UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 29, 2022
ATHENA CONSUMER ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40921 | 87-1178222 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
442 5th Avenue
New York, NY 10018
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (970) 925-1572
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry Into a Material Definitive Agreement
Forward Purchase Agreement
As previously announced, on July 28, 2022, Athena Consumer Acquisition Corp., a Delaware corporation (“Athena”), entered into a Business Combination Agreement (the “Business Combination Agreement”), by and among Athena, Next.e.GO Mobile SE, a German company (“e.GO”), Next.e.GO B.V., a Dutch private limited liability company and a wholly-owned subsidiary of e.GO (“TopCo”), and Time is Now Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of TopCo (“Merger Sub”). Also as previously announced, on September 29, 2022, Athena entered into an amendment to the Business Combination Agreement (the “First Amendment to Business Combination Agreement”), by and between Athena and e.GO, pursuant to which certain terms of the Business Combination Agreement were amended. The transactions contemplated by the Business Combination Agreement, as amended, are hereinafter referred to as the “Business Combination”.
On September 29, 2022, Athena, TopCo, e.GO and Vellar Opportunity Fund SPV LLC – Series 3 (“Seller”) entered into an agreement (the “Forward Purchase Agreement”) for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). Pursuant to the terms of the Forward Purchase Agreement, Seller intends, but is not obligated, to purchase (a) through a broker in the open market, shares of Class A common stock, par value $0.0001 per share, of Athena (together with TopCo Shares following the closing of the Business Combination, the “Shares”) after the date of the Forward Purchase Agreement from holders of Shares (other than Athena or affiliates of Athena) who have redeemed or indicated an interest in redeeming Shares (such purchased Shares, the “Recycled Shares”) pursuant to the redemption rights set forth in Athena’s Amended and Restated Certificate of Incorporation (the “Governing Documents”) in connection with the Business Combination (such holders, “Redeeming Holders”) and (b) Shares in issuance from Athena (such Shares, the “Additional Shares” and, together with the Recycled Shares, the “Subject Shares”). The aggregate total Subject Shares shall be no more than 15,000,000 (the “Maximum Number of Shares”), and the aggregate total Additional Shares that may be purchased shall not exceed the difference of the Maximum Number of Shares and the Recycled Shares. Subject to the Shares purchased in connection with the Share Consideration (as defined below), the aggregate total number of shares under the Forward Purchase Agreement (the “Number of Shares”) will be the sum of (a) the number of Recycled Shares and (b) the number of Additional Shares, but in no event more than the Maximum Number of Shares. The Number of Shares is subject to reduction as described under “Optional Early Termination” in the Forward Purchase Agreement.
Seller has agreed to hold the Subject Shares in a bankruptcy remote special purpose vehicle for the benefit of e.GO. Seller also may not beneficially own greater than 9.9% of the Shares on a post-combination pro forma basis. Further, Athena and TopCo have agreed that any proceeds from any sale of Shares (in any amount and at any price) subject to the Forward Purchase Agreement may be used by the Seller to recoup any and all fees owed to the Seller under the credit agreement, dated as September 29, 2022 (as amended, supplemented or otherwise modified from time to time), by and among e.GO, as borrower, Brucke Funding LLC, Brucke Agent LLC and certain lenders party thereto, and Seller, as administrative agent and collateral agent (the “Bridge Loan Agreement”).
The Forward Purchase Agreement provides that no later than the earlier of (a) one (1) local business day after the closing of the Business Combination (the “Closing”) and (b) the date any assets from Athena’s trust account are disbursed in connection with the Business Combination, Seller shall be paid directly, out of the funds held in Athena’s trust account, an amount (the “Prepayment Amount”) equal to (i) the redemption price per share indicated to investors ahead of Athena’s redemption notice deadline (the “Redemption Price”) multiplied by the number of Recycled Shares (the “Initial Price”), minus (ii) 10% of such amount (the “Leakage Amount”).
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In addition to the Prepayment Amount, Athena shall pay directly from Athena’s trust account an amount equal to the product of 1,500,000 multiplied by the Redemption Price (the “Share Consideration”), for the purpose of repayment of Seller having purchased, prior to the Closing, Shares from third parties in the open market through a broker in connection with the Share Consideration, which Shares shall not be included in the Number of Shares in the Forward Purchase Agreement, and shall be free and clear of all obligations of Seller in connection with the Forward Purchase Agreement.
From time to time following the Closing, Seller, in its discretion, may sell the Subject Shares (the “Shortfall Sales”) without payment obligation to TopCo until such time as the proceeds from the sales equal (i) 10% of the product of the Number of Shares and the Initial Price (the “Prepayment Shortfall”) or (ii) in the case of an Event of Default under the Bridge Loan Agreement, all amounts that are due to Seller under such agreement.
Seller may, in its discretion, sell Subject Shares, the effect of which is to terminate the Forward Purchase Agreement in respect of such Subject Shares sold (the “Terminated Shares”). Athena before the Closing or TopCo following the Closing shall be entitled to proceeds from such sales of Terminated Shares (other than any Subject Shares sold in Shortfall Sales) equal to the product of (x) the number of Terminated Shares multiplied by (y) the Reset Price. Following the Closing, the reset price (the “Reset Price”) will initially be the per share Redemption Price, but will be adjusted on the first scheduled trading day of each month (each a “Reset Date”) commencing on the first calendar month following the Closing to the lowest of (a) the then-current Reset Price, (b) $10.00 and (c) the volume weighted average price (“VWAP Price”) of the Shares of the last trading day immediately prior to the applicable Reset Date, but not lower than $4.00; provided, however, that to the extent Athena, TopCo or e.GO sells, enters any agreement to sell or grants any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Shares or any securities of Athena or TopCo or any of their respective subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares, at an effective price per share less than the then existing Reset Price, then the Reset Price shall be modified to equal such reduced price (a “Dilutive Offering Reset”).
The maturity date will be the second anniversary of the Closing (the “Maturity Date”). Upon the occurrence of the Maturity Date, TopCo is obligated to pay to Seller an amount equal to the product of (a) (x) the Maximum Number of Shares less (y) the number of Terminated Shares multiplied by (b) $2.50 (the “Maturity Consideration”). The Maturity Consideration shall be payable by TopCo, in cash or Shares at its sole discretion, equal to (a) in the case of cash, the product of the Maximum Number of Shares less the Terminated Shares, except if such Shares were sold and the sale proceeds were applied to (i) outstanding Leakage Amounts or (ii) in the case of an Event of Default under the Bridge Loan Agreement any amounts outstanding thereunder and any fees, costs or expenses of the Borrower (as defined in the Bridge Loan Agreement) and $2.50 and (b) in the case of Shares, such Number of Shares with a value equal to the product of the Maximum Number of Shares less any Shares sold, except if such Shares were sold and the sale proceeds were applied to (i) outstanding Leakage Amounts or (ii) in the case of an Event of Default under the Bridge Loan Agreement any amounts outstanding thereunder (including principal, interest, and fixed payment under the Bridge Loan Agreement, and any fees, costs or expenses of the borrower under the Bridge Loan Agreement), and $2.50 divided by the VWAP Price of the Shares for the lower of the last 30 trading days and 10 trading days prior to the Maturity Date.
Seller’s obligations to Athena under the Forward Purchase Agreement are secured by liens on (i) the proceeds of any sale or other disposition of the Subject Shares and (ii) the deposit account into which such proceeds are required to be deposited.
The Forward Purchase Agreement may be terminated if any of the following events occurs (a) failure to consummate the Business Combination on or before the Agreement End Date (as defined in the Business Combination Agreement, as such Agreement End Date may be amended or extended from time to time), (b) termination of the Business Combination Agreement prior to the Closing and (c) the Shares are involved in a delisting on the relevant exchange and are not immediately re-listed, save for any transactions contemplated by the Business Combination Agreement. Upon such a termination event, a break-up fee is payable to Seller (a) by e.GO or (b) by TopCo following the Closing equal to (i) all of Seller’s fees, costs and expenses relating to the Business Combination in an amount not to exceed $75,000 plus (ii) $3,000,000 in the event the Business Combination is terminated or otherwise uncompleted for reasons solely attributable to e.GO.
Seller may freely transfer or assign its rights under the Forward Purchase Agreement if the number of the Subject Shares it acquires would exceed 9.9% on a post-Business Combination basis.
The primary purpose of entering into the Forward Purchase Agreement is to help ensure the likelihood that the Business Combination will close.
Disclosure On Redemptions Relating to the Forward Purchase Agreement.
Seller has agreed to waive any redemption rights with respect to any Shares in connection with the Business Combination. Such waiver may reduce the number of Shares redeemed in connection with the Business Combination, which reduction could alter the perception of the potential strength of the Business Combination.
The foregoing description of the Forward Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Forward Purchase Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated by reference herein.
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Important Information about the Business Combination and Where to Find It
In connection with the Business Combination, TopCo intends to file with the U.S. Securities and Exchange Commission’s (“SEC”) the Registration Statement, which will include a preliminary prospectus and preliminary proxy statement. Athena will mail a definitive proxy statement/final prospectus and other relevant documents to its stockholders. This communication is not a substitute for the Registration Statement, the definitive proxy statement/final prospectus or any other document that Athena will send to its stockholders in connection with the Business Combination. Investors and security holders of Athena are advised to read, when available, the proxy statement/prospectus in connection with Athena’s solicitation of proxies for its special meeting of stockholders to be held to approve the Business Combination (and related matters) because the proxy statement/prospectus will contain important information about the Business Combination and the parties to the Business Combination. The definitive proxy statement/final prospectus will be mailed to stockholders of Athena as of a record date to be established for voting on the Business Combination. Stockholders will also be able to obtain copies of the proxy statement/prospectus, without charge, once available, at the SEC’s website at www.sec.gov or by directing a request to: 442 5th Avenue, New York, NY, 10018.
This Current Report on Form 8-K is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an applicable exemption from the registration requirements thereof.
Participants in the Solicitation
Athena, e.GO, TopCo and their respective directors, executive officers, other members of management, and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Athena’s stockholders in connection with the Business Combination. Investors and security holders may obtain more detailed information regarding the names and interests in the Business Combination of Athena’s directors and officers in Athena’s filings with the SEC, and such information and names of e.GO’s directors and executive officers will also be in the Registration Statement to be filed with the SEC by TopCo, which will include the proxy statement of Athena for the Business Combination.
Forward Looking Statements
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target”, “may”, “intend”, “predict”, “should”, “would”, “predict”, “potential”, “seem”, “future”, “outlook” or other similar expressions (or negative versions of such words or expressions) that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Athena, e.GO, and TopCo’s expectations with respect to future performance and anticipated financial impacts of the Business Combination, the satisfaction of the closing conditions to the Business Combination, the level of redemptions by Athena’s public stockholders, the timing of the completion of the Business Combination and the use of the cash proceeds therefrom. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of Athena, e.GO, and TopCo’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of Athena, e.GO, and TopCo.
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These forward-looking statements are subject to a number of risks and uncertainties, including: (i) changes in domestic and foreign business, market, financial, political and legal conditions; (ii) the inability of the parties to successfully or timely consummate the proposed Business Combination, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed Business Combination or that the approval of the stockholders of Athena or e.GO is not obtained; (iii) failure to realize the anticipated benefits of the proposed Business Combination; (iv) risks relating to the uncertainty of the projected financial information with respect to e.GO; (v) the outcome of any legal proceedings that may be instituted against Athena and/or e.GO following the announcement of the Business Combination agreement and the transactions contemplated therein; (vi) future global, regional or local economic and market conditions; (vii) the development, effects and enforcement of laws and regulations; (viii) e.GO’s ability to grow and achieve its business objectives; (ix) the effects of competition on e.GO’s future business; (x) the amount of redemption requests made by Athena’s public stockholders; (xi) the ability of Athena or the combined company to issue equity or equity-linked securities in the future; (xii) the ability of e.GO and Athena to raise interim financing in connection with the Business Combination, including to secure an e.GO IP-backed note; (xiii) the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; (xiv) the risk that the proposed Business Combination disrupts current plans and operations as a result of the announcement and consummation, (xv) costs related to the Business Combination, (xvi) the impact of the global COVID-19 pandemic and (xvi) those factors discussed below under the heading “Risk Factors” and in the documents of Athena filed, or to be filed, with the SEC. Additional risks related to e.GO’s business include, but are not limited to: the market’s willingness to adopt electric vehicles; volatility in demand for vehicles; e.GO’s dependence on the contemplated Business Combination and other external financing to continue its operations; significant challenges as a new entrant in the automotive industry; e.GO’s ability to control capital expenditures and costs; cost increases or disruptions in supply of raw materials, semiconductor chips or other components; breaches in data security; e.GO’s ability to establish, maintain and strengthen its brand; minimal experience in servicing and repairing vehicles; product recalls; failure by joint-venture to meet their contractual commitments; unfavorable changes to the regulatory environment; risks and uncertainties arising from the acquisition of e.GO’s predecessor business and assets following the opening of insolvency proceedings over the predecessor’s assets in July 2020; protection of e.GO’s intellectual property. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements.
There may be additional risks that neither e.GO nor Athena presently know or that e.GO and Athena currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect e.GO’s and Athena’s expectations, plans or forecasts of future events and views as of the date of this Current Report on Form 8-K. e.GO and Athena anticipate that subsequent events and developments will cause e.GO’s and Athena’s assessments to change. However, while e.GO and Athena may elect to update these forward-looking statements at some point in the future, e.GO and Athena specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing e.GO’s and Athena’s assessments as of any date subsequent to the date of this Current Report on Form 8-K. Accordingly, undue reliance should not be placed upon the forward-looking statements.
No Offer or Solicitation
This Current Report on Form 8-K is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an applicable exemption from the registration requirements thereof.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number |
Description | |
| 10.1 | Forward Purchase Agreement, dated September 29, 2022, by and among Athena Consumer Acquisition Corp., Next.e.GO B.V., Next.e.GO Mobile SE and Vellar Opportunity Fund SPV LLC – Series 3. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ATHENA CONSUMER ACQUISITION CORP. | |||
| By: | /s/ Jane Park | ||
| Name: | Jane Park | ||
| Title: | Chief Executive Officer | ||
| Dated: October 5, 2022 | |||
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Exhibit 10.1
The purpose of this agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction (the “Transaction”) entered into between Seller, Athena, TopCo and the Target on the Trade Date specified below. The term “Counterparty” refers to Athena until Business Combination (as defined below), and following closing of the Business Combination to TopCo. Certain terms of the Transaction shall be as set forth in this Confirmation, with additional terms as set forth in a Pricing Date Notice (the “Pricing Date Notice”) in the form of Schedule A hereto. This Confirmation, together with the Pricing Date Notice, constitutes a “Confirmation” and the Transaction constitutes a separate “Transaction” as referred to in the ISDA Form (as defined below).
This Confirmation, together with the Pricing Date Notice, evidences a complete binding agreement between Seller, Target, Athena and TopCo as to the subject matter and terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or oral communications with respect thereto.
The 2006 ISDA Definitions (the “Swap Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and with the Swap Definitions, the “Definitions”), each as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. If there is any inconsistency between the Definitions and this Confirmation, this Confirmation governs. If, in relation to the Transaction to which this Confirmation relates, there is any inconsistency between the ISDA Form, this Confirmation (including the Pricing Date Notice), the Swap Definitions and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) this Confirmation (including the Pricing Date Notice); (ii) the Equity Definitions; (iii) the Swap Definitions, and (iv) the ISDA Form.
This Confirmation, together with the Pricing Date Notice, shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if Seller, Target, Athena and TopCo had executed an agreement in such form (but without any Schedule except as set forth herein under “Schedule Provisions”) on the Trade Date of the Transaction.
The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms
|
Type of Transaction: |
Share Forward Transaction |
| Trade Date: | September 29, 2022 |
| Pricing Date: | As specified in the Pricing Date Notice. |
| Effective Date: | One (1) Settlement Cycle following the Pricing Date. |
| Valuation Date: | The second anniversary of the closing of the transactions between Athena and Target pursuant to the Agreement (the “Maturity Date”), dated as of July 28, 2022, by and among Athena, TopCo, the Target and certain other parties thereto (the “Merger Agreement”), as reported on the Form 8-K filed by the Counterparty on July 28, 2022 (the “Form 8-K”) (the “Business Combination”) and with the option to extend for an additional 12 months subject to mutual agreement of Seller and Counterparty and Target. |
| VWAP Price: | For any Scheduled Trading Day, the Rule 10b-18 volume weighted average price per Share for such day as reported on Bloomberg Screen “[ ] <Equity> AQR SEC” (or any successor thereto). |
| Pricing Date Notice: |
Seller shall deliver to Athena and TopCo a Pricing Date Notice no later than one (1) Exchange Business Day following the closing of the Business Combination. The Pricing Date Notice shall include the Number of Shares purchased by Seller, whether or not such purchases have been settled, with further notice to be provided by Seller to Athena and TopCo upon settlement of such purchases. |
| Dilutive Offering Reset: |
To the extent the Counterparty or the Target sells, enters any agreement to sell or grants any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Shares or any securities of the Counterparty or the Target or any of their respective subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares, at an effective price per share less than the then existing Reset Price then the Reset Price shall be modified to equal such reduced price. |
| Reset Price: |
The Reset Price shall be adjusted on the first scheduled trading day of each month (each a “Reset Date”) commencing on the first calendar month following the closing of the Initial Business Combination to be the lowest of (a) the then-current Reset Price, (b) $10.00 and (c) the VWAP Price of the Shares of the last Trading Day immediately prior to the applicable Reset Date, but not lower than $4.00; provided that the Reset Price may be further reduced pursuant to a Dilutive Offering Reset. |
| Seller: | Seller. |
| Buyer: | Counterparty. |
| Shares: | Prior to the closing of the Business Combination, the Class A common stock, par value $0.0001 per share, of Athena (Ticker: “ACAQ”) and, after the closing of the Business Combination, the ordinary shares, nominal value of €0.12 per share, of TopCo. Seller will hold the Subject Shares (as defined below) in a bankruptcy remote special purpose vehicle for the benefit of Target. Any reference herein to “Shares” shall mean the shares of Athena and then the shares of TopCo after the closing of the Business Combination. Athena and TopCo agree that any proceeds from any sale of Shares (in any amount and at any price) subject to this Agreement may be used by the Seller to recoup any and all fees owed to the Seller under the Bridge Loan Agreement (as defined below). |
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| Number of Shares: | The sum of (a) the number of Recycled Shares and (b) the number of Additional Shares, as specified in the Pricing Date Notice, but in no event more than the Maximum Number of Shares. The Number of Shares is subject to reduction as described under “Optional Early Termination.” |
| Maximum Number of Shares: | 15,000,000 Shares. |
| Initial Price: | The redemption price per share indicated to investors ahead of Athena’s redemption notice deadline (the “Redemption Price”) |
| Recycled Shares: | The number of Shares purchased by Seller from third parties (other than Athena) through a broker in the open market; provided that Seller shall have irrevocably waived all redemption rights with respect to such Shares as provided below in the section captioned “Transactions by Seller in the Shares.” Seller shall specify the number of Recycled Shares (the “Number of Recycled Shares”) in the Pricing Date Notice. |
| Additional Shares: |
Additional Shares may be purchased by Seller, in Seller’s sole discretion, from the Counterparty, with such number of Shares to be specified in a Pricing Date Notice as Additional Shares; provided that such number of Additional Shares that may be purchased from the Company shall not exceed the difference of (x) the Maximum Number of Shares and (y) the Recycled Shares. Athena and TopCo agree to provide Seller with customary demand and piggyback registration rights and agree to register for resale all Shares owned by Seller, including any Additional Shares (or after acquired shares), no later than 30 days following the closing of the Business Combination. |
| Prepayment: | Applicable. Prepayment of the Prepayment Amount shall be made directly from Athena’s trust account maintained by Continental Stock Transfer & Trust Company holding the net proceeds of the sale of the units in Athena’s initial public offering and the sale of private placement units (the “Trust Account”) no later than the Prepayment Date. Athena shall provide notice to Athena’s transfer agent of the entrance into this Confirmation no later than one (1) Local Business Day following the date hereof, with copy to Seller and Seller’s outside legal counsel. Athena shall also provide to Seller and Seller’s outside legal counsel a draft of the flow of funds from the Trust Account prior to the closing of the Business Combination itemizing the Prepayment Amount due to Seller. |
| Prepayment Amount: | An amount equal to the Initial Price multiplied by the number of Recycled Shares, minus 10% of such amount (the “Leakage Amount”) will be directly paid to the Seller in respect of the Initial Price. The Counterparty agrees to use the Leakage Amount to promptly repay in whole or in part the Loan pursuant to its terms (as defined in the Bridge Loan Agreement), including the Seller’s Fixed Payment (as defined in the Bridge Loan Agreement). “Bridge Loan Agreement” means the Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time), by and among the Target, as borrower, the lenders time to time party thereto, and Seller, as administrative agent and collateral agent. |
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| Prepayment Date: | The earlier of (a) one (1) Local Business Day after the closing of the Business Combination and (b) the date any assets from the Trust Account are disbursed in connection with the Business Combination. |
| Variable Obligation: | Not applicable. |
| Prepayment Shortfall: | 10% of the product of the Number of Shares and the Initial Price. |
| Prepayment Shortfall Consideration: | Seller in its sole discretion may sell Shares at any time and at any sales price (“Shortfall Sales,” and such Shares, “Shortfall Sale Shares”), without payment by Seller of any Early Termination Obligation until such time as the proceeds from the sales equal (i) the Prepayment Shortfall or (ii) in the case of an Event of Default under the Bridge Loan Agreement, all amounts that are due to Seller under such agreement. |
| Redemptions: | Counterparty shall promptly accept any redemption reversal requests for all Shares to be purchased by Seller. |
| Exchange(s): | The New York Stock Exchange following the closing of the Business Combination. |
| Related Exchange(s): | All Exchanges. |
| Break-Up Fees: | A Break-Up Fee shall be payable to Seller (a) by Target or (b) by TopCo following the closing of the Business Combination equal to (i) all of Seller’s fees costs and expenses relating to the Transaction in an amount not to exceed $75,000 plus (ii) $3,000,000 in the event the Transaction is terminated or otherwise uncompleted for reasons solely attributable to Target. |
| Payment Dates: | With respect to Counterparty, the last Local Business Day of each calendar quarter. |
| Period End Date: | Each Payment Date during the term of the Transaction. |
| Calculation Period: | Notwithstanding anything to the contrary in Section 4.13 of the Swap Definitions, each period from, and including, one Period End Date to, but excluding, the next following applicable Period End Date during the term of the Transaction, except that (a) the initial Calculation Period will commence on, and include, the date of the closing of the Business Combination and (b) the final Calculation Period will end on, but exclude the Settlement Date. |
| Reimbursement of Legal Fees and Other Expenses: | On the Effective Date, Counterparty shall pay to Seller an amount not to exceed $75,000 in attorney fees and other reasonable expenses related thereto incurred by Seller or its affiliates in connection with this Transaction. Counterparty shall also pay to Seller a quarterly fee of $5,000 (payable in full upon the Effective Date and upon the first day of each subsequent quarter (the “Structuring Fee”). In addition, on the Effective Date, Counterparty shall reimburse Seller for its reasonable costs and expenses incurred in connection with the acquisition of Subject Shares in an amount not to exceed $0.10 per Share and for disposition of Subject Shares in an amount not to exceed $0.02 per Share. |
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| Settlement Terms | |
| Settlement Method Election: | Not Applicable. |
| Settlement Method: | Physical Settlement. |
| Settlement Currency: | USD. |
| Settlement Date: | Two (2) Exchange Business Days following the Valuation Date. |
| Excess Dividend Amount | Ex Amount. |
| Additional Payment on Settlement: | On the Settlement Date, Counterparty shall pay to Seller any accrued and unpaid Structuring Fees. |
| Optional Early Termination: | From time to time and on any Exchange Business Day following the date of the closing of the Business Combination (any such date, an “OET Date”) and subject to the terms and conditions below, Seller may, in its absolute discretion, terminate the Transaction in whole or in part so long as Seller provides written notice to Counterparty (the “OET Notice”), or, in relation to Shortfall Sale Shares, a Shortfall Sale Notice (as defined below), as the case may be, no later than the later of (a) the third Local Business Day following the OET Date or Shortfall Sale Date (as defined below), as the case may be, and (b) the first Payment Date after the OET Date or Shortfall Sale Date, as the case may be, which shall specify the quantity by which the Number of Shares is to be reduced (such quantity, the “Terminated Shares”). Notwithstanding anything to the contrary contained herein, Seller shall terminate the Transaction in respect of any Shares sold on or prior to the Maturity Date, and Seller shall be obligated to deliver an OET Notice or Shortfall Sale Notice, as the case may be, in respect of any Shares sold prior to the Maturity Date. The effect of an OET Notice given shall be to reduce the Number of Shares by the number of Terminated Shares specified in such OET Notice with effect as of the related OET Date. As of each OET Date, Counterparty shall be entitled to an amount from Seller equal to the product of (x) the number of Terminated Shares and (y) the Reset Price in respect of such OET Date (an “Early Termination Obligation”); except that, no such amount shall be due to Counterparty upon any Shortfall Sale. The remainder of the Transaction, if any, shall continue in accordance with its terms; provided that if the OET Date is also the stated Valuation Date, the remainder of the Transaction shall be settled in accordance with the other provisions of “Settlement Terms.” Seller shall pay to Counterparty any and all unsatisfied Early Termination Obligations, calculated as of the last day of each calendar month, on the first Local Business Day following such day. |
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| Shortfall Sales: | From time to time and on any Exchange Business Day following the date of the closing of the Business Combination (any such date, a “Shortfall Sale Date”) and subject to the terms and conditions below, Seller may, in its absolute discretion, at any sales price, sell Shortfall Sale Shares so long as Seller provides written notice to Counterparty (the “Shortfall Sale Notice”) no later than the later of (a) the third Local Business Day following the Shortfall Sales Date and (b) the first Payment Date after the Shortfall Sales Date, which shall specify the quantity of the Shortfall Sale Shares. The Shortfall Sale Notice shall have the effect of reducing the Number of Shares by the number of Shortfall Sale Shares specified in such Shortfall Sale Notice with effect as of the related Shortfall Sale Date. Seller shall not have any Early Termination Obligation in connection with any Shortfall Sales. Upon such time as the net proceeds including commissions, from the Shortfall Sales equals the Prepayment Shortfall. Athena and following the closing of the Business Combination, TopCo, each agree that it shall not issue any Shares, or securities or debt that is convertible, exercisable or exchangeable into Shares until the Shortfall Sales equal the Prepayment Shortfall. |
| Maturity Consideration: |
An amount equal to the product of (1) the Maximum Number of Shares less (b) the number of Terminated Shares multiplied by (2) $2.50 (the “Maturity Consideration”). At the Maturity Date, the Counterparty shall be delivered the remaining Shares from Seller. At the Maturity Date, the Counterparty is required to pay to Seller, subject to Seller’s consent thereto, consideration equal to an amount, in cash or Shares at the sole discretion of Counterparty, equal to (a) in the case of cash, the product of the Maximum Number of Shares less the Terminated Shares, except if such Shares were sold and the sale proceeds were applied to (i) outstanding Leakage Amounts or (ii) in the case of an Event of Default under the Bridge Loan Agreement any amounts outstanding thereunder (including principal, interest, and Fixed Payment (as defined in the Bridge Loan Agreement) and any fees, costs or expenses of the Borrower (as defined in the Bridge Loan Agreement) and $2.50 and (b) in the case of Shares, such Number of Shares with a value equal to the product of the Maximum Number of Shares less any Shares sold, except if such Shares were sold and the sale proceeds were applied to (i) outstanding Leakage Amounts or (ii) in the case of an Event of Default under the Bridge Loan Agreement any amounts outstanding thereunder (including principal, interest, and Fixed Payment (as defined in the Bridge Loan Agreement) and any fees, costs or expenses of the Borrower (as defined in the Bridge Loan Agreement) and $2.50 divided by the VWAP Price of the Shares for the lower of the last 30 Trading Days and 10 Trading Days prior to the Maturity Date. |
| Share Consideration: |
In addition to the Prepayment Amount, Seller shall pay directly from the Trust Account on the Prepayment Date, an amount equal to the product of 1,500,000 multiplied by the Redemption Price, for the purpose of repayment of Seller having purchased, prior to the closing of the Business Combination, Shares from third parties in the open market through a broker in connection with the Share Consideration, which Shares shall not be included in the Number of Shares in this Transaction, and shall be free and clear of all obligations of Seller in connection with this Confirmation. |
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| Share Adjustments: | |
| Method of Adjustment: | Calculation Agent Adjustment. |
| Extraordinary Events: | |
| Consequences of Merger Events involving Counterparty: | |
| Share-for-Share: | Calculation Agent Adjustment. |
| Share-for-Other: | Cancellation and Payment. |
| Share-for-Combined: | Component Adjustment. |
| Tender Offer: | Applicable; provided, however, that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting Shares”. |
| Consequences of Tender Offers: | |
| Share-for-Share: | Calculation Agent Adjustment. |
| Share-for-Other: | Calculation Agent Adjustment. |
| Share-for-Combined: | Calculation Agent Adjustment. |
| Composition of Combined Consideration: | Not Applicable. |
| Nationalization, Insolvency or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the Nasdaq Global Select Market, Nasdaq Capital Market or the Nasdaq Global Market (or their respective successors) or such other exchange or quotation system which, in the determination of the Calculation Agent, has liquidity comparable to the aforementioned exchanges; if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange. |
| Business Combination Exclusion: | Notwithstanding the foregoing or any other provision herein, the parties agree that the Business Combination and any transactions thereunder, such as the delisting of Athena’s Shares and listing of TopCo’s Shares, shall not constitute a Merger Event, Tender Offer, Delisting or any other Extraordinary Event hereunder. |
| Additional Disruption Events: | |
| (a) Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding the words “(including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute)” after the word “regulation” in the second line thereof. |
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| Non-Reliance: | Applicable. |
| Agreements and Acknowledgements Regarding Hedging Activities: | Not applicable. |
| Additional Acknowledgements: | Applicable. |
| Collateral Provisions: | |
| Grant of Security Interest: | Seller hereby grants, effective as of the date the Seller receives the Prepayment Amount, a security interest in the Collateral to Counterparty to secure the payment or performance of all of Seller’s present and future obligations to Counterparty with respect to this Transaction. Counterparty acknowledges that Seller shall hold first-priority security interests in the Collateral granted herein to secure the payment or performance of all of Counterparty’s present and future obligations to Seller with respect to the Loan. |
| Collateral: | All of the following personal property of Seller, wherever located, and now owned, held or existing, or hereafter acquired or arising: |
| (i) all cash proceeds of the sale, transfer or other disposition (other than in connection with any Permitted PB Activities (as defined in the Limited Liability Agreement of Seller) any proceeds from Shortfall Sales, and cash flow posted to the Seller as credit enhancements under those Permitted PB Activities) of Recycled Shares or the Additional Shares (together, the “Subject Shares”); (ii) the deposit account of Seller at First Republic Bank in which such cash proceeds will be deposited; and (iii) to the extent not listed above as original collateral, proceeds and products of the foregoing. | |
| Perfection: | Seller authorizes Counterparty to file one or more financing statements, in the standard form for a UCC-1 filing or other appropriate form, describing the Collateral to perfect the security interest created hereby and otherwise make it effective against third parties. Seller hereby authorizes Counterparty at any time and from time to time to amend any financing statements naming Seller as “debtor” to include the Collateral. |
| Schedule Provisions: | |
| Specified Entity: | In relation to both Seller and Counterparty for the purpose of: |
| Section 5(a)(v), Not Applicable | |
| Section 5(a)(vi), Not Applicable | |
| Section 5(a)(vii), Not Applicable | |
| Section 5(b)(v), Not Applicable | |
| Cross-Default | The “Cross-Default” provisions of Section 5(a)(vi) of the ISDA Form will not apply to either party. |
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| Credit Event Upon Merger | The “Credit Event Upon Merger” provisions of Section 5(b)(v) of the ISDA Form will not apply to either party. |
| Automatic Early Termination: | The “Automatic Early Termination” of Section 6(a) of the ISDA Form will not apply to either party. |
| Termination Currency: | United States Dollars. |
| Additional Termination Event: | Will apply to Seller and to Counterparty and Target. The occurrence of either of the following events shall constitute an Additional Termination Event in respect of which Seller and Counterparty and Target shall be Affected Parties: |
| (a) The Business Combination fails to close on or before the Agreement End Date (as defined in the Merger Agreement) (as such Agreement End Date may be amended or extended from time to time); and | |
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(b) The Merger Agreement is terminated pursuant to its terms prior to the closing of the Business Combination; and
(c) The Shares are involved in a Delisting on the relevant exchange and are not immediately re-listed; and | |
| (d) Subject to the Break-Up Fee, if this Transaction terminates due to the occurrence of either of the foregoing Additional Termination Events, then, subject to the immediately following sentence, no further payments or deliveries shall be due by either Seller to Counterparty or Counterparty to Seller in respect of the Transaction, including without limitation in respect of any settlement amount, breakage costs or any amounts representing the future value of the Transaction, and neither party shall have any further obligation under the Transaction and, for the avoidance of doubt and without limitation, no payments will have accrued or be due under Sections 2, 6 or 11 of the ISDA Form. Notwithstanding the foregoing, Counterparty’s obligations set forth under the captions, “Reimbursement of Legal Fees and Expenses,” and “Other Provisions — (d) Indemnification” shall survive any termination due to the occurrence of either of the foregoing Additional Termination Events. |
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| Material Adverse Change: | Means any change, event, or occurrence, that, individually or when aggregated with other changes, events, or occurrences has had a materially adverse effect on the business, assets, financial condition or results of operations of the Counterparty and its subsidiaries, taken as a whole; provided, however, that no change, event, occurrence or effect arising out of or related to any of the following, alone or in combination, shall be taken into account in determining whether a Material Adverse Change pursuant has occurred: (i) acts of war (whether or not declared), sabotage, military or para-military actions or terrorism, or any escalation or worsening of any such acts, or changes in global, national or regional political or social conditions; (ii) earthquakes, hurricanes, tornados, epidemics and pandemics declared by the World Health Organization or any other reputable third party organization (including the COVID-19 virus) or other natural or man-made disasters; (iii) changes attributable to the public announcement or pendency of the transactions contemplated herein (including the impact thereof on relationships with customers, suppliers, employees or governmental authorities); (iv) changes or proposed changes in law, regulations or interpretations thereof or decisions by courts or any governmental authority; (v) changes or proposed changes in GAAP (or any interpretation thereof); (vi) any downturn in general economic conditions, including changes in the credit, debt, securities, financial, capital or reinsurance markets (including changes in interest or exchange rates or the price of any security, market index or commodity), in each case, in the United States or anywhere else in the world; (vii) events or conditions generally affecting the industries and markets in which the Counterparty operates; (viii) any failure to meet any projections, forecasts, estimates, budgets or financial or operating predictions of revenue, earnings, cash flow or cash position, provided that this clause (viii) shall not prevent a determination that any change, event, or occurrence underlying such failure (unless otherwise excluded by the other clauses of this proviso) has resulted in a Material Adverse Change; or (ix) any actions expressly required to be taken, or expressly required not to be taken, pursuant to the terms hereof; provided, however, that if a change or effect related to clause (ii) or clauses (iv) through (vii) disproportionately adversely affects the Counterparty and its subsidiaries, taken as a whole, compared to other Persons operating in the same industry as the Counterparty, then such disproportionate impact may be taken into account in determining whether a Material Adverse Change has occurred. |
| Governing Law: | New York law (without reference to choice of law doctrine). |
| Credit Support Provider: | With respect to Seller and Counterparty, None. |
| Local Business Days: | Seller specifies the following places for the purposes of the definition of Local Business Day as it applies to it: New York. Counterparty specifies the following places for the purposes of the definition of Local Business Day as it applies to it: New York and Düsseldorf, Germany. |
Representations, Warranties and Covenants
| 1. | Each of Athena, TopCo and Seller represents and warrants to, and covenants and agrees with, the other as of the date on which it enters into the Transaction that (in the absence of any written agreement between the parties that expressly imposes affirmative obligations to the contrary for the Transaction): |
| (a) | Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the Transaction, it being understood that information and explanations related to the terms and conditions of the Transaction will not be considered investment advice or a recommendation to enter into the Transaction. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of the Transaction. |
| (b) | Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction. It is also capable of assuming, and assumes, the risks of the Transaction. |
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| (c) | Non-Public Information. It is in compliance with Section 10(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
| (d) | Eligible Contract Participant. It is an “eligible contract participant” under, and as defined in, the Commodity Exchange Act (7 U.S.C. § 1a(18)) and CFTC regulations (17 CFR § 1.3). |
| (e) | Tax Characterization. It shall treat the Transaction as a derivative financial contract for U.S. federal income tax purposes, and it shall not take any action or tax return filing position contrary to this characterization. |
| (f) | Private Placement. It (i) is an “accredited investor” as such term is defined in Regulation D as promulgated under the Securities Act, (ii) is entering into the Transaction for its own account without a view to the distribution or resale thereof and (iii) understands that the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act. |
| (g) | Investment Company Act. It is not and, after giving effect to the Transaction, will not be required to register as an “investment company” under, and as such term is defined in, the Investment Company Act of 1940, as amended. |
| (h) | Authorization. The Transaction has been entered into pursuant to authority granted by its board of directors or other governing authority. It has no internal policy, whether written or oral, that would prohibit it from entering into any aspect of the Transaction, including, but not limited to, the purchase of Shares to be made in connection therewith. |
| (i) | Affiliate Status. It is the intention of the parties hereto that Seller shall not be an “affiliate” (as such term is defined in Rule 405 under the Securities Act) of Athena, or following the closing of the Business Combination, TopCo, as a result of the transactions contemplated hereunder. |
| 2. | Athena and TopCo represent and warrant to, and covenant and agree with Seller as of the date on which it enters into the Transaction that: |
| (a) | Total Assets. Athena has total assets of at least USD $5,000,000 as of the date hereof. |
| (b) | Non-Reliance. Without limiting the generality of Section 13.1 of the Equity Definitions, Athena and TopCo acknowledge that Seller is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards. |
| (c) | Solvency. Counterparty is, and shall be as of the date of any payment or delivery by Counterparty under the Transaction, solvent and able to pay its debts as they come due, with assets having a fair value greater than liabilities and with capital sufficient to carry on the businesses in which it engages. Counterparty: (i) has not engaged in and will not engage in any business or transaction after which the property remaining with it will be unreasonably small in relation to its business, (ii) has not incurred and does not intend to incur debts beyond its ability to pay as they mature, and (iii) as a result of entering into and performing its obligations under the Transaction, (a) it has not violated and will not violate any relevant state law provision applicable to the acquisition or redemption by an issuer of its own securities and (b) it would not be nor would it be rendered “insolvent” (as such term is defined under Section 101(32) of the Bankruptcy Code or under any other applicable local insolvency regime). |
| (d) | Public Reports. As of the Trade Date, Counterparty is in material compliance with its reporting obligations under the Exchange Act, and all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Exchange Act, when considered as a whole (with the most recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. |
| (e) | No Distribution. Counterparty is not entering into the Transaction to facilitate a distribution of the Shares (or any security that may be converted into or exercised or exchanged for Shares, or whose value under its terms may in whole or in significant part be determined by the value of the Shares) or in connection with any future issuance of securities. |
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| (f) | SEC Documents. Athena and TopCo shall comply with the Securities and Exchange Commission’s guidance, including Compliance and Disclosure Interpretation No. 166.01, for all relevant disclosure in connection with this Confirmation and the Transaction, and will not file with the Securities and Exchange Commission any Form 8-K, Registration Statement on Form F-4 (including any post-effective amendment thereof), proxy statement, or other document that includes any disclosure regarding this Confirmation or the Transaction without consulting with and reasonably considering any comments received from Seller, provided that, no consultation shall be required with respect to any subsequent disclosures that are substantially similar to prior disclosures by Counterparty that were reviewed by Seller. |
| (g) | Waiver. Athena hereby waives any violation of its “bulldog clause” and any other restrictions that would be caused by Seller entering into this Transaction. |
| (h) | Indemnity. Athena and following the closing of the Business Combination, TopCo, shall jointly and severally indemnify Seller for any and all claims, fees, losses and liabilities that arise out of Seller’s regulatory filings related to this Transaction. |
| (i) | Disclosure. Athena and following the closing of the Business Combination, TopCo, shall preview with Seller all public disclosure relating to the Transaction and shall consult with Seller to ensure that such public disclosure, including the Form 8-K that announces the Transaction adequately discloses the material terms and conditions of the Transaction in form and substance reasonably acceptable to Seller; provided that the Form 8-K shall be publicly filed on the same date that definitive transaction documents are signed and provided further, that to the extent definitive transaction documents are not signed at least 48 hours prior to Athena’s redemption notice deadline, Athena agrees to make all necessary disclosures (if any) at least 24 hours prior to Athena’s redemption notice deadline to ensure that Seller is not in possession of material non-public information as a result of the transactions outlined herein. |
| (j) | Listing. Athena and following the closing of the Business Combination, TopCo, agree to use their best efforts to maintain the listing of the relevant Shares on a national securities exchange; provided that if the Shares cease to be listed on a national securities exchange or upon the filing of a Form 25 Seller may terminate this agreement and shall be entitled to the Break-up Fees, which shall be due and payable immediately following the occurrence of the termination of this agreement. |
| (k) | Regulatory Filings. Counterparty covenants that it will make all regulatory filings that it is required by law or regulation to make with respect to the Transaction including, without limitation, as may be required by Section 13 or Section 16 under the Exchange Act and, assuming the accuracy of Counterparty’s Repurchase Notices (as described under “Repurchase Notices” below) any sales of Subject Shares will be in compliance therewith. |
| 3. | Seller agrees with Athena and TopCo that it will not effect any Short Sales in respect of the Shares prior to the earlier of a) the Maturity Date b) the Transaction Cancelation. Short Sales means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis). |
| 4. | Condition Precedent. Athena and Target represent and warrant that, prior to execution of this Agreement and the Bridge Loan Agreement, they shall enter into an amendment to their BCA, that Athena finds acceptable, which includes (a) an extension of outside date and exclusivity until June 30, 2023, (b) the elimination of (i) any minimum cash condition other than coverage of transaction expenses and (ii) other closing conditions of the Target save for the reps and warranties and covenants which pursuant to the failure to satisfy thereof Target may terminate the BCA, a registration rights agreement, an earn-out agreement, a certain officer certificate as well as a conditional NYSE approval. |
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Transactions by Seller in the Shares
| (a) | Seller hereby waives the redemption rights (“Redemption Rights”) set forth in the applicable provisions of Athena’s certificate of incorporation (the “Certificate of Incorporation”) in connection with the Business Combination with respect to Shares it acquires from third parties and identifies on the Pricing Notice (each, a “Third Party Shareholder”) who have redeemed Shares or indicated an interest in redeeming Shares pursuant to the Redemption Rights during the period (the “Hedging Period”) beginning on the date of execution of this Agreement and ending at the time reversals of redemptions in connection with the Business Combination are no longer permitted (the Shares so acquired, the “Subject Shares”), except as required to not exceed the Excess Ownership Position. Following such date, Seller shall notify Counterparty of the number of Subject Shares. For the avoidance of doubt, Seller may sell or otherwise transfer, loan or dispose of any of the Subject Shares or any other shares or securities of the Counterparty in one or more public or private transactions at any time. Any Subject Shares sold by Seller during the term of the Transaction will cease to be Subject Shares. |
| (b) | Seller will give written notice to Counterparty of any sale of Subject Shares by Seller within one (1) Local Business Day following the date of such sale, such notice to include the date of the sale and the number of Subject Shares sold. |
| (c) | Athena hereby waives the applicable provisions of the Certificate of Incorporation with respect to the Subject Shares (or any other shares of Athena held by Seller or any of its affiliates) provided that such Subject Shares shall not be permitted to be redeemed by Seller during the term of this Agreement to the extent set forth in Section (a) above. Notwithstanding anything to the contrary set forth herein, the waiver set forth in this paragraph (c) shall survive any termination or expiration of this Confirmation. |
No Arrangements
Seller, Athena and TopCo each acknowledge and agree that: (i) there are no voting, hedging or settlement arrangements between Seller, Athena and TopCo with respect to any Shares, other than those set forth herein; (ii) although Seller may hedge its risk under the Transaction in any way Seller determines, Seller has no obligation to hedge with the purchase or maintenance of any Shares or otherwise; (iii) Athena nor TopCo will be entitled to any voting rights in respect of any of the Shares underlying the Transaction; and (iv) Athena nor TopCo will seek to influence Seller with respect to the voting of any Hedge Positions of Seller consisting of Shares.
Wall Street Transparency and Accountability Act
In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, nor any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the date of this Confirmation, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the ISDA Form, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the ISDA Form.
Address for Notices
Notice to Seller:
3 Columbus Circle
24th Floor
New York, NY 10019
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Notice to Counterparty:
Following the Closing of the Business Combination:
Notice to Counterparty:
Next.e.GO
B.V. (Following the Closing of the Business Combination: Next.e.GO N.V.)
Lilienthalstraße 152068 Aachen, Germany
Germany
Attn: [ ]
Email: [ ]
Notice to Target:
Next.e.GO
Mobile SE
Lilienthalstraße 152068 Aachen, Germany
Germany
Attn: Eelco Van der Leij
Email: eelco.van-der-leij@e-go-mobile.com
Account Details
Account details for Seller: [To be advised].
Account details for Athena: [To be advised].
Account details for TopCo: [To be advised].
Other Provisions.
| (a) | Rule 10b5-1. |
| (i) | Athena represents and warrants to Seller that Athena is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) for the purpose of inducing the purchase or sale of such securities or otherwise in violation of the Exchange Act, and Athena represents and warrants to Seller that Athena has not entered into or altered, and agrees that Athena will not enter into or alter, any corresponding or hedging transaction or position with respect to the Shares. Athena acknowledges that it is the intent of the parties that the Transaction comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) and the Transaction shall be interpreted to comply with the requirements of Rule 10b5-1(c). |
| (ii) | Athena, and following the closing of the Business Combination, TopCo, agrees that it will not seek to control or influence Seller’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under the Transaction, including, without limitation, Seller’s decision to enter into any hedging transactions. Athena represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Confirmation and the Transaction under Rule 10b5-1. |
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| (iii) | Athena, and following the closing of the Business Combination, TopCo, acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, Athena, and following the closing of the Business Combination, TopCo, acknowledges and agrees that any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Athena, or following the closing of the Business Combination, TopCo, , or any officer, director, manager or similar person of Athena or following the closing of the Business Combination, TopCo, is aware of any material non-public information regarding Counterparty or the Shares. |
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Seller a written notice of such repurchase (a “Repurchase Notice”); provided that Athena and following the closing of the Business Combination, TopCo, each agree that this information does not constitute material non-public information; provided further if this information shall be material non-public information, it shall publicly disclosed immediately. Athena, and following the closing of the Business Combination, TopCo, agrees to indemnify and hold harmless Seller and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Seller’s hedging activities as a consequence of remaining or becoming a Section 16 “insider” following the closing of the Business Combination, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Seller with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within thirty (30) days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing; provided, however, for the avoidance of doubt, Counterparty has no indemnification or other obligations with respect to Seller becoming a Section 16 “insider” prior to the closing of the Business Combination. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Seller with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Athena, and following the closing of the Business Combination, TopCo, agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
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| (c) | Transfer or Assignment. The Seller may freely transfer or assign the rights and duties under this Confirmation, and Seller, Athena and Target will attempt to assign and novate their respective rights and obligations hereunder to one or more unaffiliated third parties such that Seller’s Section 16 Percentage does not exceed 9.9% on a post-Business Combination basis. If at any time following the closing of the Business Combination at which (A) the Section 16 Percentage exceeds 9.9%, or (B) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clause (A) or (B), an “Excess Ownership Position”), Seller is unable to effect a transfer or assignment of a portion of the Transaction to a third party on pricing terms reasonably acceptable to Seller and within a time period reasonably acceptable to Seller such that no Excess Ownership Position exists, then Seller may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Seller so designates an Early Termination Date with respect to a portion of the Transaction, a portion of the Shares with respect to the Transaction shall be delivered to Counterparty as if the Early Termination Date was the Valuation Date in respect of a Transaction having terms identical to the Transaction and a Number of Shares equal to the number of Shares underlying the Terminated Portion. The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, as determined by Seller, (A) the numerator of which is the number of Shares that Seller and each person subject to aggregation of Shares with Seller under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) of the Exchange Act) with Seller directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) (the “Seller Group” ) and (B) the denominator of which is the number of Shares outstanding. |
The “Share Amount” as of any day is the number of Shares that Seller and any person whose ownership position would be aggregated with that of Seller and any group (however designated) of which Seller is a member (Seller or any such person or group, a “Seller Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Seller in its sole discretion.
The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Seller Person, or could result in an adverse effect on a Seller Person, under any Applicable Restriction, as determined by Seller in its sole discretion, minus (B) 0.1% of the number of Shares outstanding.
| (d) | Indemnification. Athena, and following the closing of the Business Combination, TopCo, agrees to indemnify and hold harmless Seller, its affiliates and its assignees and their respective directors, officers, employees, agents and controlling persons (each such person being an “Indemnified Party”) from and against any and all losses (but not including financial losses to an Indemnified Party relating to the economic terms of the Transaction provided that the Counterparty performs its obligations under this Confirmation in accordance with its terms), claims, damages and liabilities (or actions in respect thereof), joint or several, incurred by or asserted against such Indemnified Party arising out of, in connection with, or relating to, the execution or delivery of this Confirmation, the performance by Counterparty of its obligations under the Transaction, any breach of any covenant or representation made by Counterparty in this Confirmation or the ISDA Form, regulatory filings made by Counterparty related to the Transaction (other than as relates to any information provided by or on behalf of Seller or its affiliates), or the consummation of the transactions contemplated hereby; provided, however, that Counterparty has no indemnification obligations with respect to any loss, claim, damage, liability or expense related to the manner in which Seller sells, or arising out of any sales by Seller of, the Subject Shares or any other Shares owned by Seller. Counterparty will not be liable under the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a nonappealable judgment by a court of competent jurisdiction to have resulted from Seller’s material breach of any covenant, representation or other obligation in this Confirmation or the ISDA Form or from Seller’s willful misconduct, gross negligence or bad faith in performing the services that are subject of the Transaction. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition (and in addition to any other Reimbursement of Legal Fees and other Expenses contemplated by this Confirmation), Counterparty will reimburse any Indemnified Party for all reasonable, out-of-pocket, expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty. Athena, and following the closing of the Business Combination, TopCo, also agrees that no Indemnified Party shall have any liability to Counterparty or any person asserting claims on behalf of or in right of Counterparty in connection with or as a result of any matter referred to in this Confirmation except to the extent that any losses, claims, damages, liabilities or expenses incurred by Counterparty result from such Indemnified Party’s breach of any covenant, representation or other obligation in this Confirmation or the ISDA Form or from the gross negligence, willful misconduct or bad faith of the Indemnified Party or breach of any U.S. federal or state securities laws or the rules, regulations or applicable interpretations of the Securities and Exchange Commission. The provisions of this paragraph shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and/or delegation of the Transaction made pursuant to the ISDA Form or this Confirmation shall inure to the benefit of any permitted assignee of Seller. |
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| (e) | Amendments to Equity Definitions. |
| (i) | Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (i) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (ii) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Form with respect to that Issuer.”; |
| (ii) | Section 12.6(c)(ii) of the Equity Definitions is hereby amended by replacing the words “the Transaction will be cancelled,” in the first line with the words “Seller will have the right, which it must exercise or refrain from exercising, as applicable, in good faith acting in a commercially reasonable manner, to cancel the Transaction,”; and |
| (iii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (i) replacing “either party may elect” with “Seller may elect” and (ii) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (f) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| (g) | Attorney and Other Fees. In the event of any legal action initiated by any party arising under or out of, in connection with or in respect of, this Confirmation or the Transaction, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses incurred in such action, as determined and fixed by the court. |
| (h) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure. |
| (i) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be (a) a “securities contract” as defined in the Bankruptcy Code, in which case each payment and delivery made pursuant to the Transaction is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code, and (b) a “swap agreement” as defined in the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code and a “payment or other transfer of property” within the meaning of Sections 362 and 546 of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate, terminate and accelerate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the ISDA Form with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to otherwise constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. |
| (j) | Process Agent. For the purposes of Section 13(c) of the ISDA Form: |
Seller appoints as its Process Agent: None
Counterparty appoints as its Process Agent: None.
[Signature page follows]
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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us at your earliest convenience.
| Very truly yours, | ||
| VELLAR OPPORTUNITY FUND SPV LLC – SERIES 3 | ||
| By: | ||
| Name: | ||
| Title: | Authorized Signatory | |
| Agreed and accepted by: | ||
| ATHENA CONSUMER ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
| NEXT.E.GO MOBILE SE | ||
| By: | ||
| Name: | ||
| Title: | ||
| NEXT.E.GO B.V. | ||
| By: | ||
| Name: | ||
| Title: | ||
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