vote “FOR” the Charter Proposal;
|
• |
Vote “FOR” the Incentive Plan Proposal; and
|
• |
Vote “FOR” the Adjournment Proposal.
|
1. |
(i) (a) hold Public Shares, or (b) hold Public Shares through units, you elect to separate your units into the underlying Public Shares and warrants prior to exercising your redemption rights with respect to the Public Shares; and
|
2. |
prior to 5:00 pm, Eastern Time on [●], 2022, (a) submit a written request to the Transfer Agent, in which you (i) request that the Company redeem all or a portion of your Public Shares for cash, and (ii) identify yourself as the beneficial holder of the Public Shares and provide your legal name, phone number and address; and (b) deliver your Public Shares to the Transfer Agent, physically or electronically through DTC.
|
• |
the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;
|
• |
the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by September 30, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $98.2 million, based upon the closing price of $9.87 per Class A Ordinary Share on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $7.1 million, based upon the closing price of $0.68 per Public Warrant on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and
|
• |
the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $105,356,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on February 2, 2022.
|
Securities
Held by Sponsor Group |
Sponsor Cost
at ABIC’s IPO ($) |
|||||||
Founder Shares
|
9,950,000 | $ | 25,000 |
(1)
|
||||
Private Placement Warrants
|
10,500,000 | $ | 10,500,000 | |||||
|
|
|||||||
Total
|
$
|
10,525,000
|
|
(1)
|
Includes cost for 50,000 Founder Shares held by the independent directors.
|
Securities
Held by Sponsor Group Prior to Closing |
Value per
Security ($) |
Total Value ($)
|
||||||||||
Shares of HoldCo Common Stock Issued to Holders of Founder Shares
|
9,950,000 | $ | 9.87 | $ | 98,206,500 | |||||||
HoldCo Private Placement Warrants
|
10,500,000 | $ | 0.68 | $ | 7,140,000 | |||||||
|
|
|
|
|||||||||
Total
|
$
|
105,346,500
|
|
• |
the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any
out-of-pocket
out-of-pocket
out-of-pocket
|
• |
the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by September 30, 2022;
|
• |
the fact that the Stockholders Agreement and HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;
|
• |
the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents and in the Stockholders Agreement;
|
• |
the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the
lock-up
restrictions;
|
• |
the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;
|
• |
the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;
|
• |
the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any
out-of-pocket
|
• |
the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;
|
• |
the fact that John Garcia, who is currently the Executive Chairman,
Co-Chief
Executive Officer and Director of ABIC, owns 2,500,000 Class A Ordinary Shares; and
|
• |
the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and required LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.
|
Source of Funds
(in millions)
|
||||
Existing Equity Rollover
|
$ | 1,610.0 | ||
Cash and Investments Held in Trust Account
(2)
|
400.2 | |||
Company Equityholder PIPE Investment
|
100.0 | |||
KYMCO PIPE Investment
|
100.0 | |||
Total Sources
|
$ | 2,210.2 |
Uses
(in millions)
|
||||
Existing Equity Rollover
|
$ | 1,610.0 | ||
Shareholder Redemptions
|
— | |||
Cash to LiveWire Balance Sheet
|
550.8 | |||
Estimated Transaction Fees and Expenses
(3)
|
49.4 | |||
Total Uses
|
$ | 2,210.2 |
(1)
|
Figures exclude impact of cash and cash equivalents as well as outstanding payables at ABIC.
|
(2)
|
As of September 30, 2021.
|
(3)
|
Represents an estimated amount, inclusive of IPO deferred underwriting fee, accounting, legal and other fees related to the Business Combination.
|
Source of Funds
(in millions)
|
||||
Existing Equity Rollover
|
$ | 1,610.0.0 | ||
Cash and Investments Held in Trust Account
(2)
|
400.2 | |||
Company Equityholder PIPE Investment
|
100.0 | |||
KYMCO PIPE Investment
|
100.0 | |||
Backstop
|
100.0 | |||
Total Sources
|
$ | 2,310.2 |
Uses
(in millions)
|
||||
Existing Equity Rollover
|
$ | 1,610.0 | ||
Shareholder Redemptions
|
375.2 | |||
Cash to LiveWire Balance Sheet
|
275.6 | |||
Estimated Transaction Fees and Expenses
(3)
|
49.4 | |||
Total Uses
|
$ | 2,310.2 |
(1)
|
Figures exclude impact of cash and cash equivalents as well as outstanding payables at ABIC.
|
(2)
|
As of September 30, 2021.
|
(3)
|
Represents an estimated amount, inclusive of IPO deferred underwriting fee, accounting, legal and other fees related to the Business Combination.
|
• |
We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for several years. We have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain;
|
• |
Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment;
|
• |
We may be unable to develop and produce electric vehicles of sufficient quality, and on a schedule and scale, that would appeal to a large customer base;
|
• |
If we fail to achieve unit sales expectations, our business, prospects, financial condition and operating results could be adversely impacted;
|
• |
We are a pioneer in a new space. As we scale and expand our business, we may not be able to adequately control the costs of our operations;
|
• |
The electric vehicle sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of competitors;
|
• |
Our business and prospects depend significantly on our ability to build the LiveWire brand and consumers’ recognition, acceptance and adoption of the LiveWire brand. We may not succeed in continuing to maintain and strengthen the LiveWire brand;
|
• |
We have an established standard of quality and associated consumer expectations through our
H-D
motorcycle lineage. If we are unable to continue providing quality services and customer service, our business and reputation may be materially and adversely affected;
|
• |
Our relationship to
H-D
and the
H-D
presents potential opportunities, synergies and risks. Our brand and reputation could be harmed if we fail to realize those synergies through negative publicity regarding
H-D
and its products and services;
|
• |
We may experience operational and financial risks if we fail to effectively and appropriately separate the LiveWire brand from the
H-D
business;
|
• |
H-D
could make decisions for the benefit of its overall business that could negatively impact our overall business;
|
• |
Our relationship to
H-D
may impact our other business relationships or potential business relationships;
|
• |
Leveraging contract manufacturers, including
H-D,
the KYMCO Group and other partners, to contract manufacture electric vehicles is subject to risks; or
|
• |
If retail partners are unwilling to participate in our
go-to-market
|
• |
Our business and H-D’s business overlap and we may compete, or be perceived as competitors, in certain markets;
|
• |
Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment;
|
• |
After this offering, we will be a smaller company relative to
H-D,
which could result in increased costs because of a decrease in our purchasing power and difficulty maintaining existing customer relationships and obtaining new customers;
|
• |
We are dependent on
H-D
for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it will require significant investment for us to build our own safety and testing facilities, or we may be required to obtain such services from another third party at increased costs;
|
• |
Any decision by us to electrify
H-D
products, or the products of any other company, may not achieve the intended results or return on investment when compared with developing our own motorcycle portfolio; or
|
• |
Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Business Combination.
|
• |
ABIC and LiveWire will incur significant transaction and transition costs in connection with the Business Combination.
|
• |
If the conditions to the Business Combination Agreement are not met, the Business Combination may not occur.
|
• |
The Sponsor and each of ABIC’s officers and directors agreed to vote in favor of our initial business combination, including the Business Combination in particular, as applicable, regardless of how the Public Shareholders vote.
|
• |
Since the Sponsor and our executive officers and directors have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with HoldCo is appropriate as our initial business combination and in recommending that shareholders vote in favor of approval of the Required Shareholder Proposals. Such interests include that the Sponsor and our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired during or may acquire after the IPO), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.
|
• |
The ability of the Public Shareholders to exercise their redemption rights with respect to a large number of our shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
|
• |
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of shares of HoldCo Common Stock to drop significantly, even if HoldCo’s business is doing well.
|
Nine Months Ended
|
Year Ended
|
|||||||||||||||
(Amounts in thousands)
|
September 26,
2021 |
September 27,
2020 |
December 31,
2020 |
December 31,
2019 |
||||||||||||
Revenue, net
|
$ | 22,933 | $ | 35,879 | $ | 30,863 | $ | 20,188 | ||||||||
Costs and expenses:
|
||||||||||||||||
Cost of goods sold
|
26,050 | 37,602 | 55,819 | 21,298 | ||||||||||||
Engineering expense
|
13,005 | 10,583 | 23,036 | 22,085 | ||||||||||||
Selling, general and administrative expense
|
32,123 | 22,905 | 29,063 | 34,912 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expense
|
71,178 | 71,090 | 107,918 | 78,295 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(48,245 | ) | (35,211 | ) | (77,055 | ) | (58,107 | ) | ||||||||
Other (expense) / income, net
|
(19 | ) | (5 | ) | (30 | ) | 75 | |||||||||
Interest expense related party
|
(198 | ) | (94 | ) | (186 | ) | (1 | ) | ||||||||
Interest income
|
11 | 16 | 56 | 41 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(48,451 | ) | (35,294 | ) | (77,215 | ) | (57,992 | ) | ||||||||
Income tax provision (benefits)
|
55 | 163 | 357 | (1,475 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(48,506 | ) | (35,457 | ) | (77,572 | ) | (56,517 | ) | ||||||||
Other comprehensive (loss) income:
|
||||||||||||||||
Foreign currency translation adjustments
|
(68 | ) | (81 | ) | 236 | (6 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
$ | (48,574 | ) | $ | (35,538 | ) | $ | (77,336 | ) | $ | (56,523 | ) | ||||
|
|
|
|
|
|
|
|
As of September 26,
|
As of December 31,
|
|||||||||||
2021
|
2020
|
2019
|
||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||
Balance sheet data:
|
||||||||||||
Total assets
|
$ | 60,850 | $ | 51,740 | $ | 45,210 | ||||||
Total liabilities
|
45,486 | 49,717 | 23,413 | |||||||||
Total equity
|
15,364 | 2,023 | 21,797 |
For the nine
months ended September 30, 2021 |
For the period
from July 29, 2020 (inception) through September 30, 2020 |
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Formation and operational costs
|
$ | 3,838,489 | $ | 5,005 | ||||
Loss from operations
|
(3,838,489 | ) | (5,005 | ) | ||||
Other income (expense):
|
||||||||
Interest earned on investments held in Trust Account
|
129,415 | — | ||||||
Change in fair value of warrant liability
|
27,145,000 | — | ||||||
|
|
|
|
|||||
Total other income (expense)
|
27,274,415 | — | ||||||
|
|
|
|
|||||
Net income (loss)
|
$ | 23,435,926 | $ | (5,005 | ) | |||
|
|
|
|
|||||
Weighted average shares outstanding of Class A Ordinary Shares
|
40,000,000 | — | ||||||
Basic and diluted net income per ordinary share, Class A Ordinary Shares
|
$ | 0.47 | $ | — | ||||
|
|
|
|
|||||
Weighted average shares outstanding of Class B Ordinary Shares
|
10,000,000 | 10,000,000 | ||||||
|
|
|
|
|||||
Basic and diluted net income per ordinary share, Class B Ordinary Shares
|
$ | 0.47 | $ | (0.00 | ) | |||
|
|
|
|
September 30,
2021 |
December 31,
2020 |
|||||||
(Unaudited)
|
(As Restated)
|
|||||||
Condensed Balance Sheet Data (at Period End):
|
||||||||
Total assets
|
$ | 401,646,556 | $ | 402,324,602 | ||||
Total liabilities
|
$ | 36,099,381 | $ | 60,213,353 | ||||
Class A Ordinary Shares subject to possible redemption, 40,000,000 shares at $10.00 per share redemption value at September 30, 2021 and December 31, 2020
|
400,000,000 | 400,000,000 | ||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
— | — | ||||||
Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; no shares issued and outstanding (excluding 40,000,000 shares subject to possible redemption)
|
— | — | ||||||
Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020
|
1,000 | 1,000 | ||||||
Total shareholders’ deficit
|
$ | (34,452,825 | ) | $ | (57,888,751 | ) |
• |
our ability to secure necessary funding;
|
• |
our ability to develop and launch a light model electric vehicle at scale and at attractive profit margins for our business;
|
• |
our ability to negotiate and execute definitive agreements, and maintain arrangements on reasonable terms, with our various suppliers for hardware, software or services necessary to engineer or manufacture parts or components of our electric vehicles;
|
• |
securing necessary components, services or licenses on acceptable terms and in a timely manner;
|
• |
delays by us in delivering final component designs to our suppliers;
|
• |
our ability to accurately produce electric vehicles within specified design tolerances;
|
• |
quality controls, including within our production operations, that prove to be ineffective or inefficient;
|
• |
defects in design and/or manufacture that cause our electric vehicles not to perform as expected or that require repair, field actions, product recalls or design changes;
|
• |
delays, disruptions or increased costs in our, third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies;
|
• |
other delays, backlog in manufacturing and research and development of new models, and cost overruns;
|
• |
obtaining required regulatory approvals and certifications;
|
• |
compliance with environmental, safety and similar regulations; and
|
• |
our ability to attract, recruit, hire, retain and train skilled employees.
|
• |
successfully separate the operations, as well as the accounting, financial controls, management information, technology, data, human resources and other administrative systems and functions, of
H-D
from our operations and systems;
|
• |
overcome cultural challenges associated with separating employees from
H-D
and incorporating them into our organization;
|
• |
successfully identify, validate, qualify and contract with replacement or second-source manufacturing, engineering, development and testing service providers (or stand up such capabilities internally) to act as second sources or replacement sources of such services in the event
H-D
is unable to provide such services or our agreements with
H-D
to provide the same expire or are terminate;
|
• |
successfully identify and realize potential synergies with
H-D;
|
• |
fully identify potential risks and liabilities associated with
H-D,
including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with
H-D,
including claims from terminated employees, former stockholders,
H-D
dealers, or other third parties, and other known and unknown liabilities;
|
• |
retain or hire senior management and other key personnel; and
|
• |
successfully manage strain on our management, operations and financial resources.
|
• |
increased support for other alternative fuel systems, which could have an impact on the acceptance of our electric vehicles; and
|
• |
increased sensitivity by regulators to the needs of established automobile and motorcycle manufacturers, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel vehicles.
|
• |
an increase in the cost, or decrease in the available supply, of materials used in the cells;
|
• |
disruption in the supply of cells due to quality issues or recalls by battery cell manufacturers; and
|
• |
fluctuations in the value of any foreign currencies in which battery cell and related raw material purchases are or may be denominated against the US dollar.
|
• |
attracting and hiring skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future;
|
• |
managing a larger organization with a great number of employees in different divisions and geographies;
|
• |
training and integrating new employees into our operations to meet the growing demands of our business;
|
• |
controlling expenses and investments in anticipation of expanded operations;
|
• |
establishing or expanding design, manufacturing and sales;
|
• |
managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities; and
|
• |
implementing and enhancing administrative infrastructure, systems and processes.
|
• |
successful integration with existing third-party charging networks, including obtaining necessary licenses for charging solutions on commercially acceptable terms;
|
• |
inadequate capacity or over capacity in certain areas, security risks or risk of damage to vehicles, charging equipment or real or personal property;
|
• |
access to sufficient charging infrastructure;
|
• |
the potential for lack of customer acceptance of our charging solutions; and
|
• |
the risk that government support for electric vehicle and alternative fuel solutions and infrastructure may not continue.
|
• |
perceptions about electric vehicles quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such electric vehicles are produced by us or other manufacturers;
|
• |
perceptions about electric vehicles safety in general, in particular safety issues that may be attributed to the use of advanced technology, including electric vehicles systems;
|
• |
range anxiety, including the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge;
|
• |
the availability of new energy vehicles;
|
• |
the availability of service and charging stations for electric vehicles;
|
• |
the costs and challenges of installing home charging equipment, including for multi-family, rental and densely populated urban housing;
|
• |
the environmental consciousness of consumers, and their adoption of electric vehicles;
|
• |
the occurrence of negative incidents, or perception that negative incidents have occurred, with respect to our or our competitors’ electric vehicles resulting in adverse publicity and harm to consumer perceptions in electric vehicles generally;
|
• |
the higher initial upfront purchase price of electric vehicles, despite lower cost of ongoing operating and maintenance costs, compared to internal combustion engines vehicles;
|
• |
perceptions about and the actual cost of alternative fuel;
|
• |
regulatory, legislative and political changes; and
|
• |
macroeconomic factors.
|
• |
conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time;
|
• |
expenditures related to foreign lawsuits and liability;
|
• |
difficulties in staffing and managing foreign operations;
|
• |
difficulties establishing relationships with, or disruption in the supply chain from, international suppliers;
|
• |
difficulties attracting customers in new jurisdictions;
|
• |
difficulties in attracting effective distributors, dealers or sales agents, as the case may be;
|
• |
foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States;
|
• |
fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake;
|
• |
United States and foreign government trade restrictions, tariffs and price or exchange controls;
|
• |
foreign labor laws, regulations and restrictions;
|
• |
changes in diplomatic and trade relationships;
|
• |
laws and business practices favoring local companies;
|
• |
difficulties protecting or procuring intellectual property;
|
• |
the adoption of the LiveWire brand versus competitive foreign brands;
|
• |
political instability, natural disasters, war or events of terrorism and health epidemics, such as the
COVID-19
pandemic; and
|
• |
the strength of international economies.
|
• |
our strategy, direction and objectives as a business;
|
• |
labor, tax, employee benefit, indemnification and other matters arising from our separation from
H-D;
|
• |
employee retention and recruiting;
|
• |
business combinations involving us;
|
• |
our ability to engage in activities with certain customers, suppliers, and partners;
|
• |
sales or dispositions by
H-D
of all or any portion of its ownership interest in us;
|
• |
the nature, quality and pricing of services
H-D
has agreed to provide us;
|
• |
supply chain, including access to parts and raw material supplies, as well as allocation of manufacturing labor, parts and other supplies shared across the York manufacturing facility;
|
• |
business opportunities that may be attractive to both
H-D
and us; and
|
• |
product or technology development or marketing activities which may require the consent of
H-D.
|
• |
a board that is composed of a majority of “independent directors,” as defined under the NYSE rules;
|
• |
a compensation committee that is composed entirely of independent directors; and
|
• |
director nominations be made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.
|
• |
cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the intellectual property that we allegedly infringe, misappropriate, dilute or otherwise violate;
|
• |
pay substantial royalty or license fees or other damages;
|
• |
seek a license from the holder of the allegedly infringed intellectual property, which license may not be available on reasonable terms, or at all;
|
• |
redesign or reengineer our vehicles or other technology, goods or services, which may be costly, time-consuming or impossible; or
|
• |
establish and maintain alternative branding for our products and services.
|
• |
the imposition of a carbon tax or the introduction of a
cap-and-trade
|
• |
new state regulations of electric vehicles fees could discourage consumer demand for electric vehicles;
|
• |
the increase of subsidies for alternative fuels such as corn and ethanol could reduce the operating cost of vehicles that use such alternative fuels and gasoline, and thereby reduce the appeal of electric vehicles;
|
• |
changes to the regulations governing the assembly and transportation of battery cells could increase the cost of battery cells or make such commodities more difficult to obtain;
|
• |
changes in regulation, for example relating to the noise required to be emitted by electric vehicles, may impact the design or function of electric vehicles, and thereby lead to decreased consumer appeal;
|
• |
changes in regulations governing the range and miles per gallon of gasoline-equivalent calculations could lower our electric vehicles’ ratings, making electric vehicles less appealing to consumers; and
|
• |
the amendment or rescission of the CAFE standards could reduce new business opportunities for our business.
|
• |
allocation of expenses to and among different jurisdictions;
|
• |
changes in the valuation of our deferred tax assets and liabilities;
|
• |
expected timing and amount of the release of any tax valuation allowances;
|
• |
tax effects of stock-based compensation;
|
• |
costs related to intercompany restructurings;
|
• |
changes in tax laws, tax treaties, regulations or interpretations thereof; or
|
• |
lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
|
• |
trends and changes in consumer preferences in the industries in which we operate;
|
• |
changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the consumer and advertising marketplaces;
|
• |
changes in key personnel;
|
• |
our entry into new markets;
|
• |
changes in our operating performance;
|
• |
investors’ perceptions of our prospects and the prospects of the businesses in which we participate;
|
• |
fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors;
|
• |
the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
|
• |
announcements relating to litigation;
|
• |
guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance;
|
• |
changes in financial estimates or ratings by any securities analysts who follow our HoldCo Common Stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our HoldCo Common Stock;
|
• |
downgrades in our credit ratings or the credit ratings of our competitors;
|
• |
the development and sustainability of an active trading market for our HoldCo Common Stock;
|
• |
investor perceptions of the investment opportunity associated with our HoldCo Common Stock relative to other investment alternatives;
|
• |
the inclusion, exclusion or deletion of our stock from any trading indices;
|
• |
future sales of our common stock by our officers, directors and significant stockholders;
|
• |
other events or factors, including those resulting from system failures and disruptions, hurricanes, wars, acts of terrorism, other natural disasters or responses to such events;
|
• |
price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and
|
• |
changes in accounting principles.
|
• |
the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;
|
• |
the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by September 30, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $98.2 million, based upon the closing price of $9.87 per Class A Ordinary Share on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $7.1 million, based upon the closing price of $0.68 per Public Warrant on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and
|
• |
the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $105,346,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on February 2, 2022.
|
Securities
held by Sponsor Group |
Sponsor Cost
at ABIC’s IPO ($) |
|||||||
Founder Shares
|
9,950,000 | $ | 25,000 |
(1)
|
||||
Private Placement Warrants
|
10,500,000 | $ | 10,500,000 | |||||
|
|
|||||||
Total
|
$
|
10,525,000
|
(1)
|
Includes cost for 50,000 Founder Shares held by the independent directors.
|
Securities
held by Sponsor Group
Prior
to Closing |
Value per
Security ($) |
Total Value ($)
|
||||||||||
Shares of HoldCo Common Stock Issued to Holders of Founder Shares
|
9,950,000 | $ | 9.87 | $ | 98,206,500 | |||||||
HoldCo Private Placement Warrants
|
10,500,000 | $ | 0.68 | $ | 7,140,000 | |||||||
|
|
|
|
|||||||||
Total
|
$
|
105,346,500
|
|
• |
the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any
out-of-pocket
out-of-pocket
out-of-pocket
|
• |
the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by September 30, 2022;
|
• |
the fact that the Stockholders Agreement and HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;
|
• |
the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents and in the Stockholders Agreement;
|
• |
the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the
lock-up
restrictions;
|
• |
the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;
|
• |
the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;
|
• |
the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any
out-of-pocket
|
• |
the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;
|
• |
the fact that John Garcia, who is currently the Executive Chairman,
Co-Chief
Executive Officer and Director of ABIC, owns 2,500,000 Class A Ordinary Shares; and
|
• |
the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and requires LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.
|
• |
changes in the industries in which LiveWire and HoldCo and their customers operate;
|
• |
variations in its operating performance and the performance of its competitors in general;
|
• |
the material and adverse impact of the
COVID-19
pandemic on the markets and the broader global economy;
|
• |
actual or anticipated fluctuations in LiveWire’s and HoldCo’s annual or interim operating results;
|
• |
publication of research reports by securities analysts about LiveWire, HoldCo or their competitors or their industry;
|
• |
the public’s reaction to LiveWire’s and HoldCo’s press releases, other public announcements and filings with the SEC;
|
• |
LiveWire’s or HoldCo’s failure or the failure of their competitors to meet analysts’ projections or guidance that LiveWire, HoldCo or their competitors may give to the market;
|
• |
additions and departures of key personnel;
|
• |
changes in laws and regulations affecting its business;
|
• |
failure to comply with laws or regulations, including the Sarbanes-Oxley Act, or failure to comply with the requirements of the NYSE;
|
• |
actual, potential or perceived control, accounting or reporting problems;
|
• |
commencement of, or involvement in, litigation involving LiveWire or HoldCo;
|
• |
changes in LiveWire’s or HoldCo’s capital structures, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of HoldCo Common Stock available for public sale;
|
• |
general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and epidemics and pandemics (including the ongoing
COVID-19
pandemic), acts of war or terrorism; and
|
• |
the other factors described in this “
Risk Factors
|
• |
your proportionate ownership interest in HoldCo will decrease;
|
• |
the relative voting strength of each previously outstanding share of HoldCo Common Stock following the Business Combination will be diminished; or
|
• |
the market price of the shares of HoldCo Common Stock and the Public Warrants may decline.
|
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Shareholders
|
Ownership in
Shares |
Equity
% |
Ownership in
Shares |
Equity
% |
Ownership in
Shares |
Equity
% |
Ownership in
Shares |
Equity
% |
||||||||||||||||||||||||
Company Equityholder
(5)
|
171,000,000 | 74.0 | % | 181,000,000 | 81.9 | % | 181,000,000 | 89.0 | % | 181,000,000 | 89.8 | % | ||||||||||||||||||||
Public Shareholders
|
40,000,000 | 17.4 | % | 20,000,000 | 9.1 | % | 2,500,000 | 1.2 | % | 499,732 | 0.2 | % | ||||||||||||||||||||
Sponsor stockholders
(6)
|
10,000,000 | 4.3 | % | 10,000,000 | 4.5 | % | 10,000,000 | 4.9 | % | 10,000,000 | 5.0 | % | ||||||||||||||||||||
KYMCO Group stockholders
|
10,000,000 | 4.3 | % | 10,000,000 | 4.5 | % | 10,000,000 | 4.9 | % | 10,000,000 | 5.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Shares Outstanding Excluding HoldCo Warrants
|
231,000,000 | 100.0 | % | 221,000,000 | 100 | % | 203,500,000 | 100 | % | 201,499,732 | 100 | % |
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Additional Dilution Sources
|
Amount ($)
|
Equity
%
(7)
|
Amount ($)
|
Equity
%
(7)
|
Amount ($)
|
Equity
%
(7)
|
Amount ($)
|
Equity
%
(7)
|
||||||||||||||||||||||||
HoldCo Warrants
|
30,500,000 | [●] | % | 30,500,000 | [●] | % | 30,500,000 | [●] | % | 30,500,000 | [●] | % | ||||||||||||||||||||
Earn Out Shares
|
12,500,000 | [●] | % | 12,500,000 | [●] | % | 12,500,000 | [●] | % | 12,500,000 | [●] | % | ||||||||||||||||||||
Incentive Plan
|
[●] | [●] | % | [●] | [●] | % | [●] | [●] | % | [●] | [●] | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Additional Dilution Sources
|
[●] | [●] | % | [●] | [●] | % | [●] | [●] | % | [●] | [●] | % |
Assuming No
Redemption
(1)
|
Assuming Illustrative
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
Assuming Charter
Redemption Limitation
(4)
|
|||||||||||||||||||||||||||||
Deferred Discount
|
Amount ($)
|
% of
Trust Account |
Amount ($)
|
% of
Trust Account |
Amount ($)
|
% of
Trust Account |
Amount ($)
|
% of
Trust Account |
||||||||||||||||||||||||
Effective Deferred Discount
(8)
|
$ | 14,000,000 | 3.5 | % | $ | 14,000,000 | 7.0 | % | $ | 14,000,000 | 56.0 | % | $ | 14,000,000 | 280.0 | % |
(1)
|
This scenario assumes that no Public Shares are redeemed by Public Shareholders.
|
(2)
|
This scenario assumes that 20,000,000 Public Shares are redeemed by Public Shareholders and that the Backstop is fully subscribed for.
|
(3)
|
This scenario assumes that 37,500,000 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,214,519 in the Trust Account as of September 30, 2021, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the Minimum Cash Condition and that the full Backstop is subscribed for.
|
(4)
|
This scenario assumes that 39,500,268 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,214,519 in the Trust Account as of September 30, 2021, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the Minimum Cash Condition, and that the full Backstop is subscribed for.
|
(5)
|
Excludes 12,500,000 shares of HoldCo Common Stock in estimated potential Earn Out Shares as the price threshold for each tranche has not yet been triggered.
|
(6)
|
Assumes that the Sponsor shall not forfeit and/or transfer any Founder Shares under the Investor Support Agreement.
|
(7)
|
The Equity % with respect to each Additional Dilution Source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator
|
and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator. For example, in the Illustrative Redemption Scenario, the Equity % with respect to the HoldCo Warrants would be calculated as follows: (a) 30,500,000 shares issued pursuant to the HoldCo Warrants (representing approximately 13.8% of the previously outstanding 221,000,000 shares); divided by (b) (i) 221,000,000 shares (the number of shares outstanding prior to any issuance pursuant to the HoldCo Warrants), plus (ii) 30,500,000 shares issued pursuant to the HoldCo Warrants, 12,500,000 Earn Out Shares and [●] shares issued pursuant to the Incentive Plan. |
(8)
|
The level of redemption also impacts the effective underwriting fee incurred in connection with the IPO. In a no redemption scenario, based on the approximately $400.2 million in the Trust Account, ABIC’s $14.0 million in deferred underwriting fees represents an effective deferred underwriting fee of approximately 3.5% as a percentage of cash in the Trust Account. In an illustrative redemption scenario, based on the approximately $200.1 million in the Trust Account, the effective underwriting fee would be approximately 7.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a contractual maximum redemption scenario, based on the approximately $25.0 million in the Trust Account, the effective underwriting fee would be approximately 56.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a charter redemption limitation scenario, based on the approximately $5,000,001 in the Trust Account, the effective underwriting fee would be approximately 280.0% as a percentage of the amount remaining in the Trust Account following redemptions.
|
• |
a limited availability of market quotations for HoldCo’s securities;
|
• |
reduced liquidity for HoldCo’s securities;
|
• |
a determination that the shares of HoldCo Common Stock are a “penny stock” which will require brokers trading in the shares of HoldCo Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for HoldCo’s securities;
|
• |
a limited amount of news and analyst coverage; and
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
restrictions on the nature of our investments; and
|
• |
restrictions on the issuance of securities,
|
• |
registration as an investment company with the SEC;
|
• |
adoption of a specific form of corporate structure; and
|
• |
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
|
• |
a board that is composed of a majority of “independent directors,” as defined under the NYSE rules;
|
• |
a compensation committee that is composed entirely of independent directors; and
|
• |
director nominations be made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.
|
• |
a U.S. Holder of Public Shares whose Public Shares have a fair market value of less than $50,000 on the date of the Domestication, and who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares, will generally not recognize any gain or loss and will generally not be required to include any part of ABIC’s earnings in income pursuant to the Domestication;
|
• |
a U.S. Holder of Public Shares whose Public Shares have a fair market value of $50,000 or more on the date of the Domestication, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares will generally recognize gain (but not loss) on the exchange of Public Shares for shares in HoldCo pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holders may file an election to include in income as a dividend the “all earnings and profits amounts” (as defined in Treasury
Regulation Section 1.367(b)-2(d))
attributable to their Public Shares,
provided
|
• |
a U.S. Holder of Public Shares who on the date of the Domestication owns (actually and constructively) 10% or more of the total combined voting power of all classes of ABIC Shares entitled to vote or 10% or more of the total value of all classes of ABIC Shares will generally be required to include in income as a dividend the “all earnings and profits amount” (as defined in Treasury
Regulation Section 1.367(b)-2(d))
attributable to its Public Shares,
provided
|
• |
the ability of the HoldCo Board following the Closing to issue one or more series of preferred stock;
|
• |
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at HoldCo’s annual meetings;
|
• |
certain limitations on convening special stockholder meetings;
|
• |
certain limitations on the ability of stockholders to act by written consent; and
|
• |
the express authority of the HoldCo Board to make, alter or repeal the Proposed HoldCo Bylaws.
|
• |
the Business Combination Proposal;
|
• |
the Domestication Proposal;
|
• |
the Charter Proposal;
|
• |
the Incentive Plan Proposal; and
|
• |
the Adjournment Proposal.
|
• |
you may send another proxy card with a later date;
|
• |
you may notify ABIC’s Secretary in writing before the General Meeting that you have revoked your proxy; or
|
• |
you may attend the General Meeting, revoke your proxy and vote in person as described above.
|
• |
Businesses that align with its mission and complement the experience and skills of ABIC’s management team and sponsors and are focused on, or could benefit from,
best-in-class
|
• |
Businesses that contribute scalable solutions to the SDGs, which have positive fundamental growth drivers that deliver attractive financial returns and measurable impact.
|
• |
Best-in-class
|
• |
Businesses which do not currently have
best-in-class
|
• |
Businesses with a defensible market position that are resilient to economic cycles, have attractive secular market tailwinds, and a differentiated technology, product or service, distribution capabilities, relationships or other competitive advantages.
|
• |
Businesses with a strong management team aligned with its impact mission and efforts to create value.
|
• |
Businesses that can be acquired at an attractive valuation for public market investors.
|
• |
Businesses with an attractive financial profile, including businesses with low capital intensity and that have highly recurring, stable cash flows and operating leverage.
|
• |
Growing Electric Vehicle (
“
EV
”
) Market
all-electric
motorcycle brand with a focus on the urban market and a mission to pioneer the rapidly growing
two-wheel
electric motorcycle space and beyond. LiveWire operates in a large global market in the early stage of a secular shift to EV motorcycles, which the ABIC Board believes presents an attractive, risk-adjusted investment opportunity in EV, with strong growth prospects and a large core addressable market with
|
significant upside. Following a review of industry trends including customer preferences and recognition of the benefits of EVs, financial metrics for charging network and EV technologies, LiveWire’s evolution and other factors, the ABIC Board believes LiveWire is well positioned to further capitalize on these trends.
|
• |
ESG / Impact-Focused
|
• |
Leading the Transformation of Motorcycling.
|
• |
Transformative
Go-to-Market
store-in-store
EV-ready
retail partner locations, gallery concept spaces,
pop-up
retail stores in key markets and LiveWire “on the road,” which brings test rides directly to LiveWire customers. Furthermore, LiveWire’s retail network is rapidly expanding in priority markets by leveraging
H-D’s
traditional motorcycle dealer network and working with retail partners who possess a strong sales track record, presence in a priority market, commitment to LiveWire’s mission and expertise in the EV retail and service industry.
|
• |
Growing International Presence
|
• |
Backed by World-Class Financial and Strategic Partners
H-D
and the KYMCO Group, each of which has provided significant investment in the Business Combination. With
H-D’s
118-year
heritage, technical expertise and global network of ~1,400 dealers, LiveWire is strategically linked to the
H-D
brand, enhancing LiveWire’s distribution, retail, design, engineering and manufacturing capabilities. The KYMCO Group is a Taiwanese motorcycle and sport vehicle manufacturer with a presence in over 100 countries. Through these partnerships, LiveWire is well-positioned to leverage the engineering expertise, manufacturing footprint, established distribution channels, supply chain infrastructure and global logistics capabilities of
H-D
and the KYMCO Group, which may create an opportunity for global
at-scale
manufacturing and purchasing efficiencies in priority markets. Further, the KYMCO Group’s investment provided further validation for ABIC’s valuation.
|
• |
Portfolio of Products to Drive Growth
|
investments, providing breakthrough technologies and features for its premium electric motorcycle and is poised to extend its portfolio of products to include a range of middleweight applications. LiveWire is leveraging the latest technologies to address heavyweight motorcycles and anticipates future improvements in motorcycle range and charging capabilities. Additionally, LiveWire is actively attracting new riders and building brand allegiance by offering premier electric bikes for kids and older kids (including STACYC, the
all-electric
balance bike for kids). Beyond its motorcycle sales, LiveWire has created multiple growth vectors, including through its software and subscription services consumer financing and protection services, general merchandising of apparel and equipment and parts and accessories related-services.
|
• |
Differentiated Expertise in Key Technologies.
built-in
cellular connectivity and GPS, customizable ride modes, advanced control technology and the LiveWire app, providing the rider with a unique customer experience. Arrow, LiveWire’s highly differentiated proprietary modular EV system, is scalable for future vehicle configurations, can be brought quickly to market, is a more efficient investment for new motorcycle models, includes lower incremental parts development and provides greater flexibility to evolving regulations. Through its partnership with the KYMCO Group, LiveWire’s strategic plans include scaling down the Arrow architecture to a platform of lightweight
two-wheelers.
|
• |
Mission-Driven Leadership Team with a Strong Track Record
H-D
officers Jochen Zeitz, who will serve as Executive Chairman of the HoldCo Board and Acting Chief Executive Officer of HoldCo for up to two years following the Closing, and Ryan Morrissey, who will serve as President of HoldCo following the Closing, will provide important continuity in advancing LiveWire’s strategic and growth objectives. Additionally, Jochen Zeitz will continue in his capacity as Chief Executive Officer of
H-D
and following the appointment of a permanent Chief Executive Officer of HoldCo, will retain his role as Executive Chairman of HoldCo.
|
• |
Transaction
Proceed
s
go-to-market
|
• |
Due Diligenc
e
in-person
meetings with the management team and advisors of
H-D
regarding LiveWire and its business plan, operations, prospects and forecasts, research on the EV industry, including historical growth trends and market share information as well as
end-market
size and growth projection, evaluation analyses with respect to the Business Combination, review of material contracts (including LiveWire’s exclusive retailer, dealer, and supplier contracts), LiveWire’s audited and unaudited financial statements and other material matters as well as general financial, technical, legal, intellectual property, regulatory, tax and accounting due diligence.
|
• |
Financial Condition
|
• |
Reasonableness
of Consideratio
n
|
support for the implied valuation of LiveWire indicated by the commitments obtained in the PIPE Financing, the board of directors of LiveWire determined that the aggregate consideration to be paid in the Business Combination was reasonable.
|
• |
Post-Closing
Economic
Interest
in HoldCo
|
• |
Lock
Up
H-D
and/or its subsidiaries and certain Sponsor parties have agreed to be subject to a
lock-up
in respect of their shares of HoldCo Common Stock (ranging from 12 or 18 months for Sponsor parties to seven years for
H-D
and/or its subsidiaries and subject to certain customary exceptions).
|
• |
Financing
H-D’s
commitment to subscribe for shares of HoldCo Common Stock, in an aggregate amount of up to $100 million to fund any redemptions by ABIC shareholders.
H-D’s
commitment to purchase an aggregate of 10,000,000 shares of HoldCo Common Stock, for an aggregate amount of $100 million subject to the satisfaction (or waiver) of certain of
H-D’s
Closing conditions.
|
• |
Post-
Business Combination
Corporate
Governance
post-closing
corporate governance rights in HoldCo, including the right to nominate a director to the HoldCo Board. Additionally, the HoldCo Board will include, among other committees, an Audit and Finance Committee and Conflicts Committee (to oversee conflicts arising in connection with the
H-D
relationship) comprised of all independent directors as further described in “
Management of HoldCo
Following the
Business Combination
—
Nominating and Corporate Governance Committee Information
.
|
• |
Negotiated
Transactio
n
H-D.
|
• |
Macroeconomic
Risks
|
• |
Redemption
Risk
|
• |
Exclusivity.
H-D
from soliciting other business combination proposals, as further discussed in “
The Business Combination Agreement—Covenants
of the
Parties—Other Covenants of ABIC
.
|
• |
Separation from the
H-D
Business
H-D
may involve certain risks, including (i) the fact that the business of LiveWire overlaps and competes with
H-D
in certain markets may affect LiveWire’s ability to build and maintain relationships with partners, dealers, suppliers and customers, (ii) LiveWire’s inability to maintain a strong relationship with
H-D
or to favorably resolve any disputes could result in a significant reduction of LiveWire’s revenue, (iii) following termination of the Contract Manufacturing Agreement to be entered into at Closing (pursuant to which
H-D
will continue to provide LiveWire with contracting manufacturing services for a proscribed period of time), LiveWire will need to engage a third-party contractor or build its own
|
in-house
manufacturing capability to make its products, which could result in significant cost and expense, (iv) the fact that LiveWire is dependent, and following completion of the Business Combination, will remain dependent on
H-D
for a number of services, including certain financial and accounting, IT back-of-house operations, IP, quality safety and testing-related services, (v) the fact that
H-D
will retain certain assets utilized in the LiveWire business and (vi) the fact that
H-D
holds the direct contractual relationship with many key suppliers required for LiveWire to produce its EVs and disputes between
H-D
and such key suppliers may negatively impact LiveWire’s vehicle production.
|
• |
Stockholder
Vote
|
• |
Closing Condition
s
.
|
• |
Listing Risks
|
• |
Fees and Expenses
|
• |
Dilution
ABIC
Shareholders
Receiving
a Minority
Position
in HoldCo
H-D
as consideration in the Business Combination (and may experience dilution as a result of future issuances or resales of shares of HoldCo Common Stock). The fact that ABIC’s shareholders will hold a minority interest in HoldCo, which will limit or preclude the ability of ABIC’s shareholders to influence corporate matters, including any future potential change in control or other material transaction, The ABIC Board determined that such facts were outweighed by the long-term benefits that the potential Business Combination would provide to ABIC’s shareholders and future shareholders of ABIC after Closing.
|
• |
PIPE Financing
|
• |
Litigation
|
• |
Financial Opinion
|
• |
COVID-19
COVID-19
pandemic on the LiveWire business.
|
• |
Other Risks.
Risk
Factor
s
|
• |
the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;
|
• |
the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by September 30, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $98.2 million, based upon the closing price of $9.87 per Class A Ordinary Share on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $7.1 million, based upon the closing price of $0.68 per Public Warrant on the NYSE on February 2, 2022;
|
• |
the fact that if the Business Combination or another business combination is not consummated by September 30, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and
|
• |
the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $105,346,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on February 2, 2022.
|
Securities
held by Sponsor Group |
Sponsor Cost
at ABIC’s IPO ($) |
|||||||
Founder Shares
|
9,950,000 | $ | 25,000 |
(1)
|
||||
Private Placement Warrants
|
10,500,000 | $ | 10,500,000 | |||||
|
|
|||||||
Total
|
$
|
10,525,000
|
|
(1)
|
Includes cost for 50,000 Founder Shares held by the independent directors.
|
Securities
held by Sponsor Group Prior to Closing |
Value per
Security ($) |
Total Value
($) |
||||||||||
Shares of HoldCo Common Stock Issued to Holders of Founder Shares
|
9,950,000 | $ | 9.87 | $ | 98,206,500 | |||||||
HoldCo Private Placement Warrants
|
10,500,000 | $ | 0.68 | $ | 7,140,000 | |||||||
|
|
|
|
|||||||||
Total
|
|
$105,346,500
|
|
• |
the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any
out-of-pocket
out-of-pocket
out-of-pocket
|
• |
the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by September 30, 2022;
|
• |
the fact that the Stockholders Agreement and HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;
|
• |
the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents and in the Stockholders Agreement;
|
• |
the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the
lock-up
restrictions;
|
• |
the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;
|
• |
the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;
|
• |
the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any
out-of-pocket
|
identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by September 30, 2022;
|
• |
the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;
|
• |
the fact that John Garcia, who is currently the Executive Chairman,
Co-Chief
Executive Officer and Director of ABIC, owns 2,500,000 Class A Ordinary Shares; and
|
• |
the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and required LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.
|
(in $ millions)
|
2021E
(4)
|
2022E
|
2023E
|
2024E
|
2025E
|
2026E
|
||||||||||||||||||
Units
|
387 | 957 | 7,236 | 15,736 | 53,341 | 100,961 | ||||||||||||||||||
% Growth
|
NA | 261 | % | 656 | % | 117 | % | 239 | % | 89 | % | |||||||||||||
Vehicle revenue
|
$6 | $20 | $118 | $247 | $700 | $1,491 | ||||||||||||||||||
All other
|
27 | 36 | 91 | 137 | 192 | 277 | ||||||||||||||||||
Revenue
|
$33 | $56 | $209 | $385 | $892 | $1,769 | ||||||||||||||||||
% Growth
|
NA | 63 | % | 270 | % | 84 | % | 132 | % | 98 | % | |||||||||||||
COGS
|
$33 | $56 | $196 | $341 | $743 | $1,439 | ||||||||||||||||||
Gross Margin
|
$0 | $0 | $13 | $44 | $149 | $330 | ||||||||||||||||||
% of Revenue
|
0 | % | 0 | % | 6 | % | 11 | % | 17 | % | 19 | % | ||||||||||||
Net Income
|
($60 | ) | ($111 | ) | ($137 | ) | ($146 | ) | ($55 | ) | $64 | |||||||||||||
EBITDA
(1)
|
($53 | ) | ($98 | ) | ($112 | ) | ($114 | ) | ($20 | ) | $107 | |||||||||||||
% of Revenue
|
NM
|
NM
|
NM
|
NM
|
NM
|
6
|
%
|
|||||||||||||||||
EBIT
(2)
|
($60 | ) | ($111 | ) | ($137 | ) | ($146 | ) | ($55 | ) | $64 | |||||||||||||
% of Revenue
|
NM
|
NM
|
NM
|
NM
|
NM
|
4
|
%
|
|||||||||||||||||
Adjusted Free Cash Flow
(3)
|
($90 | ) | ($120 | ) | ($139 | ) | ($152 | ) | ($89 | ) | $56 |
(1)
|
EBITDA is defined as net income before interest expense, income tax expense, depreciation and amortization. Please see the section entitled “
Shareholder Proposal 1: The Business Combination Proposal — Certain Unaudited LiveWire Prospective Financial Information—Non-GAAP Financial Measures
|
(2)
|
EBIT is defined as net income before interest expense and income tax expense. Please see the section entitled “
Shareholder Proposal 1: The Business Combination Proposal — Certain Unaudited LiveWire Prospective Financial Information—Non-GAAP Financial Measures
|
(3)
|
Adjusted Free Cash Flow is defined as EBITDA, less increase or plus decrease changes in net working capital, less cash taxes expense, less capital expenditures. Please see the section entitled “
Shareholder Proposal 1: The Business Combination Proposal — Certain Unaudited LiveWire Prospective Financial Information—Non-GAAP Financial Measures
|
(4)
|
2021 financials include the impact of both H-D branded LiveWire motorcycle shipments as well as LiveWire ONE motorcycle shipments to provide a full-year comparison.
|
(in $ millions)
|
2021E(1)
|
2022E
|
2023E
|
2024E
|
2025E
|
2026E
|
||||||||||||||||||
Net Income
|
($60 | ) | ($111 | ) | ($137 | ) | ($146 | ) | ($55 | ) | $64 | |||||||||||||
(+) Income Tax
|
— | — | — | — | — | — | ||||||||||||||||||
EBIT
|
($60 | ) | ($111 | ) | ($137 | ) | ($146 | ) | ($55 | ) | $64 | |||||||||||||
(+) Depreciation & Amortization
|
7 | 13 | 25 | 32 | 36 | 43 | ||||||||||||||||||
EBITDA
|
($53 | ) | ($98 | ) | ($112 | ) | ($114 | ) | ($20 | ) | $107 |
(1) |
2021 financials include the impact of both H-D branded LiveWire motorcycle shipments as well as LiveWire ONE motorcycle shipments to provide a full-year comparison.
|
(in $ Millions)
|
2021E(1)
|
2022E
|
2023E
|
2024E
|
2025E
|
2026E
|
||||||||||||||||||
EBITDA
|
($53 | ) | ($98 | ) | ($112 | ) | ($114 | ) | ($20 | ) | $107 | |||||||||||||
(-) Change in NWC
|
($2 | ) | ($1 | ) | ($2 | ) | ($3 | ) | ($22 | ) | ($32 | ) | ||||||||||||
(-) Cash Taxes Expenses
|
— | — | — | — | — | — | ||||||||||||||||||
(-) Capital Expenditures
|
($35 | ) | ($21 | ) | ($25 | ) | ($35 | ) | ($47 | ) | ($19 | ) | ||||||||||||
Adjusted Free Cash Flow
|
($90 | ) | ($120 | ) | ($139 | ) | ($152 | ) | ($89 | ) | $56 |
(1) |
2021 financials include the impact of both H-D branded LiveWire motorcycle shipments as well as LiveWire ONE motorcycle shipments to provide a full-year comparison.
|
• |
Prominence, Predictability and Flexibility of Delaware Law
|
• |
Well-Established Principles of Corporate Governance
|
• |
Increased Ability to Attract and Retain Qualified Directors
|
• |
Stock Options and SARs
|
• |
Restricted Stock
|
• |
RSUs
|
and conditions applicable to RSUs are determined by the plan administrator, subject to the conditions and limitations contained in the Incentive Plan.
|
• |
Other Stock or Cash Based Awards
|
• |
Dividend Equivalents
|
• |
our Sponsor, officers or directors;
|
• |
banks or other financial institutions, underwriters, insurance companies, real estate investment trusts or regulated investment companies;
|
• |
pension plans or
tax-exempt
organizations (including private foundations);
|
• |
governments or agencies or instrumentalities thereof;
|
• |
S corporations, partnerships or other pass-through entities;
|
• |
broker-dealers, or traders in securities that elect
mark-to-market
|
• |
trusts and estates;
|
• |
investors that hold Public Shares or Public Warrants or shares of HoldCo Common Stock or HoldCo Warrants as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale” or other integrated transaction for U.S. federal income tax purposes;
|
• |
investors subject to the alternative minimum tax provisions of the Code;
|
• |
U.S. Holders (as defined below) that have a functional currency other than the United States dollar;
|
• |
U.S. expatriates (or former long-term residents of the United States) and investors subject to the U.S. “inversion” rules;
|
• |
persons that own (directly, indirectly, or by attribution) 5% or more (by vote or value) of the ABIC Securities (except to the limited extent provided below), or any class of HoldCo Securities;
|
• |
persons that received ABIC Securities or HoldCo Securities as compensation for services;
|
• |
controlled foreign corporations or passive foreign investment companies;
|
• |
persons who purchase stock in HoldCo as part of the PIPE Financing; or
|
• |
accrual method taxpayers that file applicable financial statements as described in Section 451(b) of the Code,
|
• |
an individual who is a United States citizen or resident of the United States;
|
• |
a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
• |
an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
• |
a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.
|
• |
a statement that the Domestication is a Section 367(b) exchange (within the meaning of the applicable Treasury Regulations);
|
• |
a complete description of the Domestication;
|
• |
a description of any stock, securities or other consideration transferred or received in the Domestication;
|
• |
a statement describing the amounts required to be taken into account for U.S. federal income tax purposes;
|
• |
a statement that the U.S. Holder is making the election including (A) a copy of the information that the U.S. Holder received from ABIC establishing and substantiating the U.S. Holder’s “all earnings and profits amount” with respect to the U.S. Holder’s Public Shares and (B) a representation that the U.S. Holder has notified ABIC that the U.S. Holder is making the election; and
|
• |
certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations.
|
• |
the U.S. Holder’s gain will be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s Public Shares or Public Warrants;
|
• |
the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which ABIC was a PFIC, will be taxed as ordinary income;
|
• |
the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s holding period would be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder without regard to the U.S. Holder’s other items of income and loss for such year; and
|
• |
an additional amount equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder in respect of the tax attributable to each such other taxable year (described in the third bullet) of such U.S. Holder.
|
• |
the gain is effectively connected with the conduct of a trade or business by the
Non-U.S.
Holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the
Non-U.S.
Holder), in which case the
Non-U.S.
Holder will generally be subject to tax at generally applicable U.S. federal income tax rates, and a corporate
Non-U.S.
Holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty);
|
• |
the
Non-U.S.
Holder is an individual who is present in the United States for 183 days or more in the taxable year in which the redemption takes place and certain other conditions are met, in which case the
Non-U.S.
Holder will be subject to a 30% tax (or lower rate as may be specified by an applicable income tax treaty) on the individual’s net capital gain for the year; or
|
• |
we are or have been a “U.S. real property holding corporation” for United States 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 the Public Shares, and, in the case where Public Shares are regularly traded on an established securities market, the
Non-U.S.
Holder has owned, directly or constructively, more than 5% of the ABIC Shares 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 Public Shares.
|
• |
at least one day prior to the Merger Effective Time, ABIC will domesticate as a Delaware corporation in accordance with the DGCL and the Cayman Islands Companies Act (the “
Domestication
|
• |
on the Closing Date and prior to the Merger and the Exchange,
H-D
and LiveWire will consummate the separation of the LiveWire Business (as defined below) from
H-D
(the “
Separation
|
• |
following the Domestication and the Separation, Merger Sub will merge with and into ABIC, with ABIC surviving the merger (hereinafter referred to in this subsection as the “
Surviving Company
Merger
Merger Effective Time
|
• |
on the Closing Date,
H-D
will contribute to HoldCo all of the outstanding membership interests of LiveWire in exchange for the issuance of shares of HoldCo Common Stock to the Company Equityholder (the “
Exchange
|
• |
following the Exchange, HoldCo will contribute 100% of the outstanding membership interests of LiveWire to ABIC;
|
• |
ABIC will amend and restate its certificate of incorporation and bylaws in their entirety, in a form to be agreed to by ABIC and
H-D,
and as amended, will be the certificate of incorporation and bylaws of the Surviving Company;
|
• |
prior to the Closing Date, if any Class A Ordinary Shares are properly redeemed at the General Meeting,
H-D
will cause the Company Equityholder to pay and deliver to HoldCo the Backstop;
|
• |
on the Closing Date,
H-D
will cause the Company Equityholder to purchase 10 million shares of HoldCo Common Stock, for a price per share of $10 and an aggregate purchase price of $100 million; and
|
• |
on the Closing Date, ABIC and HoldCo will consummate the PIPE Financing contemplated by the Investment Agreements. Pursuant to the Investment Agreements, the KYMCO Group agreed to subscribe for and purchase, and ABIC and HoldCo agreed to issue and sell to such investors, an aggregate of 10 million shares of HoldCo Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $100 million. The shares of HoldCo Common Stock to be issued pursuant to the Investment Agreements have not been registered under the Securities Act, and will be issued in reliance on the availability of an exemption from such registration. See the section titled “
The Business Combination Agreement
Certain Agreements Related to the Business Combination
|
• |
the approval of the Required Shareholder Proposals at the General Meeting will have been obtained;
|
• |
this proxy statement/prospectus becoming effective in accordance with the provisions of the Securities Act, no stop order being issued by the SEC and remaining in effect with respect to this proxy statement/prospectus and no proceeding seeking such a stop order being threatened or initiated by the SEC and remain pending;
|
• |
the applicable waiting period (and any extension thereof) under the HSR Act applicable to the Transactions will have expired or been terminated;
|
• |
there must not be in effect any order or law issued by any court of competent jurisdiction or other governmental entity or legal restraint or prohibit preventing the consummation of the Transactions;
|
• |
after giving effect to any redemptions by ABIC shareholders, ABIC will have at least $5,000,001 of net tangible assets remaining (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act) (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act); and
|
• |
the HoldCo Common Stock issuable in connection with the Transactions must have been approved for listing on the NYSE, subject to official notice of the issuance thereof.
|
• |
certain representations and warranties of
H-D
and LiveWire regarding organization, authorization, capitalization and broker’s fees must be true and correct in all material respects as of the Closing Date (or if given as of an earlier date, must be true and correct in all material respects as of such earlier date), without giving effect to any qualifications and exceptions contained in the Business Combination Agreement that relate to materiality, material adverse effect and LiveWire Material Adverse Effect or any similar qualification or exception;
|
• |
the representations and warranties of
H-D
and LiveWire, other than representations and warranties regarding organization, authorization, capitalization and broker’s fees must be true and correct as of the Closing Date (or if given as of an earlier date, must be true and correct as of such earlier date) (without giving effect to any qualifications and exceptions contained in the Business Combination Agreement that relate to materiality, material adverse effect and LiveWire Material Adverse Effect or any similar qualification or exception); except in each case, where the failure of such representations or warranties to be true and correct does not constitute a LiveWire Material Adverse Effect; provided that the failure of any representation or warranty of LiveWire contained in the Business Combination Agreement other than with respect to organization, authorization, LiveWire entities,
no-conflict,
governmental authorities; consents, capitalization and title to and sufficiency of assets to be true and correct as of the Closing Date as a result of taking any action expressly required to be taken in connection with the Separation or Article 2 or 3 of the Business Combination Agreement in compliance with the provisions of the Separation Agreement or such provisions, as applicable, will not be taken into account when determining whether the condition set forth in this paragraph has been satisfied;
|
• |
H-D
and LiveWire will have performed or complied in all material respects with the covenants and agreements to be performed or complied with by them under the Business Combination Agreement as of or prior to the Closing;
|
• |
since September 26, 2021, there must not have occurred or be continuing a LiveWire Material Adverse Effect;
|
• |
certain LiveWire assets and liabilities will been transferred to LiveWire (or an entity of LiveWire) in all material respects, in accordance with the terms of the Separation Agreement;
|
• |
ABIC must have received a certificate executed and delivered by an authorized officer of
H-D
and LiveWire confirming that the conditions set forth in the preceding bullet points have been satisfied;
|
• |
ABIC must have received the Separation Agreement, the Transition Services Agreement, the Master Services Agreement, the Joint Development Agreement, the Intellectual Property License Agreement and the Trademark License Agreement duly executed by LiveWire and
H-D;
|
• |
ABIC must have received the Contract Manufacturing Agreement duly executed by LiveWire and Harley-Davidson Motor Company Group, LLC; and
|
• |
ABIC must have received the HoldCo Registration Rights Agreement and the Stockholders Agreement duly executed by LiveWire and the Company Equityholder.
|
• |
certain representations and warranties of ABIC regarding organization, authorization, capitalization and broker’s fees must be true and correct in all material respects as of the Closing Date (or if given as of an earlier date, must be true and correct in all material respects as of such earlier date), without giving effect to any qualifications and exceptions contained in the Business Combination Agreement that relate to materiality, material adverse effect or any similar qualification or exception;
|
• |
the representations and warranties of ABIC, other than certain representations and warranties regarding organization, authorization, capitalization and broker’s fees must be true and correct as of the Closing Date (or if given as of an earlier date, must be true and correct as of such earlier date) without giving effect to any qualifications and exceptions contained in the Business Combination Agreement that relate to materiality, material adverse effect or any similar qualification or exception except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse change or a material adverse effect, individually or in the aggregate, on the assets, financial condition, business or results of operations of ABIC, taken as a whole, or individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impede the ability of ABIC to consummate the Domestication or the Merger; provided that the failure of any representation or warranty of ABIC contained in the Business Combination Agreement, other than with respect to organization, authorization, no conflict, governmental authorities; consents, and capitalization to be true and correct as of the Closing Date as a result of taking any action expressly required to be taken in connection with the Domestication or the Merger will not be taken into account when determining whether the condition set forth in this paragraph has been satisfied;
|
• |
certain representations and warranties of HoldCo and Merger Sub regarding organization, authorization, capitalization and broker’s fees must be true and correct in all material respects as of the Closing Date (or if given as of an earlier date, must be true and correct in all material respects as of such earlier date);
|
• |
the representations and warranties of HoldCo and Merger Sub, other than certain representations and warranties regarding organization, authorization, capitalization and broker’s fees must be true and correct as of the Closing Date (or if given as of an earlier date, must be true and correct as of such earlier date) without giving effect to any qualifications and exceptions contained in the Business
|
Combination Agreement that relate to materiality, material adverse effect or any similar qualification or exception except, in each case, where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, prevent or materially delay consummation of any of the Transactions or otherwise prevent HoldCo or Merger Sub, as applicable, from performing its obligations under the Business Combination Agreement or any Ancillary Agreement to which it is or is contemplated to be a party; provided that the failure of any representation or warranty of HoldCo or Merger Sub contained in the Business Combination Agreement, other than with respect to organization, certificate of incorporation and bylaws, capitalization, authority and no conflict; required filings and consents to be true and correct as of the Closing Date as a result of taking any action expressly required to be taken in connection with the Separation or Article 2 or 3 of the Business Combination Agreement in compliance with the provisions of the Separation Agreement or such provisions, as applicable, will not be taken into account when determining whether the condition set forth in this paragraph has been satisfied; ABIC will have performed or complied with the covenants and agreements required to be performed or complied by it under the Business Combination Agreement as of or prior to the Closing;
|
• |
HoldCo and Merger Sub will have performed or complied in all material respects with the covenants and agreements to be performed or complied with by them under the Business Combination Agreement as of or prior to the Closing;
|
• |
the amount of Available Cash must be no less than $270 million;
|
• |
the Domestication must have been completed and a time-stamped copy of the certificate issued by the Secretary of State of the State of Delaware must have been delivered to LiveWire;
|
• |
LiveWire must have received a certificate executed and delivered by an authorized officer of ABIC confirming that the conditions set forth in the preceding bullet points have been satisfied;
|
• |
LiveWire must have received the HoldCo Registration Rights Agreement duly executed by the Sponsor and HoldCo; and
|
• |
LiveWire must have received the Stockholders Agreement duly executed by the Company Equityholder, Sponsor and HoldCo.
|
• |
change, amend, modify or supplement the governing documents of LiveWire or any of its subsidiaries;
|
• |
make, declare, set aside or pay any dividend or distribution or repurchase or redeem any outstanding equity interest;
|
• |
(A) amend, modify or terminate any material contract (excluding, any expiration or automatic extension or renewal of any such material contract pursuant to its terms) except in the ordinary course of business, (B) waive any material benefit or right under any material contract, (C) enter into any contract that would constitute a material contract if it had been entered into prior to the date of the Business Combination Agreement except in the ordinary course of business (subject to certain exceptions) or (D) consummate any other transaction or make (or agree to make) any other payments that, if reflected in a contract and existing on the date hereof, would survive the termination of intercompany arrangements contemplated by Section 1.3(b) of the Separation Agreement;
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• |
sell, assign, transfer, license, sublicense, convey, lease, covenant not to assert, pledge or otherwise encumber or subject to any lien, abandon, cancel, let lapse or otherwise dispose of any material tangible LiveWire asset, or any other material tangible assets or properties related to or arising out of the LiveWire Business except for (i) the sale of inventory in the ordinary course of business, (ii) dispositions of obsolete or worthless equipment or (iii) transactions among the LiveWire entities;
|
• |
acquire any ownership interest in any real property;
|
• |
except as required by applicable law, the existing terms of any
H-D
benefit plans set forth on Section 4.15 of the LiveWire Disclosure Schedules, (i) grant any severance, retention, change in control or termination or similar pay to any LiveWire employee, except for payments made in the ordinary course of business that are not in excess of $100,000, (ii) terminate, adopt, enter into or materially amend any LiveWire benefit plan (as defined in the Employee Matters Agreement) or any plan, policy, practice, program, agreement or other arrangement that would be deemed a LiveWire benefit plan if in effect as of the date of the Business Combination Agreement, (iii) terminate, adopt, enter into or materially amend any other
H-D
benefit plan to the extent such action would reasonably be expected to result in a material increase in cost to the LiveWire Business, (iv) materially increase or materially decrease the cash compensation or cash bonus opportunity of any LiveWire employee, except base compensation or cash bonus opportunity increases to any such individuals who are not directors or officers, (v) accelerate the time of payment, vesting or funding of any compensation or benefit payable to any LiveWire employees or (vi) grant any equity or equity-based awards to LiveWire employees outside of the ordinary course of business consistent with past practice pursuant to the
H-D
equity plans (as defined in the Employee Matters Agreement);
|
• |
(A) hire or engage any new employee or independent contractor that would be a LiveWire employee if such new employee or independent contractor will receive annual base compensation in excess of $300,000, or (B) terminate the employment or engagement, other than for cause (or due to death), of, or furlough or temporarily lay off, any LiveWire employee with annual base compensation in excess of $300,000;
|
• |
modify the job duties of (A) a LiveWire employee such that he or she is no longer a LiveWire employee or (B) any other employee of the
H-D
and its subsidiaries such that he or she would be considered a LiveWire employee, in each case, except in the ordinary course of business and excluding hires by the LiveWire Business in the ordinary course;
|
• |
other than in accordance with the Employee Matters Agreement or in the ordinary course of business, transfer any employee to or from LiveWire or any of its subsidiaries;
|
• |
implement any layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions or work schedule changes that could implicate the WARN Act, in any case, with respect to LiveWire employees;
|
• |
waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any LiveWire employee or current or former independent contractor of the LiveWire Business;
|
• |
(A) merge, consolidate, combine or amalgamate any LiveWire entity with any person or otherwise have any LiveWire entity acquired or purchased acquired by any other person (whether by merger,
|
consolidating with, purchase of equity securities or assets or otherwise), (B) have any LiveWire entity purchase or otherwise acquire (whether by merging or consolidating with, purchasing any equity security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or organization or division thereof or (C) make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any person by a LiveWire entity;
|
• |
subject to certain exceptions, incur, create or assume any indebtedness, except for indebtedness to be repaid in full prior to the Closing;
|
• |
take, or fail to take, any action if such action, or failure to take such action, would reasonably be expected to prevent, impair or impede the Intended Tax Treatment;
|
• |
take certain actions with respect to tax matters;
|
• |
authorize for issuance, issue, sell, transfer, subject to a lien, dispose or deliver any (A) equity interests in any LiveWire entity (including securities exercisable for or convertible into equity of any LiveWire entity), (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any LiveWire entity to issue, deliver or sell any equity interests in any LiveWire entity (including securities exercisable for or convertible into equity of any LiveWire entity) or (C) equity interests in any member of the
H-D
and its subsidiaries that holds the LiveWire assets until the consummation of the Separation;
|
• |
waive, release, settle, compromise or otherwise resolve any inquiry, action, or enter into any governmental order, in each case, to the extent related to the LiveWire Business, or otherwise constituting or related to any LiveWire asset, LiveWire employee, or to which any LiveWire entity is subject or would be party or bound, as applicable, in each case, other than settlements or compromises of any action that (A) would involve the payment of less than $500,000, in the aggregate, (B) that does not impose, or by its terms will not impose at any point in the future, any material,
non-monetary
obligations on the LiveWire Business or any LiveWire entity (or HoldCo or any of its affiliates following Closing) and (C) that is otherwise paid in full by the
H-D
and its subsidiaries prior to the time of the Separation or would constitute
H-D
liabilities (as defined in the Separation Agreement);
|
• |
sell, assign, transfer, abandon, permit to lapse, license, covenant not to assert or otherwise dispose of any material LiveWire intellectual property (other than nonexclusive licenses of LiveWire intellectual property granted in the ordinary course of business);
|
• |
disclose or agree to disclose to any person (other than ABIC or any of its representatives) any trade secret or any other material confidential or proprietary information, know how or process of LiveWire or any of its subsidiaries other than in the ordinary course of business or in connection with any research or strategic partnership;
|
• |
negotiate, modify, enter into or extend any labor agreement or recognize or certify any labor union, labor organization, or group of employees of LiveWire or any of its subsidiaries as the bargaining representative for any employees of LiveWire or any of its subsidiaries, in each case, other than as required by applicable law;
|
• |
make or commit to make capital expenditures (A) in excess of $1,000,000 or (B) other than in an accordance with the budget made available to ABIC;
|
• |
(A) limit the right of LiveWire or any of LiveWire’s subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any person or (B) grant any exclusive or similar rights to any person;
|
• |
make any change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable law;
|
• |
cease conducting the LiveWire Business, in any material respect in substantially the manner currently conducted as of the date of the Business Combination Agreement; or
|
• |
fail to maintain (A) the material LiveWire assets (as defined in the Separation Agreement) in substantially the same condition as of the date of the Business Combination Agreement, ordinary wear and tear excepted or (B) any insurance policies held by, or for the benefit of, the LiveWire Business.
|
• |
amend or otherwise modify the Trust Agreement, the ABIC Warrant Agreement or the governing documents of ABIC;
|
• |
declare, set aside or pay any dividend or make any other distribution to ABIC’s shareholders;
|
• |
subject to certain exceptions (including in connection with ABIC shareholder redemptions and the Domestication), split, combine, reclassify purchase, repurchase, redeem or otherwise acquire any of its equity interests;
|
• |
take, or fail to take, any action if such action, or failure to take such action, would reasonably be expected to prevent, impair or impede the Intended Tax Treatment;
|
• |
take certain actions with respect to tax matters;
|
• |
enter into, renew or amend in any material respect any transaction or contract with certain related parties of ABIC (including, among others, Sponsor, affiliates of ABIC and Sponsor, any officer, director or manager of ABIC, the Sponsor or any affiliate of Sponsor and ABIC);
|
• |
incur, guarantee or otherwise become liable for any indebtedness or any other material liabilities, debts or obligations other than fees and expenses incurred in support of the Transactions or in support of the ordinary course operations of ABIC (which includes any indebtedness of Working Capital Loans incurred in the ordinary course, not to exceed $1,000,000);
|
• |
issue any ABIC Securities or other equity interests, grant any options, warrants or other equity based awards, or amend, modify or waive any of the material terms or rights set forth in any ABIC Warrant or the ABIC Warrant Agreement, in each case, except as required by ABIC’s governing documents in order to consummate the Transactions; or
|
• |
subject to certain exceptions enter into, adopt or amend any benefit plan, or enter into any employment contract or labor agreement or hire any employee or any other individual to provide services to ABIC or its subsidiaries following Closing.
|
• |
engage in any business or activity of any sort whatsoever other than in connection with the Exchange and the other Transactions;
|
• |
amend or otherwise change HoldCo’s organizational documents or governing documents of Merger Sub except as otherwise required to implement the Transactions, including as contemplated by the Business Combination Agreement;
|
• |
declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
|
• |
reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the HoldCo Common Stock except as otherwise required to implement the Transactions;
|
• |
issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock or other securities of HoldCo or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of HoldCo or of Merger Sub except as otherwise required under the terms of the Business Combination Agreement or the Investor Support Agreement to implement the Transactions;
|
• |
liquidate, dissolve, reorganize or otherwise wind up the business and operations of HoldCo or of Merger Sub;
|
• |
amend any agreement pursuant to which the Exchange will be effected;
|
• |
acquire or hold any equity securities or rights thereto in any other person, other than HoldCo and Merger Sub, in each case, in accordance with the applicable provisions set forth in Article 2 and Article 3 of the Business Combination Agreement;
|
• |
take, or fail to take, any action if such action, or failure to take such action, would reasonably be expected to prevent, impair or impede the Intended Tax Treatment; or
|
• |
make any material tax election.
|
• |
subject to certain exceptions, afford ABIC and its accountants, counsel and other representatives reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, in such a manner as to not materially interfere with the ordinary course of business of
H-D
and its subsidiaries, and solely for purposes in furtherance of the Transactions and the Ancillary Agreements, to all of their respective properties (other than for purposes of performing any testing, sampling or other invasive analysis of any properties, facilities or equipment of LiveWire or any of its subsidiaries), books (including, but not limited to, tax returns and work papers of, and correspondence with,
H-D
and its ‘subsidiaries’ independent auditors, in each case to the extent relating to the LiveWire Business), contracts, commitments, records and appropriate officers and employees of
H-D
and its subsidiaries, and have also agreed to furnish such representatives with all financial and operating data and other information concerning the LiveWire Business, to the extent then available, as such representatives may reasonably request;
|
• |
as promptly as reasonably practicable following any “staleness” date (as determined in accordance with the applicable rules and regulations of the SEC), applicable to the financial statements that are required by to be included in this proxy statement/prospectus, LiveWire will deliver to ABIC financial statements of the LiveWire Business required to be included in this registration statement/prospectus;
|
• |
use reasonable best efforts to assist HoldCo and ABIC in causing to be prepared in a timely manner any other financial information or statements that are requirement to be included in the proxy statement/prospectus and any other filings to be made by HoldCo or ABIC with the SEC in connection with the Transactions and to obtain the consents of LiveWire’s auditors with respect thereto as may be required by applicable law or requested by the SEC;
|
• |
prior to the Closing, in the event any litigation related to the Business Combination Agreement, any Ancillary Agreement or the Transactions is brought, or, to the knowledge of LiveWire,
|
threatened in writing, against any member of
H-D
and its subsidiaries or the
H-D
Board by any shareholder of
H-D,
LiveWire will notify ABIC of any such litigation and keep ABIC reasonably informed with respect to the status thereof, and
H-D
will provide ABIC the opportunity to participate in, but not control, the defense of any such litigation and give due consideration to ABIC’s advice with respect thereto, and, solely to the extent such litigation is reasonably likely to result in material liability or injunctive relief applicable to HoldCo or ABIC following the Closing,
H-D
will not settle or agree to settle nay such litigation without the prior written consent of ABIC (such consent not to be unreasonably withheld, conditioned or delayed);
|
• |
H-D
will cause the Separation to be completed;
|
• |
subject to certain exceptions, prior to the Closing or termination of the Business Combination Agreement in accordance with its terms, LiveWire and its subsidiaries will not, and LiveWire will use its reasonable best efforts to cause its representatives not to, directly or indirectly, among other things, initiate, solicit or engage in any negotiations with any person with respect to, or provide any
non-public
information or data concerning LiveWire or any of its subsidiaries to, or enter into any agreement with, any person relating to any purchase of the LiveWire Business or LiveWire or any of its subsidiaries;
|
• |
subject to the satisfaction of certain conditions,
H-D
will cause the Company Equityholder to consummate, substantially concurrently with the Closing, the Company Equityholder PIPE Investment and, prior to and in connection with the Closing, to the extent any Class A Ordinary Shares are properly redeemed at the General Meeting,
H-D
will cause the Company Equityholder to pay and deliver to HoldCo an amount in cash equal to the dollar value of such redemptions, in exchange for a number of shares of HoldCo Common Stock with a dollar value equal to such amount (not to exceed $100 million) for a purchase price of $10.00 per share;
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• |
during the Interim Period,
H-D
will continue to fund all operating expenses, working capital obligations and capital expenditures of the LiveWire Business in a manner consistent with past practice and the business plan previously provided to ABIC in all material respects, and
H-D
will cause the amount of net working capital in the LiveWire Business (calculated in a manner consistent with
H-D’s
past practice) that is to be contributed to LiveWire pursuant to the Separation Agreement to be a positive amount immediately prior to the Closing, and in the event the net working capital of the LiveWire Business as of immediately prior to the Closing (but after the Separation) is a negative amount,
H-D
will cause a sufficient amount of additional cash to be contributed to LiveWire such that such net working capital is a positive amount immediately prior to the Closing;
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• |
as soon as reasonably practicable following the date of the Business Combination Agreement and prior to the Closing,
H-D
and LiveWire will finalize the schedules to the Transition Services Agreement based on the draft schedules attached to the form Transition Services Agreement attached as Exhibit F to the Business Combination Agreement;
|
• |
subject to certain exceptions, for a period of six (6) years after the Merger Effective Time, HoldCo will maintain a directors’ and officers’ liability insurance covering those persons who, at the date of the Business Combination Agreement, were covered by ABIC’s, LiveWire’s, HoldCo’s, Merger Sub’s or their respective subsidiaries’ directors’ and officers’ insurance policies; and
|
• |
at or prior to the Closing, HoldCo will enter into customary indemnification agreements with each person who will be a director or officer of HoldCo immediately following the Closing.
|
• |
with respect to the Trust Account, as of the Merger Effective Time, the obligations of ABIC to dissolve or liquidate within a specified time period, as contained in the Existing Organizational
|
Documents, will be terminated and ABIC will have no obligation whatsoever to dissolve and liquidate the assets of ABIC by reason of the closing of the Business Combination or otherwise, and no ABIC shareholders will be entitled to receive any amount from the Trust Account;
|
• |
from the date of the Business Combination Agreement until the Closing Date or, if earlier, the termination pursuant to the Business Combination Agreement, ABIC will not, and will cause its subsidiaries not to, and ABIC will instruct its and their representatives, not to, (i) make any proposal or offer that constitutes a Business Combination Proposal, (ii) initiate any discussions or negotiations with any person with respect to a Business Combination Proposal or (iii) enter into any acquisition agreement, business combination, merger agreement or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle or any other agreement relating to a Shareholder Proposal, in each case, other than to or with LiveWire and its respective representatives. From and after the date of the Business Combination Agreement, ABIC will, and will instruct its officers and directors to, and ABIC will instruct and cause its representatives, its subsidiaries and their respective representatives to, immediately cease and terminate all discussions and negotiations with any persons that may be ongoing with respect to a Business Combination Proposal;
|
• |
subject to certain exceptions, ABIC will provide to LiveWire and its accountants, counsel or other representatives, reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, in such a manner as to not materially interfere with the ordinary course business of ABIC, and solely for purposes in furtherance of the Transactions, to all of ABIC’s books (including, but not limited to, tax returns and work papers of, and correspondence with, ABIC’s independent auditors), contracts, commitments, records and appropriate officers and employees of ABIC, and will furnish such representatives with all financial and operating data and other information concerning the affairs of ABIC, to the extent then available, as such representatives may reasonably request;
|
• |
through the Merger Effective Time, ABIC will use commercially reasonable efforts to keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable laws;
|
• |
in the event that any litigation related to the Business Combination Agreement, any Ancillary Agreement or the Transactions is brought, or, to the knowledge of ABIC, threatened in writing, against ABIC or the ABIC Board by any of ABIC shareholders prior to the Closing, ABIC will promptly notify LiveWire of any such litigation and keep LiveWire reasonably informed with respect to the status thereof. ABIC will also provide LiveWire the opportunity to participate in, but not control, the defense of any such litigation, will give due consideration to LiveWire’s advice with respect to such litigation and will not settle or agree to settle any such litigation without the prior written consent of LiveWire; and
|
• |
subject to receipt of the ABIC shareholder approval, at least one day prior to the Merger Effective Time, ABIC will cause the Domestication to become effective in accordance with the Business Combination Agreement.
|
• |
To the extent required under any laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition or creation or strengthening of a dominant position through merger or acquisition, including but not limited to the Clayton Act, the HSR Act and the laws of any jurisdiction or governmental authority outside of the United States (“
Antitrust Laws
|
Antitrust Laws, including complying with the notification and reporting requirements of the HSR Act. Each of the parties will substantially comply with any antitrust information or document requests (as described in the Business Combination Agreement).
|
• |
Each of the parties will exercise its reasonable best efforts to (i) obtain termination or expiration of the waiting period under the HSR Act and (ii) prevent the entry, in any action brought by an antitrust authority or any other person, of any governmental order which would prohibit, make unlawful or delay the consummation of the Transactions. Reasonable best efforts will not include any action that requires (i) proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of any businesses, product lines, assets or capital stock or other interests of any party; (ii) agreeing to license on a
non-exclusive
basis any portion of the business of any party; or (iii) contesting and resisting (including through litigation) any action that is instituted (or threatened to be instituted) challenging any transaction contemplated by the Business Combination Agreement as in violation of the HSR Act or any other Antitrust Law, and committing to have vacated, lifted, reversed or overturned as soon as practicable (but in any event prior to September 30, 2022) any governmental order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents, limits or restricts consummation of the Transactions. Furthermore, nothing contained in the Business Combination Agreement will obligate any party to commit to seek prior approval from any governmental authority of any future transaction.
|
• |
The parties will cooperate in good faith with governmental authorities and use reasonable best efforts to complete lawfully the Transactions and the Ancillary Agreement as soon as practicable (but in any event prior to September 30, 2022) and use reasonable best efforts to avoid, prevent, eliminate or remove the actual or threatened commencement of any proceeding or action in any forum by or on behalf of any governmental authority or the issuance of any governmental order that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the Domestication, the PIPE Financing, the Exchange, the Merger or any of the other Transactions and the Ancillary Agreements.
|
• |
With respect to any filings with, or requests, inquiries, actions or other proceedings by or from, any governmental authority, each of the parties will (i) diligently and expeditiously defend and use reasonable best efforts to obtain any necessary clearance, approval, consent, or governmental authorization under laws prescribed or enforceable by any governmental authority applicable to the Transactions and the Ancillary Agreements and to resolve any objections as may be asserted by any governmental authority with respect to the Transactions and (ii) cooperate fully with each other in the defense of such matters. To the extent not prohibited by law, LiveWire will promptly furnish to ABIC, and ABIC will promptly furnish to LiveWire, copies of any notices or written communications received by such party or any of its affiliates from any third party or any governmental authority with respect to the Transactions and the Ancillary Agreements, and each party will permit counsel to the other parties an opportunity to review in advance, and each party will consider in good faith the views of such counsel in connection with, any proposed written communications by such party and/or its affiliates to any governmental authority concerning the Transactions and the Ancillary Agreements; provided that none of the parties will extend any waiting period or comparable period under the HSR Act or enter into any agreement with any governmental authority without the written consent of the other parties, not to be unreasonably withheld. To the extent not prohibited by law, LiveWire agrees to provide ABIC and its counsel, and ABIC agrees to provide LiveWire and its counsel, the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between such party and/or any of its affiliates, agents or advisors, on the one hand, and any governmental authority, on the other hand, concerning or in connection with the Transactions and the Ancillary Agreements.
|
• |
As promptly as practicable after the execution of the Business Combination Agreement
(x) H-D,
HoldCo, ABIC and LiveWire will jointly prepare, and HoldCo and ABIC will file with the SEC,
|
this proxy statement/prospectus in connection with the registration under the Securities Act of HoldCo Common Stock and HoldCo Warrants, and the Domesticated ABIC Common Stock and the Domesticated ABIC Warrants, to be issued in the Merger, the Domestication or otherwise in connection with the Transactions (collectively, the “
Registration Statement Securities
8-K
pursuant to the Exchange Act in connection with the Transactions or any other statement, filing, notice or application made by or on behalf of
H-D,
HoldCo, ABIC, LiveWire or their respective subsidiaries to any governmental authority or other regulatory or
self-regulatory
authority of competent jurisdiction (including the NYSE) in connection with the Domestication, the Exchange, the Merger and the other Transactions (the “
Offer Documents
|
• |
Each of
H-D,
HoldCo, LiveWire and ABIC will advise the other such parties, reasonably promptly after
H-D,
HoldCo, LiveWire or ABIC, as applicable, receives notice thereof, of the time when this proxy statement/prospectus has become effective or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of Domesticated ABIC Common Stock or HoldCo Common Stock for offering or sale in any jurisdiction, of the initiation or written threat of any proceeding for any such purpose, or of any request by the SEC for the amendment or supplement of this proxy statement/prospectus Statement or for additional information. Any amendments, modification or supplements to this proxy statement/prospectus and any Offer Document will be jointly prepared by
H-D,
HoldCo, ABIC and LiveWire and filed with the SEC. Each party will provide the other parties and their respective counsel with (A) any comments or other communications, whether written or oral, that such party or its counsel may receive from time to time from the SEC or its staff with respect to this proxy statement/prospectus or Offer Documents as promptly as reasonably practicable after receipt of such comments or other communications and (B) a reasonable opportunity to participate in the response to such comments and to provide comments on such response (to which reasonable and good-faith consideration will be given), including by participating with the other party or its counsel in any discussions or meetings with the SEC.
|
• |
Each of
H-D,
HoldCo, ABIC and LiveWire will ensure that none of the information supplied by or on its behalf for inclusion or incorporation by reference in (A) the Registration Statement will, at the time the Registration Statement is filed with the SEC, at each time at which it is amended and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading or (B) this proxy statement/prospectus will, at the date it is first mailed to ABIC shareholders and at the time of the General Meeting, 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 are made, not misleading.
|
• |
If
H-D,
ABIC, LiveWire or HoldCo discovers, at any time prior to the Merger Effective Time, any information relating to
H-D,
ABIC, LiveWire or HoldCo or any of their respective affiliates, directors or officers which should be set forth in an amendment or supplement to either the Registration Statement or the proxy statement/prospectus, so that either such document would 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 are made, not misleading, the party that discovers such information will promptly notify the other parties thereof and an appropriate amendment or supplement describing such information will be promptly filed with the SEC and, to the extent required by law, disseminated to ABIC shareholders.
|
• |
ABIC will, in accordance with applicable law and NYSE rules, (i) as promptly as practicable after the Registration Statement is declared effective under the Securities Act, (1) cause this proxy statement/prospectus to be disseminated to ABIC shareholders in compliance with applicable law and NYSE rules, (2) duly (A) give notice of and (B) convene and hold the General Meeting in accordance with ABIC’s governing documents and NYSE rules for a date no later than thirty (30) business days following the date the Registration Statement is declared effective under the Securities Act, and (3) solicit proxies from the holders of ABIC Shares to vote in favor of each of the Shareholder Proposals; and (ii) provide ABIC shareholders with the opportunity to elect to effect a redemption of their ABIC Shares. ABIC will, through the ABIC Board, recommend to ABIC shareholders the (A) adoption and approval of the Business Combination Agreement and the Transactions in accordance with applicable law and exchange rules and regulations, (B) the Domestication, (C) in connection with the Domestication, the amendment of ABIC’s organizational documents and approval of the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws, (D) adoption and approval of any other proposals as the SEC (or staff member thereof) may indicate are necessary in its comments to the Registration Statement or correspondence related thereto, (E) adoption and approval of any other proposals as reasonably agreed by ABIC and LiveWire to be necessary or appropriate in connection with the Transactions, and (F) adjournment of the General Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing (such proposals in (A) through (F), together, the “
Shareholder Proposals
Modification in Recommendation
|
holders of Class A Ordinary Shares have elected to redeem a number of Class A Ordinary Shares as of such time that would reasonably be expected to result in the applicable condition set forth in Section 10.8(b) or Section 11.3(c) of the Business Combination Agreement not being satisfied; provided, that, without the consent of LiveWire, the General Meeting (x) may not be adjourned to a date that is more than fifteen (15) days after the date for which the General Meeting was originally scheduled (excluding any adjournments required by applicable law) and (y) will not be held later than five business days prior to September 30, 2022. ABIC agrees that it will provide the holders of Class A Ordinary Shares the opportunity to elect redemption of such Class A Ordinary Shares in connection with the General Meeting.
|
• |
Prior to the Domestication, each of HoldCo and ABIC will take all steps to cause any acquisitions or dispositions of equity securities of HoldCo or equity securities of ABIC, as applicable (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities), that occurs or is deemed to occur by reason of the Transactions by each individual who is or may become subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with the Transactions to be exempt under Rule 16b 3 promulgated under the Exchange Act.
|
• |
Subject to the terms and conditions of the Business Combination Agreement, and to applicable laws, prior to the Closing, the parties will cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action (including executing and delivering and documents, certificates, instruments and other papers that are necessary for the consummation of the Transactions), and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary to consummate and make effective, in the most expeditious manner practicable, the Transactions. LiveWire will, and will cause its subsidiaries to, use its and their commercially reasonable efforts to send the requisite notices to or to solicit and obtain the consents of, as applicable, the contractual counterparties to the contracts listed on Section 10.6 of the LiveWire Disclosure Schedules prior to the Closing; provided, however, that no party nor any of their affiliates will be required to pay or commit to pay any amount to (or incur any obligation in favor of) any person from whom any such consent may be required (unless such payment is explicitly required in accordance with the terms of the relevant contract requiring such consent, in which case, such obligation will be paid by
H-D
and its subsidiaries); provided, further, that the parties acknowledge and agree that the failure to obtain any such consents is not, and will not be, a condition to Closing.
|
• |
Prior to the effectiveness of this proxy statement/prospectus, HoldCo will approve and adopt, in each case, effective as of no later than the Closing Date, an incentive equity plan and an employee stock purchase plan (in a form mutually determined by LiveWire and ABIC (such approval not to be unreasonably withheld, conditioned or delayed by either LiveWire or ABIC, as applicable)). Promptly following the expiration of the sixty (60)-day period following the date HoldCo has filed current Form 10 information with the SEC reflecting its status as an entity that is not a shell company, HoldCo will file an effective registration statement on Form
S-8
(or other applicable form, including Form
S-3)
with respect to the HoldCo Common Stock issuable under the incentive award plan, and HoldCo will use reasonable best efforts to maintain the effectiveness of such registration statement(s) (and maintain the current status of the prospectus or prospectuses contained therein) for so long as awards granted pursuant to the incentive award plan remain outstanding.
|
• |
Each of the parties to the Business Combination Agreement acknowledges and agrees that all of the provisions of this and the prior paragraph are included for the sole benefit of ABIC, HoldCo and LiveWire, and that nothing in the Business Combination Agreement, whether express or implied, (i) will be construed to establish, amend or modify any employee benefit plan, program, agreement or arrangement, (ii) will limit the right of ABIC, HoldCo, LiveWire or their respective affiliates to amend, terminate or otherwise modify any
H-D
benefit plan or other benefit plan following the Closing Date or (iii) will create or confer upon any person who is not a party to the Business Combination Agreement (including any equityholder, any director, manager, officer, employee or independent contractor, or any participant in any
H-D
benefit plan or other benefit plan (or any dependent or beneficiary thereof)), any right to continued or resumed employment or recall, any right to compensation or benefits, or any particular term of employment, engagement or service.
|
• |
ABIC will use its reasonable best efforts to (i) cause the Domesticated ABIC Common Stock and Domesticated ABIC Warrants to be approved for listing on the NYSE, subject to official notice of issuance; and (ii) satisfy any applicable initial and continuing listing requirements of the NYSE, in each case, as promptly as reasonably practicable after the date of the Business Combination Agreement, and in any event prior to the date on which the Domestication occurs.
|
• |
HoldCo and LiveWire will use their respective reasonable best efforts to (i) cause the HoldCo Common Stock and HoldCo Warrants issuable in the Merger and the HoldCo Common Stock that will become issuable upon the exercise of the HoldCo Warrants to be approved for listing on the NYSE, subject to official notice of issuance; and (ii) satisfy any applicable initial and continuing listing requirements of the NYSE, in each case, as promptly as reasonably practicable after the date of the Business Combination Agreement, and in any event prior to the Closing Date.
|
• |
(i) ABIC will use its reasonable best efforts to cause the ABIC Class A Ordinary Shares and ABIC ordinary warrants to be delisted from the NYSE (or be succeeded by the Domesticated ABIC Common Stock and Domesticated ABIC Warrants) as of the date on which the Domestication occurs or as soon as practicable thereafter; and (ii) LiveWire, HoldCo and ABIC will use their respective reasonable best efforts to cause the Domesticated ABIC Common Stock and Domesticated ABIC Warrants to be delisted from the NYSE and to terminate ABIC’ s registration with the SEC pursuant to Sections 12(b), 12(g) and 15(d) of the Exchange Act as of the Closing Date or as soon as practicable thereafter.
|
• |
Unless otherwise approved in writing by the parties thereto (which approval will not be unreasonably withheld, conditioned or delayed), the parties agree not to permit any amendment or modification to be made to, or grant any waiver (in whole or in part) of, or provide consent to modify (including consent to terminate), any provision or remedy under, or any replacements of, any Subscription Agreement to which they are a party, other than to reflect any permitted assignments or transfers of such agreements by the applicable parties. Subject to the immediately preceding sentence, each of the parties will use reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that they otherwise deems to be proper or advisable to consummate the transactions contemplated by the Subscription Agreements on the terms described therein, including each using its reasonable best efforts to enforce its rights under the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) HoldCo, the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms from the date of the Business Combination Agreement until Closing, each party will be bound by and comply with the provisions set forth in [●] (the “
Confidentiality Agreement
|
• |
Each party agrees, that until Closing, except in connection with or support of the Transactions, while any of them are in possession of such material nonpublic information, none of such persons will, directly or indirectly (through its affiliates or otherwise), acquire, offer or propose to acquire, agree to acquire, sell or transfer or offer or propose to sell or transfer any securities of ABIC, communicate such information to any other person or cause or encourage any person to do any of the foregoing in violation of such U.S. federal securities laws and other applicable foreign and domestic laws.
|
• |
Prior to Closing, each of HoldCo, LiveWire,
H-D
and ABIC will, and each of them will cause its respective subsidiaries (as applicable) and its and their officers, directors, managers, employees, consultants, counsel, accounts, agents and other representatives to, reasonably cooperate in a timely manner in connection with any financing arrangement the parties mutually agree to seek in connection with the Transactions (it being understood and agreed that the consummation of any such financing by HoldCo, LiveWire or ABIC will be subject to the parties’ mutual agreement), including (if mutually agreed by the parties) (a) by providing such information and assistance as
|
the other parties may reasonably request, (b) granting such access to the other parties and its representatives as may be reasonably necessary for their due diligence, and (c) participating in a reasonable number of meetings, presentations, road shows, drafting sessions, due diligence sessions with respect to such financing efforts (including direct contact between senior management and other representatives of HoldCo, LiveWire and its subsidiaries at reasonable times and locations). All such cooperation, assistance and access will be granted during normal business hours and will be granted under conditions that will not unreasonably interfere with the business and operations of
H-D,
HoldCo, LiveWire, ABIC or their respective auditors.
|
• |
On or prior to the Closing, the parties will negotiate in good faith to finalize the Stockholders Agreement and other necessary governance policies, which will be consistent with the terms set forth on Exhibit H to the Business Combination Agreement. The parties will take all action necessary to implement, as of the Closing, the governance policies set forth on Exhibit H to the Business Combination Agreement.
|
• |
by written consent of
H-D
and ABIC;
|
• |
by written notice from
H-D
or ABIC to the other parties if any governmental authority will have enacted, issued, promulgated, enforced or entered any governmental order which has become final and
non-appealable
and remains in effect and which has the effect of making closing of the Business Combination illegal or otherwise permanently preventing or prohibiting consummation of the Business Combination; provided that the governmental authority issuing such governmental order has jurisdiction over the parties with respect to the Domestication, the Exchange or the Merger, as applicable; provided that this right to terminate is not available to LiveWire or ABIC if such party’s breach of any obligation under the Business Combination Agreement is the primary cause of the existence or occurrence of any fact or circumstance but for the existence or occurrence of which the consummation of the Domestication, the Exchange or the Merger, as applicable, would not be illegal or otherwise permanently prevented or prohibited;
|
• |
by written notice from
H-D
or ABIC to the other parties if the ABIC shareholders do not approve the Shareholder Proposals at the General Meeting by reason of the failure to obtain the required vote at a meeting of ABIC’s shareholders duly convened therefor or at any adjournment thereof, provided that this right to terminate is only available to ABIC if it has complied in all material respects with its obligations with respect to such shareholder meeting as set forth in the Business Combination Agreement;
|
• |
by written notice to ABIC from LiveWire in the event there has been a Modification in Recommendation to the extent such Modification in Recommendation is not withdrawn within 10 business days of such notice;
|
• |
prior to the Closing, by written notice to
H-D
from ABIC (i) in the event of certain uncured breaches on the part of LiveWire or
H-D
or (ii) if the Closing has not occurred on or before September 30, 2022, unless in the case of (i), ABIC is in breach of the Business Combination Agreement such that certain of the closing conditions would not be satisfied or in the case of (ii), ABIC’s breach of or failure to perform any provision of the Business Combination Agreement is the proximate cause of the failure of the Closing to be consummated by September 30, 2022; or
|
• |
prior to the Closing, by written notice to ABIC from
H-D
in the event of certain uncured breaches on the part of ABIC or if the Closing has not occurred on or before September 30, 2022, unless
H-D
is in breach of the Business Combination Agreement such that certain of the closing conditions would not be satisfied.
|
• |
If the Business Combination Agreement is validly terminated, none of the parties thereto will have any liability or any further obligation under the Business Combination Agreement, other than for actual fraud or any willful or material breach of the Business Combination Agreement occurring prior to the termination and other than certain exception and except for certain other exceptions contemplated by the Business Combination Agreement (including the terms of the Confidentiality Agreement) that will survive termination of the Business Combination Agreement.
|
• |
The Separation transaction accounting and autonomous entity adjustments
|
• |
the impact of the Separation Agreement, Master Services Agreement, Transition Services Agreements, Contract Manufacturing Agreement, Employee Matters Agreement, Tax Matters Agreement and other commercial agreements between LiveWire and
H-D
and the provisions contained therein.
|
• |
The Business Combination and related transactions transaction accounting adjustments
|
• |
the reverse recapitalization (as described in Note 1) between ABIC and LiveWire;
|
• |
the $100 million investment from the Company Equityholder and the $100 million investment from certain members of the KYMCO Group, a leading global powersports company headquartered in Taiwan, through a PIPE (private investment in public equity) (collectively, the “
PIPE Financing
|
• |
the $100 million Backstop amount from the Company Equityholder under the maximum redemption scenario; and
|
• |
the
one-time
expenses associated with the Business Combination.
|
• |
Assuming No Redemption
|
• |
Assuming Maximum Redemption
plus
(b) the net amount of proceeds actually received or confirmed to be received by HoldCo pursuant to the KYMCO PIPE Investment as of immediately prior to or concurrently with the Closing,
plus
(c) the amount of proceeds required to be funded to HoldCo pursuant to the Company Equityholder PIPE Investment,
plus
(d) the portion of the Backstop actually required to be funded to HoldCo, in each case, by the Company Equityholder,
minus
(e) the aggregate amount of all Transaction Expenses and SPAC Transaction Expenses.
|
• |
6,250,000 of the Earn Out Shares will vest if and at such time as a $14.00 HoldCo Common Stock Price is achieved during the Earn Out Period (as defined below); and
|
• |
6,250,000 of the Earn Out Shares will vest if and at such time as a $18.00 HoldCo Common Stock Price is achieved during the Earn Out Period.
|
Assuming No
Redemption |
Assuming Maximum
Redemption |
|||||||||||||||
Shares
|
%
|
Shares
|
%
|
|||||||||||||
Company Equityholder (1)
|
171,000,000 | 74.0 | 181,000,000 | 89.0 | ||||||||||||
Public Shareholders
|
40,000,000 | 17.4 | 2,500,000 | 1.2 | ||||||||||||
Sponsor stockholders (2)
|
10,000,000 | 4.3 | 10,000,000 | 4.9 | ||||||||||||
KYMCO Group stockholders
|
10,000,000 | 4.3 | 10,000,000 | 4.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total shares outstanding at close
|
|
231,000,000 |
|
|
100 |
|
|
203,500,000 |
|
|
100 |
|
||||
|
|
|
|
|
|
|
|
(1)
|
Excludes 12,500,000 shares of HoldCo Common Stock in estimated potential Earn Out Shares as the price threshold for each tranche has not yet been triggered.
|
(2)
|
Assumes that the Sponsor shall not forfeit and/or transfer any Founder Shares under the Investor Support Agreement.
|
Separation
|
Business Combination
|
|||||||||||||||||||||||||||||||||||||
|
|
Assuming No
Redemptions Scenario |
Assuming Maximum
Redemptions Scenario |
|||||||||||||||||||||||||||||||||||
LiveWire
(Historical)
|
Transaction
Accounting Adjustments |
Pro Forma
Separation of LiveWire |
ABIC
(Historical) |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
|||||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||||||||||||
Current assets
|
||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 3,594 | $ | — | $ | 3,594 | $ | 1,091 |
$
|
400,214
200,000
(27,000
(15,916
(6,484
|
)
)
)
|
(c)
(d)
(f)
(g)
(h)
|
$ | 555,499 |
$
|
100,000
(375,201
|
)
|
(e)
(k)
|
$ | 280,298 | ||||||||||||||||||
Accounts receivables, net
|
5,227 | (2,748 | ) | (a) | 2,479 | — | — | 2,479 | — | 2,479 | ||||||||||||||||||||||||||||
Account receivable from related party
|
30 | (30 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Inventories
|
19,689 | (8,840 | ) | (a) | 10,849 | — | — | 10,849 | — | 10,849 | ||||||||||||||||||||||||||||
Other current assets
|
1,109 | (539 | ) | (a) | 570 | 341 | — | 911 | — | 911 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current assets
|
29,649 | (12,157 | ) | 17,492 | 1,432 | 550,814 | 569,738 | (275,201 | ) | 294,537 | ||||||||||||||||||||||||||||
Cash and investments held in Trust Account
|
— | — | — | 400,214 | (400,214 | ) | (c) | — | — | — | ||||||||||||||||||||||||||||
Property, plant and equipment, net
|
16,595 | — | 16,595 | — | — | 16,595 | — | 16,595 | ||||||||||||||||||||||||||||||
Goodwill
|
8,327 | — | 8,327 | — | — | 8,327 | — | 8,327 | ||||||||||||||||||||||||||||||
Deferred tax assets
|
89 | (89 | ) | (m) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Lease assets
|
3,755 | — | 3,755 | — | — | 3,755 | — | 3,755 | ||||||||||||||||||||||||||||||
Intangible assets, net
|
2,387 | — | 2,387 | — | — | 2,387 | — | 2,387 | ||||||||||||||||||||||||||||||
Other long-term assets
|
48 | (48 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total assets
|
$ | 60,850 | $ | (12,294 | ) | $ | 48,556 | $ | 401,646 | $ | 150,600 | $ | 600,802 | $ | (275,201 | ) | $ | 325,601 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||||||||||||||||
Accounts payable
|
$ | 11,523 | $ | (1,657 | ) | (a) | $ | 9,866 | $ | — | $ | — | $ | 9,866 | $ | — | $ | 9,866 | ||||||||||||||||||||
Accounts payable and accrued expense
|
— | — | — | 3,149 | (2,791 | ) | (g) | 358 | 358 | |||||||||||||||||||||||||||||
Accrued liabilities
|
13,725 |
|
(6,090
938
|
)
|
(a)
(b)
|
8,573 | — | — | 8,573 | — | 8,573 | |||||||||||||||||||||||||||
Warrant liabilities
|
— | — | — | 19,825 | — | 19,825 | — | 19,825 | ||||||||||||||||||||||||||||||
Deferred underwriting fee payable
|
— | — | — | 13,125 | (13,125 | ) | (g) | — | — | — | ||||||||||||||||||||||||||||
Current contingent consideration liability
|
2,159 | (2,159 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Current portion of note payable to related party
|
102 | (102 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Current portion of lease liabilities
|
1,134 | — | 1,134 | — | — | 1,134 | — | 1,134 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current liabilities
|
28,643 | (9,070 | ) | 19,573 | 36,099 | (15,916 | ) | 39,756 | — | 39, 756 | ||||||||||||||||||||||||||||
Long-term supplier liability
|
7,798 | (7,798 | ) | (a) | — | — | — | — | — | — |
Separation
|
Business Combination
|
|||||||||||||||||||||||||||||||||||||||||
|
|
Assuming No
Redemptions Scenario |
Assuming Maximum
Redemptions Scenario |
|||||||||||||||||||||||||||||||||||||||
LiveWire
(Historical)
|
Transaction
Accounting Adjustments |
Pro Forma
Separation of LiveWire |
ABIC
(Historical) |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
|||||||||||||||||||||||||||||||||||
Long-term portion of lease liabilities
|
2,716 | — | 2,716 | — | — | 2,716 | — | 2,716 | ||||||||||||||||||||||||||||||||||
Deferred tax liabilities
|
206 | 1,269 | (m) | 1,475 | — | — | 1,475 | — | 1,475 | |||||||||||||||||||||||||||||||||
Long-term portion of note payable to related party
|
5,605 | (5,605 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other long-term liabilities
|
518 | (518 | ) | (a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total liabilities
|
45,486 | (21,722 | ) | 23,764 | 36,099 | (15,916 | ) | 43,947 | — | 43,947 | ||||||||||||||||||||||||||||||||
Commitments and contingencies
|
||||||||||||||||||||||||||||||||||||||||||
Class A Ordinary Shares subject to possible redemption, 40,000,000 shares at $10.00 per share
|
— | — | — | 400,000 | (400,000 | ) | (i) | — | — | — | ||||||||||||||||||||||||||||||||
Stockholders’ equity
|
||||||||||||||||||||||||||||||||||||||||||
HoldCo Common Stock, $0.0001 par value
|
— | 16 | (1) | 16 | — |
|
2
5
|
|
(d)
(i)
|
23 |
|
1
(4
|
)
|
|
(e
(k
|
)
)
|
20 | |||||||||||||||||||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding
|
— | — | — | 1 | (1 | ) | (i) | — | — | |||||||||||||||||||||||||||||||||
Additional
paid-in
capital
|
— | 24,614 | (1) | 24,614 | — |
|
199,998
(27,000
399,996
(40,938
|
)
)
|
(d)
(f)
(i)
(j)
|
556,670 |
|
99,999
(375,197
|
)
|
|
(e
(k
|
)
)
|
281,472 | |||||||||||||||||||||||||
Accumulated deficit
|
— | — | — | (34,454 | ) |
|
(6,484
40,938
|
)
|
(h)
(j)
|
— | — | |||||||||||||||||||||||||||||||
Net parent investment
|
15,202 |
|
11,724
(938
(24,630
(1,358
|
)
)
)
|
|
(a)
(b)
(l)
(m)
|
|
— | — | — | — | — | — | |||||||||||||||||||||||||||||
Accumulated other comprehensive income
|
162 | — | 162 | — | — | 162 | — | 162 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stockholders’ equity
|
15,364 | 9,428 | 24,792 | (34,453 | ) | 566,516 | 556,855 | (275,201 | ) | 281,654 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 60,850 | $ | (12,294 | ) | $ | 48,556 | $ | 401,646 | $ | 150,600 | $ | 600,802 | $ | (275,201 | ) | $ | 325,601 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separation
|
Business Combination
|
|||||||||||||||||||||||||||||||
Assuming No Redemptions and
Maximum Redemptions Scenario |
||||||||||||||||||||||||||||||||
LiveWire
(Historical)
|
Autonomous
Entity Adjustments |
Pro
Forma Separation of LiveWire |
ABIC
(Historical) |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
|||||||||||||||||||||||||||
Revenue, net
|
$ | 22,933 | $ | — | $ | 22,933 | $ | — | $ | — | $ | 22,933 | ||||||||||||||||||||
Costs and expenses:
|
||||||||||||||||||||||||||||||||
Cost of goods sold
|
26,050 |
|
1,453
192
|
|
|
(bb
(cc
|
)
)
|
27,695 | — | — | 27,695 | |||||||||||||||||||||
Engineering expense
|
13,005 | 509 | (cc | ) | 13,514 | — | — | 13,514 | ||||||||||||||||||||||||
Selling, general and administrative expense
|
32,123 | 1,502 | (cc | ) | 33,625 | — | — | 33,625 | ||||||||||||||||||||||||
Formation and operational costs
|
— | — | — | 3,838 | — | 3,838 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating expense
|
71,178 | 3,656 | 74,834 | 3,838 | — | 78,672 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating loss
|
(48,245 | ) | (3,656 | ) | (51,901 | ) | (3,838 | ) | — | (55,739 | ) | |||||||||||||||||||||
Other (expense)/income, net
|
(19 | ) | — | (19 | ) | — | — | (19 | ) | |||||||||||||||||||||||
Interest expense related party
|
(198 | ) | — | (198 | ) | — | — | (198 | ) | |||||||||||||||||||||||
Interest income
|
11 | — | 11 | 129 | — | 140 | ||||||||||||||||||||||||||
Change in fair value of warrant liability
|
— | — | — | 27,145 | — | 27,145 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) before income taxes
|
(48,451 | ) | (3,656 | ) | (52,107 | ) | 23,436 | — | (28,671 | ) | ||||||||||||||||||||||
Income tax provision
|
55 | — | (dd) | 55 | — | — | (dd | ) | 55 | |||||||||||||||||||||||
Net income (loss) per share:
|
$ | (48,506 | ) | $ | (3,656 | ) | $ | (52,162 | ) | $ | 23,436 | $ | — | $ | (28,726 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Weighted-average shares outstanding of Class A Ordinary Shares
|
40,000,000 | n/a | ||||||||||||||||||||||||||||||
Basic and diluted net income per ordinary share, Class A Ordinary Shares
|
$ | 0.47 | n/a | |||||||||||||||||||||||||||||
Weighted-average shares outstanding of Class B Ordinary Shares
|
10,000,000 | n/a | ||||||||||||||||||||||||||||||
Basic and diluted net income per ordinary share, Class B Ordinary Shares
|
$ | 0.47 | n/a | |||||||||||||||||||||||||||||
Net loss per share – Assuming No Redemptions:
|
||||||||||||||||||||||||||||||||
Weighted-average HoldCo Common Stock outstanding
|
n/a | 231,000,000 | ||||||||||||||||||||||||||||||
Net loss per HoldCo Common Stock – basic and diluted
|
n/a | $ | (.12 | ) | ||||||||||||||||||||||||||||
Net loss per share – Assuming Maximum Redemptions:
|
||||||||||||||||||||||||||||||||
Weighted-average HoldCo Common Stock outstanding
|
n/a | 203,500,000 | ||||||||||||||||||||||||||||||
Net loss per HoldCo Common Stock – basic and diluted
|
n/a | $ | (.14 | ) |
Separation
|
Business Combination
|
|||||||||||||||||||||||||||||||
Assuming No Redemptions and
Maximum Redemptions Scenario |
||||||||||||||||||||||||||||||||
LiveWire
(Historical)
|
Autonomous
Entity Adjustments |
Pro Forma
Separation of LiveWire |
ABIC
(Historical) |
Transaction
Accounting Adjustments |
Pro Forma
Combined |
|||||||||||||||||||||||||||
Revenue, net
|
$ | 30,863 | $ | — | $ | 30,863 | $ | — | $ | — | $ | 30,863 | ||||||||||||||||||||
Costs and expenses:
|
||||||||||||||||||||||||||||||||
Cost of goods sold
|
55,819 |
|
2,601
670
|
|
|
(bb
(cc
|
)
)
|
59,090 | — | — | 59,090 | |||||||||||||||||||||
Engineering expense
|
23,036 | 569 | (cc | ) | 23,605 | — | — | 23,605 | ||||||||||||||||||||||||
Selling, general and administrative expense
|
29,063 | 811 | (cc | ) | 29,874 | — | — | 29,874 | ||||||||||||||||||||||||
Formation and operational costs
|
— | — | — | 237 | 6,484 | (aa | ) | 6,721 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating expense
|
107,918 | 4,651 | 112,569 | 237 | 6,484 | 119,290 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating loss
|
(77,055 | ) | (4,651 | ) | (81,706 | ) | (237 | ) | (6,484 | ) | (88,427 | ) | ||||||||||||||||||||
Other (expense)/income, net
|
(30 | ) | — | (30 | ) | — | — | (30 | ) | |||||||||||||||||||||||
Interest expense related party
|
(186 | ) | — | (186 | ) | — | — | (186 | ) | |||||||||||||||||||||||
Interest income
|
56 | — | 56 | 85 | — | 141 | ||||||||||||||||||||||||||
Transaction costs allocable to warrants
|
— | — | — | (999 | ) | — | (999 | ) | ||||||||||||||||||||||||
Change in fair value of warrant liability
|
— | — | — | (18,910 | ) | — | (18,910 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loss before income taxes
|
(77,215 | ) | (4,651 | ) | (81,866 | ) | (20,061 | ) | (6,484 | ) | (108,411 | ) | ||||||||||||||||||||
Income tax provision
|
357 | — | (dd) | 357 | — | — | (dd | ) | 357 | |||||||||||||||||||||||
Net loss
|
$ | (77,572 | ) | $ | (4,651 | ) | $ | (82,223 | ) | $ | (20,061 | ) | $ | (6,484 | ) | $ | (108,768 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Weighted-average shares outstanding of Class A Ordinary Shares
|
22,451,613 | n/a | ||||||||||||||||||||||||||||||
Basic and diluted net loss per ordinary share, Class A Ordinary Shares
|
$ | (0.62 | ) | n/a | ||||||||||||||||||||||||||||
Weighted-average shares outstanding of Class B Ordinary Shares
|
10,000,000 | n/a | ||||||||||||||||||||||||||||||
Basic and diluted net loss per ordinary share, Class B Ordinary Shares
|
$ | (0.62 | ) | n/a | ||||||||||||||||||||||||||||
Net loss per share – Assuming No Redemptions
|
||||||||||||||||||||||||||||||||
Weighted-average HoldCo Common Stock outstanding
|
n/a | 231,000,000 | ||||||||||||||||||||||||||||||
Net loss per HoldCo Common Stock – basic and diluted
|
n/a | $ | (.47 | ) | ||||||||||||||||||||||||||||
Net loss per share – Assuming Maximum Redemptions
|
||||||||||||||||||||||||||||||||
Weighted-average HoldCo Common Stock outstanding
|
n/a | 203,500,000 | ||||||||||||||||||||||||||||||
Net loss per HoldCo Common Stock – basic and diluted
|
n/a | $ | (.53 | ) |
• |
LiveWire’s majority shareholder, the Company Equityholder, will have the largest voting interest in the combined company under the no redemption and maximum redemption scenarios;
|
• |
LiveWire’s executive management will make up the majority of the management of the combined company;
|
• |
LiveWire’s majority shareholder, the Company Equityholder, will have the ability to designate the majority of the initial HoldCo Board and subsequent decisions on the HoldCo Board will be based on shareholder vote, of which the Company Equityholder has the largest voting interest;
|
• |
the combined company will assume the name “[●]”; and
|
• |
LiveWire is the larger entity based on revenue. Additionally, LiveWire has a larger employee base and substantive operations.
|
a) |
Reflects the adjustment for assets and liabilities which will remain with
H-D
in accordance with the separation agreement. These net assets were included in the historical combined balance sheet as they related to the LiveWire historical operations. LiveWire’s historical financial statements reflect the net assets in accordance with the manner in which
H-D’s
management operated the business.
|
b) |
Upon separation, pursuant to the Employee Matters Agreement to be entered into between LiveWire and
H-D,
each award of restricted stock units that is outstanding (“
H-D
RSU Award
RSU Payment
H-D
RSU Award would otherwise become vested in accordance with the vesting schedule applied to such award immediately prior to the separation.
|
c) |
Reflects the reclassification of $400.2 million of cash and marketable securities held in the Trust Account as of the balance sheet date that becomes available to fund expenses in connection with the Business Combination or future cash needs of the combined company.
|
d) |
Reflects the gross proceeds of $200.0 million from the private placement of 20,000,000 shares of HoldCo Common Stock, par value $0.0001, at $10.00 per share pursuant to the PIPE Financing, inclusive of $100.0 million from an investment from Company Equityholder and $100.0 million from the KYMCO Group.
|
e) |
Reflects the
H-D
Backstop Amount of $100 million received from the Company Equityholder under the maximum redemption scenario in exchange for 10,000,000 shares of HoldCo Common Stock, par value $0.0001, at $10.00 per share. Based on the Business Combination Agreement, the Company Equityholder agreed to purchase the number of shares of HoldCo Common Stock with a dollar value equal to the number of Class A Ordinary Shares that Public Shareholders have elected to redeem, up to 10,000,000 shares.
|
f) |
Reflects the capital contribution of $27 million to
H-D
pursuant to the Business Combination Agreement to reimburse
H-D
for transaction costs.
|
g) |
Reflects the payment of $15.9 million of transaction costs incurred and accrued by ABIC. Of that amount, $13.1 million relates to deferred underwriters’ fees incurred as part of ’the IPO, which will be cash settled upon the consummation of the Business Combination. The remaining $2.8 million relates to the payments of transaction-related costs accrued on the historical balance sheet of ABIC as of September 30, 2021.
|
h) |
Reflects the transaction costs of $6.5 million to be incurred concurrently with the Business Combination, which relates to legal, third-party advisory and other miscellaneous fees to be incurred by ABIC.
|
i) |
Reflects the reclassification of Founder Shares from Class B Ordinary Shares and ABIC Class A Ordinary Shares subject to possible redemption to HoldCo Common Stock at close.
|
j) |
Reflects the elimination of ABIC historical accumulated deficit.
|
k) |
Represents the redemption of the maximum number of shares of 37,500,000 Class A Ordinary Shares for $375.2 million allocated to HoldCo Common Stock and additional
paid-in
capital using par value of $0.0001 per share and at a redemption price of $10.01 per share (based on the fair value of the cash and investments held in the Trust Account of $400.2 million).
|
l) |
Represents the reclassification of the parent’s net investment in LiveWire, including other pro forma adjustments, into Additional
paid-in
capital and HoldCo Common Stock, par value $0.0001, based on the number of shares of HoldCo Common Stock outstanding as of the Closing.
|
m) |
Reflects the adjustment to deferred tax assets of $0.1 million, primarily associated with inventory and warranty related accruals, and to deferred tax liabilities of $1.3 million using a blended statutory rate of 22.74% and related adjustments to the valuation allowance for deferred tax assets that are not
more-likely-than-not
to be realized.
|
aa) |
Reflects estimated transaction-related costs expected to be incurred by ABIC related to the Business Combination as if it was consummated on January 1, 2020. Pro forma transaction-related costs adjustment of $6.5 million excludes $2.8 million of transaction related costs already in the historical statement of operations of ABIC for the nine months ended September 30, 2021. The transaction costs are nonrecurring.
|
bb) |
Reflects the effect of Contract Manufacturing Agreement that LiveWire and
H-D
will enter into prior to the Separation. The cost of products sold adjustment reflects the price adjustments related to historical transfers from
H-D
to LiveWire under the pricing terms of the Contract Manufacturing Agreement. Historically, inventory was recorded at actual cost.
|
cc) |
These incremental costs include the effect of Transition Services Agreement and a Master Services Agreement between LiveWire and
H-D
that will be entered into concurrent with the Closing. Under the Transition Services Agreement,
H-D
will continue to provide LiveWire support function services at a cost to LiveWire, including finance, information technology and infrastructure. Under the Master Services Agreement,
H-D
will continue to provide LiveWire with certain services that LiveWire does not yet have the capability to perform for itself, including testing and development, product regulatory support and color materials, finishes and graphics services, as LiveWire may request from time to time. As disclosed in the footnotes to the historical audited financial statements of LiveWire included elsewhere in this proxy statement/prospectus, certain costs incurred by the Parent to support the LiveWire operations had been allocated based on various metrics deemed reasonable by management. Accordingly, the pro forma combined financial statements have been adjusted to depict LiveWire’s costs under the Transition Services Agreement and Master Services Agreement that will be entered into between LiveWire, as an autonomous entity, and
H-D.
|
dd) |
A tax benefit for the
pre-tax
pro forma adjustments has not been recorded. LiveWire determined that it is not more likely than not that it would be able to realize the tax benefits from such losses due to the negative evidence of historical losses.
|
Nine Months Ended
September 26, 2021 |
Year Ended
December 31, 2020 |
|||||||||||||||
(in thousands, except share and per-share data)
|
Assuming No
Redemptions |
Assuming Max
Redemptions |
Assuming No
Redemptions |
Assuming Max
Redemptions |
||||||||||||
Pro forma net loss
|
$ | (28,726 | ) | $ | (28,726 | ) | $ | (108,768 | ) | $ | (108,768 | ) | ||||
Weighted-average HoldCo Common Stock outstanding
|
231,000,000 | 203,500,000 | 231,000,000 | 203,500,000 | ||||||||||||
Net loss per HoldCo Common Stock – basic and diluted
(1)
|
$ | (0.12 | ) | $ | (0.14 | ) | $ | (0.47 | ) | $ | (0.53 | ) |
(1)
|
For the purposes of applying the if converted method for calculating diluted earnings per share, it was assumed that all outstanding warrants sold in the IPO and the private placement are exchanged for HoldCo Common Stock. However, since this results in anti-dilution, the effect of such exchange was not included in calculation of diluted loss per share.
|
• |
Testing—including physical testing at
H-D’s
labs and proving grounds to develop and validate LiveWire products. This will include testing across durability, performance, vehicle dynamics, failure evaluation and regulatory compliance. It also includes virtual testing services, using simulation to inform LiveWire design and development.
|
• |
Regulatory Support—including regional,
in-country
support for certification submittals in accordance with the LiveWire product plan as well as expertise on product homologation.
|
• |
Paint & Graphics—including color, materials, finish, paint and graphics planning and development work to achieve LiveWire’s visual and functional goals, while optimizing the efficiency of manufacturing operations.
|
• |
Small and large scooters
|
• |
Light, medium and heavy motorcycles
|
• |
Three-wheelers
|
• |
Side-by-side
four-wheelers
|
• |
North America and Europe: In North America and Europe, electric vehicle unit penetration rates are expected to grow from 1% and 2% in 2020 to 10% and 13% respectively by 2026, as continued improvements in battery technology and growth in charging infrastructure support changing regional consumer preferences.
|
• |
China: In China, electric vehicle penetration growth is expected to expand from 26% in 2020 to 45% by 2026 given more stringent government electrification mandates and high adoption of electric scooters and lighter motorcycles for commuting.
|
• |
First, from leading
ICE-focused
companies including BMW, Honda, Ducati and Triumph. These companies have the ability to scale manufacturing and leverage global distribution capabilities but do not currently offer a premium electric motorcycle in market.
|
• |
Second, from smaller electric vehicle-focused companies including Zero and Energica that have product in market today but lack the global manufacturing and distribution capabilities of the major ICE players.
|
• |
Low Seat Height: Inspires confidence by allowing riders feet to be firmly planted on the ground;
|
• |
Twist Throttle: Three selectable power modes with a true power curve allow a child to learn how to operate a throttle and manage power output;
|
• |
Lightweight Aluminum Frame: A total bike weight starting as low as 17 pounds allows the child to quickly build skill, confidence, and pick up the bike on their own; and
|
• |
Quick-Change
Lithium-Ion
Battery: Removable power tool style interface allows additional batteries to be used for extended ride time.
|
• |
Goal 7: Affordable and Clean Energy;
|
• |
Goal 11: Sustainable Cities and Communities; and
|
• |
Goal 12: Responsible Consumption and Production.
|
• |
Jochen Zeitz,
Chief Executive Officer
|
• |
Ryan Morrissey,
President
|
Name and Principal Position
|
Salary
($)(1)
|
Bonus
($)(2)
|
Stock
Awards
($)(3)
|
Option
Awards
($)(4)
|
Non-Equity
Incentive Plan Compensation ($)(5) |
All Other
Compensation ($)(6) |
Total
($)
|
|||||||||||||||||||||
Jochen Zeitz
|
2,500,000 | — | 6,000,030 | 6,435,000 | 3,000,000 | 170,538 | 18,105,568 | |||||||||||||||||||||
Chief Executive Officer
|
||||||||||||||||||||||||||||
Ryan Morrissey
|
357,877 | 500,000 | 347,275 | — | 1,144,178 | 8,221 | 2,357,551 | |||||||||||||||||||||
President
|
(1)
|
Amounts reflect the base salary earned by our named executive officers in 2021. Mr. Morrissey commenced employment with
H-D
in April 2021 and his earned salary reflects his partial year of employment with
H-D.
|
(2)
|
Amount reflects a
one-time
sign-on
bonus paid to Mr. Morrissey in connection the commencement of his employment with
H-D
during 2021.
|
(3) |
Amounts reflect the aggregate grant date fair value of performance shares and RSUs granted under the
H-D
Stock Plan (as defined below) to the named executive officer during the fiscal year ended December 31, 2021, in each case, computed in accordance with FASB ASC Topic 718. The grant date fair value of restricted stock unit awards was based on the market price of the underlying stock as of the date of grant (which considers the value of dividend equivalents that the holder is entitled to receive). The grant fair value of performance share awards was determined using a Monte-Carlo simulation on the date of grant. Key assumptions included a historical volatility of 54.99% and a risk-free rate of 0.27%. The grant date fair value of the performance share award for Mr. Morrissey included in the table is based on achievement of the performance objectives at target, which was the probable outcome of such objectives at the time of grant. The grant date fair value of Mr. Morrissey’s performance shares based on achievement of the performance objectives at the maximum level of performance (i.e., 200% of the target amount) is $238,543 based on
H-D’s
stock price on the date of grant. Consistent with FASB ASC Topic 718, the value of the performance shares reflected in the table above includes only the portion of the performance shares for which a performance goal was established during the year ended December 31, 2021, which was
one-third
of the total performance shares awarded.
|
(4) |
Amount reflects the aggregate grant date fair value of stock options granted under the
H-D
Stock Plan to Mr. Zeitz during the fiscal year ended December 31, 2021, computed in accordance with FASB ASC Topic 718. The grant date fair value of the stock option award was determined using a Monte-Carlo simulation on the date of grant. Key assumptions included an expected life of 5.5 years, a historical volatility of 44.1%, a dividend yield of 1.49% and a risk-free interest rate of 1.21%.
|
(5) |
Amounts reflect short-term incentive payments earned by each named executive officer under
H-D’s
annual short-term incentive program for 2021, which were earned based on
H-D’s
operating income, and, for Mr. Morrissey, a Performance Bonus as described below under “
2021 Cash Incentives – LiveWire Bonus
H-D.
|
(6) |
Amounts reflect the following:
(i) H-D’s
contributions to its 401(k) plan ($24,450 and $8,221 for Messrs. Zeitz and Morrissey, respectively), (ii)
H-D’s
contributions to its deferred compensation plan for Mr. Zeitz ($57,708) and (iii) compensation associated with Mr. Zeitz’s usage of
H-D’s
aircraft based on the incremental cost to
H-D
($88,380). Incremental cost for Mr. Zeitz’s usage of
H-D’s
aircraft was calculated based on an annual average cost per flight hour which includes costs for fuel, landing/hanger fees, crew travel costs, catering and other variable flight expenses. This annual average cost per flight hour was then multiplied by the hours flown in connection with Mr. Zeitz’s aircraft usage, including any flight hours necessary to reposition the aircraft. Since
H-D
uses its aircraft primarily for business travel, it does not include costs that
H-D
would have incurred regardless of Mr. Zeitz’s aircraft usage, such as depreciation, pilot salaries and maintenance costs.
|
Ten-Day
Average Closing
Stock Price Achievement During Five-Year Period Beginning on Grant Date* |
Employment Through a
Date Prior to December 31, 2023 (% Exercisable) |
Employment as
H-D
CEO
Through December 31, 2023 (% Exercisable) |
Employment as
H-D
CEO or
H-D
Board-Approved Role
Through December 31, 2024 (% Exercisable) |
|||
$65.00 or higher
(% Exercisable)
|
0% | 66.0%** | 100.0%** | |||
$60.00 (% Exercisable)
|
0% | 52.8% | 80.0% | |||
$55.00 (% Exercisable)
|
0% | 39.6% | 60.0% | |||
$50.00 (% Exercisable)
|
0% | 26.4% | 40.0% | |||
$45.00 (% Exercisable)
|
0% | 13.2% | 20.0% | |||
Less Than $45
(% Exercisable)
|
0% | 0.0% | 0.0% | |||
Option Term
|
N/A | If termination of employment occurs before December 31, 2024, option term reduced to six years from grant date |
Option term remains
ten years from grant date |
* |
Percentage of the option that is exercisable will be interpolated linearly between specified stock price achievement levels.
|
** |
Percentage indicates percentage of the option that become nonforfeitable (i.e., vested) based on employment through this date.
|
Named Executive Officer
|
2021
Options
Granted
|
2021
Performance
Shares
Granted |
2021 RSUs
Granted |
|||||||||
Jochen Zeitz
|
500,000 | — | 181,764 | |||||||||
Ryan Morrissey
|
— | 2,381 | 4,761 |
• |
medical, dental and vision benefits;
|
• |
dependent care flexible spending accounts;
|
• |
short-term and long-term disability insurance; and
|
• |
basic life and accidental death and dismemberment insurance.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||
Name
|
Grant Date
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option
Exercise
Price
($) |
Option
Expiration
Date |
Number
of Shares or Units of Stock That Have Not Vested (#) |
Market
Value of Shares of Units of Stock That Have Not Vested ($)(1) |
Equity
Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested ($)(1) |
||||||||||||||||||||||||
Jochen Zeitz
|
02/03/2021 | — | — | — | 181,764 | (2) | 6,850,685 | — | — | |||||||||||||||||||||||
12/01/2021 | 500,000 | (3) | 36.63 | 12/31/2026 | — | — | — | — | ||||||||||||||||||||||||
Ryan Morrissey
|
05/04/2021 | — | — | — | — | — | 4,167 | (4) | 157,054 | |||||||||||||||||||||||
05/04/2021 | — | — | — | 4,761 | 179,442 | (5) | — | — |
(1)
|
The dollar values stated reflect the number of units or shares held at the end of 2021, multiplied by the closing price of
H-D’s
common stock on December 31, 2021, which was $37.69.
|
(2)
|
The RSUs subject to this grant will vest on the first anniversary of the grant date, subject to Mr. Zeitz’s continued employment with
H-D
through such date. In addition, if Mr. Zeitz’s employment with
H-D
terminates other than cause, such RSUs s will vest in full (to the extent then-unvested) upon such termination. Additionally, if Mr. Zeitz’s employment with
H-D
terminates due to his death or “disability” (as defined in the
H-D
Stock Plan), a pro rata portion of the RSUs will vest upon such termination based on the length of his employment between the grant date and the date of termination.
|
(3)
|
The stock option is eligible to become exercisable upon the attainment of certain stock price goals and will become vested only to the extent service conditions are met through December 31, 2023 and/or December 31, 2024 (as applicable). For additional detail on the vesting and exercise conditions related to the stock option, see “
Equity Compensation—2021 Equity Grants
|
(4)
|
These performance shares are eligible to vest on December 31, 2023 and be paid in shares of
H-D
common stock based on
H-D’s
attainment of certain annual performance goals each year of an overall three-year performance period commencing January 1, 2021 and ending December 31, 2023, subject to Mr. Morrissey’s continued employment with
H-D
through the vesting date. The performance goals for the 2021 annual period include return on invested capital, revenue, diversity and employee engagement. At the conclusion of the three-year performance period, the number of earned performance shares may be increased or decreased by up to 15% based on
H-D’s
total shareholder return relative to certain of its peer group companies over the performance period. Amounts reported represent only the portion of the performance shares for which a performance goal was established during the year ended December 31, 2021, which was
one-third
of the total performance shares granted, and, in accordance with applicable SEC rules, such performance shares are disclosed at 175% of target level (due to three out of the four relevant performance goals exceeding target level during 2021).
|
(5)
|
The RSUs subject to this grant will vest with respect to
one-third
of the RSUs subject thereto on each of the first three anniversaries of the grant date, subject to Mr. Morrissey’s continued employment with
H-D
through such date. The RSUs are expected to be canceled upon the Separation in exchange for the right to receive cash payments on each regular RSU vesting date (as described above under “
Equity Compensation—2021 Equity Grants
|
• |
Wholesale motorcycle unit shipments
|
• |
Company retail motorcycle unit sales
|
• |
Independent retail motorcycle unit sales
|
• |
Retail
partners
|
• |
Company-operated
retail partners
|
• |
Independent retail partners
|
Nine Months Ended
|
Year Ended
|
|||||||||||||||
September 2021
|
September 2020
|
December 2020
|
December 2019
|
|||||||||||||
Wholesale motorcycle unit shipments:
|
||||||||||||||||
US
|
104 | 622 | 717 | 385 | ||||||||||||
International
|
160 | 439 | 481 | 95 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
264
|
|
|
1,061
|
|
|
1,198
|
|
|
480
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Retail motorcycle unit sales:
|
||||||||||||||||
Company (a)
|
11 | — | — | — | ||||||||||||
Independent retail partners (b)
|
761 | 461 | 719 | 157 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
772
|
|
|
461
|
|
|
719
|
|
|
157
|
|
|||||
|
|
|
|
|
|
|
|
Nine Months Ended
|
Year Ended
|
|||||||||||||||
September 2021
|
September 2020
|
December 2020
|
December 2019
|
|||||||||||||
Retail motorcycle unit sales:
|
||||||||||||||||
US
|
465 | 262 | 451 | 141 | ||||||||||||
International
|
307 | 199 | 268 | 16 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
772
|
|
|
461
|
|
|
719
|
|
|
157
|
|
|||||
|
|
|
|
|
|
|
|
(a)
|
Data source for Company retail sales figures shown above is Company records.
|
(b)
|
Data source for independent retail sales figures shown above is new sales warranty and registration information provided by retail partners and compiled by the Company. The Company must rely on information that its independent retail partners supply concerning new retail sales, and the Company does not regularly verify the information that its independent retail partners supply. This information is subject to revision.
|
As of
|
||||
September 26, 2021
|
||||
Retail partners:
|
||||
Company-operated retail partners
|
1 | |||
Independent retail partners
|
||||
U.S.
|
20 | |||
International
|
— | |||
|
|
|||
20 | ||||
|
|
|||
Total
|
|
21
|
|
|
|
|
Nine Months Ended
|
||||||||||||||||
(in thousands, except percentages)
|
September 26,
2021 |
September 27,
2020 |
$ Change
|
% Change
|
||||||||||||
Revenue
|
$ | 22,933 | $ | 35,879 | $ | (12,946 | ) | (36.1 | )% | |||||||
Costs and expenses:
|
||||||||||||||||
Cost of goods sold
|
26,050 | 37,602 | (11,552 | ) | (30.7 | )% | ||||||||||
Engineering expense
|
13,005 | 10,583 | 2,422 | 22.9 | % | |||||||||||
Selling, general, and administrative expense
|
32,123 | 22,905 | 9,218 | 40.2 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expense
|
71,178 | 71,090 | 88 | 0.1 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(48,245 | ) | (35,211 | ) | (13,034 | ) | 37.0 | % | ||||||||
Other (expense) income, net
|
(19 | ) | (5 | ) | (14 | ) | 280.0 | % | ||||||||
Interest expense related party
|
(198 | ) | (94 | ) | (104 | ) | 110.6 | % | ||||||||
Interest income
|
11 | 16 | (5 | ) | (31.3 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(48,451 | ) | (35,294 | ) | (13,157 | ) | 37.3 | % | ||||||||
Income tax provision
|
55 | 163 | (108 | ) | (66.3 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(48,506 | ) | (35,457 | ) | (13,049 | ) | 36.8 | % | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustments
|
(68 | ) | (81 | ) | 13 | (16.0 | )% | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
$ | (48,574 | ) | $ | (35,538 | ) | $ | (13,036 | ) | 36.7 | % | |||||
|
|
|
|
|
|
|
|
Nine Months Ended
|
||||||||||||||||
(in thousands, except percentages)
|
September 26,
2021 |
September 27,
2020 |
$ Change
|
% Change
|
||||||||||||
Electric motorcycles
|
$ | 5,357 | $ | 25,075 | $ | (19,718 | ) | (78.6 | )% | |||||||
Electric balance bikes
|
16,914 | 9,948 | 6,966 | 70.0 | % | |||||||||||
Parts & accessories
|
575 | 821 | (246 | ) | (30.0 | )% | ||||||||||
General merchandise
|
87 | 35 | 52 | 148.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 22,933 | $ | 35,879 | $ | (12,946 | ) | (36.1 | )% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
(in thousands, except percentages)
|
2020
|
2019
|
$ Change
|
% Change
|
||||||||||||
Revenue, net
|
$ | 30,863 | $ | 20,188 | $ | 10,675 | 52.9 | % | ||||||||
Costs and expenses:
|
||||||||||||||||
Cost of goods sold
|
55,819 | 21,298 | 34,521 | 162.1 | % | |||||||||||
Engineering expense
|
23,036 | 22,085 | 951 | 4.3 | % | |||||||||||
Selling, general and administrative expense
|
29,063 | 34,912 | (5,849 | ) | (16.8 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expense
|
107,918 | 78,295 | 29,623 | 37.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(77,055 | ) | (58,107 | ) | (18,948 | ) | 32.6 | % | ||||||||
Other (expense) / income, net
|
(30 | ) | 75 | (105 | ) | (140.0 | )% | |||||||||
Interest expense related party
|
(186 | ) | (1 | ) | (185 | ) | *nm | |||||||||
Interest income
|
56 | 41 | 15 | 36.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(77,215 | ) | (57,992 | ) | (19,223 | ) | 33.1 | % | ||||||||
Income tax provision (benefit)
|
357 | (1,475 | ) | 1,832 | (124.2 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(77,572 | ) | (56,517 | ) | (21,055 | ) | 37.3 | % | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustments
|
236 | (6 | ) | 242 | *nm | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
$ | (77,336 | ) | $ | (56,523 | ) | $ | (20,813 | ) | 36.8 | % | |||||
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
(in thousands, except percentages)
|
2020
|
2019
|
$ Change
|
% Change
|
||||||||||||
Electric motorcycles
|
$ | 12,846 | $ | 11,712 | $ | 1,134 | 9.7 | % | ||||||||
Electric balance bikes
|
16,544 | 7,882 | 8,662 | 109.9 | ||||||||||||
Parts & accessories
|
1,422 | 416 | 1,006 | 241.8 | ||||||||||||
General merchandise
|
51 | 178 | (127 | ) | (71.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 30,863 | $ | 20,188 | $ | 10,675 | 52.9 | % | |||||||||
|
|
|
|
|
|
|
|
Nine Months Ended
|
Year Ended
|
|||||||||||||||
(in thousands)
|
September 26,
2021 |
September 27,
2020 |
December 31,
2020 |
December 31,
2019 |
||||||||||||
Net cash used in operating activities
|
$ | (51,728 | ) | $ | (37,214 | ) | $ | (53,714 | ) | $ | (69,216 | ) | ||||
Net cash used in investing activities
|
(7,747 | ) | (2,673 | ) | (3,243 | ) | (14,177 | ) | ||||||||
Net cash provided by financing activities
|
60,668 | 40,717 | 58,304 | 84,447 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in cash
|
$ | 1,193 | $ | 830 | $ | 1,347 | $ | 1,054 | ||||||||
|
|
|
|
|
|
|
|
• |
the risks, costs and benefits to HoldCo;
|
• |
the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
|
• |
the terms of the transaction;
|
• |
the availability of other sources for comparable services or products; and
|
• |
the terms available to or from, as the case may be, unrelated third parties.
|
• |
2021 Cash Incentives
H-D’s
cash incentive plan for calendar year 2021,
H-D
will pay our eligible employees their earned cash incentive payments for calendar year 2021 as and when payments are made generally under (and subject to the terms and conditions of) the
H-D
cash incentive plan.
|
• |
2022 Cash Incentives.
H-D’s
cash incentive plan for calendar year 2022 and remains employed with us through December 1, 2022,
H-D
will pay such employees the cash incentive payments that such employees would have earned under the
H-D
cash incentive plan for calendar year 2022 had the Separation not occurred, prorated based on the portion of calendar year 2022 during which such employees participated in the
H-D
cash incentive plan, as and when payments are made generally for calendar year 2022 under (and subject to the terms and conditions of) the
H-D
cash incentive plan.
|
• |
LiveWire Cash Incentives.
H-D’s
cash incentive plan for calendar year 2022 and we will adopt a cash incentive program for the benefit of our eligible employees.
|
• |
subject ABIC to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which ABIC operates after its initial business combination; and
|
• |
cause ABIC to depend on the marketing and sale of a single product or limited number of products or services.
|
Name
|
Age
|
Position
|
||||
John Garcia
|
65 |
Chair,
Co-Chief
Executive Officer and Director
|
||||
Michele Giddens
|
56 |
Co-Chief
Executive Officer and Director
|
||||
Ramzi Gedeon
|
48 | Chief Financial Officer, Secretary and Director | ||||
Steven E. DeCillis II
|
48 | Director | ||||
John Replogle
|
56 | Director | ||||
George Serafeim
|
39 | Director | ||||
Brian Trelstad
|
52 | Director |
• |
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
|
• |
monitoring the independence of the independent registered public accounting firm;
|
• |
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; inquiring and discussing with management our compliance with applicable laws and regulations;
pre-approving
all audit services and permitted
non-audit
services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed; appointing or replacing the independent registered public accounting firm; determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
|
• |
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; monitoring compliance on a quarterly basis with
|
the terms of our IPO and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of our IPO; and reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by the ABIC Board, with the interested director or directors abstaining from such review and approval.
|
• |
should have demonstrated notable or significant achievements in business, education or public service;
|
• |
should possess the requisite intelligence, education and experience to make a significant contribution to the ABIC Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
|
• |
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
|
• |
reviewing and approving on an annual basis the corporate goals and objectives relevant to our President, Chief Financial Officer and Chief Operating Officer’s; evaluating our President’s, Chief Financial Officer’s and Chief Operating Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our President, Chief Financial Officer and Chief Operating Officer based on such evaluation;
|
• |
reviewing and approving the compensation of all of our other Section 16 executive officers;
|
• |
reviewing our executive compensation policies and plans;
|
• |
implementing and administering our incentive compensation equity-based remuneration plans;
|
• |
assisting management in complying with our proxy statement and annual report disclosure requirements;
|
• |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
|
• |
producing a report on executive compensation to be included in our annual proxy statement; and
|
• |
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
|
• |
staffing for financial, accounting and external reporting areas, including segregation of duties;
|
• |
reconciliation of accounts;
|
• |
proper recording of expenses and liabilities in the period to which they relate;
|
• |
evidence of internal review and approval of accounting transactions;
|
• |
documentation of processes, assumptions and conclusions underlying significant estimates; and
|
• |
documentation of accounting policies and procedures.
|
Name
|
Age
|
Position
|
||||
Jochen Zeitz
|
58 | Chief Executive Officer | ||||
Ryan Morrissey
|
45 | President | ||||
[ ● ] | [ ● | ] | Director |
• |
the Audit and Finance Committee’s responsibilities will include, among other things;
|
• |
oversight of the integrity of our financial statements and the financial reporting process;
|
• |
oversight of the systems of internal control over financial reporting;
|
• |
oversight of the internal audit function;
|
• |
retention, compensation and termination of the independent registered public accounting firm;
|
• |
oversight of the annual independent audit of our financial statements;
|
• |
independent registered public accounting firm’s qualifications and independence;
|
• |
oversight of liquidity, hedging and risk management matters;
|
• |
oversight of capital structure matters; and
|
• |
oversight of compliance with legal and regulatory requirements.
|
• |
new material arrangements and transactions between
H-D
and HoldCo;
|
• |
changes to HoldCo’s organizational documents that involve conflicts between
H-D
and HoldCo;
|
• |
resolution of material disputes related to agreements between
H-D
and its affiliates on the one hand and HoldCo and its affiliates on another, including any material amendment, waiver, or enforcement action relating to any such agreements (including the Intellectual Property Licensing Agreement, Contract Manufacturing Agreement, Joint Development Agreement and the Master Services Agreement) and any other material operational matters between
H-D
and HoldCo;
|
• |
any amendment to the charter of the Conflicts Committee; and
|
• |
any sales of shares of HoldCo Common Stock by
H-D
that are subject to an early price-based release under the HoldCo Registration Rights Agreement.
|
• |
identify and make recommendations to HoldCo’s Board on individuals qualified to serve as HoldCo Board members consistent with the criteria that the HoldCo Board has approved;
|
• |
review HoldCo’s management overall to develop a chief executive officer succession plan for recommendation to the HoldCo Board;
|
• |
review and recommend the
re-nomination
of current directors;
|
• |
review and recommend committee appointments;
|
• |
lead HoldCo’s Board in its annual review of the HoldCo Board’s and its committees’ performance;
|
• |
provide input on the performance of the chief executive officer in meeting his or her goals and objectives and concerning the chief executive officer’s total compensation;
|
• |
maintain our code of ethics;
|
• |
maintain a process for review of potential conflicts of interest;
|
• |
review potential conflicts of interest and other potential code of ethics violations by our chief executive officer or directors;
|
• |
review the disclosure of any waivers of conflicts of interest or other code of ethics violations by our chief executive officer or directors;
|
• |
permitted by rules of the NYSE and applicable laws, regulations and rules, exercise the authority of the HoldCo Board to adopt, administer and amend compensation plans for directors and recommend such plans to shareholders, as appropriate and required; and
|
• |
review our policies applicable to directors regarding trading and hedging involving company securities.
|
• |
establish goals and objectives with the chief executive officer and evaluate at least annually the performance of the chief executive officer in light of these goals and objectives;
|
• |
review and approve the total compensation of the chief executive officer on an annual basis, including base pay, with input from all independent directors on the HoldCo Board (who comprise the Nominating and Corporate Governance Committee) on the performance of the chief executive officer in meeting his, her or their goals and objectives concerning the chief executive officer’s total compensation;
|
• |
review overall compensation policies and plans for executive officers and other employees and, if necessary, recommend plans to shareholders;
|
• |
exercise the authority of the HoldCo Board to adopt and amend compensation plans for executive officers and other employees, and recommend plans to shareholders;
|
• |
evaluate company management performance overall and recommend management successors;
|
• |
review potential conflicts of interest, disclosure of any related waivers, and any other potential code of ethics violations by any of our executive officers (other than the chief executive officer); and
|
• |
review our policies applicable to executive officers regarding trading and hedging involving company securities.
|
• |
monitor consumer, market, industry, and macroeconomic trends, issues and concerns that could affect HoldCo’s brand relevance and its retail and
go-to-market
|
• |
monitor the social, political, environmental, public policy, legislative and regulatory trends, issues and concerns that could affect HoldCo’s brand and sustainability models, processes, resources, activities, strategies and other capabilities, and make recommendations to the HoldCo Board and management regarding how HoldCo should respond to social and environmental trends, issues and concerns to more effectively achieve its brand and sustainability goals;
|
• |
consider and advise management on high-leverage aspects of the LiveWire brand and HoldCo’s
go-to-market
|
• |
assist management in setting strategy, establishing goals and integrating brand, social and environmental shared value creation and inclusion into daily business activities across HoldCo consistent with sustainable growth;
|
• |
review new technologies and other innovations that will permit HoldCo to achieve sustainable growth without growing our environmental impact; and
|
• |
consider the impact that the company’s sustainability policies, practices and strategies have on employees, customers, dealers, suppliers, the environment and the communities in which HoldCo operates.
|
• |
should have demonstrated notable or significant achievements in business, education or public service;
|
• |
should possess the requisite intelligence, education and experience to make a significant contribution to the HoldCo Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
|
• |
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
• |
if, and only if, the closing price of the shares of HoldCo Common Stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within
a 30-trading day
period ending three trading days before HoldCo sends the notice of redemption to the warrant holders.
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the agreed table, based on the redemption date and the “fair market value” of HoldCo Common Stock;
|
• |
if, and only if, the closing price of the shares of HoldCo Common Stock equals or exceeds $10.00 per Public Share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within
the 30-trading day
period ending three trading days before HoldCo sends the notice of redemption to the warrant holders; and
|
• |
if the closing price of the shares of HoldCo Common Stock for any 20 trading days within
a 30-trading day
period ending on the third trading day prior to the date on which HoldCo sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding HoldCo Warrants, as described above.
|
• |
each person known by HoldCo to be the beneficial owner of more than 5% of the outstanding ABIC Shares either on December 31, 2021
(pre-Business
Combination) or of shares of HoldCo Common Stock outstanding after the consummation of the Business Combination (post-Business Combination);
|
• |
each of ABIC’s current executive officers and directors;
|
• |
each person who will (or is expected to) become an executive officer or director of HoldCo upon consummation of the Business Combination;
|
• |
all executive officers and directors of ABIC as a group prior to the consummation of the Business Combination; and
|
• |
all executive officers and directors of HoldCo as a group after consummation of the Business Combination.
|
HoldCo After the Business Combination
|
||||||||||||||||||||||||
ABIC Before the
Business Combination
(1)
|
Assuming No
Redemption
(2)
|
Assuming Contractual
Maximum Redemption
(3)
|
||||||||||||||||||||||
Name and Address of Beneficial Owners
|
Number of
Shares |
%
|
Number of
Shares |
%
|
Number of
Shares |
%
|
||||||||||||||||||
Directors and Executive Officers of
ABIC
(4)
|
||||||||||||||||||||||||
Steven E. DeCillis II
(5)
|
— | — | — | — | — | [●] | ||||||||||||||||||
John Garcia
(5)
|
2,500,000 |
(6)
|
5.0 | 2,500,000 |
(6)
|
[●] | 2,500,000 |
(6)
|
[●] | |||||||||||||||
Ramzi Gedeon
(5)
|
— | — | — | — | — | [●] | ||||||||||||||||||
Michele Giddens
(5)
|
— | — | — | — | — | [●] | ||||||||||||||||||
John Replogle
(5)
|
25,000 |
(7)
|
* | 25,000 |
(7)
|
* | 25,000 |
(7)
|
* | |||||||||||||||
George Serafeim
(5)
|
25,000 |
(7)
|
* | 25,000 |
(7)
|
* | 25,000 |
(7)
|
* | |||||||||||||||
Brian Trelstad
(5)
|
— | — | — | — | — | [●] | ||||||||||||||||||
All directors and executive officers as a group (seven individuals)
|
2,550,000 |
(8)
|
5.1 | 2,550,000 |
(8)
|
[●] | 2,550,000 |
(8)
|
[●] | |||||||||||||||
Five Percent Holders of
ABIC
(
4)
|
||||||||||||||||||||||||
AEA-Bridges
Impact Sponsor LLC
(9)
|
9,950,000 |
(7)
|
19.9 | 9,950,000 |
(7)(10)
|
[●] | 9,950,000 |
(7)(10)
|
[●] | |||||||||||||||
Adage Capital Partners, L.P.
(11)
|
3,600,000 | 7.2 | 3,600,000 | [●] | 3,600,000 | [●] | ||||||||||||||||||
Glazer Capital, LLC
(12)
|
2,783,824 | 5.6 | 2,783,824 | [●] | 2,783,824 | [●] | ||||||||||||||||||
Directors and Executive Officers of HoldCo After Consummation of the Business Combination
|
||||||||||||||||||||||||
Jochen Zeitz
|
— | — | [●] | [●] | [●] | [●] | ||||||||||||||||||
Ryan Morrissey
|
— | — | [●] | [●] | [●] | [●] | ||||||||||||||||||
All directors and executive officers as a group
|
— | — | [●] | [●] | [●] | [●] | ||||||||||||||||||
Five Percent Holders of HoldCo
|
||||||||||||||||||||||||
Company Equityholder
(13)(14)
|
— | — | 171,000,000 |
(15)
|
[●] | 181,000,000 |
(16)
|
[●] |
* |
Less than one percent.
|
(1)
|
The pre-Business Combination percentage of beneficial ownership in the table below is calculated based on 50,000,000 ABIC Shares outstanding as of the Record Date. Unless otherwise indicated, ABIC believes that all persons named in the table have sole voting and investment power with respect to all ABIC Shares beneficially owned by them prior to the Business Combination.
|
(2)
|
The post-Business Combination percentage of beneficial ownership is calculated based on [●] shares of HoldCo Common Stock outstanding. Such amount assumes that no Public Shareholders have redeemed their Class A Ordinary Shares. Unless otherwise indicated, HoldCo believes that all persons named in the
|
table have sole voting and investment power with respect to all shares of HoldCo Common Stock beneficially owned by them prior to the Business Combination. |
(3)
|
The post-Business Combination percentage of beneficial ownership is calculated based on [●] shares of HoldCo Common Stock outstanding. Such amount assumes that the contractual maximum number of Class A Ordinary Shares have been redeemed, while still satisfying the Minimum Cash Condition, and [●] of the Backstop has been subscribed for. Unless otherwise indicated, HoldCo believes that all persons named in the table have sole voting and investment power with respect to all shares of HoldCo Common Stock beneficially owned by them prior to the Business Combination.
|
(4)
|
Unless otherwise noted, the business address of each of the following individuals is PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman Cayman Islands
KY1-1102.
|
(5)
|
Does not include any shares indirectly owned by this individual as a result of his membership interest in our Sponsor.
|
(6)
|
Interests shown consist of Class A Ordinary Shares.
|
(7)
|
Interests shown consist of Founder Shares.
|
(8)
|
Interests shown consist of 2,500,000 Class A Ordinary Shares and 50,000 Founder Shares.
|
(9)
|
The shares reported above are held by the Sponsor. The Sponsor is governed by a three-member board of directors. Each director has one vote, and the approval of a majority of the directors is required to approve an action of our sponsor. Under the
so-called
“rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting and dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. This is the situation with regard to the Sponsor. Based upon the foregoing analysis, no individual director of the Sponsor exercises voting or dispositive control over any of the securities held by the Sponsor, even those in which such director directly holds a pecuniary interest.
|
(10)
|
Assumes that the Sponsor shall not forfeit and/or transfer any Founder Shares under the Investor Support Agreement.
|
(11)
|
Includes Class A Ordinary Shares beneficially held by Adage Capital Partners, L.P., a Delaware limited partnership, Adage Capital Partners GP, L.L.C., a Delaware limited liability company, Adage Capital Advisors, L.L.C., a Delaware limited liability company, Robert Atchinson, a United States citizen, and Phillip Gross, a United States citizen, based solely on the Schedule 13G filed jointly by Adage Capital Partners, L.P., Adage Capital Partners GP, L.L.C. Adage Capital Advisors, L.L.C., Robert Atchinson, and Phillip Gross, with the SEC on October 15, 2020. The business address of each of Adage Capital Partners, L.P., Adage Capital Partners GP, L.L.C. Adage Capital Advisors, L.L.C., Robert Atchinson is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.
|
(12)
|
Includes Class A Ordinary Shares beneficially held by Glazer Capital, LLC, a Delaware limited liability company, and Paul J. Glazer, a United States citizen, based solely on the Schedule 13G filed jointly by Glazer Capital, LLC and Paul J. Glazer with the SEC on February 16, 2021. The business address of each of Glazer Capital, LLC and Paul J. Glazer is 250 West 55th Street, Suite 30A, New York, New York 10019.
|
(13)
|
Excludes 12,500,000 HoldCo Common Stock in estimated potential Earn Out Shares as the price threshold for each tranche has not yet been triggered.
|
(14)
|
The Company Equityholder is the record holder of such shares of HoldCo Common Stock. The Company Equityholder is a direct, wholly owned subsidiary of Harley-Davidson Motor Company Group, LLC (“
HDMCG
|
(15)
|
Interests shown consist of (a) 161,000,000 shares of HoldCo Common Stock to be issued to the Company Equityholder in the Exchange of the Company Equity at Closing and (ii) 10,000,000 shares of HoldCo Common Stock to be purchased by the Company Equityholder in connection with the Company Equityholder Pipe Investment.
|
(16)
|
Interests shown consist of 10,000,000 shares of HoldCo Common Stock to be issued to the Company Equityholder in connection with the Backstop.
|
Delaware
|
Cayman Islands
|
|||
Stockholder/Shareholder Approval of Business Combinations
|
Mergers that require a vote of stockholders require approval by a majority of all outstanding shares entitled to vote on the matter. Mergers in which the corporation’s certificate of incorporation is not amended, the corporation’s stock remains outstanding as an identical share of the surviving corporation, and any new securities issued in the merger do not exceed 20% of shares outstanding before the merger do not require approval of stockholders. Mergers that contemplate a qualifying holding company reorganization do not require approval of stockholders of the corporation that is the parent prior to the merger. Mergers in which the target is widely traded, the acquirer consummates a qualifying tender offer, and a sufficient number of target stockholders tender do not require approval of target stockholders. Mergers in which one corporation owns 90% or more of a second corporation may be completed without the vote of the second corporation’s board of directors or stockholders. | Mergers require a special resolution, and any other authorization as may be specified in the relevant articles of association. Parties holding certain security interests in the constituent companies must also consent. All mergers (other than parent/subsidiary mergers) require shareholder approval—there is no exception for smaller mergers. Where a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining shareholders and thereby become the sole shareholder. A Cayman Islands company may also be acquired through a “scheme of arrangement” sanctioned by a Cayman Islands court and approved by 50%+1 in number and 75% in value of shareholders in attendance and voting at a shareholders’ meeting. |
Delaware
|
Cayman Islands
|
|||
Stockholder/Shareholder Votes for Routine Matters
|
Approval of routine corporate matters other than director elections that are put to a stockholder vote require the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter. Director elections require a plurality vote. | Under Cayman Islands law and the Existing Organizational Documents, routine corporate matters may be approved by an ordinary resolution (being a resolution passed by a simple majority of the shareholders as being entitled to do so). | ||
Appraisal Rights
|
A stockholder of a publicly traded corporation has appraisal rights in connection with a merger unless the merger consideration is all stock in another publicly traded corporation or another exception applies. | Minority shareholders that dissent from a Cayman Islands statutory merger are entitled to be paid the fair market value of their shares, which if necessary may ultimately be determined by the court. | ||
Inspection of Books and Records
|
Any stockholder, upon written demand stating the purpose thereof, inspect the corporation’s stock ledger and other books and records for a proper purpose during the usual hours for business. | Shareholders generally do not have any rights to inspect or obtain copies of the register of shareholders or other corporate records of a company. | ||
Stockholder/Shareholder Lawsuits
|
A stockholder may bring a derivative suit by or in the right of the corporation subject to statutory pleading requirements. | In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. | ||
Fiduciary Duties of Directors
|
Directors owe fiduciary duties of care and loyalty to the company and its stockholders. | A director owes fiduciary duties to a company, including to exercise loyalty, honesty and good faith to the company as a whole. In addition to fiduciary duties, directors owe a duty of care, diligence and skill. Such duties are owed to the company but may be owed direct to creditors or shareholders in certain limited circumstances. | ||
Indemnification of Directors and Officers
|
A corporation is generally permitted to indemnify its directors and officers acting in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation. | A Cayman Islands company generally may indemnify its directors or officers except with regard to fraud or willful default. |
Delaware
|
Cayman Islands
|
|||
Limited Liability of Directors
|
Permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of duty of loyalty, intentional misconduct, unlawful repurchases or dividends or improper personal benefit. | Liability of directors may be unlimited, except with regard to their own fraud or willful default. |
Existing
Organizational Documents |
Proposed HoldCo
Organizational Documents |
|||
Authorized Shares
|
The Existing Organizational Documents authorize 555,000,000 shares, consisting of 500,000,000 Class A Ordinary Shares, 50,000,000 Class B Ordinary Shares and 5,000,000 preference shares. | The Proposed HoldCo Organizational Documents authorize [●] shares, consisting of [●] shares of common stock and [●] shares of preferred stock. | ||
See paragraph 5 of our Existing Organizational Documents.
|
See Article [
], subsection [
] of the Proposed HoldCo Certificate of Incorporation.
|
|||
Authorize the Company to Make Issuances of Preferred Stock Without Stockholder Consent
|
The Existing Organizational Documents authorize the issuance of 5,000,000 preference shares with such designations, rights and preferences as may be determined from time to time by our board of directors. Accordingly, the ABIC Board is empowered under the Existing Organizational Documents, without shareholder approval, to issue preference shares with dividend, liquidation, redemption, voting or other rights | The Proposed HoldCo Organizational Documents authorize the HoldCo Board to make issuances of all or any shares of preferred stock in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the HoldCo Board and as may be permitted by the DGCL. |
Existing
Organizational Documents |
Proposed HoldCo
Organizational Documents |
|||
which could adversely affect the voting power or other rights of the holders of ABIC Shares. | ||||
See Article 3.1 of our Existing Organizational Documents.
|
See Article [
], subsection [
] of the Proposed HoldCo Certificate of Incorporation.
|
|||
Stockholders Agreement
|
The Existing Organizational Documents are not subject to any director composition agreement or investor rights agreement. | [The Proposed HoldCo Organizational Documents provide that certain provisions therein are subject to the director nomination provisions of the Stockholders Agreement.] | ||
See Article [
], subsection [
] of the Proposed HoldCo Certificate of Incorporation.
|
||||
Shareholder/Stockholder Written Consent in Lieu of a Meeting
|
The Existing Organizational Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution. |
The Proposed HoldCo Organizational Documents allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting if HoldCo does not
qualify as a “controlled company”
within the meaning of the
corporate governance rules of the NYSE.
|
||
See Article 22 of our Existing Organizational Documents.
|
See Article [
], subsection [
] of the Certificate of Incorporation.
|
|||
Classified Board
|
See Article 27 of our Existing Organizational Documents.
|
The Proposed HoldCo Organizational Documents will provide that the HoldCo Board continue to be divided into three classes with only one class of directors being elected in each year and each class serving for a [●]-year term. | ||
See Article [
], subsection [
] of the Proposed HoldCo Certificate of Incorporation.
|
||||
Exclusive Forum
|
The Existing Organizational Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation. | The Proposed HoldCo Organizational Documents adopt Delaware as the exclusive forum for certain stockholder litigation and the U.S. federal district courts as the exclusive forum for the resolution of any complaint |
• |
1% of the total number of shares of HoldCo Common Stock then outstanding; or
|
• |
the average weekly reported trading volume of the HoldCo Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding twelve months (or such shorter period that the issuer was required to file such reports and materials), other than Form
8-K
reports; and
|
• |
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
• |
LiveWire’s majority shareholder, the Company Equityholder, will have the largest voting interest in the combined company under the no redemption and maximum redemption scenarios;
|
• |
LiveWire’s executive management will make up the majority of the management of the combined company;
|
• |
LiveWire’s majority shareholder, the Company Equityholder, will have the ability to designate the majority of the initial HoldCo Board and subsequent decisions on the HoldCo Board will be based on shareholder vote, of which the Company Equityholder has the largest voting interest;
|
• |
the combined company will assume the name “[●]”; and
|
• |
LiveWire is the larger entity based on revenue. Additionally, LiveWire has a larger employee base and substantive operations.
|
• |
If the shares are registered in the name of the shareholder, the shareholder should contact ABIC at its offices at
AEA-Bridges
Impact Corp., PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman,
KY1-1102,
Cayman Islands or by telephone at [+1 (345) 814-5825], to inform ABIC of his, her or their request; or
|
• |
If a bank, broker or other nominee holds the shares, the shareholder should contact the bank, broker or other nominee directly.
|
• |
not less than the 90 days; and
|
• |
not more than the 120 days prior to the
one-year
anniversary of the preceding year’s annual meeting.
|
AEA-Bridges
Impact Corp.
|
Page
|
|||
Unaudited Financial Statements
|
||||
F-2
|
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
Audited Financial Statements (As Restated)
|
||||
F-24 | ||||
F-26 | ||||
F-27 | ||||
F-28 | ||||
F-29 | ||||
F-30 | ||||
LiveWire EV
|
||||
Audited Financial Statements
|
||||
F-46 | ||||
F-47 | ||||
F-48 | ||||
F-49 | ||||
F-50 | ||||
F-51 | ||||
Unaudited Financial Statements
|
||||
F-70 | ||||
F-71 | ||||
F-72 | ||||
F-73 | ||||
F-74 |
September 30,
2021
|
December 31,
2020
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$ | 1,090,787 | $ | 1,661,085 | ||||
Prepaid expenses
|
341,250 | 578,413 | ||||||
|
|
|
|
|||||
Total Current Assets
|
1,432,037 | 2,239,498 | ||||||
Cash and investments held in Trust Account
|
400,214,519 | 400,085,104 | ||||||
|
|
|
|
|||||
TOTAL ASSETS
|
$
|
401,646,556
|
|
$
|
402,324,602
|
|
||
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
||||||||
Current liabilities—accounts payable and accrued expenses
|
$ | 3,149,381 | $ | 118,353 | ||||
Warrant liability
|
19,825,000 | 46,970,000 | ||||||
Deferred underwriting fee payable
|
13,125,000 | 13,125,000 | ||||||
|
|
|
|
|||||
Total Liabilities
|
|
36,099,381
|
|
|
60,213,353
|
|
||
|
|
|
|
|||||
Commitments and Contingencies
|
||||||||
Class A ordinary shares subject to possible redemption, 40,000,000 shares at $10.00
per share redemption value at September 30, 2021 and December 31, 2020
|
400,000,000 | 400,000,000 | ||||||
Shareholders’ Deficit
|
||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
— | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; no shares issued and outstanding (excluding 40,000,000 shares subject to possible redemption)
|
|
|
—
|
|
|
|
—
|
|
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020
|
1,000 | 1,000 | ||||||
Accumulated deficit
|
(34,453,825 | ) | (57,889,751 | ) | ||||
|
|
|
|
|||||
Total Shareholders’ Deficit
|
|
(34,452,825
|
)
|
|
(57,888,751
|
)
|
||
|
|
|
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
$
|
401,646,556
|
|
$
|
402,324,602
|
|
||
|
|
|
|
Three Months
Ended
September 30,
2021
|
Nine Months
Ended
September 30,
2021
|
For the Period
from July 29,
2020
(inception)
Through
September 30,
2020
|
||||||||||
Formation and operational costs
|
$ | 3,117,068 | $ | 3,838,489 | $ | 5,005 | ||||||
|
|
|
|
|
|
|||||||
Loss from operations
|
|
(3,117,068
|
)
|
|
(3,838,489
|
)
|
|
(5,005
|
)
|
|||
|
|
|
|
|
|
|||||||
Other income:
|
||||||||||||
Interest earned on investments held in Trust Account
|
28,889 | 129,415 | — | |||||||||
Change in fair value of warrant liability
|
9,455,000 | 27,145,000 | — | |||||||||
|
|
|
|
|
|
|||||||
Total other income, net
|
9,483,889 | $ | 27,274,415 | — | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss)
|
$
|
6,366,821
|
|
$
|
23,435,926
|
|
$
|
(5,005
|
)
|
|||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding of Class A ordinary shares
|
40,000,000 | $ | 40,000,000 | — | ||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income per ordinary share, Class A ordinary shares
|
$
|
0.13
|
|
$
|
0.47
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding of Class B ordinary shares
|
10,000,000 | 10,000,000 | 10,000,000 | |||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income per ordinary share, Class B ordinary shares
|
$
|
0.13
|
|
|
0.47
|
|
$
|
(0.00
|
)
|
|||
|
|
|
|
|
|
Class B
Ordinary Shares
|
Additional
Paid in Capital
|
Accumulated
Deficit
|
Total
Shareholders’
(Deficit) Equity
|
|||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Balance — January 1, 2021
|
|
10,000,000
|
|
$
|
1,000
|
|
$
|
—
|
$
|
(57,889,751
|
)
|
$
|
(57,888,751
|
)
|
||||||
Net income
|
— | — | — | 19,314,054 | 19,314,054 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — March 31, 2021 (unaudited)
|
|
10,000,000
|
|
$
|
1,000
|
|
$
|
—
|
$
|
(38,575,697
|
)
|
$
|
(38,574,697
|
)
|
||||||
Net loss
|
— | — | — | (2,244,949 | ) | (2,244,949 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — June 30, 2021 (unaudited)
|
|
10,000,000
|
|
$
|
1,000
|
|
$
|
—
|
$
|
(40,820,646
|
)
|
$
|
(40,819,646
|
)
|
||||||
Net income
|
— | — | — | 6,366,821 | 6,366,821 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — September 30, 2021 (unaudited)
|
|
10,000,000
|
|
$
|
1,000
|
|
$
|
—
|
$
|
(34,453,825
|
)
|
$
|
(34,452,825
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
Class B
Ordinary Shares
|
Additional
Paid in Capital
|
Accumulated
Deficit
|
Total
Shareholders’
(Deficit) Equity
|
|||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Balance — July 29, 2020 (inception)
|
|
—
|
|
$
|
—
|
$
|
—
|
$
|
—
|
|
$
|
—
|
|
|||||||
Issuance of Class B Ordinary shares to Sponsor – prior to forfeiture of 1.5 million shares
|
11,500,000 | 1,000 | 23,850 | — | 25,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
$ | — | $ | — | $ | — | $ | (5,005 | ) | $ | (5,005 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — September 30, 2020 (unaudited)
|
|
11,500,000
|
|
$
|
1,000
|
|
$
|
23,850
|
|
$
|
(5,005
|
)
|
$
|
(19,995
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
For the Period
from July 29, 2020 (inception) through
September 30,
|
|
||
|
|
2021
|
|
|
2020
|
|
||
Cash Flows from Operating Activities:
|
|
|
||||||
Net income (loss)
|
$ | 23,435,926 | $ | (5,005 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Formation cost paid by Sponsor in exchange for issuance of Founder Shares
|
— | 5,005 | ||||||
Interest earned on investments held in Trust Account
|
(129,415 | ) | — | |||||
Change in fair value of warrant liability
|
(27,145,000 | ) | — | |||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
237,163 | — | ||||||
Accounts payable and accrued expenses
|
3,031,028 | — | ||||||
|
|
|
|
|||||
Net cash used in operating activities
|
|
(570,298
|
)
|
|
—
|
|
||
|
|
|
|
|||||
Net Change in Cash
|
|
(570,298
|
)
|
|
—
|
|
||
Cash – Beginning
|
1,661,085 | — | ||||||
|
|
|
|
|||||
Cash – Ending
|
$
|
1,090,787
|
|
$
|
—
|
|
||
|
|
|
|
|||||
Non-cash
investing and financing activities:
|
||||||||
Offering costs included in accrued offering costs
|
$ | — | $ | 433,033 | ||||
|
|
|
|
|||||
Offering costs paid by Sponsor in exchange for issuance of Founder Shares
|
$ | — | $ | 19,995 | ||||
|
|
|
|
|||||
Offering costs paid through promissory note
|
$ |
—
|
$ | 171,395 | ||||
|
|
|
|
Balance Sheet as of March 31, 2021 (unaudited)
|
|
As
Reported |
|
|
Adjustment
|
|
|
As Restated
|
|
|||
Class A ordinary shares subject to possible redemption
|
|
$
|
356,425,300
|
|
|
$
|
43,574,700
|
|
|
$
|
400,000,000
|
|
Class A ordinary shares
|
|
$
|
436
|
|
|
$
|
(436
|
) |
|
$
|
—
|
|
Additional
paid-in
capital
|
|
$
|
5,745,622
|
|
|
$
|
(5,745,622
|
) |
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(747,055
|
) |
|
$
|
(37,828,642
|
) |
|
$
|
(38,575,697
|
) |
Total Shareholders’ Equity (Deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(43,574,700
|
) |
|
$
|
(38,574,697
|
) |
Balance Sheet as of June 30, 2021 (unaudited)
|
||||||||||||
Class A ordinary shares subject to possible redemption
|
|
$
|
354,180,350
|
|
|
$
|
45,819,650
|
|
|
$
|
400,000,000
|
|
Class A ordinary shares
|
|
$
|
458
|
|
|
$
|
(458
|
) |
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
7,990,550
|
|
|
$
|
(7,990,550
|
) |
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(2,992,004
|
)
|
|
$
|
(37,828,642
|
) |
|
$
|
(40,820,646
|
) |
Total Shareholders’ Equity (Deficit)
|
|
$
|
5,000,004
|
|
|
$
|
(45,819,650
|
|
|
$
|
(40,819,646
|
)
|
Statement of Cash Flows for the Three Months Ended
March 31, 2021 (unaudited)
|
|
As Previously
Reported |
|
|
Adjustment
|
|
|
As Restated
|
|
|||
Change in value of Class A ordinary shares subject to possible redemption
|
|
$
|
19,314,060
|
|
|
$
|
(19,314,060
|
)
|
|
—
|
|
|
Statement of Cash Flows for the Three Months Ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A ordinary shares subject to possible redemption
|
|
$
|
17,069,110
|
|
|
$
|
(17,069,110
|
)
|
|
|
—
|
|
|
|
Basic and diluted
weighted average shares outstanding, Class A ordinary shares |
|
|
Basic and diluted
net
income (
loss
)
p
er
share,
Class A ordinary shares |
|
|
Basic and diluted
weighted average shares outstanding, Class B ordinary shares |
|
|
Basic and diluted
net
income (
loss
)
p
er
share,
Class B ordinary
shares |
|
||||
For the three months ended, March 31, 2021
|
|
|
|
|
||||||||||||
As Previously Reported
|
|
|
40,000,000
|
|
|
$
|
—
|
|
|
|
10,000,000
|
|
|
$
|
1.92
|
|
Adjustment
|
|
|
—
|
|
|
$
|
0.39
|
|
|
|
—
|
|
|
$
|
(1.53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Restated
|
|
|
40,000,000
|
|
|
$
|
0.39
|
|
|
|
10,000,000
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended, June 30, 2021
|
|
|
|
|
||||||||||||
As Previously Reported
|
|
|
40,000,000
|
|
|
$
|
—
|
|
|
|
10,000,000
|
|
|
$
|
(0.23
|
)
|
Adjustment
|
|
|
—
|
|
|
$
|
(0.04
|
)
|
|
|
—
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Restated
|
|
|
40,000,000
|
|
|
$
|
(0.04
|
)
|
|
|
10,000,000
|
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended, June 30, 2021
|
|
|
|
|
||||||||||||
As Previously Reported
|
|
|
40,000,000
|
|
|
$
|
—
|
|
|
|
10,000,000
|
|
|
$
|
1.70
|
|
Adjustment
|
|
|
—
|
|
|
$
|
0.34
|
|
|
|
—
|
|
|
$
|
(1.36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Restated
|
|
|
40,000,000
|
|
|
$
|
0.34
|
|
|
|
10,000,000
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021 |
|
|
December 31,
2020 (audited) |
|
||
Gross proceeds
|
|
$
|
400,000,000
|
|
|
$
|
400,000,000
|
|
Less:
|
|
|
||||||
Proceeds allocated to Public Warrants
|
|
$
|
(18,400,000
|
)
|
|
$
|
(18,400,000
|
)
|
Class A ordinary shares issuance costs
|
|
$
|
(20,292,642
|
)
|
|
$
|
(20,292,642
|
)
|
Plus:
|
|
|
||||||
Accretion of carrying value to redemption value
|
|
$
|
38,692,642
|
|
|
$
|
38,692,642
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption
|
|
$
|
400,000,000
|
|
|
$
|
400,000,000
|
|
Three Months Ended
September 30, 2021
|
Nine Months Ended
September 30, 2021
|
For the Period from July 29,
2020 (inception) Through
September 30, 2020
|
||||||||||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||||||||
Basic and diluted net income (loss) per ordinary share
|
||||||||||||||||||||||||
Numerator:
|
||||||||||||||||||||||||
Allocation of net income (loss), as adjusted
|
$ | 5,093,457 | $ | 1,273,364 | $ | 18,748,741 | $ | 4,687,185 | $ | — | $ | (5,005 | ) | |||||||||||
Denominator:
|
||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding
|
40,000,000 | 10,000,000 | 40,000,000 | 10,000,000 | — | 10,000,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic and diluted net income (loss) per ordinary share
|
$ | 0.13 | $ | 0.13 | $ | 0.47 | $ | 0.47 | $ | — | $ | (0.00 | ) |
(1)
|
|
For the three and nine months ended September 30, 2021, and for the period from July 29, 2020 (inception) through September 30, 2020, basic and diluted shares are the same as there are no
non-redeemable
securities that are dilutive to the Company’s shareholders.
|
• |
in whole and not in part;
|
• |
at a price of $
0.01
per warrant;
|
• |
upon not less than
30
days’ prior written notice of redemption; and
|
• |
if, and only if, the reported last sales price of the Company’s Class A ordinary shares equals or exceeds $
18.00
per share for any
20
trading days within
a
period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
30
-trading day
|
• |
in whole and not in part;
|
• |
at a price equal to a number of Class A ordinary shares to be determined, based on the redemption date and the fair market value of the Company’s Class A ordinary shares;
|
• |
upon a minimum of
30
days’ prior written notice of redemption;
|
• |
if, and only if, the last reported sale price of the Company’s Class A ordinary shares equals or exceeds $
10.00
per
share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders;
|
• |
if, and only if, the Private Placement Warrants are also concurrently exchanged at the same price (equal to a number of Class A ordinary shares) as the outstanding Public Warrants; and
|
• |
if, and only if, there is an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given
|
Level 1:
|
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
|
|
Level 2:
|
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
|
|
Level 3:
|
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
Held-To-Maturity
|
Amortized Cost
|
Gross
Holding Gain
|
Fair Value
|
|||||||||||
September 30, 2021
|
U.S. Treasury Securities (Mature on October 14, 2021) | $ | 400,213,381 | $ | 645 | $ | 400,214,026 | |||||||
December 31, 2020
|
U.S. Treasury Securities (Mature on April 8, 2021) | $ | 400,085,021 | $ | 5,549 | $ | 400,090,570 | |||||||
|
|
|
|
|
|
Description
|
Level
|
September 30, 2021
|
December 31, 2020
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Warrant Liability – Public Warrants
|
1 | $ | 13,000,000 | $ | 30,800,000 | |||||||||||
Warrant Liability – Private Placement Warrants
|
2 | $ | 6,825,000 | $ | 16,170,000 |
ASSETS
|
||||
Current assets
|
||||
Cash
|
$ | 1,661,085 | ||
Prepaid expenses
|
578,413 | |||
|
|
|||
Total Current Assets
|
2,239,498 | |||
Cash and marketable securities held in Trust Account
|
400,085,104 | |||
|
|
|||
TOTAL ASSETS
|
$
|
402,324,602
|
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
||||
Current liabilities - accrued expenses
|
$ | 118,353 | ||
Warrant liabilities
|
46,970,000 | |||
Deferred underwriting fee payable
|
13,125,000 | |||
|
|
|||
Total Liabilities
|
|
60,213,353
|
|
|
|
|
|||
Commitments and Contingencies
|
||||
Class A ordinary shares subject to possible redemption, 40,000,000 shares at $10.00 per share redemption value
|
400,000,000 | |||
Shareholders’ Deficit
|
||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
— | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; no shares issued and outstanding (excluding 40,000,000 shares subject to possible redemption)
|
— | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding
|
1,000 | |||
Additional paid-in capital
|
— | |||
Accumulated deficit
|
(57,889,751 | ) | ||
|
|
|||
Total Shareholders’ Deficit
|
(57,888,751 |
)
|
||
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
$
|
402,324,602
|
|
|
|
|
Formation and operating costs
|
$ | 236,839 | ||
|
|
|||
Loss from operations
|
|
(236,839
|
)
|
|
Other income (expenses):
|
||||
Change in fair value of warrant liability
|
(18,910,000 | ) | ||
Transactions costs allocable to warrants
|
(999,374 | ) | ||
Interest earned on marketable securities held in Trust Account
|
85,104 | |||
|
|
|||
Other expense, net
|
|
(19,824,270
|
)
|
|
|
|
|||
Net Loss
|
$
|
(20,061,109
|
)
|
|
|
|
|||
Weighted average shares outstanding of Class A ordinary shares
|
22,451,613 | |||
|
|
|||
Basic and diluted net loss per ordinary share, Class A
|
$ | (0.62 | ) | |
|
|
|||
Weighted average shares outstanding of Class B ordinary shares
|
10,000,000 | |||
|
|
|||
Basic and diluted net loss per ordinary share, Class B
|
$
|
(0.62
|
)
|
|
|
|
Class A
Ordinary Shares
|
Class B
Ordinary Shares
|
Additional
Paid in
|
Accumulated
|
Total
Shareholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance — July 29, 2020 (inception)
|
|
—
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
||||||||
Issuance of Class B ordinary shares to Sponsor
|
— | — | 11,500,000 | 1,150 | 23,850 | — | 25,000 | |||||||||||||||||||||
Proceeds received in excess of fair value of Private Placement Warrants
|
— | — | — | — | 840,000 | — | 840,000 | |||||||||||||||||||||
Forfeiture of Founder Shares
|
— | — | (1,500,000 | ) | (150 | ) | 150 | — | — | |||||||||||||||||||
Accretion for Class A ordinary shares to redemption amount
|
|
—
|
|
|
—
|
|
|
(864,000
|
)
|
|
(37,828,642
|
)
|
|
(38,692,642
|
)
|
|||||||||||||
Net loss
|
— | — | — | — | — | (20,061,109 | ) | (20,061,109 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — December 31, 2020
|
|
—
|
|
$
|
—
|
|
|
10,000,000
|
|
$
|
1,000
|
|
$
|
—
|
|
$
|
(57,889,751
|
)
|
$
|
(57,888,751
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (20,061,109 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Payment of formation costs through issuance of Class B ordinary shares
|
5,000 | |||
Interest earned on marketable securities held in Trust Account
|
(85,104 | ) | ||
Change in fair value of warrant liabilities
|
18,910,000 | |||
Transaction costs allocable to warrants
|
999,374 | |||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses
|
(578,413 | ) | ||
Accrued expenses
|
118,353 | |||
|
|
|||
Net cash used in operating activities
|
|
(691,899
|
)
|
|
Cash Flows from Investing Activities:
|
||||
Investment of cash in Trust Account
|
(400,000,000 | ) | ||
|
|
|||
Net cash used in investing activities
|
|
(400,000,000
|
)
|
|
Cash Flows from Financing Activities:
|
||||
Proceeds from sale of Units, net of underwriting discounts paid
|
392,725,000 | |||
Proceeds from sale of Private Placement Warrants
|
10,500,000 | |||
Proceeds from promissory note – related party
|
5 | |||
Repayment of promissory note – related party
|
(171,395 | ) | ||
Payments of offering costs
|
(700,626 | ) | ||
|
|
|||
Net cash provided by financing activities
|
|
402,352,984
|
|
|
|
|
|||
Net Change in Cash
|
|
1,661,085
|
|
|
Cash – Beginning
|
— | |||
|
|
|||
Cash – Ending
|
$
|
1,661,085
|
|
|
|
|
|||
Non-Cash Investing and Financing Activities:
|
||||
Deferred underwriting fee payable
|
$ | 13,125,000 | ||
|
|
|||
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares
|
$ | 20,000 | ||
|
|
|||
Payment of offering costs through promissory note – related party
|
$ | 171,390 | ||
|
|
Balance Sheet as of October 5, 2020
|
As Reported as
Previously
Restated in
Form 10-K/A Amendment No.1 |
Adjustment
|
As Restated
|
|||||||||
Class A ordinary shares subject to possible redemption
|
$ | 356,167,970 | $ | 43,832,030 | $ | 400,000,000 | ||||||
Class A ordinary shares
|
$ | 438 | $ | (438 | ) | $ | — | |||||
Additional paid-in capital
|
$ | 6,002,800 | $ | (6,002,800 | ) | $ | — | |||||
Accumulated deficit
|
$ | (1,004,379 | ) | $ | (37,828,792 | ) | $ | (38,833,171 | ) | |||
Total Shareholders’ Equity (Deficit)
|
$ | 5,000,009 | $ | (43,832,030 | ) | $ | (38,832,021 | ) |
Balance Sheet as of December 31, 2020
|
As Reported as
Previously Restated in Form 10-K/A Amendment No.1 |
Adjustment
|
As Restated
|
|||||||||
Class A ordinary shares subject to possible redemption
|
$ | 337,111,240 | $ | 62,888,760 | $ | 400,000,000 | ||||||
Class A ordinary shares
|
$ | 629 | $ | (629 | ) | $ | — | |||||
Additional paid-in capital
|
$ | 25,059,489 | $ | (25,059,489 | ) | $ | — | |||||
Accumulated deficit
|
$ | (20,061,109 | ) | $ | (37,828,642 | ) | $ | (57,889,751 | ) | |||
Total Shareholders’ Equity (Deficit)
|
$ | 5,000,009 | $ | (62,888,760 | ) | $ | (57,888,751 | ) |
Statement of Cash Flows for the period from July 29, 2020 (Inception)
through December 31, 2020
|
As Reported as
Previously Restated in Form 10-K/A Amendment No.1 |
Adjustment
|
As Restated
|
|||||||||
Initial classification of Class A ordinary shares subject to possible redemption
|
$ | 356,167,970 | $ | (356,167,970 | ) | $ | — | |||||
Change in value of Class A ordinary shares subject to possible redemption
|
$ | (19,056,730 | ) | $ | 19,056,730 | $ | — |
Earnings per Share for the period from July 29, 2020 (Inception) through
December 31, 2020 |
As Reported as
Previously Restated in Form 10-K/A Amendment No.1 |
Adjustment
|
As Restated
|
|||||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares
|
40,000,000 | (17,548,387 | ) | 22,451,613 | ||||||||
Basic and diluted net loss per ordinary share, Class A ordinary shares
|
$ | — | $ | (0.62 | ) | $ | (0.62 | ) | ||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares
|
10,000,000 | — | 10,000,000 | |||||||||
Basic and diluted net loss per ordinary share, Class B ordinary shares
|
$ | (2.01 | ) | $ | 1.39 | $ | (0.62 | ) |
Gross proceeds
|
$ | 400,000,000 | ||
Less:
|
||||
Proceeds allocated to Public Warrants
|
(18,400,000 | ) | ||
Class A ordinary shares issuance costs
|
(20,292,642 | ) | ||
Plus:
|
||||
Accretion of carrying value to redemption value
|
38,692,642 | |||
|
|
|||
Class A ordinary shares subject to possible redemption
|
$ | 400,000,000 | ||
|
|
For The Period Ended
July 29, 2020
(inception) through
December 31, 2020
|
||||||||
Class A
|
Class B
|
|||||||
Basic and diluted net loss per ordinary share
|
||||||||
Numerator:
|
||||||||
Allocation of net loss
|
$ | (13,879,256 | ) | $ | (6,181,853 | ) | ||
Denominator:
|
||||||||
Basic and diluted weighted average shares outstanding
|
22,451,613 | 10,000,000 | ||||||
Basic and diluted net loss per ordinary share
|
$ | (0.62 | ) | $ | (0.62 | ) |
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon not less than 30 days’ prior written notice of redemption; and
|
• |
if, and only if, the reported last sales price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
• |
in whole and not in part;
|
• |
at a price equal to a number of Class A ordinary shares to be determined, based on the redemption date and the fair market value of the Company’s Class A ordinary shares;
|
• |
upon a minimum of 30 days’ prior written notice of redemption;
|
• |
if, and only if, the last reported sale price of the Company’s Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders;
|
• |
if, and only if, the Private Placement Warrants are also concurrently exchanged at the same price (equal to a number of Class A ordinary shares) as the outstanding Public Warrants; and
|
• |
if, and only if, there is an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given
|
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Level
|
Amortized
Cost
|
Gross
Holding
Gain
|
Fair Value
|
|||||||||||||
Assets:
|
||||||||||||||||
Held-to-Maturity Investments - U.S. Treasury Securities (Mature on April 8, 2021)
|
1 | $ | 400,085,021 | $ | 5,549 | $ | 400,090,570 | |||||||||
Liabilities:
|
||||||||||||||||
Warrant Liability – Public Warrants
|
1 | — | — | 30,800,000 | ||||||||||||
Warrant Liability – Private Placement
|
2 | — | — | 16,170,000 | ||||||||||||
|
|
|
|
|
|
|
|
At
October 5,
2020 (Initial measurement) |
||||
Unit price
|
$ | 9.95 | ||
Term to initial business combination (in years)
|
1.0 | |||
Volatility
|
16.5 | % | ||
Risk-free rate
|
0.44 | % | ||
Dividend yield
|
0.0 | % |
Private
Placement |
Public
|
Warrant
Liabilities |
||||||||||
Fair value as of July 29, 2020
|
$ | — | $ | — | $ | — | ||||||
Initial measurement on October 5, 2020
|
9,660,000 | 18,400,000 | 28,060,000 | |||||||||
Transfer to Level 1
|
— | (30,800,000 | ) | (30,800,000 | ) | |||||||
Transfer to Level 2
|
(16,170,000 | ) | — | (16,170,000 | ) | |||||||
Change in fair value
|
6,510,000 | 12,400,000 | 18,910,000 | |||||||||
|
|
|
|
|
|
|||||||
Fair value as of December 31, 2020
|
$ | — | $ | — | $ | — | ||||||
|
|
|
|
|
|
2020
|
2019
|
|||||||
Revenue, net (Note 3)
|
$ | 30,863 | $ | 20,188 | ||||
Costs and expenses:
|
||||||||
Cost of goods sold
|
55,819 | 21,298 | ||||||
Engineering expense
|
23,036 | 22,085 | ||||||
Selling, general, and administrative expense
|
29,063 | 34,912 | ||||||
|
|
|
|
|||||
Operating expense
|
107,918 | 78,295 | ||||||
|
|
|
|
|||||
Operating loss
|
(77,055 | ) | (58,107 | ) | ||||
|
|
|
|
|||||
Other (expense) income, net
|
(30 | ) | 75 | |||||
Interest expense related party
|
(186 | ) | (1 | ) | ||||
Interest income
|
56 | 41 | ||||||
|
|
|
|
|||||
Loss before income taxes
|
(77,215 | ) | (57,992 | ) | ||||
Income tax provision (benefit)
|
357 | (1,475 | ) | |||||
|
|
|
|
|||||
Net loss
|
(77,572 | ) | (56,517 | ) | ||||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation adjustments
|
236 | (6 | ) | |||||
|
|
|
|
|||||
Comprehensive loss
|
$ | (77,336 | ) | $ | (56,523 | ) | ||
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 2,401 | $ | 1,054 | ||||
Accounts receivable, net (Note 2)
|
4,711 | 2,225 | ||||||
Accounts receivable from related party (Note 15)
|
35 | 4,152 | ||||||
Inventories (Note 6)
|
20,816 | 14,231 | ||||||
Other current assets
|
225 | 247 | ||||||
|
|
|
|
|||||
Total current assets
|
28,188 | 21,909 | ||||||
Property, plant, and equipment, net (Note 6)
|
11,860 | 10,402 | ||||||
Goodwill (Note 7)
|
8,327 | 8,327 | ||||||
Deferred tax assets (Note 5)
|
70 | — | ||||||
Lease assets (Note 8)
|
512 | 1,377 | ||||||
Intangible assets, net (Note 7)
|
2,733 | 3,195 | ||||||
Other long-term assets
|
50 | — | ||||||
|
|
|
|
|||||
Total assets
|
$ | 51,740 | $ | 45,210 | ||||
|
|
|
|
|||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 6,432 | $ | 5,584 | ||||
Accrued liabilities (Note 6)
|
24,707 | 8,379 | ||||||
Current portion of contingent consideration liability (Note 9)
|
2,163 | 2,011 | ||||||
Current portion of notes payable to related party (Note 15)
|
1,049 | 301 | ||||||
Current portion of lease liabilities (Note 8)
|
526 | 784 | ||||||
|
|
|
|
|||||
Total current liabilities
|
34,877 | 17,059 | ||||||
Long-term supplier liability (Note 6)
|
7,798 | — | ||||||
Long-term portion of lease liabilities
|
— | 609 | ||||||
Deferred tax liabilities (Note 5)
|
206 | 1,236 | ||||||
Long-term contingent consideration liability (Note 9)
|
2,148 | 3,692 | ||||||
Long-term portion of notes payable to related party (Note 15)
|
3,420 | — | ||||||
Other long-term liabilities
|
1,268 | 817 | ||||||
Commitments and contingencies (Note 12)
|
— | — | ||||||
|
|
|
|
|||||
Total liabilities
|
49,717 | 23,413 | ||||||
Total equity:
|
||||||||
Net Parent investment
|
1,793 | 21,803 | ||||||
Accumulated other comprehensive income / (loss)
|
230 | (6 | ) | |||||
|
|
|
|
|||||
Total equity
|
2,023 | 21,797 | ||||||
|
|
|
|
|||||
Total liabilities and equity
|
$ | 51,740 | $ | 45,210 | ||||
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (77,572 | ) | $ | (56,517 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||
Depreciation and amortization
|
3,942 | 1,755 | ||||||
Change in valuation of contingent consideration liability
|
788 | 725 | ||||||
Payment of contingent consideration in excess of acquisition date fair value
|
(275 | ) | — | |||||
Stock compensation expense
|
188 | 105 | ||||||
Deferred income taxes
|
98 | (1,553 | ) | |||||
Inventory write-down
|
3,019 | 2,181 | ||||||
Other, net
|
725 | 870 | ||||||
Changes in current assets and liabilities:
|
||||||||
Accounts receivable
|
(2,487 | ) | (2,213 | ) | ||||
Accounts receivable from related party
|
4,117 | (4,152 | ) | |||||
Inventories
|
(9,604 | ) | (16,335 | ) | ||||
Other current assets
|
24 | (98 | ) | |||||
Accounts payable and accrued liabilities
|
23,323 | 6,016 | ||||||
|
|
|
|
|||||
Net cash used by operating activities
|
(53,714 | ) | (69,216 | ) | ||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(3,243 | ) | (7,177 | ) | ||||
Acquisition of business
|
— | (7,000 | ) | |||||
|
|
|
|
|||||
Net cash used by investing activities
|
(3,243 | ) | (14,177 | ) | ||||
Cash flows from financing activities:
|
||||||||
Borrowings on notes payable to related party
|
5,533 | 300 | ||||||
Repayment on notes payable to related party
|
(1,500 | ) | — | |||||
Payment of contingent consideration up to acquisition date fair value
|
(1,905 | ) | — | |||||
Transfers from Parent
|
56,176 | 84,147 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
58,304 | 84,447 | ||||||
|
|
|
|
|||||
Net increase in cash
|
1,347 | 1,054 | ||||||
Cash:
|
||||||||
Cash, beginning of year
|
1,054 | — | ||||||
|
|
|
|
|||||
Cash, end of year
|
$ | 2,401 | $ | 1,054 | ||||
|
|
|
|
Net Parent
Investment |
Accumulated
Other Comprehensive Income (Loss) |
Total Equity
|
||||||||||
Balance, December 31, 2018
|
$ | (4,735 | ) | $ | — | $ | (4,735 | ) | ||||
Net loss
|
(56,517 | ) | — | (56,517 | ) | |||||||
Other comprehensive loss
|
— | (6 | ) | (6 | ) | |||||||
Net contribution from Parent
|
83,055 | — | 83,055 | |||||||||
|
|
|
|
|
|
|||||||
Balance, December 31, 2019
|
21,803 | (6 | ) | 21,797 | ||||||||
Net loss
|
(77,572 | ) | — | (77,572 | ) | |||||||
Other comprehensive income
|
— | 236 | 236 | |||||||||
Net contribution from Parent
|
57,562 | — | 57,562 | |||||||||
|
|
|
|
|
|
|||||||
Balance, December 31, 2020
|
$ | 1,793 | $ | 230 | $ | 2,023 | ||||||
|
|
|
|
|
|
• |
The
Combined statements of operations and comprehensive loss
|
• |
The
Combined balance sheets
Combined financial statements
|
• |
Net Parent investment in the
Combined statements of changes in Equity
Combined balance sheets
|
• |
Transactions between the Parent and the Company are generally considered to be effectively settled in cash at the time the transaction is recorded except for the note payable and certain accounts receivable from related party. The net effect of the settlement of transactions with the Parent is reflected in the combined statements of cash flows as a financing activity and in the
Combined balance sheets
|
• |
Within the
Combined financial statements
|
• |
Level 1 inputs include quoted prices for identical instruments and are the most observable.
|
• |
Level 2 inputs include quoted prices for similar assets and observable inputs.
|
• |
Level 3 inputs are not observable in the market and include the Company’s judgments about the assumptions market participants would use in pricing the asset or liability.
|
2020
|
2019
|
|||||||
Electric motorcycles
|
$ | 12,846 | $ | 11,712 | ||||
Electric balance bikes
|
16,544 | 7,882 | ||||||
Parts & Accessories
|
1,422 | 416 | ||||||
General Merchandise
|
51 | 178 | ||||||
|
|
|
|
|||||
Revenue, net
|
$ | 30,863 | $ | 20,188 | ||||
|
|
|
|
(In thousands)
|
||||
Assets
|
||||
Accounts Receivable
|
$ | 12 | ||
Inventory
|
75 | |||
Intangible assets
|
3,580 | |||
Goodwill
|
8,327 | |||
Property, plant, and equipment
|
5 | |||
Right of use assets
|
78 | |||
Other current assets
|
1 | |||
|
|
|||
$ | 12,078 | |||
|
|
|||
Liabilities
|
||||
Accounts payable
|
65 | |||
Lease Liabilities
|
35 | |||
|
|
|||
100 | ||||
|
|
|||
Total consideration
|
$ | 11,978 | ||
|
|
2020
|
2019
|
|||||||
Current
|
||||||||
Federal
|
$ | — | $ | — | ||||
State
|
89 | 33 | ||||||
Foreign
|
170 | 45 | ||||||
|
|
|
|
|||||
Current income tax provision (benefit)
|
259 | 78 | ||||||
|
|
|
|
|||||
Deferred
|
||||||||
Federal
|
218 | (1,387 | ) | |||||
State
|
(50 | ) | (166 | ) | ||||
Foreign
|
(70 | ) | — | |||||
|
|
|
|
|||||
Deferred income tax provision (benefit)
|
98 | (1,553 | ) | |||||
|
|
|
|
|||||
Total income tax provision (benefit)
|
$ | 357 | $ | (1,475 | ) | |||
|
|
|
|
2020
|
2019
|
|||||||
Domestic
|
$ | (77,611 | ) | $ | (58,155 | ) | ||
Foreign
|
396 | 163 | ||||||
|
|
|
|
|||||
Loss before income taxes
|
$ | (77,215 | ) | $ | (57,992 | ) | ||
|
|
|
|
2020
|
2019
|
|||||||
(Benefit) provision at statutory rate
|
$ | (16,213 | ) | $ | (12,177 | ) | ||
State taxes, net of federal benefit
|
(1,372 | ) | (1,049 | ) | ||||
Foreign rate differential
|
5 | 4 | ||||||
Unrecognized tax benefits including interest and penalties
|
11 | 5 | ||||||
Unbenefited losses
|
17,337 | 11,719 | ||||||
Valuation allowance
|
578 | 16 | ||||||
Other
|
11 | 7 | ||||||
|
|
|
|
|||||
Income tax provision (benefit)
|
$ | 357 | $ | (1,475 | ) | |||
|
|
|
|
2020
|
2019
|
|||||||
Deferred tax assets
|
||||||||
Accruals not yet tax deductible
|
$ | 1,545 | $ | 629 | ||||
Stock compensation
|
53 | 34 | ||||||
Net operating loss and credit carryforwards
|
50 | 16 | ||||||
UNICAP
|
12 | 57 | ||||||
Other
|
970 | 909 | ||||||
|
|
|
|
|||||
Deferred tax assets before valuation allowance
|
$ | 2,630 | $ | 1,645 | ||||
Less: Valuation allowance
|
(594 | ) | (16 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets
|
2,036 | 1,629 | ||||||
|
|
|
|
|||||
Deferred tax liabilities
|
||||||||
Depreciation, tax in excess of book
|
(1,871 | ) | (2,159 | ) | ||||
Amortization, tax in excess of book
|
(184 | ) | (77 | ) | ||||
Other
|
(117 | ) | (629 | ) | ||||
|
|
|
|
|||||
Total deferred tax liabilities
|
(2,172 | ) | (2,865 | ) | ||||
|
|
|
|
|||||
Net deferred tax asset (liability)
|
$ | (136 | ) | $ | (1,236 | ) | ||
|
|
|
|
2020
|
2019
|
|||||||
Raw materials
|
$ | 3,999 | $ | 5,507 | ||||
Electric motorcycles and electric balance bikes
|
15,320 | 8,218 | ||||||
Parts & Accessories and General Merchandise
|
1,497 | 506 | ||||||
|
|
|
|
|||||
$ | 20,816 | $ | 14,231 | |||||
|
|
|
|
2020
|
2019
|
|||||||
Tooling
|
$ | 8,824 | $ | 8,674 | ||||
Leasehold improvements
|
1,224 | 1,224 | ||||||
Machinery and equipment
|
2,098 | 1,166 | ||||||
Software
|
307 | — | ||||||
Construction in progress
|
4,635 | 1,087 | ||||||
|
|
|
|
|||||
17,088 | 12,151 | |||||||
Accumulated depreciation
|
(5,228 | ) | (1,749 | ) | ||||
|
|
|
|
|||||
$ | 11,860 | $ | 10,402 | |||||
|
|
|
|
2020
|
2019
|
|||||||
Sales concessions
|
$ | 15,271 | $ | — | ||||
Engineering expenses
|
3,030 | 4,660 | ||||||
Payroll, employee benefits and related expenses
|
2,857 | 2,048 | ||||||
Distributor deposits
|
149 | — | ||||||
Warranty and recalls
|
473 | 184 | ||||||
Sales incentive programs
|
433 | 100 | ||||||
Tax-related
accruals
|
372 | 327 | ||||||
Other
|
2,122 | 1,060 | ||||||
|
|
|
|
|||||
$ | 24,707 | $ | 8,379 | |||||
|
|
|
|
2020
|
2019
|
|||||||
Balance, beginning of period
|
$ | 8,327 | $ | — | ||||
Acquisitions
|
— | 8,327 | ||||||
|
|
|
|
|||||
Balance, end of period
|
$ | 8,327 | $ | 8,327 | ||||
|
|
|
|
2020
|
2019
|
|||||||||||||||||||||||
Gross
Carrying Value |
Accumulated
Amortization |
Net
Carrying Value |
Gross
Carrying Value |
Accumulated
Amortization |
Net Carrying
Value |
|||||||||||||||||||
Trademarks
|
$ | 2,500 | $ | (458 | ) | $ | 2,042 | $ | 2,500 | $ | (208 | ) | $ | 2,292 | ||||||||||
Non-compete
agreements
|
640 | (235 | ) | 405 | 640 | (107 | ) | 533 | ||||||||||||||||
Others
|
440 | (154 | ) | 286 | 440 | (70 | ) | 370 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 3,580 | $ | (847 | ) | $ | 2,733 | $ | 3,580 | $ | (385 | ) | $ | 3,195 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
$ | 462 | ||
2022
|
462 | |||
2023
|
462 | |||
2024
|
289 | |||
2025
|
254 | |||
Thereafter
|
804 | |||
|
|
|||
$ | 2,733 | |||
|
|
2020
|
2019
|
|||||||
Lease assets
|
$ | 512 | $ | 1,377 | ||||
Current portion of lease liability
|
$ | 526 | $ | 784 | ||||
Long-term portion of lease liabilities
|
— | 609 | ||||||
|
|
|
|
|||||
$ | 526 | $ | 1,393 | |||||
|
|
|
|
Future lease payments:
|
||||
2021
|
$ | 533 | ||
2022
|
— | |||
|
|
|||
533 | ||||
Present value discount
|
(7 | ) | ||
|
|
|||
Lease liabilities
|
$ | 526 | ||
|
|
2020
|
2019
|
|||||||
Cash outflows for amounts included in the measurement of lease liabilities
|
$ | 819 | $ | 744 | ||||
ROU assets obtained in exchange for lease obligations
|
$ | — | $ | 295 | ||||
Lease modifications
|
$ | (83 | ) | $ | — | |||
Weighted-average remaining lease term (in years)
|
0.74 | 1.63 | ||||||
Weighted-average discount rate
|
3.66 | % | 3.63 | % |
December 31,
2020 |
December 31,
2019 |
|||
Discount Rate per performance period [a]
|
2020: 0.6%
2021: 0.7%
|
2019: 2.2%
2020: 2.3%
2021: 2.3%
|
||
Revenue Volatility [b]
|
25% | 20% | ||
Revenue Metric Risk Premium [c]
|
11% | 14% |
[a] |
Discount rates applied in arriving at expected cash flow are based on the Company’s estimated cost of debt over the appropriate time horizon as it relates to the annual contingent payments.
|
[b] |
Revenue volatility is based on historical revenue volatility data observed for guideline public companies and selected as the product volume volatility assumption for the Monte-Carlo Simulation.
|
[c] |
The Revenue Metric Risk Premium was calculated based on the risk-free rate, revenue beta, equity risk premium, size premium and company-specific risk premium
|
Roll-forward of Fair Value Using Level 3 Inputs
|
(In thousands)
|
|||
Balance, as of March 4, 2019
|
$ | 4,978 | ||
Remeasurement of contingent consideration liability
|
725 | |||
Cash payment
|
— | |||
|
|
|||
Balance, as of December 31, 2019
|
$ | 5,703 | ||
Remeasurement of contingent consideration liability
|
788 | |||
Cash payment
|
(2,180 | ) | ||
|
|
|||
Balance as of December 31, 2020
|
$ | 4,311 | ||
|
|
2020
|
2019
|
|||||||
Balance, beginning of period
|
$ | 262 | $ | — | ||||
Warranties issued during the period
|
667 | 305 | ||||||
Settlements made during the period
|
(615 | ) | (43 | ) | ||||
Currency Translation Adjustments
|
12 | — | ||||||
Provision for recalls and changes to
pre-existing
warranty liabilities
|
452 | — | ||||||
Balance, end of period
|
$ | 778 | $ | 262 | ||||
|
|
|
|
Units
|
Weighted-Average
Grant Date Fair Value per Share |
|||||||
Nonvested, beginning of period
|
5 | $ | 42 | |||||
Granted
|
8 | 35 | ||||||
Vested
|
(2 | ) | 45 | |||||
Forfeited
|
— | — | ||||||
|
|
|
|
|||||
Nonvested, end of period
|
11 | $ | 36 | |||||
|
|
|
|
2020
|
2019
|
|||||||
Revenue:
|
||||||||
North America
|
$ | 24,161 | $ | 18,715 | ||||
EMEA
|
6,601 | 1,408 | ||||||
Asia Pacific
|
101 | 65 | ||||||
|
|
|
|
|||||
$ | 30,863 | $ | 20,188 | |||||
|
|
|
|
|||||
Long-lived assets:
|
||||||||
North America
|
$ | 11,860 | $ | 10,402 |
Net contribution from Parent reconciliation to transfers from Parent
|
2020
|
2019
|
||||||
Net contribution from Parent
|
$ | 57,562 | $ | 83,055 | ||||
Net change in unbenefited losses remaining with Parent
|
(1,198 | ) | 1,197 | |||||
Stock compensation expense
|
(188 | ) | (105 | ) | ||||
|
|
|
|
|||||
Transfers from Parent
|
56,176 | 84,147 | ||||||
|
|
|
|
|||||
Transfer from Parent per cash flow statement
|
$ | 56,176 | $ | 84,147 | ||||
|
|
|
|
Nine Months Ended
|
||||||||
September 26,
2021 |
September 27,
2020 |
|||||||
Revenue, net (Note 3)
|
$ | 22,933 | $ | 35,879 | ||||
Costs and expenses:
|
||||||||
Cost of goods sold
|
26,050 | 37,602 | ||||||
Engineering expense
|
13,005 | 10,583 | ||||||
Selling, general, and administrative expense
|
32,123 | 22,905 | ||||||
|
|
|
|
|||||
Operating expense
|
71,178 | 71,090 | ||||||
|
|
|
|
|||||
Operating loss
|
(48,245 | ) | (35,211 | ) | ||||
Other (expense) / income, net
|
(19 | ) | (5 | ) | ||||
Interest expense related party
|
(198 | ) | (94 | ) | ||||
Interest Income
|
11 | 16 | ||||||
|
|
|
|
|||||
Loss before income taxes
|
(48,451 | ) | (35,294 | ) | ||||
Income tax provision (benefit)
|
55 | 163 | ||||||
|
|
|
|
|||||
Net loss
|
(48,506 | ) | (35,457 | ) | ||||
Other comprehensive loss:
|
||||||||
Foreign currency translation adjustments
|
(68 | ) | (81 | ) | ||||
|
|
|
|
|||||
Comprehensive loss
|
$ | (48,574 | ) | $ | (35,538 | ) | ||
|
|
|
|
Nine months ended
|
||||||||
(Unaudited)
September 26,
2021 |
(Unaudited)
September 27,
2020 |
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (48,506 | ) | $ | (35,457 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||
Depreciation and amortization
|
3,354 | 2,923 | ||||||
Change in valuation of contingent consideration liability
|
28 | 233 | ||||||
Payment of contingent consideration in excess of acquisition date fair value
|
(344 | ) | (275 | ) | ||||
Stock compensation expense
|
511 | 137 | ||||||
Deferred income taxes
|
(19 | ) | — | |||||
Inventory write-down
|
2,604 | 1,124 | ||||||
Other, net
|
(531 | ) | 192 | |||||
Changes in current assets and liabilities:
|
||||||||
Accounts receivable
|
(513 | ) | (2,312 | ) | ||||
Accounts receivable from related party
|
5 | 3,464 | ||||||
Inventories
|
(1,478 | ) | (9,364 | ) | ||||
Other current assets
|
(887 | ) | (167 | ) | ||||
Accounts payable and accrued liabilities
|
(5,952 | ) | 2,288 | |||||
|
|
|
|
|||||
Net cash used by operating activities
|
(51,728 | ) | (37,214 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(7,747 | ) | (2,673 | ) | ||||
|
|
|
|
|||||
Net cash used by investing activities
|
(7,747 | ) | (2,673 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Borrowings on notes payable to related party
|
2,100 | 5,533 | ||||||
Repayments on notes payable to related party
|
(1,000 | ) | (1,000 | ) | ||||
Payment of contingent consideration up to acquisition date fair value
|
(1,836 | ) | (1,905 | ) | ||||
Transfers from Parent
|
61,404 | 38,089 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
60,668 | 40,717 | ||||||
|
|
|
|
|||||
Net increase in cash
|
1,193 | 830 | ||||||
Cash:
|
||||||||
Cash, beginning of period
|
2,401 | 1,054 | ||||||
|
|
|
|
|||||
Cash, end of period
|
$ | 3,594 | $ | 1,884 | ||||
|
|
|
|
Net Parent
Investment |
Accumulated
Other Comprehensive Income (Loss) |
Total Equity
|
||||||||||
Balance, December 31, 2020
|
$ | 1,793 | $ | 230 | $ | 2,023 | ||||||
Net loss
|
(14,714 | ) | — | (14,714 | ) | |||||||
Other comprehensive loss
|
— | (29 | ) | (29 | ) | |||||||
Net contribution from Parent
|
28,775 | — | 28,775 | |||||||||
|
|
|
|
|
|
|||||||
Balance, March 28, 2021
|
$ | 15,854 | $ | 201 | $ | 16,055 | ||||||
|
|
|
|
|
|
|||||||
Net loss
|
(16,590 | ) | — | (16,590 | ) | |||||||
Other comprehensive income
|
— | 1 | 1 | |||||||||
Net contribution from Parent
|
14,443 | — | 14,443 | |||||||||
|
|
|
|
|
|
|||||||
Balance, June 27, 2021
|
$ | 13,707 | $ | 202 | $ | 13,909 | ||||||
|
|
|
|
|
|
|||||||
Net loss
|
(17,202 | ) | — | (17,202 | ) | |||||||
Other comprehensive loss
|
— | (40 | ) | (40 | ) | |||||||
Net contribution from Parent
|
18,697 | — | 18,697 | |||||||||
|
|
|
|
|
|
|||||||
Balance, September 26, 2021
|
$ | 15,202 | $ | 162 | $ | 15,364 | ||||||
|
|
|
|
|
|
|||||||
Net Parent
Investment |
Accumulated
Other Comprehensive Income (Loss) |
Total Equity
|
||||||||||
Balance, December 31, 2019
|
$ | 21,803 | $ | (6 | ) | $ | 21,797 | |||||
Net loss
|
(10,719 | ) | — | (10,719 | ) | |||||||
Other comprehensive loss
|
— | (30 | ) | (30 | ) | |||||||
Net contribution from Parent
|
13,120 | — | 13,120 | |||||||||
|
|
|
|
|
|
|||||||
Balance, March 29, 2020
|
$ | 24,204 | $ | (36 | ) | $ | 24,168 | |||||
|
|
|
|
|
|
|||||||
Net loss
|
(12,635 | ) | — | (12,635 | ) | |||||||
Other comprehensive loss
|
— | (8 | ) | (8 | ) | |||||||
Net contribution from Parent
|
17,569 | — | 17,569 | |||||||||
|
|
|
|
|
|
|||||||
Balance, June 28, 2020
|
$ | 29,138 | $ | (44 | ) | $ | 29,094 | |||||
|
|
|
|
|
|
|||||||
Net loss
|
(12,103 | ) | — | (12,103 | ) | |||||||
Other comprehensive loss
|
— | (43 | ) | (43 | ) | |||||||
Net contribution from Parent
|
7,537 | — | 7,537 | |||||||||
|
|
|
|
|
|
|||||||
Balance, September 27, 2020
|
$ | 24,572 | $ | (87 | ) | $ | 24,485 | |||||
|
|
|
|
|
|
• |
The
Combined statements of operations and comprehensive loss
|
• |
The
Combined balance sheets
Combined financial statements
|
• |
Net Parent investment in the
Combined statements of changes in Equity
Combined balance sheets
|
• |
Transactions between the Parent and the Company are generally considered to be effectively settled in cash at the time the transaction is recorded except for the note payable and certain accounts receivable from related party. The net effect of the settlement of transactions with the Parent is reflected in the combined statements of cash flows as a financing activity and in the
Combined balance sheets
|
• |
Within the
Combined financial statements
|
Nine Months Ended
|
||||||||
September 26,
2021 |
September 27,
2020 |
|||||||
Electric motorcycles
|
$ | 5,357 | $ | 25,075 | ||||
Electric balance bikes
|
16,914 | 9,948 | ||||||
Parts & Accessories
|
575 | 821 | ||||||
General Merchandise
|
87 | 35 | ||||||
|
|
|
|
|||||
$ | 22,933 | $ | 35,879 | |||||
|
|
|
|
September 26,
2021 |
December 31,
2020 |
|||||||
Raw materials
|
$ | 5,551 | $ | 3,999 | ||||
Electric motorcycles and electric balance bikes
|
12,643 | 15,320 | ||||||
Parts & Accessories and General Merchandise
|
1,495 | 1,497 | ||||||
|
|
|
|
|||||
$ | 19,689 | $ | 20,816 | |||||
|
|
|
|
September 26,
2021 |
December 31,
2020 |
|||||||
Prepaid supplier deposits
|
$ | 748 | $ | 134 | ||||
Other
|
361 | 91 | ||||||
|
|
|
|
|||||
1,109 | 225 | |||||||
|
|
|
|
September 26,
2021 |
December 31,
2020 |
|||||||
Tooling
|
$ | 9,899 | $ | 8,824 | ||||
Construction in progress
|
7,559 | 4,635 | ||||||
Machinery and equipment
|
3,266 | 2,098 | ||||||
Software
|
2,745 | 307 | ||||||
Leasehold improvements
|
1,266 | 1,224 | ||||||
|
|
|
|
|||||
24,735 | 17,088 | |||||||
Accumulated depreciation
|
(8,140 | ) | (5,228 | ) | ||||
|
|
|
|
|||||
$ | 16,595 | $ | 11,860 | |||||
|
|
|
|
September 26,
2021 |
December 31,
2020 |
|||||||
Sales concession
|
$ | — | $ | 15,271 | ||||
Accrued engineering
|
3,883 | 3,030 | ||||||
Payroll, employee benefits and related expenses
|
3,668 | 2,857 | ||||||
Deferred revenue
|
1,791 | 149 | ||||||
Sales incentive program
|
1,070 | 433 | ||||||
Warranty and recalls
|
678 | 473 | ||||||
Tax related accruals
|
524 | 372 | ||||||
Distributor deposits
|
230 | 149 | ||||||
Other
|
1,881 | 1,973 | ||||||
|
|
|
|
|||||
$ | 13,725 | $ | 24,707 | |||||
|
|
|
|
September 26,
2021 |
December 31,
2020 |
|||||||
Lease assets
|
$ | 3,755 | $ | 512 | ||||
Current portion of lease liability
|
1,134 | 526 | ||||||
Lease liabilities
|
2,716 | — | ||||||
|
|
|
|
|||||
$ | 3,850 | $ | 526 | |||||
|
|
|
|
Future lease payments:
|
||||
2021
|
$ | 295 | ||
2022
|
1,184 | |||
2023
|
1,217 | |||
2024
|
886 | |||
2025
|
209 | |||
Thereafter
|
150 | |||
|
|
|||
Future Lease payment
|
3,941 | |||
Present value discount
|
(91 | ) | ||
|
|
|||
Lease liabilities
|
$ | 3,850 | ||
|
|
Nine months ended
|
||||||||
September 26,
2021
|
September 27,
2020 |
|||||||
Cash outflows for amounts included in the measurement of lease liabilities
|
$ | 623 | $ | 613 | ||||
ROU assets obtained in exchange for lease obligations
|
3,940 | — | ||||||
Lease modifications
|
— | — |
September 26,
2021
|
December 31,
2020 |
|||||||
Weighted-average remaining lease term (in years)
|
3.52 | 0.74 | ||||||
Weighted-average discount rate
|
1.29 | % | 3.66 | % |
• |
Level 1 inputs include quoted prices for identical instruments and are the most observable.
|
• |
Level 2 inputs include quoted prices for similar assets and observable inputs.
|
• |
Level 3 inputs are not observable in the market and include the Company’s judgments about the assumptions market participants would use in pricing the asset or liability.
|
September 26,
2021 |
December 31,
2020 |
|||
Discount Rate per performance period [a]
|
2021: 0.7% |
2020: 0.6%
2021: 0.7%
|
||
Revenue Volatility [b]
|
25% | 25% | ||
Revenue Metric Risk Premium [c]
|
11% | 11% |
[a] |
Discount rates applied in arriving at expected cash flow are based on the Company’s estimated cost of debt over the appropriate time horizon as it relates to the annual contingent payments.
|
[b] |
Revenue volatility is based on historical revenue volatility data observed for guideline public companies and selected as the product volume volatility assumption for the Monte-Carlo Simulation.
|
[c] |
The Revenue Metric Risk Premium was calculated based on the risk-free rate, revenue beta, equity risk premium, size premium and company-specific risk premium
|
Nine months ended
|
||||||||
September 26,
2021
|
September 27,
2020 |
|||||||
Balance, beginning of period
|
$ | 4,311 | $ | 5,703 | ||||
Revaluation of contingent consideration liability
|
28 | 233 | ||||||
Cash paid
|
(2,180 | ) | (2,180 | ) | ||||
|
|
|
|
|||||
Balance, end of period
|
$ | 2,159 | $ | 3,756 | ||||
|
|
|
|
Nine months ended
|
||||||||
September 26,
2021 |
September 27,
2020 |
|||||||
Balance, beginning of period
|
$ | 778 | $ | 262 | ||||
Warranties issued during the period
|
413 | 645 | ||||||
Settlements made during the period
|
(739 | ) | (264 | ) | ||||
Currency Translation Adjustments
|
(3 | ) | 8 | |||||
Recalls and changes to
pre-existing
warranty liabilities
|
592 | — | ||||||
|
|
|
|
|||||
Balance, end of period
|
$ | 1,041 | $ | 651 | ||||
|
|
|
|
Nine months ended
(in thousands) |
||||||||
September 26,
2021 |
September 27,
2020 |
|||||||
Net contribution from Parent
|
$ | 61,915 | $ | 38,226 | ||||
Stock compensation expense
|
(511 | ) | (137 | ) | ||||
|
|
|
|
|||||
Transfers from Parent
|
61,404 | 38,089 | ||||||
|
|
|
|
|||||
Transfers from Parent per cash flow statement
|
$ | 61,404 | $ | 38,089 | ||||
|
|
|
|
P
AGE
|
||||||
ARTICLE 1
|
|
|||||
C
ERTAIN
D
EFINITIONS
|
|
|||||
Section 1.1.
|
Definitions | A-3 | ||||
Section 1.2.
|
Construction |
A-16
|
||||
Section 1.3.
|
Knowledge | A-17 | ||||
Section 1.4.
|
Equitable Adjustments | A-17 | ||||
ARTICLE 2
|
|
|||||
E
XCHANGE
; A
GREEMENT
AND
P
LAN
OF
M
ERGER
|
|
|||||
Section
|
The Merger | A-17 | ||||
Section 2.2.
|
Closing; Merger Effective Time | A-18 | ||||
Section 2.3.
|
Exchange | A-18 | ||||
Section 2.4.
|
Closing Deliverables | A-18 | ||||
Section 2.5.
|
Governing Documents | A-19 | ||||
Section 2.6.
|
Directors and Officers | A-19 | ||||
Section 2.7.
|
PIPE Investment | A-19 | ||||
Section 2.8.
|
Earn-Out
|
A-20 | ||||
ARTICLE 3
|
|
|||||
E
FFECTS
OF
T
HE
T
RANSACTIONS
ON
C
APITAL
S
TOCK
AND
E
QUITY
A
WARDS
|
|
|||||
Section 3.1.
|
Conversion of Securities in the Merger | A-21 | ||||
Section 3.2.
|
Merger Exchange Procedures | A-21 | ||||
Section 3.3.
|
Domesticated SPAC Warrants | A-22 | ||||
Section 3.4.
|
Exchange Consideration | A-22 | ||||
Section 3.5.
|
Withholding | A-22 | ||||
ARTICLE 4
|
|
|||||
R
EPRESENTATIONS
AND
W
ARRANTIES
R
EGARDING
THE
L
IVE
W
IRE
B
USINESS
|
|
|||||
Section 4.1.
|
Organization | A-23 | ||||
Section 4.2.
|
LiveWire Entities | A-23 | ||||
Section 4.3.
|
Due Authorization | A-23 | ||||
Section 4.4.
|
No Conflict | A-24 | ||||
Section 4.5.
|
Governmental Authorities; Consents | A-24 | ||||
Section 4.6.
|
Capitalization of the Company | A-24 | ||||
Section 4.7.
|
Capitalization of Subsidiaries | A-25 | ||||
Section 4.8.
|
Insurance | A-25 | ||||
Section 4.9.
|
Financial Statements | A-25 | ||||
Section 4.10.
|
Undisclosed Liabilities | A-26 | ||||
Section 4.11.
|
Litigation and Proceedings | A-27 | ||||
Section 4.12.
|
Legal Compliance | A-27 | ||||
Section 4.13.
|
Contracts; No Defaults | A-27 | ||||
Section 4.14.
|
Material Suppliers | A-29 | ||||
Section 4.15.
|
Company Benefit Plans | A-29 | ||||
Section 4.16.
|
Labor Relations; Employees | A-30 | ||||
Section 4.17.
|
Taxes | A-32 | ||||
Section 4.18.
|
Brokers’ Fees | A-33 | ||||
Section 4.19.
|
Licenses and Permits | A-33 | ||||
Section 4.20.
|
Title to and Sufficiency of Assets | A-34 | ||||
Section 4.21.
|
Real Property | A-34 | ||||
Section 4.22.
|
Intellectual Property | A-35 | ||||
Section 4.23.
|
Privacy and Cybersecurity | A-36 |
Section 4.24.
|
Environmental Matters | A-36 | ||||
Section 4.25.
|
Absence of Changes | A-37 | ||||
Section 4.26.
|
Anti-Corruption
and
Anti-Money
Laundering Compliance
|
A-37 | ||||
Section 4.27.
|
Sanctions and International Trade Compliance | A-37 | ||||
Section 4.28.
|
Information Supplied | A-38 | ||||
Section 4.29.
|
No Additional Representations or Warranties | A-38 | ||||
ARTICLE 5
|
|
|||||
R
EPRESENTATIONS
AND
W
ARRANTIES
OF
SPAC
|
|
|||||
Section 5.1.
|
SPAC Organization | A-38 | ||||
Section 5.2.
|
Due Authorization | A-39 | ||||
Section 5.3.
|
No Conflict | A-39 | ||||
Section 5.4.
|
Subsidiaries | A-39 | ||||
Section 5.5.
|
Litigation and Proceedings | A-39 | ||||
Section 5.6.
|
SEC Filings | A-40 | ||||
Section 5.7.
|
Internal Controls; Listing; Financial Statements | A-40 | ||||
Section 5.8.
|
Governmental Authorities; Consents | A-41 | ||||
Section 5.9.
|
Trust Account | A-41 | ||||
Section 5.10.
|
Investment Company Act; JOBS Act | A-42 | ||||
Section 5.11.
|
Absence of Changes | A-42 | ||||
Section 5.12.
|
No Undisclosed Liabilities | A-42 | ||||
Section 5.13.
|
Capitalization of SPAC | A-42 | ||||
Section 5.14.
|
Brokers’ Fees | A-43 | ||||
Section 5.15.
|
Indebtedness | A-43 | ||||
Section 5.16.
|
Taxes | A-43 | ||||
Section 5.17.
|
Business Activities | A-44 | ||||
Section 5.18.
|
NYSE Listing; Securities Registration | A-45 | ||||
Section 5.19.
|
Registration Statement, Proxy Statement and Proxy Statement/Registration Statement | A-45 | ||||
Section 5.20.
|
No Outside Reliance | A-45 | ||||
Section 5.21.
|
Affiliate Transactions | A-46 | ||||
Section 5.22.
|
Employee Matters | A-46 | ||||
Section 5.23.
|
No Additional Representations or Warranties | A-46 | ||||
ARTICLE 6
|
|
|||||
R
EPRESENTATIONS
AND
W
ARRANTIES
OF
H
OLD
C
O
AND
M
ERGER
S
UB
|
|
|||||
Section 6.1.
|
Corporate Organization | A-46 | ||||
Section 6.2.
|
Certificate of Incorporation and Bylaws | A-47 | ||||
Section 6.3.
|
Capitalization | A-47 | ||||
Section 6.4.
|
Authority Relative to This Agreement | A-47 | ||||
Section 6.5.
|
No Conflict; Required Filings and Consents | A-48 | ||||
Section 6.6.
|
Compliance | A-48 | ||||
Section 6.7.
|
Board Approval; Vote Required. | A-48 | ||||
Section 6.8.
|
No Prior Operations of HoldCo or Merger Sub;
Post-Closing
Operations
|
A-49 | ||||
Section 6.9.
|
No Indebtedness | A-49 | ||||
Section 6.10.
|
Brokers’ Fees | A-49 | ||||
Section 6.11.
|
Information Supplied | A-49 | ||||
Section 6.12.
|
Taxes | A-49 | ||||
ARTICLE 7
|
|
|||||
C
OVENANTS
OF
HD
AND
T
HE
C
OMPANY
|
|
|||||
Section 7.1.
|
Conduct of LiveWire Business | A-49 | ||||
Section 7.2.
|
Inspection | A-52 | ||||
Section 7.3.
|
Preparation and Delivery of Additional Company Financial Statements | A-53 |
Section 7.4.
|
Shareholder Litigation |
A-53
|
||||
Section 7.5.
|
Indemnification and Insurance | A-54 | ||||
Section 7.6.
|
Separation | A-54 | ||||
Section 7.7.
|
No Solicitation by HD | A-54 | ||||
Section 7.8.
|
HD Funding Obligations | A-55 | ||||
Section 7.9.
|
Transition Services Agreement | A-56 | ||||
ARTICLE 8
|
|
|||||
C
OVENANTS
OF
SPAC
|
|
|||||
Section 8.1.
|
Trust Account | A-56 | ||||
Section 8.2.
|
No Solicitation by SPAC | A-56 | ||||
Section 8.3.
|
SPAC Conduct of Business | A-56 | ||||
Section 8.4.
|
Inspection | A-57 | ||||
Section 8.5.
|
SPAC Public Filings | A-58 | ||||
Section 8.6.
|
Shareholder Litigation | A-58 | ||||
Section 8.7.
|
Domestication | A-58 | ||||
ARTICLE 9
|
|
|||||
C
OVENANTS
OF
H
OLD
C
O
AND
M
ERGER
S
UB
|
|
|||||
Section 9.1.
|
HoldCo and Merger Sub Conduct of Business | A-58 | ||||
ARTICLE 10
|
|
|||||
J
OINT
C
OVENANTS
|
|
|||||
Section 10.1.
|
Filings with Governmental Authorities | A-59 | ||||
Section 10.2.
|
Preparation of Proxy Statement/Registration Statement; Shareholders’ Meeting and Approvals | A-60 | ||||
Section 10.3.
|
Support of Transaction | A-62 | ||||
Section 10.4.
|
Tax Matters | A-63 | ||||
Section 10.5.
|
Section 16 Matters | A-64 | ||||
Section 10.6.
|
Commercially Reasonable Efforts; Further Assurances | A-64 | ||||
Section 10.7.
|
Employee Matters | A-65 | ||||
Section 10.8.
|
Securities Listing and
De-Listing
|
A-65 | ||||
Section 10.9.
|
Subscription Agreements | A-66 | ||||
Section 10.10.
|
Confidentiality | A-66 | ||||
Section 10.11.
|
Cooperation | A-66 | ||||
Section 10.12.
|
Governance Matters | A-66 | ||||
ARTICLE 11
|
|
|||||
C
ONDITIONS
TO
O
BLIGATIONS
|
|
|||||
Section 11.1.
|
Conditions to Obligations of HD, SPAC and the Company | A-67 | ||||
Section 11.2.
|
Conditions to Obligations of SPAC | A-67 | ||||
Section 11.3.
|
Conditions to the Obligations of HD and the Company | A-68 | ||||
Section 11.4.
|
Frustration of Conditions | A-69 | ||||
ARTICLE 12
|
|
|||||
T
ERMINATION
/E
FFECTIVENESS
|
|
|||||
Section 12.1.
|
Termination | A-69 | ||||
Section 12.2.
|
Effect of Termination | A-70 | ||||
ARTICLE 13
|
|
|||||
M
ISCELLANEOUS
|
|
|||||
Section 13.1.
|
Trust Account Waiver | A-70 | ||||
Section 13.2.
|
Waiver | A-71 | ||||
Section 13.3.
|
Notices | A-71 |
Section 13.4.
|
Assignment |
A-72
|
||||
Section 13.5.
|
Rights of Third Parties | A-72 | ||||
Section 13.6.
|
Expenses | A-72 | ||||
Section 13.7.
|
Governing Law | A-73 | ||||
Section 13.8.
|
Headings; Counterparts | A-73 | ||||
Section 13.9.
|
Company and SPAC Disclosure Letters | A-73 | ||||
Section 13.10.
|
Entire Agreement | A-73 | ||||
Section 13.11.
|
Amendments | A-73 | ||||
Section 13.12.
|
Publicity | A-73 | ||||
Section 13.13.
|
Severability | A-74 | ||||
Section 13.14.
|
Jurisdiction; Waiver of Jury Trial | A-74 | ||||
Section 13.15.
|
Enforcement | A-74 | ||||
Section 13.16.
|
Non-Recourse
|
A-74 | ||||
Section 13.17.
|
Non-Survival
of Representations, Warranties and Covenants
|
A-75 | ||||
Section 13.18.
|
Conflicts and Privilege | A-75 | ||||
Section 13.19.
|
HD Guarantee | A-76 |
Exhibit
|
Description
|
|
Exhibit A | Form of Separation Agreement | |
Exhibit B | Form of Registration Rights Agreement | |
Exhibit C | Form of SPAC Investor Support Agreement | |
Exhibit D | Form of HoldCo Tax Matters Agreement | |
Exhibit E | Form of Contract Manufacturing Agreement | |
Exhibit F | Form of Transition Services Agreement | |
Exhibit G | Form of Master Services Agreement | |
Exhibit H | Governance Policies |
AEA-BRIDGES IMPACT CORP.
|
||
By: | /s/ John Garcia | |
Name: John Garcia | ||
Title: Co-Chief Executive Officer |
LW EV MERGER SUB, INC.
|
||
By: | /s/ John Garcia | |
Name: John Garcia | ||
Title: President, Secretary and Treasurer |
LW EV HOLDINGS, INC.
|
/s/ John Garcia
|
Name: John Garcia |
Title: President, Secretary and Treasurer |
HARLEY-DAVIDSON, INC.
|
||
By: | /s/ Jochen Zeitz | |
Name: Jochen Zeitz | ||
Title: Chairman, President and CEO |
LIVEWIRE EV, LLC
|
||
By: | /s/ Jochen Zeitz | |
Name: Jochen Zeitz | ||
Title: Authorized Signatory |
Item
|
Terms
|
|
Committees of the Board
|
The Board of Directors (the “
Board
”) of LW EV Holdings, Inc. (“
HoldCo
”) shall establish and maintain (in accordance with applicable laws and NYSE rules) five standing committees: (i) Audit and Finance Committee, (ii) Conflicts Committee, (iii) Nominating and Corporate Governance Committee, (iv) Human Resources Committee, and (v) Brand and Sustainability Committee.
|
|
Audit and Finance Committee
|
The Audit and Finance Committee Charter will require that such committee be entirely comprised of independent directors (each, an “
Independent Director
”), each of whom shall meet the independence requirements under the listing rules of NYSE.
|
|
Conflicts Committee
|
The Conflicts Committee Charter will require that such committee be entirely comprised of Independent Directors.
The Board may refer any matters involving conflicts with HD to the Conflicts Committee; provided, however, that the Board must refer the following conflict matters: (i) new material arrangements and transactions between HD and HoldCo, (ii) changes to HoldCo’s organizational documents that involve conflicts between HD and HoldCo, (iii) resolution of material disputes related to agreements between HD and its affiliates on the one hand and HoldCo and its affiliates on another, (iv) any material amendment, waiver, or enforcement action relating to the agreements referenced in the foregoing clause (iii) (including the Intellectual Property Licensing Agreement, Contract Manufacturing Agreement, Joint Development Agreement and the Master Services Agreement) and any other material operational matters between HD and HoldCo, and (v) any amendment to the Conflicts Committee Charter.
Any sales of HoldCo shares by HD that are subject to an early price-based release under the Registration Rights Agreement will require the approval of the Conflicts Committee.
Matters not involving conflicts with HD will not require the Conflicts Committee’s approval and will be governed by applicable Delaware law.
The Board may dissolve the Conflicts Committee at the time that both (i) HoldCo has a majority independent Board and (ii) HD owns less than 50% of the outstanding shares of HoldCo.
|
|
Nominating and Corporate Governance Committee
|
The Nominating and Corporate Governance Committee Charter will require that such committee be comprised of a majority of Independent Directors.
The Nominating and Corporate Governance Committee shall have authority to determine the Independent Directors to be nominated for election to the Board.
|
|
Human Resources Committee
|
The Human Resources Committee Charter will require that such committee be comprised of a majority of Independent Directors.
The Human Resources Committee will be primarily responsible for employment matters of the senior management team, including appointments, termination, and compensation.
The Chief Executive Officer of HoldCo shall serve on the Human Resources Committee, but shall recuse himself in the event of conflicted discussions.
|
|
Brand and Sustainability Committee
|
The Brand and Sustainability Committee Charter will require that HD will choose HoldCo directors with relevant branding and sustainability experience to serve on such committee. HD will consider a director designated by Sponsor to serve on the Brand and Sustainability Committee. |
Item
|
Terms
|
|
CEO Role and Succession Plan
|
Mr. Jochen Zeitz will serve as acting Chief Executive Officer and Executive Chairman of HoldCo upon the closing of the business combination (at the same time as Mr. Zeitz acts as the Chief Executive Officer of HD). The permanent Chief Executive Officer of HoldCo will be appointed within twenty-four months following the announcement of the business combination. Mr. Zeitz will retain the role of Executive Chairman of HoldCo after HoldCo appoints a permanent Chief Executive Officer. |
1. |
ElectricSoul, LLC, a Delaware limited liability company
|
1. |
John Garcia
|
2. |
John Replogle
|
3. |
George Serafeim
|
Signature of Stockholder
|
||
Print Name of Stockholder
|
||
Its: | ||
Address: |
|
|
|
||
|
||
|
Agreed and Accepted as of | ||
[ ☐ ], 20[ ☐ ] | ||
LW EV Holdings, Inc. | ||
By: |
|
|
Name: | ||
Title: |
ARTICLE I. SEPARATION
|
I-1 | |||||
1.1
|
Transfers of Assets and Assumptions of Liabilities; LiveWire Assets; HD Assets | I-1 | ||||
1.2
|
Consents; Nonassignable Assets | I-6 | ||||
1.3
|
Termination of Intercompany Agreements | I-6 | ||||
1.4
|
Treatment of Shared Contracts | I-7 | ||||
1.5
|
Treatment of Shared Permits | I-7 | ||||
1.6
|
Treatment of ZEV Environmental Attributes | I-8 | ||||
1.7
|
Bank Accounts; Cash Balances; Misdirected Payments | I-8 | ||||
1.8
|
Misallocated Assets and Liabilities | I-10 | ||||
1.9
|
Disclaimer of Representations and Warranties | I-10 | ||||
1.10
|
Certain Other Matters | I-10 | ||||
ARTICLE II. MUTUAL RELEASES; INDEMNIFICATION; COOPERATION; INSURANCE
|
I-11 | |||||
2.1
|
Release of Claims | I-11 | ||||
2.2
|
Indemnification by LiveWire | I-12 | ||||
2.3
|
Indemnification by HD | I-12 | ||||
2.4
|
Procedures for Defense; Settlement and Indemnification of Third-Party Claims | I-12 | ||||
2.5
|
Insurance Proceeds | I-13 | ||||
2.6
|
Survival of Indemnities | I-13 | ||||
2.7
|
Insurance Matters | I-14 | ||||
2.8
|
Guarantees, Letters of Credit and Other Obligations | I-15 | ||||
ARTICLE III. EXCHANGE OF INFORMATION; CONFIDENTIALITY
|
I-16 | |||||
3.1
|
Agreement for Exchange of Information | I-16 | ||||
3.2
|
Ownership of Information | I-16 | ||||
3.3
|
Compensation for Providing Information | I-16 | ||||
3.4
|
Record Retention | I-16 | ||||
3.5
|
[Reserved] | I-17 | ||||
3.6
|
Other Agreements Providing for Exchange of Information | I-17 | ||||
3.7
|
Auditors and Audits | I-17 | ||||
3.8
|
Privileged Matters | I-17 | ||||
3.9
|
Confidentiality | I-19 | ||||
3.10
|
Protective Arrangements | I-20 | ||||
ARTICLE IV. FURTHER ASSURANCES AND ADDITIONAL COVENANTS
|
I-20 | |||||
4.1
|
Further Assurances | I-20 | ||||
4.2
|
Performance | I-21 | ||||
4.3
|
Mail Forwarding | I-21 | ||||
4.4
|
Order of Precedence | I-21 | ||||
4.5
|
HD Specified Marks | I-21 | ||||
4.6
|
Non-Solicitation
|
I-22 | ||||
4.7
|
Ancillary Agreements | I-22 | ||||
ARTICLE V. TERMINATION
|
I-22 | |||||
5.1
|
Termination | I-22 | ||||
5.2
|
Effect of Termination | I-23 | ||||
ARTICLE VI. MISCELLANEOUS
|
I-23 | |||||
6.1
|
Corporate Power | I-23 |
6.2
|
Tax Matters | I-23 | ||||
6.3
|
Modification or Amendments | I-25 | ||||
6.4
|
Waivers of Default | I-25 | ||||
6.5
|
Counterparts | I-25 | ||||
6.6
|
Governing Law | I-25 | ||||
6.7
|
Notices | I-25 | ||||
6.8
|
Entire Agreement | I-26 | ||||
6.9
|
No Third-Party Beneficiaries | I-26 | ||||
6.10
|
Severability | I-26 | ||||
6.11
|
Interpretation | I-26 | ||||
6.12
|
Defined Terms | I-27 | ||||
6.13
|
Assignment | I-27 | ||||
6.14
|
Specific Performance | I-27 | ||||
6.15
|
Expenses | I-27 | ||||
6.16
|
Survival of Covenants | I-27 | ||||
6.17
|
Construction | I-27 | ||||
6.18
|
Performance | I-28 | ||||
6.19
|
No Admission of Liability | I-28 | ||||
6.20
|
Limited Liability of Shareholders | I-28 | ||||
6.21
|
Limitations of Liability | I-28 | ||||
6.22
|
Consent to Jurisdiction | I-28 |
HARLEY-DAVIDSON, INC. | ||
By: |
|
|
Name: | ||
Title: |
LIVEWIRE EV, LLC | ||
By: |
|
|
Name: | ||
Title: |
Clause
|
Page
|
|||||
1.
|
DEFINITIONS | J-1 | ||||
2.
|
KEY COOPERATION IN LONG TERM COLLABORATION | J-5 | ||||
3.
|
MANUFACTURING MATTERS | J-6 | ||||
4.
|
SUPPLY MATTERS | J-9 | ||||
5.
|
PRICING PRINCIPLES | J-9 | ||||
6.
|
SERVICING | J-10 | ||||
7.
|
FURTHER COOPERATION BETWEEN THE PARTIES | J-10 | ||||
8.
|
STEERING COMMITTEE. | J-12 | ||||
9.
|
SECONDMENT OF STAFF | J-13 | ||||
10.
|
MARKETING; PRESS RELEASE | J-13 | ||||
11.
|
INTELLECTUAL PROPERTY | J-14 | ||||
12.
|
DATA PRIVACY AND SECURITY | J-17 | ||||
13.
|
ELECTRONIC COMMUNICATION | J-17 | ||||
14.
|
TERM AND TERMINATION | J-17 | ||||
15.
|
LIMITATIONS ON LIABILITY | J-18 | ||||
16.
|
MUTUAL REPRESENTATION AND WARRANTIES | J-18 | ||||
17.
|
CONFIDENTIALITY | J-20 | ||||
18.
|
INDEMNITY | J-20 | ||||
19.
|
GOVERNING LAW | J-20 | ||||
20.
|
DISPUTE RESOLUTION | J-21 | ||||
21.
|
NOTICES | J-21 | ||||
22.
|
MISCELLANEOUS PROVISIONS | J-22 |
(1) |
LiveWire EV, LLC
LW
|
(2) |
Kwang Yang Motor Co., Ltd
光陽工業股份有限公司
), a Taiwanese company, representing for the purpose of this Agreement also its relevant subsidiaries (collectively as “
KYMCO
|
A. |
LW and its Affiliates (“
LW Group
EV
two-wheel
and other EVs, LW is seeking to collaborate with KYMCO to achieve leadership positions across priority global markets for EV products.
|
B. |
KYMCO is one of the leading original equipment manufacturers for premium internal combustion engine scooters across key global markets with world class experience and resources in connection with the design, development and manufacturing of the same. KYMCO has substantial experience in smaller output EV scooters and related business models, as well as possessing developmental IP for various large output EV motorcycle concepts. KYMCO also offers advanced high-quality manufacturing capabilities that can be delivered at competitive cost through facilities in multiple countries, along with a track record of successful collaboration in both manufacturing and design with other premium global OEMs.
|
C. |
The Parties believe that there are compelling benefits to cooperate together to realize specific opportunities in the EV industry. After friendly negotiations, the Parties wish to enter into this Agreement with respect to long term cooperation as described under this Agreement (“
Long Term Collaboration
|
1.
|
DEFINITIONS
|
1.1 |
“
Actual Costs
Clause 5.1(6)
.
|
1.2 |
“
Affiliate(s)
|
1.3 |
“
Agreement
|
(A) |
the main body of this Agreement, including any subsequent mutually agreed amendment (if any) to the main body of this Agreement; and
|
(B) |
the Appendices to this Agreement, in the order they are listed in
Clause 1.1
.
|
1.4 |
“
Average FX Rate
Clause 5.1(2)
.
|
1.5 |
“
Change of Control Event
|
1.6 |
“
Committee Representative
Clause 8.2
.
|
1.7 |
“
Common Product
Clause 2.3
.
|
1.8 |
“
Competitor of LW
|
1.9 |
“
Confidential Information
Appendix 1
.
|
1.10 |
“
Confidential Information of KYMCO
Appendix 1
.
|
1.11 |
“
Confidential Information of LW
Appendix 1
.
|
1.12 |
“
Control
|
1.13 |
“
Data
Clause 12.1
.
|
1.14 |
“
Data Processing Agreement
Appendix 2
.
|
1.15 |
“Designated Recipients”
Clause 21.2
.
|
1.16 |
“
Effective Date
Clause 14.1
.
|
1.17 |
“
EV
|
1.18 |
“
Exceptions
Clause 15.1.
|
1.19 |
“
Externally Sourced Products and Components
Clause 3.2(2)
.
|
1.20 |
“
FCPA
Clause
16.3(1)
.
|
1.21 |
“
H-D
Group
|
1.22 |
“
Indemnified Amounts
Clause 18.1
.
|
1.23 |
“
Indemnified Party
Clause 18.1
.
|
1.24 |
“
Indemnifying Party
Clause 18.1
.
|
1.25 |
“
Initial Contract Manufacturing Agreement
Clause 3.1(1)(a)
.
|
1.26 |
“
Ionex
Clause 7.2(1)
.
|
1.27 |
“
Ionex Business Plan
Clause 7.2(1)
.
|
1.28 |
“
In-residence
Program
Clause 9.1(1)
.
|
1.29 |
“
Initial Executive Meeting
Clause 20.3
.
|
1.30 |
“
Intellectual Property
Know-How,
mask works and both registered and unregistered copyrights, but not including trademarks, service marks, trade names and trade dress; provided, that Intellectual Property does not include general industry knowledge.
|
1.31 |
“
Joint Confidential Information
Appendix 1
.
|
1.32 |
“
Jointly Owned Intellectual Property
Clause 11.4(1)(a)
.
|
1.33 |
“
Joint Tooling
Clause 3.1(2)
.
|
1.34 |
“
Know-How
non-public
information other than general industry knowledge, including but not limited to design, features, composition, manufacture, use or sale of items, procedures, protocols, and techniques and results of experimentation and testing
,
in intangible form, which is developed by or for or in the possession of a Party or its Affiliates (other than Jointly Owned Intellectual Property) and which is retained in the unaided memory by employees of a Party who have had access to the Confidential Information, and which was not already retained prior to or was not retained under circumstances unrelated to access to the Confidential Information.
|
1.35 |
“
KYMCO Intellectual Property
Clause 11.2(1)
.
|
1.36 |
“
KYMCO Tooling
Clause 3.1(2)
.
|
1.37 |
“
Long Term Collaboration
|
1.38 |
“
LW
Adjacent EV Products
|
1.39 |
“
LW
Adjacent EV Products Commercialization
Clause 3.2(1)
.
|
1.40 |
“
LW Covered Products
two-wheel
products that leverage Slayer powertrains.
|
1.41 |
“
LW Group
|
1.42 |
“
LW Intellectual Property
Clause 11.1(1)
.
|
1.43 |
“
LW Powertrain Products
|
1.44 |
“
LW Projects Information
|
1.45 |
“
LW Tooling
Clause 3.1(2)
.
|
1.46 |
“
Noodoe
Clause 7.3(1)
.
|
1.47 |
“
Noodoe Development Plan
Clause 7.3(1)
.
|
1.48 |
“
Patent Rights
continuations-in-part,
|
1.49 |
“
Person
|
1.50 |
“
Personal Information
|
1.51 |
“
Privacy and Security Requirements
Appendix 2
.
|
1.52 |
“
Proposed Procurement
Clause 3.2(3)
.
|
1.53 |
“
Proposed Procurement Notice
Clause 3.2(3)
.
|
1.54 |
“
Receiving Entity
Clause 9.1(1)
.
|
1.55 |
“
Relevant Time
Clause 3.4(1)
.
|
1.56 |
“
Representatives
Appendix 1
.
|
1.57 |
“
Review Month
Clause 5.1(2)
.
|
1.58 |
“
Signing Date
|
1.59 |
“
Sub-suppliers
Clause 11.5
.
|
1.60 |
“
Steering Committee
Clause 8
.
|
1.61 |
“
Tax
Taxes
|
1.62 |
“
Term
Clause 14.1
.
|
1.63 |
“
Trademarks
|
1.64 |
“
Transferring Entity
Clause 9.1(1)
.
|
1.65 |
“
USPTO
|
2.
|
KEY COOPERATION IN LONG TERM COLLABORATION
|
2.1 |
Purpose of Long Term Collaboration
. The purpose of the Long Term Collaboration under this Agreement is to, subject to the terms under this Agreement, explore further business opportunities in EV markets by leveraging the Parties capability in the design, development, manufacturing and distribution of EV products. Both Parties believe that they will bring unique and additive strengths to each other and that there are compelling benefits to cooperate to realize the business opportunities. For the sake of clarity, each Party’s internal combustion engine (ICE) business, including, but not limited to parts, components, engines, and vehicles, shall be excluded from the scope of this Agreement.
|
2.2 |
Geographic Scope of Long Term Collaboration
. The Long Term Collaboration intends to explore the opportunities in the global EV markets.
|
2.3 |
Optimization of Supply Chain
. The Parties understand a competitive cost level of the EV products manufactured and supplied by the Parties hereunder (“
Common Product
Clause 7.1
, to optimize the supply chains to reduce the cost of the Common Product.
|
2.4 |
Long Term Collaboration Exclusivity
.
|
(1) |
During the Term of this Agreement, neither Party nor their Affiliates will (a) engage, on behalf of itself or any other party, in any cooperation with respect to the research, design, development, manufacture, use, offer for sale, sale or import of EV product competitive with the LW Covered Products leveraging [***] with, or (b) grant any license or right to cooperate with respect to the research, design, development, manufacture, use, offer for sale, sale or import of EV product competitive with the LW Covered Products leveraging [***] or its Affiliates or successors (in the case of LW) or [***] or its Affiliates or successors (in the case of KYMCO).
|
(2) |
KYMCO shall not and shall cause its Affiliates not to, enter into any agreement with another OEM that would cause it to be unable to cooperate with LW in the design or manufacture of products of any EV motorcycle or LW Adjacent EV Products. For the avoidance of doubt, this
Clause 2.4(2)
shall not prevent KYMCO from designing or manufacturing any product, tooling or equipment as to which KYMCO cooperates with any third party or any product which utilizes the Intellectual Property owned by a third party or jointly owned by a third party and KYMCO.
|
2.5 |
Differentiation
.
|
(1) |
Unless otherwise agreed by LW, KYMCO shall not, and shall cause its Affiliates not to, produce or sell any EV motorcycle under its own brand which contains unique design features of the LW Covered Products manufactured by KYMCO for LW and which would be found to be confusingly similar to LW Covered Products by a reasonable consumer.
|
(2) |
Unless otherwise agreed by LW, KYMCO shall not, and shall cause its Affiliates not to, contract manufacture EV [***] and which would be found by a reasonable consumer to be confusingly similar to LW Covered Products manufactured by KYMCO for LW.
|
(3) |
Unless otherwise agreed by LW, KYMCO shall ensure at least of 60% of the surface area of the LW Powertrain Products of any KYMCO product being covered by body cladding or other similar method. The execution of this concept should be such that when viewed from a side angle the 60% surface area of the EV Powertrain Product in any KYMCO product is not directly visible, including through translucent materials. KYMCO shall have the option but not the obligation to provide its intended design to LW for an advance assessment of whether LW believes a particular KYMCO design would meet this standard.
|
(4) |
For clarity, nothing in this
Clause 2.5
shall restrict a Party or its Affiliates use of its own Intellectual Property (including Jointly Owned Intellectual Property), utilizing general industry knowledge or
|
place restrictions on either Party’s internal combustion engine (ICE) business, including, but not limited to parts, components, engines, and vehicles. |
3.
|
MANUFACTURING MATTERS
|
3.1 |
Manufacturing of the LW Covered Products
.
|
(1) |
Provided that KYMCO has relevant manufacturing abilities and capabilities, KYMCO will have the right to act as LW’s exclusive manufacturer for the LW Covered Products for a period that begins on the date that KYMCO begins manufacturing the LW Covered Products and ends 5 years thereafter, under the terms and conditions of a separate contract manufacturing agreement to be entered into between the Parties, in which following principles shall be reflected.
|
(a) |
The Parties agree that the key terms, items and conditions of such separate contract manufacturing agreement will be entered into between the Parties (“
Initial Contract Manufacturing Agreement
H-D
Group that engages in the manufacturing of products used for the LW Speed and SpeedWire platforms (as modified from time to time), and
|
(b) |
The Parties will in good faith agree on the minimum quantities per year of the LW Covered Products to be manufactured by KYMCO and purchased by LW for a
5-year
period commencing from the date that KYMCO begins manufacturing the LW Covered Products, and KYMCO agrees to maintain at all times during such period the agreed capacity to manufacture the LW Covered Products for LW and LW agrees to purchase such minimum quantities. LW’s obligation to purchase the agreed minimum quantities shall not be subject to
Clause 15
.
|
(c) |
The Parties agree that if the U.S. enacts consumer EV tax credits or similar, generally available incentive(s) to promote public EV consumption or reshore foreign manufacturing and such incentives would result in the LW Covered Products manufactured by KYMCO outside the U.S. becoming materially uncompetitive versus U.S. manufactured alternatives, LW shall consult with KYMCO and provide sufficient information for the Parties to ascertain the actual impact on the Parties’ manufacturing arrangements with each other at that time and make such mutually agreed upon amendments thereto. LW will have the right to amend the manufacturing exclusivity arrangement with KYMCO such that the U.S. market would be excluded, provided that KYMCO consents, such consent to not be unreasonably withheld. Should LW enact this right LW agrees to provide KYMCO with an alternate collaboration or manufacturing opportunity to be mutually agreed between the Parties with an economic value equivalent to the shortfall in economic value as a result of KYMCO’s loss of the manufacturing exclusivity for LW Covered Products in the U.S.
|
(d) |
Notwithstanding the above, LW shall not have the ability to exercise the right as described under
Clause 3.1(1)(c)
in the event that KYMCO establishes, in the U.S., facilities, manufacturing, test equipment and labor which derives the benefit of the associated EV tax credit and is able to manufacture the applicable LW Covered Products in accordance with LW’s required timeline at LW’s reasonable discretion. In such circumstances, (i) the supply price from KYMCO to LW shall be mutually discussed and agreed upon by both parties and (ii) LW will provide reasonable assistance to KYMCO and will discuss LW’s willingness to share in the related manufacturing investments with KYMCO required for the establishment of manufacturing facilities in the U.S. and related costs.
|
(2) |
All cost related to tooling and equipment required to manufacture components and parts of LW Covered Products will be borne by:
|
(a) |
LW, if such components and parts are exclusive of LW (“
LW Tooling
|
(b) |
KYMCO, if such components and parts are exclusive of KYMCO (“
KYMCO Tooling
|
(c) |
LW and KYMCO will split the cost of the Joint Tooling, if such components and parts are jointly developed by the Parties for common use (“
Joint Tooling
|
(3) |
LW shall pay for all costs of tooling and equipment for which it is responsible. The detailed payment terms shall be agreed by the Parties in a separate contract manufacturing agreement.
|
(4) |
With regard to the ownership of the Tooling:
|
(a) |
LW will own all LW Tooling and KYMCO will own all KYMCO Tooling. Upon the expiry or termination of the relevant contract manufacturing agreement to be entered into between the Parties, [***] LW shall pay KYMCO for (i) all costs and expenses of KYMCO and its Affiliates related to dismantling or shipping of such LW Tooling; and (ii) all shipping costs of such LW Tooling.
|
(b) |
Both Parties will jointly own the Joint Tooling. In the event that either Party desires to take sole possession of the Joint Tooling and the other Party desires to obtain a substitute set of Joint Tooling, then the Party that keeps sole possession of the Joint Tooling will supply a substitute set of Joint Tooling under the following terms: (i) if the request is due to LW exercising its rights under
Clause 3.1(1)(c)
then LW will assume the full cost of the substitute set of Joint Tooling; (ii) upon the expiry or termination of the relevant contract manufacturing agreement to be entered into between the Parties, then the Parties will split the cost of the substitute set of Joint Tooling; (iii) in any other circumstance other than (i) or (ii), then the Parties will mutually agree on the cost of the substitute set of Joint Tooling.
|
3.2 |
Right of First Offer for
Manufacturing of the LW Adjacent EV
Products
.
|
(1) |
From time to time during the Term of this Agreement, LW, in its sole discretion, may decide to design, develop, and commercialize LW Adjacent EV Products (“
LW Adjacent EV Products Commercialization
|
(2) |
LW agrees that KYMCO will have the first right and opportunity to submit an offer in accordance with the timelines in this Clause to assist in the design and manufacture of, the LW Adjacent EV Products that LW wishes to have manufactured for it or supplied to it by a third party (“
Externally Sourced Products and Components
|
(3) |
At least three (3) weeks prior to contacting third parties with respect to Externally Sourced Products and Components (whether in the form of an RFQ, RFP or otherwise) (a “
Proposed Procurement
Proposed Procurement Notice
|
(4) |
In the event that KYMCO fails to respond to and submit an offer in writing within three (3) weeks of receipt of the Proposed Procurement Notice (or such longer period as the Parties may mutually agree), LW shall have the right to commence a Proposed Procurement with one or more third parties provided, however, that the Proposed Procurement award to any such third party shall have been determined by LW in its reasonable discretion to be on more favorable terms to LW than those set forth in KYMCO’s response to the Proposed Procurement Notice, if any.
|
(5) |
In the event that KYMCO responds to and submits an offer to the Proposed Procurement Notice within three (3) weeks of receipt thereof (or such longer period as the Parties may mutually agree) in writing, then LW and KYMCO shall negotiate in good faith to reach an agreement regarding the terms of the Proposed Procurement (including without limitation quantity, pricing, specification, timing, and other proposed terms) and to document same. If however, after negotiating in good faith for a period of at least three (3) weeks, LW and KYMCO have not been able to reach a definitive written agreement regarding the terms of the Proposed Procurement and to document same, then LW shall have the right to commence a Proposed Procurement with one or more third parties, in its sole discretion free and clear of any obligation under this
Clause 3.2
.
|
(6) |
In the event of any material modification thereafter, recompete, extension or new proposal for the Externally Sourced Products and Components thereafter, LW shall again comply with the provisions of this
Clause 3.2
as if a new procurement.
|
3.3 |
Other LW Products
. With respect to all existing and future products, components and parts for LW products not specified under
Clause 3.1
and
Clause 3.2
, KYMCO will have a right of notification of and participation in any LW RFP or similar, and will be able to compete on equal terms with other participants in the procurement process.
|
3.4 |
LW Manufacturing Exclusivity
.
|
(1) |
To the extent permitted by applicable laws, unless otherwise agreed by LW in writing at its sole discretion, KYMCO commits that, KYMCO shall not, and shall cause its Affiliates not to, [***] at the time KYMCO enters into a binding agreement, term sheet, letter of intent or other similar instrument setting forth key terms and conditions of such EV product with the relevant Competitor of LW (“
Relevant Time
|
(2) |
Notwithstanding
Clause 3.4(1)
,
|
(a) |
subject to
Clause 3.4(4)
, KYMCO may exercise all rights or fulfill all obligations under any existing agreement with the Competitor of LW that has been executed prior to the Effective Date of this Agreement [***] unless otherwise required by the terms of the existing agreements with the Competitor of LW;
|
(b) |
KYMCO may manufacture any product for a Competitor of LW provided that such product (i) is only built to a specification it receives from the relevant Competitor of LW, and (ii) does not utilize LW Intellectual Property or any Confidential Information of LW (except for (x) general industry knowledge, (y) Intellectual Property or Confidential Information of KYMCO (solely of KYMCO or owned together by KYMCO with a third party (other than LW)) or (z) Intellectual Property or confidential information of a third party (other than confidential information of third parties provided by LW)) used for the LW Covered Products; and
|
(c) |
KYMCO is the owner of its Intellectual Property and shall have the right to use such Intellectual Property in the manner it deems fit.
|
(3) |
To the extent permitted by applicable laws, unless otherwise agreed by LW in writing, KYMCO commits that KYMCO shall not, and shall cause its Affiliates not to (a) sell any parts made from LW Tooling to any third party, (b) sell any parts bearing a LW trademark made from Joint Tooling to any third party or (c) sell or market any non LW parts to owners of
LW-branded
vehicles.
|
(4) |
KYMCO shall install and maintain at all times during the Term of this Agreement adequate “firewalls” arrangements with regard to the LW Projects Information no less robust than those that
|
have been put in place in other projects for any third-party other than LW and shall use commercially reasonable efforts to ensure that engineers employed or engaged by KYMCO working, full-time or part-time, on projects with LW shall not disclose the LW Projects Information to any third party, including any other personnel of KYMCO (other than KYMCO personnel involved in
LW-KYMCO
collaborative projects, in connection with such collaborative projects).
|
(5) |
Notwithstanding the foregoing, there shall be no limitation under any firewalls on KYMCO and its Affiliates’ usage of any Intellectual Property owned by KYMCO or its Affiliates or any general industry knowledge or from working on KYMCO branded projects.
|
(6) |
KYMCO shall have engineers employed or engaged by KYMCO working, full-time or part-time, on projects with LW [***] that would prohibit them from working with [***].
|
(7) |
For the avoidance of doubt, subject to the requirements under the
Appendix 1
, nothing in this
Clause 3.4
prevents
|
(a) |
LW from sharing information other than LW Projects Information to any third party; or
|
(b) |
engineers employed or engaged by KYMCO working, full-time or part-time, on projects with LW from working or being responsible for any project in relation to design, manufacture, develop for any product.
|
(8) |
The exclusivity provisions in this
Clause 3.4
shall not apply to KYMCO’s Ionex EV system of swappable batteries.
|
4.
|
SUPPLY MATTERS
|
4.1 |
Supply of Powertrain Products to KYMCO
.
|
(1) |
LW agrees to supply the Powertrain Products to KYMCO for KYMCO to develop, manufacture, market or sell EV products under KYMCO’s brand in accordance with the ordering process, the product schedule and product limitation as the same may be modified from time to time and set forth in one or more separate supply agreements to be entered into between LW and KYMCO. For the avoidance of doubt, nothing in this Clause will prevent KYMCO from purchasing any powertrain from any third-party other than LW.
|
(2) |
LW will provide appropriate engineering support in connection with LW’s supply of Powertrain Products to KYMCO without extra charge to assist KYMCO in making limited modifications to the Powertrain Product for KYMCO branded EV products.
|
(3) |
The Parties acknowledge that timeline and the volume of the Powertrain Products supplied by LW to KYMCO under this
Clause 4.1
is conditional on LW’s sole determination of the maturity of the technology and LW Intellectual Property developed by it, the production capacity, and its internal policy with respect to licensing LW Intellectual Property.
|
5.
|
PRICING PRINCIPLES
|
5.1 |
Payment Term and Currency
.
|
(1) |
Unless otherwise agreed upon by the Parties in writing or another supply or other agreement (including any purchase order issued thereunder) between the Parties, any amount payable under this Agreement or any other such agreement (including any purchase order issued thereunder) shall be paid within sixty (60) days of the issuance of the invoice by the Party entitled to the payment.
|
(2) |
All payments due under this Agreement or any other such agreement (including any purchase order issued thereunder) will be paid in U.S. Dollars. Conversion of foreign currency to U.S. Dollars will be made using a designated exchange rate between the New Taiwan Dollar and US Dollar that will
|
be set based on the following process: (a) as promptly as reasonably practicable after the start of each January, April, July and October (each, a “
Review Month
Average FX Rate
Clause 5.1(2)
.
|
(3) |
Such payments will be without deduction for foreign exchange, withholding or other amounts, but will be subject to late payment and other collection charges.
|
(4) |
At each Party’s request, the other party will issue itemized invoices. Such itemized invoices shall contain specific details of the charges from one party to the other.
|
(5) |
The contract manufacturing margin [***] Actual Costs.
|
(6) |
The contract manufacturing margin will be applied against costs incurred in KYMCO’s manufacture and delivery of Covered Products, such as KYMCO’s actual direct costs, without
mark-up,
to manufacture and deliver such Covered Product, plus a reasonable allocation of overhead and other operating expenses and, with respect to third-party providers, a reasonable allocation of the amounts paid to such providers that is proportionate to usage of services by or on behalf of LW, and other relevant mutually agreed factors (collectively the “
Actual Costs
|
6.
|
SERVICING
|
6.1 |
KYMCO Service Point Utilization
. The Parties will discuss in good faith, and subject to the Parties’ mutual agreement, including subject to continued demonstrated performance and their mutual agreement on the schedule, pricing, financing, economics and other applicable terms and conditions, coverage of service for their respectively branded EVs.
|
7.
|
FURTHER COOPERATION BETWEEN THE PARTIES
|
7.1 |
General Concept
. The purpose of this
Clause 7
is to identify potential areas where the Parties may collaborate to explore further business opportunities in the EV industry. The Parties will discuss in good faith as follows in furtherance of their strategic alliance. The obligations of the Parties pursuant to this
Clause 7
are subject to continued demonstrated performance and their mutual agreement on the schedule, pricing, financing, economics and other terms and conditions applicable to any of the following project.
|
7.2 |
Ionex
.
|
(1) |
The Parties may discuss in good faith and, subject to the Parties’ mutual agreement, to put in place a business plan to assist KYMCO in developing
business-to-business
Ionex
Ionex Business Plan
|
(2) |
Unless otherwise agreed by the Parties, the implementation of the Ionex Business Plan will be carried out under the Ionex brand name owned by KYMCO. Related costs should be discussed and agreed by both parties.
|
(3) |
If the Parties mutually agree to create an Ionex Business Plan, the Parties shall use their respective reasonable endeavours to agree in good faith a detailed product introduction schedule, taking into account projected customer demand and other relevant factors, in the selected jurisdictions.
|
7.3 |
Noodoe
.
|
(1) |
The Parties may discuss in good faith and, subject to the Parties’ mutual agreement, to explore utilizing KYMCO’s software capabilities, including its Noodoe platform and Noodoe resources (“
Noodoe
Noodoe Development Plan
|
(2) |
If the Parties mutually agree to create a Noodoe Development Plan, the Parties shall use their respective reasonable endeavours to agree in good faith on a detailed technical joint development agreement setting forth the scope of technical or business development, product introduction schedule, the Intellectual Property arrangement, the cost sharing mechanism, the development schedule and other relevant matters.
|
7.4 |
Charging Infrastructure
. The Parties may discuss in good faith and, subject to the Parties’ mutual agreement, to work toward compatible electric charging systems, such that users of both KYMCO and LW branded EVs will be able to utilize the charging infrastructure of the other Party and its Affiliates; for these purposes, the specifications of the charging system include hardware (including, but not limited to, charger stations), charger guns, and software (including, but not limited to, communication protocols, cloud service, and applications).
|
7.5 |
Technical Support
.
|
7.6 |
Joint Development.
|
(1) |
Without prejudice to the other provisions of this Agreement, the Parties may discuss in good faith and agree to jointly develop or design EV products, platforms and/or resources subject to the Parties’ mutual agreement on all relevant matters, including the scope of such development, the duration, the budget therefor (and the party responsible for the same), the products or projects to be developed, the resources projected to be utilized, the value of Intellectual Property contributed by each Party to the relevant joint development and all other relevant matters. For the avoidance of doubt, the Parties’ mutual agreement on the value of Intellectual Property contributed by each Party to the relevant joint development is for the purpose of assessing the Jointly Owned Intellectual Property, not for the purpose of charging the royalty by one Party to the other party.
|
(2) |
The Parties will endeavor to enter into a development agreement for any such joint development projects, but in the absence of such further development agreements, jointly-developed Intellectual Property arising from or in relation to the Parties’ joint development or design of the EV products, platforms and/or resources will constitute Jointly Owned Intellectual Property under
Clause
11.4
(1)(a)
.
|
(3) |
Allocation of development costs for jointly-developed Intellectual Property as between the Parties will be determined at the relevant time by mutual agreement of the Parties taking into account the particular attributes and usage of the jointly-developed Intellectual Property, as well as other relevant factors, and set forth in the applicable product agreement.
|
7.7 |
Distribution
.
|
(1) |
The Parties may discuss in good faith and, subject to Parties’ mutual agreement, to put in place a joint distribution plan to promote the expansion of EVs designed, developed, manufactured or branded under each Party’s name.
|
(2) |
If the Parties mutually agree to create a joint distribution plan described under
Clause 7.7(1)
, the Parties shall use their respective reasonable endeavours to agree in good faith a detailed joint distribution agreement setting forth the distribution channel to be utilized, including the potential cooperation with a third party, products subject to such joint distribution agreement, cost sharing arrangement, the cross-licensing of the Parties’ Trademarks, targeted customer base, and all other relevant matters.
|
7.8 |
Other Commercial Collaboration
. Each Party may refer to the other Party other investment opportunities or commercial collaboration opportunities in the EV industry to implement and universalize the application of the EV total solutions, including but not limited to EV, energy and mobility services and the Parties may discuss in good faith whether to approach or implement such referred opportunities. The Parties acknowledge that KYMCO may take the lead on referring such investment opportunities or commercial collaboration opportunities in Taiwan, Mainland China, India, and South-East Asia whereas LW may take the lead on referring such investment opportunities or commercial collaboration opportunities in the United States.
|
8.
|
STEERING COMMITTEE.
|
8.1 |
To the extent permitted by the applicable laws, the Long Term Collaboration, including but not limited to the initiatives described under
Clause 7.1
to
Clause 7.8
, shall be carried out by the Steering Committee.
|
8.2 |
The Steering Committee shall comprise four (4) representatives (“
Committee Representatives
|
8.3 |
Each Party may change either of the Committee Representatives that it has appointed at any time by written notice to the other Party. Each Committee Representative may at any time and from time to time by written notice addressed to the Parties appoint an alternate to attend, speak and vote on his behalf at any meeting of the Steering Committee at which he is not present. Other specialists and technicians may be invited by the Steering Committee to provide specialist and technical assistance as and when deemed necessary.
|
8.4 |
The Steering Committee shall meet on a quarterly basis during the Term, unless otherwise decided by the Steering Committee, or otherwise within a reasonable period of a meeting being called by any Party to discuss the progress of, to resolve any issues arising under, or all other matters related to the Long Term Collaboration, including the development process of LW Adjacent EV Products or any other EV products as deemed appropriate by the respective Party. LW will make reasonable efforts to use this forum to provide KYMCO with an understanding of potential future projects that may be of interest to KYMCO in the context of a Joint Development Projects, where doing so would not cause LW to violate any confidentially obligations or cause any adverse commercial impact for LW, in the sole discretion of LW.
|
8.5 |
A meeting of the Steering Committee may be held by telephone or via internet provided that such meetings have appropriate representation from each Party.
|
8.6 |
Unless otherwise agreed by the Parties in writing, none of resolutions, determinations and decisions made by the Steering Committee shall be binding on the Parties.
|
9.
|
SECONDMENT OF STAFF
|
9.1 |
General Arrangement
.
|
(1) |
To assist in achieving the objectives of the Long Term Collaboration, including close communication and coordination between the Parties, the Parties may discuss in good faith and, subject to Parties’ mutual agreement, to create an
“in-residence”
program to second employees of one Party (“
Transferring Entity
Receiving Entity
In-residence
Program
|
(2) |
If the Parties mutually agree to create an
In-residence
Program, the Parties shall use their respective reasonable endeavours to agree in good faith a detailed secondment arrangement, including the purpose, period, activities, tasks, cost sharing mechanism of such secondment, and the number, qualifications and seniority of the seconded employees, and all other matters pertaining to
In-residence
Program and document the same.
|
9.2 |
General Obligations of the Transferring Entity and the Receiving Entity
.
|
(1) |
Under an
In-residence
Program, unless otherwise agreed by the Parties, the seconded employee will continue to carry out his/her previous duties when he/she was an employee of the Transferring Entity and all duties performed by the seconded employee shall be under the directions of the Transferring Entity.
|
(2) |
Under an
In-residence
Program, unless otherwise agreed by the Parties, the seconded employee will remain employed by the Transferring Entity and such employee does not have an employment relationship with the Receiving Entity. The Receiving Entity shall have no authority to, among other things, discharge or discipline the Employee.
|
(3) |
Under an
In-residence
Program, unless otherwise agreed by the Parties, the Transferring Entity and Receiving Entity shall use their respective reasonable endeavours to assist the seconded employee to obtain all necessary approvals and make all necessary registrations requested by the relevant authorities to perform his/her duties under the
In-residence
Program. The Parties acknowledge that the seconded employee shall comply with all internal procedures and policies of the Receiving Entity throughout the
In-residence
Program.
|
(4) |
Secondment of employees will be subject to agreement in writing between the parties on all relevant matters related to seconded employees, including without limitation business travel, leave, compensation, cost, housing, transportation and health care, as well as other applicable conditions and costs.
|
10.
|
MARKETING; PRESS RELEASE
|
10.1 |
Marketing
.
|
(1) |
KYMCO may not advertise, market or otherwise highlight the fact that its EV powertrains are sourced from LW Group or
H-D
Group, designed with Intellectual Property of LW Group or
H-D
Group, or similar; and
|
(2) |
KYMCO may not label or mark with one or more (i) LW Group or
H-D
Group’s Trademarks or (ii) any reasonably similar variant or derivative which would be found to be confusingly similar to LW Group or
H-D
Group’s Trademarks by a reasonable consumer to any EV powertrain, EV scooter or EV motorcycle which may be reasonably interpreted to indicate that such powertrains, scooter or motorcycle are sourced from LW Group or
H-D
Group or designed by LW Group or
H-D
Group, or similar unless otherwise required by applicable laws.
|
(3) |
neither LW nor KYMCO may use any Trademark of the other Party for any reason without first receiving the written consent and the terms of use from such other Party while each Party may withhold its consent to the use of any or all of its trademarks by the other Party for any or no reason.
|
10.2 |
Press Release
.
|
(1) |
Subject to the mutual agreement between the Parties, the Parties will produce joint press releases in relation to this Agreement or Long Term Collaboration. Each Party shall be free to publicize any previously-agreed press release that has not been revised in any manner nor accompanied by any additional commentary without consent of the other Party.
|
(2) |
Except as contemplated by the last sentence of
Clause 10.2(1)
, any press release, including but not limited to earnings releases/calls, investor relations presentations, securities disclosures or other similar activities that mentions the other Party, such other Party’s Trademarks or in any way references the other Party requires approval from the other party; for other press releases not mentioning the other Party in any way can be presented without need for approval. To the extent permissible by applicable law or regulation or the requirements of any stock exchange or other regulatory or government authority, seven (7) days’ prior notice of a proposed usage of a Party’s (or its Affiliates’) name or trademarks shall be provided by the requesting Party in order to enable the other Party to review such proposed usages.
|
11.
|
INTELLECTUAL PROPERTY
|
11.1 |
LW Intellectual Property
.
|
(1) |
All Intellectual Property independently developed by LW, or otherwise in LW’s possession, as of and after the Effective Date of this Agreement, and improvements thereto (other than Jointly Owned Intellectual Property), will be the sole property of LW (“
LW Intellectual Property
|
(2) |
LW will defend, indemnify, and hold harmless KYMCO against all liabilities and expenses (including, without limitation, reasonable attorneys’ fees and court costs) arising out of any alleged infringement of any third-party Intellectual Property by KYMCO’s use of LW Intellectual Property provided or approved, explicitly or implicitly, by LW under this Agreement;
provided
, that LW shall have no obligation under this
Clause 11.1(2)
to KYMCO with respect to any claim of infringement of Intellectual Property based, in whole or in part, upon (a) any KYMCO modification of the LW Intellectual Property and/or (b) the combination of the LW Intellectual Property with products, data or materials not supplied by LW, if such infringement claim would have been avoided without such modification or if use of the materials furnished by LW independent of the data or materials supplied by KYMCO would not give rise to the infringement claim. Notwithstanding the foregoing, LW shall have the right to require KYMCO to cease further usage of the LW Intellectual Property or to modify such LW Intellectual Property, so as to prevent further infringement (or alleged infringement) and KYMCO shall promptly comply with the same.
|
11.2 |
KYMCO Intellectual Property
.
|
(1) |
All Intellectual Property independently developed by KYMCO, or otherwise in KYMCO’s possession, as of and after the Effective Date of this Agreement, and improvements thereto (other than Jointly Owned Intellectual Property), will be the sole property of KYMCO (“
KYMCO
|
Intellectual Property
|
(2) |
KYMCO will defend, indemnify, and hold harmless LW against all liabilities and expenses (including, without limitation, reasonable attorneys’ fees and court costs) arising out of any alleged infringement of any third-party Intellectual Property by LW’s use of KYMCO Intellectual Property provided or approved, explicitly or implicitly, by KYMCO under this Agreement;
provided
, that KYMCO shall have no obligation under this
Clause 11.2(2)
to LW with respect to any claim of infringement of Intellectual Property based, in whole or in part, upon (a) any LW modification of the KYMCO Intellectual Property and/or (b) the combination of the KYMCO Intellectual Property with products, data or materials not supplied by KYMCO, if such infringement claim would have been avoided without such modification or if use of the materials furnished by LW independent of the data or materials supplied by KYMCO would not give rise to the infringement claim. Notwithstanding the foregoing, KYMCO shall have the right to require LW to cease further usage of the KYMCO Intellectual Property or to modify such KYMCO Intellectual Property, so as to prevent further infringement (or alleged infringement) and LW shall promptly comply with the same.
|
11.3 |
Indemnification Procedures
.
|
11.4 |
Jointly Owned Intellectual Property
.
|
(1) |
Ownership and Usage
.
|
(a) |
All (i) Intellectual Property developed jointly by KYMCO and LW, and (ii) improvements to a Party’s Intellectual Property rights that are developed by the other Party, in each case, after the Effective Date in connection with this Agreement, will be the joint property and jointly and severally owned by each of KYMCO and LW (“
Jointly Owned Intellectual Property
|
(b) |
Each Party shall have the right on a worldwide basis to freely use all Jointly Owned Intellectual Property, including to make and have made products using such Jointly Owned Intellectual Property, to grant
non-exclusive
licenses and sublicenses to such Jointly Owned Intellectual Property, on such terms as may be determined by such Party in its sole discretion. In the case of Jointly Owned Intellectual Property that consists of Trade Secrets, Joint Confidential Information, or Confidential Information of LW (as applicable to KYMCO) or Confidential Information of KYMCO (as applicable to LW), and except as contemplated in
Clause 11.4(2)
, neither Party will publicly disclose, disseminate, display or distribute in any form or in any medium (including news releases, professional articles, or publications), any such Jointly Owned Intellectual Property without the prior written consent of the other Party. There shall be no right of accounting with respect to the other Party with respect to any usage of Jointly Owned Intellectual Property. Except as expressly set forth in this
Clause
11.4(
1
)(b)
or in
Clause
11.4(2)
, no consent or notice shall be required for either Party’s usage of Jointly Owned Intellectual Property.
|
(c) |
Each Party’s ownership of Jointly Owned Intellectual Property and Joint Confidential Information, as well as all rights thereto, shall continue unaffected by termination or expiration of this Agreement.
|
(d)
|
Except as provided in
Clause 11.4(2)
, each Party is responsible for its own use of Jointly Owned Intellectual Property.
|
(e) |
Subject to terms and conditions under this Agreement, each Party may use Jointly Owned Intellectual Property in any manner as it deems fit.
|
(2) |
IP Protection; Prosecution and Defense of Claims
.
|
(a) |
If either Party wishes to obtain any form of Intellectual Property protection for Jointly Owned Intellectual Property, the other Party has the choice, in its sole discretion to (i) share all reasonable costs associated with obtaining and maintaining such Protection, in which case, the prosecuting Party will provide the
non-prosecuting
Party the opportunity to review and comment on documents to be filed in connection with the prosecution process a reasonable time in advance of applicable filing dates and prosecution deadlines, and will provide the
non-prosecuting
Party with copies of any substantive documents received in connection with the prosecution if the
non-prosecuting
Party requests such documents, and any resulting Intellectual Property Protection will be jointly owned and enjoyed by LW and KYMCO or (ii) waive its right to participate in the Intellectual Property prosecution process, in which case any resulting Intellectual Property Protection will be owned solely by the prosecuting Party. In either case, the
non-prosecuting
Party will reasonably cooperate in good faith with and assist the other Party in connection with the Intellectual Property prosecution process concerning Jointly Owned Intellectual Property, at the other Party’s request, including by making inventors available as reasonably necessary, and by executing any documents or instruments, or performing such other acts, as reasonably requested by the other Party. To the extent necessary to carry out the process of obtaining any Patent Rights in the Jointly Owned Intellectual Property as set forth in this Agreement, the Parties consent to disclosure to the USPTO of information necessary to fulfill the requirements of 35 U.S.C. §102(c) including, without limitation, a declaration that: (i) the claimed invention was made by or on behalf of the Parties to this Agreement; (ii) the claimed invention was made as a result of activities subject to this Agreement; and (iii) the claimed invention is owned or is subject to an obligation of assignment as set forth in this Agreement. The Parties also agree to disclose to the USPTO the names of the Parties to this Agreement.
|
(b)
|
In the event a suit is brought against one or both Parties by a third-party alleging that Jointly Owned Intellectual Property infringes any Intellectual Property of such third party, the Party being sued will give the other Party prompt notice of such suit. Each Party will defend itself against any such third party;
provided
,
however
, that any settlement with such third-party involving royalties or other payments will require the prior written consent of both Parties. If a court of competent jurisdiction determines that the Jointly Owned Intellectual Property infringes any Intellectual Property of such third party, then the Parties will pay that portion of all
out-of-pocket
|
(c) |
Either Party may, in its sole discretion and without the consent of the other Party, bring suit against any unlicensed or unauthorized third party or parties for infringement of Jointly Owned Intellectual Property, after first providing the other Party with written notice and the opportunity to participate in such suit. If both Parties participate in such suit, then (i) each Party will bear an equal share of the aggregate
out-of-pocket
|
(d) |
Notwithstanding anything to the contrary in the preceding paragraphs, without the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, neither LW nor KYMCO may compromise, settle, covenant not to sue or take any similar action in connection with a suit against or by a third party if such compromise, settlement, covenant or similar action could materially and adversely affect the Intellectual Property of the other Party or their commercialization.
|
11.5 |
Each Party will be responsible for ensuring that its Affiliates and its and their employees comply with the terms of this
Clause 11
. In addition, each Party will include contractual provisions that its suppliers, subcontractors and other legal entity contractors (collectively, “
Sub-suppliers
Clause 11
. Each Party will take such action, legal or otherwise, to the extent necessary to cause each
Sub-supplier
to comply with the terms and conditions of this
Clause 11
against its
Sub-suppliers.
Each Party will be responsible for failures by its Affiliates and employees, but not for its
sub-suppliers,
to comply with this
Clause 11
.
|
12.
|
DATA PRIVACY AND SECURITY
|
12.1 |
As the performance of rights and obligations hereunder may require a Party to receive, store, transmit or manage data of the other Party or Personal Information of or relating to its employees, customers, suppliers or contractors (collectively, “
Data
Appendix 2
.
|
13.
|
ELECTRONIC COMMUNICATION
|
13.1 |
LW requires all of its business partners to communicate certain information electronically.
|
13.2 |
When LW and KYMCO communicate electronically with each other, the Parties will use one or more agreed formats for electronic communication, which may be direct or through a third-party service provider.
|
13.3 |
When the Parties transmit information electronically in an agreed format under an agreed protocol, the electronic communication will be considered “written” or “in writing” for the purpose of this Agreement. Each Party will pay its own hardware, software and transmission costs. All electronic transmissions with electronic signatures will be treated as signed copies if confirmed by the signatory (provided that any applicable laws have been complied with).
|
13.4 |
Signatures to this Agreement or any documents referred to under this Agreement transmitted by electronic mail or any other electronic transmission shall take effect from the date as specified in the document or in the absence of such specification, the date of transmission. Each Party agrees to promptly deliver an execution original to the other Party provided that a failure to do so shall not affect the enforceability of such document.
|
14.
|
TERM AND TERMINATION
|
14.1 |
The Agreement will come into effect upon completion of LW’s combination with a special purpose acquisition company and the commencement of public trading of LW’s shares (the “
Effective Date
Term
|
14.2 |
Without prejudice to any other rights or remedies under this Agreement or applicable laws, LW or KYMCO (as the case may be) may, upon written notice to the other Party, terminate this Agreement with immediate effect:
|
(1) |
if the other Party is in material breach of its obligations under this Agreement; provided, however, that if the breach can be remedied, the termination shall only be effective if the breach is not or cannot be remedied within (a) in the case of
non-payment
of an invoice for goods or services pursuant to a contract manufacturing or other agreement between the parties, the first Party having
|
notified the other Party in writing of such
non-payment
and thirty (30) days having elapsed beyond the date of receipt of such written notice by the other Party and (b) in the case of any other breach, the first Party having notified the other Party in writing of such breach and ninety (90) days having elapsed beyond the date of receipt of such written notice by the other Party;
|
(2) |
if the other Party enters into liquidation, becomes insolvent or enters into a deed of arrangement for the benefit of creditors or otherwise commits or suffers any equivalent act; or
|
(3) |
if a “Change of Control Event” occurs to the other Party.
|
14.3 |
The Parties will discuss the impacts of termination or expiration in good faith. In particular, as the parties prepare and enter into other agreements related to this Agreement (such as contract manufacturing agreements), the parties will provide for reciprocal termination and transition provisions as well as obligations to supply products, components and parts following termination), so that, among other matters, the transition and post-termination supply obligations will be consistent between the contract manufacturing agreements for the LW Covered Product and the supply agreement for the Powertrain Products.
|
14.4 |
No termination or expiration shall limit either party’s right to use its Jointly Owned Intellectual Property or
co-developed
products.
|
14.5 |
Unless the Parties otherwise agree in writing, certain provisions hereunder shall survive such termination, including without limitation,
Clause 11
(Intellectual Property);
Clause 20
(Dispute Resolution),
Clause 21
(Notices), and
Clause 22
(Miscellaneous Provisions), and
Appendix 1
(Confidentiality Provisions), of this Agreement.
|
15.
|
LIMITATIONS ON LIABILITY
|
15.1 |
Neither Party shall be liable to the other Party for any incidental, indirect, special or consequential damages arising out of, connected with, or resulting from this Agreement, except in the case of such damages resulting from such Party’s [***] (the matters described in items (a) and (b) of
Clause 15.1
, the “
Exceptions
|
15.2 |
Even in circumstances where the Exceptions apply, in no circumstances shall damages, liabilities or losses for purposes of Exceptions include losses of a Party’s shareholders.
|
16.
|
MUTUAL REPRESENTATION AND WARRANTIES
|
16.1 |
Representations and Warranties
.
|
(1) |
Such Party has the authority to enter into this Agreement, and its performance of the terms of this Agreement will not breach its Articles of Association, Articles of Organization, Articles of Incorporation, bylaws (or any other documents of similar nature under the local laws), or any other agreement by which such Party is bound. This Agreement constitutes the valid and binding obligations of such Party and is and shall continue to be enforceable against such Party in accordance with its terms.
|
(2) |
Such Party has obtained, at its own cost and expenses, all required licenses, permits, and registrations as required for performing its obligations hereunder. Such Party’s ability to perform its obligations under this Agreement in a timely and complete manner are not materially adversely impaired by any of the following: (a) any law, regulation, or order of any court or government or governmental agency or instrumentality binding on or affecting such Party; or (b) any pending or threatened litigation or administrative proceeding.
|
16.2 |
Covenants
.
|
16.3 |
Compliance
.
|
(1) |
KYMCO acknowledges and understands that LW is covered by certain anticorruption laws and regulations, including the U.S. Foreign Corrupt Practices Act (“
FCPA
|
(a) |
induce a government official to do or omit to do any act in violation of his or her lawful duty;
|
(b) |
induce a government official to use his influence with a foreign government or instrumentality to affect or influence any act or decision of such government or instrumentality; or
|
(c) |
gain any other improper advantage. It is the intent of the parties that no payments or transfers of value shall be made which have the purpose or effect of public or commercial bribery, acceptance of or acquiesce in extortion, kickbacks or other unlawful or improper means of obtaining business.
|
(2) |
KYMCO agrees that KYMCO will (a) complete an Anti-Bribery [***] as a condition precedent to the Effective Date of this Agreement, and (b) provide a new Anti-Bribery [***] (which shall not be requested more than annually) if requested by LW. Any failure to complete such Anti-Bribery [***] at the request of LW shall be considered a material breach of the Agreement.
|
(3) |
KYMCO agrees that KYMCO will complete anti-bribery training as a condition precedent to the Effective Date of this Agreement (which shall not be requested more than annually) if requested by LW (which shall not be requested more than annually). Any failure to complete such anti-bribery training at the request of LW shall be considered a material breach of the Agreement.
|
(4) |
KYMCO stipulates that no government official holds an ownership interest in KYMCO beyond potentially being among and having the same rights in KYMCO as any other of KYMCO’s individual
non-controlling
shareholders. KYMCO stipulates that it is not providing anything of value to any government official in connection with the contractual relationship established by this Agreement or with any of the proceeds arising from it.
|
(5) |
KYMCO agrees to have a continuing obligation to advise LW of any of its actions that may violate
Clause 16.3(1)
.
|
(6) |
KYMCO acknowledges and understands that LW has the right to disclose any FCPA violation by KYMCO to the government.
|
(7) |
If there are reasonable grounds to believe (i.e. sufficient and credible facts and circumstance) or receiving a written notification from the competent authority or having other adequate evidence, that
|
any representation covering the anticorruption requirements contained in this Agreement or in the Anti-Bribery Certification has been breached, or that a bribery-related violation has occurred or is about to occur, notwithstanding anything to the contrary herein, LW may [***] directly related to the products or services of the alleged violation or take such further action LW reasonably determines is necessary until it has received adequate confirmation that KYMCO is in compliance with the terms of this Agreement and that no violations of bribery-related laws have occurred or will occur. KYMCO agrees that if reasonably necessary, upon reasonable written notice, KYMCO will allow LW to [***] related to this Agreement to assist and cooperate with LW in confirming compliance with the applicable anticorruption laws. |
(8) |
In the event of any breach of this
Clause 16.3
or any actions by KYMCO that cause a violation of the FCPA, LW will have the right to terminate this Agreement with written notice.
|
(9) |
Neither Party is obligated to take any actions or omit to take any actions under this Agreement that it reasonably believes would cause it to violate the laws of any country, including the FCPA or the UK Bribery Act.
|
(10) |
KYMCO agrees to indemnify LW for any costs, fees, expenses or fines or penalties incurred by LW as a result of KYMCO’s breach of this
Clause 16.3
, subject to the terms and conditions of this Agreement.
|
17.
|
CONFIDENTIALITY
|
17.1 |
KYMCO and LW will comply with the terms and conditions of
Appendix 1
except that LW may disclose the existence and the terms of this Agreement to LW’s potential and existing investors of a private investment in public equity transaction contemplated by LW and AEA.
|
18.
|
INDEMNITY
|
18.1 |
General Indemnity
. Without limiting any other rights which any such Party may have hereunder or under applicable laws, each Party (the “
Indemnifying Party
Indemnified Party
Indemnified Amounts
|
18.2 |
Third Party Claim
. In the event of the assertion or commencement by any third party of any claim or other proceeding that may result in Indemnified Amounts, the Indemnified Party shall (a) promptly notify the Indemnifying Party thereof in writing and (b) consult in good faith with respect thereto with the Indemnifying Party. If requested by the Indemnifying Party, the Indemnified Party shall keep the Indemnifying Party informed of developments in such claim and proceeding and the parties shall work together in good faith to minimize any liabilities or obligations of both parties in respect of such claim and proceeding.
|
19.
|
GOVERNING LAW
|
19.1 |
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to principles of conflicts of law.
|
20.
|
DISPUTE RESOLUTION
|
20.1 |
The Parties’ shared objective is to resolve all disputes that may arise between them as amicably and efficiently as possible, and neither Party will unreasonably delay the resolution of a dispute.
|
20.2 |
All dispute resolution proceedings, including the arbitration proceedings will be conducted pursuant to this
Clause 20
and will be conducted in English.
|
20.3 |
Within fourteen (14) days after a written notice of a dispute, LW and KYMCO personnel who are senior (when possible) to the people with responsibility for administering this Agreement and who have the authority to resolve the dispute will meet either on the telephone or face to face, at a mutually agreeable time and location and attempt in good faith to resolve the dispute (the “
Initial Executive Meeting
|
20.4 |
The Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the applicable courts of the State of Delaware, and any appellate court thereof for any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding
non-contractual
obligations arising out of or relating to it, and which have not been resolved between the Parties themselves at the Initial Executive Meeting (including instances in which the Parties are unwilling or unable to conduct an Initial Executive Meeting) and consent not to commence any action, suit or proceeding relating thereto except in such courts.
|
20.5 |
The Parties hereby irrevocably and unconditionally waive any objection to venue on any action, suit or proceeding arising out of this Agreement in the applicable courts of the State of Delaware, and any appellate court thereof, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
|
20.6 |
EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
|
21.
|
NOTICES
|
21.1 |
LW and KYMCO will each use commercially reasonable efforts to ensure that all written, verbal and electronic notices are delivered to appropriate personnel at the other Party. Neither Party will attempt to avoid receipt of notice from the other Party.
|
21.2 |
Any notice required or permitted under this Agreement will be in writing and will be effective as noted when sent by any of the following methods at the addresses set out below: (a) upon delivery if by personal delivery; (b) the third (3
rd
) business day if sent by reputable overnight courier (e.g., UPS); or (c) upon delivery if by
e-mail,
provided that a confirmation copy is delivered by another method under subparts (a) or (b). Either Party may change its notice address at any time by written notice to the other Party.
|
21.3 |
Either Party may change its Designated Recipients at any time by written notice to the Designated Recipients of the other Party.
|
22.
|
MISCELLANEOUS PROVISIONS
|
22.1 |
All written and electronic communication made under or in connection with this Agreement will be made in English. Where required by the local laws, the Parties shall translate and execute the local language version of this Agreement, and any amendments to this Agreement, and any other related documents to this Agreement (other than those which are already made and executed in local language) as may be required by prevailing regulations, relevant authorities or the courts order.
|
22.2 |
The Parties agree that this Agreement shall be signed and executed in English language on the Signing Date.
|
22.3 |
No failure of a Party to exercise its rights under this Agreement will be considered a waiver of future rights.
|
22.4 |
Any public statements about “partnering” between LW and KYMCO will not create a legal partnership or fiduciary relationship between LW and KYMCO. Nothing herein or in any supplemental agreement or purchase order will create any implied obligations between the Parties or their Affiliates; the sole obligations of the Parties are what are expressly set forth in this Agreement or in any supplemental agreement or purchase order. Neither Party nor its Affiliates shall have the right to create any legal obligation or take any action in the name of the other Party or its Affiliates without the prior written consent of the other Party.
|
22.5 |
Each Party will comply in all material respects with all applicable laws, rules and regulations in the Long Term Collaboration cooperation hereunder, including without limitation remain in material compliance with all environmental, health, safety and labor laws applicable to such Party to the operation and use of such Party’s facilities at which the relevant products are manufactured or stored.
|
22.6 |
LW has adopted an affirmative action policy and has pledged to extend equal employment opportunities to all of its employees, regardless of race, color, creed, age (over 40), sex, religion, national origin, ancestry, citizenship status, disability, handicap, medical condition (cancer related), marital status, sexual orientation, or affectional preference, and to offer promotion and employment to all applicants and employees primarily on the basis of individual merit and qualifications. These equal opportunity personnel actions include, but are not limited to, recruitment, selection, placement, transfer, promotion, compensation action, layoff, recall from layoff, termination, training, development, recreation, social action programs, benefit eligibility, and application of other personnel policies. Veterans and those who are either mentally or physically disabled in a manner which substantially limits one or more of their major life activities are potentially eligible for special consideration under LW’s affirmative action program. In its operations outside the United States, to the extent required by Taiwanese law, KYMCO agrees to comply with all comparable laws and regulations that are applicable to KYMCO.
|
22.7 |
In addition to its other obligations under this Agreement, each Party will (a) conduct its business in an ethical and fair manner; (b) maintain facilities for its workers that provide a safe and healthy environment; (c) provide wages and benefits that conform to the prevailing industry standards; (d) not exceed local work hour limits; (e) not, directly or indirectly, use any child labor (i.e. workers younger than 16 years of age or
|
the compulsory age for school attendance), or purchase materials from any entity that uses child labor; (f) not, directly or indirectly, use prison or other forced labor or purchase materials from any entity that uses prison or other forced labor; and (g) not discriminate on the basis of personal characteristics or beliefs, in the case of KYMCO with respect to
Clause 22.7(a)
to
Clause 22.7(e)
, and
Clause 22.7(g)
, to the extent required under Taiwan law.
|
22.8 |
Neither Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, which consent must not be unreasonably withheld. Notwithstanding the foregoing, either Party may assign or transfer any of its rights or obligations under this Agreement to a parent, Affiliate or subsidiary of such Party, or in the event of a merger, acquisition or sale of substantially all such Party’s assets, without the prior written consent of the other Party, but subject to at least thirty (30) days’ prior written notice to the other Party. This Agreement will be binding on the Parties and their respective permitted successors and assigns, and the assigning Party shall remain liable for its obligations under this Agreement to the maximum extent permitted by applicable law. A Party wishing to assign this Agreement will give reasonable advance written notice of the proposed assignment to the Designated Recipients of the other Party.
|
22.9 |
If any provision in this Agreement is determined to be unenforceable (a) the remainder of this Agreement will continue in effect after severance of the unenforceable provision and (b) the Parties will promptly through good faith negotiations amend this Agreement to restore, to the maximum extent legally permissible, the benefits, rights and obligations included in the unenforceable provision.
|
22.10 |
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all previous written, oral and implied agreements, covenants and undertakings between them. No collateral agreements, written, oral or implied, have been made.
|
22.11 |
The provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person (including any shareholders of KYMCO or shareholders of LW) except the Parties hereto any rights or remedies hereunder. There are no third-party beneficiaries of this Agreement, and this Agreement shall not provide any third Person (including any shareholders of KYMCO or shareholders of LW) with any remedy, claim, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.
|
22.12 |
This Agreement may be executed electronically or by facsimile signature and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or pdf shall be as effective as delivery of a manually executed counterpart of this Agreement.
|
LiveWire EV, LLC
|
||
By: |
/s/ Jochen Zeitz
|
|
Name: | Jochen Zeitz | |
Title: | Authorized Signatory |
Kwang Yang Motor Co., Ltd.
|
||
By: |
/s/ KO, SHENG-FENG (
柯勝峯
)
|
|
Name: |
KO, SHENG-FENG (
柯勝峯
)
|
|
Title: | Chairman |
(a) |
at the time of disclosure is generally known to the public;
|
(b) |
becomes generally known to the public through no fault of the receiving party;
|
(c) |
is already rightfully in the possession of the receiving party at the time of disclosure and was not obtained from the disclosing party;
|
(d) |
is later rightfully obtained by the receiving party from a third party not known by the receiving party to be under an obligation of confidentiality to the disclosing party; or
|
(e) |
is later independently developed by the employees or agents of the receiving party who had no access to or knowledge of the confidential information.
|
(a) |
comply, at each Party’s own expense, with all applicable local, state, federal, and international privacy, confidentiality, consumer protection, advertising, electronic mail, data security, data destruction, and other similar laws, rules, regulations, and industry best practices, whether in effect now or in the future (all of the foregoing will be collectively referred to as the “
Privacy and Security Requirements
|
(b) |
use, handle, collect, maintain, safeguard, and destroy Personal Information and the other Party’s Data solely as permitted under this Agreement and in accordance with all Privacy and Security Requirements; and, in particular;
|
(c) |
maintain and enforce administrative, technical, and physical security procedures designed to ensure the confidentiality, integrity, and availability of Personal Information and the other Party’s Data that are (a) at least equal to those required by all relevant Privacy and Security Requirements, and, to the extent not inconsistent with the foregoing, (b) in accordance with industry best practices for services of this kind;
|
(d) |
not transmit or make available any Personal Information to any entity or individual outside the respective country where each Party is located (as informed in this Agreement), except that each Party may transmit or make available the Personal Information and the other’s Data back to the United States or Taiwan or other country where an each Party’s facility using the other Party’s services is located; and
|
(e) |
not sell, transfer, disclose to any unauthorized person, or use the Personal Information or the other Party’s Data received in connection with this Agreement except, to the extent applicable: (i) to provide the services under this Agreement; (ii) to cooperate with law enforcement investigations, to comply with legally executed subpoenas, or as specifically required by law (provided the other Party is notified immediately of any such request, unless expressly precluded from providing such notice by the applicable process); or (iii) for those other uses, if any, expressly authorized by the other Party in writing.
|
LW EV Holdings, Inc. | ||
By: |
|
|
Title:
|
||
Date:
|
HARLEY-DAVIDSON, INC. | ||
By: |
|
|
Title:
|
||
Date:
|
Term
|
Article / Section
|
|
Agreement
|
Preamble | |
Chosen Courts
|
14.6 | |
Dispute
|
12.4 | |
Dispute Committee
|
12.4 | |
Effective Date
|
Preamble | |
Force Majeure Event
|
ARTICLE
11 |
|
Forecasts
|
2.4 | |
HD
|
Preamble | |
HD Data
|
8.3 | |
Initial Term
|
13.1 | |
LiveWire
|
Preamble | |
LiveWire Data
|
8.3 | |
LiveWire’s Recall Obligations
|
6.3 | |
Operational Committee
|
12.1 | |
Parties
|
Preamble | |
Party
|
Preamble | |
Privacy and Security Requirements
|
Exhibit B | |
Products
|
Recitals | |
Quarterly
True-Up
Report
|
3.2 | |
Recall
|
6.1 | |
Renewal Term
|
13.1 | |
Separation Agreement
|
Recitals | |
Technical Manufacturing Documents
|
ARTICLE 7 | |
Term
|
13.1 | |
Warranty Period
|
4.2 |
Harley-Davidson Motor Company Group, LLC
|
||
By: |
|
|
Name: | ||
Title: | ||
LiveWire EV, LLC
|
||
By: |
|
|
Name: | ||
Title: |
(a) |
Provider shall be addressed as follows:
|
(b) |
Recipient shall be addressed as follows:
|
PROVIDER:
|
||
Harley-Davidson, Inc. | ||
By: |
|
|
Name: | ||
Title: | ||
RECIPIENT:
|
||
LiveWire EV LLC | ||
By: |
|
|
Name: | ||
Title: |
Harley-Davidson, Inc. | ||
By: | ||
Name: | ||
Title: | ||
LiveWire EV, LLC | ||
By: | ||
Name: | ||
Title: |
1.
|
INVESTMENT
Per-Share
Price
Section
1
are hereinafter referred to as the “
Shares
”; and the U.S. dollar amount equal to the number of Shares multiplied by the
Per-Share
Price is hereinafter referred to as the “
Purchase Price
.”
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2.
|
CLOSING
|
(a) |
The closing of the sale of Shares contemplated hereby (the “
Closing
”) shall occur on the date (the “
Closing Date
”) of the consummation of the Business Combination pursuant to the Transaction Agreement and shall be conditioned upon the prior or substantially concurrent consummation of the Business Combination, the Separation and the PIPE Offering. At least three (3) Business Days before the anticipated Closing Date, HoldCo shall deliver written notice to the Investor (the “
Closing Notice
”) specifying (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Purchase Price to HoldCo. No later than two (2) Business Days prior to the Closing Date, the Investor shall deliver or cause to be delivered to HoldCo (A) the Purchase Price via wire transfer of United States dollars in immediately available funds to the account specified by HoldCo in the Closing Notice, such funds to be held by HoldCo in escrow until the Closing, and (B) such information as is reasonably requested in the Closing Notice in order for HoldCo to cause the Shares to be issued and delivered to the Investor. HoldCo shall deliver to the Investor (1) at the Closing, the Shares in book entry form, free and clear of any liens or other restrictions (other than those arising under this Investment Agreement or applicable securities laws), in the name of the Investor (or its nominee in accordance with its delivery instructions) or to a custodian designated by the Investor, as applicable, and (2) as promptly as practicable after the Closing, written notice from HoldCo or its transfer agent evidencing the issuance to the Investor of the Shares on and as of the Closing Date;
provided, however
Section
2
. In the event that the Closing Date does not occur within ten (10) Business Days after the anticipated Closing Date specified in the Closing Notice, unless otherwise agreed to in writing by HoldCo and the Investor, HoldCo shall promptly (but not later than one (1) Business Day thereafter) return the funds so delivered by the Investor to HoldCo by wire transfer in immediately available funds to the account specified by the Investor;
provided
Section
8
hereof, such return of funds shall not terminate this Investment Agreement or relieve the Investor of its obligation to purchase the Shares at the Closing following HoldCo’s delivery to Investor of a new Closing Notice. For purposes of this Investment Agreement, “
Business Day
” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
|
(b) |
Prior to or at the Closing, Investor shall deliver to HoldCo a duly completed and executed Internal Revenue Service Form
W-9
or appropriate Internal Revenue Service Form
W-8.
|
(c) |
Closing Conditions. In addition to the conditions set forth in
Section 2(a)
:
|
(i) |
General Conditions
|
(1) |
no applicable governmental authority shall have enacted, rendered, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the consummation of the transactions contemplated by this Investment Agreement, the Transaction Agreement, the Separation Agreement or the PIPE Subscription Agreements illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby or thereby, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition; and
|
(2) |
all conditions precedent to the closing of the Business Combination set forth in the Transaction Agreement, including the consummation of the Separation and the PIPE Offering, shall have been satisfied or waived by the applicable party (other than those conditions which, by their nature, are to be satisfied at the closing of the Business Combination pursuant to the Transaction Agreement, the Separation Agreement and the PIPE Subscription Agreements).
|
(ii) |
HoldCo Conditions
|
(1) |
all representations and warranties of the Investor contained in this Investment Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true in all respects) as of such specified date), and consummation of the Closing, shall constitute a reaffirmation by the Investor of each of the representations, warranties and agreements of the Investor contained in this Investment Agreement as of the Closing Date, or such specified date, as applicable;
|
(2) |
the Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Investment Agreement to be performed, satisfied or complied with by it at or prior to Closing; and
|
(3) |
the Commercial Agreement shall have been executed and delivered by the Investor or its affiliate(s) party thereto.
|
(iii) |
Investor Conditions
|
3.
|
FURTHER ASSURANCES
|
4.
|
SPAC AND HOLDCO REPRESENTATIONS AND WARRANTIES
|
(a) |
As of the date hereof, SPAC is an exempted company duly incorporated validly existing and in good standing under the laws of the Cayman Islands (to the extent such concept exists in such jurisdiction) and HoldCo is duly incorporated, validly existing as a corporation and in good standing under the laws of the State of Delaware; and each of SPAC and HoldCo has corporate power and authority to own, lease and operate its properties and conduct its business as presently proposed to be conducted
|
(b) |
As of the Closing Date, the Shares will be duly authorized and, when issued and delivered to the Investor against full payment therefor in accordance with the terms of this Investment Agreement, the Shares will be validly issued, fully paid and
non-assessable
and will not have been issued in violation of or subject to any preemptive or similar rights created under HoldCo’s organizational documents, or under applicable law, or under any other agreement to which HoldCo is a party or by which HoldCo is bound.
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(c) |
This Investment Agreement has been duly authorized, executed and delivered by SPAC and HoldCo and, assuming that this Investment Agreement constitutes a valid and binding agreement of the Investor, is a valid and binding obligation of SPAC and HoldCo, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
|
moratorium and similar laws relating to or affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether considered at law or equity. |
(d) |
The issuance and sale of the Shares and the compliance by SPAC and HoldCo with all of the provisions of this Investment Agreement and the consummation of the transactions herein will be done in accordance with NYSE rules and will not: (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of SPAC or HoldCo or any of their respective subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which SPAC or HoldCo or any of their respective subsidiaries is a party or by which SPAC or HoldCo or any of its subsidiaries is bound or to which any of the property or assets of SPAC or HoldCo is subject, which would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, prospects, assets, liabilities, operations, condition (including financial condition
)
, stockholders’ equity or results of operations of SPAC or HoldCo (including following the closing of the Business Combination) or materially affect the validity of the Shares or the ability or legal authority of SPAC or HoldCo to timely perform in all material respects their respective obligations under the terms of this Investment Agreement (a “
Material Adverse Effect
”); (ii) result in any violation of the provisions of the organizational documents of SPAC or HoldCo; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over SPAC or HoldCo or any of their respective properties that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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(e) |
As of their respective dates, all reports or other filings (the “
SEC Reports
”) required to be filed by SPAC or HoldCo with the U.S. Securities and Exchange Commission (the “
SEC
”) have been timely filed and complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “
Securities Act
”), the Exchange Act, and the rules and regulations of the SEC promulgated thereunder. None of the SEC Reports, when filed, or, if amended, as of the date of such amendment, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof to the knowledge of SPAC, there are no material outstanding or unresolved comments in comment letters received by SPAC from the staff of the Division of Corporation Finance of the SEC with respect to any of the SEC Reports. The financial statements of SPAC and HoldCo included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing and fairly present in all material respects the financial condition of SPAC and HoldCo as of and for the dates thereof and the results of operations and cash flows for the periods presented, subject, in the case of interim unaudited statements, to normal,
year-end
audit adjustments. A copy of each SEC Report is available to the Investor via the SEC’s EDGAR system. For the avoidance of doubt, any restatement of the financial statements of SPAC or HoldCo and any amendments to previously filed SEC Reports or delays in filing SEC Reports, in connection with any guidance from the SEC following the date hereof, shall not be deemed to constitute a breach of this
Section
4
.
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(f) |
Assuming the accuracy of the Investor’s representations and warranties set forth in
Section
5
of this Investment Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by HoldCo to the Investor.
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(g) |
No consent, waiver, authorization, approval, filing with or notification to any court or other federal, state, local or other governmental authority is required on the part of SPAC or HoldCo with respect to the execution, delivery or performance by SPAC or HoldCo of this Investment Agreement (including without limitation the issuance of the Shares), other than (i) the filings required by applicable state or federal securities laws, (ii) the filings required by the NYSE, or (iii) those consents, waivers,
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authorizations, approvals, filings or notifications the failure of which to give, make or obtain would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. |
(h) |
None of SPAC, HoldCo or any person acting on behalf of SPAC or HoldCo has offered or sold the Shares by any form of general solicitation or general advertising in violation of the Securities Act.
|
(i) |
Neither SPAC nor HoldCo has entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other person to any broker’s or finder’s fee or any other commission or similar fee in connection with the transactions contemplated by this Investment Agreement for which the Investor could become liable.
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(j) |
As of the date of this Investment Agreement, the authorized capital stock of SPAC consists of (i) 50,000,000 of SPAC’s Class A ordinary shares, par value $0.0001 per share (the “Class A Shares”), 40,000,000 of which are issued and outstanding, (ii) 50,000,000 of SPAC’s Class B ordinary shares, par value $0.0001 per share (the “Class B Shares”), 10,000,000 of which are issued and outstanding, and (iii) 5,000,000 of SPAC’s preference shares, par value $0.0001 per share, none of which are issued and outstanding. All of the outstanding shares of capital stock of HoldCo are owned by SPAC. There are no outstanding contractual obligations of SPAC to repurchase, redeem or otherwise acquire any equity capital of SPAC. There are no securities or instruments issued by or to which SPAC is a party containing anti-dilution or similar provisions that will be triggered by the issuance of the (i) Shares pursuant to this Investment Agreement or (ii) the shares of Common Stock to be issued pursuant to any PIPE Subscription Agreement (if any). There are no outstanding contractual obligations of SPAC to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in, any other person or entity. Except pursuant to the PIPE Subscription Agreements (if any), the Transaction Agreement and the other agreements and arrangements referred to therein or in the SEC Reports, as of the date hereof there are no outstanding options, warrants, or other rights to subscribe for, purchase or acquire from SPAC any equity interests in SPAC, or securities convertible into or exchangeable or exercisable for any such equity interests. There are no stockholder agreements, voting trusts or other agreements or understandings to which SPAC is a party or by which it is bound relating to the voting of any securities of SPAC, other than (i) as set forth in the SEC Reports and (ii) as contemplated by the Transaction Agreement (including the exhibits thereto).
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(k) |
Each of SPAC and HoldCo acknowledges that there have been no representations or warranties made to SPAC or HoldCo by the Investor, or its officers, employees or directors or other representatives, expressly or by implication, other than those representations or warranties of the Investor explicitly included in
Section
5
of this Investment Agreement.
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(l) |
Neither SPAC nor HoldCo is, and immediately after receipt of payment for the Shares, will be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
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(m) |
Each of SPAC and HoldCo is in compliance with all applicable laws, except where such noncompliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date hereof, neither SPAC nor HoldCo has received any written communication from a governmental authority that alleges that SPAC or HoldCo is not in compliance with or is in default or violation of any applicable law, except where such
non-compliance,
default or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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(n) |
Except for such matters as have not had and would not be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no (i) action, suit, claim or other proceeding, in each case by or before any governmental authority pending, or, to the knowledge of SPAC, threatened against SPAC or HoldCo or (ii) judgment, decree, injunction, ruling or order of any governmental entity outstanding against SPAC or HoldCo.
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(o) |
As of the date hereof, other than the Transaction Agreement and any other agreement contemplated by the Transaction Agreement, neither SPAC nor HoldCo has entered into any agreement (including any
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side letter or similar agreement) with any PIPE Investor in connection with such PIPE Investor’s direct or indirect investment in SPAC or HoldCo (other than any side letter or similar agreement relating to the transfer to any investor of (i) securities of SPAC by existing securityholders of SPAC, which may be effectuated as a forfeiture to HoldCo or SPAC and reissuance, or (ii) securities to be issued to the direct or indirect securityholders of SPAC or HoldCo pursuant to the Transaction Agreement). Each PIPE Subscription Agreement entered into as of the date hereof contains a
per-share
purchase price for the shares of Common Stock to be purchased thereunder that is equal to the
Per-Share
Price, and the other terms and conditions of each PIPE Subscription Agreement are not materially more advantageous to the PIPE Investor thereunder than the terms and conditions of this Investment Agreement; and no provision of any PIPE Subscription Agreement shall be amended, modified or waived after the date hereof in a manner that results in the terms and conditions of such PIPE Subscription Agreement being more favorable to the PIPE Investor thereunder than the terms and conditions of this Investment Agreement are to the Investor.
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(p) |
Prior to the Investor’s execution and delivery of this Investment Agreement, SPAC has furnished to the Investor true and complete copies of the Transaction Agreement and the Separation Agreement, each as it will be in effect following its execution and delivery by the parties thereto on the date hereof.
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(q) |
The issued and outstanding Class A Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE. There is no suit, action, proceeding or investigation pending or, to the knowledge of SPAC, threatened against SPAC by the NYSE or the SEC to deregister the Class A Shares under the Exchange Act or prohibit or terminate the listing of the Class A Shares, or suspend the trading of the Class A Shares, on the NYSE. SPAC has taken no action that is designed to terminate the registration of the Class A Shares under the Exchange Act or the listing of the Class A Shares on the NYSE. Upon consummation of the Business Combination, the issued and outstanding shares of Common Stock will be registered pursuant to Section 12(b) of the Exchange Act and listed for trading on the NYSE.
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(r) |
There has been no action taken by SPAC or HoldCo or, to the knowledge of SPAC, any officer, director, equityholder, manager, employee, agent or representative of SPAC or HoldCo, in each case, acting on behalf of SPAC or HoldCo, in violation of any applicable Anti-Corruption Laws (as defined below). Neither SPAC nor HoldCo: (i) has been convicted of violating any Anti-Corruption Laws or, to the knowledge of SPAC, been subject to any investigation by a governmental authority for potential violation of any applicable Anti-Corruption Laws; (ii) has conducted or initiated any internal investigation or made a voluntary, directed, or involuntary disclosure to any governmental authority regarding any alleged act or omission arising under or relating to any noncompliance with any Anti-Corruption Laws; or (iii) has received any written notice or citation from a governmental authority for any actual or potential noncompliance with any applicable Anti-Corruption Laws. As used herein, “
Anti-Corruption Laws
” means any applicable laws relating to corruption and bribery, including the U.S. Foreign Corrupt Practices Act of 1977 (as amended), the UK Bribery Act 2010, and any similar law that prohibits bribery or corruption in the jurisdictions in which SPAC and HoldCo operate.
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(s) |
Each of SPAC and HoldCo acknowledges that neither the due diligence investigation conducted by the Investor in connection with making its decision to acquire the Shares nor any representations and warranties made by the Investor herein shall modify, amend or affect the Investor’s right to rely on the truth, accuracy and completeness of SPAC’s and HoldCo’s representations and warranties contained herein.
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(t) |
Prior to the date hereof, each of SPAC and HoldCo has made available to the Investor written due diligence information concerning SPAC, HoldCo, the Business Combination, the Separation and the LiveWire Business (as defined in the Separation Agreement) that is not materially different, in scope or content, from any such written information made available by SPAC or HoldCo (including their respective representatives and agents) to any current PIPE Investor as of the date hereof.
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5.
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INVESTOR
REPRESENTATIONS AND WARRANTIES
|
(a) |
The Investor is (i) an Institutional Account (as defined in FINRA Rule 4512(c)) and (ii) (x) an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or (y) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) and is acquiring the Shares only for its own account and not for the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information set forth on
Schedule A
).
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(b) |
The Investor acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act or any other applicable securities laws. The Investor acknowledges and agrees that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act except (i) to HoldCo or a subsidiary thereof, (ii) to
non-U.S. persons
pursuant to offers and sales qualifying as “offshore transactions” within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (ii) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book entry account representing the Shares shall contain a legend to such effect. The Investor acknowledges that the Shares will not be eligible for resale pursuant to Rule 144 promulgated under the Securities Act until at least one year following the filing of certain required information with the SEC after the Closing Date and that the provisions of Rule 144(i) will apply to the Shares. The Investor understands and agrees that the Shares will be subject to the transfer restrictions set forth in
Section
10
and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Shares.
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(c) |
The Investor acknowledges and agrees that the Investor is purchasing the Shares directly from HoldCo. The Investor further acknowledges that there have been no representations, warranties, covenants or agreements made to the Investor by SPAC or HoldCo, any of their respective officers or directors or other representatives, expressly or by implication, other than those representations, warranties, covenants and agreements of SPAC and HoldCo explicitly included in this Investment Agreement.
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(d) |
The Investor’s acquisition and holding of the Shares will not constitute or result in a
non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar Law.
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(e) |
Subject to the truth and accuracy of SPAC’s and HoldCo’s representations and warranties in Sections 4(p) and 4(t), the Investor acknowledges and agrees that the Investor has received such information as the Investor deems necessary in order to make an investment decision with respect to the Shares. Without limiting the generality of the foregoing, the Investor acknowledges that it has reviewed the SEC Reports and other information as the Investor has deemed necessary to make an investment decision with respect to the Shares. Subject to the truth and accuracy of SPAC’s and HoldCo’s representations and warranties in Sections 4(p) and 4(t), the Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information from SPAC and HoldCo concerning SPAC and HoldCo and an investment in the Shares as the Investor and such Investor’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares.
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(f) |
The Investor acknowledges that HoldCo represents and warrants that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner
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involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. |
(g) |
The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including but not limited to those set forth in the SEC Reports. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision.
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(h) |
The Investor acknowledges that the Investor (and not SPAC or HoldCo) shall be responsible for any tax liabilities that may arise as a result of the transactions contemplated by this Investment Agreement. The Investor acknowledges that none of SPAC, HoldCo or any representative of SPAC or HoldCo has provided, or will provide, the Investor with tax advice regarding the Shares, SPAC, HoldCo or the execution of this Investment Agreement, and each of SPAC and HoldCo has advised the Investor to consult the Investor’s own tax advisor with respect to the tax consequences of each of the foregoing, including but not limited to any applicable elections, withholdings or other matters relating to the Shares, SPAC, HoldCo or the execution of this Investment Agreement.
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(i) |
Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in HoldCo. The Investor acknowledges specifically that a possibility of total loss exists.
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(j) |
In making its decision to purchase the Shares, the Investor has relied solely upon independent investigation made by the Investor. Without limiting the generality of the foregoing, the Investor has not relied on any statements or other information provided by SPAC , HoldCo, LiveWire or any of their respective Representatives concerning HoldCo or the Shares or the offer and sale of the Shares, other than those representations, warranties, covenants and agreements included in this Investment Agreement.
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(k) |
The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.
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(l) |
The Investor has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority to enter into, deliver and perform its obligations under this Investment Agreement.
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(m) |
The execution, delivery and performance by the Investor of this Investment Agreement and the transactions contemplated herein are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and will not violate any provisions of the Investor’s charter documents, including without limitation, its incorporation or formation papers, bylaws, indenture of trust or partner or operating agreement, as may be applicable. The signature on this Investment Agreement is genuine, the signatory has been duly authorized to execute the same, and assuming this Investment Agreement constitutes a valid and binding agreement of each of SPAC and HoldCo, this Investment Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether considered at law or equity.
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(n) |
[Reserved]
|
(o) |
The Investor is not, and has not at any time during the past five (5) years been, (i) a person or entity named on, or otherwise owned or controlled by or acting on behalf of, a person or entity named on, the Specially Designated Nationals and Blocked Persons List administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“
OFAC
”) or on any similar list of sanctioned persons maintained by the U.S. Government, the European Union or any European Union Member State, including the United Kingdom, or a person or entity with whom transactions are restricted or prohibited by any OFAC sanctions program or any sanctions program of the European Union or any European Union Member State, including the United Kingdom or (ii) a
non-U.S. shell
bank or providing banking services directly or indirectly to a
non-U.S. shell
bank. The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law,
provided
PATRIOT Act
”), and its implementing regulations (collectively, the “
BSA/PATRIOT Act
”), to the extent required, the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, Investor maintains policies and procedures reasonably designed to ensure compliance with sanctions and export control laws in each of the jurisdictions in which the Investor operates. The Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived.
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(p) |
The Investor will have sufficient funds to pay the Purchase Price pursuant to
Section
2
hereto at the Closing. The Investor acknowledges and agrees that its obligations hereunder are not in any way contingent or otherwise subject to: (i) the Investor consummating any financing arrangements or obtaining any financing; or (ii) the availability of any financing to the Investor or any of its affiliates.
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(q) |
No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in HoldCo as a result of the purchase and sale of Shares hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory under 31 C.F.R. Part 800.401, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over HoldCo from and after the Closing as a result of the purchase and sale of Shares hereunder.
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(r) |
As of the date hereof, the Investor does not have, and during the thirty (30) day period immediately prior to the date hereof the Investor has not entered into, any “put equivalent position” as such term is defined in Rule
16a-1
under the Exchange Act or short sale positions with respect to the securities of SPAC. Notwithstanding the foregoing, nothing in this Section 5(r) (i) shall apply to any entities under common management with the Investor (including the Investor’s controlled affiliates and/or affiliates) from entering into any such transactions; and (ii) in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets, the representations set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Investment Agreement.
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(s) |
Investor, together with its affiliates holding the Shares, are not currently (and at all times through Closing will refrain from being or becoming) members of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) with any other person(s) acting for the purpose of acquiring, holding, voting or disposing of equity securities of HoldCo or LiveWire
13d-5(b)(1)
under the Exchange Act).
|
(t) |
No broker or finder is entitled to any brokerage or finder’s fee or commission solely in connection with the sale of the Shares to Investor.
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6.
|
SURVIVAL
|
covenants and agreements made by each party hereto in this Investment Agreement shall survive the Closing until the expiration of any statute of limitations under applicable law. |
7.
|
REGISTRATION RIGHTS
|
(a) |
In the event that the Shares are not registered in connection with the consummation of the closing of the Business Combination, HoldCo agrees that HoldCo will use commercially reasonable efforts to submit or file with the SEC (at HoldCo’s sole cost and expense) a registration statement (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, the “
Registration Statement
”) registering the resale of the Shares, within thirty (30) calendar days after the Closing Date (the “
Filing Deadline
”), and HoldCo shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60
th
calendar day after the filing thereof (or the 90
th
calendar day after the filing thereof if the SEC notifies HoldCo that it will “review” the Registration Statement) following the Closing Date and (ii) the fifth Business Day after the date HoldCo is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “
Effectiveness Date
”);
provided, however
Rule 144
”) and without the requirement that HoldCo be in compliance with the current public information requirements under Rule 144; (ii) the date on which all of the Shares have actually been sold; and (iii) the date which is three (3) years after the Closing. For purposes of clarification, any failure by HoldCo to file the Registration Statement by the Filing Deadline or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve HoldCo of its obligations to file or obtain the effectiveness of the Registration Statement set forth in this
Section
7
.
|
(b) |
In no event shall the Investor be identified as a statutory underwriter in the Registration Statement;
provided
|
shall amend the Registration Statement or file a new Registration Statement (such amendment or new Registration Statement shall also be deemed to be a “Registration Statement” hereunder) to register such additional Shares and cause such Registration Statement to become effective as promptly as practicable after the filing thereof. |
(c) |
Notwithstanding anything to the contrary in this Investment Agreement, HoldCo shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, (i) if any information (e.g., compensation data) is not readily available and the
non-disclosure
of which in the Registration Statement would be expected, in the reasonable determination of HoldCo’s Chief Executive Officer, Chief Financial Officer or General Counsel, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements, (ii) at any time HoldCo is required to file a post-effective amendment to the Registration Statement and the SEC has not declared such amendment effective (if such declaration of effectiveness is required) or (iii) if the negotiation or consummation of a transaction by HoldCo or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, HoldCo’s Chief Executive Officer, Chief Financial Officer or General Counsel reasonably believes, upon the advice of legal counsel, would require additional disclosure by HoldCo in the Registration Statement of material information that HoldCo has a bona fide business purpose for keeping confidential and the
non-disclosure
of which in the Registration Statement would be expected, in the reasonable determination of HoldCo’s Chief Executive Officer, Chief Financial Officer or General Counsel, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “
Suspension Event
”);
provided, however
non-public
information) during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that (A) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144 but subject, for the avoidance of doubt, to compliance with Investor’s obligations under applicable securities laws) until the Investor receives copies of a supplemental or amended prospectus (which HoldCo agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by HoldCo that it may resume such offers and sales, and (B) it will maintain the confidentiality of any information included in such written notice delivered by HoldCo unless otherwise required by law. If so directed by HoldCo, the Investor will deliver to HoldCo or, in the Investor’s sole discretion destroy, all copies of the prospectus covering the Shares in the Investor’s possession;
provided, however
pre-existing
document retention policy or (y) to copies stored electronically on archival servers as a result of automatic data
back-up.
|
(d) |
HoldCo shall indemnify and hold harmless the Investor (to the extent a seller under the Registration Statement), its officers, directors, employees and agents, and each person who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “
Losses
”), as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a
|
material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements or alleged untrue statements, omissions or alleged omissions are based upon information regarding the Investor furnished in writing to HoldCo by the Investor expressly for use therein. |
(e) |
The Investor shall
Section
7
of which the Investor is aware.
|
(f) |
Any person or entity 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 or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). 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 legal counsel to 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), which settlement shall not include a statement or admission of fault and culpability on the part of such indemnified party, and which settlement shall 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.
|
(g) |
The indemnification provided for under this Investment Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent or controlling person or entity of such indemnified party and shall survive the transfer of securities.
|
(h) |
If the indemnification provided under this
Section
7
from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses, 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 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;
provided, however
Section
7
, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this
Section
7(h)
from any person or entity who was not guilty of such fraudulent misrepresentation.
|
(i) |
For purposes of this
Section 7
of this Investment Agreement, (i) “Shares” shall mean, as of any date of determination, the Shares (as defined in the recitals to this Investment Agreement) and any other equity security issued or issuable with respect to the Shares by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or otherwise, and (ii) “Investor” shall include any affiliate of the Investor to which the Investor’s rights under this Investment Agreement shall have been duly assigned.
|
8.
|
TERMINATION
Section
2
of this Investment Agreement are (i) not satisfied or waived prior to the Closing or (ii) not capable of being satisfied on the Closing and, in each case of (i) and (ii), as a result thereof, the transactions contemplated by this Investment Agreement will not be and are not consummated at the Closing (the termination events described in clauses (a)–(d) above, collectively, the “
Termination Events
”);
provided
set-off.
|
9.
|
TRUST ACCOUNT WAIVER.
|
(a) |
The Investor acknowledges that SPAC is a blank check company with the powers and privileges to effect the Business Combination. The Investor further acknowledges that, as described in the final prospectus relating to SPAC’s initial public offering (the “IPO”) filed with the SEC on October 2, 2020 (the “Prospectus”), (i) as of the date hereof, substantially all of SPAC’s assets consist of the cash
|
proceeds of the IPO and private placements of its securities conducted prior to or in conjunction with the IPO, (ii) substantially all of those proceeds have been deposited into a trust account (collectively, with interest accrued from time to time thereon, the “Trust Account”) for the benefit of SPAC, its public shareholders and certain other parties (including the underwriters of SPAC’s IPO), and (iii) the funds held from time to time in the Trust Account may only be released upon certain conditions. The Investor agrees and acknowledges that, except as otherwise described in the Prospectus and released to SPAC to pay SPAC’s income taxes, SPAC may not disburse monies from the Trust Account: (1) to SPAC, until the completion of SPAC’s business combination (as such term is used in the Prospectus), or (2) SPAC’s public shareholders, until the earliest of (a) the completion of the Business Combination, and then only in connection with those shares that such public shareholder properly elected to redeem, subject to the limitations described in the Prospectus, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend SPAC’s amended and restated memorandum and articles of association (A) to modify the substance or timing of SPAC’s obligation to provide holders of SPAC’s public shares the right to have their shares redeemed in connection with the Business Combination or to redeem 100% of SPAC’s public shares if SPAC does not complete SPAC’s Business Combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to the rights of holders of SPAC’s public shares, and (c) the redemption of SPAC’s public shares if SPAC has not consummated its Business Combination within 24 months from the closing of the IPO, subject to applicable law. To the extent the Investor, its shareholders or any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to SPAC or SPAC’s Representatives, which proceeding seeks, in whole or in part, monetary relief against SPAC or SPAC’s Representatives, the Investor hereby acknowledges and agrees that the Investor’s, its shareholders’ and its affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit the Investor, or its affiliates or shareholders (or any person claiming on any of their behalves or in lieu of any of them) to have any right, title and interest, or any claim of any kind they have or may have in the future against the Trust Account (including any distributions therefrom) or any amounts contained therein. |
10.
|
SECURITIES LAW MATTERS.
|
(a) |
It is understood that, except as provided below, book entry accounts evidencing the Shares must bear the following legends:
|
(b) |
Notwithstanding the foregoing, HoldCo shall use its commercially reasonable efforts, to provide the Investor with a like number of shares not bearing such legend upon the request of the Investor (or, at HoldCo’s option, have such legend removed from the Shares) at such time as such restrictions are no longer applicable;
provided
|
(c) |
As long as the Investor shall own any of the Shares and such Shares shall not be included in the Registration Statement, and such Shares are “restricted securities” (as defined in Rule 144), HoldCo covenants to use its commercially reasonable efforts to make and keep public information available
(
|
those terms are understood and defined in Rule 144) and file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by HoldCo after the Closing pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Investor with true and complete copies of all such filings to enable the Investor to resell the Shares pursuant to Rule 144;
provided
Section
10(c)
.
|
11.
|
MISCELLANEOUS.
|
(a) |
Press Releases and Other Public Communications
. All press releases or other public communications relating to the transactions contemplated hereby between HoldCo and the Investor, and the method of the release for publication thereof, shall prior to the Closing be subject to the prior approval of (i) HoldCo, and (ii) to the extent such public communication references the Investor, the Investor;
provided
Section 11(a)
to the extent any proposed release or statement is substantially equivalent to the information that has previously been made public without breach of the obligation under this
Section
11(a)
. The restriction in this
Section
11(a)
shall not apply to the extent the public announcement is required by applicable securities law, any governmental authority or stock exchange rule;
provided, however
|
(b) |
Cleansing Disclosure; Investor-Related Disclosure
.
|
(i) |
SPAC shall, by 9:00 a.m., New York City time, on the first (1st) Business Day immediately following the date of this Investment Agreement (the “
Disclosure Time
”), issue one or more press releases or file with the SEC a Current Report on Form
8-K
(collectively, the “
Disclosure Document
”) disclosing all material terms of the transactions contemplated by this Investment Agreement and by each of the Transaction Agreement, the Separation Agreement, the PIPE Subscription Agreements and the Commercial Agreement. From and after the Disclosure Time, SPAC represents to the Investor that it shall have publicly disclosed all material,
non-public
information delivered to the Investor by SPAC or any of its officers, directors, employees or agents, in connection with the transactions contemplated by this Investment Agreement and by each of the Transaction Agreement, the Separation Agreement, the PIPE Subscription Agreements and the Commercial Agreement; and from and after the earlier of the Disclosure Time and the issuance or filing of the Disclosure Document, Investor shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with SPAC or any of its respective officers, directors, employees, agent or affiliates with respect to the transactions contemplated by this Investment Agreement and by each of the Transaction Agreement, the Separation Agreement, the PIPE Subscription Agreements and the Commercial Agreement.
|
(ii) |
The Investor hereby consents to the publication and disclosure in any press release issued by HoldCo, SPAC or HD, any Form
8-K
filed by HoldCo, SPAC or HD with the SEC in connection with the execution and delivery of the Transaction Agreement or the transactions contemplated thereby and the Registration Statement (as defined in the Transaction Agreement) (and, as and to the extent otherwise required by the federal securities laws, exchange rules, the SEC or any other securities authorities or any rules and regulations promulgated thereby, any other documents or communications provided by HoldCo, SPAC or HD to any governmental entity or to any securityholders of HoldCo, SPAC or HD) of the Investor’s identity and beneficial ownership of the Shares and the nature of the Investor’s commitments, arrangements and understandings under
|
and relating to this Investment Agreement (“
Investor-Related Disclosure
”) and, if deemed appropriate by HoldCo, HD or SPAC, a copy of this Investment Agreement, all solely to the extent required by applicable law or any regulation or stock exchange listing requirement. HoldCo, SPAC and LiveWire shall use commercially reasonable efforts to afford the Investor and its counsel an opportunity to review any proposed Investor-Related Disclosure reasonably prior to its public disclosure and will consider in good faith any reasonable comments the Investor may make on such proposed Investor-Related Disclosure (it being understood and agreed that in no event shall such Investor-Related Disclosure exceed the scope or substance of information disclosed by HoldCo with respect to HD). The Investor will promptly provide any information reasonably requested by HoldCo, HD or SPAC for any regulatory application or filing made or approval sought in connection with the Business Combination (including filings with the SEC) to the extent readily available and to the extent consistent with its internal policies and procedures.
|
(c) |
Notices
. All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service, or (iv) when delivered by email (in each case in this clause (iv), solely if receipt is confirmed, but excluding any automated reply, such as an
out-of-office
|
(i) |
If to SPAC or HoldCo:
|
(ii) |
If to the Investor, to
|
(d) |
Successors and Assigns
. No party hereto shall transfer or assign this Investment Agreement or any part hereof without the prior written consent of each of the other parties and any such assignment without such prior written consent shall be void. Subject to the foregoing, this Investment Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.
|
(e) |
Further Assurances
. Each party hereto shall (i) execute and deliver such additional documents and use reasonable best efforts to take such additional actions as the parties reasonably may deem to be
|
practical and necessary and (ii) use reasonable best efforts to obtain all material consents and approvals of third parties (including Governmental Authorities) that such party is required to obtain, in each case, in order to consummate the investment as contemplated by this Investment Agreement (including such consents and approvals as may be required to give effect to HoldCo’s obligations under
Section 7
hereof). Without limiting the foregoing, HoldCo may request from the Investor such additional information as HoldCo may deem necessary to obtain any material consents and approvals of third parties (including Governmental Authorities), and the Investor shall provide such information as may reasonably be requested. The Investor acknowledges and agrees that if it does not provide HoldCo with such requested information, HoldCo may not be able to register the Investor
’
s Shares for resale pursuant to
Section 7
hereof.
|
(f) |
Entire Agreement
. This Investment Agreement (including the schedule and any exhibits hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as otherwise set forth herein, this Investment Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns.
|
(g) |
Invalidity
. If any provision of this Investment Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Investment Agreement shall remain in full force and effect. The parties further agree that if any provision contained herein is, to any extent, held invalid, illegal or unenforceable in any respect under the laws governing this Investment Agreement, they shall take any actions reasonably necessary to render the remaining provisions of this Investment Agreement valid and enforceable to the fullest extent permitted by law and, to the extent reasonably necessary, shall amend or otherwise modify this Investment Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
|
(h) |
Headings; Counterparts
. The headings in this Investment Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Investment Agreement. This Investment Agreement may be executed in one or more counterparts (including by electronic mail or other electronic submission, including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
|
(i) |
Governing Law
. This Investment Agreement, and all claims or causes of action based upon, arising out of, or related to this Investment Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction.
|
(j) |
Consent to Jurisdiction
. Any proceeding or Action based upon, arising out of or related to this Investment Agreement or the transactions contemplated hereby must be brought in the Court of Chancery of the State of Delaware (or, to the extent such Court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware,
|
proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action, suit or proceeding brought pursuant to this
Section
11(
j
)
. Each party acknowledges and agrees that any controversy which may arise under this Investment Agreement and the transactions contemplated hereby is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably, unconditionally and voluntarily waives any right such party may have to a trial by jury in respect of any Action, suit or proceeding directly or indirectly arising out of or relating to this Investment Agreement or any of the transactions contemplated hereby. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS INVESTMENT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
|
(k) |
Remedies
. Each party hereto agrees that irreparable damage would occur in the event that any of the provisions of this Investment Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Investment Agreement and to specific enforcement of the terms and provisions of this Investment Agreement, in addition to any other remedy to which it is entitled at law, in equity, in contract, in tort or otherwise. In the event that any Action shall be brought in equity to enforce the provisions of this Investment Agreement, the defending party shall not allege, and such party hereby waives the defense, that there is an adequate remedy at law, and such party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
|
(l) |
Expenses
. Each party hereto shall be responsible for and pay its own expenses incurred in connection with this Investment Agreement, including all fees of its legal counsel, financial advisers and accountants.
|
(m) |
Third-Party Beneficiaries
. The parties hereto agree that HD and SPAC are express third-party beneficiaries of, and may enforce HoldCo’s and their rights with respect to, this Investment Agreement.
|
(n) |
Independent Rights and Obligations
. For the avoidance of doubt, all obligations of the Investor hereunder are separate and several from the obligations of any PIPE Investor. Nothing contained herein or in any PIPE Subscription Agreement, and no action taken by the Investor or any PIPE Investors pursuant hereto or thereto, shall be deemed to constitute the Investor and any PIPE Investor(s) as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investor and any PIPE Investor(s) are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Investment Agreement and the PIPE Subscription Agreements. The Investor shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Investment Agreement, and it shall not be necessary for any PIPE Investor to be joined as an additional party in any proceeding for such purpose.
|
12.
|
NO HEDGING
|
publicly disclose the intention to undertake any of the foregoing; provided, however, that the provisions of this
Section
12
shall not apply to long sales (including sales of securities held by the Investor, its controlled affiliates or any person or entity acting on behalf of the Investor or any of its controlled affiliates prior to the date hereof and securities purchased by the Investor in the open market after the date hereof) other than those effectuated through derivative transactions and similar instruments. Notwithstanding the foregoing, nothing in this
Section
12
(i) shall prohibit any entities under common management with the Investor that have no knowledge (constructive or otherwise) of this Investment Agreement or of Investor’s participation in the transactions contemplated hereby from entering into any of the transactions set forth in the first sentence of this
Section
12
; and (ii) in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers or desks manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, this
Section
12
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Investment Agreement.
|
13.
|
NON-RELIANCE
|
14.
|
EQUAL TREATMENT.
Per-Share
Price than that paid by the Investor hereunder (including through the issuance or grant of warrants or options)) that are more favorable in any material respect than such rights or terms established in favor of the Investor hereunder (“
Additional Rights
”), the Investor, SPAC and HoldCo shall promptly amend and restate this Agreement to provide Investor with such Additional Rights. A “
Comparable Investor
” means any person investing in or subscribing for any newly issued securities of HoldCo in connection with the closing of the Business Combination for an aggregate amount of consideration that is equal to or less than the Purchase Price payable by the Investor hereunder. For the avoidance of doubt, in no event shall HD or
AEA-Bridges
Impact Sponsor LLC or any of their respective affiliates be deemed to be a Comparable Investor for any purpose hereunder.
|
15.
|
NON-RECOURSE
|
AEA-BRIDGES
IMPACT CORP.
|
||
By: |
|
|
Name: | ||
Title: |
LW EV HOLDINGS, INC.
|
||
By: |
|
|
Name: | ||
Title: |
Investor: | ||
[ ☐ ] | ||
By: |
|
|
Name: | ||
Title: |
AEA-BRIDGES
IMPACT CORP.
|
||
By: | /s/ John Garcia | |
Name: | John Garcia | |
Title: |
Co-Chief
Executive Officer
|
|
AEA-BRIDGES
IMPACT SPONSOR LLC
|
||
By: | /s/ John Garcia | |
Name: | John Garcia | |
Title: |
Co-Chief
Executive Officer
|
|
/s/ John Garcia
|
||
John Garcia | ||
/s/ John Replogle
|
||
John Replogle | ||
/s/ George Serafeim
|
||
George Serafeim |
Harley-Davidson, Inc. | ||
By: |
|
|
Name: | ||
Title: | ||
LiveWire EV, LLC | ||
By: |
|
|
Name: | ||
Title: |
Category
|
Designated Approvers
|
|
Concepts, artwork, and three-dimensional models which are to be used on or in connection with the Licensed Products (“
Concept Materials
”)
|
VP Styling and Design (as of the Effective Date, Brad Richards)
H-D
Trademark Team
|
|
Pre-production/pre-release
Pre-Production
Samples
Production Samples
”)
|
VP Styling and Design (as of the Effective Date, Brad Richards)
H-D
Trademark Team
|
|
Packaging for the Licensed Products (“
Packaging
”)
|
VP Styling and Design (as of the Effective Date, Brad Richards)
H-D
Trademark Team
|
|
Materials for promoting and advertising the Licensed Products (including for use on Digital Media)
|
VP Marketing (as of the Effective Date, Theo Keetell)
H-D
Trademark Team
|
|
Methods of promoting and advertising the Licensed Products
|
VP Marketing (as of the Effective Date, Theo Keetell)
VP Marketing
|
LICENSOR | ||
Harley-Davidson, Inc. | ||
By: |
|
|
Name: | ||
Title: | ||
LICENSEE | ||
LiveWire EV, LLC | ||
By: |
|
|
Name: | ||
Title: |
Acknowledged and Approved: | ||
H-D
U.S.A., LLC
|
||
By: |
|
|
Name: | ||
Title: |
Harley-Davidson, Inc. | ||
By: |
|
Name: | ||
Title: | ||
LiveWire EV, LLC |
By: |
|
Name: | ||
Title: |
Harley-Davidson, Inc. | ||
By: |
|
Name: |
Title: | VP Engineering |
LiveWire EV, LLC |
By: |
|
Name: |
Title: | Head of EV Technology |
1. |
Abad, Mariano
|
2. |
Akrikencheikh, Judi
|
3. |
Amber, Lucas
|
4. |
Aunkst, David
|
5. |
Bednarz, Mike
|
6. |
Bekefy, Jon
|
7. |
Krimpelbein, Ben (Pending Start)
|
8. |
Bhushan, Swaroop
|
9. |
Black, Matthew
|
10. |
Blomdahl, Kirk
|
11. |
Brett, Pfarr
|
12. |
Burns, Shannon
|
13. |
Cahya, Harianto,
|
14. |
Chitnis, Abhishek
|
15. |
Cirillo, Jill
|
16. |
Cole, Mark
|
17. |
Connelly, David
|
18. |
Delling, Lindsay
|
19. |
Douglas, Harlan
|
20. |
Easterla, Dylan
|
21. |
Halverson, Eric
|
22. |
Esmael, Mufaddal
|
23. |
Fabian, Lucas
|
24. |
Farage, Ryan
|
25. |
Feldman, Gerald
|
26. |
Fleming, Justin
|
27. |
Flieh, Huthaifa
|
28. |
Frazier, Anna
|
29. |
Gabergrits, Evgueni
|
30. |
Gales, Mark
|
31. |
Gnanasek, Mugesh
|
32. |
Gopireddy, Manasa
|
33. |
Graaf, Jason
|
34. |
Gudmundsson, Stefan
|
35. |
Haag, Jeff
|
36. |
Hafezinasab, Hamidreza
|
37. |
Handley, Christian
|
38. |
Hannah, Michael
|
39. |
Hebert, Stephen
|
40. |
Herb, Robert
|
41. |
Hietpas, Brian
|
42. |
Huang, Robert
|
43. |
Hunter, Mitchell
|
44. |
Klaus, Jeff (Pending Hire)
|
45. |
Nienhuis, Jeffrey (Pending Hire)
|
46. |
Jha, Niharika
|
47. |
Jimenez, Natasha
|
48. |
Johnson, Rick
|
49. |
Jyoti, Nitin
|
50. |
Kato, Mikalea
|
51. |
Kazmirski, Todd
|
52. |
Kelley-Sexton, Margo
|
53. |
Kelly, Renae
|
54. |
Kohlman, Chris
|
55. |
Konieczka, Kyle
|
56. |
Konkel, Eric
|
57. |
Konshak, Joe
|
58. |
Kuczmarski, Ashley
|
59. |
Kulai, Harshith
|
60. |
Lehrbaum, Daniel
|
61. |
Lorbiecki, Alexandra
|
62. |
Luddy, Stephan (pending start)
|
63. |
Gillihan, Maijken (pending start)
|
64. |
Maksim, Sorin (pending start)
|
65. |
Marchese, Gina
|
66. |
Marotta Jr, Frank
|
67. |
Masoud, Vaezi
|
68. |
McGinley, Ben
|
69. |
Mennitt, Tim
|
70. |
Metzner, Adam
|
71. |
Millis, Joseph
|
72. |
Monge, Louie
|
73. |
Morrissey, Ryan
|
74. |
Mroz, Jamieson
|
75. |
Neelam, Chopade
|
76. |
Noonan, Maureen
|
77. |
O’Mahoney, Dylan
|
78. |
Osgood, Steven
|
79. |
Perez, Nicholas
|
80. |
Plesetz, Jonathan
|
81. |
Prosser, Nick
|
82. |
Purfeerst, Jamie
|
83. |
Ravari, Shahriar
|
84. |
Reitinger, Samuel
|
85. |
Richter, Dwayne
|
86. |
Rinaldo, Steven
|
87. |
Romo, Hector
|
88. |
Roseberry, Harlan
|
89. |
Rosenkranz, Erik
|
90. |
Roth, Shannon
|
91. |
Safarik, Dan
|
92. |
Sanchez, Mario
|
93. |
Sandeep, Chava (pending hire)
|
94. |
Scalzo, Timothy
|
95. |
Scherbarth, Brian
|
96. |
Schweiner, Vanessa
|
97. |
Scot, Ferguson
|
98. |
Severance, Ryan
|
99. |
Shweta, Sawant
|
100. |
Silovich, Brian
|
101. |
Stafford, Eric
|
102. |
Strader, Vance
|
103. |
Sweney, Rob
|
104. |
Szymanski, Kevin
|
105. |
Tareen, Affan
|
106. |
Tarun, Sadineni (Pending hire)
|
107. |
Thede, Jared
|
108. |
Thuilliez, Jacob
|
109. |
Tirumalareddy, Pavan
|
110. |
Trebe, Kevin
|
111. |
Uduwage, Don
|
112. |
Weaver, Austin
|
113. |
Weiss, Andrew
|
114. |
Woyak, James
|
115. |
Yuhasz, Donald
|
116. |
Ziegler, Taylor
|
1. |
Jochen Zeitz
|
1. |
Harley-Davidson, Inc. U.S. Salaried Leave, Vacation and Other Time Off Information
|
2. |
Harley-Davidson Motor Company Group Retiree Health Care Account
|
3. |
Group Insurance Plan for Employees of Harley-Davidson Motor Company Group LLC, which includes the following benefits:
|
a. |
Medical
|
b. |
Prescription drug
|
c. |
Dental
|
d. |
Vision
|
e. |
Life Insurance
|
f. |
Accidental death & dismemberment
|
g. |
Supplemental life insurance
|
h. |
Short-term disability
|
i. |
Long-term disability for salaried employees
|
j. |
Long-term disability and voluntary life insurance for Kansas City Hourly Employees
|
k. |
Personal accident insurance plan
|
l. |
Business travel accident insurance
|
m. |
Employee assistance plan
|
n. |
Cafeteria plan
|
o. |
Health care spending accounts
|
p. |
Dependent care spending account
|
Item 20.
|
Indemnification of Directors and Officers.
|
Item 21.
|
Exhibits and Financial Statement Schedules.
|
Exhibit No.
|
Description
|
|
2.1† | Business Combination Agreement, dated as of December 12, 2021, by and among Harley-Davidson, Inc., AEA-Bridges Impact Corp., LW EV Holdings, Inc., LW EV Merger Sub, Inc. and LiveWire EV, LLC (included as Annex A to the proxy statement/prospectus). | |
3.1* |
Form of Proposed Certificate of Incorporation of
AEA-Bridges
Impact Corp. to become effective following the Domestication but prior to the Merger (included as
Annex B
to the proxy statement/prospectus).
|
|
3.2* |
Form of Proposed Bylaws of
AEA-Bridges
Impact Corp. to become effective following the Domestication but prior to the Merger (included as
Annex C
to the proxy statement/prospectus).
|
|
3.3* |
Form of Proposed Certificate of Incorporation of HoldCo to become effective following the Merger and to remain in effect following the Closing (included as
Annex D
to the proxy statement/prospectus).
|
|
3.4* |
Form of Proposed Bylaws of HoldCo to become effective following the Merger and to remain in effect following the Closing (included as
Annex E
to the proxy statement/prospectus).
|
|
4.1* | Specimen Common Stock Certificate of HoldCo. | |
4.2* | Specimen Warrant Certificate of HoldCo. | |
4.3 | ABIC Warrant Agreement, dated as of October 1, 2020, by and between AEA-Bridges Impact Corp. and Continental Stock Transfer & Trust Company, as transfer agent. | |
5.1* | Opinion of Kirkland & Ellis LLP. | |
8.1* | Tax Opinion of Kirkland & Ellis LLP |
Exhibit No.
|
Description
|
|
101.INS | XBRL Instance Document—this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |
107 | Filing Fee Table |
† |
Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). ABIC and HoldCo agree to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.
|
* |
To be filed by amendment.
|
Item 22.
|
Undertakings.
|
i. |
To include any prospectus required by Section 10(a)(3) of the Securities Act;
|
ii. |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
|
iii. |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
|
i. |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
|
ii. |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
iii. |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
|
iv. |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
AEA-BRIDGES
IMPACT CORP.
|
||||
By: |
/s/ John Garcia
|
|||
Name: | John Garcia | |||
Title: |
Chair and
Co-Chief
Executive Officer
|
|||
By: |
/s/ Michele Giddens
|
|||
Name: | Michele Giddens | |||
Title: |
Co-Chief
Executive Officer
|
Signature
|
Title
|
|
/s/ John Garcia
|
Chairman,
Co-Chief
Executive Officer and Director
(Principal Executive Officer)
|
|
John Garcia | ||
/s/ Michele Giddens
|
Co-Chief
Executive Officer and Director
(Principal Executive Officer)
|
|
Michele Giddens | ||
/s/ Ramzi Gedeon
|
Chief Financial Officer and Director
(Principal Financial and Accounting Officer)
|
|
Ramzi Gedeon |
Signature
|
Title
|
|
/s/ Steven E. DeCillis II
|
Director | |
Steven E. DeCillis II | ||
/s/ John Replogle
|
Director | |
John Replogle | ||
/s/ George Serafeim
|
Director | |
George Serafeim | ||
/s/ Brian Trelstad
|
Director | |
Brian Trelstad |
By: |
/s/ Brian Trelstad
|
|||
Name: | Brian Trelstad | |||
Title: | Authorized Representative |
LW EV HOLDINGS, INC.
|
||
By: |
/s/ John Garcia
|
|
Name: | John Garcia | |
Title: | President, Secretary, Treasurer and Director |
Signature
|
Title
|
|
/s/ John Garcia
|
President, Secretary, Treasurer and Director (Principal Executive, Financial and Accounting Officer) | |
John Garcia |
By: |
/s/ Brian Trelstad
|
|
Name: | Brian Trelstad | |
Title: | Authorized Representative |
Exhibit 4.3
WARRANT AGREEMENT
AEA-BRIDGES IMPACT CORP.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Dated October 1, 2020
THIS WARRANT AGREEMENT (this Agreement), dated October 1, 2020, is by and between AEA-Bridges Impact Corp., a Cayman Islands exempted company (the Company), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (in such capacity, the Warrant Agent).
WHEREAS, it is proposed that the Company enter into that certain Sponsor Warrants Purchase Agreement, with AEA-Bridges Impact Sponsor LLC, a Cayman Islands limited liability company (the Sponsor), pursuant to which the Sponsor will purchase an aggregate of 10,500,000 warrants (or up to 11,700,000 warrants if the underwriters in the Public Offering (defined below) exercise their Over-allotment Option (as defined below) in full) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option, if applicable), bearing the legend set forth in Exhibit B hereto (the Private Placement Warrants) at a purchase price of $1.00 per Private Placement Warrant. Each Private Placement Warrant entitles the holder thereof to purchase one Ordinary Share (as defined below) at a price of $11.50 per share, subject to adjustment as described herein; and
WHEREAS, in order to finance the Companys transaction costs in connection with an intended initial merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, involving the Company and one or more businesses (a Business Combination), the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional 1,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant; and
WHEREAS, the Company is engaged in an initial public offering (the Offering) of units of the Companys equity securities, each such unit comprised of one Ordinary Share and one-half of one Public Warrant (as defined below) (the Units) and, in connection therewith, has determined to issue up to 23,000,000 redeemable warrants (including up to 3,000,000 redeemable warrants subject to the Over-allotment Option) to public investors in the Offering (the Public Warrants and, together with the Private Placement Warrants, the Warrants). Each whole Warrant entitles the holder thereof to purchase one Class A ordinary share of the Company, par value $0.0001 per share (Ordinary Shares), for $11.50 per share, subject to adjustment as described herein. Only whole Warrants are exercisable. A holder of the Public Warrants will not be able to exercise any fraction of a Warrant; and
WHEREAS, the Company has filed with the Securities and Exchange Commission (the Commission) a registration statement on Form S-1, File No. 333-248785 and prospectus (the Prospectus), for the registration, under the Securities Act of 1933, as amended (the Securities Act), of the Units, the Public Warrants and the Ordinary Shares included in the Units; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of Warrant. Each Warrant shall initially be issued in registered form only.
2.2. Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a certificated Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3. Registration.
2.3.1. Warrant Register. The Warrant Agent shall maintain books (the Warrant Register), for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a Participant).
2
If the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (Definitive Warrant Certificates) which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if issued, shall be signed by, or bear the facsimile signature of either of the Chairman of the Board, Co-Chief Executive Officers, 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, for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4. Detachability of Warrants. The Ordinary Shares and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally open for normal business (a Business Day), then on the immediately succeeding Business Day following such date, or earlier (the Detachment Date) with the consent of Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc., but in no event shall the Ordinary Shares and the Public Warrants comprising the Units be separately traded until (A) the Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Offering, including the proceeds then received by the Company from the exercise by the underwriters of their right to purchase additional Units in the Offering (the Over-allotment Option), if the Over-allotment Option is exercised prior to the filing of the Current Report on Form 8-K, and (B) the Company issues a press release announcing when such separate trading shall begin.
2.5. Fractional Warrants. The Company shall not issue fractional Warrants other than as part of the Units, each of which is comprised of one Ordinary Share and one-half of one whole Public Warrant. If, upon the detachment of Public Warrants from the Units or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.
2.6. Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants: (i) may be exercised for cash or on a cashless basis, pursuant to subsection 3.3.1(c) hereof, (ii) including the Ordinary Shares issuable upon exercise of the Private Placement Warrants, may not be transferred, assigned or sold
3
until thirty (30) days after the completion by the Company of an initial Business Combination, (iii) shall not be redeemable by the Company pursuant to Section 6.1 hereof and (iv) shall only be redeemable by the Company pursuant to Section 6.2 if the Reference Value (as defined below) is less than $18.00 per share (subject to adjustment in compliance with Section 4 hereof); provided, however, that in the case of (ii), the Private Placement Warrants and any Ordinary Shares issued upon exercise of the Private Placement Warrants may be transferred by the holders thereof:
(a) to the Companys officers or directors, any affiliates or family members of any of the Companys officers or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such affiliates;
(b) in the case of an individual, by gift to a member of one of the individuals immediate family or to a trust, the beneficiary of which is a member of the individuals immediate family, an affiliate of such person or to a charitable organization;
(c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual;
(d) in the case of an individual, pursuant to a qualified domestic relations order;
(e) by private sales or transfers made in connection with the consummation of the Companys Business Combination at prices no greater than the price at which the Private Placement Warrants or Ordinary Shares, as applicable, were originally purchased;
(f) by virtue of the Sponsors organizational documents upon liquidation or dissolution of the Sponsor;
(g) to the Company for no value for cancellation in connection with the consummation of our initial Business Combination;
(h) in the event of the Companys liquidation prior to the completion of its initial Business Combination; or
(i) in the event of the Companys completion of a liquidation, merger, share exchange or other similar transaction which results in all of the public shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the completion of the Companys initial Business Combination;
provided, however, that, in the case of clauses (a) through (f), these permitted transferees (the Permitted Transferees) must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.
4
3. Terms and Exercise of Warrants.
3.1. Warrant Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of Ordinary Shares stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term Warrant Price as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a cashless exercise, to the extent permitted hereunder) described in the prior sentence at which Ordinary Shares may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than fifteen Business Days (unless otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable law); provided that the Company shall provide at least five days prior written notice of such reduction to Registered Holders of the Warrants; and provided further, that any such reduction shall be identical among all of the Warrants.
3.2. Duration of Warrants. A Warrant may be exercised only during the period (the Exercise Period) (A) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a Business Combination, and (ii) the date that is twelve (12) months from the date of the closing of the Offering, and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation of the Company in accordance with the Companys amended and restated memorandum and articles of association, as amended from time to time, if the Company fails to complete a Business Combination, and (z) other than with respect to the Private Placement Warrants then held by the Sponsor or its Permitted Transferees with respect to a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof, 5:00 p.m., New York City time on the Redemption Date (as defined below) as provided in Section 6.3 hereof (the Expiration Date); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement or a valid exemption therefrom being available. Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Private Placement Warrant then held by the Sponsor or its Permitted Transferees in connection with a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof) in the event of a redemption (as set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant then held by the Sponsor or its Permitted Transferees in the event of a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants.
5
3.3. Exercise of Warrants.
3.3.1. Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised (the Book-Entry Warrants) on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election to purchase (Election to Purchase) any Ordinary Shares pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the Depositarys procedures, and (iii) the payment in full of the Warrant Price for each Ordinary Share as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Ordinary Shares and the issuance of such Ordinary Shares, as follows:
(a) in lawful money of the United States, in good certified check or good bank draft payable to the order of the Warrant Agent;
(b) [Reserved];
(c) with respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor or a Permitted Transferee, by surrendering the Warrants for that number of Ordinary Shares equal to (i) if in connection with a redemption of Private Placement Warrants pursuant to Section 6.2 hereof, as provided in Section 6.2 hereof with respect to a Make-Whole Exercise and (ii) in all other scenarios the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the Sponsor Exercise Fair Market Value (as defined in this subsection 3.3.1(c)) less the Warrant Price by (y) the Sponsor Exercise Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the Sponsor Fair Market Value shall mean the average last reported sale price of the Ordinary Shares for the ten (10) trading days ending on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;
(d) as provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or
(e) as provided in Section 7.4 hereof.
3.3.2. Issuance of Ordinary Shares on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book- entry position or certificate, as applicable, for the number of Ordinary Shares to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it on the register of members of the Company, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any Ordinary Shares pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Ordinary Shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Companys satisfying its obligations under Section 7.4 or a valid exemption from registration
6
is available. No Warrant shall be exercisable and the Company shall not be obligated to issue Ordinary Shares upon exercise of a Warrant unless the Ordinary Shares issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants. Subject to Section 4.6 of this Agreement, a Registered Holder of Warrants may exercise its Warrants only for a whole number of Ordinary Shares. The Company may require holders of Public Warrants to settle the Warrant on a cashless basis pursuant to Section 7.4. If, by reason of any exercise of Warrants on a cashless basis, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in an Ordinary Share, the Company shall round down to the nearest whole number, the number of Ordinary Shares to be issued to such holder.
3.3.3. Valid Issuance. All Ordinary Shares issued upon the proper exercise of a Warrant in conformity with this Agreement and the Amended and Restated Memorandum and Articles of Association of the Company shall be validly issued, fully paid and nonassessable.
3.3.4. Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Ordinary Shares is issued and who is registered in the register of members of the Company shall for all purposes be deemed to have become the holder of record of such Ordinary Shares on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the register of members of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5. Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holders 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 persons affiliates), to the Warrant Agents actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) (the Maximum Percentage) of the Ordinary Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Ordinary Shares beneficially owned by such person and its affiliates shall include the number of Ordinary Shares issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Ordinary Shares that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
7
Exchange Act). For purposes of the Warrant, in determining the number of outstanding Ordinary Shares, the holder may rely on the number of outstanding Ordinary Shares as reflected in (1) the Companys most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or Continental Stock Transfer & Trust Company, as transfer agent (in such capacity, the Transfer Agent), setting forth the number of Ordinary Shares outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number of Ordinary Shares then outstanding. In any case, the number of issued and outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of issued and outstanding Ordinary Shares was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1. Share Capitalizations.
4.1.1. Sub-Divisions. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of issued and outstanding Ordinary Shares is increased by a capitalization or share dividend of Ordinary Shares, or by a sub-division of Ordinary Shares or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding Ordinary Shares. A rights offering made to all or substantially all holders of Ordinary Shares entitling holders to purchase Ordinary Shares at a price less than the Historical Fair Market Value (as defined below) shall be deemed a capitalization of a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Ordinary Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Ordinary Share paid in such rights offering divided by (y) the Historical Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Ordinary Shares, in determining the price payable for Ordinary Shares, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) Historical Fair Market Value means the volume weighted average price of the Ordinary Shares during the ten (10) trading day period ending on the trading day prior to the first date on which the Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights. No Ordinary Shares shall be issued at less than their par value.
4.1.2. Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, pays to all or substantially all of the holders of the Ordinary Shares a dividend or make a distribution in cash, securities or other assets on account of such Ordinary Shares (or other shares into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy
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the redemption rights of the holders of the Ordinary Shares in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of the Ordinary Shares in connection with a shareholder vote to amend the Companys amended and restated memorandum and articles of association (i) to modify the substance or timing of the Companys obligation to provide holders of Ordinary Shares the right to have their shares redeemed in connection with the Companys initial Business Combination or to redeem 100% of the Companys public shares if it does not complete its initial Business Combination within the time period required by the Companys Amended and Restated Memorandum and Articles of Association, as amended from time to time, or (ii) with respect to any other provision relating to the rights of holders of Ordinary Shares, (e) as a result of the repurchase of Ordinary Shares by the Company if a proposed initial Business Combination is presented to the shareholders of the Company for approval or (f) in connection with the redemption of public shares upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation (any such non-excluded event being referred to herein as an Extraordinary Dividend), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Companys board of directors (the Board), in good faith) of any securities or other assets paid on each Ordinary Share in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, Ordinary Cash Dividends means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend or distribution to the extent it does not exceed $0.50 (which amount shall be adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of Ordinary Shares issuable on exercise of each Warrant).
4.2. Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of issued and outstanding Ordinary Shares is decreased by a consolidation, combination or reclassification of Ordinary Shares or other similar event, then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in issued and outstanding Ordinary Shares.
4.3. Adjustments in Exercise Price. Whenever the number of Ordinary Shares purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of Ordinary Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Ordinary Shares so purchasable immediately thereafter.
4.4. Raising of the Capital in Connection with the Initial Business Combination. If (x) the Company issues additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per Ordinary Share (with such issue price or effective issue price to be determined in good faith by the Board and, in the case of any such issuance to the
9
Sponsor or its affiliates, without taking into account any Class B ordinary shares, par value $0.0001 per share, of the Company held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Companys initial Business Combination on the date of the completion of the Companys initial Business Combination (net of redemptions), and (z) the volume-weighted average trading price of Ordinary Shares during the twenty (20) trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the Market Value) is below $9.20 per share, the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described in Section 6.1 and Section 6.2 shall be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption trigger price described in Section 6.2 shall be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
4.5. Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding Ordinary Shares (other than a change under Section 4.1 or Section 4.2 hereof or that solely affects the par value of such Ordinary Shares), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the issued and outstanding Ordinary Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Ordinary Shares of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the Alternative Issuance); provided, however, that(i) if the holders of the Ordinary Shares were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Ordinary Shares in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Ordinary Shares (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by shareholders of the Company as provided for in the Companys amended and restated memorandum and articles of association or as a result of the repurchase of Ordinary Shares by the Company if a proposed initial Business Combination is presented to the shareholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any
10
such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Ordinary Shares, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Ordinary Shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided further that if less than 70% of the consideration receivable by the holders of the Ordinary Shares in the applicable event is payable in the form of shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The Black-Scholes Warrant Value means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (assuming zero dividends) (Bloomberg). For purposes of calculating such amount, (i) Section 6 of this Agreement shall be taken into account, (ii) the price of each Ordinary Share shall be the volume weighted average price of the Ordinary Shares during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event, (iii) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event and (iv) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. Per Share Consideration means (i) if the consideration paid to holders of the Ordinary Shares consists exclusively of cash, the amount of such cash per Ordinary Share, and (ii) in all other cases, the volume weighted average price of the Ordinary Shares during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also results in a change in Ordinary Shares covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event shall the Warrant Price be reduced to less than the par value per share issuable upon exercise of such Warrant.
4.6. Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
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4.7. No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to such holder.
4.8. Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
5. Transfer and Exchange of Warrants.
5.1. Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2. Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3. Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as part of the Units.
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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 When Shares Trade Above $18.00. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.01 per Warrant, provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof) and (b) there is an effective registration statement covering the issuance of the Ordinary Shares issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below).
6.2. Redemption of Warrants When Shares Trade Above $10.00. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10 per Warrant, provided that (i) the Reference Value equals or exceeds $10.00 per share (subject to adjustment in compliance with Section 4 hereof) and (ii) if the Reference Value is less than $18.00 per share (subject to adjustment in compliance with Section 4 hereof), the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants. During the 30-day Redemption Period in connection with a redemption pursuant to this Section 6.2, Registered Holders of the Warrants may elect to exercise their Warrants on a cashless basis pursuant to subsection 3.3.1 and receive a number of Ordinary Shares determined by reference to the table below, based on the Redemption Date (calculated for purposes of the table as the period to expiration of the Warrants) and the Redemption Fair Market Value (as such term is defined in this Section 6.2) (a Make-Whole Exercise). Solely for purposes of this Section 6.2, the Redemption Fair Market Value shall mean the volume weighted average price of the Ordinary Shares for the ten (10) trading days immediately following the date on which notice of redemption pursuant to this Section 6.2 is sent to the Registered Holders. In connection with any redemption pursuant to this Section 6.2, the Company shall provide the Registered Holders with the Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading day period described above ends.
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Redemption Fair Market Value of Ordinary Shares (period to expiration of warrants)
Redemption Date |
£10.00 | 11.00 | 12.00 | 13.00 | 14.00 | 15.00 | 16.00 | 17.00 | ³18.00 | |||||||||||
60 months |
0.261 | 0.280 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||
0 months |
| | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
The exact Redemption Fair Market Value and Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value is between two values in the table or the Redemption Date is between two redemption dates in the table, the number of Ordinary Shares to be issued for each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number of shares set forth for the higher and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365- or 366-day year, as applicable.
The share prices set forth in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant or the Exercise Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a Warrant is adjusted pursuant to Section 4 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a Warrant as so adjusted. The number of shares in the table above shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a Warrant. If the Exercise Price of a warrant is adjusted, (a) in the case of an adjustment pursuant to Section 4.4 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price and the denominator of which is $10.00 and (b)
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in the case of an adjustment pursuant to Section 4.1.2 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment less the decrease in the Exercise Price pursuant to such Exercise Price adjustment. In no event shall the number of shares issued in connection with a Make-Whole Exercise exceed 0.361 Ordinary Shares per Warrant (subject to adjustment)
6.3. Date Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem the Warrants pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption (the Redemption Date). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the 30-day Redemption Period) to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice. As used in this Agreement, (a) Redemption Price shall mean the price per Warrant at which any Warrants are redeemed pursuant to Sections 6.1 or 6.2 and (b) Reference Value shall mean the last reported sales price of the Ordinary Shares for any twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the redemption is given.
6.4. Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a cashless basis in accordance with Section 6.2 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof and prior to the Redemption Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
6.5. Exclusion of Private Placement Warrants. The Company agrees that (a) the redemption rights provided in Section 6.1 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or its Permitted Transferees and (b) if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), the redemption rights provided in Section 6.2 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or its Permitted Transferees. However, once such Private Placement Warrants are transferred (other than to Permitted Transferees in accordance with Section 2.6 hereof), the Company may redeem the Private Placement Warrants pursuant to Section 6.1 or 6.2 hereof, provided that the criteria for redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement Warrants prior to redemption pursuant to Section 6.4 hereof. Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under this Agreement, including for purposes of Section 9.8 hereof.
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1. No Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter.
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7.2. Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation of Ordinary Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Ordinary Shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4. Registration of Ordinary Shares; Cashless Exercise at Companys Option.
7.4.1. Registration of the Ordinary Shares. The Company agrees that as soon as practicable, but in no event later than twenty (20) Business Days after the closing of its initial Business Combination, it shall use its commercially reasonable efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise of the Warrants. The Company shall use its commercially reasonable efforts to cause the same to become effective within sixty (60) Business Days following the closing of its initial Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the Warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth (60th) Business Day following the closing of the Business Combination, holders of the Warrants shall have the right, during the period beginning on the sixty-first (61st) Business Day after the closing of the Business Combination and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the issuance of the Ordinary Shares issuable upon exercise of the Warrants, to exercise such Warrants on a cashless basis, by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of Ordinary Shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the Fair Market Value (as defined below) less the Warrant Price by (y) the Fair Market Value and (B) 0.361. Solely for purposes of this subsection 7.4.1, Fair Market Value shall mean the volume-weighted average price of the Ordinary Shares as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the cashless exercise of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act and (ii) the Ordinary Shares issued upon such exercise shall be freely tradable under United States
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federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of doubt, unless and until all of the Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this subsection 7.4.1.
7.4.2. Cashless Exercise at Companys Option. If the Ordinary Shares are at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary, and (y) use its commercially reasonable efforts to register or qualify for sale the Ordinary Shares issuable upon exercise of the Public Warrant under applicable blue sky laws to the extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1. Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of Ordinary Shares upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
8.2. Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Companys cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing under the laws of the State of New York, in good standing and having its principal office in the United States of America, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
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8.2.2. Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Ordinary Shares not later than the effective date of any such appointment.
8.2.3. Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
8.3. Fees and Expenses of Warrant Agent.
8.3.1. Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4. Liability of Warrant Agent.
8.4.1. Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, the President, the Chief Financial Officer, Chief Operating Officer, the General Counsel, the Secretary or the Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2. Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, out-of-pocket costs and reasonable outside counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agents gross negligence, willful misconduct, fraud or bad faith.
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8.4.3. Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Ordinary Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Ordinary Shares shall, when issued, be valid and fully paid and nonassessable.
8.5. Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Ordinary Shares through the exercise of the Warrants.
8.6. Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (Claim) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the Company and Continental Stock Transfer & Trust Company as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous Provisions.
9.1. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2. Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
AEA-Bridges Impact Corp.
PO Box 1093, Boundary Hall, Cricket Square
Grand Cayman, KY-1102, Cayman Islands
Attention: Co-Chief Executive Officers
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attention: Christian O. Nagler
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Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3. Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York. Subject to applicable law, the Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Any person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located within the State of New York or the United States District Court for the Southern District of New York (a foreign action) in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an enforcement action), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holders counsel in the foreign action as agent for such warrant holder.
9.4. Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person, corporation or other entity other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5. Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the United States of America, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holders Warrant for inspection by the Warrant Agent.
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9.6. Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8. Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of(i) curing any ambiguity or to correct any mistake, including to conform the provisions hereof to the description of the terms of the Warrants and this Agreement set forth in the Prospectus, or defective provision contained herein, (ii) amending the definition of Ordinary Cash Dividend as contemplated by and in accordance with the second sentence of subsection 4.1.2 or (iii) adding or changing any provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the rights of the Registered Holders under this Agreement. All other modifications or amendments, including any modification or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 65% of the then-outstanding Public Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect to the Private Placement Warrants, 65% of the then-outstanding Private Placement Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.
9.9. Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend Private Placement Warrants
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
AEA-BRIDGES IMPACT CORP. |
By: |
/s/ John Garcia |
Name: John Garcia | ||
Title: Co-Chief Executive Officer | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent |
By: |
/s/ Douglas Reed |
Name: Douglas Reed | ||
Title: Vice President |
[Signature Page to Warrant Agreement]
EXHIBIT A
[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
AEA-Bridges Impact Corp.
Incorporated Under the Laws of the Cayman Islands
CUSIP #G01046 112
Warrant Certificate
This Warrant Certificate certifies that [ ], or registered assigns, is the registered holder of [ ] warrant(s) (the Warrants and each, a Warrant) to purchase Class A ordinary shares, $0.0001 par value (Ordinary Shares), of AEA-Bridges Impact Corp., a Cayman Islands exempted company (the Company). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable Ordinary Shares as set forth below, at the exercise price (the Exercise Price) as determined pursuant to the Warrant Agreement, payable in lawful money (or through cashless exercise as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable for one fully paid and non-assessable Ordinary Share. Fractional shares shall not be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant holder. The number of Ordinary Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.
The initial Exercise Price per one Ordinary Share for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth in the Warrant Agreement.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York.
AEA-BRIDGES IMPACT CORP. | ||
By: |
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Name: |
|
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Title: Authorized Signatory | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS WARRANT AGENT | ||
By: |
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Name: |
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Title: Authorized Signatory |
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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 [ ] Ordinary Shares and are issued or to be issued pursuant to a Warrant Agreement dated as of October 1, 2020 (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 the Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words holders or holder meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through cashless exercise as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance of the Ordinary Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the Ordinary Shares is current, except through cashless exercise as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain events the number of Ordinary Shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number of Ordinary Shares to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.
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Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
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Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive [ ] Ordinary Shares and herewith tenders payment for such Ordinary Shares to the order of AEA-Bridges Impact Corp. (the Company) in the amount of $[ ] in accordance with the terms hereof. The undersigned requests that a certificate for such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Ordinary Shares be delivered to [ ], whose address is [ ]. If said [ ] number of Ordinary Shares is less than all of the Ordinary Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Warrant Certificate be delivered to [ ], whose address is [ ].
In the event that the Warrant has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise its Warrant pursuant to a Make-Whole Exercise, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the Warrant is a Private Placement Warrant that is to be exercised on a cashless basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.
In the event that the Warrant is to be exercised on a cashless basis pursuant to Section 7.4 of the Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Ordinary Shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Ordinary Shares. If said number of shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Warrant Certificate be delivered to [ ], whose address is [ ].
[Signature Page Follows]
Date: [ ], 20______
(Signature) | ||
(Address) | ||
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(Tax Identification Number) | ||
Signature Guaranteed: | ||
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
EXHIBIT 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 AEA-BRIDGES IMPACT CORP. (THE COMPANY), AEA-BRIDGES IMPACT SPONSOR LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND CLASS A ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
NO. [ ] WARRANT
Exhibit 10.1
October 1, 2020
AEA-Bridges Impact Corp.
PO Box 1093, Boundary Hall, Cricket Square,
Grand Cayman, KY1-1102, Cayman Islands
Re: |
Initial Public Offering |
Ladies and Gentlemen:
This letter (this Letter Agreement) is being delivered to you in accordance with the Underwriting Agreement (the Underwriting Agreement) entered into by and among AEA-Bridges Impact Corp., a Cayman Islands exempted company (the Company), Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc., as representatives (the Representatives) of the several underwriters (the Underwriters), relating to an underwritten initial public offering (the Public Offering) of 46,000,000 of the Companys units (including 6,000,000 units that may be purchased pursuant to the Underwriters option to purchase additional units, the Units), each comprising of one of the Companys Class A ordinary shares, par value $0.0001 per share (the Ordinary Shares), and one-half of one redeemable warrant (each whole warrant, a Warrant). Each Warrant entitles the holder thereof to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustment, terms and limitations as described in the Prospectus (as defined below). The Units will be sold in the Public Offering pursuant to a registration statement on Form S-l and a prospectus (the Prospectus) filed by the Company with the U.S. Securities and Exchange Commission (the Commission). Certain capitalized terms used herein are defined in paragraph 1 hereof.
In order to induce the Company and the 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, AEA-Bridges Impact Sponsor LLC (the Sponsor) and each of the undersigned (each, an Insider and, collectively, the Insiders) hereby agree with the Company as follows:
1. Definitions. As used herein, (i) Business Combination shall mean a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities; (ii) Founder Shares shall mean the 11,500,000 Class B ordinary shares of the Company, par value $0.0001 per share, outstanding prior to the consummation of the Public Offering; (iii) Private Placement Warrants shall mean the warrants to purchase Ordinary Shares of the Company that will be acquired by the Sponsor for an aggregate purchase price of $10,500,000 (or up to $11,700,000 if the Underwriters exercise their option to purchase additional units), or $1.00 per Warrant, in a private placement that shall close simultaneously with the consummation of the Public Offering (including Ordinary Shares issuable upon conversion thereof); (iv) Public Shareholders shall mean the holders of Ordinary Shares included in the Units issued in the Public Offering; (v) Public Shares shall mean the Ordinary Shares included in the Units issued in the Public Offering; (vi) Trust Account shall mean the trust account into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Warrants shall be deposited; (vii) Transfer shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to
purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b); and (viii) Charter shall mean the Companys Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time.
2. Representation and Warranties.
(a) The Sponsor and each Insider, with respect to itself, herself or himself, represent and warrant to the Company that it, she or he has the full right and power, without violating any agreement to which it, she or he is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement, as applicable, and to serve as an officer of the Company and/or a director on the Companys Board of Director (the Board), as applicable, and each Insider hereby consents to being named in the Prospectus, road show and any other materials as an officer and/or director of the Company, as applicable.
(b) Each Insider represents and warrants, with respect to herself or himself, that such Insiders biographical information furnished to the Company (including any such information included in the Prospectus) is true and accurate in all material respects and does not omit any material information with respect to such Insiders background. The Insiders questionnaire furnished to the Company is true and accurate in all material respects. Each Insider represents and warrants that such Insider is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; such Insider has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in any such criminal proceeding; and such Insider has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
3. Business Combination Vote. It is acknowledged and agreed that the Company shall not enter into a definitive agreement regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and each Insider, with respect to itself or herself or himself, agrees that if the Company seeks shareholder approval of a proposed initial Business Combination, then in connection with such proposed initial Business Combination, it, she or he, as applicable, shall vote all Founder Shares and any Public Shares held by it, her or him, as applicable, in favor of such proposed initial Business Combination (including any proposals recommended by the Board in connection with such Business Combination) and not redeem any Public Shares held by it, her or him, as applicable, in connection with such shareholder approval.
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4. Failure to Consummate a Business Combination: Trust Account Waiver.
(a) The Sponsor and each Insider hereby agree, with respect to itself, herself or himself, that in the event that the Company fails to consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor and each Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously release to the Company to pay 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 Shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Companys remaining shareholders and the Board, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Companys obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. The Sponsor and each Insider agree not to propose any amendment to the Charter (i) that would modify the substance or timing of the Companys obligation to provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete an initial Business Combination within the required time period set forth in the Charter or (ii) with respect to any other provision relating to the rights of holders of Public Shares unless the Company provides its Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, if any, divided by the number of then-outstanding Public Shares.
(b) The Sponsor and each Insider, with respect to itself, herself or himself, acknowledges that it, she or he has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares held by it, her or him, if any. The Sponsor and each of the Insiders hereby further waive, with respect to any Founder Shares and Public Shares held by it, her or him, as applicable, any redemption rights it, she or he may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a shareholder vote to approve such Business Combination or a shareholder vote to approve an amendment to the Charter (i) that would modify the substance or timing of the Companys obligation to provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within the time period set forth in the Charter or (ii) with respect to any other provision relating to the rights of holders of Public Shares (although the Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Public Shares they hold if the Company fails to consummate a Business Combination within the required time period set forth in the Charter).
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5. Lock-up: Transfer Restrictions.
(a) The Sponsor and the Insiders agree that they shall not Transfer any Founder Shares (the Founder Shares Lock-up) until the earliest of (A) one year after the completion of an initial Business Combination and (B) the date following the completion of an initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Companys shareholders having the right to exchange their Ordinary Shares for cash, securities or other property (the Founder Shares Lock-up Period). Notwithstanding the foregoing, if, subsequent to a Business Combination, the closing price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, share consolidations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing at least 150 days after the Companys initial Business Combination, the Founder Shares shall be released from the Founder Shares Lock-up.
(b) The Sponsor and Insiders agree that they shall not effectuate any Transfer of Private Placement Warrants or Ordinary Shares underlying such warrants until 30 days after the completion of an initial Business Combination.
(c) Notwithstanding the provisions set forth in paragraphs 5(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and Ordinary Shares underlying the Private Placement Warrants are permitted (a) to the Companys officers or directors, any affiliate or family member of any of the Companys officers or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individuals immediate family or to a trust, the beneficiary of which is a member of the individuals immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the Founder Shares, Private Placement Warrants or Ordinary Shares, as applicable, were originally purchased; (f) by virtue of the Sponsors organizational documents upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation in connection with the consummation of an initial Business Combination, (h) in the event of the Companys liquidation prior to the completion of a Business Combination; or (i) in the event of completion of a liquidation, merger, share exchange or other similar transaction which results in all of the Companys Public Shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the completion of an initial Business Combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.
(d) During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior written consent of the Representatives, Transfer any Units, Ordinary Shares, Warrants or any other securities convertible into, or exercisable or exchangeable for, Ordinary Shares held by it, her or him, as applicable, subject to certain exceptions enumerated in Section 6(h) of the Underwriting Agreement.
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6. Remedies. The Sponsor and each of the Insiders hereby agree and acknowledge that (i) each of the Underwriters and the Company would be irreparably injured in the event of a breach by the Sponsor or such Insider of its, her or his obligations, as applicable under paragraphs 3. 4, 5, 7, 10 and 11. (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.
7. Payments by the Company. Except as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor nor any director or officer of the Company nor any affiliate of the officers shall receive from the Company any finders fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate the consummation of the Companys initial Business Combination (regardless of the type of transaction that it is).
8. Director and Officer Liability Insurance. The Company will maintain an insurance policy or policies providing directors and officers liability insurance, and the Insiders shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Companys directors or officers.
9. Termination. This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Shares Lock-up Period and (ii) the liquidation of the Company.
10. Indemnification. In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor (the Indemnitor) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened) to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to the Company (except for the Companys independent auditors) or (ii) any prospective target business with which the Company has discussed entering into a transaction agreement (a Target), provided, however, that such indemnification of the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third party for services rendered or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets, in each case net of interest that may be withdrawn to pay the Companys tax obligations, (y) shall not apply to any claims by a third party or Target who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims under the Companys indemnity of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense.
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11. Forfeiture of Founder Shares. To the extent that the Underwriters do not exercise their option to purchase additional Units within 45 days from the date of the Prospectus in full (as further described in the Prospectus), the Sponsor agrees to automatically surrender to the Company for no consideration, for cancellation at no cost, an aggregate number of Founder Shares so that the number of Founder Shares will equal of 20% of the sum of the total number of Ordinary Shares and Founder Shares outstanding at such time. The Sponsor and Insiders further agree that to the extent that the size of the Public Offering is increased or decreased, the Company will effect a share capitalization or a share repurchase, as applicable, with respect to the Founder Shares immediately prior to the consummation of the Public Offering in such amount as to maintain the number of Founder Shares at 20% of the sum of the total number of Ordinary Shares and Founder Shares outstanding at such time.
12. Entire Agreement. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.
13. Assignment. No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor, each of the Insiders and each of their respective successors, heirs, personal representatives and assigns and permitted transferees.
14. Counterparts. This Letter Agreement may be executed in any number of original or facsimile counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
15. Effect of Headings. The paragraph headings herein are for convenience only and are not part of this Letter Agreement and shall not affect the interpretation thereof.
16. Severability. This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
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17. Governing Law. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive, and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.
18. Notices. Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission.
[Signature Page Follows]
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Sincerely, | ||
AEA-BRIDGES IMPACT SPONSOR LLC | ||
By: | /s/ John Garcia | |
Name: John Garcia | ||
Title: Co-Chief Executive Officer |
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/s/ Ramzi Gedeon |
Ramzi Gedeon |
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/s/ Michele Giddens |
Michele Giddens |
10
/s/ Brian Trelstad |
Brian Trelstad |
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/s/ John Replogle |
John Replogle |
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/s/ George Serafeim |
George Serafeim |
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Acknowledged and Agreed: | ||
AEA-BRIDGES IMPACT CORP. | ||
By: | /s/ John Garcia | |
Name: John Garcia | ||
Title: Co-Chief Executive Officer |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of our report dated June 22, 2021, except for the effects of the restatement disclosed in Note 2, as to which the date is December 9, 2021, relating to the financial statements of AEA-Bridges Impact Corp., which is contained in the Registration Statement. We also consent to the reference to our Firm under the caption Experts in the Registration Statement.
/s/ WithumSmith+Brown, PC |
New York, New York |
February 7, 2022 |
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption Experts and to the use of our report dated October 13, 2021, with respect to the combined financial statements of LiveWire EV included in the preliminary proxy statement/prospectus of AEA-Bridges Impact Corp. that is made part of the Registration Statement (Form S-4) and related Prospectus of AEA-Bridges Impact Corp. dated February 7, 2022.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
February 7, 2022
Exhibit 107
Calculation of Filing Fee Table
Form S-4
(Form Type)
AEA-Bridges Impact Corp.
LW EV Holdings, Inc.
(Exact Name of Registrants as Specified in their Respective Charters)
Newly Registered Securities
Security Type |
Security Class Title |
Fee
Calculation or Carry Forward Rule |
Amount
Registered(8) |
Proposed
Maximum Offering Price Per Unit |
Maximum
Aggregate Offering Price |
Fee
Rate |
Amount of
Registration Fee |
|||||||||||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||||||
Fees to Be Paid |
Equity | Domesticated ABIC Common Stock(1) | | 50,000,000 | | | | | ||||||||||||||||||||
Equity | Domesticated ABIC Common Stock issuable upon exercise of warrants(2) | | 30,500,000 | | | | | |||||||||||||||||||||
Equity | Domesticated ABIC Warrants(3) | | 30,500,000 | | | | | |||||||||||||||||||||
Equity | Shares of HoldCo Common Stock(4) | 457(f)(1) | 50,000,000 | $ | 9.875 | (9) | $ | 493,750,000 | 0.0000927 | $ | 45,770.63 | |||||||||||||||||
Equity | Shares of HoldCo Common Stock(5) | 457(f)(2) | 173,500,000 | $ | | $ | 24,792,000(10) | 0.0000927 | $ | 2,298.22 | ||||||||||||||||||
Equity | Shares of HoldCo Common Stock(6) | 457(g)(1) | 30,500,000 | $ | 11.50 | (11) | $ | 350,750,000 | 0.0000927 | $ | 32,514.53 | |||||||||||||||||
Equity | HoldCo Warrants(7) | 457(g) | 30,500,000 | | | | | (12) | ||||||||||||||||||||
Total Offering Amounts | $ | 869,292,000 | $ | 80,583.37 | ||||||||||||||||||||||||
Registration Fee Due | $ | 80,584 |
(1) |
The number of shares of common stock, par value $0.0001 per share (Domesticated ABIC Common Stock), of AEA-Bridges Impact Corp., a Delaware corporation (Domesticated ABIC), immediately following the Domestication (as defined in the proxy statement/prospectus) represents (i) 40,000,000 Class A Ordinary Shares (as defined in the proxy statement/prospectus) of AEA-Bridges Impact Corp., a Cayman Islands exempted company (ABIC), that were registered pursuant to the Registration Statement on Form S-1 (SEC File No. 333-248785) and offered by ABIC in its initial public offering (the Public Shares) and (ii) 10,000,000 Class B Ordinary Shares (as defined in the proxy statement/prospectus) held by the ABIC Initial Shareholders. The Class A Ordinary Shares and Class B Ordinary Shares of ABIC will automatically be converted by operation of law into shares of Domesticated ABIC Common Stock as a result of the Domestication. |
(2) |
Represents shares of Domesticated ABIC Common Stock to be issued upon the exercise of (i) 20,000,000 public warrants (as defined in the proxy statement/prospectus) and (ii) 10,500,000 Private Placement Warrants (as defined in the proxy statement/prospectus). The warrants will convert into warrants to acquire shares of Domesticated ABIC Common Stock at a per share exercise price of $11.50 as a result of the Domestication. |
(3) |
Represents warrants to acquire shares of Domesticated ABIC Common Stock (Domesticated ABIC Warrants) with a per share exercise price of $11.50 after the Domestication. |
(4) |
Represents the number of shares of common stock of LW EV Holdings, Inc. (HoldCo), par value $0.0001 per share (the HoldCo Common Stock), to be issued upon completion of the business combination described in the proxy statement/prospectus (the Business Combination) in exchange for shares of Domesticated ABIC Common Stock, (a) up to a maximum (subject to any redemptions) of 40,000,000, the number of Public Shares issued by ABIC in its initial public offering which represent shares of Domesticated ABIC Common Stock following the Domestication and (b) 10,000,000, the number of Class B Ordinary Shares issued by ABIC to the ABIC Initial Shareholders which represents shares of Domesticated ABIC Common Stock following the Domestication. |
(5) |
Represents (a) 161,000,000 shares of HoldCo Common Stock issued to ElectricSoul, LLC, a Delaware limited liability company (Company Equityholder), in respect of its equity interests in LiveWire EV, LLC, a Delaware limited liability company (LiveWire) and (b) 12,500,000 shares of HoldCo Common Stock that may be issued as contingent consideration in the Business Combination pursuant to the Business Combination Agreement. |
(6) |
Represents 20,000,000 shares of HoldCo Common Stock and 10,500,000 shares of HoldCo Common Stock, respectively, issuable upon exercise by holders of Domesticated ABIC Warrants following the Domestication. |
(7) |
Represents HoldCo Warrants issuable in exchange for Domesticated ABIC Warrants outstanding immediately prior to the closing of the Business Combination with a per share exercise price of $11.50. |
(8) |
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the Securities Act), there are also being registered an indeterminable number of additional securities as may be issued resulting from stock splits, stock dividends or similar transactions. |
(9) |
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A Ordinary Shares of ABIC on the New York Stock Exchange (NYSE) on February 2, 2022 ($9.875 per Class A Ordinary Share). This calculation is in accordance with Rule 457(f)(1) of the Securities Act. |
(10) |
Pursuant to Rule 457(f)(2) under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the aggregate book value of LiveWire shares as of February 1, 2022. |
(11) |
Pursuant to Rule 457(g)(1) under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price of the shares underlying the warrants is calculated based on an exercise price of $11.50 per share. |
(12) |
No registration fee is required pursuant to Rule 457(g) under the Securities Act. |