Ireland | | | 3714 | | | Not Applicable |
(State or other jurisdiction of | | | (Primary Standard Industrial | | | (IRS Employer |
incorporation or organization) | | | Classification Code Number) | | | Identification Number) |
Jocelyn Arel Jeffrey A Letalien Goodwin Procter LLP 620 Eighth Avenue New York, New York 10018 Tel: (212) 813-8000 | | | Alexander Mackinnon Herbert Smith Freehills 80 Collins St. Melbourne VIC 3000 Australia Tel: +61 3 9288 1234 | | | Connor Manning Arthur Cox LLP Ten Earlsfort Terrace Dublin 2 D02 T380 Tel: +353 1 920-1000 | | | Christian Nagler, P.C. Peter Seligson, P.C. Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 |
| | Sincerely, | |
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| | Sanjay K. Morey | |
| | Co-Chief Executive Officer, President and Director |
1. | The Business Combination Proposal: To consider and vote upon a proposal by ordinary resolution to approve the (i) Business Combination Agreement, dated November 29, 2022 (as it may be amended or supplemented from time to time), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, by and among Twin Ridge, Carbon Revolution Public Limited Company (formerly known as Poppetell Limited), a public limited company incorporated in Ireland with registered number 607450 (“MergeCo”), Carbon Revolution Limited, an Australian public company with Australian Company Number (ACN) 128 274 653 listed on the Australian Securities Exchange (“Carbon Revolution”), and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of MergeCo (“Merger Sub”), and (ii) Scheme Implementation Deed, dated November 30, 2022 (as it may be amended and supplemented from time to time), a copy of which is attached to the accompanying proxy statement/prospectus as Annex B, by and among Twin Ridge, Carbon Revolution and MergeCo, and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects (the “Business Combination” and such proposal, the “Business Combination Proposal”). |
2. | The Merger Proposal: To consider and vote upon a proposal by special resolution to approve the Plan of Merger in the form attached to the General Meeting (a draft of which is attached to the accompanying proxy statement/prospectus as Annex J), pursuant to which Twin Ridge will merge with and into Merger Sub so that Merger Sub will be the surviving company and all the rights and obligations of Twin Ridge will be assumed by Merger Sub by virtue of such merger pursuant to the Cayman Islands Companies Act (As Revised) of the Cayman Islands, and the consummation of the merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and Twin Ridge be authorized to enter into the Plan of Merger (the “Merger Proposal”). |
3. | The Equity Incentive Plan Proposal: To consider and vote upon a proposal by ordinary resolution to approve, assuming the Business Combination Proposal and the Merger Proposal are approved and adopted, the Carbon Revolution Public Limited Company 2023 Equity Incentive Plan (the “Equity Incentive Plan Proposal”). |
4. | 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 or convenient, (i) to permit further solicitation and vote of proxies for the purpose of obtaining approval of the Business Combination Proposal and the Merger Proposal, (ii) in 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 Twin Ridge’s Class A Ordinary Shares, par value $0.0001 (the “Twin Ridge Class A Ordinary Shares”) included in the units issued in Twin Ridge’s initial public offering (the “Public Shares”) have elected to redeem such shares such that the ordinary shares of MergeCo, par value $0.0001, would not be approved for listing on a U.S. stock exchange (the “Adjournment Proposal”). |
(i) | (a) hold Public Shares, or (b) hold Public Shares through units, you elect to separate your units into the underlying Public Shares and warrants prior to exercising your redemption rights with respect to the Public Shares; and |
(ii) | prior to 5:00 p.m., Eastern Time on , 2023, (a) submit a written request to Continental Stock Transfer & Trust Company, Twin Ridge’s transfer agent (the “Transfer Agent”), in which you (i) request that Twin Ridge redeem all or a portion of your Public Shares for cash, and (ii) identify yourself as the beneficial holder of the Public Shares and provide your legal name, phone number and address; and (b) deliver your Public Shares to the Transfer Agent, physically or electronically through the Depository Trust Company (“DTC”). |
| | By Order of the Board of Directors | |
| | ||
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| | Sanjay K. Morey | |
| | Co-Chief Executive Officer, President and Director | |
, 2023 | | |
• | “$”, “USD” and “U.S. dollar” each refer to the United States dollar; |
• | “A$” and “AUD” each refer to the Australian dollar; and |
• | “€”, “EUR” and “Euro” each refer to the Euro. |
• | the unaudited condensed consolidated financial statements of Carbon Revolution as of and for the six months ended December 31, 2022 and December 31, 2021, prepared in accordance with IFRS; |
• | the audited combined financial statements of Carbon Revolution as of and for the years ended June 30, 2022 and June 30, 2021, prepared in accordance with IFRS; |
• | the unaudited condensed consolidated financial statements of Twin Ridge as of and for the three months ended March 31, 2022 and March 31, 2023, prepared in accordance with GAAP; and |
• | the audited financial statements of Twin Ridge as of December 31, 2022 and December 31, 2021, and for the year ended December 31, 2022 and for the period from January 7, 2021 (inception) through December 31, 2021 prepared in accordance with GAAP. |
• | the benefits of the Business Combination; |
• | the future financial performance of MergeCo following the Business Combination; |
• | the market for Carbon Revolution’s products and services; |
• | expansion plans and opportunities; and |
• | other statements preceded by, followed by or that include the words “may”, “can”, “should”, “will”, “estimate”, “plan”, “project”, “forecast”, “intend”, “expect”, “anticipate”, “believe”, “seek”, “target” or similar expressions. |
• | changes in domestic and foreign business, market, financial, political and legal conditions; |
• | the inability of the parties to successfully or timely consummate the 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 Post-Combination Company or the expected benefits of the Business Combination, or that the approval of the shareholders of Twin Ridge or Carbon Revolution is not obtained; |
• | the ability of Carbon Revolution to obtain financing, equity, debt, or convertible debt financings, to fund its operations on favorable terms or at all, including in the short term, the ability of Carbon Revolution to obtain bridge financing necessary to continue as a going concern until consummation of the Business Combination; |
• | growth in demand for Carbon Revolution’s wheels being lower than expected, or eventuating later than expected (including but not limited to delay in commencement of wheel programs); |
• | increase in prices of labor or materials, or adverse movements in foreign exchange; |
• | disruption to global supply chains; |
• | Carbon Revolution’s relationships with suppliers and technical partners may deteriorate; |
• | risks relating to Carbon Revolution’s bespoke equipment and production process to create a highly complex and innovative product; |
• | downward pricing pressure from customers |
• | changes in Carbon Revolution’s competitive position or market share; |
• | the inability to maintain the listing of MergeCo’s securities on a U.S. securities exchange; |
• | the inability to complete any private placement financing, the amount of any private placement financing or the completion of any private placement financing with terms unfavorable to us; |
• | the risk that the Business Combination and related transactions disrupts current plans and operations Carbon Revolution or Twin Ridge; |
• | the risk that any of the conditions to closing of the Business Combination are not satisfied in the anticipated manner or on the anticipated timeline or are waived by any of the parties thereto; |
• | the failure to realize the anticipated benefits of the Business Combination and related transactions; |
• | risks relating to the uncertainty of the costs related to the Business Combination; |
• | risks related to the rollout of Carbon Revolution’s business strategy and the timing of expected business milestones; |
• | the effects of competition on Carbon Revolution’s future business and the ability of the Post-Combination Company to grow and manage growth, establish and maintain relationships with customers, and retain Carbon Revolution’s management and key employees; |
• | risks related to domestic and international political and macroeconomic uncertainty, including the Russia-Ukraine conflict; |
• | the outcome of any legal proceedings that may be instituted against Twin Ridge, Carbon Revolution or any of their respective directors or officers; |
• | the amount of redemption requests made by Public Shareholders; |
• | the ability of Twin Ridge to issue equity, if any, in connection with the Business Combination or to otherwise obtain financing in the future; |
• | the impact of the global COVID-19 pandemic and governmental responses on any of the foregoing risks; |
• | risks related to Carbon Revolution’s industry; |
• | changes in laws and regulations; and |
• | other risks and uncertainties described in this proxy statement/prospectus, including those under the section entitled “Risk Factors”. |
• | best-in-class businesses that benefit all stakeholders, where Twin Ridge can leverage its management expertise to maximize the companies’ positive impacts, build a stronger brand and value proposition, and drive financial return; |
• | are fundamentally sound but underperforming their potential and exhibit unrecognized value creation opportunities; |
• | strong competitive market positioning driven by brand equity, advantages of scope or scale, differentiated products or services, proprietary technology, robust infrastructure or strong customer or supplier relationships; |
• | attractive financial profile with multiple avenues for continued future growth and margin upside that result in sustainable free cash flow generation and a defensible market position that is resilient to economic cycles; |
• | businesses that can be acquired at an attractive valuation for public market investors; |
• | experienced and public-ready management team with internal reporting and control systems that can comply with the requirements of a public listing; and |
• | potential to offer an attractive risk-adjusted return for our shareholders across business cycles. |
• | Reasonableness of the aggregate consideration to be paid to the Public Shareholders under the Business Combination Agreement and the Scheme Implementation Deed. Following a review of the financial data provided to Twin Ridge, including certain audited and unaudited financial information and models regarding Carbon Revolution (including, where applicable, the assumptions underlying such unaudited financial information and models) and Twin Ridge’s due diligence review of Carbon Revolution’s business, the Twin Ridge Board determined that the consideration to be paid to the Carbon Revolution shareholders was reasonable in light of such data and financial information. In this context “reasonable” means (i) given the uniqueness of the Carbon Revolution business model, that the work done by the third-party due diligence advisors supported the “reasonableness” of the assumptions used to validate the business model, (ii) that the variables considered by the Twin Ridge Board in relation to the financial analysis for the Carbon Revolution business were a reasonable basis to compute the valuation and (iii) given the inherent uncertainties in any long-term projections, that the assumptions underlying them supported their “reasonableness”. |
• | Mission-Driven Leadership Team with a Strong Track Record. The Twin Ridge Board believes that Carbon Revolution has a strong, experienced public company management team with a proven track record of operational excellence. Twin Ridge is confident in the management team’s deep industry knowledge and strategic vision and believes that the Twin Ridge and Carbon Revolution teams will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. Twin Ridge believes that Jacob Dingle, who is contemplated to serve as Chief Executive Officer of MergeCo, and Gerard Buckle, who is contemplated to serve as Chief Financial Officer of MergeCo, following the Closing, will provide important continuity in advancing Carbon Revolution’s strategic and growth objectives. |
• | Due Diligence. The Twin Ridge Board reviewed and discussed in detail the results of the due diligence examination of Carbon Revolution conducted by Twin Ridge’s management team and Twin Ridge’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of Carbon Revolution regarding Carbon Revolution’s business plan, operations, prospects and forecasts 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 such as Carbon Revolution’s commercial agreements with Deakin University, government research grants from the Australian and Victorian government, supplier agreements with material suppliers, engineering and procurement firms, material contracts with top OEM customers and related purchase orders, licensing provisions in contractor agreements and research agreements related to key research partnerships, Carbon Revolution’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. The Twin Ridge Board reviewed factors such as Carbon Revolution’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the Twin Ridge Board believed that Carbon Revolution was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors. |
• | Reasonableness of Consideration. Following a review of the financial data provided to Twin Ridge, and the due diligence of Carbon Revolution’s business conducted by Twin Ridge’s management and Twin Ridge’s advisors, the management of Twin Ridge determined that the aggregate consideration to be paid in the Business Combination was reasonable. |
• | Post-Closing Economic Interest in MergeCo. If the Business Combination is consummated, Twin Ridge’s shareholders (other than Twin Ridge’s shareholders that sought redemption of their Twin Ridge Ordinary Shares) would have a meaningful economic interest in MergeCo and, as a result, would have a continuing opportunity to benefit from the success of Carbon Revolution following the consummation of the Business Combination. |
• | Lock-Up. Pursuant to the Registration Rights Agreement, certain members of management and all of the directors of Carbon Revolution, the Sponsor Parties, Ms. Burns, Mr. Henrys and Mr. Pilnick (together with their respective successors and any permitted transferees) will agree to be subject to a 180-day lock-up from the Closing Date in respect of their MergeCo Ordinary Shares received in the Business Combination (subject to certain customary exceptions). |
• | Financing. The agreement of Yorkville Advisors to provide a committed equity facility in an aggregate amount of up to $60 million for MergeCo Ordinary shares, subject to the terms of the Equity Purchase Agreement. |
• | Industry and Trends. Carbon Revolution’s business is based in a proprietary technology and research and development manufacturing industry focused on supply chain integrity that the Twin Ridge Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Twin Ridge Board believes has continued growth potential in future periods. |
• | Negotiated Transaction. The Twin Ridge Board considered the terms and conditions of the Business Combination Agreement, the Scheme Implementation Deed and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both Twin Ridge and Carbon Revolution to complete the Business Combination. The Twin Ridge Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Carbon Revolution and Twin Ridge. |
• | Other Alternatives. After a review of other business combination opportunities reasonably available to Twin Ridge, the Twin Ridge Board believes that the proposed Business Combination represents the best potential business combination reasonably available to Twin Ridge taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives. |
• | Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate a certain number of members of the MergeCo Board following the Business Combination, which the Twin Ridge Board believes will allow for the combined company to benefit from the Sponsor’s professional relationships to identify potential board members that will have appropriate industry and/or financial knowledge and professional experience to oversee the combined company and drive returns for shareholders. See “Comparison of Corporate Governance and Shareholder Rights” for more information. |
• | Advisor SPAC Experience. The fact that representatives of the Advisor that provided advice to Twin Ridge on financial and strategic matters in connection with the Business Combination have expertise in a wide variety of SPAC transactions. Gregory Ethridge and Nicholas Petruska have held and hold officer positions at multiple SPACs that have successfully completed business combinations in the advanced mobility, automotive and automotive technology sectors. |
• | Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe. |
• | Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination. |
• | Shareholder Vote. Twin Ridge’s shareholders may fail to approve the proposals necessary to effect the Business Combination. |
• | Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Twin Ridge’s control, including the receipt of certain required regulatory approvals. |
• | Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
• | Listing Risks. The challenges associated with preparing Carbon Revolution, for the applicable disclosure and listing requirements to which Carbon Revolution will be subject as a publicly traded company in the United States. |
• | Market Volatility. The possibility that the market for Twin Ridge Class A Ordinary Shares experiences volatility and disruptions, causing deal disruption. |
• | Liquidation. The risks and costs to Twin Ridge if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Twin Ridge being unable to effect an initial business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
• | Redemption Risk. The potential that a significant number of Twin Ridge’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of Twin Ridge’s shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination. |
• | Exclusivity. The fact that the Business Combination Agreement and Scheme Implementation Deed includes an exclusivity provision that prohibits Carbon Revolution and Twin Ridge from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—The Business Combination, the Business Combination Agreement and the Scheme Implementation Deed—Covenants of the Parties—Exclusivity”. |
• | Litigation. The possibility of shareholder litigation challenging the Business Combination. |
• | COVID-19. The impact of the COVID-19 pandemic on Carbon Revolution's business. |
• | Waiver of Corporate Opportunity Doctrine. The Existing Organizational Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that have been appropriate for a combination with Twin Ridge but were not offered due to a Twin Ridge director’s duties to another entity. Twin Ridge and its management are not aware of any such corporate opportunities not being offered to Twin Ridge and does not believe that the waiver of the corporate opportunity doctrine in its Existing Organizational Documents interfered with its ability to identify an acquisition target, including the decision to pursue the Business Combination. |
• | Interests of Certain Persons. The Sponsor, Twin Ridge’s officers and certain of its directors may have interests in the Business Combination (see “Shareholder Proposal 1 – The Business Combination Proposal—Interests of Certain Persons in the Business Combination”). |
• | Fees and Expenses. The associated fees and expenses were waived by the underwriters (see “Shareholder Proposal 1 – The Business Combination Proposal—Background to the Business Combination”. |
• | Other Risk Factors. Various other risk factors associated with the business of Carbon Revolution, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. |
• | Fairness Opinion. Craig-Hallum, Twin Ridge’s financial advisor, provided its Fairness Opinion to the Twin Ridge Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to Twin Ridge and (ii) the fair market value of Carbon Revolution equals or exceeds 80% of the amount held by Twin Ridge in trust for benefit of its Public Shareholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Craig-Hallum was limited to the fairness of the aggregate consideration to be received by all of the Twin Ridge shareholders, collectively as a group, including the Sponsor and its affiliates. Craig-Hallum did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other shareholders of Twin Ridge. |
| | Source (in millions) | |
Cash and Investment Held in the Trust Account(2) | | | $65 |
MergeCo Ordinary Share Consideration to Existing Carbon Revolution Shareholders | | | 187 |
Total Sources | | | $252 |
| | Uses (in millions) | |
MergeCo Ordinary Share Consideration to Existing Carbon Revolution Shareholders(3) | | | $187 |
Twin Ridge Shareholder Redemptions | | | — |
Cash to MergeCo Balance Sheet | | | 45 |
Estimated Transaction Fees and Expenses(4) | | | 20 |
Total Uses | | | $252 |
(1) | Figures exclude impact of the Committed Equity Financing, cash and cash equivalents, as well as outstanding payables at Twin Ridge. |
(2) | As of May 15, 2023. |
(3) | Reflects negotiated equity value of Carbon Revolution equal to $200 million pursuant to the Scheme Implementation Deed, minus $13 million of adjustments to add cash and certain transaction costs and subtract net debt on Carbon Revolution’s balance sheet prior to Closing. |
(4) | Represents an estimated amount inclusive of accounting, legal and other fees related to the Business Combination. |
| | Source (in millions) | |
Cash and Investment Held in the Trust Account(2) | | | $65 |
MergeCo Ordinary Share Consideration to Existing Carbon Revolution Shareholders | | | 187 |
Total Sources | | | $252 |
| | Uses (in millions) | |
MergeCo Ordinary Share Consideration to Existing Carbon Revolution Shareholders(3) | | | $187 |
Twin Ridge Shareholder Redemptions | | | 65 |
Cash to MergeCo Balance Sheet | | | — |
Estimated Transaction Fees and Expenses(4) | | | — |
Total Uses | | | $252 |
(1) | Figures exclude impact of the Committed Equity Financing, cash and cash equivalents as well as outstanding payables at Twin Ridge. |
(2) | As of May 15, 2023. |
(3) | Reflects negotiated equity value of Carbon Revolution equal to $200 million pursuant to the Scheme Implementation Deed, minus $13 million of adjustments to add cash and certain transaction costs and subtract net debt on Carbon Revolution’s balance sheet prior to Closing. |
(4) | Includes accounting, legal and other fees related to the Business Combination. Such amount is estimated to be $20 million. However, under the maximum redemption scenario, the available cash at Closing provided by Twin Ridge will be insufficient to pay transaction fees and expenses and such expenses will be paid from the proceeds of external financing or cash on Carbon Revolution’s balance sheet; provided, that, the Business Combination contains a cap on such expenses of $20 million. |
• | Carbon Revolution may be unable to obtain sufficient financing to pay its expenses incurred prior to the completion of the Business Combination if the completion of the Business Combination is delayed beyond its expected completion date. |
• | Carbon Revolution is not yet profitable or cash flow positive and it may take longer for Carbon Revolution to reach profitability or become cash flow breakeven than anticipated (or it may never occur), and Carbon Revolution may not be able to obtain financing to fund its operations on acceptable terms, or at all; |
• | Carbon Revolution could fail to meet the financial covenants under the New Debt Program entered into on May 23, 2023. |
• | Carbon Revolution could fail to make payments when due or otherwise comply with other requirements under the New Debt Program, resulting in an event of default thereunder and acceleration thereof. |
• | Carbon Revolution’s customer contracts contain no take or pay provisions or other minimum purchase requirements and its customers may not order wheels as expected. |
• | Wheel programs may not be awarded or may not be awarded in the expected timeframe or for the expected volumes. Carbon Revolution’s view of expected volumes may not be achieved or may not be achieved within expected timeframes. |
• | Carbon Revolution will need to raise additional funds by equity, debt, or convertible debt financings, to support its growth, and those funds may be unavailable on acceptable terms, or at all. As a result, Carbon Revolution may be unable to meet its future capital needs, which may limit its ability to grow and jeopardize its ability to continue its business. |
• | Carbon Revolution may not be able to execute its plans to increase its capacity to the extent expected within the timeframes as expected and/or at the expected cost. |
• | Carbon Revolution’s relationships with suppliers and technical partners may deteriorate or there may be other issues with goods, services or equipment received from suppliers. |
• | As a manufacturer of a highly complex and innovative product (which is continuing to evolve), and which requires bespoke equipment to be designed and produced for numerous steps of the production process, Carbon Revolution is subject to inherent risks in the development and use of new technology, including equipment not performing to the level expected, product quality not being to the level desired, and manual labor required to finish wheels being greater than expected. |
• | Carbon Revolution may be unable to retain and increase its workforce as required, or the cost of doing so may be higher than expected. Workforce engagement issues and industrial action may impact Carbon Revolution’s operations and growth. Further, loss of or failure to replace or hire key persons may impact Carbon Revolution’s operations and growth. |
• | Carbon Revolution is exposed to price increases from suppliers and may not be able to pass those increases on to customers in full or at all. |
• | Carbon Revolution’s competitive position or market share may deteriorate including as a result of actions by it or its competitors. |
• | Carbon Revolution is a recipient of grant funding under various grants that include obligations to repay grant funding received in certain circumstances, including where Carbon Revolution is in breach of certain obligations under the relevant agreements. |
• | The Sponsor Parties and each of Twin Ridge’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, Industry Advisors and our directors and executive officers 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 MergeCo is appropriate as our initial business combination and in recommending that shareholders vote in favor of approval of the Twin Ridge Shareholder Proposals. Such interests include that the Sponsor, Industry Advisors and our directors and executive officers, will lose their entire investment in us if our initial business combination is not completed, and that the Sponsor and the Industry Advisors will benefit from the completion of an initial 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 Twin Ridge. |
• | The process of taking a company public by means of a business combination with a special purpose acquisition company is different from taking a company public through an underwritten offering and may create risks for our unaffiliated investors. |
• | Twin Ridge and Carbon Revolution will incur significant transaction and transition costs in connection with the Business Combination. |
• | The ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may be from Twin Ridge and Carbon Revolution, and some of whom may join MergeCo following the Closing. The loss of key personnel or the hiring of ineffective personnel after the Business Combination could negatively impact the operations and profitability of MergeCo’s business following the Closing. |
• | If the conditions to the Business Combination Agreement and the Scheme Implementation Deed are not met, the Business Combination may not occur. |
• | MergeCo will be a holding company with no business operations of its own and will depend on cash flow from Carbon Revolution to meet its obligations. |
• | The price of the MergeCo Ordinary Shares and MergeCo Public Warrants may be volatile. |
• | 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 MergeCo Ordinary Shares to drop significantly, even if MergeCo’s business is doing well. |
• | A market for MergeCo’s securities may not develop, which would adversely affect the liquidity and price of MergeCo’s securities. |
• | MergeCo may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. This would subject MergeCo to GAAP reporting requirements which may be difficult for it to comply with. |
• | If Twin Ridge fails to consummate the Committed Equity Financing, it is possible that the Business Combination may not be completed. |
• | Public Shareholders who wish to redeem their Public Shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their Redemption Right prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their Public Shares for a pro rata portion of the funds held in the Trust Account. |
• | MergeCo is incorporated in Ireland; Irish law differs from the laws in effect in the United States and accordingly the rights afforded to shareholders under Irish law may be different to those afforded to shareholders under United States law. |
• | As an Irish public limited company, certain decisions to change the capital structure of MergeCo will require the approval of MergeCo shareholders, which may limit MergeCo’s flexibility with respect to managing its capital structure. |
• | Investors may face difficulties in protecting their interests, and their ability to protect their rights through the U.S. federal courts may be limited, because MergeCo is formed under Irish law. |
Q. | Why am I receiving this proxy statement/prospectus? |
A. | You are receiving this proxy statement/prospectus in connection with the General Meeting of Twin Ridge’s shareholders. Twin Ridge is holding the General Meeting to consider and vote upon the 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 is the General Meeting? |
A. | The General Meeting will be held at a.m., Eastern Time, on , 2023, 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. Only shareholders who held Twin Ridge Ordinary 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 Twin Ridge are being asked to vote on the following Shareholder Proposals: |
• | The Business Combination Proposal; |
• | The Merger Proposal; |
• | The Equity Incentive Plan Proposal; and |
• | The Adjournment Proposal, if presented. |
Q. | Are the Shareholder Proposals conditioned on one another? |
A. | Each of the Business Combination Proposal and the Merger Proposal is interdependent upon the other and each must be approved in order for Twin Ridge to complete the Business Combination contemplated by the Business Combination Agreement. The Equity Incentive Plan Proposal is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Business Combination Proposal, the Equity Incentive Plan Proposal, and the Adjournment Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of the outstanding Twin Ridge Ordinary Shares, who, being present and entitled to vote at a meeting of Twin Ridge’s shareholders, vote at such meeting. The Merger Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the outstanding Twin Ridge Ordinary Shares, who, being present and entitled to vote at a meeting of Twin Ridge’s shareholders, vote at such meeting. If any of the Business Combination Proposal or the Merger Proposal fails to receive the required approval, neither will be approved and the Business Combination will not be completed. If the Business Combination Proposal and the Merger Proposal are not approved, the Equity Incentive Plan Proposal will not be presented to the Twin Ridge shareholders for a vote. The Adjournment Proposal may not be presented for consideration if the Business Combination Proposal and the Merger Proposal are approved and certain other conditions are satisfied. |
Q. | Why is Twin Ridge proposing the Business Combination? |
A. | Twin Ridge 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 Twin Ridge’s organization, the Twin Ridge Board has sought to identify suitable candidates in order to effect such a transaction. In its review of Carbon Revolution, the Twin Ridge Board considered a variety of factors weighing positively and negatively in connection with the Business Combination. After careful consideration, the Twin Ridge Board has determined that the Business Combination presents a highly attractive business combination opportunity and is in the best interests of Twin Ridge’s shareholders. The Twin Ridge Board believes that, based on its review and consideration, the Business Combination with Carbon Revolution presents an opportunity to increase shareholder value. However, there can be no assurance that the anticipated benefits of the Business |
Q. | What will happen in the Business Combination? |
A. | The Business Combination Agreement provides for the Business Combination, pursuant to which, among other things, Twin Ridge shall be merged with and into Merger Sub, with Merger Sub surviving as a wholly-owned subsidiary of MergeCo, subject to, among other things, the approval of Twin Ridge’s shareholders. Under the Scheme Implementation Deed, Carbon Revolution has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) which, if implemented, will result in all shares of the Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing a share to MergeCo (resulting in Carbon Revolution becoming a wholly-owned subsidiary of MergeCo), subject to Carbon Revolution’s shareholder approval, approval of the Federal Court of Australia and the satisfaction of various other conditions (a full list of the conditions is set out in the Scheme Implementation Deed). |
Q. | What consideration will be received in connection with the Business Combination? |
A. | Subject to the terms and conditions set forth in the Business Combination Agreement and Scheme Implementation Deed, shareholders of Carbon Revolution will receive, in consideration for the cancellation of each share of Carbon Revolution held by them at the Scheme Record Date, a number of MergeCo Ordinary Shares pursuant to the Scheme of Arrangement – Share Scheme attached to Scheme Implementation Deed (“Scheme of Arrangement”) calculated in the following manner: (I)(x)USD$200,000,000 (y)(i) less Outstanding Debt (as defined in the Scheme of Arrangement) (ii) plus Cash (as defined in the Scheme of Arrangement), with such total amount (z) divided by USD$10.00, with such total amount, (II) divided by the total number of Carbon Revolution shares on issue as at the Scheme Record Date (or which would be on issue if all securities of Carbon Revolution convertible into shares of Carbon Revolution had converted on such date) plus the performance rights set out in clause 2(b)(2) of the Scheme of Arrangement to the extent those rights are cancelled on the Scheme Record Date in exchange for new replacement rights to be issued by MergeCo. |
Q. | What is the expected per share value of the cash consideration to be received by MergeCo in the Business Combination? |
A. | As described in “Summary—Sources and Uses of Funds for the Business Combination,” and “—What happens if a substantial number of Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?” the net cash to the balance sheet of MergeCo and the total number of MergeCo Ordinary Shares will depend upon the extent to which Public Shareholders exercise their redemption rights. Although the parties to the Business Combination have deemed the value of MergeCo Ordinary Shares to be equal to $10.00 per share for determining the number of MergeCo Ordinary Shares issuable to holders of Carbon |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |
Twin Ridge Class A Ordinary Shares not redeemed | | | 6,266,645 | | | 4,699,984 | | | 1,566,661 | | | — |
Gross Cash Proceeds of Trust Account at $10.41 per share | | | $65,207,912 | | | $48,905,934 | | | $16,301,978 | | | — |
Transaction Expenses* | | | $20,000,000 | | | $20,000,000 | | | $20,000,000 | | | $20,000,000 |
Net Cash Proceeds of Trust Account at $10.41 | | | $45,207,912 | | | $28,905,934 | | | N/A | | | N/A |
Total Shares Outstanding | | | 29,786,457 | | | 28,219,796 | | | 25,086,473 | | | 23,519,812 |
Net Cash per MergeCo Ordinary Share Outstanding | | | $1.52 | | | $1.02 | | | N/A | | | N/A |
(1) | This scenario assumes that no Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(2) | This scenario assumes that 1,566,661 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(3) | This scenario assumes that 4,699,984 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the net proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(4) | This scenario assumes that 6,266,645 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the net proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(*) | Pro forma presentation includes a total of $22M expenses pursuant to Article 11 guidelines including accruals and non-cash expenses as of December 31, 2022 presentation date. Section 2.05(b) of the Business Combination Agreement provides a $20 million limitation on Twin Ridge’s ability to use the proceeds of the Trust Account to pay expenses incurred thereby. Such limitation applies to transaction expenses incurred by Twin Ridge and does not include transaction expenses incurred by Carbon Revolution. The total of $22 million of expenses includes expenses of all of the parties to the Business Combination Agreement. The parties have agreed to work together in good faith (including through having discussions with the applicable vendors) in order to reduce the amount of Twin Ridge’s transaction expenses to be no greater than $20 million. Such obligation is not a closing condition and the failure to limit such expenses to $20 million does not automatically create a termination right for either party. |
Q. | What are the U.S. federal income tax consequences of exercising my Redemption Rights? |
A. | The U.S. federal income tax consequences of a U.S. Holder exercising its redemption rights depends on such U.S. Holder’s particular facts and circumstances. See the section entitled “Material Tax Considerations—Material U.S. Federal Tax Considerations—Consequences to U.S. Holders—Tax Consequences for U.S. Holders Exercising Redemption Rights” for more information. We urge all U.S. Holders of Twin Ridge Class A Ordinary Shares that are contemplating exercising redemption rights to consult their tax advisor to determine the tax consequences thereof. |
Q. | What are the U.S. federal income tax consequences as a result of the Business Combination? |
A. | As discussed more fully in the section entitled “Material Tax Considerations—Material U.S. Federal Tax Considerations—Consequences to U.S. Holders—Tax Consequences of the Merger to U.S. Holders,” it is intended that the Merger qualify as a “reorganization” within the meaning of Section 368(a)(l)(F) of the Code. However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) of the Code to a merger involving a corporation holding only investment-type assets such as Twin Ridge, whether the Merger qualifies as an F Reorganization is not entirely clear. Assuming that the Merger so qualifies, U.S. Holders (as defined in the section entitled “Material Tax Considerations—Material U.S. Federal Tax Considerations—Consequences to U.S. Holders”) will generally not recognize gain or loss for U.S. federal income tax purposes on the exchange of Twin Ridge Class A Ordinary Shares and Public Warrants for MergeCo Ordinary Shares and MergeCo Public Warrants, as applicable, in the Merger. |
Q. | What positive and negative factors did the Twin Ridge Board consider when determining whether to approve the Business Combination Agreement and the related transactions? |
A. | In considering the Business Combination and the Scheme, the Twin Ridge Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Business Combination Agreement, the Scheme Implementation Deed and the transactions contemplated thereby (including the Merger and the Scheme), including, but not limited to, the following factors (not necessarily in order of relative importance): |
• | Reasonableness of the aggregate consideration to be paid to the Public Shareholders under the Business Combination Agreement and the Scheme Implementation Deed. Following a review of the financial data provided to Twin Ridge, including certain audited and unaudited financial information and models regarding Carbon Revolution (including, where applicable, the assumptions underlying such unaudited financial information and models) and Twin Ridge’s due diligence review of Carbon Revolution’s business, the Twin Ridge Board determined that the consideration to be paid to the Carbon Revolution shareholders was reasonable in light of such data and financial information. In this context “reasonable” means (i) given the uniqueness of the Carbon Revolution business model, that the work done by the third-party due diligence advisors supported the “reasonableness” of the assumptions used to validate the business model, (ii) that the variables considered by the Twin Ridge Board in relation to the financial analysis for the Carbon Revolution business were a reasonable basis to compute the valuation and (iii) given the inherent uncertainties in any long-term projections, that the assumptions underlying them supported their “reasonableness”. |
• | Mission-Driven Leadership Team with a Strong Track Record. The Twin Ridge Board believes that Carbon Revolution has a strong, experienced public company management team with a proven track record of operational excellence. Twin Ridge is confident in the management team’s deep industry knowledge and strategic vision and believes that the Twin Ridge and Carbon Revolution teams will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. Twin Ridge believes that Jacob Dingle, who is contemplated to serve as Chief Executive Officer of MergeCo, and Gerard Buckle, who is contemplated to serve as Chief Financial Officer of MergeCo, following the Closing, will provide important continuity in advancing Carbon Revolution’s strategic and growth objectives. |
• | Due Diligence. The Twin Ridge Board reviewed and discussed in detail the results of the due diligence examination of Carbon Revolution conducted by Twin Ridge’s management team and Twin Ridge’s |
• | Financial Condition. The Twin Ridge Board reviewed factors such as Carbon Revolution’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the Twin Ridge Board believed that Carbon Revolution was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors. |
• | Reasonableness of Consideration. Following a review of the financial data provided to Twin Ridge, and the due diligence of Carbon Revolution’s business conducted by Twin Ridge’s management and Twin Ridge’s advisors, the management of Twin Ridge determined that the aggregate consideration to be paid in the Business Combination was reasonable. |
• | Post-Closing Economic Interest in MergeCo. If the Business Combination is consummated, Twin Ridge’s shareholders (other than Twin Ridge’s shareholders that sought redemption of their Twin Ridge Ordinary Shares) would have a meaningful economic interest in MergeCo and, as a result, would have a continuing opportunity to benefit from the success of Carbon Revolution following the consummation of the Business Combination. |
• | Lock-Up. Pursuant to the Registration Rights Agreement, certain members of management and all of the directors of Carbon Revolution, the Sponsor Parties, Ms. Burns, Mr. Henrys and Mr. Pilnick (together with their respective successors and any permitted transferees) will agree to be subject to a 180-day lock-up from the Closing Date in respect of their MergeCo Ordinary Shares received in the Business Combination (subject to certain customary exceptions). |
• | Financing. The agreement of Yorkville Advisors to provide a committed equity facility in an aggregate amount of up to $60 million for MergeCo Ordinary shares, subject to the terms of the Equity Purchase Agreement. |
• | Industry and Trends. Carbon Revolution’s business is based in a proprietary technology and research and development manufacturing industry focused on supply chain integrity that the Twin Ridge Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Twin Ridge Board believes has continued growth potential in future periods. |
• | Negotiated Transaction. The Twin Ridge Board considered the terms and conditions of the Business Combination Agreement, the Scheme Implementation Deed and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both Twin Ridge and Carbon Revolution to complete the Business Combination. The Twin Ridge Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Carbon Revolution and Twin Ridge. |
• | Other Alternatives. After a review of other business combination opportunities reasonably available to Twin Ridge, the Twin Ridge Board believes that the proposed Business Combination represents the best potential business combination reasonably available to Twin Ridge taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives. |
• | Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate a certain number of members of the MergeCo Board following the Business Combination, which the Twin Ridge Board believes will allow for the combined company to benefit from the Sponsor’s professional relationships to |
• | Advisor SPAC Experience. The fact that representatives of the Advisor that provided advice to Twin Ridge on financial and strategic matters in connection with the Business Combination have expertise in a wide variety of SPAC transactions. Gregory Ethridge and Nicholas Petruska have held and hold officer positions at multiple SPACs that have successfully completed business combinations in the advanced mobility, automotive and automotive technology sectors. |
• | Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe. |
• | Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination. |
• | Shareholder Vote. Twin Ridge’s shareholders may fail to approve the proposals necessary to effect the Business Combination. |
• | Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Twin Ridge’s control, including the receipt of certain required regulatory approvals. |
• | Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
• | Listing Risks. The challenges associated with preparing Carbon Revolution, for the applicable disclosure and listing requirements to which Carbon Revolution will be subject as a publicly traded company in the United States. |
• | Market Volatility. The possibility that the market for Twin Ridge Class A Ordinary Shares experiences volatility and disruptions, causing deal disruption. |
• | Liquidation. The risks and costs to Twin Ridge if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Twin Ridge being unable to effect an initial business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
• | Redemption Risk. The potential that a significant number of Twin Ridge’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of Twin Ridge’s shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination. |
• | Exclusivity. The fact that the Business Combination Agreement and Scheme Implementation Deed includes an exclusivity provision that prohibits Carbon Revolution and Twin Ridge from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—The Business Combination, the Business Combination Agreement and the Scheme Implementation Deed—Covenants of the Parties—Exclusivity”. |
• | Litigation. The possibility of shareholder litigation challenging the Business Combination. |
• | COVID-19. The impact of the COVID-19 pandemic on Carbon Revolution's business. |
• | Waiver of Corporate Opportunity Doctrine. The Existing Organizational Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that have been appropriate for a combination with Twin Ridge but were not offered due to a Twin Ridge director’s duties to another entity. Twin Ridge and its management are not aware of any such corporate opportunities not being offered to Twin Ridge and does not believe that the waiver of the corporate opportunity doctrine in its Existing Organizational Documents interfered with its ability to identify an acquisition target, including the decision to pursue the Business Combination. |
• | Interests of Certain Persons. The Sponsor, Twin Ridge’s officers and certain of its directors may have interests in the Business Combination (see “Shareholder Proposal 1 – The Business Combination Proposal—Interests of Certain Persons in the Business Combination”). |
• | Fees and Expenses. The associated fees and expenses were waived by the underwriters (see “Shareholder Proposal 1 – The Business Combination Proposal—Background to the Business Combination”. |
• | Other Risk Factors. Various other risk factors associated with the business of Carbon Revolution, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. |
• | Fairness Opinion. Craig-Hallum, Twin Ridge’s financial advisor, provided its Fairness Opinion to the Twin Ridge Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to Twin Ridge and (ii) the fair market value of Carbon Revolution equals or exceeds 80% of the amount held by Twin Ridge in trust for benefit of its Public Shareholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Craig-Hallum was limited to the fairness of the aggregate consideration to be received by all of the Twin Ridge shareholders, collectively as a group, including the Sponsor and its affiliates. Craig-Hallum did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other shareholders of Twin Ridge. |
Q. | Will Twin Ridge obtain new financing in connection with the Transactions? |
A. | Twin Ridge entered into the Equity Purchase Agreement with Yorkville Advisors for the committed equity facility. Subject to satisfaction of various conditions contained therein, the committed equity facility could provide Twin Ridge with access to up to an additional $60,000,000. The price at which such MergeCo Ordinary Shares may be sold pursuant to the Equity Purchase Agreement will be a discount to the then applicable trading price thereof. Accordingly, the existing MergeCo shareholders could have their positions significantly diluted by the potential increase in additional outstanding MergeCo Ordinary Shares to be issued to Yorkville Advisors at prices below the current market value thereof. As a condition to closing the Business Combination, the Scheme Implementation Deed provides that the Equity Purchase Agreement remains in full force and effect. |
Q. | What equity stake will the Public Shareholders and the current shareholders of Carbon Revolution hold in MergeCo immediately after the Closing? |
A. | It is anticipated that, upon completion of the Business Combination, and assuming no holders of Public Shares exercise their redemption rights: (i) Public Shareholders will retain an ownership interest of approximately 21.04% of the outstanding MergeCo Ordinary Shares; (ii) the Founder Holders will own approximately 16.79% of the outstanding MergeCo Ordinary Shares; (iii) Carbon Revolution shareholders will own approximately 62.12% of the outstanding MergeCo Ordinary Shares; and (iv) Yorkville Advisors will own approximately 0.05% of the outstanding MergeCo Ordinary Shares (consisting solely of the MergeCo Ordinary Shares issued as a commitment fee and excluding any other shares issuable under the Equity Purchase Agreement from time to time after Closing). These levels of ownership assume (A) that prior to the Closing no Warrants will be exercised and (B) that at or after the Closing no MergeCo Warrants will be exercised. |
Q. | What vote is required to approve the Shareholder Proposals presented at the General Meeting of Twin Ridge’s shareholders? |
A. | Approval of the Business Combination Proposal, the Equity 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 Twin Ridge 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 Business Combination Proposal and the Adjournment Proposal. |
Q. | Do Carbon Revolution shareholders need to approve the Business Combination? |
A. | Carbon Revolution shareholders are separately voting to approve the Scheme and the Capital Reduction as discussed in the section entitled “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents”. |
Q. | What interests do the current Twin Ridge shareholders and Twin Ridge’s other current officers and directors have in the Business Combination? |
A. | The Sponsor and our directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Required Twin Ridge Shareholder Proposals. As a result of such interests, the Sponsor and our directors and officers may be incentivized to complete a business combination with a less favorable combination partner or on terms less favorable to Public Shareholders rather than fail to complete a business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board) and be forced to liquidate and dissolve Twin Ridge. The Twin Ridge Board was aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to Twin Ridge’s shareholders that they approve the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. Twin Ridge's shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. These interests include: |
• | the fact that the Founder Holders have agreed not to redeem any of the Founder Shares held by them in connection with a vote of Twin Ridge’s shareholders to approve a proposed initial business combination, including the Business Combination; |
• | the fact that the Sponsor is entitled to designate two directors on the MergeCo Board; |
• | the fact that the Sponsor paid an aggregate of $25,000 for 5,750,000 Twin Ridge Class B Ordinary Shares on January 12, 2021. After giving effect to (i) the forfeiture of 422,797 Twin Ridge Class B Ordinary Shares in connection with the underwriters’ partial exercise of the over-allotment option and (ii) the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares, the remaining 5,000,000 Twin Ridge Class B Ordinary Shares held by the Sponsor Parties, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, Alison Burns, Paul Henrys and Gary Pilnick, would be worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), 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 $52,750,000, based upon the closing price of $10.55 per Twin Ridge Class A Ordinary Share on the NYSE on June 8, 2023; |
• | the fact that the Sponsor paid an aggregate of $7,661,763 for 5,107,842 Private Placement Warrants, each exercisable to purchase one Twin Ridge Class A Ordinary Share at $11.50 per share, subject to adjustment, currently held by the Sponsor, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, and which were acquired in a private placement that took place simultaneously with the consummation of the IPO, would become worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). 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 $383,088, based upon the closing price of $0.075 per Public Warrant on the NYSE on June 8, 2023; |
• | the fact that if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), Twin Ridge will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Twin Ridge Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the Twin Ridge Board, dissolving and liquidating; |
• | the fact that the Sponsor Parties paid an aggregate of $7,686,763 for its investment in MergeCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $52,500,088 (after giving effect to the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares), based upon the respective closing price of the Twin Ridge Class A Ordinary Shares and the Public Warrants on the NYSE on June 8, 2023. |
| | Securities held by the Sponsor Parties | | | Sponsor Cost ($) | |
Founder Shares | | | 5,267,203 | | | $25,000(1) |
Private Placement Warrants | | | 5,107,842 | | | $7,661,763 |
Total | | | | | $7,686,763 |
(1) | Includes cost for 60,000 Founder Shares held by the independent directors of Twin Ridge. |
| | Securities held By the Sponsor Parties Prior to Closing | | | Value per Security(2) ($)(2) | | | Total Value ($) | |
MergeCo Ordinary Shares Issued to Holders of Founder Shares | | | 4,940,000(1) | | | $10.55 | | | $52,117,000 |
MergeCo Private Placement Warrants | | | 5,107,842 | | | $0.075 | | | $383,088 |
Total | | | | | | | $52,500,088 |
(1) | Immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger, the Sponsor has agreed that 327,203 Founder Shares shall be automatically forfeited and surrendered to Twin Ridge for no additional consideration. |
(2) | Value per security is based upon the closing price of $10.55 per Twin Ridge Class A Ordinary Share and $0.075 per Public Warrant on the NYSE on June 8, 2023. |
• | 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; |
• | fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other Twin Ridge shareholders experience a negative rate of return in MergeCo; |
• | if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Twin Ridge to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Shares, or such lesser per Public Share as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, 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 Sponsor (including its representatives and affiliates) and Twin Ridge directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to Twin Ridge or Carbon Revolution. For example, each of Twin Ridge’s officers may be considered an affiliate of the Sponsor, which was formed for the sole purpose of investing in Twin Ridge. The Sponsor and Twin Ridge’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to Twin Ridge completing its initial business combination. Moreover, certain of Twin Ridge’s directors and officers have time and attention requirements for certain other companies. Twin Ridge’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to Twin Ridge and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in Twin Ridge’s favor and such potential business opportunities may be presented to other entities prior to their presentation to Twin Ridge, subject to applicable fiduciary duties. |
• | the continued indemnification of Twin Ridge’s existing directors and officers and the continuation of its directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that the Sponsor and Twin Ridge’s directors and officers, or their affiliates, will lose their entire investment in Twin Ridge and will not be reimbursed for any out-of-pocket expenses incurred by them on |
• | that, at the closing of the Business Combination we will enter into the Registration Rights Agreement with the Sponsor Parties and our directors and officers, which provides for registration rights to such persons and their permitted transferees; and |
• | the fact that the Business Combination Agreement provides for the continued indemnification of Twin Ridge’s existing directors and officers and requires Carbon Revolution 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 Twin Ridge directors and officers after the Business Combination. |
Q. | Did the Twin Ridge Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
A. | Yes. The Twin Ridge Board obtained a fairness opinion from Craig-Hallum, dated November 28, 2022, to the Twin Ridge Board, to the effect that, as of such date, and subject to the various assumptions, considerations, qualifications and limitations set forth in its written opinion, (i) the Merger Consideration to be paid by Twin Ridge in the Business Combination pursuant to the Business Combination Agreement and Scheme Implementation Deed is fair, from a financial point of view, to Twin Ridge, and (ii) the fair market value of Carbon Revolution equals or exceeds 80% of the amount held by Twin Ridge in trust for benefit of its Public Shareholders (excluding taxes payable on the income earned on the Trust Account).For a description of the opinion issued by Craig-Hallum to the Twin Ridge Board please see “Shareholder Proposal 1 — The Business Combination Proposal-Opinion of Craig-Hallum Capital Group LLC”. |
Q. | Who will have the right to nominate or appoint directors to the MergeCo Board after the consummation of the Business Combination? |
A. | Subject to the Business Combination Agreement and Scheme Implementation Deed, each holder of MergeCo Ordinary Shares has the exclusive right to vote for the election of directors at each annual general meeting of MergeCo following the consummation of the Business Combination. In the case of election of directors, all matters to be voted on by shareholders must be approved by a plurality of the votes entitled to be cast by all shareholders present in person or represented by proxy, voting together as a single class. If any vacancy arises on the MergeCo Board from time to time, that vacancy may be filled by the decision of a majority of the MergeCo Board then in office, |
Q. | What happens to the funds deposited in the Trust Account after consummation of the Business Combination? |
A. | Following the closing of the IPO, an amount equal to $213,088,130 ($10.00 per unit) from the net proceeds of the sale of Twin Ridge Units and Private Placement Warrants was placed in the Trust Account. At May 15, 2023, we had cash and investments held in the Trust Account of approximately $65,207,912. 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, 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 Twin Ridge’s share capital or debt is used, in whole or in part, as consideration to complete the 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 Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights? |
A. | The Public Shareholders are not required to vote “FOR” the Business Combination in order to exercise their Redemption Right. 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 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Shareholders | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % |
Holders of Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 21.04% | | | 4,699,984 | | | 16.65% | | | 1,566,661 | | | 6.25% | | | — | | | 0.0% |
Holders of Twin Ridge Class B Ordinary Shares(5) | | | 5,000,000 | | | 16.79% | | | 5,000,000 | | | 17.72% | | | 5,000,000 | | | 19.93% | | | 5,000,000 | | | 21.26% |
Yorkville Advisors(6) | | | 15,000 | | | 0.05% | | | 15,000 | | | 0.05% | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.06% |
Existing Carbon Revolution Equityholders | | | 18,504,812 | | | 62.12% | | | 18,504,812 | | | 65.57% | | | 18,504,812 | | | 73.76% | | | 18,504,812 | | | 78.68% |
Total Shares Outstanding Excluding Additional Dilution Sources | | | 29,786,457 | | | 100.00% | | | 28,219,796 | | | 100.00% | | | 25,086,473 | | | 100.00% | | | 23,519,812 | | | 100.00% |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Additional Dilution Sources | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) |
MergeCo Warrants | | | 12,210,780 | | | 25.19% | | | 12,210,780 | | | 26.03% | | | 12,210,780 | | | 27.89% | | | 12,210,780 | | | 28.93% |
Carbon Revolution Performance Rights(8) | | | 168,077 | | | 0.35% | | | 168,077 | | | 0.36% | | | 168,077 | | | 0.38% | | | 168,077 | | | 0.40% |
Committed Equity Financing(9) | | | 6,315,789 | | | 13.03% | | | 6,315,789 | | | 13.46% | | | 6,315,789 | | | 14.43% | | | 6,315,789 | | | 14.96% |
Total Additional Dilution Sources | | | 18,694,646 | | | 38.56% | | | 18,694,646 | | | 39.85% | | | 18,694,646 | | | 42.70% | | | 18,694,646 | | | 44.28% |
(1) | This scenario assumes that no Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(2) | This scenario assumes that 1,566,661 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(3) | This scenario assumes that 4,699,984 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the net proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(4) | This scenario assumes that 6,266,645 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that |
(5) | Excludes 327,203 of the Sponsor’s Twin Ridge Class B Ordinary Shares that shall automatically be forfeited and surrendered to Twin Ridge for no additional consideration immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger. |
(6) | Represents the commitment fee of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors in connection with the Committed Equity Financing which takes effect at Closing. |
(7) | The Equity % with respect to each Additional Dilution Source set forth above, 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 25% redemption scenario, the Equity % with respect to the MergeCo Warrants would be calculated as follows: (a) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants; divided by (b) (i) 28,219,796 MergeCo Ordinary Shares (the number of MergeCo Ordinary Shares outstanding prior to any issuance pursuant to the MergeCo Warrants or Carbon Revolution Performance Rights) plus (ii) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants, 168,077 MergeCo Ordinary Shares issued pursuant to the Carbon Revolution Performance Rights and 6,315,789 pursuant to the Committed Equity Financing. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the number of issued and outstanding MergeCo Ordinary Shares immediately after the closing of the Business Combination (such number of issued and outstanding MergeCo Ordinary Shares, the “Total Shares Outstanding”) promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). |
(8) | Consists of performance rights, as of , 2023. Assumes that none of such securities are converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date. If such performance rights are not converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date, such performance rights will be exchanged for performance rights with respect to MergeCo Ordinary Shares pursuant to the Scheme. These 168,077 performance rights relate to performance rights currently on issue under Carbon Revolution’s STI plans. All options and performance rights issued under Carbon Revolution’s LTI plans will be cancelled. Additional dilution will occur when performance rights or options are issued to employees post completion of the Business Combination. As disclosed in “2023 Incentive Equity Plan”, prior to the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, the MergeCo Board and MergeCo’s shareholders will approve and adopt the Carbon Revolution FY2023 Incentive Equity Plan (the “2023 Incentive Equity Plan”) which will reserve for grant a number of MergeCo Ordinary Shares or other forms of equity in MergeCo. Such grants may include both one-off retention grants, and business-as-usual grants in respect of FY2023. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the Total Shares Outstanding promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). Shares or other equities issued under the Equity Incentive Plan are not included in the table above and would result in an increase of the number of equities on issue which would be dilutive to existing shares. |
(9) | Represents the issuance of 6,315,789 MergeCo Ordinary Shares pursuant to the Committed Equity Financing. The terms of the Committed Equity Financing provide for a purchase price equal to 95% or 97% of the volume-weighted average price of MergeCo Ordinary Shares for a specified period, depending upon which specified period is selected. This amount assumes conversion at $9.50, which is the lower of such purchase prices, assuming the volume-weighted average price is equal to the assumed trading price of $10.00 per share the deemed value of MergeCo Ordinary Shares in the Business Combination for determining the number of MergeCo Ordinary Shares issuable to holders of Carbon Revolution Shares and assumes the issuance of all shares issuable pursuant to the terms of the Equity Purchase Agreement. |
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 and the Merger Proposal by Twin Ridge shareholders and the transactions contemplated thereby; (b) the waiting period (or any extension thereof) applicable to the consummation of the transactions contemplated by the Scheme Implementation Deed 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 MergeCo Ordinary Shares to be issued in connection with the Business Combination having been approved for listing on a U.S. stock exchange; (e) since November 29, 2022, there shall not have occurred a Material Adverse Effect (as defined in the Business Combination Agreement), the material adverse effects of which are continuing; (f) at 8:00 a.m. on the Second Court Date, MergeCo and its subsidiaries (in aggregate) shall be reasonably expected to have, immediately following the Implementation Date and following exercise by Twin Ridge Shareholders of their Redemption |
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 second half of 2023. |
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 Twin Ridge to complete its initial business combination (which will be the Business Combination should it occur) is July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
Q. | What differences will there be between the Existing Organizational Documents and the MergeCo Amended and Restated Memorandum and Articles of Association following the Closing? |
A. | This proxy statement/prospectus describes the material differences between the rights of Public Shareholders before the consummation of the Business Combination, and the rights of MergeCo shareholders after the Business Combination. See “Comparison of Corporate Governance and Shareholder Rights” for more information. These differences in shareholders rights result from the differences between the respective governing documents of Twin Ridge under Cayman Islands law and MergeCo under the law of Ireland. |
Q. | Why is Twin Ridge proposing the Adjournment Proposal? |
A. | Twin Ridge 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, if necessary, (i) to permit further solicitation and vote of proxies for the purpose of obtaining approval of the Business Combination Proposal and Merger Proposal; (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 MergeCo Ordinary Shares and MergeCo Warrants would not be approved for listing on the NYSE or Nasdaq or (b) the MergeCo Net Tangible Assets would not be satisfied at Closing. See the section titled “Shareholder Proposal 4 – The Adjournment Proposal” for additional information. |
Q. | Who is entitled to vote at the General Meeting? |
A. | Twin Ridge has fixed , 2023 as the Record Date. If you are a shareholder of Twin Ridge 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 Twin Ridge Ordinary Shares at the General Meeting: |
Q. | What if I do not vote my Twin Ridge Class A Ordinary Shares or if I abstain from voting? |
A. | The approval of the Business Combination Proposal, the Equity 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 Twin Ridge Ordinary Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting. Approval of the Merger Proposal requires a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the outstanding Twin Ridge 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 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 and the Merger Proposal are approved. If Twin Ridge does not complete an initial business combination (which will be the Business Combination should it occur) by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), Twin Ridge will be required to dissolve and liquidate itself and return the monies held within its Trust Account to its Public Shareholders unless Twin Ridge submits and its shareholders approve an extension. |
Q. | How does the Twin Ridge Board recommend that I vote on the Shareholder Proposals? |
A. | The Twin Ridge Board unanimously recommends that the holders of Twin Ridge Ordinary Shares entitled to vote on the Shareholder Proposals, vote as follows: |
Q. | How many votes do I have? |
A. | Twin Ridge shareholders have one vote per each Twin Ridge Ordinary Share held by them on the Record Date for each of the Twin Ridge Shareholder Proposals to be voted upon. |
Q. | How will the Sponsor and Twin Ridge’s officers and directors vote in connection with the Required Twin Ridge Shareholder Proposals? |
A. | As of the Record Date, the Founder Holders owned of record an aggregate of 5,327,203 Twin Ridge Class B Ordinary Shares, representing approximately 46% of the issued and outstanding Twin Ridge Ordinary Shares. |
Q. | How do the Public Warrants differ from the Private Placement Warrants and what are the related risks for any holders of MergeCo 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 MergeCo 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 MergeCo 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 Twin Ridge Class A Ordinary Shares? |
A. | Under Section 49.5 of the Existing Organizational Documents, prior to the completion of the Business Combination, Twin Ridge 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 Twin Ridge may not redeem such shares to the extent that such redemption would result in Twin Ridge having net tangible assets (as determined under the Exchange Act) of less than $5,000,001 upon the completion of the |
Q. | Can the Founder Holders redeem their Founder Shares in connection with the consummation of the Business Combination? |
A. | The Founder Holders 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, Twin Ridge directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination? |
A. | The Sponsor and Twin Ridge’s directors, officers, advisors or their affiliates may purchase Twin Ridge Class A Ordinary Shares in privately negotiated transactions or in the open market either prior to or after the Closing, including from Twin Ridge 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 Twin Ridge 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 or the tender offer rules 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 Twin Ridge 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 Twin Ridge’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 |
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 demand redemption no later than 5:00 p.m., Eastern Time, on , 2023 (two Business Days before the General Meeting) by (a) submitting a written request to the Transfer Agent that Twin Ridge redeem such holder’s Public Shares for cash, (b) affirmatively certifying in such request to the Transfer Agent for redemption if such holder is acting in concert or as a “group” (as defined in Section 13 d-3 of the Exchange Act) with any other shareholder with respect to Twin Ridge Ordinary Shares and (c) delivering their Twin Ridge Ordinary Shares, either physically or electronically using DTC’s DWAC system, at the holder’s option, to the Transfer Agent prior to the General Meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered to the Transfer Agent (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the Business Combination is not completed, this may result in an additional cost to shareholders for the return of their shares. |
Q. | If I am a holder of Twin Ridge Units, can I exercise redemption rights with respect to my Twin Ridge Units? |
A. | No. Holders of issued and outstanding Twin Ridge Units must elect to separate the Twin Ridge 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 , 2023 (two Business Days before the General Meeting) in order to exercise your redemption right with respect to your Public Shares. |
• | US$13.1 million in costs (comprising approximately US$8.8 million for the premium on the insurance for the program (described further below) plus various fees and transactional costs relating to the New Debt Program) was deducted from the proceeds; |
• | US$9.9 million was used to repay the amounts owed by the Company to previous key lenders (including Export Finance Australia and Timelio); and |
• | US$15.5 million was deposited into certain reserve funds of which US$5.7 million will be released once certain insurance endorsement conditions are met, which are expected to occur within 30 days. US$5 million is scheduled to be released after six months if not required for covenant cures in that period, US$0.3 million will be used for initial interest payment and the balance of US$4.4 million is held as a payment reserve. |
• | agreed threshold for revenue, assessed monthly on a rolling trailing six month basis with specific agreed targets for each testing period, with the first testing period being the 6 months expiring June 30, 2023; |
• | agreed threshold for Adjusted EBITDA, assessed monthly on a rolling trailing six month basis with specific agreed targets for each testing period, with the first testing period being the 6 months expiring June 30, 2023; |
• | maximum capital expenditure (capex) limits, initially assessed on a rolling trailing six months with specific agreed maximum capex for each testing period with the first testing period being the 6 months expiring June 30, 2023, and moving to a rolling trailing 12 months basis in January 2024; and |
• | liquidity ratios based on remaining months of liquidity assessed monthly based on the monthly Adjusted EBITDA for the 3 most recent months until the Adjusted EBITDA of the Group becomes positive, following which the measure will be based on a current ratio. |
• | failure to make a payment due under the agreement by the due date; |
• | existence of circumstances which could result in a Material Adverse Effect; |
• | a change in control of the Carbon Revolution Group (prior to the Business Combination); |
• | events of insolvency, judgment debt, asset seizure and impairment of security; |
• | material misrepresentation; and |
• | if any portion of the guaranty ceases to be in full force and effect. |
• | manual labor hours required to produce wheels being higher than anticipated, higher materials or supply chain costs than anticipated, wheel programs may experience delays in development or production, or wheel production volume increases may not be as expected or may not materialize; |
• | Carbon Revolution may not be able to achieve its manufacturing quality, volume and cost targets (including targets relating to reduction in labor cost per wheel and materials cost per wheel); |
• | Carbon Revolution may not be able to increase its capacity to service customer demand or the cost to increase capacity may be more than expected, or it may otherwise be unable to execute its industrialization plans, including the Mega-line project, as planned; |
• | Carbon Revolution may be exposed to volatility in demand, resulting in disruption to Carbon Revolution’s operations and supply chain and increased costs; |
• | Carbon Revolution may not have the flexibility to adjust its raw material supply orders on short notice based on the fluctuations in its customer’s orders, which may adversely affect Carbon Revolution’s profitability, cash flow and operations; or |
• | Carbon Revolution’s equipment not performing to the level expected, or product quality not being to the level expected. |
• | geopolitical and economic instability in and impacting the localities where we have foreign operations; |
• | rising inflation impacting the stability of our workforce and foreign operations; |
• | military conflicts impacting the localities where we have foreign operations; |
• | limited protection for, and vulnerability to theft of, our intellectual property rights, including our trade secrets; |
• | compliance with local laws and regulations, and unanticipated changes in local laws and regulations, including tax laws and regulations; |
• | trade and foreign exchange restrictions and higher tariffs; |
• | the complexity of managing international trade sanctions and export restrictions from the jurisdictions in which we have foreign operations; |
• | fluctuations in foreign currency exchange rates which may increase our expenses for employee compensation and other operating expenses that are paid in currencies other than U.S. dollars; |
• | restrictions imposed by the United States government against other countries, or foreign governments’ restrictions imposed on the United States, impacting our ability to do business with certain companies or in certain countries and the complexity of complying with those restrictions; |
• | power outages, natural disasters, and other local events that could affect the availability of the internet and the consequences of disruptions, such as large-scale outages or interruptions of service from utilities or telecommunications providers; |
• | difficulties in staffing international operations; |
• | changes in immigration policies which may impact our ability to hire personnel; |
• | differing employment practices, laws, and labor relations; |
• | regional health issues and the impact of public health epidemics and pandemics on employees and the global economy, such as the COVID-19 pandemic; and |
• | disruptions posed by the COVID-19 pandemic and related government restrictions or other government responses. |
• | Lack of appropriately designed, implemented and documented procedures and controls at both entity- and process-level to allow for Carbon Revolution to achieve complete, accurate and timely financial reporting. This is pervasive across the entity-level and each of the key business processes, including controls over the preparation and review of account reconciliations and journal entries, and controls over information technology to ensure access to financial data is adequately restricted to appropriate personnel. |
• | Segregation of duties has not been sufficiently established across the key business and financial processes. Given the size, nature of the organization and the current structure of the finance function, a lack of segregation of duties applied to the key business and financial processes across the organization has been identified. A consequence of the lack of segregation of duties is the heightened risk of fraud or material misstatement when no appropriate mitigating controls are in place. |
• | Lack of personnel with appropriate knowledge and experience relating to SEC reporting requirements to enable the entity to design and maintain an effective financial reporting process. A lack of knowledge and experience in these areas may lead to the Company being in breach of SEC financial reporting and other related requirements, especially given that the current finance function has not been designed to include sufficient accounting and financial reporting personnel with the requisite knowledge and experience in the application of SEC financial reporting rules and regulations. |
• | Reasonableness of the aggregate consideration to be paid to the Public Shareholders under the Business Combination Agreement and the Scheme Implementation Deed. Following a review of the financial data |
• | Mission-Driven Leadership Team with a Strong Track Record. The Twin Ridge Board believes that Carbon Revolution has a strong, experienced public company management team with a proven track record of operational excellence. Twin Ridge is confident in the management team’s deep industry knowledge and strategic vision and believes that the Twin Ridge and Carbon Revolution teams will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. Twin Ridge believes that Jacob Dingle, who is contemplated to serve as Chief Executive Officer of MergeCo, and Gerard Buckle, who is contemplated to serve as Chief Financial Officer of MergeCo, following the Closing, will provide important continuity in advancing Carbon Revolution’s strategic and growth objectives. |
• | Due Diligence. The Twin Ridge Board reviewed and discussed in detail the results of the due diligence examination of Carbon Revolution conducted by Twin Ridge’s management team and Twin Ridge’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of Carbon Revolution regarding Carbon Revolution’s business plan, operations, prospects and forecasts 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 such as Carbon Revolution’s commercial agreements with Deakin University, government research grants from the Australian and Victorian government, supplier agreements with material suppliers, engineering and procurement firms, material contracts with top OEM customers and related purchase orders, licensing provisions in contractor agreements and research agreements related to key research partnerships, Carbon Revolution’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. The Twin Ridge Board reviewed factors such as Carbon Revolution’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the Twin Ridge Board believed that Carbon Revolution was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors. |
• | Reasonableness of Consideration. Following a review of the financial data provided to Twin Ridge, and the due diligence of Carbon Revolution’s business conducted by Twin Ridge’s management and Twin Ridge’s advisors, the management of Twin Ridge determined that the aggregate consideration to be paid in the Business Combination was reasonable. |
• | Post-Closing Economic Interest in MergeCo. If the Business Combination is consummated, Twin Ridge’s shareholders (other than Twin Ridge’s shareholders that sought redemption of their Twin Ridge Ordinary Shares) would have a meaningful economic interest in MergeCo and, as a result, would have a continuing opportunity to benefit from the success of Carbon Revolution following the consummation of the Business Combination. |
• | Lock-Up. Pursuant to the Registration Rights Agreement, certain members of management and all of the directors of Carbon Revolution, the Sponsor Parties, Ms. Burns, Mr. Henrys and Mr. Pilnick (together with their respective successors and any permitted transferees) will agree to be subject to a 180-day lock-up from the Closing Date in respect of their MergeCo Ordinary Shares received in the Business Combination (subject to certain customary exceptions). |
• | Financing. The agreement of Yorkville Advisors to provide a committed equity facility in an aggregate amount of up to $60 million for MergeCo Ordinary shares, subject to the terms of the Equity Purchase Agreement. |
• | Industry and Trends. Carbon Revolution’s business is based in a proprietary technology and research and development manufacturing industry focused on supply chain integrity that the Twin Ridge Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Twin Ridge Board believes has continued growth potential in future periods. |
• | Negotiated Transaction. The Twin Ridge Board considered the terms and conditions of the Business Combination Agreement, the Scheme Implementation Deed and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both Twin Ridge and Carbon Revolution to complete the Business Combination. The Twin Ridge Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Carbon Revolution and Twin Ridge. |
• | Other Alternatives. After a review of other business combination opportunities reasonably available to Twin Ridge, the Twin Ridge Board believes that the proposed Business Combination represents the best potential business combination reasonably available to Twin Ridge taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives. |
• | Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate a certain number of members of the MergeCo Board following the Business Combination, which the Twin Ridge Board believes will allow for the combined company to benefit from the Sponsor’s professional relationships to identify potential board members that will have appropriate industry and/or financial knowledge and professional experience to oversee the combined company and drive returns for shareholders. See “Comparison of Corporate Governance and Shareholder Rights” for more information. |
• | Advisor SPAC Experience. The fact that representatives of the Advisor that provided advice to Twin Ridge on financial and strategic matters in connection with the Business Combination have expertise in a wide variety of SPAC transactions. Gregory Ethridge and Nicholas Petruska have held and hold officer positions at multiple SPACs that have successfully completed business combinations in the advanced mobility, automotive and automotive technology sectors. |
• | Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe. |
• | Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination. |
• | Shareholder Vote. Twin Ridge’s shareholders may fail to approve the proposals necessary to effect the Business Combination. |
• | Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Twin Ridge’s control, including the receipt of certain required regulatory approvals. |
• | Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
• | Listing Risks. The challenges associated with preparing Carbon Revolution, for the applicable disclosure and listing requirements to which Carbon Revolution will be subject as a publicly traded company in the United States. |
• | Market Volatility. The possibility that the market for Twin Ridge Class A Ordinary Shares experiences volatility and disruptions, causing deal disruption. |
• | Liquidation. The risks and costs to Twin Ridge if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Twin Ridge being unable to effect an initial business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
• | Redemption Risk. The potential that a significant number of Twin Ridge’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of Twin Ridge’s shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination. |
• | Exclusivity. The fact that the Business Combination Agreement and Scheme Implementation Deed includes an exclusivity provision that prohibits Carbon Revolution and Twin Ridge from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—The Business Combination, the Business Combination Agreement and the Scheme Implementation Deed—Covenants of the Parties—Exclusivity”. |
• | Litigation. The possibility of shareholder litigation challenging the Business Combination. |
• | COVID-19. The impact of the COVID-19 pandemic on Carbon Revolution's business. |
• | Waiver of Corporate Opportunity Doctrine. The Existing Organizational Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that have been appropriate for a combination with Twin Ridge but were not offered due to a Twin Ridge director’s duties to another entity. Twin Ridge and its management are not aware of any such corporate opportunities not being offered to Twin Ridge and does not believe that the waiver of the corporate opportunity doctrine in its Existing Organizational Documents interfered with its ability to identify an acquisition target, including the decision to pursue the Business Combination. |
• | Interests of Certain Persons. The Sponsor, Twin Ridge’s officers and certain of its directors may have interests in the Business Combination (see “Shareholder Proposal 1 – The Business Combination Proposal—Interests of Certain Persons in the Business Combination”). |
• | Fees and Expenses. The associated fees and expenses were waived by the underwriters (see “Shareholder Proposal 1 – The Business Combination Proposal—Background to the Business Combination”. |
• | Other Risk Factors. Various other risk factors associated with the business of Carbon Revolution, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. |
• | Fairness Opinion. Craig-Hallum, Twin Ridge’s financial advisor, provided its Fairness Opinion to the Twin Ridge Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to Twin Ridge and (ii) the fair market value of Carbon Revolution equals or exceeds 80% of the amount held by Twin Ridge in trust for benefit of its Public Shareholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Craig-Hallum was limited to the fairness of the aggregate consideration to be received by all of the Twin Ridge shareholders, collectively as a group, including the Sponsor and its affiliates. Craig-Hallum did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other shareholders of Twin Ridge. |
1. | the Court, on the First Court Date, approving the dispatch of the Scheme Booklet and the convening of the Scheme Meeting; |
2. | Carbon Revolution shareholders approving the Scheme and Capital Reduction at the Scheme Meeting and general meeting; |
3. | ASIC producing: |
a. | an indication of intent letter stating that it does not intend to appear before the Court on the First Court Date; and |
b. | a statement under paragraph 411(17)(b) of the Corporations Act stating that ASIC has no objection to the Scheme on the Second Court Date; and |
4. | the Court, on the Second Court Date, approving the Scheme as agreed to by the Carbon Revolution shareholders at the Scheme Meeting. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, |
• | each of which may make it difficult for us to complete our initial business combination. |
• | In addition, we may have imposed upon us burdensome requirements, including: |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
• | changes in the industry in which MergeCo and its customers operate; |
• | variations in its operating performance and the performance of its competitors in general; |
• | the impact of the COVID-19 pandemic on the markets and the broader global economy; |
• | actual or anticipated fluctuations in MergeCo’s annual or interim operating results; |
• | publication of research reports by securities analysts about MergeCo or its competitors or its industry; |
• | the public’s reaction to MergeCo’s press releases, its other public announcements and its filings with the SEC; |
• | MergeCo’s failure or the failure of its competitors to meet analysts’ projections or guidance that MergeCo or its 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 relevant U.S. stock exchange; |
• | actual, potential or perceived control, accounting or reporting problems; |
• | commencement of, or involvement in, litigation involving MergeCo; |
• | changes in MergeCo’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of MergeCo’s capital stock available for public sale; |
• | general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, sanctions, export controls, 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” section. |
• | your proportionate ownership interest in MergeCo following the Closing will decrease; |
• | the relative voting strength of each previously outstanding share of MergeCo Ordinary Shares following the Business Combination will be diminished; or |
• | the market price of the MergeCo Ordinary Shares and the Public Warrants may decline. |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Shareholders | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % | | | Ownership in Shares | | | Equity % |
Holders of Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 21.04% | | | 4,699,984 | | | 16.65% | | | 1,566,661 | | | 6.25% | | | — | | | 0.0% |
Holders of Twin Ridge Class B Ordinary Shares(5) | | | 5,000,000 | | | 16.79% | | | 5,000,000 | | | 17.72% | | | 5,000,000 | | | 19.93% | | | 5,000,000 | | | 21.26% |
Yorkville Advisors(6) | | | 15,000 | | | 0.05% | | | 15,000 | | | 0.05% | | | 15,000 | | | 0.06% | | | 15,000 | | | 0.06% |
Existing Carbon Revolution Equityholders | | | 18,504,812 | | | 62.12% | | | 18,504,812 | | | 65.57% | | | 18,504,812 | | | 73.76% | | | 18,504,812 | | | 78.68% |
Total Shares Outstanding Excluding Additional Dilution Sources | | | 29,786,457 | | | 100.00% | | | 28,219,796 | | | 100.00% | | | 25,086,473 | | | 100.00% | | | 23,519,812 | | | 100.00% |
| | Assuming No Redemption(1) | | | Assuming 25% Redemption(2) | | | Assuming 75% Redemption(3) | | | Assuming Maximum Redemption(4) | |||||||||||||
Additional Dilution Sources | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) | | | Ownership in Shares | | | Equity %(7) |
MergeCo Warrants | | | 12,210,780 | | | 25.19% | | | 12,210,780 | | | 26.03% | | | 12,210,780 | | | 27.89% | | | 12,210,780 | | | 28.93% |
Carbon Revolution Performance Rights(8) | | | 168,077 | | | 0.35% | | | 168,077 | | | 0.36% | | | 168,077 | | | 0.38% | | | 168,077 | | | 0.40% |
Committed Equity Financing(9) | | | 6,315,789 | | | 13.03% | | | 6,315,789 | | | 13.46% | | | 6,315,789 | | | 14.43% | | | 6,315,789 | | | 14.96% |
Total Additional Dilution Sources | | | 18,694,646 | | | 38.56% | | | 18,694,646 | | | 39.85% | | | 18,694,646 | | | 42.70% | | | 18,694,646 | | | 44.28% |
(1) | This scenario assumes that no Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(2) | This scenario assumes that 1,566,661 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(3) | This scenario assumes that 4,699,984 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(4) | This scenario assumes that 6,266,645 Twin Ridge Class A Ordinary Shares are redeemed by Twin Ridge shareholders, after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting after taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting. The Business Combination Agreement and Scheme Implementation Deed provide that Carbon Revolution’s obligation to consummate the Business Combination is conditioned on, among other things, MergeCo being reasonably expected to have at least $5,000,001 of net tangible assets upon closing of the Business Combination. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of the Trust Account and decreased by the transaction expenses described in the table above, as well as increased by the proceeds of any equity financing obtained by MergeCo in connection with the closing of the Business Combination. MergeCo expects net tangible assets to exceed $5,000,001 upon closing of the Business Combination even in a Maximum Redemption Scenario. See “Business of Twin Ridge and Certain Information About Twin Ridge-Extension of Time to Complete a Business Combination” for more information on the Extension Meeting. |
(5) | Excludes 327,203 of the Sponsor’s Twin Ridge Class B Ordinary Shares that shall automatically be forfeited and surrendered to Twin Ridge for no additional consideration immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger. |
(6) | Represents the commitment fee of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors in connection with the Committed Equity Financing which takes effect at Closing. |
(7) | The Equity % with respect to each Additional Dilution Source set forth above, 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 25% redemption scenario, the Equity % with respect to the MergeCo Warrants would be calculated as follows: (a) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants; divided by (b) (i) 28,219,796 MergeCo Ordinary Shares (the number of MergeCo Ordinary Shares outstanding prior to any issuance pursuant to the MergeCo Warrants or Carbon Revolution Performance Rights) plus (ii) 12,210,780 MergeCo Ordinary Shares issued pursuant to the MergeCo Warrants, 168,077 MergeCo Ordinary Shares issued pursuant to the Carbon Revolution Performance Rights and 6,315,789 pursuant to the Committed Equity Financing. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the Total Shares Outstanding promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). |
(8) | Consists of performance rights, as of , 2023. Assumes that none of such securities are converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date. If such performance rights are not converted into Carbon Revolution ordinary shares on or prior to the Scheme Record Date, such performance rights will be exchanged for performance rights with respect to MergeCo Ordinary Shares pursuant to the Scheme. These 168,077 performance rights relate to performance rights currently on issue under Carbon Revolution’s STI plans. All options and performance rights issued under Carbon Revolution’s LTI plans will be cancelled. Additional dilution will occur when performance rights or options are issued to employees post completion of the Business Combination. As disclosed in “2023 Incentive Equity Plan”, prior to the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, the MergeCo Board and MergeCo’s shareholders will approve and adopt the Carbon Revolution FY2023 Incentive Equity Plan (the “2023 Incentive Equity Plan”) which will reserve for grant a number of MergeCo Ordinary Shares or other forms of equity in MergeCo. Such grants may include both one-off retention grants, and business-as-usual grants in respect of FY2023. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the Total Shares Outstanding promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares |
(9) | Represents the issuance of 6,315,789 MergeCo Ordinary Shares pursuant to the Committed Equity Financing. The terms of the Committed Equity Financing provide for a purchase price equal to 95% or 97% of the volume-weighted average price of MergeCo Ordinary Shares for a specified period, depending upon which specified period is selected. This amount assumes conversion at $9.50, which is the lower of such purchase prices, assuming the volume-weighted average price is equal to the assumed trading price of $10.00 per share the deemed value of MergeCo Ordinary Shares in the Business Combination for determining the number of MergeCo Ordinary Shares issuable to holders of Carbon Revolution Shares and assumes the issuance of all shares issuable pursuant to the terms of the Equity Purchase Agreement. |
• | a limited availability of market quotations for MergeCo’s securities; |
• | reduced liquidity for MergeCo’s securities; |
• | a determination that MergeCo Ordinary Shares are a “penny stock” which will require brokers trading in the MergeCo Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for MergeCo’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. |
• | require that the Post-Combination Company’s board of directors be classified into three classes of directors with staggered three-year terms; |
• | permit the Post-Combination Company’s board of directors to fill any vacancies; and |
• | prohibit shareholder action by written consent without unanimous approval of all holders of the MergeCo Ordinary Shares. |
• | the Business Combination Proposal; |
• | the Merger Proposal; |
• | the Equity Incentive Plan Proposal; and |
• | the Adjournment Proposal, if presented. |
• | you may send another proxy card with a later date; |
• | you may notify Twin Ridge’s Chief Financial Officer 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 (including by virtual means), as indicated above. |
(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 |
(ii). | prior to 5:00 p.m., Eastern Time on , 2023, (a) submit a written request to the Transfer Agent in which you (i) request that Twin Ridge 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 Continental Stock Transfer & Trust Company, Twin Ridge’s transfer agent, physically or electronically through DTC. |
• | financial institutions; |
• | insurance companies; |
• | mutual funds; |
• | pension plans; |
• | S corporations; |
• | broker-dealers; |
• | traders in securities that elect mark-to-market treatment; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | trusts and estates; |
• | tax-exempt organizations (including private foundations); |
• | investors that hold Twin Ridge Class A Ordinary Shares or Public Warrants or who will hold MergeCo Ordinary Shares or MergeCo Public 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 that have a functional currency other than the U.S. dollar; |
• | U.S. expatriates; |
• | U.S. Holders owning or considered as owning (directly, indirectly, or through attribution) 5 percent (measured by vote or value) or more of Twin Ridge Class A Ordinary Shares, or, following the Merger, MergeCo Ordinary Shares; |
• | persons who purchase MergeCo Ordinary Shares as part of the PIPE Committed Equity Financing; |
• | persons who received any Twin Ridge Class A Ordinary Shares as compensation; |
• | accrual method taxpayers that file applicable financial statements as described in Section 451(b); |
• | investors subject to the U.S. “inversion” rules; and |
• | persons who are not U.S. Holders, all of whom may be subject to tax rules that differ materially from those summarized below. |
• | an individual who is a U.S. 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 U.S. court and which has one or more U.S. 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 U.S. person. |
• | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the MergeCo Ordinary Shares or MergeCo Public Warrants; |
• | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of the First PFIC Holding Year, will be taxed as ordinary income; |
• | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder. |
• | there is no change in the beneficial ownership of such shares as a result of the transfer; and |
• | the transfer into (or out of) DTC is not effected in contemplation of a sale of such shares or warrants by a beneficial owner to a third party. |
• | a person (not being a company) resident for tax purposes in a Relevant Territory (including the United States) and is neither resident nor ordinarily resident in Ireland (for a list of Relevant Territories for DWT purposes, please see Annex K to this proxy statement/prospectus); |
• | a company resident for tax purposes in a Relevant Territory, provided such company is not under the control, whether directly or indirectly, of a person or persons who is or are resident in Ireland; |
• | a company that is controlled, directly or indirectly, by persons resident in a Relevant Territory and who is or are (as the case may be) not controlled by, directly or indirectly, persons who are not resident in a Relevant Territory; |
• | a company whose principal class of shares (or those of its 75% direct or indirect parent) is substantially and regularly traded on a stock exchange in Ireland, on a recognized stock exchange either in a Relevant Territory or on such other stock exchange approved by the Irish Minister for Finance; or |
• | a company that is wholly-owned, directly or indirectly, by two or more companies where the principal class of shares of each of such companies is substantially and regularly traded on a stock exchange in Ireland, a recognized stock exchange in a Relevant Territory or on such other stock exchange approved by the Irish Minister for Finance, |
• | its broker (and the relevant information is further transmitted to any qualifying intermediary appointed by MergeCo) before the record date for the distribution (or such later date before the distribution payment date as may be notified to the holder of MergeCo Ordinary Shares by the broker) if its MergeCo Ordinary Shares are held through DTC; or |
• | MergeCo’s transfer agent before the record date for the distribution if its MergeCo Ordinary Shares are held outside of DTC. |
• | Each Twin Ridge Class B Ordinary Share, shall convert automatically, on a one-for-one basis, into a Twin Ridge Class A Ordinary Share; |
• | Immediately after the Pre-Merger Conversion, each Twin Ridge Class A Ordinary Share shall be automatically cancelled in exchange for one validly issued, fully paid and non-assessable MergeCo Ordinary Share; |
• | Each Public Warrant shall be automatically exchanged to become one MergeCo Public Warrant. Each such MergeCo Public Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement, pursuant to which such Twin Ridge Public Warrant was issued immediately prior to the Twin Ridge Merger Effective Time; and |
• | Each Private Placement Warrant shall be automatically exchanged to become one MergeCo Public Warrant (each, a “MergeCo Founder Warrant”). Each such MergeCo Founder Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement pursuant to which such Twin Ridge Private Warrant was issued immediately prior to the Twin Ridge Merger Effective Time. |
• | Certain governmental, court and regulatory approval of the transactions contemplated by the Business Combination Agreement and Scheme Implementation Deed; |
• | Carbon Revolution obtains necessary shareholder approval; |
• | The approval of the Required Twin Ridge Shareholder Proposals at the General Meeting will have been obtained; |
• | Twin Ridge's business combination deadline is extended to a date not earlier than May 31, 2023, or such other date that the parties to the Scheme Implementation Deed may agree and, following exercise by Twin Ridge shareholders of their redemptions rights, Twin Ridge continues to satisfy the continued listing standards of NYSE, NYSE American or Nasdaq and will continue to satisfy such continued listing standards until the Implementation Date (as defined in the Scheme Implementation Deed); |
• | 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 Business Combination Agreement is not terminated or rescinded and has otherwise not ceased to have effect in accordance with its terms; |
• | MergeCo is reasonably expected to have, immediately following the Implementation Date (as defined in the Scheme Implementation Deed) at least $5,000,001 of net tangible assets (as determined in accordance with 3a51-1(g)(1) of the Exchange Act) assuming certain redemptions as described in the Scheme Implementation Deed; |
• | MergeCo Ordinary Shares are issued pursuant to the Scheme Implementation Deed being approved for listing on either NYSE, NYSE American or Nasdaq; and |
• | MergeCo enters into a composition agreement with the Revenue Commissioners of Ireland and a Special Eligibility Agreement for Securities with the Depository Trust Company in respect of the MergeCo Ordinary Shares and MergeCo Warrants. |
• | No temporary, preliminary, or final order, injunction, decision, decree or legal restraint or prohibition and no action or investigation by any Australian, United States or Irish Government Agency which prevents completion of the Business Combination. |
• | Neither the Carbon Revolution Prescribed Occurrence or MergeCo Prescribed Occurrence (as both are defined in the Scheme Implementation Deed) has occurred; and |
• | Certain representations and warranties of Carbon Revolution and MergeCo, are true and correct in all material respects as at the date of the Scheme Implementation Deed and the Second Court Date. |
• | An independent expert’s report (as chosen in accordance with the Scheme Implementation Deed) is issued and concludes that the Capital Reduction and Scheme are in the best interests of Carbon Revolution shareholders; |
• | No SPAC Prescribed Occurrence (as defined in the Scheme Implementation Deed) occurs; |
• | A duly executed Registration Rights Agreement is delivered by Twin Ridge to MergeCo and Carbon Revolution; |
• | The CEF remains in full force and effect; and |
• | Certain representations and warranties of Twin Ridge are true and correct in all material respects as at the date of the Scheme Implementation Deed and the Second Court Date (as defined in the Scheme Implementation Deed). |
• | Carbon Revolution has the requisite authority, and power, to enter into the Business Combination Agreement and the Scheme Implementation Deed and to complete the contemplated transactions; |
• | Carbon Revolution’s implementation of the transactions contemplated by the Scheme Implementation Deed, the Business Combination Agreement and each other transaction document will not result in default by Carbon Revolution under its constitution or any applicable material writ, order, injunction, judgement, law, rule or regulation; |
• | The validity and binding effect of the Scheme Implementation Deed on Carbon Revolution; |
• | Carbon Revolution’s compliance with laws, including continuous disclosure obligations; |
• | Carbon Revolution’s capital structure; |
• | The lack of an insolvency event or regulatory action involving Carbon Revolution; |
• | Carbon Revolution has all necessary licenses, authorizations and permits for it to conduct its business; and |
• | Other than certain governmental and regulatory consents and approvals specified in the Scheme Implementation Deed, no other consents from government agencies are necessary in connection with the Scheme Implementation Deed, Business Combination Agreement and each transaction document related to the Business Combination to which Carbon Revolution is a party. |
• | MergeCo has the requisite authority, and power, to enter into the Business Combination Agreement and the Scheme Implementation Deed and to complete the contemplated transactions; |
• | Implementation of the transactions contemplated by the Scheme Implementation Deed, the Business Combination Agreement and each other transaction document by MergeCo and Merger Sub will not result in default by MergeCo or Merger Sub of their constituent documents or any applicable material writ, order, injunction, judgement, law, rule or regulation; |
• | The validity and binding effect of the Scheme Implementation Deed on MergeCo; |
• | The lack of an insolvency event or regulatory action involving MergeCo and Merger Sub; |
• | Other than as contemplated by the Scheme Implementation Deed, MergeCo does not require any governmental and regulatory approvals or consents to enter into the Business Combination Agreement and Scheme Implementation Deed; and |
• | MergeCo’s ownership and operation. |
• | Twin Ridge has requisite authority, and power, to enter into the Business Combination Agreement and the Scheme Implementation Deed and to complete the contemplated transactions; |
• | Twin Ridge’s capitalization; |
• | Twin Ridge’s implementation of the transactions contemplated by the Scheme Implementation Deed, the Business Combination Agreement and each other transaction document will not result in default by Twin Ridge; |
• | The validity and binding effect of the Scheme Implementation Deed on Carbon Revolution; |
• | The lack of other dealings between Twin Ridge and Carbon Revolution, or the Carbon Revolution Board and Carbon Revolution’s employees; |
• | Twin Ridge has or is obtaining all required governmental and regulatory approvals or consents necessary in connection with the Scheme Implementation Deed, Business Combination Agreement and each transaction document to which is a party; and |
• | Other than as contemplated by the Scheme Implementation Deed, Twin Ridge has necessary shareholder approval. |
• | MergeCo will carry on its business in the ordinary course and will not grant any right or incur any liability outside of the ordinary course. |
• | MergeCo will not convert all or any of its shares into a larger or smaller number of shares. |
• | MergeCo will not permit any transfer of its shares to occur, or any encumbrance or trust to be created over or in respect of its shares (or any interest in them). |
• | MergeCo will not reduce its share capital in any way or reclassify, combine, split or redeem or repurchase directly or indirectly any of its shares. |
• | MergeCo will not repurchase, enter into a buy-back agreement or resolve to approve the terms of a buy-back agreement. |
• | MergeCo will not make or declare, or announce an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie) or otherwise undertake to issue any shares, grant an option over its shares or agree to make an issue of or grant an option over shares. |
• | MergeCo will not undertake to acquire or dispose of, agree to acquire or dispose of or offer, propose, announce a bid or tenders for any business, entity or undertaking or assets, merge or consolidate with any other person or restructure, reorganize or completely or partially liquidates or dissolve. |
• | MergeCo will not create, or agree to create any encumbrance over or declares itself the trustee of any of its business or property or otherwise undergo an insolvency event. |
• | MergeCo will not commence any legal proceedings or threaten to do so. |
• | Carbon Revolution will conduct its businesses and operations and will cause each other Carbon Revolution group member to conduct its respective business and operations, in the ordinary and usual course generally consistent with past practice. |
• | Carbon Revolution will keep Twin Ridge informed of any material developments concerning the conduct of its business. |
• | Carbon Revolution will not pay, declare, determine or otherwise agree to pay any dividend or distribution. |
• | Carbon Revolution will not enter into any line of business or other activities in which the Carbon Revolution group is not engaged as at the date of the Scheme Implementation Deed. |
• | Carbon Revolution will provide monthly management accounts for Carbon Revolution and its subsidiaries, in a timely manner to Twin Ridge. |
• | Carbon Revolution will promptly notify Twin Ridge of any legal proceeding, claim or investigation which may be threatened or asserted or commenced against Carbon Revolution or its subsidiaries and which is material in the context of Carbon Revolution and its subsidiaries taken as a whole. |
• | Carbon Revolution will comply in all material respects with all applicable authorizations, laws and regulations. |
• | Carbon Revolution will make all reasonable efforts, and procure that each of its subsidiaries makes all reasonable efforts to (i) comply with the terms of all Material Contracts (as defined in the Scheme Implementation Deed); (ii) preserve and maintain the value of the business and assets of the Carbon Revolution group; (iii) keep available the services of the Carbon Revolution Locked-Up Persons (subject to normal operating attrition rates) employees of each Carbon Revolution group member; (iv) maintain and preserve their relationship with stakeholders; and (v) ensure that there is no occurrence within their control that would constitute or be likely to constitute a Carbon Revolution Adverse Change. |
• | Carbon Revolution will use its best endeavors to ensure that no Carbon Revolution Regulated Event (as defined in the Scheme Implementation Deed) occurs; and |
• | Carbon Revolution will ensure that no Carbon Revolution Prescribed Occurrence occurs. |
• | Twin Ridge will maintain the condition of its business and material assets in all material respects. |
• | Twin Ridge will not take any action that would give rise to a “SPAC Prescribed Occurrence” (as defined in the Scheme Implementation Deed). |
• | Twin Ridge will not amend or otherwise change the organizational documents of Twin Ridge or form any subsidiary of Twin Ridge. |
• | Twin Ridge will not reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any Twin Ridge securities and will not pay, declare, determine or otherwise agree to pay any dividend or distribution. |
• | Twin Ridge will not 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 Twin Ridge, 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 Twin Ridge. |
• | Twin Ridge will not acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or enter into any strategic joint ventures, partnerships or alliances with any other person. |
• | With the exception of reasonably necessary working capital loans, Twin Ridge will not incur indebtedness. |
• | Twin Ridge will not amend the Trust Agreement or any other agreement related to the trust account. |
• | Twin Ridge will promptly notify Carbon Revolution of any legal proceeding, claim or investigation which may be threatened or asserted or commenced against any it. |
• | Twin Ridge will comply in all material respects with all applicable authorizations, laws and regulations. |
• | The Carbon Revolution Board acting in good faith and in order to satisfy what the Carbon Revolution Board considers to be their statutory or fiduciary duties (having received written legal advice from its external Australian legal advisers) determines that the competing proposal is, or would be reasonably likely to be, an actual, proposed or potential, Superior Proposal (as defined in the Scheme Implementation Deed); |
• | Carbon Revolution has provided Twin Ridge with the material terms and conditions of the actual, proposed or potential competing proposal (including price and form of consideration, conditions precedent, proposed deal protection arrangements and timetable) (in each case, to the extent known) and the identity of the third party making the actual, proposed or potential competing proposal; |
• | Carbon Revolution has given Twin Ridge at least five Business Days after the date of the provision of the information to provide a matching or superior counter-proposal to the terms of the actual, proposed or potential competing proposal; and |
• | Twin Ridge has not announced or otherwise formally proposed to Carbon Revolution a matching or superior counter-proposal to the terms of the actual, proposed or potential competing proposal by the expiry of the five Business Day period. |
• | With the prior approval of the Carbon Revolution Board, Deal in any of its Restricted Shares: |
○ | to fund the Holder’s liability associated with any tax, duty, levy, fee, penalty or charge imposed by any Governmental Agency in connection with any securities issued under any executive or employee incentive plan of Carbon Revolution; or |
○ | realize a maximum of A$100,000. |
• | Deal in any of its Restricted Shares to the extent the Dealing is required in connection with the Scheme or contemplated by the Scheme Implementation Deed. |
• | Deal in any of its Restricted Shares solely as a requirement of applicable law. |
• | Grant a security interest over any (or all) of the Restricted Shares to a bona fide third-party financial institution as security for a loan, hedge or other financial accommodation (subject to certain conditions). |
• | Dispose of any or all Restricted Shares to an affiliate of the Holder provided that such transferee agrees to be bound by the terms and conditions of the Voluntary Escrow Deed by entering into such further agreements as Carbon Revolution may reasonably require. |
• | the fact that the Founder Holders have agreed not to redeem any of the Founder Shares held by them in connection with a vote of Twin Ridge’s shareholders to approve a proposed initial business combination, including the Business Combination; |
• | the fact that the Sponsor is entitled to designate two directors on the MergeCo Board; |
• | the fact that the Sponsor paid an aggregate of $25,000 for 5,750,000 Twin Ridge Class B Ordinary Shares on January 12, 2021. After giving effect to (i) the forfeiture of 422,797 Twin Ridge Class B Ordinary Shares in connection with the underwriters’ partial exercise of the over-allotment option and (ii) the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares, the remaining 5,000,000 Twin Ridge Class B Ordinary Shares held by the Sponsor Parties, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, Alison Burns, Paul Henrys and Gary Pilnick, would be worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), because the holders are not entitled to participate in any redemption or distribution with respect to such |
• | the fact that the Sponsor paid an aggregate of $7,661,763 for 5,107,842 Private Placement Warrants, each exercisable to purchase one Twin Ridge Class A Ordinary Share at $11.50 per share, subject to adjustment, currently held by the Sponsor, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, and which were acquired in a private placement that took place simultaneously with the consummation of the IPO, would become worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). 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 $383,088, based upon the closing price of $0.075 per Public Warrant on the NYSE on June 8, 2023; |
• | the fact that if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), Twin Ridge will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Twin Ridge Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the Twin Ridge Board, dissolving and liquidating; |
• | the fact that the Sponsor Parties paid an aggregate of $7,686,763 for its investment in MergeCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $52,500,088 (after giving effect to the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares), based upon the respective closing price of the Twin Ridge Class A Ordinary Shares and the Public Warrants on June 8, 2023. |
| | Securities held by the Sponsor Parties | | | Sponsor Cost ($) | |
Founder Shares | | | 5,267,203 | | | $25,000(1) |
Private Placement Warrants | | | 5,107,842 | | | $7,661,763 |
Total | | | | | $7,686,763 |
(1) | Includes cost for 60,000 Founder Shares held by the independent directors of Twin Ridge. |
| | Securities held by The Sponsor Parties Prior to Closing | | | Value per Security ($)(2) | | | Total Value ($) | |
MergeCo Ordinary Shares Issued to Holders of Founder Shares | | | 4,940,000(1) | | | $10.55 | | | $52,117,000 |
MergeCo Private Placement Warrants | | | 5,107,842 | | | $0.075 | | | $383,088 |
Total | | | | | | | $52,500,088 |
(1) | Immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger, the Sponsor has agreed that 327,203 Founder Shares shall be automatically forfeited and surrendered to Twin Ridge for no additional consideration. |
(2) | Value per security is based upon the closing price of $10.55 per Twin Ridge Class A Ordinary Share and $0.075 per Public Warrant on the NYSE on June 8, 2023. |
• | 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; |
• | fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other Twin Ridge shareholders experience a negative rate of return in MergeCo; |
• | if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Twin Ridge to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Shares, or such lesser per Public Share as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, 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 Sponsor (including its representatives and affiliates) and Twin Ridge directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to Twin Ridge or Carbon Revolution. For example, each of Twin Ridge’s officers may be considered an affiliate of the Sponsor, which was formed for the sole purpose of investing in Twin Ridge. The Sponsor and Twin Ridge’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to Twin Ridge completing its initial business combination. Moreover, certain of Twin Ridge’s directors and officers have time and attention requirements for certain other companies. Twin Ridge’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to Twin Ridge and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in Twin Ridge’s favor and such potential business opportunities may be presented to other entities prior to their presentation to Twin Ridge, subject to applicable fiduciary duties. |
• | the continued indemnification of Twin Ridge’s existing directors and officers and the continuation of its directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that the Sponsor and our directors and officers, or their affiliates, will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses incurred by them on Twin Ridge’s behalf incident to identifying, investigating and consummating an initial business combination, including the formation and setting up of the Sponsor and related entities, if an initial business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by Twin Ridge’s officers and directors and there are no outstanding out-of-pocket expenses for which Twin Ridge’s officers or directors are awaiting reimbursement; |
• | that, at the closing of the Business Combination we will enter into the Registration Rights Agreement with the Sponsor Parties and our directors and officers, which provides for registration rights to such persons and their permitted transferees; and |
• | the fact that the Business Combination Agreement provides for the continued indemnification of Twin Ridge’s existing directors and officers and required Carbon Revolution 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 Twin Ridge directors and officers after the Business Combination. |
• | best-in-class businesses that benefit all stakeholders, where Twin Ridge can leverage its management expertise to maximize the companies’ positive impacts, build a stronger brand and value proposition, and drive financial return; |
• | are fundamentally sound but underperforming their potential and exhibit unrecognized value creation opportunities; |
• | strong competitive market positioning driven by brand equity, advantages of scope or scale, differentiated products or services, proprietary technology, robust infrastructure or strong customer or supplier relationships; |
• | attractive financial profile with multiple avenues for continued future growth and margin upside that result in sustainable free cash flow generation and a defensible market position that is resilient to economic cycles; |
• | businesses that can be acquired at an attractive valuation for public market investors; |
• | experienced and public-ready management team with internal reporting and control systems that can comply with the requirements of a public listing; and |
• | potential to offer an attractive risk-adjusted return for our shareholders across business cycles. |
• | Reasonableness of the aggregate consideration to be paid to the Public Shareholders under the Business Combination Agreement and the Scheme Implementation Deed. Following a review of the financial data provided to Twin Ridge, including certain audited and unaudited financial information and models regarding Carbon Revolution (including, where applicable, the assumptions underlying such unaudited financial information and models) and Twin Ridge’s due diligence review of Carbon Revolution’s business, the Twin Ridge Board determined that the consideration to be paid to the Carbon Revolution shareholders was reasonable in light of such data and financial information. In this context “reasonable” means (i) given the uniqueness of the Carbon Revolution business model, that the work done by the third-party due diligence advisors supported the “reasonableness” of the assumptions used to validate the business model, (ii) that the variables considered by the Twin Ridge Board in relation to the financial analysis for the Carbon Revolution business were a reasonable basis to compute the valuation and (iii) given the inherent uncertainties in any long-term projections, that the assumptions underlying them supported their “reasonableness”. |
• | Mission-Driven Leadership Team with a Strong Track Record. The Twin Ridge Board believes that Carbon Revolution has a strong, experienced public company management team with a proven track record of operational excellence. Twin Ridge is confident in the management team’s deep industry knowledge and strategic vision and believes that the Twin Ridge and Carbon Revolution teams will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. Twin Ridge believes that Jacob Dingle, who is contemplated to serve as Chief Executive Officer of MergeCo, and Gerard Buckle, who is contemplated to serve as Chief Financial Officer of MergeCo, following the Closing, will provide important continuity in advancing Carbon Revolution’s strategic and growth objectives. |
• | Due Diligence. The Twin Ridge Board reviewed and discussed in detail the results of the due diligence examination of Carbon Revolution conducted by Twin Ridge’s management team and Twin Ridge’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of Carbon Revolution regarding Carbon Revolution’s business plan, operations, prospects and forecasts 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 such as Carbon Revolution’s commercial agreements with Deakin University, government research grants from the Australian and Victorian government, supplier agreements with material suppliers, engineering and procurement firms, material contracts with top OEM customers and related purchase orders, licensing provisions in contractor agreements and research agreements related to key research partnerships, Carbon Revolution’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. The Twin Ridge Board reviewed factors such as Carbon Revolution’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the Twin Ridge Board believed that Carbon Revolution was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors. |
• | Reasonableness of Consideration. Following a review of the financial data provided to Twin Ridge, and the due diligence of Carbon Revolution’s business conducted by Twin Ridge’s management and Twin Ridge’s advisors, the management of Twin Ridge determined that the aggregate consideration to be paid in the Business Combination was reasonable. |
• | Post-Closing Economic Interest in MergeCo. If the Business Combination is consummated, Twin Ridge’s shareholders (other than Twin Ridge’s shareholders that sought redemption of their Twin Ridge Ordinary Shares) would have a meaningful economic interest in MergeCo and, as a result, would have a continuing opportunity to benefit from the success of Carbon Revolution following the consummation of the Business Combination. |
• | Lock-Up. Pursuant to the Registration Rights Agreement, certain members of management and all of the directors of Carbon Revolution, the Sponsor Parties, Ms. Burns, Mr. Henrys and Mr. Pilnick (together with their respective successors and any permitted transferees) will agree to be subject to a 180-day lock-up from the Closing Date in respect of their MergeCo Ordinary Shares received in the Business Combination (subject to certain customary exceptions). |
• | Financing. The agreement of Yorkville Advisors to provide a committed equity facility in an aggregate amount of up to $60 million for MergeCo Ordinary shares, subject to the terms of the Equity Purchase Agreement. |
• | Industry and Trends. Carbon Revolution’s business is based in a proprietary technology and research and development manufacturing industry focused on supply chain integrity that the Twin Ridge Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Twin Ridge Board believes has continued growth potential in future periods. |
• | Negotiated Transaction. The Twin Ridge Board considered the terms and conditions of the Business Combination Agreement, the Scheme Implementation Deed and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both Twin Ridge and Carbon Revolution to complete the Business Combination. The Twin Ridge Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Carbon Revolution and Twin Ridge. |
• | Other Alternatives. After a review of other business combination opportunities reasonably available to Twin Ridge, the Twin Ridge Board believes that the proposed Business Combination represents the best potential business combination reasonably available to Twin Ridge taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives. |
• | Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate a certain number of members of the MergeCo Board following the Business Combination, which the Twin Ridge Board believes will allow for the combined company to benefit from the Sponsor’s professional relationships to identify potential board members that will have appropriate industry and/or financial knowledge and professional experience to oversee the combined company and drive returns for shareholders. See “Comparison of Corporate Governance and Shareholder Rights” for more information. |
• | Advisor SPAC Experience. The fact that representatives of the Advisor that provided advice to Twin Ridge on financial and strategic matters in connection with the Business Combination have expertise in a wide variety of SPAC transactions. Gregory Ethridge and Nicholas Petruska have held and hold officer positions at multiple SPACs that have successfully completed business combinations in the advanced mobility, automotive and automotive technology sectors. |
• | Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe. |
• | Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination. |
• | Shareholder Vote. Twin Ridge’s shareholders may fail to approve the proposals necessary to effect the Business Combination. |
• | Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Twin Ridge’s control, including the receipt of certain required regulatory approvals. |
• | Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
• | Listing Risks. The challenges associated with preparing Carbon Revolution for the applicable disclosure and listing requirements to which Carbon Revolution will be subject as a publicly traded company in the United States. |
• | Market Volatility. The possibility that the market for Twin Ridge Class A Ordinary Shares experiences volatility and disruptions, causing deal disruption. |
• | Liquidation. The risks and costs to Twin Ridge if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Twin Ridge being unable to effect an initial business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
• | Redemption Risk. The potential that a significant number of Twin Ridge’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of Twin Ridge’s shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination. |
• | Exclusivity. The fact that the Business Combination Agreement and Scheme Implementation Deed includes an exclusivity provision that prohibits Carbon Revolution and Twin Ridge from soliciting other business combination proposals, as further discussed in “—The Business Combination, the Business Combination Agreement and the Scheme Implementation Deed—Covenants of the Parties—Exclusivity”. |
• | Litigation. The possibility of shareholder litigation challenging the Business Combination. |
• | COVID-19. The impact of the COVID-19 pandemic on Carbon Revolution's business. |
• | Waiver of Corporate Opportunity Doctrine. The Existing Organizational Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that have been appropriate for a combination with Twin Ridge but were not offered due to a Twin Ridge director’s duties to another entity. Twin Ridge and its management are not aware of any such corporate opportunities not being offered to Twin Ridge and does not believe that the waiver of the corporate opportunity doctrine in its Existing Organizational Documents interfered with its ability to identify an acquisition target, including the decision to pursue the Business Combination. |
• | Interests of Certain Persons. The Sponsor, Twin Ridge’s officers and certain of its directors may have interests in the Business Combination (see “Shareholder Proposal 1 – The Business Combination Proposal—Interests of Certain Persons in the Business Combination”). |
• | Fees and Expenses. The associated fees and expenses were waived by the underwriters. (see “Shareholder Proposal 1 — The Business Combination Proposal—Background to the Business Combination”. |
• | Other Risk Factors. Various other risk factors associated with the business of Carbon Revolution, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. |
• | Fairness Opinion. Craig-Hallum, Twin Ridge's financial advisor, provided its Fairness Opinion to the Twin Ridge Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to Twin Ridge |
• | best-in-class businesses that benefit all stakeholders, where Twin Ridge can leverage its management expertise to maximize the companies’ positive impacts, build a stronger brand and value proposition, and drive financial return; |
• | are fundamentally sound but underperforming their potential and exhibit unrecognized value creation opportunities; |
• | strong competitive market positioning driven by brand equity, advantages of scope or scale, differentiated products or services, proprietary technology, robust infrastructure or strong customer or supplier relationships; |
• | attractive financial profile with multiple avenues for continued future growth and margin upside that result in sustainable free cash flow generation and a defensible market position that is resilient to economic cycles; |
• | businesses that can be acquired at an attractive valuation for public market investors; |
• | experienced and public-ready management team with internal reporting and control systems that can comply with the requirements of a public listing; and |
• | potential to offer an attractive risk-adjusted return for our shareholders across business cycles. |
• | reviewed a draft of the Scheme Implementation Deed provided to Craig-Hallum on November 16, 2022, a draft of the Business Combination Agreement provided to Craig-Hallum on November 26, 2022; |
• | reviewed certain financial, operating and business information related to Carbon Revolution provided to Craig-Hallum by management of Carbon Revolution; |
• | reviewed Carbon Revolution’s audited financial statements for the fiscal years ended June 30, 2020, 2021 and 2022, as well as reviewed financial reports for the six- month periods ended December 31, 2019, 2020 and 2021; |
• | reviewed a detailed Carbon Revolution financial projection model for the years ending December 31, 2022 through 2024, provided to Craig-Hallum by management of Carbon Revolution; |
• | reviewed other internal documents, including the data room prepared by Carbon Revolution and its advisors, relating to the history, past and current operations, financial conditions and expected future outlook of Carbon Revolution, provided to Craig-Hallum by management of Carbon Revolution; |
• | reviewed various press releases, internal presentation and marketing materials prepared by management of Carbon Revolution, industry and market reports, research reports and white papers; |
• | discussed the information above with members of management of Twin Ridge and Carbon Revolution and had discussions concerning the information referred to above and the background and other elements of the Business Combination, the financial condition, current operating results and business outlook for Twin Ridge and Carbon Revolution; |
• | performed certain valuation and comparative analyses using generally accepted valuation and analytical techniques including an analysis of comparable public companies that Craig-Hallum deemed relevant and an analysis of comparable M&A transactions that Craig-Hallum deemed relevant; and |
• | conducted such other analyses, examinations and inquiries and considered such other financial, economic and market criteria as Craig-Hallum has deemed necessary in arriving at its opinion. |
• | Ballard Power Systems |
• | Gentex |
• | Gentherm |
• | Plug Power |
• | Sensata Technologies |
• | Solid Power |
• | Xpel |
• | Multiple of enterprise value to estimated 2023 revenue, or EV / 2023E Revenue |
• | Multiple of enterprise value to estimated 2024 revenue, or EV / 2024E Revenue |
| | Comparable Group | |||||||||||||
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | |
EV / 2023E Revenue(1) | | | 1.8x | | | 2.6x | | | 3.9x | | | 4.8x | | | 7.6x |
EV / 2024E Revenue(1) | | | 1.6x | | | 2.4x | | | 2.9x | | | 3.7x | | | 5.1x |
(1) | Projected fiscal year 2023 and 2024 revenue for Carbon Revolution was based on projections provided by management of Twin Ridge and Carbon Revolution. Projected fiscal year 2023 and 2024 revenue for the selected public companies was based on equity research analyst consensus estimates. |
| | Implied Enterprise Value of Carbon Revolution (millions) | ||||||||||||||||
| | Carbon Revolution (millions) | | | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | |
2023E Revenue | | | $50 | | | $88 | | | $132 | | | $196 | | | $242 | | | $382 |
2024E Revenue | | | $90 | | | $143 | | | $217 | | | $263 | | | $333 | | | $457 |
• | transactions with a target company primarily focused on disruptive auto technology or that are auto OEM suppliers with next generation products and technology; |
• | transactions announced since January 1, 2018; and |
• | transactions with publicly available information regarding terms of the transaction. |
Target | | | Buyer(s) |
Romeo Power | | | Nikola |
Veoneer Energica Motor Company ABC Technologies Holdings Akasol UQM Technologies | | | SSW Partners Ideanomics Apollo Global Management BorgWarner Danfoss Power Solutions |
| | Precedent Transaction Group | |||||||||||||
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | |
Implied EV (millions) | | | $100 | | | $103 | | | $476 | | | $918 | | | $4,096 |
Implied EV to NTM Revenue(1) | | | 0.8x | | | 1.7x | | | 3.6x | | | 6.1x | | | 6.6x |
(1) | NTM Revenue for the Precedent Transaction Group is based on public filings. |
| | Implied Enterprise Value (millions) | ||||||||||||||||
| | Stand-Alone Value (millions) | | | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | |
NTM Revenue(1) | | | $50 | | | $41 | | | $84 | | | $180 | | | $309 | | | $330 |
(1) | NTM Revenue equal to calendar year 2022 revenue. |
• | best-in-class businesses that benefit all stakeholders, where Twin Ridge can leverage its management expertise to maximize the companies’ positive impacts, build a stronger brand and value proposition, and drive financial return; |
• | are fundamentally sound but underperforming their potential and exhibit unrecognized value creation opportunities; |
• | strong competitive market positioning driven by brand equity, advantages of scope or scale, differentiated products or services, proprietary technology, robust infrastructure or strong customer or supplier relationships; |
• | attractive financial profile with multiple avenues for continued future growth and margin upside that result in sustainable free cash flow generation and a defensible market position that is resilient to economic cycles; |
• | businesses that can be acquired at an attractive valuation for public market investors; |
• | experienced and public-ready management team with internal reporting and control systems that can comply with the requirements of a public listing; and |
• | potential to offer an attractive risk-adjusted return for our shareholders across business cycles. |
• | Reasonableness of the aggregate consideration to be paid to the Public Shareholders under the Business Combination Agreement and the Scheme Implementation Deed. Following a review of the financial data provided to Twin Ridge, including certain audited and unaudited financial information and models regarding Carbon Revolution (including, where applicable, the assumptions underlying such unaudited financial information and models) and Twin Ridge’s due diligence review of Carbon Revolution’s business, the Twin Ridge Board determined that the consideration to be paid to the Carbon Revolution shareholders was reasonable in light of such data and financial information. In this context “reasonable” means (i) given the uniqueness of the Carbon Revolution business model, that the work done by the third-party due diligence advisors supported the “reasonableness” of the assumptions used to validate the business model, (ii) that the variables considered by the Twin Ridge Board in relation to the financial analysis for the Carbon Revolution business were a reasonable basis to compute the valuation and (iii) given the inherent uncertainties in any long-term projections, that the assumptions underlying them supported their “reasonableness”. |
• | Mission-Driven Leadership Team with a Strong Track Record. The Twin Ridge Board believes that Carbon Revolution has a strong, experienced public company management team with a proven track record of operational excellence. Twin Ridge is confident in the management team’s deep industry knowledge and strategic vision and believes that the Twin Ridge and Carbon Revolution teams will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. Twin Ridge believes that Jacob Dingle, who is contemplated to serve as Chief Executive Officer of MergeCo, and Gerard Buckle, who is contemplated to serve as Chief Financial Officer of MergeCo, following the Closing, will provide important continuity in advancing Carbon Revolution’s strategic and growth objectives. |
• | Due Diligence. The Twin Ridge Board reviewed and discussed in detail the results of the due diligence examination of Carbon Revolution conducted by Twin Ridge’s management team and Twin Ridge’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of Carbon Revolution regarding Carbon Revolution’s business plan, operations, prospects and forecasts 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 such as Carbon Revolution’s commercial agreements with Deakin University, government research grants from the Australian and Victorian government, supplier agreements with material suppliers, engineering and procurement firms, material contracts with top OEM customers and related purchase orders, licensing provisions in contractor agreements and research agreements related to key research partnerships, Carbon Revolution’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. The Twin Ridge Board reviewed factors such as Carbon Revolution’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the Twin Ridge Board believed that Carbon Revolution was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors. |
• | Reasonableness of Consideration. Following a review of the financial data provided to Twin Ridge, and the due diligence of Carbon Revolution’s business conducted by Twin Ridge’s management and Twin Ridge’s advisors, the management of Twin Ridge determined that the aggregate consideration to be paid in the Business Combination was reasonable. |
• | Post-Closing Economic Interest in MergeCo. If the Business Combination is consummated, Twin Ridge’s shareholders (other than Twin Ridge’s shareholders that sought redemption of their Twin Ridge Ordinary Shares) would have a meaningful economic interest in MergeCo and, as a result, would have a continuing opportunity to benefit from the success of Carbon Revolution following the consummation of the Business Combination. |
• | Lock-Up. Pursuant to the Registration Rights Agreement, certain members of management and all of the directors of Carbon Revolution, the Sponsor Parties, Ms. Burns, Mr. Henrys and Mr. Pilnick (together with their respective successors and any permitted transferees) will agree to be subject to a 180-day lock-up from the Closing Date in respect of their MergeCo Ordinary Shares received in the Business Combination (subject to certain customary exceptions). |
• | Financing. The agreement of Yorkville Advisors to provide a committed equity facility in an aggregate amount of up to $60 million for MergeCo Ordinary shares, subject to the terms of the Equity Purchase Agreement. |
• | Industry and Trends. Carbon Revolution’s business is based in a proprietary technology and research and development manufacturing industry focused on supply chain integrity that the Twin Ridge Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Twin Ridge Board believes has continued growth potential in future periods. |
• | Negotiated Transaction. The Twin Ridge Board considered the terms and conditions of the Business Combination Agreement, the Scheme Implementation Deed and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both Twin Ridge and Carbon Revolution to complete the Business Combination. The Twin Ridge Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Carbon Revolution and Twin Ridge. |
• | Other Alternatives. After a review of other business combination opportunities reasonably available to Twin Ridge, the Twin Ridge Board believes that the proposed Business Combination represents the best potential business combination reasonably available to Twin Ridge taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives. |
• | Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate a certain number of members of the MergeCo Board following the Business Combination, which the Twin Ridge Board believes will allow for the combined company to benefit from the Sponsor’s professional relationships to identify potential board members that will have appropriate industry and/or financial knowledge and professional experience to oversee the combined company and drive returns for shareholders. See “Comparison of Corporate Governance and Shareholder Rights” for more information. |
• | Advisor SPAC Experience. The fact that representatives of the Advisor that provided advice to Twin Ridge on financial and strategic matters in connection with the Business Combination have expertise in a wide variety of SPAC transactions. Gregory Ethridge and Nicholas Petruska have held and hold officer positions at multiple SPACs that have successfully completed business combinations in the advanced mobility, automotive and automotive technology sectors. |
• | Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe. |
• | Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination. |
• | Shareholder Vote. Twin Ridge’s shareholders may fail to approve the proposals necessary to effect the Business Combination. |
• | Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Twin Ridge’s control, including the receipt of certain required regulatory approvals. |
• | Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination. |
• | Listing Risks. The challenges associated with preparing Carbon Revolution for the applicable disclosure and listing requirements to which Carbon Revolution will be subject as a publicly traded company in the United States. |
• | Market Volatility. The possibility that the market for Twin Ridge Class A Ordinary Shares experiences volatility and disruptions, causing deal disruption. |
• | Liquidation. The risks and costs to Twin Ridge if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Twin Ridge being unable to effect an initial business combination by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). |
• | Redemption Risk. The potential that a significant number of Twin Ridge’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of Twin Ridge’s shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination. |
• | Exclusivity. The fact that the Business Combination Agreement and Scheme Implementation Deed includes an exclusivity provision that prohibits Carbon Revolution and Twin Ridge from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—The Business Combination, the Business Combination Agreement and the Scheme Implementation Deed—Covenants of the Parties—Exclusivity”. |
• | Litigation. The possibility of shareholder litigation challenging the Business Combination. |
• | COVID-19. The impact of the COVID-19 pandemic on Carbon Revolution's business. |
• | Waiver of Corporate Opportunity Doctrine. The Existing Organizational Documents contain a waiver of the corporate opportunity doctrine, and there could have been business combination targets that have been appropriate for a combination with Twin Ridge but were not offered due to a Twin Ridge director’s duties to another entity. Twin Ridge and its management are not aware of any such corporate opportunities not being offered to Twin Ridge and does not believe that the waiver of the corporate opportunity doctrine in its Existing Organizational Documents interfered with its ability to identify an acquisition target, including the decision to pursue the Business Combination. |
• | Interests of Certain Persons. The Sponsor, Twin Ridge’s officers and certain of its directors may have interests in the Business Combination (see “—Shareholder Proposal 1 — The Business Combination Proposal Interests of Certain Persons in the Business Combination”). |
• | Fees and Expenses. The associated fees and expenses were waived by the underwriters see- “—Shareholder Proposal 1 — The Business Combination Proposal – Background to the Business Combination”. |
• | Other Risk Factors. Various other risk factors associated with the business of Carbon Revolution, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus. |
• | Fairness Opinion. Craig-Hallum, Twin Ridge’s financial advisor, provided its Fairness Opinion to the Twin Ridge Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to Twin Ridge and (ii) the fair market value of Carbon Revolution equals or exceeds 80% of the amount held by Twin Ridge in trust for benefit of its Public Shareholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Craig-Hallum was |
• | the fact that the Founder Holders have agreed not to redeem any of the Founder Shares held by them in connection with a vote of Twin Ridge’s shareholders to approve a proposed initial business combination, including the Business Combination; |
• | the fact that the Sponsor is entitled to designate two directors on the MergeCo Board; |
• | the fact that the Sponsor paid an aggregate of $25,000 for 5,750,000 Twin Ridge Class B Ordinary Shares on January 12, 2021. After giving effect to (i) the forfeiture of 422,797 Twin Ridge Class B Ordinary Shares in connection with the underwriters’ partial exercise of the over-allotment option and (ii) the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares, the remaining 5,000,000 Twin Ridge Class B Ordinary Shares held by the Sponsor Parties, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, Alison Burns, Paul Henrys and Gary Pilnick, would be worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), 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 $52,750,000 based upon the closing price of $10.55 per Twin Ridge Class A Ordinary Share on the NYSE on June 8, 2023; |
• | the fact that the Sponsor paid an aggregate of $7,661,763 for 5,107,842 Private Placement Warrants, each exercisable to purchase one Twin Ridge Class A Ordinary Share at $11.50 per share, subject to adjustment, currently held by the Sponsor, in which certain of Twin Ridge’s officers and directors hold a direct and indirect interest, and which were acquired in a private placement that took place simultaneously with the consummation of the IPO, would become worthless if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). 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 $383,088, based upon the closing price of $0.075 per Public Warrant on the NYSE on June 8, 2023; |
• | the fact that if the Business Combination or another business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board), Twin Ridge will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Twin Ridge Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the Twin Ridge Board, dissolving and liquidating; |
• | the fact that the Sponsor Parties paid an aggregate of $7,686,763 for its investment in MergeCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $52,500,088 (after giving effect to the forfeiture of 327,203 Twin Ridge Class B Ordinary Shares), based upon the respective closing price of the Twin Ridge Class A Ordinary Shares and the Public Warrants on the NYSE on June 8, 2023. |
| | Securities held by the Sponsor Parties | | | Sponsor Cost ($) | |
Founder Shares | | | 5,267,203 | | | $25,000(1) |
Private Placement Warrants | | | 5,107,842 | | | $7,661,763 |
Total | | | | | $7,686,763 |
(1) | Includes cost for 60,000 Founder Shares held by the independent directors of Twin Ridge. |
| | Securities held by the Sponsor Parties Prior to Closing | | | Value per Security ($)(2) | | | Total Value ($) | |
MergeCo Ordinary Shares Issued to Holders of Founder Shares | | | 4,940,000(1) | | | $10.55 | | | $52,117,000 |
MergeCo Private Placement Warrants | | | 5,107,842 | | | $0.075 | | | $383,088 |
Total | | | | | | | $52,500,088 |
(1) | Immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger, the Sponsor has agreed that 327,203 Founder Shares shall be automatically forfeited and surrendered to Twin Ridge for no additional consideration. |
(2) | Value per security is based upon the closing price of $10.55 per Twin Ridge Class A Ordinary Share and $0.075 per Public Warrant on the NYSE on June 8, 2023. |
• | 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; |
• | fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other Twin Ridge shareholders experience a negative rate of return in MergeCo; |
• | if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Twin Ridge to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Shares, or such lesser per Public Share as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, 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 Sponsor (including its representatives and affiliates) and Twin Ridge directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to Twin Ridge or Carbon Revolution. For example, each of Twin Ridge’s officers may be considered an affiliate of the Sponsor, which was formed for the sole purpose of investing in Twin Ridge. The Sponsor and Twin Ridge’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies |
• | the continued indemnification of Twin Ridge’s existing directors and officers and the continuation of its directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that the Sponsor and our directors and officers, or their affiliates, will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses incurred by them on Twin Ridge’s behalf incident to identifying, investigating and consummating an initial business combination, including the formation and setting up of the Sponsor and related entities, if an initial business combination is not consummated by July 8, 2023 (or, up to March 8, 2024, if up to eight additional monthly extensions thereafter are approved by the Twin Ridge Board). As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by Twin Ridge’s officers and directors and there are no outstanding out-of-pocket expenses for which Twin Ridge’s officers or directors are awaiting reimbursement; |
• | that, at the closing of the Business Combination we will enter into the Registration Rights Agreement with the Sponsor Parties and our directors and officers, which provides for registration rights to such persons and their permitted transferees; and |
• | the fact that the Business Combination Agreement provides for the continued indemnification of Twin Ridge’s existing directors and officers and required Carbon Revolution 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 Twin Ridge directors and officers after the Business Combination. |
In USD $*(1) | | | CY2022 | | | CY2023 | | | CY2024 |
Revenue | | | $28.7 | | | $50.3 | | | $90.1 |
Contribution Margin | | | $1.9 | | | $11.0 | | | $31.4 |
EBITDA(2) | | | ($18.0) | | | ($13.8) | | | $2.8 |
* | using an AUD to USD Exchange Rate of 0.70. |
(1) | On June 5, 2023 the Group issued updated financial projections for the calendar year 2023. These financial projections include actual results for the 3-month period ended March 31, 2023 and a forecast for the remaining 9-month period ending December 31, 2023. In the updated financial projections, the forecast revenue for calendar 2023 is USD $47.4 million, contribution margin is USD $8.7 million and EBITDA is negative USD $17.1 million using an AUD to USD Exchange Rate of 0.70. Such updated financial projections were not available to the Twin Ridge Board or Craig-Hallum as of November 29, 2022. The financial projections do not factor in any general contingency to allow for changes in OEM production schedules (e.g., to reflect supply chain disruption, as has been observed over the past few years). Except as set forth in the footnote, Carbon Revolution has not updated, and does not intend to update or otherwise revise, the Financial Projections to reflect circumstances existing since November 29, 2022, including any changes in general economic or industry conditions, or to reflect the occurrence of unanticipated events. Neither Twin Ridge, Carbon Revolution nor any of our respective representatives, affiliates advisers, officers, directors, partners or representatives makes any representation to any person with regard to the ultimate performance of us, Carbon Revolution or the combined company. |
(2) | In connection with the restatement of Carbon Revolution’s audited financial statements included elsewhere in this proxy statement/prospectus, Carbon Revolution revised its projection of R&D costs for CY22 from the $3.2 million described above to $10.4 million, an increase of $7.2 million, partially offset by a $0.2 million reduction in projected SG&A costs for CY22. The increase in R&D costs for CY22 results in a reduction in projected EBITDA by $7.0 million to ($25.0) million. Projected revenue and contribution margin for CY22, as well as Carbon Revolution’s forecasted financial information for CY23 and CY24 were not affected by the restatement. |
1 | Carbon Revolution’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the Financial Projections and, accordingly, they did not and do not express an opinion, and did not and do not provide any other form of assurance with respect thereto and assume no responsibility and disclaim any association for the purpose of the information provided in this proxy statement/prospectus. The report of the Company’s independent auditors included elsewhere in this proxy statement/prospectus relates to the historical financial information of Carbon Revolution. It does not extend to the Financial Projections and should not be read to do so. |
• | A condensed combined statement of financial position as of December 31, 2022 assuming the transaction was consummated on that date; and |
• | A condensed combined statement of comprehensive income for the year ended June 30, 2022 and six months ended December 31, 2022 assuming the transaction was consummated as of July 1, 2021, at the commencement of the earliest period presented. |
• | The exchange of shares between MergeCo, Carbon Revolution and Twin Ridge as a result of the Scheme Implementation Deed and the Business Combination Agreement and associated transaction costs; and |
• | The issuance of shares as a commitment fee as consideration for the CEF (as defined below) upon completion of the Business Combination. |
• | Carbon Revolution’s unaudited financial statements as of and for the six months ended December 31, 2022 and the related notes thereto, included elsewhere in this proxy statement/prospectus; |
• | Carbon Revolution’s audited financial statements as of and for the year ended June 30, 2022 and the related notes thereto, included elsewhere in this proxy statement/prospectus; |
• | Twin Ridge’s audited financial statements as of December 31, 2021 and the period from January 7, 2021 (inception) through December 31, 2021, the audited financial statements as of and for the year ended December 31, 2022, included elsewhere in this proxy statement/prospectus and the unaudited interim financial statements as of June 30, 2022 and June 30, 2021 (as restated) and for the six months ended June 30, 2022 and for the period from January 7, 2021 (inception) through June 30, 2021 and the related notes thereto and the unaudited interim financial statements as of September 30, 2022 and December 31, 2022 (audited) and for the three months ended September 30, 2022 and December 31, 2022 (audited) and the related notes thereto. The income statement of Twin Ridge for the year ended June 30, 2022 and the six months ended December 31, 2022 for pro forma purposes has been arithmetically derived from these financial statements – refer also to Note 2 to the Unaudited Pro Forma Condensed Combined Financial Information; and |
• | the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Carbon Revolution” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Twin Ridge” and other financial information. |
• | Carbon Revolution’s existing shareholders will have the greatest voting interest in the combined entity under both the 75% Redemption and Maximum Redemption (both terms, as defined below) scenarios. Further, even in the instance of No Redemptions, Twin Ridge shareholders would not have a substantial majority of the voting interests, being approximately 37% and board and management representation are considered further below; |
• | Carbon Revolution’s directors will represent the majority of the board of directors of the combined company following the consummation of the Business Combination; |
• | Carbon Revolution’s senior management will be the senior management of the combined company following the consummation of the Business Combination as disclosed elsewhere in this proxy statement/prospectus. Of the disclosed executive officers, all of them are current Carbon Revolution employees; |
• | Carbon Revolution is the larger entity based on historical operating activity and its employee base; and |
• | MergeCo will continue to operate under the Carbon Revolution trade name and the combined entity’s headquarters will be based in Australia with its corporate head office in Geelong, consistent with the current location of Carbon Revolution’s head office. |
• | Assuming No Redemptions: This presentation assumes that no Twin Ridge shareholders exercise redemption rights with respect to their Twin Ridge Class A Ordinary Shares (the “No Redemption”). |
• | Assuming 25% Redemptions: This presentation assumes that Twin Ridge shareholders holding 1,566,661 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for approximately A$23.4 million at a redemption price of USD$10.00 per share based on the investment held in the Trust Account as of December 31, 2022, which represents 25% of Twin Ridge Class A Ordinary Shares that could be redeemed by Twin Ridge shareholders, after giving effect to exercise of redemption rights by such Twin Ridge shareholders and payments thereto in such redemption (the “25% Redemption”). |
• | Assuming 75% Redemptions: This presentation assumes that Twin Ridge shareholders holding 4,699,984 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for approximately A$70.3 million at a redemption price of USD$10.00 per share based on the investment held in the Trust Account as of December 31, 2022, which represents 75% of Twin Ridge Class A Ordinary Shares that could be redeemed by Twin Ridge shareholders, after giving effect to exercise of redemption rights by such Twin Ridge shareholders and payments thereto in such redemption (the “75% Redemption”). |
• | Assuming Maximum Redemptions: This presentation assumes that Twin Ridge shareholders holding 6,266,645 Twin Ridge Class A Ordinary Shares will exercise their redemption rights for A$93.8 million at a redemption price of USD$10.00 per share based on the investment held in the Trust Account as of December 31, 2022, which represents 100% of Twin Ridge Class A Ordinary Shares that could be redeemed by Twin Ridge shareholders, after giving effect to exercise of redemption rights by such Twin Ridge shareholders and payments thereto in such redemption (the “Maximum Redemption”). The Maximum Redemption scenario assumes that MergeCo has at least USD$5,000,001 of net tangible assets upon closing of the Business Combination. The satisfaction of this minimum net tangible asset requirement is a condition precedent to Carbon Revolution’s and Twin Ridge’s obligations under the Scheme Implementation Deed. In this scenario, MergeCo would only recognize the issuance of 5,000,000 MergeCo Ordinary Shares to the holders of the Twin Ridge Class B Ordinary Shares. The net tangible assets of MergeCo will include the net tangible assets of Carbon Revolution, as increased by the gross proceeds of |
• | Each Twin Ridge Class B Ordinary Share, shall convert automatically, on a one-for-one basis, into a Twin Ridge Class A Ordinary Share; |
• | Immediately after the Pre-Merger Conversion, each Twin Ridge Class A Ordinary Share shall be automatically cancelled in exchange for one validly issued, fully paid and non-assessable MergeCo Ordinary Share; |
• | Each Public Warrant shall be automatically exchanged to become one MergeCo Public Warrant. Each such MergeCo Public Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement, pursuant to which such Twin Ridge Public Warrant was issued immediately prior to the Twin Ridge Merger Effective Time; and |
• | Each Private Placement Warrant shall be automatically exchanged to become one MergeCo Public Warrant (each, a “MergeCo Founder Warrant”). Each such MergeCo Founder Warrant will be subject to substantially the same terms and conditions set forth in the Existing Warrant Agreement pursuant to which such Twin Ridge Private Warrant was issued immediately prior to the Twin Ridge Merger Effective Time. |
• | For a period of three years from closing, MergeCo has the right to require Yorkville Advisors to purchase new MergeCo Ordinary Shares in a series of advances, with each advance being in an amount up to the |
• | MergeCo can choose one of two Purchase Price Options: |
○ | Purchase Price Option 1: Yorkville Advisors will purchase MergeCo Ordinary Shares at a price equal to 95.0% of the average VWAP during the day on which the advance request was made. If the volume threshold under an advance is not reached during the pricing period, the number of shares purchased will be reduced to the greater of (i) 35.0% of the trading volume during the pricing period, or (ii) the number of shares sold by the Yorkville Advisors during the pricing period. The volume threshold is the amount of the advance in shares divided by 35.0%. |
○ | Purchase Price Option 2: Yorkville Advisors will purchase MergeCo Ordinary Shares at a price equal to 97.0% of the lowest VWAP of the MergeCo Ordinary Shares during the pricing period of three consecutive trading days commencing on the trading day commencing after the advance notice is received by Yorkville Advisors. |
• | During either pricing period, Yorkville Advisors will have the ability to hedge its position by short selling in full the quantum of shares that it is required to purchase under any advance notice. Under Purchase Price Option 2, MergeCo will have the ability to notify Yorkville Advisors of the minimum acceptable price (“MAP”) at which it can sell the new shares. If MergeCo does not set a MAP, this may have a material and adverse impact on MergeCo’s share price depending on the quantum of shares being sold relative to overall liquidity of MergeCo’s shares. |
• | Yorkville Advisors cannot be issued MergeCo Ordinary Shares in an amount that would result in it holding more than 9.99% of the outstanding MergeCo Ordinary Shares at any one time. In the circumstance where Yorkville Advisors is unable to dispose of its MergeCo Ordinary Shares on an ongoing basis, it will not be required to purchase additional shares under the CEF beyond an overall ownership of 9.99%, which means MergeCo may not have full access to the stated USD$60 million CEF capital. Carbon Revolution determined that the CEF right to issue shares represents a purchased put option which is classified as a derivative asset with a de minimus fair value at inception. |
• | MergeCo has agreed to issue 15,000 MergeCo Ordinary Shares to Yorkville Advisors as a ‘commitment fee’ to secure the facility. These must be issued upon completion of the Business Combination. |
| | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||
| | Shares | | | % | | | Shares | | | % | | | Shares | | | % | | | Shares | | | % | |
Twin Ridge Ordinary Shares | | | | | | | | | | | | | | | | | ||||||||
Twin Ridge Class A Ordinary Shares currently outstanding | | | 21,308,813 | | | | | 21,308,813 | | | | | 21,308,813 | | | | | 21,308,813 | | | ||||
Less: Twin Ridge Class A Ordinary shares known redemptions (70.6%) | | | (15,042,168) | | | | | (15,042,168) | | | | | (15,042,168) | | | | | (15,042,168) | | | ||||
Twin Ridge Class A Ordinary Shares(4) | | | 6,266,645 | | | | | 6,266,645 | | | | | 6,266,645 | | | | | 6,266,645 | | | ||||
Less: Redeemed Twin Ridge Class A ordinary shares | | | — | | | | | (1,566,661) | | | | | (4,699,984) | | | | | (6,266,645) | | | ||||
Sub-total: Twin Ridge Class A Ordinary Shares | | | 6,266,645 | | | 21.04 | | | 4,699,984 | | | 16.65 | | | 1,566,661 | | | 6.25 | | | — | | | 0.0 |
Twin Ridge Class B Ordinary Shares(1) | | | 5,000,000 | | | 16.79 | | | 5,000,000 | | | 17.72 | | | 5,000,000 | | | 19.93 | | | 5,000,000 | | | 21.26 |
Twin Ridge Shareholders | | | 11,266,645 | | | 37.82 | | | 9,699,984 | | | 34.37 | | | 6,566,661 | | | 26.18 | | | 5,000,000 | | | 21.26 |
Carbon Revolution Shareholders(2) | | | 18,504,812 | | | 62.12 | | | 18,504,812 | | | 65.57 | | | 18,504,812 | | | 73.76 | | | 18,504,812 | | | 78.68 |
Yorkville Advisors Global, LP(3) | | | 15,000 | | | 0.05 | | | 15,000 | | | 0.05 | | | 15,000 | | | 0.06 | | | 15,000 | | | 0.06 |
Total Pro Forma MergeCo Ordinary Shares Outstanding as of December 31, 2022 | | | 29,786,457 | | | 100.00 | | | 28,219,796 | | | 100.00 | | | 25,086,473 | | | 100.00 | | | 23,519,812 | | | 100.00 |
(1) | Includes, in all scenarios, the Founder Shares to be converted into 5,000,000 MergeCo Ordinary Shares as part of the Pro Forma Transaction. |
(2) | Carbon Revolution shareholders shares are based upon anticipated total share consideration to owners of equity interests in Carbon Revolution equal to 18,672,889 MergeCo Ordinary Shares (reflecting an equity value of $186,728,889, divided by $10.00 per share), with 18,504,812 MergeCo Ordinary Shares issuable to holders of Carbon Revolution shares and 168,077 MergeCo Ordinary Shares available for issuance upon exercise of performance rights, in each case, following the cancellation of all Carbon Revolution equity incentives prior to closing. These 168,077 MergerCo Ordinary Shares available for issuance upon exercise of performance rights relate only to performance rights issued under Carbon Revolution’s STI plans and do not include any number in relation to options and performance rights issued under Carbon Revolution’s LTI plans which will be cancelled and not convertible to Carbon Revolution Shares. Additional dilution will occur when performance rights or options are issued to employees post completion of the Business Combination. As disclosed in “The Business Combination Agreement, Scheme Implementation Deed and Ancillary Documents—Other Agreements Related to the Business Combination—2023 Incentive Equity Plan”, prior to the effectiveness of the registration statement, the MergeCo Board and MergeCo’s shareholders will approve and adopt the Carbon Revolution Company FY2023 Incentive Equity Plan (the “FY2023 Incentive Equity Plan”) which will reserve for grant a number of MergeCo Ordinary Shares or other forms of equity in MergeCo. Such grants may include both one-off retention grants, and business-as-usual grants in respect of FY2023. MergeCo intends to grant initial equity incentive awards with respect to a number of MergeCo Ordinary Shares equal to 5% of the Total Shares Outstanding promptly following MergeCo’s eligibility to register the issuance of such awards on Form S-8, which is expected to occur 60 days after the closing of the Business Combination. Such awards may take the form of MergeCo Ordinary Shares or other instruments such as options or rights with respect to MergeCo Ordinary Shares. Under the terms of the Scheme Implementation Deed, Carbon Revolution must seek the consent of Twin Ridge (not to be unreasonably withheld) in relation to the form and quantum of any employee or director short-term or long-term incentive or similar arrangements in excess of such 5% limitation. The total number of MergeCo Ordinary Shares reserved for issuance upon grant of equity incentive awards thereafter is expected to equal 8% of the Total Shares Outstanding (for an aggregate of 13% of the Total Shares Outstanding, inclusive of the initial equity incentive awards). Shares or other equities issued under the FY23 Incentive Equity Plan are not included in the table above and would result in an increase of the number of equities on issue which would be dilutive to existing shares. The unaudited pro forma condensed combined financial information presented has not been adjusted to reflect such an equity issuance as the terms and conditions of such incentive awards have not yet been finalized and cannot, therefore, be quantified. |
(3) | Includes, in all scenarios, the commitment fee of 15,000 MergeCo Ordinary Shares to Yorkville Advisors irrespective of subsequent drawdown. |
(4) | The Twin Ridge Class A Ordinary Shares held by the current Twin Ridge shareholders as at December 31, 2022 less the number of Twin Ridge Class A Ordinary Shares redeemed in connection with the Extension Meeting (70.6%) is used for the purpose of the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statement of operations as shown below. |
AS OF DECEMBER 31, 2022 (in thousands) | | | Carbon Revolution Limited | | | Twin Ridge Capital Acquisition Corp. (Twin Ridge) | | | | | Twin Ridge | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||
| | CRL (Historical) | | | US GAAP (Historical) | | | IFRS Adjustments | | | IFRS (Historical) | | | Notes | | | Transaction Accounting Adjustments – Financing Transaction | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | |
| | (1) | | | (2) | | | (3) | | | (4) | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Cash and cash equivalents | | | 14,078 | | | 1,524 | | | — | | | 1,524 | | | | | 40,176 | | | 1L | | | 55,778 | | | 318,921 | | | 1A | | | 107,526 | | | 318,921 | | | 1A | | | 84,078 | | | 318,921 | | | 1A | | | 37,183 | | | 318,921 | | | 1A | | | 13,735 | |
| | | | | | | | | | | | | | | | | | — | | | | | | | (23,448) | | | 1A.1 | | | | | (70,343) | | | 1A.2 | | | | | (93,791) | | | 1A.3 | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | | | (6,536) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (21,845) | | | 1D | | | | | (21,845) | | | 1D.1 | | | | | (21,845) | | | 1D.2 | | | | | (21,845) | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | |||||||||||||
Restricted Cash | | | — | | | — | | | | | — | | | | | 14,347 | | | 1L | | | 14,347 | | | | | | | 14,347 | | | | | | | 14,347 | | | | | | | 14,347 | | | — | | | | | 14,347 | |||||||||
Receivables | | | 5,674 | | | — | | | | | — | | | | | — | | | | | 5,674 | | | | | | | 5,674 | | | | | | | 5,674 | | | | | | | 5,674 | | | — | | | | | 5,674 | ||||||||||
Contract assets | | | 1,946 | | | — | | | | | — | | | | | — | | | | | 1,946 | | | | | | | 1,946 | | | | | | | 1,946 | | | | | | | 1,946 | | | — | | | | | 1,946 | ||||||||||
Inventories | | | 20,754 | | | — | | | | | — | | | | | — | | | | | 20,754 | | | | | | | 20,754 | | | | | | | 20,754 | | | | | | | 20,754 | | | — | | | | | 20,754 | ||||||||||
Prepaid expenses | | | — | | | 111 | | | | | 111 | | | | | — | | | | | 111 | | | | | | | 111 | | | | | | | 111 | | | | | | | 111 | | | — | | | | | 111 | ||||||||||
Other current assets | | | 2,640 | | | 19 | | | — | | | 19 | | | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | | | — | | | | | 2,659 | ||||||
Total current assets | | | 45,092 | | | 1,654 | | | — | | | 1,654 | | | | | 54,523 | | | | | 101,269 | | | 51,748 | | | | | 153,017 | | | 28,300 | | | | | 129,569 | | | (18,595) | | | | | 82,674 | | | (42,043) | | | | | 59,226 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Non-current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Marketable securities held in Trust Account | | | — | | | 318,921 | | | | | 318,921 | | | | | — | | | | | 318,921 | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | | | (318,921) | | | 1A | | | — | |||
Property, plant and equipment | | | 58,488 | | | — | | | | | — | | | | | — | | | | | 58,488 | | | | | | | 58,488 | | | | | | | 58,488 | | | | | | | 58,488 | | | — | | | | | 58,488 | ||||||||||
Right-of-use assets | | | 7,804 | | | — | | | | | — | | | | | — | | | | | 7,804 | | | | | | | 7,804 | | | | | | | 7,804 | | | | | | | 7,804 | | | — | | | | | 7,804 | ||||||||||
Intangible assets | | | 15,688 | | | — | | | — | | | — | | | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | | | — | | | | | 15,688 | ||||||
Total non-current assets | | | 81,980 | | | 318,921 | | | — | | | 318,921 | | | | | — | | | | | 400,901 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | | | (318,921) | | | | | 81,980 | ||||||
Total assets | | | 127,072 | | | 320,575 | | | — | | | 320,575 | | | | | 54,523 | | | | | 502,170 | | | (267,173) | | | | | 234,997 | | | (290,621) | | | | | 211,549 | | | (337,516) | | | | | 164,654 | | | (360,964) | | | | | 141,206 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Payables | | | 8,120 | | | 6,536 | | | | | 6,536 | | | | | — | | | | | 14,656 | | | (6,536) | | | 1C | | | 5,182 | | | (6,536) | | | 1C | | | 5,182 | | | (6,536) | | | 1C | | | 5,182 | | | (6,536) | | | 1C | | | 5,182 | |||
| | | | | | | | | | | | | | | | | | (2,938) | | | 1D | | | | | (2,938) | | | 1D.1 | | | | | (2,938) | | | 1D.2 | | | | | (2,938) | | | 1D.3 | | | |||||||||||||
Borrowings | | | 20,581 | | | — | | | | | — | | | | | (14,658) | | | 1L | | | 5,923 | | | | | | | 5,923 | | | | | | | 5,923 | | | | | | | 5,923 | | | — | | | | | 5,923 | |||||||||
Lease liability | | | 633 | | | — | | | | | — | | | | | — | | | | | 633 | | | | | | | 633 | | | | | | | 633 | | | | | | | 633 | | | — | | | | | 633 | ||||||||||
Contract liability | | | 779 | | | — | | | | | — | | | | | — | | | | | 779 | | | | | | | 779 | | | | | | | 779 | | | | | | | 779 | | | — | | | | | 779 | ||||||||||
Deferred income | | | 1,763 | | | — | | | | | — | | | | | — | | | | | 1,763 | | | | | | | 1,763 | | | | | | | 1,763 | | | | | | | 1,763 | | | — | | | | | 1,763 | ||||||||||
Provisions | | | 4,414 | | | — | | | — | | | — | | | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | | | — | | | | | 4,414 | ||||||
Total current liabilities | | | 36,290 | | | 6,536 | | | — | | | 6,536 | | | | | (14,658) | | | | | 28,168 | | | (9,474) | | | | | 18,694 | | | (9,474) | | | | | 18,694 | | | (9,474) | | | | | 18,694 | | | (9,474) | | | | | 18,694 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Non-current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Borrowings | | | — | | | — | | | 318,921 | | | 318,921 | | | (a) | | | 69,181 | | | 1L | | | 388,102 | | | (318,921) | | | 1A | | | 69,181 | | | (318,921) | | | 1A | | | 69,181 | | | (318,921) | | | 1A | | | 69,181 | | | (318,921) | | | 1A | | | 69,181 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Lease liability | | | 7,694 | | | — | | | | | — | | | | | — | | | | | 7,694 | | | | | | | 7,694 | | | | | | | 7,694 | | | | | | | 7,694 | | | — | | | | | 7,694 | ||||||||||
Deferred income | | | 15,950 | | | — | | | | | — | | | | | — | | | | | 15,950 | | | | | | | 15,950 | | | | | | | 15,950 | | | | | | | 15,950 | | | — | | | | | 15,950 | ||||||||||
Provisions | | | 657 | | | — | | | | | — | | | | | — | | | | | 657 | | | | | | | 657 | | | | | | | 657 | | | | | | | 657 | | | — | | | | | 657 | ||||||||||
Warrant liabilities | | | — | | | 555 | | | | | 555 | | | | | — | | | | | 555 | | | | | | | 555 | | | | | | | 555 | | | | | | | 555 | | | | | | | 555 | |||||||||||
Commitment fee shares | | | — | | | 217 | | | — | | | 217 | | | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | | | — | | | | | 217 | ||||||
Total non-current liabilities | | | 24,301 | | | 772 | | | 318,921 | | | 319,693 | | | | | 69,181 | | | | | 413,175 | | | (318,921) | | | | | 94,254 | | | (318,921) | | | | | 94,254 | | | (318,921) | | | | | 94,254 | | | (318,921) | | | | | 94,254 | ||||||
Total Liabilities | | | 60,591 | | | 7,308 | | | 318,921 | | | 326,229 | | | | | 54,523 | | | | | 441,343 | | | (328,395) | | | | | 112,948 | | | (328,395) | | | | | 112,948 | | | (328,395) | | | | | 112,948 | | | (328,395) | | | | | 112,948 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AS OF DECEMBER 31, 2022 (in thousands) | | | Carbon Revolution Limited | | | Twin Ridge Capital Acquisition Corp. (Twin Ridge) | | | | | Twin Ridge | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||
| | CRL (Historical) | | | US GAAP (Historical) | | | IFRS Adjustments | | | IFRS (Historical) | | | Notes | | | Transaction Accounting Adjustments – Financing Transaction | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | |
| | (1) | | | (2) | | | (3) | | | (4) | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Commitment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Class A ordinary shares subject to possible redemption, 21,308,813 shares at redemption value | | | — | | | 318,921 | | | (318,921) | | | — | | | (a) | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | |||||
Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Twin Ridge | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Preference shares | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | ||||||
Class A ordinary shares | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | | | — | | | | | — | ||||||
Class B ordinary shares | | | — | | | 1 | | | 34,554 | | | 34,555 | | | (b) | | | — | | | | | 34,555 | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | | | (34,555) | | | 1G | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
MergeCo common stock | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | 318,921 | | | 1A | | | 517,509 | | | 318,921 | | | 1A | | | 494,491 | | | 318,921 | | | 1A | | | 448,618 | | | 318,921 | | | 1A | | | 428,433 | ||
| | | | | | | | | | | | | | | | | | — | | | | | | | (23,448) | | | 1A.1 | | | | | (70,343) | | | 1A.2 | | | | | (93,791) | | | 1A.3 | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | 22 | | | 1E | | | | | 22 | | | 1E | | | | | 22 | | | 1E | | | | | 22 | | | 1E | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | | | 385,536 | | | 1F | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (4,715) | | | 1D | | | | | (4,285) | | | 1D.1 | | | | | (3,263) | | | 1D.2 | | | | | — | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | | | 7,876 | | | 1B | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | | | 444 | | | 1H | | | |||||||||||||
| | | | | | | | | | | | | | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | | | 34,555 | | | 1G | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | | | (225,130) | | | 1K | | | |||||||||||||
Additional paid-in-capital | | | — | | | 7,876 | | | — | | | 7,876 | | | | | — | | | | | 7,876 | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | | | (7,876) | | | 1B | | | — | ||
Share based payment reserves | | | — | | | — | | | | | — | | | | | — | | | | | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | | | 24,187 | | | 1C.1 | | | 24,187 | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Carbon Revolution Contributed equity | | | 385,536 | | | — | | | — | | | — | | | | | — | | | | | 385,536 | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | | | (385,536) | | | 1F | | | — | ||
Carbon Revolution Reserves | | | 7,070 | | | — | | | — | | | — | | | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | | | — | | | | | 7,070 | ||||||
Accumulated losses | | | (326,125) | | | (13,531) | | | (34,554) | | | (48,085) | | | (b) | | | | | | | (374,210) | | | — | | | | | (426,717) | | | — | | | | | (427,147) | | | — | | | | | (428,168) | | | — | | | | | (431,432) | ||||||
| | | | | | | | | | | | | | | | | | (14,192) | | | 1D | | | | | (14,622) | | | 1D.1 | | | | | (15,643) | | | 1D.2 | | | | | (18,907) | | | 1D.3 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (22) | | | 1E | | | | | (22) | | | 1E | | | | | (22) | | | 1E | | | | | (22) | | | 1E | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | | | (13,662) | | | 1C | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | | | (24,187) | | | 1C.1 | | | |||||||||||||
| | | | | | | | | | | | | | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | | | (444) | | | 1H | | | |||||||||||||
Total Stockholders’ Equity | | | 66,481 | | | 313,267 | | | (318,921) | | | (5,654) | | | | | — | | | | | 60,827 | | | 61,222 | | | | | 122,049 | | | 37,774 | | | | | 98,601 | | | (9,121) | | | | | 51,706 | | | (32,569) | | | | | 28,258 | ||||||
Total Liabilities and Stockholders’ Equity | | | 127,072 | | | 320,575 | | | — | | | 320,575 | | | | | 54,523 | | | | | 502,170 | | | (267,173) | | | | | 234,997 | | | (290,621) | | | | | 211,549 | | | (337,516) | | | | | 164,654 | | | (360,964) | | | | | 141,206 |
| | | | | | | | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||||||
AS OF JUNE 30, 2022 (in thousands) | | | CRL | | | Twin Ridge | | | IFRS Conversion and Presentation Alignment | | | Twin Ridge IFRS | | | Notes | | | Transaction Accounting Adjustments - Financing transactions | | | Notes | | | Pro forma for financing transaction | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Sale of Wheels | | | 38,276 | | | — | | | — | | | — | | | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | | | — | | | | | 38,276 | ||||||
Engineering Services | | | 464 | | | — | | | — | | | — | | | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | | | — | | | | | 464 | ||||||
Sale of tooling | | | 1,596 | | | — | | | — | | | — | | | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | | | — | | | | | 1,596 | ||||||
Total Revenue | | | 40,336 | | | | | | | — | | | | | — | | | | | 40,336 | | | — | | | | | 40,336 | | | | | | | 40,336 | | | | | | | 40,336 | | | — | | | | | 40,336 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Cost of goods sold | | | (57,445) | | | — | | | — | | | — | | | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | | | — | | | | | (57,445) | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Gross Margin | | | (17,109) | | | | | | | — | | | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | | | — | | | | | (17,109) | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Other income | | | 4,320 | | | 338 | | | | | 338 | | | | | — | | | | | 4,658 | | | | | | | 4,658 | | | | | | | 4,658 | | | | | | | 4,658 | | | | | | | 4,658 | |||||||||||
Operational expenses | | | (2,013) | | | (3,244) | | | | | (3,244) | | | | | — | | | | | (5,257) | | | | | | | (5,257) | | | | | | | (5,257) | | | | | | | (5,257) | | | | | | | (5,257) | |||||||||||
Research and development | | | (16,933) | | | | | | | — | | | | | — | | | | | (16,933) | | | — | | | | | (16,933) | | | | | | | (16,933) | | | | | | | (16,933) | | | | | | | (16,933) | |||||||||||
Administrative expenses | | | (13,146) | | | | | | | — | | | | | — | | | | | (13,146) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | | | (444) | | | 1H | | | (13,590) | ||||
Marketing expenses | | | (1,550) | | | | | | | — | | | | | — | | | | | (1,550) | | | | | | | (1,550) | | | | | | | (1,550) | | | | | | | (1,550) | | | | | | | (1,550) | ||||||||||||
Borrowing costs | | | (1,390) | | | | | 14,070 | | | 14,070 | | | (d) | | | (11,402) | | | 1M | | | 1,278 | | | (22) | | | 1E | | | 1,256 | | | (22) | | | 1E | | | 1,256 | | | (22) | | | 1E | | | 1,256 | | | (22) | | | 1E | | | 1,256 | |
Transaction costs | | | — | | | — | | | — | | | — | | | | | — | | | | | — | | | (13,662) | | | 1C | | | (56,001) | | | (13,662) | | | 1C | | | (56,432) | | | (13,662) | | | 1C | | | (57,453) | | | (13,662) | | | 1C | | | (69,429) | ||
| | | | | | | | | | | | | | | | | | (25,210) | | | 1C.1 | | | — | | | (25,210) | | | 1C.1 | | | — | | | (25,210) | | | 1C.1 | | | | | (25,210) | | | 1C.1 | | | |||||||||||
| | | | | | | | | | | | | | | | | | (17,129) | | | 1D | | | — | | | (17,560) | | | 1D.1 | | | — | | | (18,581) | | | 1D.2 | | | | | (21,845) | | | 1D.3 | | | |||||||||||
| | | | | | | | | | | | | | | | | | — | | | | | — | | | | | | | | | — | | | | | | | (8,712) | | | 1A.3 | | | ||||||||||||||||
Change in fair value of warrant liability | | | — | | | 13,648 | | | (13,648) | | | — | | | (d) | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | |||||||||
Change in fair value of over-allotment liability | | | — | | | 422 | | | (422) | | | — | | | (d) | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | |||||||||
(Loss)/profit before income taxes | | | (47,821) | | | 11,164 | | | — | | | 11,164 | | | | | (11,402) | | | | | (48,059) | | | (56,467) | | | | | (104,526) | | | (56,898) | | | | | (104,957) | | | (57,919) | | | | | (105,978) | | | (69,895) | | | | | (117,954) | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Net Loss | | | (47,821) | | | 11,164 | | | — | | | 11,164 | | | | | (11,402) | | | | | (48,059) | | | (56,467) | | | | | (104,526) | | | (56,898) | | | | | (104,957) | | | (57,919) | | | | | (105,978) | | | (69,895) | | | | | (117,954) | ||||||
Pro forma weighted average common shares outstanding - basic and diluted | | | | | | | | | | | | | | | | | | | | | | | 29,786,457 | | | | | | | 28,219,796 | | | | | | | 25,086,473 | | | | | | | 23,519,812 | ||||||||||||||||
Pro forma net loss per share-basic and diluted | | | | | | | | | | | | | | | | | | | | | | | (3.51) | | | | | | | (3.72) | | | | | | | (4.22) | | | | | | | (5.02) |
| | | | | | | | | | | | | | | | | | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2022 (in thousands) | | | CRL | | | Twin Ridge | | | IFRS Conversion and Presentation Alignment | | | Twin Ridge IFRS | | | Notes | | | Transaction Accounting Adjustments - Financing transaction | | | Notes | | | Pro forma for financing tranaction | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma | | | Transaction Accounting Adjustments - Business Combination | | | Notes | | | Pro Forma |
| | AUD | | | AUD | | | AUD | | | AUD | | | | | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | | | AUD | | | | | |||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Sale of Wheels | | | 18,009 | | | | | | | — | | | | | — | | | | | 18,009 | | | | | | | 18,009 | | | | | | | 18,009 | | | | | | | 18,009 | | | | | | | 18,009 | ||||||||||||
Engineering Services | | | — | | | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | ||||||||||||
Sale of tooling | | | — | | | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | ||||||||||||
Total Revenue | | | 18,009 | | | | | | | — | | | | | — | | | | | 18,009 | | | — | | | | | 18,009 | | | | | | | 18,009 | | | | | | | 18,009 | | | — | | | | | 18,009 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Cost of goods sold | | | (25,586) | | | | | | | — | | | | | — | | | | | (25,586) | | | | | | | (25,586) | | | | | | | (25,586) | | | | | | | (25,586) | | | | | | | (25,586) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Gross Margin | | | (7,577) | | | | | | | — | | | | | — | | | | | (7,577) | | | — | | | | | (7,577) | | | | | | | (7,577) | | | | | | | (7,577) | | | — | | | | | (7,577) | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Other income | | | 2,485 | | | 4,601 | | | | | 4,601 | | | | | — | | | | | 7,086 | | | | | | | 7,086 | | | | | | | 7,086 | | | | | | | 7,086 | | | | | | | 7,086 | |||||||||||
Operational expenses | | | (388) | | | (5,180) | | | | | (5,180) | | | | | — | | | | | (5,568) | | | | | | | (5,568) | | | | | | | (5,568) | | | | | | | (5,568) | | | | | | | (5,568) | |||||||||||
Research and development | | | (9,134) | | | | | | | — | | | | | — | | | | | (9,134) | | | | | | | (9,134) | | | | | | | (9,134) | | | | | | | (9,134) | | | | | | | (9,134) | ||||||||||||
Administrative expenses | | | (7,855) | | | | | | | — | | | | | — | | | | | (7,855) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | | | (305) | | | 1J | | | (8,160) | ||||
Marketing expenses | | | (732) | | | | | | | — | | | | | — | | | | | (732) | | | | | | | (732) | | | | | | | (732) | | | | | | | (732) | | | | | | | (732) | ||||||||||||
Borrowing costs | | | (1,037) | | | | | 1,048 | | | 1,048 | | | (d) | | | (6,253) | | | 1M | | | (6,242) | | | 224 | | | 1I | | | (6,018) | | | 224 | | | 1I | | | (6,018) | | | 224 | | | 1I | | | (6,018) | | | 224 | | | 1I | | | (6,018) | |
Transaction costs | | | (3,243) | | | | | | | | | | | — | | | | | (3,243) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | | | 305 | | | 1J | | | (2,938) | |||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Change in fair value of warrant liability | | | — | | | 1,272 | | | (1,272) | | | — | | | (d) | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | |||||||||
Fair value of Commitment fee shares | | | — | | | (224) | | | 224 | | | — | | | (d) | | | — | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | |||||||||
(Loss)/profit before income taxes | | | (27,481) | | | 469 | | | — | | | 469 | | | | | (6,253) | | | | | (33,265) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||
Net (Loss)/profit | | | (27,481) | | | 469 | | | — | | | 469 | | | | | (6,253) | | | | | (33,265) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | | | 224 | | | | | (33,041) | ||||||
Pro forma weighted average common shares outstanding - basic and diluted | | | | | | | | | | | | | | | | | | | | | | | 29,786,457 | | | | | | | 28,219,796 | | | | | | | 25,086,473 | | | | | | | 23,519,812 | ||||||||||||||||
Pro forma net loss per share-basic and diluted | | | | | | | | | | | | | | | | | | | | | | | (1.11) | | | | | | | (1.17) | | | | | | | (1.32) | | | | | | | (1.40) |
1. | Basis of Presentation |
• | Carbon Revolution’s consolidated balance sheet as of December 31, 2022 (unaudited), and the related notes, for the six months ended December 31, 2022 included elsewhere in this proxy statement/prospectus; and |
• | Twin Ridge’s balance sheet as of December 31, 2022 (audited) and the annual financial statements included in Twin Ridge’s Amendment No. 1 to Annual Report on Form 10-K filed with the SEC on April 4, 2023. |
• | Carbon Revolution’s condensed consolidated statements of operations for the year ended June 30, 2022 and the related notes included elsewhere in this proxy statement/prospectus; and |
• | Twin Ridge’s condensed statement of operations for the period from January 7, 2021 (inception) through December 31, 2021 and the related notes included elsewhere in this proxy statement/prospectus, and the unaudited condensed statement of operations for the six months ended June 30, 2022 and for the period from January 7, 2021 (inception) through June 30, 2021 (as restated) and the related notes included in Twin Ridge's Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2022. The income statement of Twin Ridge for the year ended June 30, 2022 is arithmetically derived from such financial statements as set out in Note 2. |
• | Carbon Revolution’s condensed consolidated statements of operations for the six months ended December 31, 2022 and the related notes included elsewhere in this proxy statement/prospectus; and |
• | Twin Ridge’s condensed statement of operations for the three months ended September 30, 2022 and the fourth quarter financial information and the related notes included in Twin Ridge’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2022 and Amendment No. 1 to Annual Report on Form 10-K, filed with the SEC on April 4, 2023. The income statement of Twin Ridge for the six months ended December 31, 2022 is arithmetically derived from such financial statements as set out in Note 2. |
2. | IFRS, Policy and Presentation Alignment |
| The statement of operations was translated using the average exchange rate during the following period: | | | 1 AUD = | |
| 3 months ended September 30, 2021 | | | 0.7422 USD | |
| 3 months ended December 31, 2021 | | | 0.7366 USD | |
| 3 months ended March 31, 2022 | | | 0.7330 USD | |
| 3 months ended June 30, 2022 | | | 0.7289 USD | |
| 3 months ended September 30, 2022 | | | 0.6836 USD | |
| 3 months ended December 31, 2022 | | | 0.6570 USD | |
3. | Adjustments to Unaudited Pro Forma Condensed Combined Financial Information |
• | (a) Reflects the U.S. GAAP to IFRS conversion adjustment related to the reclassification of Twin Ridge’s historical mezzanine equity (Twin Ridge Class A Ordinary Shares subject to possible redemption) into Non-current Liabilities (Borrowings). |
• | (b) Reflects the award of Founder Shares measured at fair value of A$34.6 million in accumulated losses representing an IFRS 2 charge for the Twin Ridge Class B Ordinary Shares awarded to the Sponsor in Q1, 2021. IFRS 2 requires that where an issuance of shares is made for less than fair value, an IFRS 2 expense is recognized for any unidentifiable services provided at the value of the difference. The adjustment represents the value of the difference between the aggregate consideration paid and the aggregate value of B shares issued with reference to the USD$5.01 fair value of the Founder Shares as determined by the concurrent award of Class B shares to the directors of Twin Ridge described below. As the award did not contain any performance or forfeiture conditions, nor any variability based on the outcome of a subsequent business combination, the IFRS 2 charge is recognized at the date of issuance of the shares being for services deemed to be provided by the Sponsor up to that date. As this took place prior to July 1, 2021 no corresponding pro forma compensation charge is recognized in the pro forma statement of operations for the twelve months ended June 30, 2022. US GAAP does not contain a similar prescriptive requirement regarding unidentifiable services. |
• | (c) As reflected in the pro forma C and D series of adjustments below, transaction costs that are not direct and incremental to the issuance of new shares for consideration are expensed as a pro forma adjustment. |
| Costs | | | No redemption scenario | | | 25% redemption scenario | | | 75% redemption scenario | | | Maximum redemption scenario | |
| Fraction of Carbon transaction costs capitalized based on proportionate shares issued to Twin Ridge shareholders. These predominantly comprise US counsel and other direct and incremental advisory fees related to the transaction and preparation of the associated registration statement. | | | 4,533 | | | 4,111 | | | 3,115 | | | — | |
| Fraction of Carbon transaction costs expensed based on proportionate share and other costs not direct and incremental to the transaction. These other costs include Australian legal counsel, advisory fees relating to the structure of MergeCo, taxation advice and insurances recognized as a pro forma expense for the year ended June 30, 2022. | | | 17,311 | | | 17,734 | | | 18,730 | | | 21,845 | |
• | (d) Reflects the U.S. GAAP to IFRS conversion adjustment related to the reclassification of Twin Ridge’s change in fair value of warrant liability and fair value of commitment fees shares into finance expenses (Borrowings). |
• | (1A) Reflects the recognition and reclassification of AUD equivalent $318.9 million of cash and marketable securities held in the Trust Account as of December 31, 2022 to cash and cash equivalents that becomes available for general use by MergeCo following the closing of the Business Combination. It also reflects the issuance of MergeCo Ordinary Shares in exchange for Twin Ridge Class A Ordinary Shares currently classified in borrowings. |
• | (1A.1) Represents the impact to cash of a 25% redemption scenario in which 1,566,661 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$23.4 million allocated to common stock, using a par value of USD$0.0001 per share at a redemption price of USD$10.00 per share. |
• | (1A.2) Represents the impact to cash of a 75% redemption scenario in which 4,699,984 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$70.3 million allocated to common stock, using a par value of AUD0.0001 per share at a redemption price of USD$10.00 per share. |
• | (1A.3) Represents the impact to cash of a maximum redemption scenario in which 6,266,645 shares of Twin Ridge Class A Ordinary Shares are redeemed for A$93.8 million allocated to common stock, using a par value of USD$0.0001 per share. Additionally, an IFRS 2 charge has been recognized for the excess of the fair value of MergeCo Ordinary Shares issued to Twin Ridge shareholders over the net assets of Twin Ridge as a pro forma adjustment. |
• | (1B) Under Australian law share capital does not have any par value or share premium. Accordingly, this pro forma adjustment represents the reclassification of Twin Ridge additional paid-in-capital to MergeCo Ordinary Shares as a result of the Business Combination. |
• | (1C) Represents the preliminary estimated direct and incremental transaction costs incurred prior to, or concurrent with, the completion of the Business Combination by Twin Ridge recognized in profit and loss. |
• | (1C.1) Represents a non-cash compensation incurred, concurrent with, the completion of the Business Combination by Twin Ridge through a share based award payment to advisors. $16.4 million is translated at the relevant AUD/USD exchange rates. |
• | (1D) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new capital raised and the listing of Carbon Revolution legacy shareholder securities in a no redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.1) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new and existing capital using a 25% redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.2) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution, allocated between new and existing capital using a 75% redemption scenario directly in equity and in profit and loss respectively. |
• | (1D.3) Represents preliminary estimated direct and incremental transaction costs incurred by Carbon Revolution recognized in profit and loss in a maximum redemption scenario with no new capital raised. |
• | (1E) Represents the commitment fee being the fair value of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors for establishment of the committed equity facility which takes effect at closing of the Business Combination. The fair value of MergeCo Ordinary Shares is determined by reference to the implied value based on the market price of Carbon Revolution shares and associated proposed transaction exchange ratio. |
• | (1F) Represents the pro forma adjustment for the exchange of Carbon Revolution shares as a result of the Business Combination. |
• | (1G) Represents the pro forma adjustment for the award of Founder Shares of A$34.6 million as a result of the Business Combination with no forfeiture conditions and the award of shares to the Twin Ridge directors that are contingent on successful completion of a business combination. |
• | (1H) Represents the pro forma adjustment for the share-based compensation offered to the directors that is contingent on successful completion of a business combination. |
• | (1I) Reversal of commitment fee being the fair value of 15,000 MergeCo Ordinary Shares issued to Yorkville Advisors for establishment of the committed equity facility which takes effect at closing of the Business Combination. This has been recognized as part of the pro-forma adjustments in the year ended June 30, 2022. |
• | (1J) Represents a reclassification of transaction expenses comprising existing staff costs to administrative expenses in order to meet IFRS requirements. |
• | (1K) Represents the pro forma adjustment for the 70.6% Twin Ridge Class A Ordinary Shares, the holders of which exercised their redemption rights in connection with the Extension Meeting totaling A$225.1 million in redemptions. |
• | (1L) The pro forma presentation gives effect to financing entered into subsequent to December 31, 2022 that is not contingent on consummation of the merger. The financing adjustments amounts give effect to |
• | A$88.6 million equivalent in 4 year borrowings pursuant to the PIUS Financing; |
• | associated transaction costs and financing fees of A$19.4 million paid out of proceeds; |
• | cash reserves required to be maintained of A$14.3 million – classified as restricted cash; |
• | The repayment of existing debt outstanding at December 31, 2022 of A$14.7 million; and |
• | Net cash proceeds of A$40.2 million |
| | A$’000 | |
Restricted Cash | | | 14,347 |
Transaction costs and financing fees | | | 19,380 |
Repayment of borrowings | | | 14,658 |
Cash (Net proceeds) | | | 40,176 |
Total | | | 88,561 |
• | (1M) Reflects coupon interest at 8.5% per annum and the amortization of transaction related costs on the drawdown of borrowings under the PIUS Financing as if it had been drawn down on July 1, 2021 concurrent with the Business Combination as presented in the pro forma statement of operations. |
4. | Loss per Share |
• | Class A Ordinary Shares, par value $0.0001 per share, all of which were subject to possible redemption at approximately $10.00 per share: 500,000,000 shares authorized, 21,308,813 shares issued and outstanding; and |
• | Class B Ordinary Shares, par value $0.0001 per share: 50,000,000 shares authorized, 5,327,203 shares issued and outstanding (0.3 million of which will be forfeited). |
• | None of Carbon Revolution’s outstanding vested or unvested options were exercised immediately prior to the Business Combination. |
| | Net Earnings (loss) per share-basic and diluted | ||||||||||
| | Scenario 1: Assuming No Redemptions | | | Scenario 2: Assuming 25% Redemptions | | | Scenario 3: Assuming 75% Redemptions | | | Scenario 4: Assuming Maximum Redemptions | |
Year ended June 30, 2022 | | | | | | | | | ||||
Pro forma net loss (in thousands) | | | (104,526) | | | (104,957) | | | (105,978) | | | (117,954) |
Net loss per share-basic and diluted | | | (3.51) | | | (3.72) | | | (4.22) | | | (5.02) |
| | | | | | | | |||||
6 months ended December 31, 2022 | | | | | | | | | ||||
Pro forma net loss (in thousands) | | | (33,041) | | | (33,041) | | | (33,041) | | | (33,041) |
Net loss per share-basic and diluted | | | (1.11) | | | (1.17) | | | (1.32) | | | (1.40) |
| | | | | | | | |||||
Number of Shares | | | | | | | | | ||||
Twin Ridge shareholders* | | | 11,266,645 | | | 9,699,984 | | | 6,566,661 | | | 5,000,000 |
Carbon Revolution Shareholders | | | 18,504,812 | | | 18,504,812 | | | 18,504,812 | | | 18,504,812 |
Yorkville Advisors Global, LP | | | 15,000 | | | 15,000 | | | 15,000 | | | 15,000 |
| | 29,786,457 | | | 28,219,796 | | | 25,086,473 | | | 23,519,812 |
(*) | The historical shares of MergeCo outstanding prior to the Business Combination will be cancelled. |
2 | Carbon Revolution’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the financial information as of and for the three months ended March 31, 2023 or the financial projections and, accordingly, they did not and do not express an opinion, and did not and do not provide any other form of assurance with respect thereto and assume no responsibility and disclaim any association for the purpose of the information provided in this proxy statement/prospectus. The report of the Company’s independent auditors included elsewhere in this proxy statement/prospectus relates to the historical financial information of Carbon Revolution. It does not extend to the financial information as of and for the quarter ended March 31, 2023 or the financial projections and should not be read to do so. |
• | Action Composites (“Action”): Action (formerly Thyssenkrupp Carbon Components) has developed carbon fiber wheels for Porsche using a braided rim technology. These wheels are reportedly 20% lighter than Porsche’s regular aluminum wheels for the vehicle; |
• | Blackstone Tek (“BST”): BST produces single piece carbon fiber wheels for the motorcycle and automotive aftermarkets; |
• | Bucci Composites (“Bucci”): Bucci has developed a low volume 22-inch single piece carbon fiber wheel for the Bentley Bentayga Mulliner and a 20-inch aftermarket carbon fiber automotive wheel; |
• | Duqueine Group (“Duqueine”): Duqueine has developed a single piece carbon fiber wheel for the Alpine A110R; |
• | Dymag Group Limited (“Dymag”): Dymag sells carbon fiber motorcycle wheels and two piece carbon fiber wheels for the automotive aftermarket and niche vehicle manufacturers; |
• | Lacks Enterprises (“Lacks”): Lacks has developed a two-piece wheel with a carbon fiber rim and a forged aluminum face, including for the Dodge Challenger SRT Demon 170; |
• | ESE Carbon (“ESE”): ESE has developed a single piece carbon fiber wheel and has a focus on the aftermarket; and |
• | Mubea Carbo Tech (“Carbo Tech”): Carbo Tech has developed carbon fiber wheels for BMW using a carbon-fiber/aluminum hybrid wheel, with an aluminum hub and spokes and a carbon-fiber rim. The hybrid wheel option for the vehicle such wheels are made for appears to be approximately equivalent in weight to the forged aluminum wheel option that is also offered for the vehicle. In addition, Carbo Tech's website refers to a Carbo Tech single piece carbon fiber wheel consisting or a carbon fiber composite “rim bed and rim spider”. |
(i) | Fixed – annual remuneration includes base salary, superannuation (pension contributions), other eligible salary sacrifice benefits and employee rights where this has been substituted for base salary. Annual remuneration is reviewed annually based on performance and economic data or on promotion. |
(ii) | At risk – short-term incentive (“STI”) is an annual incentive opportunity delivered in cash and equity, or 100% (typically equity including STI deferral). The Carbon Revolution Board sets financial, and non-financial objectives for this element and determines overall weighting of the objectives annually based on business priorities. The Carbon Revolution Board has the discretion to adjust STI outcomes to ensure that individual outcomes are appropriate. Typically, fifty percent of STI award is made in cash or fully vested equity and 50% deferred into rights, which is subject to a continuous service condition. This generally requires the participant to remain employed until the one year anniversary on which the rights are granted. For fiscal year 2022, STIs were awarded at 40% of maximum opportunities, based on corporate and individual performance. |
(iii) | At risk – long-term incentive (“LTI”) is a three-year incentive opportunity delivered through options or performance rights with vesting dependent on service conditions and achievement of challenging performance conditions. Immediately following completion of the vesting period, the performance conditions are tested to determine whether, and to what extent, awards vest. This element is intended to promote the opportunity for executives to build their interests in Carbon Revolution’s equity and to achieve shareholder alignment through equity ownership. For fiscal year 2022, no LTIs vested given that LTI plans were first introduced in fiscal year 2020 and none has reached the end of its performance period. No LTI grant has yet been made in respect of fiscal 2023 and it is expected that this grant will be made after closing of the Business Combination. |
| | | A$ Year end | | | Short-term employee benefit | | | Post- employment benefits | | | Share-based payment | | |||||||||||||||||||
| | | June 30 | | | Cash | | | Other Benefits | | | Leave Benefits | | | Super- annuation | | | Salary granted as base rights(1) | | | FY21 matched rights(2) | | | STI expense(3) | | | LTI expense(4) | | | One-off equity award(5) | | |
| Managing director – Jacob Dingle | | ||||||||||||||||||||||||||||||
| | | 2022 | | | 443,538 | | | — | | | 37,038 | | | 27,500 | | | — | | | — | | | 221,211 | | | 402,528 | | | — | | |
| Chief financial officer – Gerard Buckle | | ||||||||||||||||||||||||||||||
| | | 2022 | | | 310,735 | | | — | | | 21,351 | | | 23,568 | | | — | | | — | | | 106,629 | | | 151,229 | | | 13,380 | |
| | | A$ Year end | | | Short-term employee benefit | | | Post- employment benefits | | | Share-based payment | | |||||||||||||||||||
| | | June 30 | | | Cash | | | Other Benefits | | | Leave Benefits | | | Super- annuation | | | Salary granted as base rights(1) | | | FY21 matched rights(2) | | | STI expense(3) | | | LTI expense(4) | | | One-off equity award(5) | | |
| Total executive KMP | | ||||||||||||||||||||||||||||||
| | | 2022 | | | 754,274 | | | — | | | 58,389 | | | 51,068 | | | — | | | — | | | 327,841 | | | 553,757 | | | 13,380 | |
(1) | Salary contributed to the FY21 Employee Rights Plan. |
(2) | The value of matched rights allocated in the FY21 Employee Rights Plan. |
(3) | STI expense for FY22 plus amortization of STI relating to prior years grants. |
(4) | Employee Stock Ownership Plan and FY21& FY22 LTI grants are expensed over the vesting period at a valuation determined on grant date by a third party detailed below under “—Number of LTI Awards”. |
(5) | Total expense of the one-off equity grant made to Mr. Buckle on November 29, 2019 as a sign on award to replace a portion of an incentive from his previous employer which he forfeited on joining Carbon Revolution. The face value of these shares was A$262,501 and they will vest on September 9, 2022. |
| Number of STI deferred rights and STI non-deferred rights | | |||||||||||||||||||||||||||||||||
| | | Plan | | | Balance July 1, 2021 | | | Granted as Remuneration | | | Vested and Exercised(1) | | | Lapsed | | | Balance June 30, 2022(2) | | | Grant Date | | | Vesting Date | | | Expiry Date | | | Face Value (A$) | | | Fair Value (A$) | | |
| Managing Director – Jake Dingle(3) | | | FY21 Non- deferral | | | — | | | 50,645 | | | — | | | — | | | 50,645 | | | Nov 29, 2021 | | | Nov 29, 2021 | | | Nov 29, 2031 | | | 1.180 | | | 1.05 | |
| FY21 STI Deferral | | | — | | | 50,645 | | | — | | | — | | | 50,645 | | | Nov 29, 2021 | | | Nov 29, 2022 | | | Nov 29, 2031 | | | 1.180 | | | 1.18 | | |||
| FY20 Non- deferral | | | 33,549 | | | — | | | 33,549 | | | — | | | — | | | Nov 12, 2020 | | | Nov 12, 2020 | | | Nov 12, 2030 | | | 2.012 | | | 2.65 | | |||
| FY20 STI Deferral | | | 33,548 | | | — | | | — | | | — | | | 33,548 | | | Nov 12, 2020 | | | Nov 12, 2021 | | | Nov 12, 2030 | | | 2.012 | | | 2.012 | | |||
| Chief Financial Officer – Gerard Buckle | | | FY21 Non- deferral | | | — | | | 23,634 | | | — | | | — | | | 23,634 | | | Nov 29, 2021 | | | Nov 29, 2021 | | | Nov 29, 2031 | | | 1.180 | | | 1.24 | |
| FY21 STI Deferral | | | — | | | 23,634 | | | — | | | — | | | 23,634 | | | Nov 29, 2021 | | | Nov 29, 2022 | | | Nov 29, 2031 | | | 1.180 | | | 1.18 | | |||
| FY20 Non- deferral | | | 12,654 | | | — | | | 12,654 | | | — | | | — | | | Oct 2, 2020 | | | Oct 2, 2020 | | | Oct 2, 2030 | | | 2.012 | | | 2.77 | | |||
| FY20 STI Deferral | | | 12,653 | | | — | | | — | | | — | | | 12,653 | | | Oct 2, 2020 | | | Oct 2, 2021 | | | Oct 2, 2030 | | | 2.012 | | | 2.012 | |
(1) | Deferred rights relating to FY20 STI with grant date of November 12, 2020. The number of rights granted to each participant was calculated by dividing the STI awarded by the 20-day VWAP of Shares traded on ASX during the 20-trading day period following release of the full-year financial results (on August 25, 2020), being A$2.012. |
(2) | The closing balance of STI deferred rights at June 30, 2022 represents FY20 deferred STI rights that have not been exercised and unvested STI Deferred rights for FY21 STI. The closing balance of STI Non deferred rights at June 30, 2022 represents FY20 & FY21 non-deferred STI rights that have not been exercised. The number of FY21 STI rights allocated is calculated by dividing the STI awarded by the 20-day VWAP of shares traded on ASX during the 20-trading day period following release of the full-year financial results (on August 24, 2021), being A$1.18. Rights for the FY22 STI will be granted in November 2022. |
(3) | Mr. Dingle was granted 101,290 STI rights (50,645 STI deferred rights and 50,645 STI non-deferred rights) as part of his remuneration package approved at Carbon Revolution’s 2021 annual general meeting. This grant relates to the FY21 STI award. |
| Number of FY22 Employee Rights | | |||||||||||||||||||||||||||||||||
| | | Plan | | | Balance July 1, 2021 | | | Rights purchased | | | Matching rights | | | Rights vested and exercised | | | Lapsed | | | Balance June 30, 2022 | | | Grant Date Commencing | | | Fair Value (A$) | | | Face Value (A$) | | | Vesting Date(1) | | |
| Managing Director – Jake Dingle | | | FY21 Non- deferral | | | 35,650 | | | — | | | — | | | 35,650 | | | — | | | — | | | Nov 2020 | | | $2.012 | | | $2.58 | | | Nov 20 to June 30, 2021 | |
| Chief Financial Officer – Gerard Buckle | | | FY21 Non- deferral | | | 31,063 | | | — | | | — | | | 31,063 | | | — | | | — | | | Nov 2020 | | | $2.012 | | | $2.58 | | | Nov 20 to June 30, 2021 | |
(1) | Base rights purchased vested on a monthly basis from November 2020 to June 2021. Matched rights vested on 30 June 2021. |
| Number of LTI Awards | | ||||||||||||||||||||||||||||||||||||
| | | Plan | | | Balance July 1, 2021 | | | Granted as Remuneration | | | Vested and Exercised | | | Lapsed | | | Balance June 30, 2022 | | | Grant Date | | | Vesting Date | | | Expiry Date | | | Exercise Price (A$) | | | Face Value(1) (A$) | | | Fair Value(2) (A$) | | |
| Managing Director – Jake Dingle | | | FY22 Options | | | — | | | 1,210,826 | | | — | | | — | | | 1,210,826 | | | Dec 20, 2021 | | | Oct 28, 2024 | | | Sept 20, 2026 | | | $1.60 | | | $0.32 | | | 0.12 & 0.13 | |
| FY21 Rights | | | 186,381 | | | — | | | — | | | — | | | 186,381 | | | Nov 12, 2020 | | | Sept 20, 2023 | | | Sept 20, 2023 | | | nil | | | $2.01 | | | $2.16 | | |||
| FY20 ESOP Options | | | 1,273,419 | | | — | | | — | | | — | | | 1,273,419 | | | Dec 23, 2019 | | | Nov 29, 2022 | | | Nov 29, 2024 | | | $2.60 | | | $2.60 | | | $0.77 | | |||
| Chief Financial Officer – Gerard Buckle | | | FY22 Options | | | — | | | 678,062 | | | — | | | — | | | 678,062 | | | Dec 20, 2021 | | | Oct 28, 2024 | | | Sept 20, 2026 | | | $1.60 | | | $0.32 | | | 0.12 & 0.13 | |
| FY21 Rights | | | 104,373 | | | — | | | — | | | — | | | 104,373 | | | Nov 12, 2020 | | | Sept 20, 2023 | | | Sept 20, 2023 | | | nil | | | $2.01 | | | $2.16 | | |||
| FY20 ESOP Options | | | 356,557 | | | — | | | — | | | — | | | 356,557 | | | Dec 23, 2019 | | | Nov 29, 2022 | | | Nov 29, 2024 | | | $2.60 | | | $2.60 | | | $0.77 | |
(1) | The face value of each FY22 option was determined provided by an independent external consultant using a binomial tree methodology as at September 20, 2021 (the “Preliminary Allocation Price”). The starting Share price input for the valuation was the VWAP of a share over the 20 trading days following the announcement of the Company’s FY21 full-year results. The 20-day VWAP calculation period commenced on August 24, 2021 and concluded on September 20, 2021. The Preliminary Allocation Price has been calculated as A$0.2124. Carbon Revolution Board determined that a premium of approximately 50% should be applied to the Preliminary Allocation Price determined above, resulting in a final allocation price of A$0.3159. |
(2) | The fair value is provided by a third-party valuation at the time of grant. The fair value of the FY22 Options that relate to the tranche associated with rTSR was A$0.12 and for the tranche associated with the strategic objective was A$0.13. |
Role | | | Annual fee for FY22 (including super guarantee) (in A$) |
Chair – Carbon Revolution Board (base fees) | | | $180,000 |
Other NED (base fees) | | | $90,000 |
Chair of the Audit and Risk Committee | | | An additional $10,000 |
Chair of the Remuneration and Nomination Committee | | | An additional $10,000 |
Committee memberships | | | An additional $5,000 per committee |
Year ended June 30, 2022 | | | Directors’ fees A$ | | | Directors’ Fees Allocated in Rights $ | | | Superannuation A$ | | | Total A$ | |||
James Douglas (Chair) | | | FY22 | | | 172,727 | | | — | | | 17,273 | | | 190,000 |
Lucia Cade | | | FY22 | | | 90,909 | | | — | | | 9,091 | | | 100,000 |
Dale McKee | | | FY22 | | | 90,909 | | | — | | | 9,091 | | | 100,000 |
Mark Bernhard | | | FY22 | | | 90,909 | | | — | | | 9,091 | | | 100,000 |
| Stage of Program Lifecycle (1) | | | Programs | | |||||||||
| Awarded programs in production | | | 6 | | | Ferrari SF90 Stradale Ferrari 812 Competizione Ferrari 296 GTB GM Corvette Z06/Z07/E-Ray JLR Range Rover Sport SV Ford Mustang Dark Horse | | ||||||
| Programs in development | | | Awarded | | | Electric Vehicles | | | 2 | | | 2 SUV / Pickup | |
| Premium ICE Vehicles | | | 3 | | | 3 Performance vehicles | | ||||||
| Under detailed design and engineering agreement | | | Electric Vehicles | | | 2 | | | 2 SUV / Pickup | | |||
| | | Premium ICE Vehicles | | | 1 | | | 1 Offroad Application | | ||||
| Total Active Programs | | | | | 14 | | | | |||||
| Programs in Aftersales | | | | | 5 | | | Ford Mustang GT350R Ford GT500 Ford GT Ferrari 488 Pista / F8 Tributo Renault Sport Megane Trophy R | |
(1) | As of May 29, 2023 |
Consolidated statements of profit or loss | | | 2022 US $’000 | | | 2022 AU $’000 (Restated) | | | 2021 AU $’000 (Restated) |
Sale of wheels | | | 26,315 | | | 38,276 | | | 32,205 |
Engineering services | | | 319 | | | 464 | | | 2,732 |
Sale of tooling | | | 1,097 | | | 1,596 | | | — |
Revenue | | | 27,731 | | | 40,336 | | | 34,937 |
Cost of goods sold | | | (39,493) | | | (57,445) | | | (49,232) |
Gross margin | | | (11,762) | | | (17,109) | | | (14,295) |
Other income | | | 2,970 | | | 4,320 | | | 10,506 |
Operational expenses | | | (1,384) | | | (2,013) | | | (3,366) |
Research and development | | | (11,641) | | | (16,933) | | | (10,513) |
Administrative expenses | | | (9,038) | | | (13,146) | | | (15,690) |
Marketing expenses | | | (1,066) | | | (1,550) | | | (938) |
Finance costs | | | (956) | | | (1,390) | | | (1,704) |
Loss before income tax expense | | | (32,877) | | | (47,821) | | | (36,000) |
Income tax expense | | | — | | | — | | | — |
Loss for the year after income tax | | | (32,877) | | | (47,821) | | | (36,000) |
• | Average price per wheel increased 6.7% to $2,695, when compared to the prior year due to changes in the sales mix; and |
• | Increase in sale of tooling in FY22 compared to FY 21. |
Consolidated statements of profit or loss | | | six months ended December 2022 US $’000 | | | six months ended December 2022 AU $’000 | | | six months ended December 2021 AU $’000 (Restated) |
Sale of wheels | | | 12,255 | | | 18,009 | | | 17,306 |
Engineering services | | | — | | | — | | | 21 |
Sale of tooling | | | — | | | — | | | 319 |
Revenue | | | 12,255 | | | 18,009 | | | 17,646 |
Cost of goods sold | | | (17,411) | | | (25,586) | | | (25,393) |
Gross margin | | | (5,156) | | | (7,577) | | | (7,747) |
Other income | | | 1,691 | | | 2,485 | | | 1,681 |
Operational expenses | | | (264) | | | (388) | | | (1,936) |
Research and development | | | (6,216) | | | (9,134) | | | (8,965) |
Administrative expenses | | | (5,345) | | | (7,855) | | | (6,212) |
Marketing expenses | | | (498) | | | (732) | | | (847) |
Capital raising transaction costs | | | (2,207) | | | (3,243) | | | — |
Finance costs | | | (706) | | | (1,037) | | | (712) |
Consolidated statements of profit or loss | | | six months ended December 2022 US $’000 | | | six months ended December 2022 AU $’000 | | | six months ended December 2021 AU $’000 (Restated) |
Loss before income tax expense | | | (18,701) | | | (27,481) | | | (24,738) |
Income tax expense | | | — | | | — | | | — |
Loss for the year after income tax | | | (18,701) | | | (27,481) | | | (24,738) |
Cashflow | | | 2022 AUD $m (Restated) | | | 2021 AUD $m (Restated) | | | Change AUD $m |
Net cash used in operating activities | | | (46.0) | | | (19.0) | | | (27.0) |
Capital Expenditure | | | (15.6) | | | (12.6) | | | (3.0) |
Intangible Expenditure | | | (6.0) | | | (3.9) | | | (2.1) |
Net cash used in investing activities | | | (21.6) | | | (16.5) | | | (5.1) |
Net cash from financing activities | | | 3.3 | | | 88.9 | | | (85.6) |
Net cash outflow | | | (64.3) | | | 53.4 | | | (117.7) |
| | six months ended December 2022 AUD $m | | | six months ended December 2021 AUD $m (Restated) | | | Change AUD $m | |
Cashflow | | ||||||||
Net cash from/(used in) operating activities | | | 5.3 | | | (28.0) | | | 33.3 |
Capital Expenditure | | | (5.9) | | | (9.1) | | | 3.2 |
Intangible Expenditure | | | (2.5) | | | (2.8) | | | 0.3 |
Net cash used in investing activities | | | (8.4) | | | (11.9) | | | 3.5 |
Net cash from financing activities | | | (5.8) | | | 0.5 | | | (6.3) |
Net cash outflow | | | (8.9) | | | (39.4) | | | 30.5 |
• | higher customer receipts of $11.5 million, lower receivables and improved working capital; |
• | Higher operating grants including grant advances to assist short-term liquidity including MMI grant for $9 million in December 2022, which was $4.2 million higher than initially expected; and |
• | Continued strong cost control focus |
| | FY22 $m (Restated) | | | FY21 $m (Restated) | | | Change $m | |
Loans and borrowings | | | | | | | |||
Current | | | 18.7 | | | 12.2 | | | 6.5 |
Non-current | | | 4.3 | | | 6.5 | | | (2.2) |
Total loans and borrowings | | | 23.0 | | | 18.7 | | | 4.3 |
Less: Cash and cash equivalents | | | (22.7) | | | (87.3) | | | 64.6 |
Net debt/(cash) | | | 0.3 | | | (68.6) | | | 68.9 |
| | six months ended December 2022 AUD $m | | | FY22 $m (Restated) | | | Change $m | |
Loans and borrowings | | | | | | | |||
Current | | | 20.6 | | | 18.7 | | | 1.9 |
Non-current | | | — | | | 4.3 | | | (4.3) |
Total loans and borrowings | | | 20.6 | | | 23.0 | | | (2.4) |
Less: Cash and cash equivalents | | | (14.1) | | | (22.7) | | | 8.6 |
Net debt/(cash) | | | 6.5 | | | 0.3 | | | 6.2 |
• | Net cash used in operating activities (including government grants) was $8.0 million. Cash receipts from customers of $7.7 million and government grants of $0.1 million were offset by payments to suppliers and employees. |
• | Net cash used in investing activities of $3.3 million supported Mega-line milestones and investment in program development. Payments comprised $2.0 million of targeted and essential investment in property, plant and equipment and $1.3 million of investment in intangibles. |
• | Net cash from financing activities of $1.3 million consisted primarily of $3.0 million of inflows from liquidity improvement initiatives involving one customer and the previously mentioned $2.0 million short-term convertible funding, offset partly by costs relating to the Business Combination. |
3 | Carbon Revolution’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the financial information as of and for the three months ended March 31, 2023 and, accordingly, they did not and do not express an opinion, and did not and do not provide any other form of assurance with respect thereto and assume no responsibility and disclaim any association for the purpose of the information provided in this proxy statement/prospectus. The report of the Company’s independent auditors included elsewhere in this proxy statement/prospectus relates to the historical financial information of Carbon Revolution. It does not extend to the financial information as of and for the quarter ended March 31, 2023 and should not be read to do so. |
Consolidated statement of cash flows | | | Current quarter $A’000 | | | Year to date (9 months) $A’000 |
1. Cash flows from operating activities | | | | | ||
1.1 Receipts from customers | | | 7,684 | | | 37,587 |
1.2 Payments for: | | | | | ||
(a) research and development | | | (878) | | | (4,482) |
(b) product manufacturing and operating costs | | | (6,074) | | | (25,847) |
(c) advertising and marketing | | | (23) | | | (66) |
(d) leased assets | | | — | | | (97) |
(e) staff costs | | | (6,830) | | | (19,632) |
(f) administration and corporate costs | | | (593) | | | (3,272) |
1.3 Interest received | | | 22 | | | 59 |
1.4 Interest and other costs of finance paid | | | (364) | | | (1,147) |
1.5 Government grants and tax incentives | | | 150 | | | 15,335 |
1.6 Other | | | (1,066) | | | (1,066) |
1.7 Net cash from / (used in) operating activities | | | (7,972) | | | (2,628) |
Consolidated statement of cash flows | | | Current quarter $A’000 | | | Year to date (9 months) $A’000 |
2. Cash flows from investing activities | | | | | ||
2.1 Payments to acquire: | | | | | ||
(a) property, plant and equipment | | | (2,033) | | | (7,947) |
(b) other non-current assets | | | (1,305) | | | (3,815) |
2.2 Proceeds from disposal of: | | | | | ||
(a) property, plant and equipment | | | 3 | | | 3 |
2.3 Net cash from / (used in) investing activities | | | (3,335) | | | (11,759) |
Consolidated statement of cash flows | | | Current quarter $A’000 | | | Year to date (9 months) $A’000 |
3. Cash flows from financing activities | | | | | ||
3.1 Transaction costs related to issuances of equity securities, or convertible debt securities | | | (2,364) | | | (5,508) |
3.2 Proceeds from borrowings | | | 8,186 | | | 23,691 |
3.3 Repayment of borrowings | | | (4,568) | | | (22,511) |
3.4 Other (provide details if material) | | | — | | | (191) |
3.5 Net cash from / (used in) financing activities | | | 1,254 | | | (4,519) |
Consolidated statement of cash flows | | | Current quarter $A’000 | | | Year to date (9 months) $A’000 |
4. Net increase / (decrease) in cash and cash equivalents for the period | | | (10,053) | | | (18,906) |
4.1 Cash and cash equivalents at beginning of period | | | 14,078 | | | 22,693 |
4.2 Net cash from / (used in) operating activities (item 1.7 above) | | | (7,972) | | | (2,628) |
4.3 Net cash from / (used in) investing activities (item 2.3 above) | | | (3,335) | | | (11,759) |
4.4 Net cash from / (used in) financing activities (item 3.5 above) | | | 1,254 | | | (4,519) |
4.5 Effect of movement in exchange rates on cash held | | | 36 | | | 274 |
4.6 Cash and cash equivalents at end of period | | | 4,061 | | | 4,061 |
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | | | Current quarter $A’000 | | | Previous quarter $A’000 |
5.1 Bank balances | | | 4,061 | | | 14,078 |
5.2 Cash and cash equivalents at end of quarter (should equal item 4.6 above) | | | 4,061 | | | 14,078 |
6. Payments to related parties of the entity and their associates | | | Current quarter $A'000 |
6.1 Aggregate amount of payments to related parties and their associates included in item 1 | | | 251 |
6.2 Aggregate amount of payments to related parties and their associates included in item 2 | | | 0 |
• | Ongoing construction and commissioning of Phase 1 of the Mega-line with successful commissioning with first production in early CY23; |
• | Capturing demand for carbon fiber wheels from current programs, including the Corvette Z06/Z07/E-Ray program; |
• | Successful launches of two new programs including the wheel for the JLR Range Rover Sport SV; |
• | Development activities for contracted programs and further awards of a number of programs currently under design and engineering agreement; |
• | Working collaboratively with existing and new customers to apply its technology to the emerging generation of electric vehicles; |
• | Delivering production cost improvements relating to labor and material costs with the objective of materially improving contribution margin; |
• | Reducing cash burn by minimizing operating and capital expenditure; |
• | Completing the Business Combination by August 31, 2023 while ensuring sufficient short term funds are available (that enables Carbon Revolution to continue as a going concern through completion of the Business Combination and for a period of at least 12 months from the issuance of this prospectus document); |
• | Securing up to US$60 million (A$ 85.7 million) through the Committed Equity Facility; and |
• | In addition, securing further long-term funding including seeking to raise at least US$60 million via a Qualified Capital Raise as defined in the New Debt Program documents. |
• | US$13.1 million (A$19.7 million) in costs (comprising approximately US$8.8 million (A$13.1 million) for the premium on the insurance for the program plus various fees and transactional costs relating to the New Debt Program) were deducted from the proceeds; |
• | US$9.9 million (A$14.9 million) was used to repay the amounts owed by the Company to previous key lenders (including Export Finance Australia and Timelio); and |
• | US$15.5 million (A$23.2 million) was deposited into certain reserve funds of which US$5.8 million (A$8.6 million) will be released once certain insurance conditions are met, which we expect to occur within 30 days. US$5 million (A$7.5 million) is scheduled to be released after 6 months if not required for covenant cures in that period, US$0.3 million (A$0.5 million) will be used for initial interest payment and the balance of US$4.4 million (A$6.6 million) is held as a payment reserve. |
• | agreed threshold for revenue, assessed monthly on a rolling trailing six month basis with specific agreed targets for each testing period, with the first testing period being the 6 months expiring June 30, 2023; |
• | agreed threshold for EBITDA, assessed monthly on a rolling trailing six month basis with specific agreed targets for each testing period, with the first testing period being the 6 months expiring June 30, 2023; |
• | maximum capital expenditure (capex) limits, assessed monthly and initially assessed on a rolling trailing six months with specific agreed maximum capex for each testing period with the first testing period being the 6 months expiring June 30, 2023, and moving to a rolling trailing 12 months basis in January 2024; and |
• | liquidity ratios based on remaining months of liquidity (assessed monthly based on the monthly Adjusted EBITDA for the 3 most recent months until the Adjusted EBITDA of the Group becomes positive, following which the measure will be based on a current ratio). |
• | failure to make a payment due under the agreement by the due date; |
• | existence of circumstances which could result in a Material Adverse Effect; |
• | a change in control of the Carbon Revolution Group (prior to the Business Combination); |
• | events of insolvency, judgment debt, asset seizure and impairment of security; |
• | material misrepresentation; and |
• | if any portion of the guaranty ceases to be in full force and effect. |
• | net cash outflows within the next 12 months related to the Business Combination of approximately A$14 million, being expected remaining cash of A$14 million in the Trust Account upon completion of the Business Combination (based on redemptions equal to 95% of the total Twin Ridge Class A Ordinary Shares prior to taking into account shares redeemed by Twin Ridge shareholders in connection with the Extension Meeting), offset by approximately A$28 million of costs related to the Business Combination; and |
• | net cash outflows in the 12 month period of approximately A$86 million, being cash inflows from customers (and grants), less operating costs, research and development costs, working capital needs and capital expenditure. |
• | The Business Combination may not be completed; |
• | The Committed Equity Financing will not be available until the completion of the Business Combination and the filing and effectiveness of a new registration statement with the SEC relating thereto; |
• | There may be a delay in the completion of the Business Combination or anticipated availability of the Committed Equity Financing, thereby necessitating additional funding to be obtained by the Group; |
• | The Group’s advisers that will be assisting in raising capital through the Committed Equity Financing may be unable to dispose of the shares of MergeCo on an ongoing basis. As the terms of the Committed Equity Financing will not require the advisers to purchase additional shares under the Committed Equity Financing beyond an overall ownership of 9.99%, or US$10 million ($14 million) per week, whichever is lower, the Group may not have full access to the US$60 million ($86 million) Committed Equity Financing capital (of the total US$60 million permitted to be drawn under the IP Equity Financing) included in the Group’s Cash Flow Projection; and |
• | There may be less than $14 million cash remaining in the Trust Account upon completion of the Business Combination if redemptions are higher than expected. |
| | 2022 $’000 | | | 2021 $’000 | |
Right-of-use assets | | | | | ||
Property | | | 7,564 | | | 7,983 |
Lease liabilities | | | | | ||
Current | | | 579 | | | 542 |
Non-current | | | 7,461 | | | 7,813 |
| | 8,040 | | | 8,355 |
| | Interest rate % | | | Maturity | | | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Working capital facility | | | 7.44% | | | August 2022 | | | 6,843 | | | 5,525 |
Term loan | | | 6.15% | | | December 2024 | | | 2,889 | | | 4,333 |
Letter of credit facility | | | 6.45% | | | November 2022 | | | 4,000 | | | — |
| | | | | | 13,732 | | | 9,858 | |||
| | | | | | | | |||||
Unsecured | | | | | | | | | ||||
Supplier finance arrangement | | | 6.00% | | | August 2022 | | | 4,954 | | | 2,375 |
| | | | | | 18,686 | | | 12,233 | |||
Non-current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Term loan | | | 6.15% | | | December 2024 | | | 4,333 | | | 6,529 |
| | | | | | 4,333 | | | 6,529 |
| | Interest rate % | | | Maturity | | | Six months ended December 2022 $’000 | | | Six months ended December 2021 $’000 (Restated) | |
Current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Working capital facility | | | 10.44% | | | March 2023 | | | 3,249 | | | 5,922 |
Term loan | | | 8.75% | | | December 2024 | | | 6,500 | | | 4,333 |
Letter of credit facility | | | 8.78% | | | November 2022 | | | 4,000 | | | — |
| | | | | | | | 10,255 | ||||
| | | | | | | | |||||
Supplier finance arrangement | | | 6.00% | | | August 2022 | | | 6,832 | | | 2,973 |
| | | | | | 20,581 | | | 13,228 | |||
| ||||||||||||
Non-current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Term loan | | | 8.75% | | | December 2024 | | | | | 4,333 | |
| | | | | | | | 4,333 |
+/- 5% exchange rate | | | 2022 $’000 | | | 2021 $’000 |
Impact on profit after tax | | | 90 | | | 54 |
Impact on equity | | | (90) | | | (54) |
• | Post-tax discount rate: 11.7% |
• | Terminal value growth rate beyond 6 years: 3% |
• | Compound annual growth rate wheel volume: 30.6% |
• | subject Twin Ridge to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which Twin Ridge operates after its initial business combination; and |
• | cause Twin Ridge to depend on the marketing and sale of a single product or limited number of products or services. |
Name | | | Age | | | Title |
William Toler | | | 64 | | | Chairman of the Board of Directors |
Sanjay K. Morey | | | 51 | | | Co-Chief Executive Officer, President and Director |
William P. Russell, Jr. | | | 50 | | | Co-Chief Executive Officer, Chief Financial Officer and Director |
Alison Burns | | | 59 | | | Director |
Paul Henrys | | | 52 | | | Director |
Gary Pilnick | | | 58 | | | 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 registered public accounting firm 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 Twin Ridge 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 board of directors 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 executive officers’ performance in light of such goals and objectives and determining and approving the remuneration (if any) of each of our executive officers 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. |
• | may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Twin Ridge Class B Ordinary Shares resulted in the issuance of Twin Ridge Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Twin Ridge Class B Ordinary Shares; |
• | may subordinate the rights of holders of Twin Ridge Class A Ordinary Shares if preference shares are issued with rights senior to those afforded our Twin Ridge Class A Ordinary Shares; |
• | could cause a change in control if a substantial number of our Twin Ridge Class A Ordinary Shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
• | may adversely affect prevailing market prices for our Twin Ridge Units, Twin Ridge Class A Ordinary Shares and/or Warrants; and |
• | may not result in adjustment to the exercise price of our Warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on our Twin Ridge Class A Ordinary Shares; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Twin Ridge Class A Ordinary Shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
Name | | | Age | | | Position | | | Class |
Director Nominees | | | | | | | |||
Mark Bernhard | | | 59 | | | Class Director | | | |
Lucia Cade | | | 56 | | | Class Director | | | |
Jacob Dingle | | | 52 | | | Class Director | | | |
James Douglas | | | 55 | | | Class Director | | | |
Dale McKee | | | 62 | | | Class Director | | | |
| | | | Class Director | | | |||
| | | | Class Director | | | |||
| | | | | | ||||
Executive Officers | | | | | | | |||
Jacob Dingle | | | 52 | | | Chief Executive Officer and Director | | | |
Gerard Buckle | | | 53 | | | Chief Financial Officer | | | |
David French | | | 60 | | | Vice President Operations | | | |
Ashley Denmead | | | 41 | | | Chief Technology Officer | | | |
Jesse Kalkman | | | 54 | | | Director of Sales and Business Development | | | |
David Nock | | | 50 | | | General Counsel and Company Secretary | | |
• | 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 to each warrant holder; and |
• | if, and only if, the closing price of the MergeCo Ordinary Shares equals or exceeds $18.00 per share (as adjusted for adjustments described under – Anti-dilution Adjustments) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which notice of the redemption is sent 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 table below, based on the redemption date and the “fair market value” (as defined below) of the MergeCo Ordinary Shares, except as otherwise described below; |
• | if, and only if, the closing price of the MergeCo Ordinary Shares equals or exceeds $10.00 per public share (as adjusted for adjustments described under – Anti-dilution Adjustments) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and |
• | if the closing price of the MergeCo Ordinary Shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments described under – Anti-dilution Adjustments), the MergeCo Founder Warrants must also be concurrently called for redemption on the same terms as the outstanding MergeCo Public Warrants, as described above. |
Redemption Date (period to expiration of warrants) | | | Fair Market Value of MergeCo Ordinary Shares | ||||||||||||||||||||||||
| ≤$10.00 | | | $11.00 | | | $12.00 | | | $13.00 | | | $14.00 | | | $15.00 | | | $16.00 | | | $17.00 | | | ≥$18.00 | ||
60 months | | | 0.261 | | | 0.281 | | | 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 |
• | each person known by MergeCo to be the beneficial owner of more than 5% of the outstanding Twin Ridge Ordinary Shares either on June 8, 2023 (pre-Business Combination) or of MergeCo Ordinary Shares outstanding after the consummation of the Business Combination (post-Business Combination); |
• | each of Twin Ridge’s current executive officers and directors; |
• | each person who will (or is expected to) become an executive officer or director of MergeCo upon consummation of the Business Combination; |
• | all executive officers and directors of Twin Ridge as a group prior to the consummation of the Business Combination; and |
• | all executive officers and directors of MergeCo as a group after consummation of the Business Combination. |
| | | | | | MergeCo After the Business Combination | ||||||||||||
| | Twin Ridge Before the Business Combination(1) | | | Assuming No Redemption(2) | | | Assuming Maximum Redemption(3) | ||||||||||
Name and Address of Beneficial Owners | | | Number of Twin Ridge Ordinary Shares | | | % | | | Number of MergeCo Ordinary Shares | | | % | | | Number of MergeCo Ordinary Shares | | | % |
Directors and Executive Officers of Twin Ridge(4) | | | | | | | | | | | | | ||||||
William Toler | | | — | | | — | | | — | | | — | | | — | | | — |
Sanjay K. Morey(5) | | | 5,267,203(6) | | | 45.4 | | | 4,940,000 | | | 16.1 | | | 4,940,000 | | | 20.2 |
William P. Russell(5) | | | 5,267,203(6) | | | 45.4 | | | 4,940,000 | | | 16.1 | | | 4,940,000 | | | 20.2 |
Alison Burns | | | 20,000(6) | | | * | | | 20,000 | | | * | | | 20,000 | | | * |
Paul Henrys | | | 20,000(6) | | | * | | | 20,000 | | | * | | | 20,000 | | | * |
Gary Pilnick | | | 20,000(6) | | | * | | | 20,000 | | | * | | | 20,000 | | | * |
Five Percent Holders of Twin Ridge(4) | | | | | | | | | | | | | ||||||
The Sponsor(5)(7) | | | 5,267,203(6) | | | 45.4 | | | 4,940,000(11) | | | 16.1 | | | 4,940,000(10) | | | 20.2 |
Glazer Capital, LLC(8) | | | 2,460,998(10) | | | 21.2 | | | 2,460,998 | | | 8.0 | | | — | | | — |
Hudson Bay Capital Management LP(9) | | | 620,607(10) | | | 5.4 | | | 620,607 | | | 2.0 | | | — | | | — |
Directors and Executive Officers of MergeCo After Consummation of the Business Combination | | | | | | | | | | | | | ||||||
Mark Bernhard | | | — | | | — | | | 9,871 | | | * | | | 9,871 | | | * |
Lucia Cade | | | — | | | — | | | 7,384 | | | * | | | 7,384 | | | * |
Jacob Dingle(12) | | | — | | | — | | | 476,451 | | | 1.5 | | | 476,451 | | | 1.9 |
James Douglas | | | — | | | — | | | 173,898 | | | * | | | 173,898 | | | * |
Dale McKee | | | — | | | — | | | 11,547 | | | * | | | 11,547 | | | * |
Gerard Buckle(13) | | | — | | | — | | | 50,926 | | | * | | | 50,926 | | | * |
Five Percent Holders of MergeCo | | | | | | | | | | | | | ||||||
Ronal AG | | | — | | | — | | | 1,317,399 | | | 4.3% | | | 1,317,399 | | | 5.4% |
* | Less than one percent. |
(1) | The pre-Business Combination percentage of beneficial ownership in the table above is calculated based on 11,593,848 Twin Ridge Ordinary Shares outstanding as of the Record Date. Unless otherwise indicated, Twin Ridge believes that all persons named in the table have sole voting and investment power with respect to all Twin Ridge Ordinary Shares beneficially owned by them prior to the Business Combination. |
(2) | The post-Business Combination percentage of beneficial ownership is calculated based on 30,756,200 MergeCo Ordinary Shares outstanding. Such amount assumes that no Public Shareholders have redeemed their Twin Ridge Class A Ordinary Shares. Unless otherwise indicated, MergeCo believes that all persons named in the table have sole voting and investment power with respect to all MergeCo Ordinary Shares beneficially owned by them prior to the Business Combination. |
(3) | The post-Business Combination percentage of beneficial ownership is calculated based on 24,489,555 MergeCo Ordinary Shares outstanding. Such amount assumes that 100% of the Twin Ridge Class A Ordinary Shares have been redeemed. Unless otherwise indicated, MergeCo believes that all persons named in the table have sole voting and investment power with respect to all MergeCo Ordinary Shares beneficially owned by them prior to the Business Combination. |
(4) | Unless otherwise noted, the business address of each of the following individuals is 999 Vanderbilt Beach Road, Suite 200, Naples, Florida 34108. |
(5) | The Sponsor is the beneficial holder of the shares reported herein. The Sponsor is controlled by Sanjay K. Morey and William P. Russell, Jr. Each of Sanjay K. Morey and William P. Russell Jr. disclaims any beneficial ownership of the securities held by the Sponsor other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
(6) | Interests shown consist of Twin Ridge Class B Ordinary Shares. |
(7) | Interests shown consist of (1) 1,917,203 Twin Ridge Class B Ordinary Shares held by the Sponsor; and (2) 3,350,000 Twin Ridge Class B Ordinary Shares held by the TRCA Subsidiary. The Sponsor is the sole managing member of the TRCA Subsidiary and may be deemed to have voting and investment power with respect to the shares held by the TRCA Subsidiary. As consideration for Advisor’s performance of certain services to Twin Ridge in connection with the Business Combination, Sponsor has agreed to transfer the 3,350,000 Twin Ridge Class B Ordinary Shares held by TRCA Subsidiary to Advisor at the Closing; such shares will revert to the Sponsor if the Business Combination with Carbon Revolution is not completed. |
(8) | Includes Twin Ridge Class A Ordinary Shares beneficially held by Glazer Capital, LLC, a Delaware limited liability company (“Glazer Capital”), with respect to the Twin Ridge Class A Ordinary Shares held by certain funds and managed accounts to which Glazer Capital serves as investment manager (collectively, the “Glazer Funds”); and Mr. Paul J. Glazer (“Mr. Glazer”), who serves as the Managing Member of Glazer Capital, with respect to the Ordinary Shares held by the Glazer Funds. The business address of each of Glazer Capital and Mr. Glazer is 250 West 55th Street, Suite 30A, New York, New York 10019. |
(9) | Includes Twin Ridge Class A Ordinary Shares beneficially held by Hudson Bay Capital Management LP, a Delaware limited partnership (“Hudson”), and Mr. Sander Gerber. The business address of each of Hudson and Mr. Gerber is 28 Havemeyer Place, 2nd Floor, Greenwich, CT 06830. |
(10) | Interests shown consist of Twin Ridge Class A Ordinary Shares. |
(11) | Excludes 327,203 of the Sponsor’s Twin Ridge Class B Ordinary Shares that shall automatically be forfeited and surrendered to Twin Ridge for no additional consideration immediately prior to the consummation of the Merger and conditioned upon the consummation of the Merger. |
(12) | Includes 12,484 Ordinary Shares issuable upon the exercise of rights within 60 days of December 12, 2022, and 117,908 Ordinary Shares issuable upon the exercise of options within 60 days of December 12, 2022. |
(13) | Includes 5,548 Ordinary Shares issuable upon the exercise of rights within 60 days of December 12, 2022, and 33,014 Ordinary Shares issuable upon the exercise of options within 60 days of December 12, 2022. |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Principal Applicable Legislation | | |||
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| The Cayman Islands Companies Act | | | The ICA | |
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| Shareholder Meetings | | |||
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| Held at a time and place as determined by the directors. | | | Held at a time and place as determined by the directors subject to at least one shareholder meeting being held in each year, being the company’s annual general meeting. Shareholders holding not less than 10% of the paid up share capital in MergeCo may also require the directors to convene a shareholder meeting. | |
| | | | ||
| May be held within or outside the Cayman Islands. | | | May be held within or outside Ireland. | |
| | | | ||
| Notice: | | | Notice: | |
| | | | ||
| A copy of the notice of any meeting shall be given not fewer than five clear days before the date of the proposed meeting to those persons whose names appear in the register of members on the record date of the proposed meeting. | | | A copy of the notice of any meeting shall be given at least 21 days before the date of the proposed meeting to the members, directors and auditors. In certain limited circumstances, a meeting may be called by 14 days’ notice, but this shorter notice period shall not apply to the annual general meeting. | |
| | | | ||
| Shareholders’ Voting Rights | | |||
| | ||||
| Any person authorized to vote may be represented at a meeting by a proxy who may vote on behalf of the shareholder. | | | Every shareholder entitled to attend, speak, ask questions and vote at a general meeting may appoint a proxy or proxies to attend, speak, ask questions and vote on behalf of the shareholder. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Quorum is fixed by the Existing Organizational Documents to consist of the holder or holders of a majority of Twin Ridge’s shares present in person or by proxy. | | | Quorum is fixed by the MergeCo Amended and Restated Memorandum and Articles of Association, to consist of at least two shareholders present in person or by proxy entitled to exercise more than fifty percent (50%) of the voting rights of the shares | |
| | | | ||
| Resolutions put to the vote of a meeting shall be decided on a poll, which shall be taken in such manner as the chairperson of the meeting directs. Subject to the provisions of the Existing Organizational Documents and any rights or restrictions attached to any shares, every shareholder of record present in person or by proxy shall have one vote for each share registered in his or her name. | | | Resolutions put to the vote of a meeting shall be decided on a poll, which shall be taken in such manner as the chairperson of the meeting directs. Subject to the provisions of the MergeCo Amended and Restated Memorandum and Articles of Association and any rights or restrictions attached to any shares, every shareholder of record present in person or by proxy shall have one vote for each share registered in his or her name. | |
| | | | ||
| Where the rights attaching to shares are set out in the Existing Organizational Documents, any changes to these rights will need to be effected by way of special resolution (passed by at least two-thirds of the votes cast by shareholders attending and voting at the meeting in person or by proxy) amending the Memorandum and Articles of Association. Additionally, the rights attaching to a particular class of shares may only be varied with the consent in writing of the holders of not less than two thirds of the issued shares of that class or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of shares of that class. | | | Where the rights attaching to shares are set out in the MergeCo Amended and Restated Memorandum and Articles of Association, any changes to these rights will need to be effected by way of a special resolution (passed by 75% of the votes cast by shareholders attending and voting at the meeting) amending the MergeCo Amended and Restated Memorandum and Articles of Association. Additionally, the rights attaching to a particular class of shares may only be varied if (a) the holders of 75% of the nominal value of the issued shares of that class consent in writing to the variation, or (b) a special resolution, passed at a separate general meeting of the holders of that class, sanctions the variation. | |
| | | | ||
| The directors may issue preference shares from time to time and may fix the rights attaching to such preference shares. The rights attaching to the preference shares may (once such shares are in issue) be changed by way of a resolution passed by a majority of not less than two-thirds of the votes attending and voting at the relevant meeting or class meeting. | | | The MergeCo Board is empowered to cause preferred shares to be issued from time to time and may fix the rights attaching to such preferred shares. The MergeCo Board may change the rights of any series of preferred shares that has been created but not yet issued. Once issued, the rights attaching to a series of preferred shares may only be varied with the consent in writing of 75% of the holders of those shares or by a special resolution passed by that class. | |
| | | | ||
| The creation, designation or issue of preference shares with rights and privileges ranking in priority to an existing class of shares shall be deemed not to be a variation of the rights of such existing class. | | | The creation, issue and allotment of preferred shares shall not constitute a variation of rights of any existing class of shares. | |
| | | | ||
| Cumulative voting in the election of directors is not provided for. | | | Cumulative voting in the election of directors is not provided for. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Shareholder approval in respect of the consummation of Twin Ridge’s initial business combination requires a majority vote of the Twin Ridge shareholders who, being so entitled, attend and vote at the general meeting (whether in person or by proxy). | | | MergeCo’s Board has approved entry into and consummation of the Business Combination by MergeCo. Shareholder approval of the Business Combination is not required. | |
| | | | ||
| All other matters to be decided upon by the shareholders require a majority vote of shareholders who, being so entitled, attend and vote at the general meeting, unless the Cayman Islands Companies Act or the Twin Ridge Memorandum and Articles of Association requires a higher majority. | | | All other matters to be decided upon by the shareholders require a majority vote of shareholders who, being so entitled, attend and vote at the general meeting, unless the ICA or MergeCo’s constitution requires a higher majority, in which case a special resolution must be passed by not less than 75% of the votes cast by those attending and voting. By way of example only, matters that require a special resolution include any amendments to the MergeCo Amended and Restated Memorandum and Articles of Association, the acquisition by MergeCo of its own shares, the variation of class rights attaching to classes of shares, and the re-registration of MergeCo as a different company form. | |
| | | | ||
| | | The MergeCo Amended and Restated Memorandum and Articles of Association may not be amended by resolution of directors, but the directors when issuing preference shares may fix the rights attaching to such shares. | | |
| | | | ||
| Shareholder Rights Plan | | |||
| | | | ||
| No equivalent provisions | | | Subject to applicable law, the MergeCo Amended and Restated Memorandum and Articles of Association provide the MergeCo Board with the power to adopt a shareholder rights plan upon such terms as the MergeCo Board deems expedient in the best interests of MergeCo, and to exercise any power of MergeCo to grant rights (including approving the execution of any documents relating to the grant of such rights) to subscribe for MergeCo Ordinary Shares or preference shares in the capital of MergeCo in accordance with the terms of such rights plan. MergeCo’s ability to adopt a rights plan or to take other anti-takeover measures after the MergeCo Board has received an approach which may lead to an offer or has reason to believe an offer is, or may be, imminent would be restricted by the frustrating actions prohibition of the Irish Takeover Rules. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Shareholder Consent to Action without Meeting | | |||
| | | | ||
| The Cayman Islands Companies Act allows an ordinary resolution signed by all the shareholders entitled to vote on such resolution and authorized by the articles of association. The Existing Organizational Documents authorize such unanimous written resolutions. | | | As set out in the MergeCo Amended and Restated Memorandum and Articles of Association, for so long as MergeCo has more than one shareholder, unanimous consent of the holders of MergeCo Ordinary Shares is required before the shareholders may act by way of written resolution in lieu of holding a general meeting. | |
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| Directors | | |||
| | | | ||
| The Twin Ridge Board must consist of at least one director. | | | The MergeCo Board must consist of at least two directors. | |
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| Maximum and minimum number of directors can be changed by an ordinary resolution of shareholders being a majority vote of shareholders who, being so entitled, attend and vote at the general meeting. | | | Maximum and minimum number of directors can be changed by an amendment to the MergeCo Amended and Restated Memorandum and Articles of Association, with such amendment being passed by a special resolution of shareholders (75% of those attending and voting) but not a resolution of the directors. | |
| | | | ||
| The directors shall be divided into three classes, designated Class I, Class II and Class III. | | | The directors shall be divided into three classes, designated Class I, Class II and Class III. | |
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| The term of the initial Class I directors shall terminate at Twin Ridge’s first annual general meeting; the term of the initial Class II directors shall terminate at Twin Ridge’s second annual general meeting; and the term of the initial Class III directors shall terminate at Twin Ridge’s third annual general meeting. | | | The term of the initial Class I directors shall terminate at the conclusion of MergeCo’s 2024 annual general meeting; the term of the initial Class II directors shall terminate on the conclusion of MergeCo’s 2025 annual general meeting; and the term of the initial Class III directors shall terminate on the conclusion of MergeCo’s 2026 annual general meeting. Directors are eligible to stand for re-election at the relevant annual general meeting. Directors shall be re-elected for a three-year term. In the event of a contested election (i.e., where the number of MergeCo director nominees exceeds the number of MergeCo directors to be elected), each of those nominees shall be voted upon as a separate resolution and the directors of MergeCo shall be elected by a plurality of the votes cast in person or by proxy at any such meeting. “Elected by a plurality” means the election of those of the MergeCo director nominees equaling in number the number of positions to be filled at the relevant general meeting that receive the highest number of votes. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| The directors may by resolution appoint a replacement director to fill a casual vacancy arising on the resignation, disqualification or death of a director. The replacement director will then hold office until the next annual general meeting at which the director he replaces would have been subject to retirement by rotation. | | | Any vacancy on the board shall be deemed a casual vacancy, which shall be filled by the decision of a majority of the board then in office. The replacement director will hold office until the next annual general meeting at which the director he replaces would have been subject to retirement by rotation. | |
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| Directors do not have to be independent under the Existing Organizational Documents. | | | Directors do not have to be independent under the MergeCo Amended and Restated Memorandum and Articles of Association. | |
| | | | ||
| Under the Existing Organizational Documents, a director may be removed from office by a resolution of the holders of Twin Ridge Class B Ordinary Shares only prior to the consummation of Twin Ridge’s initial business combination. | | | Under Section 146 of the ICA, a director may be removed before the expiration of his or her period of office by way of ordinary resolution of the shareholders (i.e., a simple majority of the members attending and voting), provided that at least 28 clear days’ notice of the resolution is given to MergeCo, and the shareholders comply with the relevant procedural requirements of the ICA. Under Irish law, one or more MergeCo shareholders representing not less than 10% of the paid-up share capital of MergeCo carrying voting rights may requisition the holding of an extraordinary general meeting at which a resolution to remove a director and appoint another person in his or her place may be proposed. | |
| | | | ||
| There are no share ownership qualifications for directors. | | | There are no share ownership qualifications for directors. | |
| | | | ||
| Meetings of the Twin Ridge Board may be convened at any time by any of Twin Ridge’s directors. A quorum will be present at a meeting of the Twin Ridge Board if at least a majority of the directors are present or represented by an alternate director. At any meeting of Twin Ridge’s directors, each director, whether by his or her presence or by his or her alternate, is entitled to one vote. Questions arising at a meeting of the Twin Ridge Board shall be decided by a majority vote. In the case of a tie vote, the chairperson of the meeting shall have a second or casting vote. | | | Meetings of the MergeCo Board may be convened at such time and place as the directors determine. The quorum may be fixed by the directors and unless so fixed shall be a majority of the directors in office. The directors are not entitled to appoint alternates. Questions arising at a meeting of the MergeCo Board are required to be decided by a simple majority of the directors present, with each director entitled to one vote. In the case of a tie vote, the chairperson of the meeting shall not have a second or casting vote. | |
| | | | ||
| The Twin Ridge Board may pass resolutions without a meeting by unanimous written consent. | | | The MergeCo Board may pass resolutions without a meeting where such resolution is signed by all the directors. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Fiduciary Duties of Directors | | |||
| | | | ||
| Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. Cayman Islands law imposes a number of fiduciary duties on a director. A Cayman Islands director’s fiduciary duties are not codified; however, the courts of the Cayman Islands have held that a director owes the following fiduciary duties: (a) a duty to act in what the director bona fide considers to be in the best interests of the company; (b) a duty to exercise their powers for the purposes they were conferred; (c) a duty to avoid fettering his or her discretion in the future; (d) a duty to exercise powers fairly as between different sections of shareholders; (e) a duty to exercise independent judgment; and (f) a duty to avoid conflicts of interest. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. Under the Existing Organizational Documents, so long as a director has disclosed any interests in a transaction entered into or to be entered into by the company to the board, he/she may: (i)vote on a matter relating to the transaction; (ii) attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and | | | Directors and officers owe fiduciary duties at both common law and under statute. These duties include those listed below. A director shall: (a) act in good faith in what the director considers to be the interests of the company; (b) act honestly and responsibly in relation to the conduct of the affairs of the company; (c) act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law; (d) not use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless expressly permitted by the company’s constitution or approved by a resolution of the company in general meeting; (e) not agree to restrict the director’s power to exercise an independent judgement, unless expressly permitted by the company’s constitution or approved by a resolution of the company in general meeting; (f) avoid any conflict between the director’s duties to the company and the director’s other (including personal) interests unless released from this duty by the company’s constitution or by resolution of the company in general meeting; (g) exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both the knowledge and experience that may reasonably be expected of a person in the same position as the director and the knowledge and experiences that the director has; and (h) in addition to having a general duty to have regard to the interests of the company’s employees, have regard to the interests of its members. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| (iii) sign a document on behalf of the company, or do any other thing in his capacity as a director, that relates to the transaction. | | | Under the MergeCo Amended and Restated Memorandum and Articles of Association, so long as a director has disclosed to the MergeCo Board any interests he/she may have in a contract or proposed contract with MergeCo, he/she may vote in respect of any contract, appointment or arrangement in which he/she is interested and be counted in the quorum present at the meeting. | |
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| Under the laws of the Cayman Islands, a transaction entered into by the company in respect of which a director is interested will not be voidable by the company where the members have approved or ratified the transaction in knowledge of the material facts of the interest of the director in the transaction, or if the company received fair value for the transaction. | | | Under the laws of Ireland, certain transactions entered into by MergeCo with a director will be voidable by MergeCo unless MergeCo’s shareholders have approved or ratified the transaction in knowledge of the material facts of the interest of the director in the transaction. Shareholder approval will be required even where MergeCo receives fair value for the transaction. There is a de minimis threshold in terms of transaction value that needs to be reached before shareholder approval is required. | |
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| Indemnification of Directors | | |||
| | | | ||
| The Existing Organizational Documents provides that, subject to certain limitations, Twin Ridge shall indemnify its directors and officers against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. Such indemnity does not apply in respect of any incurred by reason of such person’s own actual fraud, willful neglect or willful default. | | | The MergeCo Amended and Restated Memorandum and Articles of Association provide that, subject to certain limitations and so far as may be permitted by the ICA, each director and officer shall be entitled to be indemnified by MergeCo against all costs and expenses incurred in the execution and discharge of his or her duties, including any liability incurred in defending any proceedings relating to his or her office where judgment is given in his or her favor or the proceedings disposed of without any finding against him or her. It is expected that MergeCo will purchase and maintain directors and officers insurance on behalf of its directors, secretary and employees. A director shall not be indemnified in respect of any claim where he or she has been adjudged to be liable for fraud or dishonesty, unless otherwise directed by the court. | |
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| Committees | | |||
| | | | ||
| Under the Existing Organizational Documents, the directors of Twin Ridge may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of one or more of Twin Ridge's directors and subject to any conditions that the Twin Ridge's directors may impose. Furthermore, under Twin Ridge’s Memorandum and Articles of Association, the | | | Under the MergeCo Amended and Restated Memorandum and Articles of Association, the directors of MergeCo may establish one or more committees consisting in whole or in part of members of the MergeCo Board. The composition, function, power and obligations of any such committee will be determined by the MergeCo Board from time to time. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| directors of Twin Ridge may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of Twin Ridge and may appoint any person to be a member of such committees, local boards or agencies and subject to any conditions that the Twin Ridge's directors may impose. | | | | |
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| Limited Liability of Directors | | |||
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| Under Cayman Islands law, directors owe certain fiduciary duties to the company and may be liable where they act in breach of such duties. | | | Under the ICA, a director of MergeCo may be liable to MergeCo where such director acts in breach of certain of his or her fiduciary duties. | |
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| Dissenters’ Rights | | |||
| | | | ||
| The Cayman Islands Companies Act prescribes that: 238. (1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. 239. (1) No rights under Section 238 shall be available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under Section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to Section 233 or 237 to accept for such shares anything except — (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, | | | Generally, under Irish law, shareholders of an Irish company do not have dissenters’ or appraisal rights. Under the European Communities (Cross-Border Mergers) Regulations 2008 governing the merger of an Irish public limited company such as MergeCo and a company incorporated in the European Economic Area, a shareholder (i) who voted against the special resolution approving a merger or (ii) of a company in which 90% of the shares are held by the other party to the merger, has the right to request that the company acquire his or her shares for cash at a price determined in accordance with the share exchange ratio set out in the transaction. Under the ICA, which governs the merger of Irish companies limited by shares, such as MergeCo, a shareholder of either of the merging companies who voted against the special resolution approving the merger, or any shareholder, other than the successor company, where the successor company held 90% or more of the voting shares in the transferor company, may, not later than 15 days after the shareholder meeting of the relevant merging company at which the merger was approved, request in writing that the successor company acquire his, her or its shares for cash. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c). Generally any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by the company’s Memorandum and Articles of Association. | | | | |
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| Share Issues | | |||
| | | | ||
| Under the Existing Organizational Documents, Twin Ridge’s directors may allot, issue, grant options over or otherwise dispose of shares (including fractions of a share) with or without preferred, deferred or other rights or restrictions, whether in regard to dividends or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Cayman Islands Companies Act and its Articles of Association) vary such rights. There are generally no statutory pre-emptive rights under Cayman Islands law and there are no preemptive rights under Twin Ridge's memorandum and Articles. | | | Irish law generally provides that a board of directors may allot and issue shares (or rights to subscribe for or convert into shares) if authorized to do so by a company’s constitution or by an ordinary resolution. Such authorization may be granted for up to the maximum of a company’s authorized but unissued share capital and for a maximum period of five years, at which point it must be renewed by another ordinary resolution. The MergeCo Amended and Restated Memorandum and Articles of Association authorize the MergeCo Board to allot shares up to the maximum of MergeCo’s authorized but unissued share capital until the fifth anniversary of the adoption of the MergeCo Amended and Restated Memorandum and Articles of Association (i.e., five years after completion of the Transactions). This authorization will need to be renewed by ordinary resolution (typically at the company’s annual general meeting) upon its expiration and at periodic intervals thereafter. Under Irish law, an allotment authority may be given for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or for less than the maximum permitted number of shares being sought or approved. | |
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| | | While Irish law also generally provides shareholders with pre-emptive rights when new shares are issued for cash, it is possible for the MergeCo Amended and Restated Memorandum and Articles of Association, or for shareholders of MergeCo in a general meeting, to exclude such pre-emptive rights. the MergeCo Amended and Restated Memorandum and Articles of Association exclude pre-emptive rights until the fifth anniversary of the adoption of the MergeCo Amended and Restated Memorandum and Articles of Association (i.e., five years after completion of the | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| | | Transactions). This exclusion will need to be renewed by special resolution (typically at the company’s annual general meeting) upon its expiration and at periodic intervals thereafter. Under Irish law, a disapplication of pre-emption rights may be authorized for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or for less than the maximum permitted number of unissued shares being sought or approved. | | |
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| Share Repurchases and Redemptions | | |||
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| A Cayman Islands company may, if authorized to do so in its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the holder thereof or the company, or purchase its own shares, whether issued as redeemable or not. Shares may be purchased in the manner set out in the articles of association. If no such manner is provided for, approval of the members in general meeting must be obtained. | | | Shares may be redeemed or repurchased by MergeCo. Any share in MergeCo shall be deemed to be a redeemable share as and from the time of existence of an agreement or transaction between MergeCo and any person pursuant to which MergeCo will acquire a share or shares. Any acquisition by MergeCo of shares in MergeCo other than a surrender for nil value shall constitute a redemption. Any redemption or repurchase must be funded out of MergeCo’s distributable reserves or from the proceeds of a fresh issue of shares. Redemptions and repurchases are governed by the applicable provisions of the ICA and the MergeCo Amended and Restated Memorandum and Articles of Association. | |
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| Dividends | | |||
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| Subject to the Cayman Islands Companies Act and Twin Ridge’s Memorandum and Articles of Association, Twin Ridge’s directors may declare dividends at a time and amount they think fit if they are satisfied, on reasonable grounds, that, immediately after distribution of the dividend, the value of its assets will exceed its liabilities and Twin Ridge will be able to pay its debts as they fall due in the ordinary course of business. No dividend shall carry interest against Twin Ridge. | | | The directors may from time to time pay such dividends as appear justified by the profits of MergeCo, provided that dividends may only be made out of MergeCo’s distributable reserves and if the dividend will not cause MergeCo’s net assets to fall below the aggregate of its called up share capital and undistributable reserves (as such terms are calculated in accordance with the ICA). No dividend shall bear interest against MergeCo. The MergeCo Board may also recommend a dividend to be approved and declared by MergeCo shareholders at a general meeting, provided that no such dividend may exceed the amount recommended by the Board. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Rights of Non-resident or Foreign Shareholders and Disclosure of Substantial Shareholdings | | |||
| | | | ||
| There are no limitations imposed by the Existing Organizational Documents on the rights of non-resident or foreign shareholders to hold or exercise voting rights on Twin Ridge’s shares. There are no provisions in the Existing Organizational Documents governing the ownership threshold above which shareholder ownership must be disclosed. | | | There are no limitations imposed by the MergeCo Amended and Restated Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on MergeCo’s shares. Under the ICA, shareholders must notify MergeCo if, as a result of a transaction, the shareholder will become interested in 3% or more of MergeCo’s voting shares, or if as a result of a transaction a shareholder who was interested in 3% or more of MergeCo’s voting shares ceases to be so interested. Where a shareholder is interested in 3% or more of MergeCo’s voting shares, the shareholder must notify MergeCo of any alteration to his or her interest that brings his or her total through the nearest whole percentage number, whether an increase or a reduction. Where a person fails to comply with these notification requirements no right or interest of any kind whatsoever in respect of any shares in the company concerned, held by such person, shall be enforceable by such person, whether directly or indirectly, by action or legal proceeding. However, such person may apply to the Irish High Court to have the rights attaching to the shares concerned reinstated. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Shareholder Inspection of Books and Records | | |||
| | | | ||
| Under Cayman Islands law, shareholders have no right to inspect the books of the company but are entitled to an up-to-date copy of the memorandum and articles of association. Standard articles provide that directors may determine whether and to what extent the books of the company shall be open to inspection. | | | Under Irish law, MergeCo’s shareholders have the rights to: (i) receive a copy of MergeCo’s Memorandum and Articles of Association; (ii) inspect and obtain copies of the minutes of general meetings and resolutions of MergeCo; (iii) inspect and receive a copy of MergeCo’s register of members, register of directors and secretaries, register of directors’ interests, register of directors’ service contracts and memoranda and other statutory registers maintained by MergeCo; (iv) receive copies of balance sheets and directors’ and auditors’ reports that have previously been sent to MergeCo’s shareholders prior to an annual general meeting; and (v) receive balance sheets of any subsidiary of MergeCo that have previously been sent to MergeCo’s shareholders prior to an annual general meeting for the preceding 10 years. | |
| Corporate Law Differences | | |||
| Cayman Islands | | | Ireland | |
| Anti-Money Laundering Laws | | |||
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| In order to comply with legislation or regulations aimed at the prevention of money laundering, Twin Ridge is required to adopt and maintain anti-money laundering procedures, and may require investors to provide evidence to verify their identity. If any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise. | | | Under Irish law, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (the “2010 Act”) sets down the law in relation to money laundering and the proceeds of crime and its application to MergeCo. MergeCo does not fall within the definition of a “designated person” under the 2010 Act and is therefore not obliged to report suspicious transactions in the same manner as a “designated person” but it can make a voluntary disclosure. MergeCo is required to hold “adequate, accurate and current” information on its beneficial owners. MergeCo must set up a beneficial ownership register, where a beneficial owner is a corporate or individual that directly (or indirectly through other companies) holds over 25% of the shares in MergeCo or otherwise directly (or indirectly through other companies) controls over 25% of MergeCo. | |
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| Governing Law and Jurisdiction | | |||
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| | | The MergeCo Amended and Restated Memorandum and Articles of Association provide that the courts of Ireland are to have exclusive jurisdiction to settle any dispute arising out of the MergeCo Amended and Restated Memorandum and Articles of Association except that (unless MergeCo consents in writing to the selection of an alternative forum) the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Exchange Act or the Securities Act. | |
• | 1% of the total number of MergeCo Ordinary Shares then outstanding; or |
• | the average weekly reported trading volume of the MergeCo Ordinary Shares 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 12 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, which is expected to be filed promptly after completion of the Business Combination, reflecting its status as an entity that is not a shell company. |
• | the U.S. judgment must be for a definite sum; |
• | the U.S. judgment is not directly or indirectly for the payment of taxes or other charges of a like nature or a fine or other penalty, for example, punitive or exemplary damage; |
• | the U.S. judgment must be final and conclusive; |
• | the Irish proceedings were commenced within the relevant limitation period; |
• | the U.S. judgment must be provided by a court of competent jurisdiction, as determined by Irish law; and |
• | the U.S. judgment remains valid and enforceable in the U.S. court in which it was obtained. |
• | where an ultra vires or illegal act is perpetrated; |
• | where more than a bare majority is required to ratify the “wrong” complained of; |
• | where the shareholders’ personal rights are infringed; |
• | where a fraud has been perpetrated upon a minority by those in control; and |
• | where the justice of the case required a minority to be permitted to institute proceedings. |
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Twin Ridge Capital Acquisition Corp. | | | |
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Unaudited Condensed Financial Statements | | | |
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Audited Consolidated Financial Statements | | | |
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Carbon Revolution Limited | | | |
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Unaudited Financial Statements | | | |
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Audited Financial Statements | | | |
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| | March 31, 2023 | | | December 31, 2022 | |
| | (Unaudited) | | | ||
Assets | | | | | ||
Cash | | | $262,505 | | | $1,032,620 |
Prepaid expenses | | | 121,898 | | | 74,994 |
Due from related party, net | | | 223,855 | | | 12,526 |
Total current assets | | | 608,258 | | | 1,120,140 |
Marketable securities held in Trust Account | | | 64,837,978 | | | 216,069,362 |
Total Assets | | | $65,446,236 | | | $217,189,502 |
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Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $5,395,930 | | | $4,427,004 |
Promissory note - related party | | | 480,000 | | | — |
Total current liabilities | | | 5,875,930 | | | 4,427,004 |
Warrant liability | | | 872,039 | | | 376,312 |
Commitment fee shares liability | | | 150,279 | | | 147,469 |
Total Liabilities | | | 6,898,248 | | | 4,950,785 |
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Commitments | | | | | ||
Class A ordinary shares subject to possible redemption, 6,266,645 shares and 21,308,813 shares at redemption value of approximately $10.35 and $10.14 at March 31, 2023 and December 31, 2022, respectively | | | 64,837,978 | | | 216,069,362 |
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Shareholders’ Deficit: | | | | | ||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2023 and December 31, 2022, respectively | | | — | | | — |
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none shares issued and outstanding (excluding 6,266,645 and 21,308,813 shares subject to possible redemption at March 31, 2023 and December 31, 2022, respectively) | | | — | | | — |
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,327,203 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | | | 533 | | | 533 |
Additional paid-in capital | | | 2,999,990 | | | 5,336,153 |
Accumulated deficit | | | (9,290,513) | | | (9,167,331) |
Total Shareholders’ Deficit | | | (6,289,990) | | | (3,830,645) |
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Total Liabilities and Shareholders’ Deficit | | | $65,446,236 | | | $217,189,502 |
| | For the Three Months Ended March 31, 2023 | | | For the Three Months Ended March 31, 2022 | |
Formation and operating costs | | | $1,480,858 | | | $203,300 |
Loss from operations | | | (1,480,858) | | | (203,300) |
Other income: | | | | | ||
Change in fair value of commitment fee shares | | | (2,810) | | | — |
Change in fair value of warrant liabilities | | | (495,727) | | | 4,165,857 |
Trust interest income | | | 1,856,213 | | | 5,256 |
Total other income, net | | | 1,357,676 | | | 4,171,113 |
Net (loss) income | | | $(123,182) | | | $3,967,813 |
Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption | | | 12,764,713 | | | 21,308,813 |
Basic and diluted net (loss) income per share | | | $(0.01) | | | $0.15 |
Basic and diluted weighted average shares outstanding, ordinary shares | | | 5,327,203 | | | 5,327,203 |
Basic and diluted net (loss) income per share | | | $(0.01) | | | $0.15 |
| | Class A Ordinary Shares | | | Class B Ordinary Shares | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Total Shareholders’ Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | |||||||||
Balance – December 31, 2022 | | | — | | | $— | | | 5,327,203 | | | $533 | | | $5,336,153 | | | $(9,167,331) | | | $(3,830,645) |
Remeasurement of Class A ordinary shares to redemption value | | | — | | | — | | | — | | | — | | | (2,336,163 | | | — | | | (2,336,163) |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (123,182) | | | (123,182) |
Balance – March 31, 2023 (Unaudited) | | | — | | | $— | | | 5,327,203 | | | $533 | | | $2,999,990 | | | $(9,290,513) | | | $(6,289,990) |
| | Class A Ordinary Shares | | | Class B Ordinary Shares | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Total Shareholders’ Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | |||||||||
Balance – December 31, 2021 | | | — | | | $— | | | 5,327,203 | | | $533 | | | $— | | | $(14,283,016) | | | $(14,282,483) |
Remeasurement of Class A ordinary shares to redemption value | | | — | | | — | | | — | | | — | | | — | | | (5,256) | | | (5,256) |
Net income | | | — | | | — | | | — | | | — | | | — | | | 3,967,813 | | | 3,967,813 |
Balance – March 31, 2022 (Unaudited) | | | — | | | $— | | | 5,327,203 | | | $533 | | | $— | | | $(10,320,459) | | | $(10,319,926) |
| | For the Three Months Ended March 31, 2023 | | | For the Three Months Ended March 31, 2022 | |
Cash Flows from Operating Activities: | | | | | ||
Net (loss) income | | | $(123,182) | | | $3,967,813 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | | | | | ||
Trust interest income | | | (1,856,213) | | | (5,256) |
Change in fair value of warrant liabilities | | | 495,727 | | | (4,165,857) |
Change in fair value of commitment fee shares | | | 2,810 | | | — |
Changes in current assets and liabilities: | | | | | ||
Prepaid expenses | | | (46,904) | | | 79,047 |
Accounts payable | | | 968,926 | | | (98,871) |
Due from related party | | | (211,329) | | | — |
Due to related party | | | — | | | (88) |
Net cash used in operating activities | | | (770,165) | | | (223,212) |
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Cash Flows from Investing Activities: | | | | | ||
Principal deposited into Trust Account | | | (480,000) | | | — |
Cash withdrawn from trust in connection with redemption | | | 153,567,597 | | | — |
Net cash provided by investing activities | | | 153,087,597 | | | — |
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Cash Flows from Financing Activities: | | | | | ||
Redemption of Class A Shares | | | (153,567,547) | | | — |
Proceeds from issuance of promissory note to related party | | | 480,000 | | | — |
Net cash used in financing activities | | | (153,087,547) | | | — |
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Net Change in Cash | | | (770,115) | | | (223,212) |
Cash – Beginning | | | 1,032,620 | | | 1,714,922 |
Cash – Ending | | | $262,505 | | | $1,491,710 |
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Non-Cash Investing and Financing Activities: | | | | | ||
Remeasurement of Class A ordinary shares subject to possible redemption | | | $2,336,163 | | | $5,256 |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Class A ordinary shares subject to possible redemption - December 31, 2021 | | | $213,101,191 |
Plus: | | | |
Accretion of carrying value to redemption value | | | 2,968,171 |
Class A ordinary shares subject to possible redemption - December 31, 2022 | | | 216,069,362 |
Less: | | | |
Redemption of Class A Ordinary Shares | | | (153,567,547) |
Plus: | | | |
Remeasurement of Class A ordinary shares to redemption value | | | 2,336,163 |
Class A ordinary shares subject to possible redemption – March 31, 2023 | | | $64,837,978 |
| | For the Three Months Ended March 31, 2023 | | | For the Three Months Ended March 31, 2022 | |||||||
| | Class A | | | Class B | | | Class A | | | Class B | |
Basic and diluted net (loss) income per share: | | | | | | | | | ||||
Numerator: | | | | | | | | | ||||
Allocation of net (loss) income | | | $(86,911) | | | $(36,271) | | | $3,174,250 | | | $793,563 |
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Denominator: | | | | | | | | | ||||
Weighted-average shares outstanding | | | 12,764,713 | | | 5,327,203 | | | 21,308,813 | | | 5,327,203 |
Basic and diluted net (loss) income per share | | | $(0.01) | | | $(0.01) | | | $0.15 | | | $0.15 |
• | 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 Class A ordinary shares 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 the Company 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, based on the redemption date and the “fair market value” of the Company’s Class A ordinary shares except as otherwise described above; |
• | if, and only if, the closing price of the Company’s Class A ordinary shares 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 the Company sends the notice of redemption to the warrant holders; and |
• | if the closing price of the Class A ordinary shares 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 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 public warrants. |
| | March 31, 2023 | | | Quoted Prices In Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Assets: | | | | | | | | | ||||
Marketable securities held in Trust Account | | | $64,837,978 | | | $64,837,978 | | | $— | | | $— |
| | $64,837,978 | | | $64,837,978 | | | $— | | | $— | |
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Liabilities: | | | | | | | | | ||||
Warrant Liability – Public Warrants | | | $497,916 | | | $— | | | $497,916 | | | $— |
Warrant Liability – Private Placement Warrants | | | 374,123 | | | — | | | — | | | 374,123 |
Commitment fee shares liability | | | 150,279 | | | — | | | — | | | 150,279 |
| | $1,022,318 | | | $497,916 | | | $— | | | $524,402 |
| | December 31, 2022 | | | Quoted Prices In Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Assets: | | | | | | | | | ||||
Marketable securities held in Trust Account | | | $216,069,362 | | | $216,069,362 | | | $— | | | $— |
| | $216,069,362 | | | $216,069,362 | | | $— | | | $— | |
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Liabilities: | | | | | | | | | ||||
Warrant Liability – Public Warrants | | | $213,799 | | | $213,799 | | | $— | | | $— |
Warrant Liability – Private Placement Warrants | | | 162,513 | | | — | | | — | | | 162,513 |
Commitment fee shares liability | | | 147,469 | | | — | | | — | | | 147,469 |
| | $523,781 | | | $213,799 | | | $— | | | $309,982 |
Input | | | March 31, 2023 | | | December 31, 2022 |
Expected term (years)(1) | | | 1.20 | | | 5.18 |
Expected volatility | | | 6.2% | | | 9.30% |
Risk-free interest rate | | | 4.52% | | | 4.75% |
Fair value of the ordinary share price | | | $10.24 | | | $10.09 |
(1) | Decrease from December 31, 2022 to March 31, 2023, is due to the expected term of the Business Combination on a weighted probability on a successful Business Combination. |
| | March 31, 2023 | |
Fair value as of January 1, 2023 | | | $162,513 |
Revaluation of warrant liability included in other income within the statements of operations | | | 211,610 |
Fair value as of March 31, 2023 | | | 374,123 |
| | March 31, 2022 | |
Fair value as of January 1, 2022 | | | $3,102,551 |
Revaluation of warrant liability included in other income within the statements of operations | | | (1,757,961) |
Fair value as of March 31, 2022 | | | 1,344,590 |
Input | | | November 28, 2022 (Initial Measurement) | | | December 31, 2022 | | | March 31, 2023 |
Expected term (years) | | | 0.41 | | | 0.20 | | | 0.45 |
Risk-free interest rate | | | 4.61% | | | 4.34% | | | 4.92% |
Fair value of the ordinary share price | | | $10.02 | | | $10.090 | | | $10.24 |
| | December 31, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $1,032,620 | | | $1,714,922 |
Prepaid expenses | | | 74,994 | | | 339,697 |
Due from related party, net | | | 12,526 | | | — |
Total Current Assets | | | 1,120,140 | | | 2,054,619 |
Prepaid expenses, non-current | | | — | | | 57,995 |
Marketable securities held in Trust Account | | | 216,069,362 | | | 213,101,191 |
Total Assets | | | $217,189,502 | | | $215,213,805 |
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Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $4,427,004 | | | $1,572,476 |
Due to related party, net | | | — | | | 222 |
Total Current Liabilities | | | 4,427,004 | | | 1,572,698 |
Warrant liability | | | 376,312 | | | 7,364,314 |
Commitment fee shares liability | | | 147,469 | | | — |
Deferred underwriting discount | | | — | | | 7,458,085 |
Total Liabilities | | | 4,950,785 | | | 16,395,097 |
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Commitments and Contingencies (Note 7) | | | | | ||
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Class A Ordinary Shares Subject to Possible Redemption | | | | | ||
Class A ordinary shares subject to possible redemption, 21,308,813 shares at redemption value of approximately $10.14 and $10.00 as of December 31, 2022 and 2021, respectively | | | 216,069,362 | | | 213,101,191 |
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Shareholders’ Deficit: | | | | | ||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | | | — | | | — |
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none shares issued and outstanding (excluding 21,308,813 shares subject to possible redemption) | | | — | | | — |
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,327,203 shares issued and outstanding as of December 31, 2022 and 2021, respectively | | | 533 | | | 533 |
Additional paid-in capital | | | 5,336,153 | | | — |
Accumulated deficit | | | (9,167,331) | | | (14,283,016) |
Total Shareholders’ Deficit | | | (3,830,645) | | | (14,282,483) |
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Total Liabilities and Shareholders’ Deficit | | | $217,189,502 | | | $215,213,805 |
| | For the Year Ended December 31, 2022 | | | For the Period from January 7, 2021 (Inception) through December 31, 2021 | |
Formation and operating costs | | | $3,846,780 | | | $2,333,766 |
Loss from operations | | | (3,846,780) | | | (2,333,766) |
Other income (expense): | | | | | ||
Warrant issuance costs | | | — | | | (539,844) |
Change in fair value of warrant liability | | | 6,988,002 | | | 8,777,435 |
Change in fair value of over-allotment liability | | | — | | | 307,134 |
Fair value of commitment fee shares liability | | | (147,469) | | | — |
Trust interest income | | | 2,968,171 | | | 13,061 |
Other income attributable to derecognition of deferred underwriting fee allocated to offering costs | | | 323,385 | | | — |
Total other income, net | | | 10,132,089 | | | 8,557,786 |
Net income | | | $6,285,309 | | | $6,224,020 |
Basic and diluted weighted average shares outstanding, ordinary share subject to redemption | | | 21,308,813 | | | 17,981,328 |
Basic and diluted net income per share | | | $0.24 | | | $0.27 |
Basic and diluted weighted average shares outstanding, ordinary share | | | 5,327,203 | | | 5,237,292 |
Basic and diluted net income per share | | | $0.24 | | | $0.27 |
| | Class A Ordinary Shares | | | Class B Ordinary Shares | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Total Shareholders’ Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | |||||||||
Balance – January 7, 2021 (inception) | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $— |
Class B ordinary shares issued to Sponsor | | | — | | | — | | | 5,750,000 | | | 575 | | | 24,425 | | | — | | | 25,000 |
Proceeds received in excess of fair value of private placement warrants | | | — | | | — | | | — | | | — | | | 894,382 | | | — | | | 894,382 |
Forfeiture of Class B ordinary shares | | | — | | | — | | | (422,797) | | | (42) | | | — | | | 42 | | | — |
Initial classification of Over-allotment liability | | | — | | | — | | | — | | | — | | | (538,911) | | | — | | | (538,911) |
Partial exercise of Over-allotment liability | | | — | | | — | | | — | | | — | | | 231,777 | | | — | | | 231,777 |
Accretion of Class A Ordinary Shares to redemption value | | | — | | | — | | | — | | | — | | | (611,673) | | | (20,507,078) | | | (21,118,751) |
Net income | | | — | | | — | | | — | | | — | | | — | | | 6,224,020 | | | 6,224,020 |
Balance – December 31, 2021 | | | — | | | — | | | 5,327,203 | | | 533 | | | — | | | (14,283,016) | | | (14,282,483) |
Waived deferred underwriting discount | | | — | | | — | | | — | | | — | | | 7,134,700 | | | — | | | 7,134,700 |
Remeasurement for Class A Ordinary Shares to redemption value | | | — | | | — | | | — | | | — | | | (1,798,547) | | | (1,169,624) | | | (2,968,171) |
Net income | | | — | | | — | | | — | | | — | | | — | | | 6,285,309 | | | 6,285,309 |
Balance – December 31, 2022 | | | — | | | $—- | | | 5,327,203 | | | $533 | | | $5,336,153 | | | $(9,167,331) | | | $(3,830,645) |
| | For the Year Ended December31, 2022 | | | For the Period from January 7, 2021 (Inception) through December 31, 2021 | |
Cash Flows from Operating Activities: | | | | | ||
Net income | | | $6,285,309 | | | $6,224,020 |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | ||
Trust interest income | | | (2,968,171) | | | (13,061) |
Change in fair value of warrant liability | | | (6,988,002) | | | (8,777,435) |
Change in fair value of over-allotment liability | | | — | | | (307,134) |
Fair value of commitment fee shares liability | | | 147,469 | | | — |
Warrant issuance costs | | | — | | | 539,844 |
Other income | | | (323,385) | | | — |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses | | | 322,698 | | | (397,692) |
Accounts payable | | | 2,854,528 | | | 1,572,476 |
Due from related party | | | (12,526) | | | — |
Due to related party | | | (222) | | | 222 |
Net cash used in operating activities | | | (682,302) | | | (1,158,760) |
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Cash Flows from Investing Activities: | | | | | ||
Marketable securities held in Trust Account | | | — | | | (213,088,130) |
Net cash used in investing activities | | | — | | | (213,088,130) |
| | | | |||
Cash Flows from Financing Activities: | | | | | ||
Proceeds from Initial Public Offering, net of underwriters’ fees | | | — | | | 208,826,366 |
Proceeds from private placement | | | — | | | 7,661,764 |
Proceeds from issuance of founder shares | | | — | | | 25,000 |
Repayments to promissory note to related party | | | — | | | (60,094) |
Payment of offering costs | | | — | | | (491,224) |
Net cash provided by financing activities | | | — | | | 215,961,812 |
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Net Change in Cash | | | (682,302) | | | 1,714,922 |
Cash – Beginning | | | 1,714,922 | | | — |
Cash – Ending | | | $1,032,620 | | | $1,714,922 |
| | | | |||
Non-Cash Investing and Financing activities: | | | | | ||
Deferred underwriting commissions charged to additional paid in capital | | | $— | | | $7,458,085 |
Remeasurement of Class A ordinary shares subject to possible redemption | | | $2,968,171 | | | $21,118,751 |
Waived deferred underwriting discount | | | $7,134,700 | | | $— |
Initial classification of warrant liability | | | $— | | | $16,141,749 |
Deferred offering costs by Sponsor loan | | | $— | | | $60,094 |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Gross proceeds from IPO | | | $213,088,130 |
Less: | | | |
Proceeds allocated to Public Warrants | | | (9,374,367) |
Class A ordinary shares issuance costs | | | (11,731,323) |
Plus: | | | |
Accretion of carrying value to redemption value | | | 21,105,690 |
Remeasurement of carrying value to redemption value | | | 13,061 |
Class A ordinary shares subject to possible redemption - December 31, 2021 | | | 213,101,191 |
Plus: | | | |
Remeasurement of carrying value to redemption value | | | 2,968,171 |
Class A ordinary shares subject to possible redemption - December 31, 2022 | | | $216,069,362 |
| | For the Year Ended December 31, 2022 | | | For the Period from January 7, 2021 (Inception) through December 31, 2021 | |||||||
| | Class A | | | Class B | | | Class A | | | Class B | |
Basic and diluted net income per ordinary share: | | | | | | | | | ||||
Numerator: | | | | | | | | | ||||
Allocation of net income | | | $5,028,247 | | | $1,257,062 | | | $4,820,103 | | | $1,403,917 |
| | | | | | | | |||||
Denominator: | | | | | | | | | ||||
Weighted-average shares outstanding | | | 21,308,813 | | | 5,327,203 | | | 17,981,328 | | | 5,237,292 |
Basic and diluted net income per ordinary share | | | $0.24 | | | $0.24 | | | $0.27 | | | $0.27 |
• | 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 Class A ordinary shares 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 the Company 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, based on the redemption date and the “fair market value” of the Company’s Class A ordinary shares except as otherwise described above; |
• | if, and only if, the closing price of the Company’s Class A ordinary shares 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 the Company sends the notice of redemption to the warrant holders; and |
• | if the closing price of the Class A ordinary shares 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 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 public warrants. |
| | December 31, 2022 | | | Quoted Prices In Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Assets: | | | | | | | | | ||||
Marketable securities held in Trust Account | | | $216,069,362 | | | $216,069,362 | | | $— | | | $— |
| | $216,069,362 | | | $216,069,362 | | | $— | | | $— | |
| | | | | | | | |||||
Liabilities: | | | | | | | | | ||||
Warrant Liability –Public Warrants | | | $213,799 | | | $213,799 | | | $— | | | $— |
Warrant Liability – Private Placement Warrants | | | 162,513 | | | — | | | — | | | 162,513 |
Commitment fee shares liability | | | 147,469 | | | — | | | — | | | 147,469 |
| | $523,781 | | | $213,799 | | | $— | | | $309,982 |
| | December 31, 2021 | | | Quoted Prices In Active Markets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Other Unobservable Inputs (Level 3) | |
Assets: | | | | | | | | | ||||
Marketable securities held in Trust Account | | | $213,101,191 | | | $213,101,191 | | | $— | | | $— |
| | $213,101,191 | | | $213,101,191 | | | $— | | | $— | |
| | | | | | | | |||||
Liabilities: | | | | | | | | | ||||
Warrant Liability –Public Warrants | | | $4,261,763 | | | $4,261,763 | | | $— | | | $— |
Warrant Liability – Private Placement Warrants | | | 3,102,551 | | | — | | | — | | | 3,102,551 |
| | $7,364,314 | | | $4,261,763 | | | $— | | | $3,102,551 |
Input | | | December 31, 2022 | | | December 31, 2021 |
Expected term (years) | | | 5.18 | | | 6.48 |
Expected volatility | | | 9.30% | | | 12.40% |
Risk-free interest rate | | | 4.75% | | | 1.40% |
Fair value of the ordinary share price | | | $10.09 | | | $9.69 |
| | December 31, 2022 | |
Fair value as of January 1, 2022 | | | $3,102,551 |
Revaluation of warrant liability included in other income within the statements of operations | | | (2,940,038) |
Fair value as of December 31, 2022 | | | $162,513 |
| | December 31, 2021 | |
Fair value as of January 7, 2021 (inception) | | | $— |
Initial fair value of warrant liability upon issuance at IPO | | | 15,334,757 |
Initial fair value of warrant liability upon issuance at over-allotment | | | 806,992 |
Transfer out of Level 3 to Level 1 | | | (6,440,945) |
Revaluation of warrant liability included in other income within the statements of operations | | | (6,598,253) |
Fair value as of December 31, 2021 | | | $3,102,551 |
Input | | | November 28, 2022 (Initial Measurement) | | | December 31, 2022 |
Expected term (years) | | | 0.41 | | | 0.20 |
Risk-free interest rate | | | 4.61% | | | 4.34% |
Fair value of the ordinary share price | | | $10.015 | | | $10.090 |
| | Note | | | Half-year ended December 31, 2022 US $’0001 | | | Half-year ended December 31, 2022 AU $’000 | | | Half-year ended December 31, 2021 AU $’000 (Restated) | |
Sale of wheels | | | | | 12,255 | | | 18,009 | | | 17,306 | |
Engineering services | | | | | — | | | — | | | 21 | |
Sale of tooling | | | | | — | | | — | | | 319 | |
Revenue | | | 3 | | | 12,255 | | | 18,009 | | | 17,646 |
Cost of goods sold | | | | | (17,411) | | | (25,586) | | | (25,393) | |
Gross margin | | | | | (5,156) | | | (7,577) | | | (7,747) | |
Other income | | | 4 | | | 1,691 | | | 2,485 | | | 1,681 |
Operational expenses | | | | | (264) | | | (388) | | | (1,936) | |
Research and development | | | | | (6,216) | | | (9,134) | | | (8,965) | |
Administrative expenses | | | | | (5,345) | | | (7,855) | | | (6,212) | |
Marketing expenses | | | | | (498) | | | (732) | | | (847) | |
Capital raising transaction costs | | | | | (2,207) | | | (3,243) | | | — | |
Finance costs | | | | | (706) | | | (1,037) | | | (712) | |
Loss before income tax expense | | | | | (18,701) | | | (27,481) | | | (24,738) | |
Income tax expense | | | | | — | | | — | | | — | |
Loss for the period after income tax | | | | | (18,701) | | | (27,481) | | | (24,738) | |
Other comprehensive income | | | | | | | | | ||||
Items that may be reclassified subsequently to profit or loss: | | | | | | | | | ||||
Foreign currency translation differences – foreign operations | | | | | (12) | | | (17) | | | (60) | |
Other comprehensive loss | | | | | (12) | | | (17) | | | (60) | |
Total comprehensive loss for the period, net of tax | | | | | (18,713) | | | (27,498) | | | (24,798) | |
Earnings per share | | | | | | | | | ||||
Basic | | | 6 | | | ($0.09) | | | ($0.13) | | | ($0.12) |
Diluted | | | 6 | | | ($0.09) | | | ($0.13) | | | ($0.12) |
| | Note | | | December 31, 2022 US $’0001 | | | December 31, 2022 AU $’000 | | | June 30, 2022 AU $’000 | |
Current assets | | | | | | | | | ||||
Cash and cash equivalents | | | | | 9,580 | | | 14,078 | | | 22,693 | |
Receivables | | | | | 3,861 | | | 5,674 | | | 14,483 | |
Contract assets | | | | | 1,324 | | | 1,946 | | | 5,909 | |
Inventories | | | 7 | | | 14,123 | | | 20,754 | | | 20,164 |
Other current assets | | | | | 1,797 | | | 2,640 | | | 1,587 | |
Total current assets | | | | | 30,685 | | | 45,092 | | | 64,836 | |
Non-current assets | | | | | | | | | ||||
Property, plant and equipment | | | | | 39,801 | | | 58,488 | | | 57,616 | |
Right-of-use assets | | | | | 5,311 | | | 7,804 | | | 7,564 | |
Intangible assets | | | 8 | | | 10,676 | | | 15,688 | | | 14,364 |
Total non-current assets | | | | | 55,788 | | | 81,980 | | | 79,544 | |
Total assets | | | | | 86,473 | | | 127,072 | | | 144,380 | |
Current liabilities | | | | | | | | | ||||
Payables | | | | | 5,526 | | | 8,120 | | | 9,502 | |
Borrowings | | | 9 | | | 14,005 | | | 20,581 | | | 18,686 |
Lease liability | | | | | 431 | | | 633 | | | 579 | |
Contract liability | | | | | 530 | | | 779 | | | 458 | |
Deferred income | | | | | 1,200 | | | 1,763 | | | 1,028 | |
Provisions | | | | | 3,004 | | | 4,414 | | | 4,161 | |
Total current liabilities | | | | | 24,696 | | | 36,290 | | | 34,414 | |
Non-current liabilities | | | | | | | | | ||||
Borrowings | | | 9 | | | — | | | — | | | 4,333 |
Lease liability | | | | | 5,236 | | | 7,694 | | | 7,461 | |
Contract liability | | | | | — | | | — | | | 323 | |
Deferred income | | | 4 | | | 10,854 | | | 15,950 | | | 5,211 |
Provisions | | | | | 447 | | | 657 | | | 713 | |
Total non-current liabilities | | | | | 16,537 | | | 24,301 | | | 18,041 | |
Total liabilities | | | | | 41,233 | | | 60,591 | | | 52,455 | |
Net assets | | | | | 45,240 | | | 66,481 | | | 91,925 | |
Equity | | | | | | | | | ||||
Contributed equity | | | 4 | | | 262,357 | | | 385,536 | | | 383,822 |
Reserves | | | | | 4,811 | | | 7,070 | | | 6,747 | |
Accumulated losses | | | | | (221,928) | | | (326,125) | | | (298,644) | |
Total equity | | | | | 45,240 | | | 66,481 | | | 91,925 |
| | Note | | | Contributed Equity | | | Share buyback reserve | | | Share based payment reserve | | | Accumulated Losses | | | Foreign Currency Translation Reserve | | | Total Equity | |
| | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | ||||
Balance as at June 30, 2021 | | | | | 381,890 | | | (311) | | | 5,979 | | | (250,823) | | | (9) | | | 136,726 | |
Net loss after tax for the half year (Restated) | | | | | — | | | — | | | — | | | (24,738) | | | — | | | (24,738) | |
Other comprehensive loss for the half year | | | | | — | | | — | | | — | | | — | | | (60) | | | (60) | |
Total comprehensive loss for the half year (Restated) | | | | | — | | | — | | | — | | | (24,738) | | | (60) | | | (24,798) | |
Transactions with owners in their capacity as owners: | | | | | | | | | | | | | | | |||||||
Share-based payments | | | 5 | | | 1,712 | | | — | | | (838) | | | — | | | — | | | 874 |
Total transactions with owners in their capacity as owners | | | | | 1,712 | | | — | | | (838) | | | — | | | — | | | 874 | |
Balance as at December 31, 2021 (Restated) | | | | | 383,602 | | | (311) | | | 5,141 | | | (275,561) | | | (69) | | | 112,802 | |
Balance as at June 30, 2022 | | | | | 383,822 | | | (311) | | | 7,214 | | | (298,644) | | | (156) | | | 91,925 | |
Net loss after tax for the half year | | | | | — | | | — | | | — | | | (27,481) | | | — | | | (27,481) | |
Other comprehensive loss for the half year | | | | | — | | | — | | | — | | | — | | | (17) | | | (17) | |
Total comprehensive loss for the half year | | | | | — | | | — | | | — | | | (27,481) | | | (17) | | | (27,498) | |
Transactions with owners in their capacity as owners | | | | | | | | | | | | | | | |||||||
Share-based payments | | | 5 | | | 1,714 | | | — | | | 340 | | | — | | | — | | | 2,054 |
Total transactions with owners in their capacity as owners | | | | | 1,714 | | | — | | | 340 | | | — | | | — | | | 2,054 | |
Balance as at December 31, 2022 | | | | | 385,536 | | | (311) | | | 7,554 | | | (326,125) | | | (173) | | | 66,481 |
| | Note | | | Half-year ended December 31, 2022 US$’0001 | | | Half-year ended December 31, 2022 AU $’000 | | | Half-year ended December 31, 2021 $’000 (Restated) | |
Cash flow from operating activities | | | | | | | | | ||||
Receipts from customers | | | | | 20,349 | | | 29,903 | | | 18,380 | |
Receipt of grants and research and development incentives | | | | | 10,334 | | | 15,186 | | | 151 | |
Payments to suppliers and employees | | | | | (26,473) | | | (38,902) | | | (44,832) | |
Interest received | | | | | 25 | | | 37 | | | 59 | |
Finance costs | | | | | (599) | | | (880) | | | (1,757) | |
Net cash from/ (used in) operating activities | | | | | 3,636 | | | 5,344 | | | (27,999) | |
Cash flow from investing activities | | | | | | | | | ||||
Payments for property, plant and equipment | | | | | (4,024) | | | (5,914) | | | (9,018) | |
Payments for intangible assets | | | | | (1,708) | | | (2,510) | | | (2,844) | |
Net cash used in investing activities | | | | | (5,732) | | | (8,424) | | | (11,862) | |
Cash flow from financing activities | | | | | | | | | ||||
Capital raising transaction costs | | | | | (2,139) | | | (3,144) | | | (422) | |
Proceeds from third-party borrowings | | | 9 | | | 10,551 | | | 15,505 | | | 15,559 |
Repayment of third-party borrowings | | | 9 | | | (12,210) | | | (17,943) | | | (14,354) |
Repayment of lease liability | | | | | (130) | | | (191) | | | (314) | |
Net cash (used in)/ from financing activities | | | | | (3,928) | | | (5,773) | | | 469 | |
Net decrease in cash held | | | | | (6,024) | | | (8,853) | | | (39,392) | |
Cash at beginning of financial period | | | | | 15,443 | | | 22,693 | | | 87,257 | |
Effects of exchange rate changes on cash and cash equivalents | | | | | 161 | | | 238 | | | (68) | |
Cash at end of financial period | | | | | 9,580 | | | 14,078 | | | 47,797 |
• | The Group may not be able to successfully reach agreements with its customers to obtain early payments or bailment arrangements and therefore not be able to successfully raise the amount included in the Group’s Cash Flow Projection; and |
• | There may be delays in obtaining early customer payments thereby necessitating additional bridge funding to be obtained by the Group. |
• | The Group and its specialist third party advisers may not be able to identify lenders to provide the financing under the Proposed New Debt Facility; |
• | In order to secure the funding to be facilitated under the Proposed New Debt Facility, the Group needs to secure debt collateral insurance (which may or may not be forthcoming), the cost of which is likely to be significant, which may mean the Group is not able to secure the full amount of $72 million (US$51 million) as included in the Group's Cash Flow Projection; |
• | Given the circumstances of the Group, the Group is likely to have to agree to significantly higher rates of interest, costs, fees and other forms of consideration than would customarily be payable under traditional finance arrangements, to secure the Proposed New Debt Facility. Further, these costs may be higher than currently projected and the Group may not be able to secure the full amount of US$51 million as included in the Group’s Cash Flow Projection; |
• | The Group may not be able to meet all of the conditions precedent to draw down under the Proposed New Debt Facility once it is entered into; |
• | There may be a delay in the expected draw-down date of the Proposed New Debt Facility thereby necessitating additional bridge funding to be obtained by the Group; and |
• | The Proposed New Debt Facility may be required to be repaid in full if the Transaction does not complete. If this was required, the Group would have 60 days to repay the debt following notification of this requirement. |
• | The Transaction may not close; |
• | The CEF will not be available until the completion of the Transaction and the filing and effectiveness of a new registration statement with the U.S. Securities and Exchange Commission relating thereto; |
• | There may be a delay in the completion of the Transaction or anticipated availability of the CEF, thereby necessitating additional bridge funding to be obtained by the Group; |
• | The Group’s advisers that will be assisting in raising capital through the CEF may be unable to dispose of the shares of MergeCo on an ongoing basis. As the terms of the CEF will not require the advisers to purchase additional shares under the CEF beyond an overall ownership of 9.99%, or US$10 million ($14 million) per week, whichever is lower, the Group may not have full access to the US$30 million ($43 million) CEF capital (of the total US$60 million permitted to be drawn under the CEF) included in the Group’s Cash Flow Projection; and |
• | There may be less than $14 million cash remaining in the SPAC Trust Account upon completion of the Transaction. |
• | Subsequent to the first filing of the Company’s SEC Form F-4 on February 27, 2023 through March 31, 2023 the Group secured $2.3 million of net cash inflows from early payment and bailment arrangements from certain of its customers for the March 2023 period; |
• | In addition to the $2.3 million cash received in March 2023 the Group has secured arrangements with certain customers for amounts receivable for wheels and tooling to be prepaid in advance of due dates, with a net positive cash inflow of $2.6 million expected in April 2023 |
• | The Group reached agreement with certain suppliers to defer total payments of $9.7 million for amounts that have been invoiced, and for amounts that are projected to be payable by the Group during the period from February to April 2023 based on the Group’s Cash Flow Projection. Under the terms of these agreements, the new payment date ranges are from late April to late May 2023; |
• | The Group also secured a short term convertible debt funding of $2 million in March 2023, which will be repaid by the Group post-closing of the Proposed New Debt Facility; and |
• | The Group received certain consents and waivers from its existing lender, including reducing its minimum month end cash balance requirement to $3.5 million for February to April 2023. |
• | Based on a re-evaluation of costs capitalized as development costs included in intangible assets, under IAS 38, Intangible Assets, the Group determined that certain development costs did not meet all of the recognition criteria set forth under IAS 38 most particularly with respect to the extent of record-keeping and supporting documentation. Based on this analysis, the Group identified the following adjustments to the financial statements for the six months ended December 31, 2021: |
• | For the half year ended December 31, 2021, research and development expenses, net of adjustments to amortization expenses, were understated by $2.9 million; |
• | For the half year ended December 31, 2021, cash flows used in operating activities increased by $5.7 million, with a corresponding decrease in cash used in investing activities. |
• | The Group’s supply chain finance arrangement has the characteristics of cash flows relating to both operating and financing activities. Under IFRS 9, Financial Instruments, there is no explicit guidance as to when to classify supply chain finance arrangements as operating or financing activities. The assessment involves judgment and careful consideration of all relevant facts and circumstances of the arrangement. Previously, the Group classified its supply chain finance arrangement as payables. Upon reassessing the facts and circumstances, the Group concluded that the supply chain finance arrangement is more akin to a finance arrangement due to the fact that the Group pays an administration charge which it normally does not to suppliers. Therefore, the Group reclassified the arrangement from payables to current borrowings. Based on this analysis of the supply chain financing arrangement, the Group identified the following adjustments to the financial statements for the six months ended December 31, 2021: |
• | For the half year ended December 31, 2021, cash flows used in operating activities increased by $3.0 million with a corresponding increase in cash provided by financing activities; |
• | For the half year ended December 31, 2021, there was a reclassification of $123 thousand from administrative expenses to finance costs. |
| | As previously reported Dec 31, 2021 S’000 | | | Restatement adjustment – Intangible Assets Dec 31, 2021 S’000 | | | Restatement adjustment – Supplier Financing arrangement Dec 31, 2021 S’000 | | | As restated Dec 31, 2021 S’000 | |
Research and development | | | (6,068) | | | (2,897) | | | — | | | (8,965) |
Administrative expenses | | | (6,335) | | | — | | | 123 | | | (6,212) |
Finance costs | | | (589) | | | — | | | (123) | | | (712) |
Loss before income tax expense | | | (21,841) | | | (2,897) | | | — | | | (24,738) |
Income tax expense | | | — | | | — | | | — | | | — |
Loss after income tax | | | (21,841) | | | (2,897) | | | — | | | (24,738) |
Total comprehensive loss for the period, net of tax | | | (21,901) | | | (2,897) | | | — | | | (24,798) |
| | | | | | | | |||||
Earnings per share | | | (0.11) | | | (0.01) | | | — | | | (0.12) |
| | As previously reported Dec 31, 2021 $’000 | | | Restatement adjustment- intangible Assets Dec 31, 2021 $’000 | | | Restatement adjustment- Supplier Financing arrangement Dec 31, 2021 $’000 | | | As restated Dec 31, 2021 $’000 | |
Cash flow from operating activities | | | | | | | | | ||||
Payments to suppliers and employees | | | (36,290) | | | (5,653) | | | (2,889) | | | (44,832) |
Finance costs | | | (1,672) | | | — | | | (85) | | | (1,757) |
Net cash used in operating activities | | | (19,372) | | | (5,653) | | | (2,974) | | | (27,999) |
| | | | | | | | |||||
Cash flow from investing activities | | | | | | | | | ||||
Payment for intangible assets | | | (8,497) | | | 5,653 | | | — | | | (2,844) |
Net cash (used in) / provided by investing activities | | | (17,515) | | | 5,653 | | | — | | | (11,862) |
| | | | | | | | |||||
Cash flow from financing activities | | | | | | | | | ||||
Proceeds from third party borrowings | | | 8,523 | | | — | | | 7,036 | | | 15,559 |
Repayment of third party borrowings | | | (10,292) | | | — | | | (4,062) | | | (14,354) |
Net cash provided by / (decrease) in cash held | | | (2,505) | | | — | | | 2,974 | | | 469 |
| | | | | | | | |||||
Net increase / (used in) cash held | | | (39,392) | | | — | | | — | | | (39,392) |
Cash at end of financial year | | | 47,797 | | | — | | | — | | | 47,797 |
| | Half year ended December 31, 2022 $’000 | | | Half year ended December 31, 2021 $’000 | |
Revenue | | | | | ||
International | | | 18,009 | | | 17,646 |
Domestic | | | — | | | — |
| | 18,009 | | | 17,646 |
| | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Non-current assets | | | | | ||
International | | | — | | | — |
Domestic | | | 81,980 | | | 79,544 |
| | 81,980 | | | 79,544 |
| | Half year ended December 31, 2022 $’000 | | | Half year ended December 31, 2021 $’000 | |
External revenue by product line | | | | | ||
Sale of wheels | | | 18,009 | | | 17,306 |
Engineering services | | | — | | | 21 |
Sale of tooling | | | — | | | 319 |
Total revenue | | | 18,009 | | | 17,646 |
| | | | (Restated) | ||
External revenue by timing of revenue recognition | | | | | ||
Goods transferred at a point in time | | | 12,817 | | | 6,660 |
Goods transferred over time | | | 5,192 | | | 10,646 |
Services transferred at a point in time | | | — | | | 319 |
Services transferred over time | | | — | | | 21 |
Total revenue | | | 18,009 | | | 17,646 |
| | Half year ended December 31, 2022 $’000 | | | Half year ended December 31, 2021 $’000 | |
Government grants | | | 2,152 | | | 1,229 |
Interest income | | | 37 | | | 59 |
Realized foreign exchange gain | | | 259 | | | 11 |
Unrealized foreign exchange gain | | | — | | | 137 |
Other income | | | 37 | | | 245 |
| | 2,485 | | | 1,681 |
| | December 31, 2022 Ordinary shares | | | June 30, 2022 Ordinary shares | | | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Ordinary shares – fully paid | | | 209,986,635 | | | 206,326,138 | | | 385,536 | | | 383,822 |
Ordinary shares – restricted | | | 338,951 | | | 527,889 | | | — | | | — |
Balance | | | 210,325,586 | | | 206,854,027 | | | 385,536 | | | 383,822 |
| | December 31, 2021 Ordinary shares | | | June 30, 2021 Ordinary shares | | | December 31, 2021 $’000 | | | June 30, 2021 $’000 | |
Ordinary shares – fully paid | | | 206,173,593 | | | 205,421,449 | | | 383,602 | | | 381,890 |
Ordinary shares – restricted | | | 550,686 | | | 377,642 | | | — | | | — |
Balance | | | 206,724,279 | | | 205,799,091 | | | 383,602 | | | 381,890 |
Movement in ordinary shares during the period | | | Number of shares | | | $’000 |
Balance at July 01, 2021 | | | 205,421,449 | | | 381,890 |
Shares issued under Employee Share Plan | | | 752,144 | | | 1,712 |
Balance at December, 2021 | | | 206,173,593 | | | 383,602 |
| | | | |||
Balance at July 01, 2022 | | | 206,326,138 | | | 383,822 |
Shares issued under Employee Share Plan | | | 3,660,497 | | | 1,714 |
Balance at December 31, 2022 | | | 209,986,635 | | | 385,536 |
| | Half year ended December 31, 2022 $’000 | | | Half year ended December 31 2021 $’000 (Restated) | |
Earnings | | | | | ||
Net loss attributable to ordinary equity holders of the parent | | | (27,481) | | | (24,738) |
Effect of dilutive potential ordinary shares | | | — | | | — |
Earnings for the purposes of diluted earnings per share | | | (27,481) | | | (24,738) |
| | Half year ended December 31, 2022 No. ’000 | | | Half year ended December 31, 2021 No. ’000 | |
Number of shares | | | | | ||
Weighted average number of ordinary shares for the purposes of basic earnings per share | | | 206,102 | | | 205,758 |
Effect of dilutive potential ordinary shares | | | — | | | — |
| | 206,102 | | | 205,758 |
Loss per share | | | | | ||
Basic | | | ($0.13) | | | ($0.12) |
Diluted | | | ($0.13) | | | ($0.12) |
| | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Current | | | | | ||
Raw materials | | | 9,885 | | | 7,646 |
Work in progress | | | 8,496 | | | 8,969 |
Finished goods | | | 4,419 | | | 5,037 |
Consumables and spare parts | | | 3,522 | | | 3,276 |
| | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Provision for trial wheels, obsolescence and scrap | | | (5,568) | | | (4,764) |
Inventories at the lower of cost and net realisable value | | | 20,754 | | | 20,164 |
| | Development costs $’000 | | | Patents and trademarks $’000 | | | Total $’000 | |
At June 30, 2022 | | | | | | | |||
Gross cost | | | 15,750 | | | 1,354 | | | 17,062 |
Less accumulated amortization | | | (2,247) | | | (493) | | | (2,698) |
Net book amount as at June 30, 2022 | | | 13,503 | | | 861 | | | 14,364 |
| | | | | | ||||
Half-year ended December 31, 2022 | | | | | | | |||
Opening net book amount | | | 13,503 | | | 861 | | | 14,364 |
Additions | | | 2,458 | | | 52 | | | 2,510 |
Amortization | | | (1,142) | | | (44) | | | (1,186) |
Closing net book amount as at December 31, 2022 | | | 14,819 | | | 869 | | | 15,688 |
| | | | | | ||||
At December 31, 2022 | | | | | | | |||
Gross cost | | | 18,208 | | | 1,406 | | | 19,614 |
Less accumulated amortization | | | (3,389) | | | (537) | | | (3,926) |
Net book amount as at December 31, 2022 | | | 14,819 | | | 869 | | | 15,688 |
Half-year ended December 31, 2021 | | | | | | | |||
Opening net book amount | | | 8,890 | | | 859 | | | 9,749 |
Additions | | | 2,798 | | | 45 | | | 2,843 |
Amortization | | | (457) | | | (42) | | | (499) |
Closing net book amount as at December 31, 2021 | | | 11,231 | | | 862 | | | 12,093 |
| | | | | | ||||
At December 31, 2021 | | | | | | | |||
Gross cost | | | 12,628 | | | 1,313 | | | 13,941 |
Less accumulated amortization | | | (1,397) | | | (451) | | | (1,848) |
Net book amount as at December 31, 2021 | | | 11,231 | | | 862 | | | 12,093 |
| | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Current borrowings | | | | | ||
Secured | | | | | ||
Working capital facility | | | 3,249 | | | 6,843 |
Term loan | | | 6,500 | | | 2,889 |
Letter of credit facility | | | 4,000 | | | 4,000 |
| | 13,749 | | | 13,732 |
| | December 31, 2022 $’000 | | | June 30, 2022 $’000 | |
Unsecured | | | | | ||
Supplier finance arrangement | | | 6,832 | | | 4,954 |
| | 20,581 | | | 18,686 | |
| | | | |||
Non-current borrowings | | | | | ||
Secured | | | | | ||
Term loan | | | — | | | 4,333 |
| | — | | | 4,333 |
| | Note | | | 2022 US $’0001 (Restated) | | | 2022 AU $’000 (Restated) | | | 2021 AU $’000 (Restated) | |
Sale of wheels | | | | | 26,315 | | | 38,276 | | | 32,205 | |
Engineering services | | | | | 319 | | | 464 | | | 2,732 | |
Sale of tooling | | | | | 1,097 | | | 1,596 | | | — | |
Revenue | | | 2.1 | | | 27,731 | | | 40,336 | | | 34,937 |
Cost of goods sold | | | 3.2.1 | | | (39,493) | | | (57,445) | | | (49,232) |
Gross margin | | | | | (11,762) | | | (17,109) | | | (14,295) | |
Other income | | | 2.2 | | | 2,970 | | | 4,320 | | | 10,506 |
Operational expenses | | | | | (1,384) | | | (2,013) | | | (3,366) | |
Research and development expenses | | | 2.4 | | | (11,641) | | | (16,933) | | | (10,513) |
Administrative expenses | | | | | (9,038) | | | (13,146) | | | (15,690) | |
Marketing expenses | | | | | (1,066) | | | (1,550) | | | (938) | |
Finance costs | | | 2.4 | | | (956) | | | (1,390) | | | (1,704) |
Loss before income tax expense | | | | | (32,877) | | | (47,821) | | | (36,000) | |
Income tax expense | | | 5 | | | — | | | — | | | — |
Loss for the year after income tax | | | | | (32,877) | | | (47,821) | | | (36,000) | |
Other comprehensive income | | | | | | | | | ||||
Items that may be reclassified subsequently to profit or loss: | | | | | | | | | ||||
Foreign currency translation differences - foreign operations | | | | | (101) | | | (147) | | | 150 | |
Other comprehensive income | | | | | (101) | | | (147) | | | 150 | |
Total comprehensive loss for the year, net of tax | | | | | (32,978) | | | (47,968) | | | (35,850) | |
Earnings per share | | | | | | | | | ||||
Basic | | | 2.5 | | | ($0.16) | | | ($0.23) | | | ($0.23) |
Diluted | | | 2.5 | | | ($0.16) | | | ($0.23) | | | ($0.23) |
| | Note | | | June 30, 2022 US $’0001 (Restated) | | | June 30, 2022 AU $’000 (Restated) | | | June 30, 2021 AU $’000 (Restated) | | | July 1, 2020 AU $’000 (Restated) | |
Current assets | | | | | | | | | | | |||||
Cash and cash equivalents | | | 4.1 | | | 15,601 | | | 22,693 | | | 87,257 | | | 33,861 |
Receivables | | | 3.1 | | | 9,957 | | | 14,483 | | | 12,152 | | | 7,880 |
Contract assets | | | 2.1 | | | 4,062 | | | 5,909 | | | — | | | — |
Inventories | | | 3.2 | | | 13,863 | | | 20,164 | | | 18,179 | | | 27,826 |
Other current assets | | | | | 1,092 | | | 1,587 | | | 1,054 | | | 811 | |
Total current assets | | | | | 44,575 | | | 64,836 | | | 118,642 | | | 70,378 | |
Non-current assets | | | | | | | | | | | |||||
Property, plant and equipment | | | 3.3 | | | 39,611 | | | 57,616 | | | 47,319 | | | 44,036 |
Right-of-use assets | | | 3.4 | | | 5,201 | | | 7,564 | | | 7,983 | | | 9,290 |
Intangible assets | | | 3.5 | | | 9,875 | | | 14,364 | | | 9,749 | | | 6,364 |
Total non-current assets | | | | | 54,687 | | | 79,544 | | | 65,051 | | | 59,690 | |
Total assets | | | | | 99,262 | | | 144,380 | | | 183,693 | | | 130,068 | |
Current liabilities | | | | | | | | | | | |||||
Payables | | | 3.6 | | | 6,533 | | | 9,502 | | | 9,742 | | | 16,962 |
Borrowings | | | 4.2 | | | 12,847 | | | 18,686 | | | 12,233 | | | 5,674 |
Related party borrowings | | | 4.2 | | | — | | | — | | | — | | | 13,000 |
Lease liability | | | 3.4 | | | 398 | | | 579 | | | 542 | | | 979 |
Contract liability | | | 2.1 | | | 315 | | | 458 | | | — | | | — |
Deferred income | | | 3.7 | | | 707 | | | 1,028 | | | 1,060 | | | 798 |
Provisions | | | 3.8 | | | 2,861 | | | 4,161 | | | 3,655 | | | 2,853 |
Total current liabilities | | | | | 23,661 | | | 34,414 | | | 27,232 | | | 40,266 | |
Non-current liabilities | | | | | | | | | | | |||||
Borrowings | | | 4.2 | | | 2,979 | | | 4,333 | | | 6,529 | | | — |
Lease liability | | | 3.4 | | | 5,129 | | | 7,461 | | | 7,813 | | | 8,540 |
Contract liability | | | 2.1 | | | 222 | | | 323 | | | — | | | — |
Deferred income | | | 3.7 | | | 3,583 | | | 5,211 | | | 4,782 | | | 3,416 |
Provisions | | | 3.8 | | | 490 | | | 713 | | | 611 | | | 519 |
Total non-current liabilities | | | | | 12,403 | | | 18,041 | | | 19,735 | | | 12,475 | |
Total liabilities | | | | | 36,064 | | | 52,455 | | | 46,967 | | | 52,741 | |
Net assets | | | | | 63,198 | | | 91,925 | | | 136,726 | | | 77,327 | |
Equity | | | | | | | | | | | |||||
Contributed equity | | | 4.4 | | | 263,878 | | | 383,822 | | | 381,890 | | | 291,226 |
Reserves | | | 4.6 | | | 4,638 | | | 6,747 | | | 5,659 | | | 924 |
Accumulated losses | | | | | (205,318) | | | (298,644) | | | (250,823) | | | (214,823) | |
Total equity | | | | | 63,198 | | | 91,925 | | | 136,726 | | | 77,327 |
| | Note | | | Contributed equity | | | Share buyback reserve | | | Share based payment reserve | | | Accumulated losses | | | Foreign currency translation reserve | | | Total equity | |
| | | | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | | | AU $’000 | ||
Balance as of July 1, 2020 (as previously reported) | | | | | 291,226 | | | (311) | | | 1,394 | | | (203,240) | | | (159) | | | 88,910 | |
Effect of restatement (refer Note 1.7) | | | | | — | | | — | | | — | | | (11,583) | | | — | | | (11,583) | |
Balance as of July 1, 2020 (Restated) | | | | | 291,226 | | | (311) | | | 1,394 | | | (214,823) | | | (159) | | | 77,327 | |
Net loss after tax for the full year (Restated) | | | | | — | | | — | | | — | | | (36,000) | | | — | | | (36,000) | |
Other comprehensive profit/(loss) for the full year | | | | | — | | | — | | | — | | | — | | | 150 | | | 150 | |
Total comprehensive loss for the full year (Restated) | | | | | — | | | — | | | — | | | (36,000) | | | 150 | | | (35,850) | |
Transactions with owners in their capacity as owners | | | | | | | | | | | | | | | |||||||
Issue of share capital | | | 4.4 | | | 95,047 | | | — | | | — | | | — | | | — | | | 95,047 |
Share-based payments | | | 4.4 | | | 1,138 | | | — | | | 4,585 | | | — | | | — | | | 5,723 |
Share issue costs | | | 4.4 | | | (5,521) | | | — | | | — | | | — | | | — | | | (5,521) |
Total transactions with owners in their capacity as owners | | | | | 90,664 | | | — | | | 4,585 | | | — | | | — | | | 95,249 | |
Balance as of June 30, 2021 (Restated) | | | | | 381,890 | | | (311) | | | 5,979 | | | (250,823) | | | (9) | | | 136,726 | |
| | | | | | | | | | | | | | ||||||||
Balance as of July 1, 2021 (as previously reported) | | | | | 381,890 | | | (311) | | | 5,979 | | | (235,233) | | | (9) | | | 152,316 | |
Effect of restatement (refer Note 1.7) | | | | | — | | | — | | | — | | | (15,590) | | | — | | | (15,590) | |
Balance as of June 30, 2021 (Restated) | | | | | 381,890 | | | (311) | | | 5,979 | | | (250,823) | | | (9) | | | 136,726 | |
Net loss after tax for the full year (Restated) | | | | | — | | | — | | | — | | | (47,821) | | | — | | | (47,821) | |
Other comprehensive profit/(loss) for the full year | | | | | — | | | — | | | — | | | — | | | (147) | | | (147) | |
Total comprehensive loss for the full year (Restated) | | | | | — | | | — | | | — | | | (47,821) | | | (147) | | | (47,968) | |
Transactions with owners in their capacity as owners | | | | | | | | | | | | | | | |||||||
Share-based payments | | | 4.4 | | | 1,932 | | | — | | | 1,235 | | | — | | | — | | | 3,167 |
Total transactions with owners in their capacity as owners | | | | | 1,932 | | | — | | | 1,235 | | | — | | | — | | | 3,167 | |
Balance as of June 30, 2022 (Restated) | | | | | 383,822 | | | (311) | | | 7,214 | | | (298,644) | | | (156) | | | 91,925 |
| | Note | | | 2022 US $’0001 (Restated) | | | 2022 AU $’000 (Restated) | | | 2021 AU $’000 (Restated) | |
Cash flow from operating activities | | | | | | | | | ||||
Receipts from customers | | | | | 23,130 | | | 33,643 | | | 30,236 | |
Receipt of grants and research and development incentives | | | | | 2,590 | | | 3,767 | | | 11,888 | |
Payments to suppliers and employees | | | | | (55,690) | | | (81,005) | | | (59,533) | |
Interest received | | | | | 65 | | | 94 | | | 69 | |
Finance costs | | | | | (1,702) | | | (2,475) | | | (1,641) | |
Net cash used in operating activities | | | 4.1.1 | | | (31,607) | | | (45,976) | | | (18,981) |
Cash flow from investing activities | | | | | | | | | ||||
Payments for property, plant and equipment | | | 3.3 | | | (10,748) | | | (15,634) | | | (12,571) |
Payments for intangible assets | | | 3.5 | | | (4,130) | | | (6,007) | | | (3,990) |
Net cash used in investing activities | | | | | (14,878) | | | (21,641) | | | (16,561) | |
Cash flow from financing activities | | | | | | | | | ||||
Proceeds from third party borrowings | | | 4.2 | | | 23,139 | | | 33,657 | | | 25,774 |
Repayment of third-party borrowings | | | | | (20,192) | | | (29,370) | | | (12,715) | |
Repayment of related party borrowings | | | 4.2 | | | — | | | — | | | (13,000) |
Proceeds from share issues | | | 4.4 | | | — | | | — | | | 95,046 |
Capital raising transaction costs | | | 4.4 | | | (290) | | | (422) | | | (5,119) |
Repayment of lease liability | | | | | (410) | | | (596) | | | (1,040) | |
Net cash provided by financing activities | | | | | 2,247 | | | 3,269 | | | 88,946 | |
Net (decrease) / increase in cash held | | | | | (44,238) | | | (64,348) | | | 53,404 | |
Cash at beginning of financial year | | | | | 59,989 | | | 87,257 | | | 33,861 | |
Effects of exchange rate changes on cash and cash equivalents | | | | | (150) | | | (216) | | | (8) | |
Cash at end of financial year | | | | | 15,601 | | | 22,693 | | | 87,257 |
• | The Group may not be able to successfully reach agreements with its customers to obtain early payments or bailment arrangements and therefore not be able to successfully raise the amount included in the Group’s Cash Flow Projection; |
• | There may be delays in obtaining early customer payments thereby necessitating additional bridge funding to be obtained by the Group; |
• | The Group may not be able to meet all of the conditions precedent to reach a binding agreement for the short term convertible debt funding; and |
• | There may be a delay in the closing date of the short term convertible debt funding thereby necessitating additional bridge funding to be obtained by the Group. |
• | The Group and its specialist third party advisers may not be able to identify lenders to provide the financing under the Proposed New Debt Facility; |
• | The valuation of the Group’s intellectual property may be less than what has been initially indicated by the Group’s specialist third party advisers, thereby not being able to secure the full amount of $72 million (US$51 million) as included in the Group’s Cash Flow Projection; |
• | In order to secure the funding to be facilitated under the Proposed New Debt Facility, the Group needs to secure debt collateral insurance (which may or may not be forthcoming), the cost of which is likely to be significant, which may mean the Group is not able to secure the full amount of $72 million (US$51 million) as included in the Group's Cash Flow Projection; |
• | Given the circumstances of the Group, the Group is likely to have to agree to significantly higher rates of interest, costs, fees and other forms of consideration than would customarily be payable under traditional finance arrangements, to secure the Proposed New Debt Facility. Further, these costs may be higher than |
• | The Group may not be able to meet all of the conditions precedent to draw down under the Proposed New Debt Facility once it is entered into; |
• | There may be a delay in the expected draw-down date of the Proposed New Debt Facility thereby necessitating additional bridge funding to be obtained by the Group. |
• | The Transaction may not close; |
• | The CEF will not be available until the completion of the Transaction and the filing and effectiveness of a new registration statement with the U.S. Securities and Exchange Commission relating thereto; |
• | There may be a delay in the completion of the Transaction or anticipated availability of the CEF, thereby necessitating additional bridge funding to be obtained by the Group; |
• | The Group’s advisers that will be assisting in raising capital through the CEF may be unable to dispose of the shares of MergeCo (as defined in Note 6.7 below) on an ongoing basis. As the terms of the CEF will not require the advisers to purchase additional shares under the CEF beyond an overall ownership of 9.99%, or US$10 million ($14 million) per week, whichever is lower, the Group may not have full access to the US$30 million ($43 million) CEF capital (of the total US$60 million permitted to be drawn under the CEF) included in the Group’s Cash Flow Projection; and |
• | There may be less than $14 million cash remaining in the SPAC Trust Account upon completion of the Transaction. |
• | The Group has secured arrangements with certain customers for amounts receivable for tooling to be prepaid in advance of due dates, with a net positive cash inflow of $1.1 million through to May 2023; |
• | The Group reached agreement with certain suppliers to defer total payments of $9.7 million for amounts that have been invoiced, and for amounts that are projected to be payable by the Group during the period from February to April 2023 based on the Group’s Cash Flow Projection. Under the terms of these agreements, the new payment date ranges are from late April to late May 2023; and |
• | The Group received certain consents and waivers from its existing lender, including reducing its minimum month end cash balance requirement to $3.5 million for February to April 2023. |
• | assets and liabilities are translated at the closing rate at the reporting date; |
• | income and expenses are translated at average exchange rates throughout the course of the year (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rates on the dates of the transactions); and |
• | all resulting exchange differences are recognized in other comprehensive income and accumulated in the foreign currency translation reserve, a separate component of equity. |
Note 3.2 Inventories | | | Note 3.5 Intangible assets |
| | ||
Note 3.3 Property, plant and equipment | | | Note 5.5 Income tax |
| |
1. | Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority; |
2. | Receivables and payables are stated inclusive of the amount of GST receivable or payable; |
3. | The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the consolidated balance sheet; |
4. | Cash flows for receipts from customers and payments to suppliers are presented on a gross basis. The GST components of cash flows arising from investing and financing activities are presented as payments to suppliers under operating cash flows; and |
5. | Commitments are disclosed net of GST. |
• | Re-evaluated the costs capitalized as development costs included in intangible assets; |
• | Reassessed the classification of supplier finance arrangements previously classified as part of payables to borrowings (current). |
• | Based on a re-evaluation of costs capitalized as development costs included in intangible assets, under International Accounting Standards (IAS) 38, Intangible Assets, the Group determined that certain development costs did not meet all of the recognition criteria set forth under IAS 38 most particularly with respect to the extent of record-keeping and supporting documentation. Based on this analysis, the Group identified the following adjustments to the Australian statutory financial statements: |
○ | For the years ended June 30, 2022 and 2021, research and development expenses, net of adjustments to amortization expenses, were understated by $4.9 million and $4.0 million, respectively; |
○ | As of June 30, 2022, 2021, and July 1, 2020, intangible assets, net of amortization were overstated by $20.5 million, $15.6 million, and $11.6 million, respectively, with a corresponding understatement of accumulated losses as of those dates; |
○ | For the years ended June 30, 2022 and 2021, cash flows used in operating activities increased by $11.3 million and $7.3 million, respectively, with a corresponding decrease in cash used in investing activities. |
• | The Group’s supply chain finance arrangement has the characteristics of cash flows relating to both operating and financing activities. Under IFRS 9, Financial Instruments, there is no explicit guidance as to when to classify supply chain finance arrangements as operating or financing activities. The assessment involves judgment and careful consideration of all relevant facts and circumstances of the arrangement. Previously, the Group classified its supply chain finance arrangement as payables. Upon reassessing the |
○ | As of June 30, 2022 and 2021, the Group decreased payables and increased current borrowings by $5.0 million and $2.4 million, respectively; |
○ | For the years ended June 30, 2022 and 2021, cash flows used in operating activities increased by $2.6 million and $2.4 million, respectively, with a corresponding increase in cash provided by financing activities; |
○ | For the years ended June 30, 2022 and 2021, there was a reclassification of $213 thousand and $60 thousand, respectively, from administrative expenses to finance costs. |
| | As previously reported | | | Restatement adjustment- Intangible Assets | | | Restatement adjustment- Supplier Financing arrangement | | | Restatement adjustment- Revenue from contracts with customers | | | As restated | | | As previously reported | | | Restatement adjustment- Intangible Assets | | | Restatement adjustment- Supplier Financing arrangement | | | As restated | | | As previously reported | | | Restatement adjustment- Intangible Assets | | | As restated | |
| | 30-Jun-22 $’000 | | | 30-Jun-22 $’000 | | | 30-Jun-22 $’000 | | | 30-Jun-22 $’000 | | | 30-Jun-22 $’000 | | | 30-Jun-21 $’000 | | | 30-Jun-21 $’000 | | | 30-Jun-21 $’000 | | | 30-Jun-21 $’000 | | | 30-Jun-20 $’000 | | | 30-Jun-20 $’000 | | | 30-Jun-20 $’000 | |
Receivables | | | 20,392 | | | — | | | — | | | (5,909) | | | 14,483 | | | 12,152 | | | — | | | — | | | 12,152 | | | 7,880 | | | — | | | 7,880 |
Contract asset | | | — | | | — | | | — | | | 5,909 | | | 5,909 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Total current assets | | | 64,836 | | | — | | | — | | | — | | | 64,836 | | | 118,642 | | | — | | | — | | | 118,642 | | | 70,378 | | | — | | | 70,378 |
Intangible assets | | | 34,860 | | | (20,496) | | | — | | | — | | | 14,364 | | | 25,339 | | | (15,590) | | | — | | | 9,749 | | | 17,947 | | | (11,583) | | | 6,364 |
Total non-current assets | | | 100,040 | | | (20,496) | | | — | | | — | | | 79,544 | | | 80,641 | | | (15,590) | | | — | | | 65,051 | | | 71,273 | | | (11,583) | | | 59,690 |
Total assets | | | 164,876 | | | (20,496) | | | — | | | — | | | 144,380 | | | 199,283 | | | (15,590) | | | — | | | 183,693 | | | 141,651 | | | (11,583) | | | 130,068 |
Payables | | | 14,456 | | | — | | | (4,954) | | | — | | | 9,502 | | | 12,117 | | | — | | | (2,375) | | | 9,742 | | | 16,962 | | | — | | | 16,962 |
Borrowings | | | 13,732 | | | — | | | 4,954 | | | — | | | 18,686 | | | 9,858 | | | — | | | 2,375 | | | 12,233 | | | 18,674 | | | — | | | 18,674 |
Contract liability | | | — | | | — | | | — | | | 458 | | | 458 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Deferred income | | | 1,486 | | | — | | | — | | | (458) | | | 1,028 | | | 1,060 | | | — | | | — | | | 1,060 | | | 798 | | | — | | | 798 |
Total current liabilities | | | 34,414 | | | — | | | — | | | — | | | 34,414 | | | 27,232 | | | — | | | — | | | 27,232 | | | 40,266 | | | — | | | 40,266 |
Contract liability | | | — | | | — | | | — | | | 323 | | | 323 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Deferred income | | | 5,534 | | | — | | | — | | | (323) | | | 5,211 | | | 4,782 | | | — | | | — | | | 4,782 | | | 3,416 | | | — | | | 3,416 |
Total non-current liabilities | | | 18,041 | | | — | | | — | | | — | | | 18,041 | | | 19,735 | | | — | | | — | | | 19,735 | | | 12,475 | | | — | | | 12,475 |
Total liabilities | | | 52,455 | | | — | | | — | | | — | | | 52,455 | | | 46,967 | | | — | | | — | | | 46,967 | | | 52,741 | | | — | | | 52,741 |
Net (liabilities) / assets | | | 112,421 | | | (20,496) | | | — | | | — | | | 91,925 | | | 152,316 | | | (15,590) | | | — | | | 136,726 | | | 88,910 | | | (11,583) | | | 77,327 |
Accumulated losses | | | (278,148) | | | (20,496) | | | — | | | — | | | (298,644) | | | (235,233) | | | (15,590) | | | — | | | (250,823) | | | (203,240) | | | (11,583) | | | (214,823) |
Total (deficiency in equity) / equity | | | 112,421 | | | (20,496) | | | — | | | — | | | 91,925 | | | 152,316 | | | (15,590) | | | — | | | 136,726 | | | 88,910 | | | (11,583) | | | 77,327 |
| | As previously reported | | | Restatement adjustment – Intangible Assets | | | Restatement adjustment – Supplier Financing arrangement | | | Restatement adjustment- Revenue from contracts with customers | | | As restated | | | As previously reported | | | Restatement adjustment – Intangible Assets | | | Restatement adjustment – Supplier Financing arrangement | | | As restated | | | ||
| | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | ||
Research and development | | | (12,027) | | | (4,906) | | | — | | | — | | | (16,933) | | | (6,506) | | | (4,007) | | | — | | | (10,513) | | | |
Administrative expenses | | | (13,359) | | | — | | | 213 | | | — | | | (13,146) | | | (15,750) | | | — | | | 60 | | | (15,690) | | | |
Finance costs | | | (1,177) | | | — | | | (213) | | | — | | | (1,390) | | | (1,644) | | | — | | | (60) | | | (1,704) | | | |
Loss before income tax expense | | | (42,915) | | | (4,906) | | | — | | | — | | | (47,821) | | | (31,993) | | | (4,007) | | | — | | | (36,000) | | | |
Income tax expense | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Loss for the year after income tax | | | (42,915) | | | (4,906) | | | — | | | — | | | (47,821) | | | (31,993) | | | (4,007) | | | — | | | (36,000) | | | |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Total comprehensive loss for the year, net of tax | | | (43,062) | | | (4,906) | | | — | | | — | | | (47,968) | | | (31,843) | | | (4,007) | | | — | | | (35,850) | | | |
Earnings per share | | | (0.21) | | | (0.02) | | | — | | | — | | | (0.23) | | | (0.20) | | | (0.03) | | | — | | | (0.23) | | |
| | As previously reported | | | Restatement adjustment – Intangible Assets | | | Restatement adjustment – Supplier Financing arrangement | | | Restatement adjustment- Revenue from contracts with customers | | | As restated | | | As previously reported | | | Restatement adjustment – Intangible Assets | | | Restatement adjustment – Supplier Financing arrangement | | | As restated | | | ||
| | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2022 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | 2021 $’000 | | | ||
Cash flow from operating activities | | | | | | | | | | | | | | | | | | | | | ||||||||||
Payments to suppliers and employees | | | (67,239) | | | (11,332) | | | (2,434) | | | — | | | (81,005) | | | (49,896) | | | (7,288) | | | (2,349) | | | (59,533) | | | |
Finance costs | | | (2,329) | | | | | (146) | | | — | | | (2,475) | | | (1,615) | | | | | (26) | | | (1,641) | | | |||
Net cash used in operating activities | | | (32,064) | | | (11,332) | | | (2,580) | | | — | | | (45,976) | | | (9,318) | | | (7,288) | | | (2,375) | | | (18,981) | | | |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Cash flow from investing activities | | | | | | | | | | | | | | | | | | | | | ||||||||||
Payment for intangible assets | | | (17,339) | | | 11,332 | | | — | | | — | | | (6,007) | | | (11,278) | | | 7,288 | | | — | | | (3,990) | | | |
Net cash (used in) / provided by investing activities | | | (32,973) | | | 11,332 | | | — | | | — | | | (21,641) | | | (23,849) | | | 7,288 | | | — | | | (16,561) | | | |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Cash flow from financing activities | | | | | | | | | | | | | | | | | | | | | ||||||||||
Proceeds from third party borrowings | | | 23,768 | | | — | | | 9,889 | | | — | | | 33,657 | | | 13,000 | | | — | | | 12,774 | | | 25,774 | | | |
Repayment of third party borrowings | | | (22,061) | | | — | | | (7,309) | | | — | | | (29,370) | | | (2,316) | | | — | | | (10,399) | | | (12,715) | | | |
Net cash provided by / (used in) financing activities | | | 689 | | | — | | | 2,580 | | | — | | | 3,269 | | | 86,571 | | | — | | | 2,375 | | | 88,946 | | | |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Net increase / (decrease) in cash held | | | (64,348) | | | — | | | — | | | — | | | (64,348) | | | 53,404 | | | — | | | — | | | 53,404 | | | |
Cash at end of financial year | | | 22,693 | | | — | | | — | | | — | | | 22,693 | | | 87,257 | | | — | | | — | | | 87,257 | | |
| | 2022 $’000 | | | 2021 $’000 | |
External revenue by product line | | | | | ||
Sale of wheels | | | 38,276 | | | 32,205 |
Engineering services | | | 464 | | | 2,732 |
Sale of tooling | | | 1,596 | | | — |
Total revenue | | | 40,336 | | | 34,937 |
| | | | |||
| | (Restated) | | | (Restated) | |
External revenue by timing of revenue recognition | | | | | ||
Goods transferred at a point in time | | | 15,730 | | | 9,606 |
Goods transferred over time | | | 22,546 | | | 22,599 |
Services transferred at a point in time | | | 1,277 | | | 1,422 |
Services transferred over time | | | 783 | | | 1,310 |
Total revenue | | | 40,336 | | | 34,937 |
| | 2022 $’000 | | | 2021 $’000 | |
| | (Restated) | | | (Restated) | |
Contract asset | | | 5,909 | | | — |
| | 2022 $’000 | | | 2021 $’000 | |
| | (Restated) | | | (Restated) | |
Contract liability – current | | | 458 | | | — |
Contract liability – non current | | | 323 | | | — |
Total contract liability | | | 781 | | | — |
| | 2022 $’000 | | | 2021 $’000 | |
Government grants | | | 3,506 | | | 3,504 |
Jobkeeper | | | — | | | 6,835 |
Interest income | | | 94 | | | 84 |
Foreign exchange gain | | | 448 | | | — |
Other income | | | 272 | | | 83 |
Total other income | | | 4,320 | | | 10,506 |
• | the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; |
• | the Group’s performance creates or enhances an asset that the customer controls as the Group performs; or |
• | the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. |
| | 2022 $’000 | | | 2021 $’000 | |
Revenue | | | | | ||
International | | | 40,336 | | | 34,937 |
Domestic | | | — | | | — |
| | 40,336 | | | 34,937 | |
| | | | |||
| | (Restated) | | | (Restated) | |
Non-current assets | | | | | ||
International | | | — | | | — |
Domestic | | | 79,544 | | | 65,051 |
| | 79,544 | | | 65,051 |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Finance costs | | | | | ||
Interest on Ronal AG loan | | | — | | | 668 |
Facility costs | | | — | | | 435 |
Interest on third party loans | | | 552 | | | 400 |
Interest on lease liabilities | | | 301 | | | 50 |
Supplier arrangement costs | | | 213 | | | 60 |
Interest other | | | 324 | | | 91 |
| | 1,390 | | | 1,704 | |
| | | | |||
Salaries and employee benefit expense | | | | | ||
Wages and salaries | | | 33,370 | | | 26,034 |
Post-employment benefits (defined contribution plans) | | | 2,838 | | | 2,259 |
Share-based payments expense | | | 3,167 | | | 5,723 |
| | 39,375 | | | 34,016 | |
| | | | |||
| | (Restated) | | | (Restated) | |
Depreciation and amortization | | | | | ||
Property, plant and equipment | | | 6,919 | | | 6,391 |
Right of use assets | | | 656 | | | 687 |
Capitalized development costs | | | 1,307 | | | 520 |
Patents and trademarks | | | 84 | | | 85 |
| | 8,966 | | | 7,683 | |
| | | | |||
| | (Restated) | | | (Restated) | |
Research and development expense | | | | | ||
Research and development | | | 16,933 | | | 10,513 |
Class of fixed asset | | | Depreciation period | | | Depreciation method |
Leasehold improvements | | | Shorter of 20 years or the remaining term of the lease | | | Straight line |
Manufacturing plant and equipment | | | 2 to 10 years | | | Diminishing value |
Tooling | | | 3 to 10 years | | | Diminishing value |
Other equipment | | | 3 to 5 years | | | Diminishing value |
(i) | purchases of supplies and materials used in our research and development projects, |
(ii) | salaries, bonuses and related expenses for personnel engaged in research and development, |
(iii) | consumption of low-value consumables used in our research and development projects, |
(iv) | depreciation of property, plant and equipment used in connection with our research and development efforts, and |
(v) | amortization of capitalized development costs. |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
The following reflects the income used in the basic and diluted earnings per share computations: | | | — | | | — |
(a) Earnings used in calculating earnings per share | | | | | ||
Net loss attributable to ordinary equity holders of the parent | | | (47,821) | | | (36,000) |
(b) Weighted average number of shares | | | | | ||
Weighted average number of ordinary shares on issue for basic earnings per share | | | 205,938 | | | 155,501 |
Effect of dilution: | | | | | ||
Share options | | | — | | | — |
Weighted average number of ordinary shares adjusted for the effect of dilution | | | 205,938 | | | 155,501 |
Loss per share (basic and diluted in cents) | | | $(0.23) | | | $(0.23) |
| | 2022 No. | | | 2021 No. | |
ESOP | | | 4,996,896 | | | 4,996,896 |
LTIP | | | 3,334,183 | | | — |
Total | | | 8,331,079 | | | 4,996,896 |
| | 2022 No. | | | 2021 No. | |
NED Plan | | | 43,033 | | | 107,518 |
LTIP | | | 718,345 | | | 718,345 |
STI | | | 595,363 | | | 333,017 |
TESP | | | 321,803 | | | 125,647 |
SRS | | | 113,780 | | | 360,614 |
Total | | | 1,792,324 | | | 1,645,141 |
| | 2022 $’000 | | | 2021 $’000 | |
Trade receivables | | | | | ||
Not past due | | | 7,591 | | | 5,618 |
Past due 1 – 30 days | | | 3,433 | | | 2,662 |
Past due 31 – 90 days | | | 1,445 | | | 3,174 |
Past due 90 days and over | | | 684 | | | 2 |
| | 13,153 | | | 11,456 | |
Allowance for impairment losses | | | — | | | — |
Trade receivables | | | 13,153 | | | 11,456 |
Apprenticeship grant funding | | | 479 | | | — |
Other receivables | | | 236 | | | 277 |
GST recoverable | | | 615 | | | 419 |
Trade and other receivables | | | 14,483 | | | 12,152 |
| | 2022 $’000 | | | 2021 $’000 | |
Current | | | | | ||
Raw materials | | | 7,646 | | | 6,095 |
Work in progress | | | 9,688 | | | 14,882 |
Finished goods | | | 4,318 | | | 3,361 |
Consumables and spare parts | | | 3,276 | | | 2,820 |
Provision for impaired wheels | | | (4,764) | | | (8,979) |
Inventories at the lower of cost and net realizable value | | | 20,164 | | | 18,179 |
• | Raw materials – recorded at standard cost, reassessed against actual costs quarterly; |
• | Finished goods and work-in-progress – cost of direct materials, labor, outsourced processing costs and a proportion of manufacturing overheads based on normal operating capacity but excluding finance costs. Includes inventory in transit reflecting the relevant customer incoterm; |
• | Consumables and spare parts – recorded at purchase price. Consumables and spares are assessed for ongoing usefulness and written off if they are no longer likely to be of use. |
| | Capital works in progress $’000 | | | Leasehold improvements $’000 | | | Manufacturing equipment $’000 | | | Tooling $’000 | | | Other equipment $’000 | | | Total $’000 | |
Gross cost | | | 7,138 | | | 5,540 | | | 40,370 | | | 10,312 | | | 2,136 | | | 65,496 |
Less accumulated depreciation | | | — | | | (1,074) | | | (10,654) | | | (5,575) | | | (874) | | | (18,177) |
As of June 30, 2021 | | | 7,138 | | | 4,466 | | | 29,716 | | | 4,737 | | | 1,262 | | | 47,319 |
| | | | | | | | | | | | |||||||
Gross cost | | | 18,950 | | | 5,649 | | | 40,454 | | | 14,326 | | | 2,784 | | | 82,163 |
Less accumulated depreciation | | | — | | | (1,355) | | | (14,070) | | | (7,618) | | | (1,504) | | | (24,547) |
As of June 30, 2022 | | | 18,950 | | | 4,294 | | | 26,384 | | | 6,708 | | | 1,280 | | | 57,616 |
| | | | | | | | | | | | |||||||
Movement in carrying amounts | | | | | | | | | | | | | ||||||
Balance at June 30, 2020 | | | 10,521 | | | 4,739 | | | 21,766 | | | 5,880 | | | 1,130 | | | 44,036 |
Additions | | | 10,059 | | | — | | | — | | | — | | | — | | | 10,059 |
Transfer into/(out of) capital WIP | | | (13,442) | | | 63 | | | 11,920 | | | 945 | | | 514 | | | — |
Depreciation expense | | | — | | | (281) | | | (3,866) | | | (1,862) | | | (382) | | | (6,391) |
Disposals/write-offs | | | — | | | (55) | | | (104) | | | (226) | | | — | | | (385) |
Balance as of June 30, 2021 | | | 7,138 | | | 4,466 | | | 29,716 | | | 4,737 | | | 1,262 | | | 47,319 |
| | | | | | | | | | | | |||||||
Additions | | | 17,496 | | | — | | | — | | | — | | | — | | | 17,496 |
Transfer into/(out of) capital WIP | | | (5,684) | | | 109 | | | 947 | | | 4,231 | | | 397 | | | — |
Depreciation expense | | | — | | | (281) | | | (4,089) | | | (2,173) | | | (376) | | | (6,919) |
Disposals/write-offs | | | — | | | — | | | (190) | | | (87) | | | (3) | | | (280) |
Balance as of June 30, 2022 | | | 18,950 | | | 4,294 | | | 26,384 | | | 6,708 | | | 1,280 | | | 57,616 |
| | 2022 $’000 | | | 2021 $’000 | |
Right-of-use assets | | | | | ||
Property | | | 7,564 | | | 7,983 |
Lease liabilities | | | | | ||
Current | | | 579 | | | 542 |
Non-current | | | 7,461 | | | 7,813 |
| | 8,040 | | | 8,355 |
| | 2022 $’000 | | | 2021 $’000 | |
Depreciation charge of right of use assets | | | | | ||
Equipment | | | — | | | 48 |
Property | | | 656 | | | 639 |
| | 656 | | | 687 | |
Interest expense | | | 301 | | | 50 |
Expense relating to short-term leases (included in costs of goods sold and administrative expenses) | | | 246 | | | 258 |
| | Development costs $’000 (Restated) | | | Patents and trademarks $’000 | | | Total $’000 (Restated) | |
Gross cost | | | 9,830 | | | 1,268 | | | 11,098 |
Less accumulation amortization | | | (940) | | | (409) | | | (1,349) |
As of June 30, 2021 | | | 8,890 | | | 859 | | | 9,749 |
| | | | | | ||||
Gross cost | | | 15,750 | | | 1,354 | | | 17,104 |
Less accumulation amortization | | | (2,247) | | | (493) | | | (2,740) |
As of June 30, 2022 | | | 13,503 | | | 861 | | | 14,364 |
| | | | | | ||||
Movement in carrying amounts | | | | | | | |||
Balance at July 1, 2020 | | | 5,538 | | | 826 | | | 6,364 |
Additions | | | 3,872 | | | 118 | | | 3,990 |
Amortization | | | (520) | | | (85) | | | (605) |
Balance as of June 30, 2021 | | | 8,890 | | | 859 | | | 9,749 |
| | | | | | ||||
Additions | | | 5,920 | | | 86 | | | 6,006 |
Amortization | | | (1,307) | | | (84) | | | (1,391) |
Balance as of June 30, 2022 | | | 13,503 | | | 861 | | | 14,364 |
- | the technical feasibility of completing the intangible asset so that it will be available for use or sale; |
- | the intention to complete the intangible asset and use or sell it; |
- | the ability to use or sell the intangible asset; |
- | how the intangible asset will generate probable future economic benefits; |
- | the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and |
- | the ability to measure the expenditure attributable to the intangible asset during the development phase. |
- | Post-tax discount rate: 11.5% |
- | Terminal value growth rate beyond 6 years: 3% |
- | Compound annual growth rate wheel volume: 25.6% |
| | | Post-tax discount rate | | | Terminal value growth rate | | | Annual reduction in wheel volume | | |
| | | 1% | | | (1%) | | | (5%) | | |
| Change in recoverable amount in $m | | | (23.5) | | | (16.7) | | | (33.8) | |
| Impairment charge | | | — | | | — | | | — | |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Current | | | | | ||
Unsecured liabilities | | | | | ||
Trade payables | | | 5,128 | | | 4,368 |
Accruals | | | 3,746 | | | 3,759 |
Interest accrued | | | 118 | | | 1,101 |
Other payables | | | 510 | | | 514 |
| | 9,502 | | | 9,742 |
Deferred income | | | 2022 $’000 | | | 2021 $’000 |
Balance as of July 1 | | | 5,842 | | | 4,214 |
Received during the year | | | 3,202 | | | 3,839 |
Released to the statement of profit or loss | | | (2,805) | | | (2,211) |
Balance as of June 30 | | | 6,239 | | | 5,842 |
| | | | |||
Current | | | 1,028 | | | 1,060 |
Non-current | | | 5,211 | | | 4,782 |
| | 6,239 | | | 5,842 |
| | Employee benefits $’000 | | | Make good provision $’000 | | | Warranty claims $’000 | | | Total $’000 | |
Current | | | 2,496 | | | — | | | 1,159 | | | 3,655 |
Non-current | | | 393 | | | 218 | | | — | | | 611 |
As of June 30, 2021 | | | 2,889 | | | 218 | | | 1,159 | | | 4,266 |
| | | | | | | | |||||
Current | | | 2,666 | | | — | | | 1,495 | | | 4,161 |
Non-current | | | 479 | | | 234 | | | — | | | 713 |
As of June 30, 2022 | | | 3,145 | | | 234 | | | 1,495 | | | 4,874 |
| | Make good provision $’000 | | | Warranty claims $’000 | | | Total $’000 | |
Movement in carrying amounts | | | | | | | |||
Balance as of July 1, 2020 | | | 203 | | | 729 | | | 932 |
Provided for/ (released) during the year | | | 15 | | | 430 | | | 445 |
Balance as of June 30, 2021 | | | 218 | | | 1,159 | | | 1,377 |
Provided for/(released) during the year | | | 16 | | | 336 | | | 352 |
Balance as of June 30, 2022 | | | 234 | | | 1,495 | | | 1,729 |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Loss after income tax | | | (47,821) | | | (36,000) |
Non-cash items from ordinary activities | | | | | ||
Depreciation and amortization | | | 8,966 | | | 7,683 |
Share based payment expenses | | | 3,167 | | | 5,723 |
Reduction of borrowings from achievement of grant milestones (refer to Note 4.2) | | | — | | | (2,000) |
Movement in inventory provision | | | (4,216) | | | 4,563 |
Write off of property, plant and equipment | | | 280 | | | 1,230 |
Financing activity in prior financial year | | | (422) | | | — |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Changes in assets and liabilities | | | | | ||
(Increase)/decrease in assets: | | | | | ||
- Receivables | | | (8,240) | | | (4,272) |
- Inventories | | | 2,231 | | | 5,084 |
- Other assets | | | (533) | | | (243) |
Increase/(decrease) in liabilities: | | | | | ||
- Payables | | | (1,174) | | | (5,270) |
- Contract liabilities | | | 781 | | | — |
- Deferred income | | | 397 | | | 3,627 |
- Provisions | | | 608 | | | 894 |
Cash used in operating activities | | | (45,976) | | | (18,981) |
| | Interest rate % | | | Maturity | | | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Working capital facility | | | 7.44% | | | August 2022 | | | 6,843 | | | 5,525 |
Term loan | | | 6.15% | | | December 2024 | | | 2,889 | | | 4,333 |
Letter of credit facility | | | 6.45% | | | November 2022 | | | 4,000 | | | — |
| | | | | | | | |||||
Unsecured | | | | | | | | | ||||
Supplier finance arrangement | | | 6.00% | | | August 2022 | | | 4,954 | | | 2,375 |
| | | | | | | | |||||
| | | | | | 18,686 | | | 12,233 | |||
| | | | | | | | |||||
Non-current borrowings | | | | | | | | | ||||
Secured | | | | | | | | | ||||
Term loan | | | 6.15% | | | December 2024 | | | 4,333 | | | 6,529 |
| | | | | | 4,333 | | | 6,529 |
2022 | | | EUR $’000 (Restated) | | | USD $’000 (Restated) |
Trade receivables | | | 5,650 | | | — |
Trade payables | | | (343) | | | (233) |
Supplier finance arrangement | | | (3,253) | | | (13) |
Balance sheet exposure | | | 2,054 | | | (246) |
2021 | | | EUR $’000 (Restated) | | | USD $’000 (Restated) |
Trade receivables | | | 1,489 | | | 42 |
Trade payables | | | (165) | | | (266) |
Supplier finance arrangement | | | (24) | | | — |
Balance sheet exposure | | | 1,300 | | | (224) |
| | 2022 $’000 | | | 2021 $’000 | |
Net foreign exchange gain/(loss) included in other income | | | 448 | | | (234) |
+/- 5% exchange rate | | | 2022 $’000 | | | 2021 $’000 |
Impact on profit after tax | | | 90 | | | 54 |
Impact on equity | | | (90) | | | (54) |
| | Variable interest rate | | | Fixed interest rate | | | Total | ||||||||||
| | 2022 $’000 | | | 2021 $’000 | | | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | | | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Financial assets | | | | | | | | | | | | | ||||||
Cash | | | 22,301 | | | 86,865 | | | — | | | — | | | 22,301 | | | 86,865 |
Short term deposits | | | — | | | — | | | 392 | | | 392 | | | 392 | | | 392 |
Total financial assets | | | 22,301 | | | 86,865 | | | 392 | | | 392 | | | 22,693 | | | 87,257 |
| | | | | | | | | | | | |||||||
Financial liabilities | | | | | | | | | | | | | ||||||
Working capital facility | | | 6,843 | | | 5,525 | | | — | | | — | | | 6,843 | | | 5,525 |
Letter of credit facility | | | 4,000 | | | — | | | — | | | — | | | 4,000 | | | — |
Supplier finance arrangement | | | — | | | — | | | 4,954 | | | 2,375 | | | 4,954 | | | 2,375 |
Term loan | | | 7,222 | | | 10,862 | | | — | | | — | | | 7,222 | | | 10,862 |
Total financial liabilities | | | 18,065 | | | 16,387 | | | 4,954 | | | 2,375 | | | 23,019 | | | 18,762 |
| | On demand $’000 (Restated) | | | < 3 months $’000 | | | 3-12 months $’000 | | | 1-5 years $’000 | | | > 5 years $’000 | | | Total $’000 (Restated) | |
2022 | | | | | | | | | | | | | ||||||
Working capital facility | | | — | | | 6,843 | | | — | | | — | | | — | | | 6,843 |
Letter of credit facility | | | — | | | — | | | 4,000 | | | — | | | — | | | 4,000 |
Term loan | | | — | | | — | | | 2,889 | | | 4,333 | | | — | | | 7,222 |
Supplier finance arrangement | | | 4,954 | | | — | | | — | | | — | | | — | | | 4,954 |
Lease Liabilities | | | — | | | 95 | | | 483 | | | 2,541 | | | 4,921 | | | 8,040 |
| | 4,954 | | | 6,938 | | | 7,372 | | | 6,874 | | | 4,921 | | | 31,059 | |
2021 | | | | | | | | | | | | | ||||||
Working capital facility | | | — | | | 3,860 | | | 1,665 | | | — | | | — | | | 5,525 |
Term loan | | | — | | | — | | | 4,333 | | | 6,529 | | | — | | | 10,862 |
Supplier finance arrangement | | | 2,375 | | | — | | | — | | | — | | | — | | | 2,375 |
Lease Liabilities | | | — | | | 89 | | | 453 | | | 2,387 | | | 5,426 | | | 8,355 |
| | 2,375 | | | 3,949 | | | 6,451 | | | 8,916 | | | 5,426 | | | 27,117 |
| | June 30, 2022 # Ordinary shares | | | June 30, 2021 # Ordinary shares | | | June 30, 2022 $’000 | | | June 30, 2021 $’000 | |
Ordinary shares – fully paid | | | 206,326,138 | | | 205,421,449 | | | 383,822 | | | 381,890 |
Ordinary shares – restricted | | | 527,889 | | | 377,642 | | | — | | | — |
Total share capital | | | 206,854,027 | | | 205,799,091 | | | 383,822 | | | 381,890 |
2021 | | | Date | | | # Shares | | | Issue Price | | | $’000 |
Balance | | | July 1, 2020 | | | 145,632,909 | | | | | 291,226 | |
Institutional entitlement offer | | | April 26, 2021 | | | 45,932,235 | | | $1.60 | | | 73,492 |
Retail entitlement offer | | | May 21, 2021 | | | 13,471,671 | | | $1.60 | | | 21,555 |
Shares issued under Employee Share Plan | | | | | 384,634 | | | | | 1,138 | ||
Share issue transaction costs | | | | | | | | | (5,521) | |||
Balance of fully paid shares | | | June 30, 2021 | | | 205,421,449 | | | | | 381,890 |
2022 | | | Date | | | # Shares | | | Issue Price | | | $’000 |
Balance | | | July 1, 2021 | | | 205,421,449 | | | | | 381,890 | |
Shares issued under Employee Share Plan | | | | | 904,689 | | | | | 1,932 | ||
Balance of fully paid shares | | | June 30, 2022 | | | 206,326,138 | | | | | 383,822 |
| | 2022 | | | 2021 | |
Grant date | | | Dec 2021 | | | Dec 2020 |
Number of employees granted shares | | | 266 | | | 287 |
Value of shares granted per employee (on FTE and length of service pro-rata basis) | | | $279-$1000 | | | $300-$1,000 |
| | | | |||
Total number of shares | | | 255,281 | | | 87,378 |
Fair value at grant date | | | $1.01 | | | $2.74 |
• | Issue date 23 December 2019 |
• | Exercise price $2.60 (IPO price) |
• | Vesting date – 23 December 2022 |
• | Term of 5 years (exercise window from 23 December 2022 to 23 December 2024) |
• | Issue date 20 December 2021 |
• | Exercise price $1.60 |
• | Vesting date – 28 October 2024 |
• | Term of 5 years (exercise window from 28 October 2024 to 28 October 2026) |
| | 2022 $’000 | | | 2021 $’000 | |
Share-based payments | | | 7,214 | | | 5,979 |
Share buyback | | | (311) | | | (311) |
Foreign currency translation | | | (156) | | | (9) |
| | 6,747 | | | 5,659 |
| | 2022 $’000 | | | 2021 $’000 | |
Consolidated statement of profit or loss | | | | | ||
Current income tax charge/benefit | | | — | | | — |
Adjustment for current tax relating to prior periods | | | — | | | — |
Deferred income tax relating to the origination and reversal of temporary differences | | | — | | | — |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
The prima facie tax benefit on loss before tax differs from the income tax expense as follows: | | | | | ||
Accounting loss before tax | | | (47,821) | | | (36,000) |
Benefit at the Australian statutory income tax rate of 30% (2021: 30%) | | | 14,346 | | | 10,800 |
Tax impact of: | | | | | ||
Non-deductible expenses | | | (5,083) | | | (4,964) |
Non-assessable income | | | — | | | — |
Impact of different tax rates in foreign jurisdictions | | | 54 | | | (50) |
Current year taxable loss not recognized | | | (9,317) | | | (5,786) |
Income tax benefit | | | — | | | — |
| | 2022 $’000 (Restated) | | | 2021 $’000 (Restated) | |
Deferred tax liabilities relating to temporary differences: | | | | | ||
Receivables | | | (25) | | | (24) |
Intangible assets | | | (4,050) | | | (2,667) |
Property, plant and equipment | | | (6,551) | | | (2,124) |
| | (10,626) | | | (4,815) | |
Deferred tax assets related to temporary differences: | | | | | ||
Provisions and accruals | | | 3,785 | | | 5,102 |
Capital raising costs | | | 1,960 | | | 2,776 |
Other | | | 89 | | | 147 |
| | 5,834 | | | 8,025 | |
Net deferred tax asset/(liability) | | | (4,792) | | | 3,210 |
Add/ Less: (temporary) differences not recognized | | | 4,792 | | | (3,210) |
Net deferred tax recognized in the statement of financial position | | | — | | | — |
Name | | | Principal activities | | | Country of incorporation | | | % equity interest | |||
| 2022 | | | 2021 | ||||||||
Carbon Revolution Operations Pty Ltd | | | Carbon fiber wheels | | | Australia | | | 100 | | | 100 |
Carbon Revolution Technology Pty Ltd | | | Carbon fiber wheels | | | Australia | | | 100 | | | 100 |
Carbon Revolution (USA) LLC | | | Carbon fiber wheels | | | United States | | | 100 | | | 100 |
Carbon Revolution (UK) Limited | | | Carbon fiber wheels | | | United Kingdom | | | 100 | | | 100 |
| | 2022 $ | | | 2021 $ | |
Compensation by category | | | | | ||
Short-term employment benefits | | | 2,195,825 | | | 1,037,034 |
Post-employment benefits | | | 96,132 | | | 82,020 |
Share based payments | | | — | | | 1,251,222 |
| | 2,291,957 | | | 2,370,276 |
| Standard and Interpretation | | | Effective for annual reporting periods beginning on or after | | | Expected to be initially applied in the financial year ending | |
| Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | | | January 1, 2025 | | | June 30, 2026 | |
| Amendments to IAS 1 – Classifications of Liabilities as Current or Non-Current | | | January 1, 2023 | | | June 30, 2024 | |
| Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies | | | January 1, 2023 | | | June 30, 2024 | |
| Amendments to IAS 8 - Definition of Accounting Estimates | | | January 1, 2023 | | | June 30, 2024 | |
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| | | | | |
Exhibit A | | | Form of SID |
Exhibit B | | | Form of MergeCo Amended and Restated Memorandum and Articles of Association |
| | ||
Schedule 1 | | | Registration Rights Agreement Signatories |
Schedule 2 | | | Lock-up Agreement Signatories |
Agreement | | | Preamble |
Book-Entry Shares | | | Section 2.03(b) |
Cayman Companies Act | | | Preamble |
Certificate of Merger | | | Section 2.02(a)(i) |
Chosen Courts | | | Section 10.06 |
Claims | | | Section 6.02 |
Closing | | | Section 2.02(a)(i) |
Closing Date | | | Section 2.02(a)(i) |
Company | | | Preamble |
Contracting Parties | | | Section 10.11 |
Corporations Act | | | Preamble |
D&O Indemnified Persons | | | Section 7.04(b) |
D&O Tail Insurance | | | Section 7.04(c) |
DGCL | | | Preamble |
ICA | | | Preamble |
Intended Tax Treatment | | | Section 2.07 |
Letter of Transmittal | | | Section 2.03(b) |
Lock-up Agreement | | | Preamble |
MergeCo | | | Preamble |
MergeCo Amended and Restated Memorandum and Articles of Association | | | Section 2.02(b)(iii) |
MergeCo Board | | | Preamble |
MergeCo Founder Warrant | | | Section 2.02(d)(iii) |
Merger | | | Preamble |
Merger Sub | | | Preamble |
Merger Sub Board | | | Preamble |
Nonparty Affiliates | | | Section 10.11 |
Outstanding Company Transaction Expenses | | | Section 2.05(a) |
Outstanding SPAC Transaction Expenses | | | Section 2.05(b) |
Parties | | | Preamble |
Party | | | Preamble |
Plan of Merger | | | Section 2.02(a) |
Registration Rights Agreement | | | Preamble |
SID | | | Preamble |
Scheme Acquisition | | | Preamble |
SPAC | | | Preamble |
SPAC Board | | | Preamble |
SPAC Merger Effective Time | | | Section 2.02(i) |
Sponsor Support Agreement | | | Preamble |
Surviving Company | | | Section 2.02(i) |
Terminating Company Breach | | | Section 9.01(d) |
Terminating SPAC Breach | | | Section 9.01(e) |
Transfer Agent | | | Section 2.03(a) |
Trust Distributions | | | Section 6.02 |
Unit Separation | | | Section 2.02(c) |
Voting Agreement | | | Preamble |
(a) | Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the definitions contained in this agreement are applicable to the other grammatical forms of such terms, (iv) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (v) the terms “Article,” “Section,” “Schedule” and “Exhibit” refer to the specified Article, Section, Schedule or Exhibit of or to this Agreement, (vi) the word “including” means “including without limitation,” (vii) the word “or” shall be disjunctive but not exclusive, (viii) references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto and (ix) references to any Law shall include all rules and regulations promulgated thereunder and references to any Law shall be construed as including all statutory, legal, and regulatory provisions consolidating, amending or replacing such Law. |
(b) | The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent and no rule of strict construction shall be applied against any Party. |
(c) | Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified, and when counting days, the date of commencement will not be included as a full day for purposes of computing any applicable time periods (except as otherwise may be required under any applicable Law). If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day. |
(d) | All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP for matters with respect to SPAC or Merger Sub, and IFRS with respect to the Company and MergeCo. |
(e) | The phrases “provided to,” “furnished to,” “made available” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred to has been provided to the Party to which such information or material is to be provided or furnished (i) in the Virtual Data Room set up by the Company in connection with this Agreement or (ii) by delivery to such Party or its legal counsel via electronic mail or hard copy form, in each case no later than two (2) Business Days prior to the date hereof. |
(a) | Upon the terms and subject to the conditions set forth in the SID, the Company, SPAC and MergeCo shall consummate the Scheme Acquisition. |
(a) | SPAC Merger Effective Time; Closing. |
(i) | SPAC shall cause the Merger to be consummated (such consummation, the “Closing” and the date on which the Closing occurs, the “Closing Date”) by the filing of a plan of merger, in a form reasonably satisfactory to the Parties (with such modification, amendments or supplements thereto as may be required to comply with the Cayman Companies Act) (the “Plan of Merger”), along with all other documentation and declarations required under the Cayman Companies Act in connection with the Merger, to be duly executed and properly filed with the Cayman Islands Registrar of Companies, in accordance with the relevant provisions of the Cayman Companies Act. The Plan of Merger will have an effective time subject to, and immediately prior to, the consummation of the Scheme Acquisition (which, for the avoidance of doubt, shall be immediately prior to the issuance of the Scheme Consideration (as defined in the SID)) (such time, the “SPAC Merger Effective Time”). Upon the terms and subject to the conditions set forth in the SID and Article VIII, and in accordance with the Cayman Companies Act, at the SPAC Merger Effective Time, SPAC shall be merged with and into Merger Sub by operation of Law. As a result of the Merger, the separate corporate existence of SPAC shall cease and Merger Sub shall continue as the surviving corporation of the Merger (the “Surviving Company”) by operation of the laws of the Cayman Islands. |
(ii) | At the SPAC Merger Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the Cayman Companies Act, this Agreement and the Plan of Merger. Without limiting the generality of the foregoing, and subject thereto, at the SPAC Merger Effective Time, all of the assets, properties, rights, privileges, immunities, powers and franchises of SPAC shall vest in the Surviving Company by operation of law and all debts, liabilities, obligations and duties of SPAC shall become the debts, liabilities, obligations and duties of the Surviving Company by operation of law. |
(b) | Memorandum and Articles of Association. |
(i) | At the SPAC Merger Effective Time, the memorandum and articles of association of Merger Sub as the Surviving Company shall be amended and restated in such form as shall be mutually agreed by the Parties promptly after the execution of this Agreement, until thereafter amended as provided by Law and such amended and restated memorandum and articles of association. |
(ii) | At the Closing, MergeCo’s existing memorandum and articles of association shall be amended and restated in the form of Exhibit B and, as so amended and restated, shall be the memorandum and articles of association of MergeCo, until thereafter amended as provided by Law and the memorandum and articles of association, which shall, among other matters, (A) provide that the name of MergeCo be changed to Carbon Revolution plc or such other name as is agreed by the Parties and (B) provide for the size and structure of the MergeCo Board as provided in accordance with Section 5.10 of the SID. |
(c) | Unit Separation. At the SPAC Merger Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of their securities, the SPAC Class A Ordinary Shares and SPAC Public Warrants comprising each issued and outstanding SPAC Public Unit immediately prior to the SPAC Merger Effective Time, shall be automatically separated (the “Unit Separation”), and the holder thereof shall be deemed to hold such SPAC Public Units constituent parts; provided that no fractional SPAC Public Warrants, will be issued in connection with the Unit Separation such that if a holder of SPAC Public Units would be entitled to receive a fractional SPAC Public Warrant upon the Unit Separation, then the number of SPAC Public Warrants to be issued to such holder upon the Unit Separation shall be rounded down to the nearest whole number of SPAC Public Warrants. |
(d) | Conversion of SPAC Securities. Subject to the terms of this Agreement, at the SPAC Merger Effective Time, by virtue of the Merger, the Cayman Companies Act, the ICA and without any action on the part of any Party or the holder of any of their securities (i) SPAC Class A Ordinary Shares, (ii) SPAC Class B Ordinary Shares, (iii) SPAC Public Warrants and (iv) SPAC Private Warrants, in each case, issued and outstanding immediately prior to the SPAC Merger Effective Time, shall be automatically cancelled, exchanged or adjusted (as applicable) as follows: |
(i) | Each then issued and outstanding SPAC Class B Ordinary Share, shall convert automatically, on a one-for-one basis, into a share of SPAC Class A Ordinary Share (the “Pre-Merger Conversion”). |
(ii) | Immediately after the Pre-Merger Conversion, each SPAC Class A Ordinary Share shall be automatically cancelled in exchange for one (1) validly issued, fully paid and non-assessable MergeCo Ordinary Share. |
(iii) | Each SPAC Public Warrant shall be automatically exchanged to become to one (1) MergeCo Public Warrant. Each such MergeCo Public Warrant will be subject to substantially the same terms and conditions set forth in the warrant agreement pursuant to which such SPAC Public Warrant was issued immediately prior to the SPAC Merger Effective Time. Each SPAC Private Warrant shall be automatically exchanged to become one (1) MergeCo Public Warrant (each, a “MergeCo Founder Warrant”). Each such MergeCo Founder Warrant will be subject to substantially the same terms and conditions set forth in the warrant agreement pursuant to which such SPAC Private Warrant was issued immediately prior to the SPAC Merger Effective Time. The SPAC shall enter into customary warrant assumption documentation prior to the SPAC Merger Effective Time (“Warrant Assumption Documentation”). |
(e) | Conversion of Merger Sub Shares. Each ordinary share of Merger Sub issued and outstanding immediately prior to the SPAC Merger Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable ordinary share, par value $0.0001 per share, of the Surviving Company. |
(a) | On or prior to the Closing Date, the Company shall designate a transfer agent reasonably satisfactory to the SPAC (the “Transfer Agent”), as its agent, for purposes of exchanging MergeCo Ordinary Shares for SPAC Class A Ordinary Shares. MergeCo agrees to issue MergeCo Ordinary Shares as and to the extent required by this Agreement to the holders of SPAC Class A Ordinary Shares. MergeCo shall cause the Transfer Agent to effect the exchange of SPAC Class A Ordinary Shares for a number of MergeCo Ordinary Shares, each in accordance with the terms of this Agreement, and, to the extent applicable, customary transfer agent procedures and the rules and regulations of the Depository Trust Company. Outstanding MergeCo Class A Ordinary Shares exchanged into SPAC Class A Ordinary Shares in accordance with this Agreement will be deemed, from and after the SPAC Merger Effective Time, to evidence only the right to secure the consideration to which the holder thereof is entitled hereunder. |
(b) | The consideration payable upon conversion of the SPAC Ordinary Shares shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to SPAC Ordinary Shares occurring on or after the date hereof and prior to the SPAC Merger Effective Time. |
(c) | None of the Transfer Agent, MergeCo or the Surviving Company shall be liable to any shareholder of SPAC for any such SPAC Ordinary Shares (or dividends or distributions with respect thereto) or cash delivered to a public official pursuant to any abandoned property, escheat or similar Law in accordance with this Section 2.03. |
(a) | No later than two (2) Business Days prior to the Closing Date, the Company shall provide to SPAC a certificate executed by an executive officer of the Company setting forth the Company’s calculation of all of the following fees, expenses and disbursements incurred by or on behalf of the Company, MergeCo or Merger Sub in connection with the preparation, negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby (together with written invoices and wire transfer instructions for the payment thereof), solely to the extent such fees and expenses are incurred and expected to remain unpaid as of the close of business on the Business Day immediately preceding the Closing Date: (i) the fees and disbursements of outside counsel to the Company, MergeCo and Merger Sub incurred in connection with the Transactions, and (ii) the fees and expenses of any other agent, advisor, consultant, expert, financial advisor and other service providers engaged by the Company, MergeCo or Merger Sub in connection with the Transactions (collectively, the “Outstanding Company Transaction Expenses”). Prior to the Closing, SPAC shall have an opportunity to review the Outstanding Company Transaction Expenses and discuss such certificate with the persons responsible for its preparation, and the Company shall reasonably cooperate with SPAC in good faith to timely respond to any questions and consider in good faith any comments regarding the certificate of Outstanding Company Transaction Expenses. On the Closing Date, following the Closing, the Company shall pay or cause to be paid by wire transfer of immediately available funds all such Outstanding Company Transaction Expenses. For the avoidance of doubt, the Outstanding Company Transaction Expenses shall not include any fees and expenses of the Company’s shareholders. |
(b) | No later than two (2) Business Days prior to the Closing Date, SPAC shall provide to the Company a certificate executed by an executive officer of SPAC setting forth SPAC’s calculation of all of the following fees, expenses and disbursements incurred by or on behalf of SPAC (together with written invoices, vendor names, reasonable descriptions of services of vendors, the costs and expenses for each vendor and wire transfer instructions for the payment thereof), solely to the extent such fees and expenses are incurred and expected to remain unpaid as of the close of business on the Business Day immediately preceding the Closing Date: all fees and expenses incurred in connection with, or otherwise related to, the Transactions, the negotiation and preparation of this Agreement, the Ancillary Agreements and the other documents contemplated hereby and the performance and compliance with all agreements and conditions contained herein and therein, or otherwise in connection with SPAC’s operations or organization, including the fees, expenses and disbursements of legal counsel, auditors, accountants and notaries; due diligence expenses; advisory and consulting fees (including financial advisors) and expenses; and other third-party fees, in each case of SPAC (collectively, the “Outstanding SPAC Transaction Expenses”). Prior to the Closing, the Company shall have an opportunity to review the Outstanding SPAC Transaction Expenses and discuss such certificate with the persons responsible for its preparation, and SPAC shall reasonably cooperate with the Company in good faith to timely respond to any questions and consider in good faith any comments regarding the certificate of Outstanding SPAC Transaction Expenses. On the Closing Date following the Closing, SPAC shall pay or cause to be paid by wire transfer of immediately available funds all such Outstanding SPAC Transaction Expenses up to an amount equal to $20 million. In such case that the amount of Outstanding SPAC Transaction Expenses is greater than $20 million, the Parties shall work together in good faith (including through having discussions with the applicable vendors) in order to reduce such amount to be no greater than $20 million. |
(a) | The Company shall deliver (or cause to be delivered) to SPAC: |
(i) | the Registration Rights Agreement, duly executed by MergeCo and each of the Persons set forth on Schedule 1 (other than the holders of equity securities of SPAC prior to the Closing); and |
(ii) | each other Ancillary Agreement to be executed after the date of this Agreement by the Company, MergeCo or Merger Sub or any of their respective Affiliates, duly executed by the Company, MergeCo or Merger Sub or their respective Affiliates, as applicable |
(b) | SPAC shall deliver (or cause to be delivered) to the Company: |
(i) | the Registration Rights Agreement, duly executed by each of the Persons set forth on Schedule 1 (other than the holders of equity securities of the Company prior to the Closing). |
(a) | As of the date hereof, the authorized share capital of Merger Sub consists of one ordinary share, par value $1.00. |
(b) | As of the date of this Agreement, MergeCo owns 100% of the issued and outstanding shares of Merger Sub free and clear of all Liens, options, rights of first refusal and limitations on voting or transfer rights other than transfer restrictions under applicable securities laws and Merger Sub’s organizational documents. All such shares of common stock of Merger Sub are validly issued, fully paid and non-assessable. |
(c) | As of the date of this Agreement, there are no options, warrants, preemptive rights, calls, convertible securities, conversion rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued share capital of Merger Sub or obligating Merger Sub to issue or sell any shares of, or other equity or voting interests in, or any securities convertible into or exchangeable or exercisable for shares of , or other equity or other voting interests in, Merger Sub. As of the date of this Agreement, Merger Sub is not a party to, or otherwise bound by, and Merger Sub has not granted, any equity appreciation rights, participations, phantom equity, restricted shares, restricted share units, performance shares, contingent value rights or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any shares of, or other securities or ownership interests in, Merger Sub. As of the date of this Agreement, there are no voting trusts, voting |
(a) | The execution and delivery by Merger Sub of this Agreement and each Ancillary Agreement to which it is a party does not, and the performance of this Agreement and each such Ancillary Agreement by Merger Sub will not, (i) conflict with or violate the memorandum and articles of association of Merger Sub, (ii) assuming that all consents, approvals, authorizations and other actions described in Section 5.06(b) have been obtained and all filings and obligations described in Section 5.06(b) have been made, conflict with or violate any Law, rule, regulation, order, judgment or decree applicable to Merger Sub or by which any of its property or assets are bound or affected or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of Merger Sub pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Merger Sub is a party or by which Merger Sub or any of its property or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not have or reasonably be expected to have a Material Adverse Effect. |
(b) | The execution and delivery by Merger Sub of this Agreement and each Ancillary Agreement to which it is a party does not, and the performance of this Agreement and each such Ancillary Agreement by Merger Sub will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, blue sky Laws and state takeover laws, any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, if any, and filing and recordation of appropriate Merger documents as required by the Cayman Companies Act, as the case may be, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, prevent or materially delay consummation of any of the Transactions or otherwise prevent Merger Sub from performing its material obligations under this Agreement and each such Ancillary Agreement. |
(a) | The Merger Sub Board has, by resolutions duly adopted by written consent and not subsequently rescinded or modified in any way, duly (i) determined that this Agreement and the Transactions are fair to and in the best interests of Merger Sub and MergeCo (as the sole shareholder of Merger Sub), (ii) approved this Agreement and the Transactions and declared their advisability and (iii) recommended that MergeCo (as the sole shareholder of Merger Sub) approve and adopt this Agreement and approve the Transactions and directed that this Agreement and the Transactions be submitted for consideration and approval by MergeCo (as the sole shareholder of Merger Sub). |
(b) | The only shareholder vote of Merger Sub that is necessary to approve this Agreement and the Transactions is the affirmative vote of MergeCo as sole shareholder of Merger Sub. |
(a) | The covenants set forth in Section 7 of the SID are incorporated herein by reference. |
(b) | The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of SPAC and each Person who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of SPAC (the “D&O Indemnified Persons”) as provided in the SPAC’s organizational documents or under any agreement relating to the exculpation or indemnification of, or advancement of expenses to, any D&O Indemnified Person, as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law, and Surviving Company and MergeCo shall honor all such rights to exculpation, indemnification, and advancement to the fullest extent permitted by Law. For a period of six (6) years after the SPAC Merger Effective Time, the Surviving Company shall, and MergeCo shall cause the Surviving Company to, ensure that the organizational documents of Surviving Company and its Subsidiaries contain provisions no less favorable with respect to exculpation and |
(c) | For the benefit of each of SPAC’s directors and officers, SPAC shall be permitted prior to the SPAC Merger Effective Time to obtain and fully pay (which shall be deemed to constitute an “Outstanding SPAC Transaction Expense” for purposes of the $20 million cap set forth in Section 2.05(b)) the premium for a “tail” insurance policy that provides coverage for up to a six-year period from and after the SPAC Merger Effective Time for events occurring prior to the SPAC Merger Effective Time (the “D&O Tail Insurance”). |
(a) | Scheme. Each of the conditions precedent to the Scheme (as defined in the SID) as set out in Section 3.1 of the SID shall have been satisfied or waived in accordance with the terms of the SID and the Scheme Acquisition shall be effective subject only to the filing by the Company of an office copy of the order of the Court (as defined in the SID) with the Australian Securities and Investments Commission approving the Scheme Acquisition in accordance with section 411(10) of the Corporations Act. |
(a) | by mutual written consent of SPAC and the Company; or |
(b) | if the SID has been terminated in accordance with its terms. |
If to SPAC: | | | with copies (which shall not constitute notice) to: | ||||||
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| | Twin Ridge Capital Acquisition Corp. | | | | | Peter Seligson | ||
| | 999 Vanderbilt Beach Road, Suite 200 | | | | | Kirkland & Ellis | ||
| | Naples, FL 34108 | | | | | 601 Lexington Avenue | ||
| | Attention: William P Russell, Jr; Sanjay | | | | | New York, NY 10022 | ||
| | Morey | | | | | Email: peter.segilson@kirkland.com; | ||
| | Email: wrussell@twinridgecapital.com; | | | | | |||
| | smorey@twinridgecapital.com | | | | | and | ||
| | | | | | ||||
| | | | | | Adam Larson; Rami Totari | |||
| | | | | | Kirkland & Ellis | |||
| | | | | | 609 Main St | |||
| | | | | | Houston, TX 77002 | |||
| | | | | | Email: adam.larson@kirkland.com; | |||
| | | | | | rami.totari@kirkland.com |
If to the Company, MergeCo or Merger Sub: | | | with copies (which shall not constitute notice) to: | ||||||
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| | Carbon Revolution Limited | | | | | Jocelyn M. Arel | ||
| | 75 Pigdons Road, Warn Ponds | | | | | 100 Northern Avenue | ||
| | VIC 3126 Australia | | | | | Boston, MA 02210 | ||
| | Attention: David Nock | | | | | Email: jarel@goodwinlaw.com | ||
| | Email: david.nock@carbonrev.com | | | | | |||
| | | | | | and | |||
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| | | | | | Jeffrey Letalien | |||
| | | | | | 620 Eighth Avenue | |||
| | | | | | New York, NY 10018 | |||
| | | | | | Email: jletalien@goodwinlaw.com |
(a) | The Parties agree that irreparable damage would occur if any provision of this Agreement, were not performed in accordance with the terms hereof, and, accordingly, that the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the Parties’ obligation to consummate the Transactions) without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at Law or in equity as expressly permitted in this Agreement. Each of the Parties hereby further waives (i) any defense in any action for specific performance that a remedy at Law would be adequate, or an award of specific performance is not an appropriate remedy and (ii) any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief. |
(b) | Notwithstanding anything to the contrary in this Agreement, if prior to the End Date any Party initiates an Action to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, then the End Date shall be automatically extended by: (i) the amount of time during which such Action is pending plus thirty (30) Business Days; or (ii) such other time period established by the court presiding over such Action. |
| | TWIN RIDGE CAPITAL ACQUISITION CORP. | ||||
| | | | |||
| | By: | | | /s/ William P. Russell, Jr. | |
| | Name: | | | William P. Russell, Jr. | |
| | Title: | | | Co-Chief Executive Officer | |
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| | CARBON REVOLUTION LIMITED | ||||
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| | By: | | | /s/ James Douglas | |
| | Name: | | | James Douglas | |
| | Title: | | | Director | |
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| | POPPETELL LIMITED | ||||
| | | | |||
| | By: | | | /s/ Ronan Donohoe | |
| | Name: | | | Ronan Donohoe | |
| | Title: | | | Director | |
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| | POPPETTELL MERGER SUB | ||||
| | | | |||
| | By: | | | /s/ Jacob William Dingle | |
| | Name: | | | Jacob William Dingle | |
| | Title: | | | Authorized Signatory |
Carbon Revolution - Scheme implementation deed | | | | | |||||
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Carbon Revolution Limited | |
| | 80 Collins Street Melbourne Vic 3000 Australia | | | | | T +61 3 9288 1234 F +61 3 9288 1567 | ||
| | GPO Box 128 Melbourne Vic 3001 Australia | | | | | herbertsmithfreehills.com DX 240 Melbourne |
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| | Schedule 1 | | | |||||
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| | Schedule 2 | | | |||||
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| | Attachment 1 | | | |||||
| | Conditions Precedent certificate | | | |||||
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| | Attachment 2 | | | |||||
| | Scheme of arrangement | | | |||||
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| | Attachment 3 | | | |||||
| | Deed poll | | | |||||
| | Herbert Smith Freehills owns the copyright in this document and using it without permission is strictly prohibited. | | |
Carbon Revolution - Scheme implementation deed | ||||||
Date ► | | | | | ||
Between the parties | | | | | ||
Carbon Revolution | | | Carbon Revolution Limited ACN 128 274 653 of 75 Pigdons Road, Waurn Ponds VIC 3126 Australia (Carbon Revolution) | |||
SPAC | | | Twin Ridge Capital Acquisition Corp, a Cayman Islands Corporation of 999 Vanderbilt Beach Road, Suite 200 Naples, Florida (SPAC) | |||
MergeCo | | | Poppetell Limited, a private limited company incorporated in Ireland with registered number 607450 and registered address at 10 Earlsfort Terrace, Dublin 2, Ireland (MergeCo) | |||
| | | | |||
Recitals | | | 1 | | | The parties have agreed that MergeCo will acquire all of the ordinary shares in Carbon Revolution by means of a scheme of arrangement under Part 5.1 of the Corporations Act between Carbon Revolution and the Scheme Shareholders, and SPAC will merge with a subsidiary of MergeCo. |
| | 2 | | | The parties have agreed to implement the scheme of arrangement on the terms and conditions of this deed. | |
This deed witnesses as follows: |
Definitions and interpretation |
Definitions |
Interpretation |
Deed components |
Agreement to proceed with the Transaction |
Carbon Revolution to propose Scheme |
(a) | Carbon Revolution agrees to propose the Scheme on and subject to the terms and conditions of this deed. |
(b) | MergeCo and SPAC agree to assist Carbon Revolution to propose the Scheme on and subject to the terms and conditions of this deed. |
(c) | Carbon Revolution, MergeCo and SPAC agree to implement the Scheme on and subject to the terms and conditions of this deed. |
SPAC Merger |
(a) | The SPAC agrees to propose the SPAC Proposals and SPAC Extension Proposals on and subject to the terms and conditions of this deed and the BCA. |
(b) | Immediately prior to implementation of the Scheme, SPAC will merge with Merger Sub (with Merger Sub being the surviving entity) and MergeCo will issue shares of MergeCo to the SPAC Shareholders, pursuant to the terms and conditions of the BCA. |
Conditions Precedent and pre-implementation steps |
Conditions Precedent |
(a) | FIRB: before 5.00pm on the Business Day before the Second Court Date one of the following has occurred: |
(1) | MergeCo has received written notice under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), by or on behalf of the Treasurer of the Commonwealth of Australia (Treasurer), advising that the Commonwealth Government has no objections to the Transaction, either unconditionally or on terms that are acceptable to MergeCo and the SPAC acting reasonably; |
(2) | the Treasurer becomes precluded by the passage of time from making an order or decision under Part 3 of the FATA in relation to the Transaction and the Transaction is not prohibited by section 82 of the FATA; or |
(3) | where an interim order is made under section 68 of the FATA in respect of the Transaction, the subsequent period for making an order or decision under Part 3 of the FATA elapses without the Treasurer making such an order or decision. |
(b) | Restraints: between (and including) the date of this deed and 8.00am on the Second Court Date: |
(1) | there is not in effect any temporary, preliminary or final order, injunction, decision or decree or other material legal restraint or prohibition issued by any court of competent jurisdiction or other Australian, United States or Irish Government Agency; and |
(2) | no action or investigation is commenced or threatened by any Australian, United States or Irish Government Agency, |
(3) | restrains or prohibits (or could reasonably be expected to restrain or prohibit) the Scheme, completion of the Transaction or the rights of MergeCo in respect of Carbon Revolution or the Carbon Revolution Shares to be acquired under the Scheme or the rights of Merger Sub in respect of the Merger with the SPAC; or |
(4) | requires the divestiture by MergeCo of any assets of the Carbon Revolution Group or of any Merger Sub Shares, |
(c) | Shareholder approval: Carbon Revolution Shareholders approve the Scheme and the Capital Reduction at the Scheme Meeting by the requisite majorities under subparagraph 411(4)(a)(ii) of the Corporations Act either unconditionally and without modification or with modifications of conditions consented to by the SPAC in accordance with clause 4.2. |
(d) | Court approval: the Court approves the Scheme in accordance with paragraph 411(4)(b) of the Corporations Act (either unconditionally and without modification or with modifications of conditions consented to by the SPAC in accordance with clause 4.2). |
(e) | Independent Expert: the Independent Expert: |
(1) | issues an Independent Expert’s Report which concludes that the Scheme and the Capital Reduction are in the best interests of Carbon Revolution Shareholders before the time the Scheme Booklet is registered by ASIC; and |
(2) | does not change its conclusion or withdraw its Independent Expert’s Report before 8.00 am on the Second Court Date. |
(f) | No Carbon Revolution Prescribed Occurrence: no Carbon Revolution Prescribed Occurrence occurs between (and including) the date of this deed and 8.00am on the Second Court Date. |
(g) | No SPAC Prescribed Occurrence: no SPAC Prescribed Occurrence occurs between (and including) the date of this deed and 8.00am on the Second Court Date. |
(h) | No MergeCo Prescribed Occurrence: no MergeCo Prescribed Occurrence occurs between (and including) the date of this deed and 8.00am on the Second Court Date. |
(i) | SPAC Shareholder Approval: approval of the SPAC Proposals and SPAC Extension Proposals by SPAC Shareholders by the requisite affirmative vote in accordance with the NYSE Listing Rules, the SPAC’s Amended and Restated Memorandum and Articles of Association, Cayman Islands general law and any applicable SPAC Proxy Statement. |
(j) | Business Combination Deadline: by 8 March 2023, the SPAC’s business combination deadline, as set forth in its Amended and Restated Memorandum and Articles of Association, effective 3 March 2021, has been extended as necessary to a date not earlier than 31 May 2023, or such other, earlier or later, date as the parties reasonably agree and, following exercise by SPAC Shareholders of their Redemption Rights in accordance with the SPAC Memorandum and Articles of Association in connection with the approval of the SPAC Extension Proposal, the SPAC continues to satisfly the continued listing standards of the NYSE, NYSE American or NASDAQ and will continue to satisfy such continued listing standards until the Implementation Date, including the Continued Listing Criteria applicable to “Acquisition Companies” set forth in Section 802.01 of the NYSE Listed Company Manual. |
(k) | Registration Statement: the MergeCo Registration Statement has been declared effective under the Securities Act and has not been the subject of any stop order that has not been withdrawn or revoked and no proceedings for the purposes of obtaining a stop order will have been initiated or threatened by the SEC and not withdrawn by 8.00am on the Second Court Date. |
(l) | BCA: at 8:00am on the Second Court Date, the BCA has not been terminated or rescinded and has otherwise not ceased to have effect in accordance with its terms. |
(m) | Transaction Documents: prior to 8.00am on the Second Court Date, the Registration Rights Agreement has been duly executed and delivered by the SPAC to MergeCo and Carbon Revolution and has not been terminated, rescinded or materially altered, amended or varied. |
(n) | MergeCo Net Tangible Assets at 8.00am on the Second Court Date MergeCo and its Subsidiaries (in aggregate) shall be reasonably expected to have, immediately following the Implementation Date and following exercise by SPAC Shareholders of their Redemption Rights in accordance with the SPAC Memorandum and Articles of Association, at least USD$5,000,001 of net tangible assets (as reasonably determined by the SPAC Board in accordance with Rule 3a51-1(g)(1) of the Exchange Act). |
(o) | ATO Ruling: before 5.00pm on the Business Day before the Second Court Date, Carbon Revolution has received a draft copy of the ATO Ruling from the Australian Tax Office in a form acceptable to Carbon Revolution (acting reasonably). |
(p) | Nasdaq or NYSE Quotation: before 8.00am on the Second Court Date, the MergeCo Shares to be issued pursuant to this Scheme have been approved for listing on either Nasdaq or NYSE, subject only to official notice of issuance; |
(q) | CEF Agreement: as at 8.00am on the Second Court Date, the CEF Agreement remain in full force and effect. |
(r) | Composition Agreement/SEAS: before 8.00am on the Second Court Date, MergeCo has entered into a composition agreement with the Revenue Commissioners of Ireland and a Special Eligibility Agreement for Securities with the Depository Trust Company in respect of the MergeCo Shares and MergeCo Warrants, both of which are in full force and effect and are enforceable in accordance with their terms. |
(s) | Carbon Revolution Representations and Warranties: the Carbon Revolution Representations and Warranties are true and correct and not misleading in all material respects as at the date of this deed and as at 8.00am on the Second Court Date except to the extent any such representation or warranty expressly relates to an earlier date. |
(t) | MergeCo Representations and Warranties: the MergeCo Representations and Warranties are true and correct and not misleading in all material respects as at the date of this deed and as at 8.00am on the Second Court Date except to the extent any such representation or warranty expressly relates to an earlier date. |
(u) | SPAC Representations and Warranties: the SPAC Representations and Warranties are true and correct and not misleading in all material respects as at the date of this deed and as at 8.00am on the Second Court Date except to the extent any such representation or warranty expressly relates to an earlier date. |
Satisfaction of Conditions Precedent |
(a) | Carbon Revolution must, to the extent it is within its power to do so, use reasonable endeavours to procure that each of the Conditions Precedent in clauses 3.1(c) (Shareholder approval), 3.1(d) (Court approval), 3.1(e) (Independent Expert), 3.1(f) (No Carbon Revolution Prescribed Occurrence), 3.1(o) (ATO Ruling)and 3.1(s) (Carbon Revolution Representations and Warranties) is satisfied as soon as practicable after the date of this deed and continues to be satisfied at all times until the last time that the relevant clause provides that it is to be satisfied. |
(b) | SPAC must, to the extent it is within its power to do so, use reasonable endeavours to procure that each of the Conditions Precedent in clauses 3.1(g) (No SPAC Prescribed Occurrence), 3.1(i) (SPAC Shareholder Approval), 3.1(j) (Business Combination Deadline), 3.1(m) (Transaction Documents), 3.1(q) (CEF Agreement) and 3.1(u) (SPAC Representations and Warranties) is satisfied as soon as practicable after the date of this deed and continues to be satisfied at all times until the last time that the relevant clause provides that it is to be satisfied. |
(c) | MergeCo must, to the extent it is within its power to do so, use reasonable endeavours to procure that each of the Conditions Precedent in clauses 3.1(h) (No MergeCo Prescribed Occurrence), 3.1(r) (Composition Agreement/SEAS) and 3.1(t) (MergeCo Representations and Warranties) is satisfied as soon as practicable after the date of this deed and continues to be satisfied at all times until the last time that the relevant clause provides that it is to be satisfied. |
(d) | Each party must, to the extent it is within its respective power to do so, use reasonable endeavours to procure that: |
(1) | the Condition Precedent in clauses 3.1(a) (FIRB), 3.1(b) (Restraints), 3.1(k) (Registration Statement), 3.1(l) (BCA), 3.1(n) (MergeCo Net Tangible Assets) and 3.1(o) (Nasdaq or NYSE Quotation) are satisfied as soon as practicable after the date of this deed and continues to be satisfied at all times until the last time that the relevant clause provides that it is to be satisfied; and |
(2) | there is no occurrence within its control or the control of any of its Subsidiaries that would prevent any of the Conditions Precedent being or remaining satisfied. |
(e) | For the avoidance of doubt, a party will not be in breach of its obligations under clause 3.2(a), 3.2(b), 3.2(c) or 3.2(d) to the extent that it takes an action or omits to take an action: |
(1) | as expressly required, permitted or permitted not to be done, by this deed (including taking an action or omitting to take an action in response to a Competing Proposal or SPAC Competing Transaction (as applicable) as permitted or contemplated by clause 10; or |
(2) | which has been consented to in writing by the other parties. |
(f) | Without limiting this clause 3.2 and except to the extent prohibited by a Government Agency, each party must: |
(1) | promptly apply for all relevant Regulatory Approvals (as applicable) and provide to the other party a copy of all those applications; |
(2) | take all steps it is responsible for as part of the Regulatory Approval process, including responding to requests for information from the relevant Government Agencies at the earliest practicable time; |
(3) | keep the other party informed of progress in relation to each Regulatory Approval (including in relation to any material matters raised by, or conditions or other arrangements proposed by, or to, any Government Agency in relation to a Regulatory Approval) and provide the other party with all information reasonably requested in connection with the applications for, or progress of, the Regulatory Approvals; |
(4) | consult with the other party in advance in relation to the progress of obtaining, and all material communications with Government Agencies regarding any of, the Regulatory Approvals; and |
(5) | provide the other party with all assistance and information that it reasonably requests in connection with an application for a Regulatory Approval to be lodged by that other party. |
(g) | SPAC and MergeCo acknowledge and agree that the Standard Tax Conditions issued by FIRB from time to time are reasonable and acceptable to it if they are included in any “no objections” notification contemplated by clause 3.1(a)(1) that is received in connection with the Transaction. |
Waiver of Conditions Precedent |
(a) | The Conditions Precedent in clauses 3.1(a) (FIRB), 3.1(c) (Shareholder approval), 3.1(d) (Court approval), 3.1(i) (SPAC Shareholder Approval), 3.1(j) (Business Combination deadline), 3.1(k) (Registration Statement), 3.1(l) (BCA), 3.1(n) (MergeCo Net Tangible Assets), 3.1(p) (Nasdaq or NYSE Quotation), 3.1(r) (Composition Agreement/SEAS) and cannot be waived. |
(b) | The Conditions Precedent in clause 3.1(f) (No Carbon Revolution Prescribed Occurrence), 3.1(h) (No MergeCo Prescribed Occurrence) and 3.1(s) (Carbon Revolution Representations and Warranties), 3.1(t) (MergeCo Representations and Warranties) are for the sole benefit of the SPAC and may only be waived by the SPAC (in its absolute discretion) in writing. |
(c) | The Conditions Precedent in clauses 3.1(e) (Independent Expert), 3.1(g) (No SPAC Prescribed Occurrence), 3.1(m) (Transaction Documents), 3.1(o) (ATO Ruling), 3.1(q) (CEF Agreement) and 3.1(u) (SPAC Representations and Warranties) are for the sole benefit of Carbon Revolution and may only be waived by Carbon Revolution (in its absolute discretion) in writing. |
(d) | The Condition Precedent in clause 3.1(b) (Restraints) is for the benefit of both the SPAC and Carbon Revolution and may only be waived by written agreement between the SPAC and Carbon Revolution (in each case in their respective absolute discretion). |
(e) | Waiver of a breach or non-satisfaction in respect of one Condition Precedent does not constitute: |
(1) | a waiver of breach or non-satisfaction of any other Condition Precedent resulting from the same event; or |
(2) | a waiver of breach or non-satisfaction of that Condition Precedent resulting from any other event. |
Termination on failure of Condition Precedent |
(a) | If there is an event or occurrence that would, does, or will prevent any of the Conditions Precedent being satisfied (including, for the avoidance of doubt, if Carbon Revolution Shareholders do not agree to the Scheme at the Scheme Meeting by the requisite majorities), or if any of the Conditions Precedent will not otherwise be satisfied, by the earlier of: |
(1) | the time and date specified in this deed for the satisfaction of that Condition Precedent; and |
(2) | the End Date, |
(3) | consider and, if agreed, determine, whether the Transaction may proceed by way of alternative means or methods or whether, in the case of a breach of the Condition Precedent in clause 3.1(f) (No Carbon Revolution Prescribed Occurrence), 3.1(g) (No SPAC Prescribed Occurrence) or 3.1(h) (No MergeCo Prescribed Occurrence), the breach or the effects of the breach is or are able to be remedied; |
(4) | consider changing and, if agreed, change, the date of the application made to the Court for an order under paragraph 411(4)(b) of the Corporations Act approving the Scheme or adjourning that application (as applicable) to another date agreed to in writing by the SPAC and Carbon Revolution (being a date no later than 5 Business Days before the End Date); or |
(5) | consider extending and, if agreed, extend, the time and date specified in this deed for the satisfaction of that Condition Precedent or End Date (as applicable), |
(b) | Subject to clauses 3.4(c), 3.4(d) and 3.4(e), if the parties are unable to reach agreement under clause 3.4(a) within 5 Business Days after the date on which the Consultation Notice is given, then, unless: |
(1) | the relevant Condition Precedent has been waived in accordance with clause 3.3; or |
(2) | the party or parties (as applicable), entitled to waive the relevant Condition Precedent in accordance with clause 3.3 confirms in writing to the other parties that it will not rely on the event or occurrence that would or does prevent the relevant Condition Precedent from being satisfied, or would mean the relevant Condition Precedent would or will not otherwise be satisfied, |
(c) | A party may not terminate this deed pursuant to clause 3.4(b) if: |
(1) | the relevant occurrence or event, the failure of the Condition Precedent to be satisfied, or the failure of the Scheme to become Effective, arises out of a breach of clauses 3.2 or 3.5 by that party; or |
(2) | the relevant Condition Precedent is stated in clause 3.3 to be for the sole benefit of the other party. |
(d) | If the Condition Precedent in clause 3.1(c) (Shareholder approval) is not satisfied only because of a failure to obtain the majority required by sub-subparagraph 411(4)(a)(ii)(A) of the Corporations Act, then any party may by written notice to the other parties within 3 Business Days after the date of the conclusion of the Scheme Meeting require the approval of the Court to be sought, pursuant to the Court’s discretion in that sub-subparagraph, provided the party has, in good faith formed the view that the prospect of the Court exercising its discretion in that way is reasonable. If such a notice is given, Carbon Revolution must make such submissions to the Court and file such evidence as counsel engaged by Carbon Revolution to represent it in Court proceedings related to the Scheme, in consultation with the SPAC, considers is reasonably required to seek to persuade the Court to exercise its discretion under sub-subparagraph 411(4)(a)(ii)(A) of the Act. If approval is given, the Condition Precedent in clause 3.1(c) (Shareholder approval) is deemed to be satisfied for all purposes. |
(e) | If the Court refuses to make an order approving the Scheme which satisfies the Condition Precedent in clause 3.1(d) (Court approval), at the SPAC’s request Carbon Revolution must appeal the Court’s decision to the fullest extent possible (except to the extent that the parties agree otherwise, or an |
Certain notices relating to Conditions Precedent |
(a) | the satisfaction of a Condition Precedent or of any material progress towards such satisfaction; or |
(b) | the happening of an event or occurrence that would, does, will, or would reasonably be likely to: |
(1) | prevent a Condition Precedent being satisfied; or |
(2) | mean that any Condition Precedent will not otherwise be satisfied, |
Transaction steps |
Scheme |
No amendment to the Scheme without consent |
Scheme Consideration and Merger consideration |
(a) | The parties acknowledge that each Scheme Shareholder will be entitled to receive the Scheme Consideration in consideration for the cancellation of each Scheme Share held by that Scheme Shareholder in accordance with the terms and conditions of this deed and the Scheme. |
(b) | The parties acknowledge that on Closing, each SPAC Shareholder will be entitled to receive securities in MergeCo in exchange for the SPAC securities they hold at the SPAC Merger Effective Time (as defined in the BCA), in accordance with the terms and conditions of the BCA. |
Provision of Carbon Revolution Share information |
(a) | In order to facilitate the provision of the Scheme Consideration, Carbon Revolution must provide, or procure the provision of, to MergeCo or a nominee of MergeCo a complete copy of the Carbon Revolution Share Register as at the Scheme Record Date (which must include the name, Registered Address and registered holding of each Scheme Shareholder as at the Scheme Record Date), within one Business Day after the Scheme Record Date. |
(b) | The details and information to be provided under clause 4.4(a) must be provided in such form as MergeCo or its nominee may reasonably require. |
Equity Incentives |
(a) | the parties agree that the Equity Incentives will be treated in the manner agreed between the parties in writing on the date of this deed; and |
(b) | Carbon Revolution must ensure that all Equity Incentives which are not Carbon Revolution Shares have either been cancelled or exchanged, lapsed or vested and converted into Carbon Revolution Shares such that there are no outstanding Equity Incentives which are not Carbon Revolution Shares on issue as at the Scheme Record Date. |
Tax treatment |
(a) | No party has taken (or failed to take) any action or caused any action to be taken (or to fail to be taken) and will not take (or fail to take) any action or will cause any action to be taken (or to fail to be taken) (in each case other than any action provided for or prohibited by this deed), or has any knowledge of any fact or circumstance, that would reasonably be expected to prevent the Merger and the Scheme, as applicable, from qualifying for the Intended Tax Treatment. |
(b) | Each party agrees to act in good faith consistent with the Intended Tax Treatment and will not take any position on any U.S. Tax Return or otherwise take any U.S. Tax reporting position inconsistent with the Intended Tax Treatment, unless otherwise required by a “determination” within the meaning of Section 1313 of the U.S. Internal Revenue Code of 1986, as amended, that the Intended Tax Treatment is not correct. |
Implementation |
Timetable |
(a) | Subject to clause 5.1(b), the parties must each use reasonable endeavours to: |
(1) | comply with their respective obligations under this clause 5; and |
(2) | take all necessary steps and exercise all rights necessary to implement the Transaction, |
(b) | Failure by a party to meet any timeframe or deadline set out in the Timetable will not constitute a breach of clause 5.1(a) to the extent that such failure is due to circumstances and matters outside the party’s control or due to Carbon Revolution taking or omitting to take any action in response to a Competing Proposal as permitted or contemplated by this deed. |
(c) | Each party must keep the other informed about their progress against the Timetable and notify each other if it believes that any of the dates in the Timetable are not achievable. |
(d) | To the extent that any of the dates or timeframes set out in the Timetable become not achievable due to matters outside of a party’s control, the parties will consult in good faith to agree to any necessary extension to ensure such matters are completed within the shortest possible timeframe. |
Carbon Revolution’s obligations |
(a) | preparation of Scheme Booklet: subject to clauses 5.3(a) and 5.3(b), prepare and despatch the Scheme Booklet in accordance with all applicable laws (including the Corporations Act and the Corporations Regulations), RG 60, applicable Takeovers Panel guidance notes and the Listing Rules; |
(b) | directors’ recommendation: include in the Scheme Booklet and the public announcement contemplated by clause 8 a statement by the Carbon Revolution Board: |
(1) | unanimously recommending that Carbon Revolution Shareholders vote in favour of the Scheme in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme and the Capital Reduction is in the best interest of Carbon Revolution Shareholders; and |
(2) | that each Carbon Revolution Board Member will (subject to the same qualifications as set out in clause 5.2(b)(1)) vote, or procure the voting of, any Director Carbon Revolution Shares directly or indirectly held or controlled by or on behalf of them at the time of the Scheme Meeting in favour of the Scheme and the Capital Reduction at the Scheme Meeting, |
(c) | paragraph 411(17)(b) statement: apply to ASIC for the production of: |
(1) | an indication of intent letter stating that it does not intend to appear before the Court on the First Court Date; and |
(2) | a statement under paragraph 411(17)(b) of the Corporations Act stating that ASIC has no objection to the Scheme; |
(d) | Court direction: apply to the Court for orders pursuant to subsection 411(1) of the Corporations Act directing Carbon Revolution to convene the Scheme Meeting and, without limiting clause 5.2(f), lodge all relevant documents with the Court and take all other reasonable steps necessary to ensure that such application is heard by the Court on the First Court Date; |
(e) | Scheme Meeting: convene the Scheme Meeting to seek Carbon Revolution Shareholders’ agreement to the Scheme and the Capital Reduction in accordance with the orders made by the Court pursuant to subsection 411(1) of the Corporations Act and must not adjourn or postpone the Scheme Meeting or request the Court to adjourn or postpone the Scheme Meeting in either case without consulting with the SPAC; |
(f) | Court documents: prepare and consult with the SPAC in relation to the content of the documents required for the purpose of each of the Court hearings held for the purpose of subsection 411(1) and paragraph 411(4)(b) of the Corporations Act in relation to the Scheme (including originating process, affidavits, submissions and draft minutes of Court orders) and consider in good faith, for the purpose of amending drafts of those documents, comments from the SPAC and its Related Persons on those documents; |
(g) | Court approval: if the Scheme is approved by Carbon Revolution Shareholders under subparagraph 411(4)(a)(ii) of the Corporations Act and it can reasonably be expected that all of the Conditions Precedent (other than the Condition Precedent in clause 3.1(d) (Court Approval)) will be satisfied or waived in accordance with this deed before 8.00am on the Second Court Date, apply to the Court for orders approving the Scheme as agreed to by the Carbon Revolution Shareholders at the Scheme Meeting and, without limiting clause 5.2(f), lodge all relevant documents with the Court and take all other reasonable steps necessary to ensure that such application is heard by the Court; |
(h) | certificate: at the hearing on the Second Court Date provide to the Court: |
(1) | a certificate (signed for and on behalf of Carbon Revolution) in the form of a deed (substantially in the form of Attachment 1 – Conditions Precedent certificate) confirming whether or not the Conditions Precedent (other than the Condition Precedent in clause 3.1(d) (Court Approval)) have been satisfied or waived in accordance with this deed, a draft of which certificate must be provided by Carbon Revolution to the SPAC by 4.00pm on the date that is two Business Days prior to the Second Court Date; |
(2) | any certificate provided to it by SPAC pursuant to clause 5.3(i); and |
(3) | any certificate provided to it by MergeCo pursuant to clause 5.4(c); |
(i) | lodge copy of Court order: lodge with ASIC an office copy of the Court order in accordance with subsection 411(10) of the Corporations Act approving the Scheme by no later than the Business Day after the date on which the Court order was made (or such later date as agreed in writing by the SPAC); |
(j) | Scheme Consideration: if the Scheme becomes Effective, finalise and close the Carbon Revolution Share Register as at the Scheme Record Date, and determine entitlements to the Scheme Consideration, in accordance with the Scheme and the Deed Poll; |
(k) | Cancellation and registration: if the Scheme becomes Effective, on the Implementation Date: |
(1) | implement the Capital Reduction by making the necessary lodgements with ASIC and cancelling the Scheme Shares; and |
(2) | immediately following cancellation of the Scheme Shares as set out in clause 5.2(k)(1), and in consideration for the issuance of the Scheme Consideration, issue one Carbon Revolution Share to MergeCo and register MergeCo as the holder of a Carbon Revolution Share, |
(l) | consultation with the SPAC in relation to Scheme Booklet: consult with the SPAC as to the content and presentation of the Scheme Booklet including: |
(1) | providing to the SPAC drafts of the Scheme Booklet and, provided the Independent Expert provides their prior written consent, the Independent Expert’s Report in a timely manner and within a reasonable time before the Regulator’s Draft is finalised for the purpose of enabling the SPAC to review and comment on those draft documents. In relation to the Independent Expert’s Report, the SPAC’s review is to be limited to a factual accuracy review; |
(2) | considering and taking all reasonable and timely comments made by the SPAC into account in good faith when producing a revised draft of the Scheme Booklet; |
(3) | providing to the SPAC a revised draft of the Scheme Booklet within a reasonable time before the Regulator’s Draft is finalised and to enable the SPAC to review the Regulator’s Draft before the date of its submission; |
(4) | obtaining written consent from the SPAC for the form and content in which the SPAC Information appears in the Scheme Booklet; and |
(5) | confirming in writing to the SPAC that the Carbon Revolution Information in the Scheme Booklet does not contain any material statement that is false or misleading in a material respect including because of any material omission from that statement; |
(m) | due diligence committee and verification: undertake appropriate due diligence committee and verification processes in relation to the Carbon Revolution Information; |
(n) | pursuing the Bridge Financing: use reasonable endeavours to pursue and implement the Bridge Financing on or before 31 March 2023; |
(o) | consultation with the SPAC in relation to Bridge Financing: in relation to the Bridge Financing: |
(1) | promptly provide the SPAC with reasonable updates in relation to any material discussions or developments and copies of all material communications arising from or related to, the provision of Bridge Financing; |
(2) | provide a copy of any Bridge Financing term sheet that Carbon Revolution proposes to send to a potential Bridge Financing provider (Bridge Financing Term Sheet) to the SPAC and provide a copy of any material amendments made to any such Bridge Financing Term Sheet by a potential Bridge Financing provider to SPAC for the purpose of enabling the SPAC to review and comment on the Bridge Financing Term Sheet and any material amendments to any such Bridge Financing Term Sheet; and |
(3) | consider and take into account all reasonable and timely comments made by the SPAC in good faith when producing a revised draft of the Bridge Financing Term Sheet and negotiations in relation to the Bridge Financing Term Sheet and any long-form documentation to reflect the full terms of any Bridge Financing. |
(p) | New Incentive Arrangements: seek the prior written consent (not to be unreasonably withheld) of the SPAC in relation to the form and quantum of any employee or director short term or long term incentive or similar arrangements to be put in place following completion of the Transaction to the extent such arrangements exceed 5% in the aggregate of the issued capital of MergeCo at completion of the Transaction; |
(q) | lodgement of Regulator’s Draft: as soon as practicable, but by no later than 14 days before the First Court Date, provide the Regulator’s Draft to ASIC for its review for the purposes of subsection 411(2) of the Corporations Act, and provide a copy of the Regulator’s Draft to the SPAC as soon as practicable thereafter; |
(r) | information: provide all necessary information, and procure that the Carbon Revolution Registry provides all necessary information about the Scheme, the Scheme Shareholders and Carbon Revolution Shareholders to MergeCo, which MergeCo reasonably requires in order to: |
(1) | understand the legal and beneficial ownership of Carbon Revolution Shares, (including the results of directions by Carbon Revolution to Carbon Revolution Shareholders under Part 6C.2 of the Corporations Act); |
(2) | facilitate the provision by, MergeCo of the Scheme Consideration and to otherwise enable MergeCo to comply with the terms of this deed, the Scheme and the Deed Poll; and |
(3) | review the tally of proxy appointments and directions received by Carbon Revolution before the Scheme Meeting; |
(s) | ASIC and ASX review of Scheme Booklet: keep the SPAC informed of any matters raised by ASIC or ASX in relation to the Scheme Booklet or the Transaction, and use reasonable endeavours to take into consideration any comments made by the SPAC in relation to any such matters raised by ASIC or ASX; |
(t) | registration of Scheme Booklet: take all reasonable measures within its control to cause ASIC to register the Scheme Booklet under subsection 412(6) of the Corporations Act; |
(u) | representation: procure that it is represented by counsel at the Court hearings convened for the purposes of subsection 411(1) and paragraph 411(4)(b) of the Corporations Act; |
(v) | Independent Expert: promptly appoint the Independent Expert and provide all assistance and information reasonably requested by the Independent Expert in connection with the preparation of the Independent Expert’s Report for inclusion in the Scheme Booklet (including any updates to such report) and any other materials to be prepared by the Independent Expert for inclusion in the Scheme Booklet (including any updates thereto); |
(w) | Investigating Accountant: appoint the Investigating Accountant and provide assistance and information reasonably required by the Investigating Accountant to enable it to prepare the Investing Accountant’s Report. |
(x) | assistance: up to the Implementation Date and subject to legal professional privilege, obligations of confidentiality owed to third parties and undertakings to Government Agencies, provide the SPAC and its Related Persons with reasonable access during normal business hours to information and personnel of the Carbon Revolution Group that the SPAC reasonably requests for the purpose of collation and provision of the SPAC Information and implementation of the Transaction; |
(y) | compliance with laws: do everything reasonably within its power to ensure that the Transaction is effected in accordance with all applicable laws and regulations; |
(z) | listing: subject to clause 5.2(dd), not do anything to cause Carbon Revolution Shares to cease being quoted on ASX or to become permanently suspended from quotation prior to implementation of the Transaction unless the SPAC has agreed in writing; |
(aa) | update Scheme Booklet: until the date of the Scheme Meeting, promptly update or supplement the Scheme Booklet with, or where appropriate otherwise inform the market by way of announcement of, any information that arises after the Scheme Booklet has been despatched that is necessary to ensure that the Scheme Booklet does not contain any material statement that is false or misleading in a |
(bb) | update MergeCo Registration Statement: until the date of the SPAC Shareholders Meeting, promptly inform SPAC of any information in relation to Carbon Revolution that Carbon Revolution is aware of that arises after the MergeCo Registration Statement has been declared effective that is necessary to ensure that the MergeCo Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. Carbon Revolution and SPAC must consult on the content and presentation of any update or supplement to the MergeCo Registration Statement, or where appropriate, an announcement to otherwise inform the market of the updated information contemplated by this clause; |
(cc) | promote Transaction: participate in efforts reasonably requested by the SPAC to promote the merits of the Transaction and the Scheme Consideration, including, where requested by the SPAC, meeting with key Carbon Revolution Shareholders and, in consultation with the SPAC, undertaking reasonable shareholder engagement and proxy solicitation actions so as so promote the merits of the Transaction and encourage Carbon Revolution Shareholders to vote on the Scheme, in each case in accordance with the recommendation of the Carbon Revolution Board, subject to applicable law and ASIC policy; |
(dd) | suspension of trading: apply to ASX to suspend trading in Carbon Revolution Shares with effect from the close of trading on the Effective Date; |
(ee) | removal of quotation: if the Scheme becomes Effective, apply to ASX to have Carbon Revolution removed from the official list of ASX, and quotation of Carbon Revolution Shares on the ASX terminated, with effect on and from the close of trading on the Trading Day immediately following the Implementation Date (unless otherwise directed by the SPAC in writing); |
(ff) | Carbon Revolution Locked-Up Shareholders: using best endeavours to secure the execution by each of the Carbon Revolution Locked-Up Shareholders of the Outsider Lock-Up Agreement as soon as practicable after the date of this deed (for the avoidance of doubt, Carbon Revolution will not be in breach of its obligation under this deed if any one or more of the Carbon Revolution Locked-Up Shareholders does not sign the Outsider Lock-Up Agreement); |
(gg) | preparation of the MergeCo Registration Statement: use reasonable best efforts to assist MergeCo in the preparation and filing of the MergeCo Registration Statement, including by furnishing all information (including the financial statements of the Carbon Revolution Group) concerning Carbon Revolution as MergeCo may reasonably request in connection with such actions and the preparation of the MergeCo Registration Statement. Carbon Revolution will use its reasonable best efforts to (i) cause the MergeCo Registration Statement, when filed with the SEC, to comply in all material respects with all legal requirements applicable thereto, (ii) respond promptly as reasonably practicable to and resolve all comments received from the SEC concerning the MergeCo Registration Statement, (iii) cause the MergeCo Registration Statement to be declared effective under the Securities Act as promptly as practicable after filing with the SEC and (iv) to keep the MergeCo Registration Statement effective as long as is necessary to consummate the Transaction; |
(hh) | Proxy information: upon request by the SPAC made prior to commencement of the Scheme Meeting, inform the SPAC of the total number of proxy votes received by Carbon Revolution: |
(1) | to vote in favour of the Scheme; |
(2) | to vote against the Scheme; |
(3) | to abstain from voting on the Scheme; and |
(4) | where the proxy may vote at the proxy’s discretion; |
(ii) | MergeCo Obligations: for each instance in which MergeCo has an obligation or covenant under this deed, Carbon Revolution shall cause MergeCo to perform such obligation or covenant and shall be responsible for any failure or breach thereof by MergeCo; |
(jj) | Financial Statements: |
(1) | Carbon Revolution shall deliver to SPAC, at such time as is required by ASIC, true and complete copies of the unaudited balance sheet of Carbon Revolution as of December 31, 2022, and the related unaudited income statement and statement of cash flows of Carbon Revolution for the six month period then ended, prepared in accordance with IFRS. Prior to the Closing, Carbon Revolution shall deliver to SPAC interim financial information at such time and in such form as is required by ASIC. |
(2) | Carbon Revolution shall deliver to SPAC as promptly as practicable after the execution of the BCA with regard to clauses (i) and (iv) below, the true and complete copies of the (i) audited consolidated statement of financial position as of June 30, 2022 and June 30, 2021, and the related audited statements of comprehensive income, changes in equity and cash flows for the years ended June 30, 2022, and June 30, 2021, of Carbon Revolution Group, together with all related notes and schedules thereto, accompanied by the reports thereon of Carbon Revolution’s independent auditors (which reports shall be unqualified) (the “Audited Financial Statements”); (ii) unaudited interim consolidated statement of financial position as of and for the six (6) month periods ended December 31, 2022, and the related unaudited interim statements of comprehensive income, changes in equity, and cash flows as of and for the six (6) month periods ended December 31, 2022 and 2021, together with all related notes and schedules thereto, prepared in accordance with Regulation S-X of the Exchange Act and reviewed by Carbon Revolution’s independent auditor in accordance with Statement on Auditing Standards No. 100 issued by the American Institute of Certified Public Accountants, of Carbon Revolution and its Subsidiaries (the “Unaudited Financial Statements” and, together with the Audited Financial Statements, the “Financial Statements”); (iii) any financial statements or similar reports of Carbon Revolution required to be included in the F-4, Proxy Statement, Form 6-K filed in connection with and announcing the Closing or any other filings to be made with the SEC in connection with the transactions contemplated by the BCA or any Ancillary Agreement (as defined in the BCA); and (iv) management’s discussion and analysis of financial condition and results of operations prepared in accordance with Item 303 of Regulation S-K of the Exchange Act (as if Carbon Revolution Group were subject thereto) with respect to the periods described in clauses (i) and (ii) above, as necessary for inclusion in the Form F-4 (including pro forma financial information). Additionally, Carbon Revolution shall use reasonable best efforts to provide as soon as reasonably practicable all other audited and unaudited financial statements of Carbon Revolution Group, and any company or business units acquired by Carbon Revolution Group, as applicable, required under the applicable rules and regulations and guidance of the SEC to be included in the Form F-4 and/or the Form 6-K filed in connection with and announcing the Closing (including pro forma financial information). |
SPAC’s obligations |
(a) | SPAC Information: prepare and promptly provide to Carbon Revolution the SPAC Information for inclusion in the Scheme Booklet, including all information regarding the SPAC required by all applicable laws (including the Corporations Act and the Corporations Regulations), RG 60, applicable Takeovers Panel guidance notes and the Listing Rules, and consent to the inclusion of that information in the Scheme Booklet; |
(b) | Scheme Booklet and Court documents: promptly provide any assistance or information reasonably requested by Carbon Revolution in connection with preparation of the Scheme Booklet (including any updated or supplementary Scheme Booklet) and any documents required to be filed with the Court in respect of the Scheme, promptly review the drafts of the Scheme Booklet (including any updated or supplementary Scheme Booklet) prepared by Carbon Revolution and provide comments promptly on those drafts in good faith; |
(c) | Independent Expert’s Report: subject to the Independent Expert entering into arrangements with the SPAC including in relation to confidentiality in a form reasonably acceptable to the SPAC, provide any assistance or information reasonably requested by Carbon Revolution or by the Independent Expert in connection with the preparation of the Independent Expert’s Report to be sent together with the Scheme Booklet; |
(d) | representation: procure that it is represented by counsel at the Court hearings convened for the purposes of subsection 411(1) and paragraph 411(4)(b) of the Corporations Act; |
(e) | Deed Poll: by no later than the Business Day prior to the First Court Date, execute and deliver to Carbon Revolution the Deed Poll; |
(f) | accuracy of SPAC Information: confirm in writing to Carbon Revolution that the SPAC Information in the Scheme Booklet does not contain any material statement that is false ormisleading in a material respect including because of any material omission from that statement; |
(g) | due diligence committee and verification: undertake appropriate due diligence and verification processes in relation to the SPAC Information; |
(h) | consent: provide a consent and use reasonable best efforts to obtain consents from third parties in such for as Carbon Revolution reasonably requires in relation to the form and content in which information about SPAC appears in the Scheme Booklet; |
(i) | certificate: before the commencement of the hearing on the Second Court Date provide to Carbon Revolution for provision to the Court at that hearing a certificate (signed for and on behalf of the SPAC) in the form of a deed (substantially in the form of Attachment 1 – Conditions Precedent Certificate) confirming whether or not the Conditions Precedent (other than the Condition Precedent in clause 3.1(d) (Court Approval)) have been satisfied or waived in accordance with this deed, a draft of which certificate must be provided by the SPAC to Carbon Revolution by 4.00 pm on the date that is two Business Days prior to the Second Court Date; |
(j) | update SPAC Information: until the date of the Scheme Meeting, promptly provide to Carbon Revolution any information that arises after the Scheme Booklet has been despatched that is necessary to ensure that the SPAC Information contained in the Scheme Booklet does not contain any material statement that is false or misleading in a material respect including because of any material omission from that statement; |
(k) | assistance: up to (and including) the Implementation Date and subject to obligations of confidentiality owed to third parties and undertakings to Government agencies, provide Carbon Revolution and its Related Persons with reasonable access during normal business hours to information and personnel of the SPAC that Carbon Revolution reasonably requests for the purpose of preparation of the Scheme Booklet and implementation of the Transaction; |
(l) | compliance with laws: do everything reasonably within its power to ensure that the Transaction is effected in accordance with all applicable laws and regulations; |
(m) | Sponsor Nominees: as soon as reasonably practicable after the date of this deed and in any event 5 days before the last filed amendment to the MergeCo Registration Statement prior to the MergeCo Registration Statement Effective Date notify Carbon Revolution and MergeCo of the identity of two persons it wishes to become directors of MergeCo on the Implementation Date, who must both qualify as independent directors (in accordance with the independence requirements of Nasdaq or NYSE (as applicable)) and be acceptable to Carbon Revolution (acting reasonably) (Sponsor Nominees); |
(n) | FPA: prior to the earlier of: |
(1) | despatch by Carbon Revolution of the Scheme Booklet; or |
(2) | despatch by MergeCo of the MergeCo Registration Statement, |
(o) | promote Transaction: participate in efforts reasonably requested by Carbon Revolution to promote the merits of the Transaction and the Scheme Consideration, including, where requested by Carbon Revolution, meeting with key Carbon Revolution Shareholders and, in consultation with Carbon Revolution, undertaking reasonable shareholder engagement and proxy solicitation actions to encourage Carbon Revolution Shareholders to vote on the Scheme, subject to applicable law and ASIC policy. SPAC shall also recommend, through the SPAC Board, that the SPAC Shareholders adopt and approve the Transaction, the Scheme Consideration and any and all other actions and agreements in furtherance of the Transaction, unless the SPAC Board has determined after receiving written advice from SPAC’s external legal advisers specialising in the area of corporate law that the SPAC Board, by virtue of the fiduciary or statutory duties of the SPAC Board Members, is required to change, modify, qualify or withdraw its or their recommendation; |
(p) | SPAC Shareholders Meeting: as promptly as practicable after the date on which the MergeCo Registration Statement becomes effective SPAC shall call and hold the SPAC Shareholders Meeting for the purpose of voting solely upon the SPAC Proposals, and SPAC shall hold the SPAC Shareholders Meeting as soon as practicable after the date on which the MergeCo Registration Statement becomes effective (but in any event no later than 30 days after the date on which the MergeCo Registration Statement is mailed to SPAC Shareholders). SPAC shall use its reasonable best efforts to obtain the approval of the SPAC Proposals at the SPAC Shareholders Meeting, including by soliciting from its stockholders proxies as promptly as possible in favour of the SPAC Proposals, and shall take all other lawful action necessary or advisable to secure the required vote or consent of its stockholders. The SPAC Board shall recommend to its Shareholders that they approve the SPAC Proposals and shall include such recommendation in the MergeCo Registration Statement, unless the SPAC Board has determined after receiving written advice from SPAC’s external legal advisers specialising in the area of corporate law that the SPAC Board, by virtue of the fiduciary or statutory duties of the SPAC Board Members, is required to change, modify, qualify or withdraw its or their recommendation. SPAC may adjourn the SPAC Shareholders Meeting (i) to solicit additional proxies for the purpose of obtaining approval of the SPAC Proposals, (ii) for the absence of a quorum, (iii) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosure that SPAC has determined in good faith after consultation with outside legal counsel is required under applicable laws and for such supplemental or amended disclosure to be disseminated and reviewed by SPAC Shareholders prior to SPAC Shareholders Meeting or (iv) if the holders of shares have elected to redeem a number of shares as of such time that would reasonably be expected to result in the condition set forth in clause 3.1(n) or 3.1(p) not being satisfied; provided, that, without the consent of Carbon Revolution, SPAC Shareholders Meeting (x) may not be adjourned to a date that is more than 15 days after the date for which SPAC Shareholders Meeting was originally scheduled (excluding any adjournments required by applicable laws) and (y) shall not be held later than five Business Days prior to the End Date; |
(q) | Preparation of the MergeCo Registration Statement: use reasonable best efforts to assist MergeCo in the preparation and filing of the MergeCo Registration Statement, including by furnishing all information concerning the SPAC as MergeCo may reasonably request in connection with such actions and the preparation of the MergeCo Registration Statement. SPAC will use its reasonable best efforts to (i) cause the MergeCo Registration Statement, when filed with the SEC, to comply in all material respects with all legal requirements applicable thereto, (ii) respond promptly as reasonably practicable to and resolve all comments received from the SEC concerning the MergeCo Registration Statement, |
(r) | rollover relief: provide Carbon Revolution with such assistance and information as may reasonably be requested by Carbon Revolution for the purposes of obtaining the ATO Ruling from the Australian Taxation Office. |
MergeCo’s obligations |
(a) | MergeCo Board Approval: before 8.00am on the Second Court Date, the MergeCo Board must approve the issuance of the MergeCo Shares to be issued as Scheme Consideration, conditional on the Scheme becoming Effective and the condition subsequent in clause 3.3 of the terms of the Scheme occurring; |
(b) | Scheme Consideration: if the Scheme becomes Effective, procure (to the extent permissible under applicable law) the provision of the Scheme Consideration in the manner and amount contemplated by clause 4 and the terms of the Scheme and the Deed Poll; |
(c) | certificate: before the commencement of the hearing on the Second Court Date provide to Carbon Revolution for provision to the Court at that hearing a certificate (signed for and on behalf of the MergeCo) in the form of a deed (substantially in the form of Attachment 1 – Conditions Precedent Certificate) confirming whether or not the Conditions Precedent (other than the Condition Precedent in clause 3.1(d) (Court Approval)) have been satisfied or waived in accordance with this deed, a draft of which certificate must be provided by MergeCo to Carbon Revolution by 4.00 pm on the date that is two Business Days prior to the Second Court Date; |
(d) | Deed Poll: by no later than the Business Day prior to the First Court Date, execute and deliver to Carbon Revolution the Deed Poll; |
(e) | consent: provide a consent and use reasonable best efforts to obtain consents from third parties in such form as Carbon Revolution and SPAC reasonably require in relation to the form and content in which information about MergeCo appears in the Scheme Booklet; |
(f) | Agree to become Carbon Revolution’s sole shareholder: if the Scheme becomes Effective, on the Implementation Date, do all things necessary to subscribe for one Carbon Revolution Share and otherwise agree to become a member of Carbon Revolution in accordance with the constitution of Carbon Revolution as consideration for the issuance of the Scheme Consideration; |
(g) | Filing of the MergeCo Registration Statement: as promptly as practicable after the execution of this deed, MergeCo shall prepare and file with the SEC the MergeCo Registration Statement; |
(h) | Foreign private issuer status: use reasonable and best endeavours to qualify as a foreign private issuer pursuant to Rule 3B-4 of the Exchange Act prior to 8.00am on the Second Court Date; |
(i) | Conversion of MergeCo to a Public Limited Company: prior to the First Court Date MergeCo will convert from a private limited company to a public limited company; and |
(j) | rollover relief: to facilitate the availability of scrip-for-scrip rollover relief under Subdivision 124-M of the Tax Act for eligible Scheme Shareholders: |
(1) | provide Carbon Revolution with such assistance and information as may reasonably be requested by Carbon Revolution for the purposes of obtaining the ATO Ruling from the Australian Taxation Office; |
(2) | not make an election under section 124-795(4) of the Tax Act preventing the availability of the rollover relief; and |
(3) | if applicable, make any election required under Subdivision 124-M of the Tax Act in relation to the rollover. |
Other Transaction Documents and associated arrangements |
(a) | Carbon Revolution Locked-Up Shareholders: the identity of the Carbon Revolution Shareholders who are proposed to be subject to Outsider Lock-up Agreements (Carbon Revolution Locked-Up Shareholders). |
(b) | Registration Rights Agreement: the terms of the Registration Rights Agreement. |
Conduct of business – Carbon Revolution |
(a) | Subject to clause 5.6(b), from the date of this deed up to and including the Implementation Date, and without limiting any other obligations of Carbon Revolution under this deed, Carbon Revolution must: |
(1) | conduct its businesses and operations, and must cause each other Carbon Revolution Group Member to conduct its respective business and operations, in the ordinary and usual course generally consistent with past practice; |
(2) | keep the SPAC informed of any material developments concerning the conduct of its business; |
(3) | not pay, declare, determine or otherwise agree to pay any dividend or distribution; |
(4) | not enter into any line of business or other activities in which the Carbon Revolution Group is not engaged as at the date of this deed; |
(5) | provide monthly management accounts for the Carbon Revolution Group, in a timely manner to the SPAC; |
(6) | promptly notify SPAC of any legal proceeding, claim or investigation which may be threatened or asserted or commenced against any Carbon Revolution Group Member and which is material in the context of the Carbon Revolution Group taken as a whole; |
(7) | comply in all material respects with all applicable Authorisations, laws and regulations (including the Listing Rules); |
(8) | ensure that no Carbon Revolution Prescribed Occurrence occurs; |
(9) | make all reasonable efforts, and procure that each other Carbon Revolution Group Member makes all reasonable efforts, to: |
(A) | comply with the terms of all Material Contracts; |
(B) | preserve and maintain the value of the businesses and assets of the Carbon Revolution Group; |
(C) | keep available the services of the Carbon Revolution Locked-up Persons and (subject to normal operating attrition rates) employees of each Carbon Revolution Group Member; |
(D) | maintain and preserve their relationship with Government Agencies, customers, suppliers and others having business dealings with any Carbon Revolution Group Member; and |
(E) | ensure that there is no occurrence within their control that would constitute or be likely to constitute a Carbon Revolution Adverse Change; and |
(10) | use its best endeavours to ensure that no Carbon Revolution Regulated Event occurs. |
(b) | Nothing in clause 5.6(a) restricts the ability of Carbon Revolution to take any action: |
(1) | which is required or expressly permitted by this deed, the BCA or the Scheme, including for the avoidance of doubt actions to give effect to a Superior Proposal; |
(2) | which has been agreed to in writing by the SPAC (which agreement must not be unreasonably withheld or delayed) or requested by the SPAC in writing; |
(3) | in connection with the marketing, underwriting, entry into and completion of the Bridge Financing and compliance with any associated disclosure requirements or the agreements giving effect to the Bridge Financing; |
(4) | which is required by any applicable law, regulation or by a Government Agency; |
(5) | which is Fairly Disclosed in the Disclosure Materials as being an action that the Carbon Revolution Group may, or could reasonably be expected to, carry out between (and including) the date of this deed and the Implementation Date; |
(6) | that Carbon Revolution Fairly Disclosed in an announcement made by Carbon Revolution to ASX in the one year period prior to the date of this deed; |
(7) | to reasonably and prudently respond to: |
(A) | Carbon Revolution’s prevailing or anticipated cash flow and liquidity requirements at the relevant point in time and the need to minimise cash outflows and maximise cash inflows and profitability between (and including) the date of this deed and the Implementation Date including: operational restructuring initiatives, acceleration of grant income, variation of customer payment terms and consensual deferral of creditor payments; |
(B) | an emergency or disaster (including a situation giving rise to a risk of personal injury or damage to property, or a disease epidemic or pandemic, including the outbreak, escalation or any impact of, or recovery from, COVID-19 or the COVID-19 Measures); |
(C) | changes in market conditions affecting the business of Carbon Revolution or a Carbon Revolution Group Member to a material extent; |
(D) | regulatory or legislative changes (including without limitation changes to subordinate legislation) affecting the business of Carbon Revolution or a Carbon Revolution Group Member to a material extent, |
(8) | in connection with an actual, proposed or potential Competing Proposal as contemplated by clause 10. |
(c) | From the date of this deed up to and including the Second Court Date unless the SPAC agrees otherwise in writing, Carbon Revolution will promptly notify the SPAC of anything of which it becomes aware that: |
(1) | makes any material information publicly filed by Carbon Revolution (either on its own account or in respect of any other Carbon Revolution Group Member) to be, or reasonably likely to be, incomplete, incorrect, untrue or misleading in any material respect; |
(2) | makes any of the Carbon Revolution Representations and Warranties false, inaccurate, misleading or deceptive in any material respect; |
(3) | makes any information provided in the Disclosure Materials incomplete, incorrect, untrue or misleading in any material respect; or |
(4) | would constitute or be likely to constitute a Carbon Revolution Prescribed Occurrence, a Carbon Revolution Regulated Event or a Carbon Revolution Material Adverse Effect. |
Conduct of business – SPAC |
(a) | Subject to clause 5.7(b), from the date of this deed up to and including the Implementation Date, and without limiting any other obligations of the SPAC under this deed, the SPAC must: |
(1) | maintain the condition of its business and material assets in all material respects; |
(2) | keep available the services of its key employees; |
(3) | preserve its material relationships with customers, suppliers, licensors, licensees, joint venturers and others with whom it has business dealings in all material respects; |
(4) | not take any action that would give rise to a SPAC Prescribed Occurrence; |
(5) | not amend or otherwise change the organisational documents of SPAC or form any Subsidiary of SPAC; |
(6) | not reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any SPAC securities, but excluding distributions from the Trust Account to the shareholders of the SPAC upon the redemption of their shares that are required pursuant to the organisational documents of the SPAC; |
(7) | not pay, declare, determine or otherwise agree to pay any dividend or distribution; |
(8) | not issue, sell, pledge, dispose of, grant or encumber, or authorise the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock or other securities of SPAC, 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 SPAC; |
(9) | not acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organisation or enter into any strategic joint ventures, partnerships or alliances with any other person; |
(10) | other than reasonably necessary SPAC Working Capital Loans, not incur indebtedness; |
(11) | other than for purposes of reasonably complying with any agreements, orders, comments or other guidance from the Staff or SPAC’s auditors following the date hereof, not make any change in any method of financial accounting or financial accounting principles, policies, procedures or practices; |
(12) | not make or change any material Tax election or settle or compromise any material liability relating to a Tax dispute, file any amendment to a material Tax Return, enter into any Tax sharing, indemnification, allocation or similar agreement or arrangement, or consent to any extension or waiver of the limitation period applicable to or relating to any Tax audit, dispute, litigation or other proceeding; |
(13) | not amend the Trust Agreement or any other agreement related to the Trust Account; |
(14) | not enter into any line of business or other activities in which it is not engaged as at the date of this deed; |
(15) | promptly notify Carbon Revolution of any legal proceeding, claim or investigation which may be threatened or asserted or commenced against any it; and |
(16) | comply in all material respects with all applicable Authorisations, laws and regulations. |
(b) | Nothing in clause 5.7(a) restricts the ability of the SPAC to take any action: |
(1) | which is required or expressly permitted by this deed, the BCA or the Scheme; |
(2) | which has been agreed to in writing by Carbon Revolution (which agreement must not be unreasonably withheld or delayed) or requested by Carbon Revolution in writing; |
(3) | which is required by any applicable law or regulation by a Government Agency; or |
(4) | to reasonably and prudently respond to an emergency or disaster (including a situation giving rise to a risk of personal injury or damage to property, or a disease epidemic or pandemic, including the outbreak, escalation or any impact of, or recovery from, COVID-19 or the COVID-19 Measures). |
Conduct of business – MergeCo |
(a) | Other than with the prior written approval of the SPAC (such approval not to be unreasonably withheld or delayed) MergeCo must not and must cause its Subsidiaries not to, and Carbon Revolution must ensure that MergeCo does not and causes its Subsidiaries not to, from the date of this deed up to and including Implementation, except to the extent contemplated by this document, the BCA or the Transaction: |
(1) | carry on business, grant any right or incur any liability; |
(2) | convert all or any of its shares into a larger or smaller number of shares; |
(3) | permit any transfer of its shares to occur, or any Encumbrance or trust to be created over or in respect of its shares (or any interest in them); |
(4) | resolve to reduce its share capital in any way or resolve to reclassify, combine, split or redeem or repurchase directly or indirectly any of its shares; |
(5) | undertake to: |
(A) | repurchase, redeem or otherwise acquire any shares of capital stock of Parent, or agree to do any of the foregoing; |
(B) | enter into a buy-back agreement; or |
(C) | resolve to approve the terms of a buy-back agreement; |
(6) | make or declare, or announce an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie); |
(7) | undertake to: |
(A) | issue any shares; |
(B) | grant an option over its shares; or |
(C) | agree to make an issue of or grant an option over shares; |
(8) | issue or agree to issue securities or other instruments convertible into shares; |
(9) | adopt a new constitution or modify or repeal its constitution or a provision of it; |
(10) | undertake to: |
(A) | acquire or dispose of; |
(B) | agree to acquire or dispose of; or |
(C) | offer, propose, announce a bid or tenders for, |
(11) | create, or agree to create, any Encumbrance over or declares itself the trustee of any of its business or property; |
(12) | merge or consolidate with any other person or restructure, reorganise or completely or partially liquidates or dissolve; |
(13) | undergoes an Insolvency Event; |
(14) | enter into any agreement, contract or commitment; |
(15) | engage any employee; |
(16) | incur, assume, guarantee or become liable for any Financial Indebtedness; |
(17) | incur or make any expenditure; |
(18) | own any real or personal property; |
(19) | commence any legal proceedings, or threaten to do so. |
(b) | Nothing in clause 5.8(a) restricts the ability of MergeCo to take any action: |
(1) | in connection with the marketing, underwriting, entry into and completion of the Bridge Financing and compliance with any associated disclosure requirements or the agreements giving effect to the Bridge Financing; |
(2) | which is required by any applicable law, regulation or by a Government Agency; |
(3) | which is required in order for MergeCo or any Subsidiary of MergeCo to re-register as a public limited company and/or change its name, including creating a new class of shares and/or issuing additional shares for the purposes of re-registering as a public limited company and/or updating its memorandum and articles of association and making any regulatory filings as required by any applicable law. |
Material Contract consents |
(a) | In respect of each Material Contract: |
(1) | Carbon Revolution will initiate contact with the relevant counterparties and request that they provide the consents required or appropriate for the Transaction. The SPAC and its Related Persons must not contact any counterparties to Material Contracts without Carbon Revolution being present or without Carbon Revolution’s prior written consent (which is not to be unreasonably withheld or delayed); |
(2) | Carbon Revolution must use reasonable endeavours to obtain such consents or confirmations as expeditiously as possible, including by providing any information reasonably required by counterparties (but nothing in this clause 5.8 requires Carbon Revolution to incur material expense or provide material concessions to any applicable counterparties); and |
(3) | The SPAC must cooperate with, and provide all reasonable assistance to, Carbon Revolution to obtain such consents or confirmations, including by: |
(A) | providing any information required; and |
(B) | making officers and employees available where necessary to meet with counterparties to deal with any issues arising in relation to the relevant consent or waiver, |
(b) | Provided that Carbon Revolution has complied with this clause 5.8, a failure by Carbon Revolution to obtain any third party consent will not constitute a breach of this deed by Carbon Revolution. |
Appointment of directors |
(a) | cause the appointment of the Sponsor Nominees to the MergeCo Board; |
(b) | cause the appointment of the Carbon Revolution Nominees to the MergeCo Board; and |
(c) | ensure that all directors on the MergeCo Board, other than the Sponsor Nominees and the Carbon Revolution Nominees: |
(1) | resign; and |
(2) | unconditionally and irrevocably release MergeCo from any claims they may have against MergeCo. |
Carbon Revolution Board Recommendation |
(a) | Carbon Revolution must procure that, subject to clause 5.11(b): |
(1) | the Carbon Revolution Board unanimously recommends that Carbon Revolution Shareholders vote in favour of the Scheme and the Capital Reduction at the Scheme Meeting in the absence of a Superior Proposal and subject to the Independent Expert concluding in the Independent Expert’s Report (and continuing to conclude) that the Scheme and the Capital Reduction is in the best interest of Carbon Revolution Shareholders and that the Scheme Booklet and all other public statements relating to the Transaction include statements by the Carbon Revolution Board to that effect; and |
(2) | each Carbon Revolution Board member provides a statement to Carbon Revolution that they: |
(A) | will not, prior to the Scheme Meeting (in accordance with the Timetable) dispose (or agree to dispose) of their respective Director Carbon Revolution Shares; and |
(B) | intend to vote, or cause to be voted, all of their respective Director Carbon Revolution Shares in favour of the Scheme and the Capital Reduction in the absence of a Superior Proposal and subject to the Independent Expert concluding in the Independent Expert’s Report (and continuing to conclude) that the Scheme and the Capital Reduction is in the best interest of Carbon Revolution Shareholders, and authorises the inclusion by Carbon Revolution of that statement in the Scheme Booklet and all other public statements relating to the Transaction. |
(b) | Carbon Revolution: |
(1) | must procure that the Carbon Revolution Board collectively, and the Carbon Revolution Board members individually, do not; and |
(2) | represents and warrants to the SPAC that, as at the date of this deed, each Carbon Revolution Board Member has confirmed that he or she does not intend to, |
(3) | the Independent Expert provides a report to Carbon Revolution (including either the Independent Expert’s Report or any update of, or any revision, amendment or supplement to, that report) that concludes that the Scheme and the Capital Reduction are not in the best interest of Carbon Revolution Shareholders; |
(4) | Carbon Revolution has received a Competing Proposal and the Carbon Revolution Board has determined, after the procedure in clause 10.4 has been complied with, that the Competing Proposal constitutes a Superior Proposal; |
(5) | the change, modification, qualification or withdrawal occurs because of a requirement or request by a court or Government Agency that one or more Carbon Revolution Board members abstain from making a recommendation that Carbon Revolution Shareholders vote in favour of the Scheme and the Capital Reduction after the date of this deed; or |
(6) | the Carbon Revolution Board has determined after receiving written advice from Carbon Revolution’s external Australian legal advisers specialising in the area of corporate law that the Carbon Revolution Board, by virtue of the fiduciary or statutory duties of the Carbon Revolution Board Members, is required to change, modify, qualify or withdraw its or their recommendation (with a copy of such advice to be provided to the SPAC). |
(c) | For the purposes of this clause 5.11, customary qualifications and explanations contained in the Scheme Booklet and any public announcements by Carbon Revolution in relation to a recommendation to vote in favour of the Scheme and the Capital Reduction to the effect that the recommendation is made: |
(1) | in the absence of a Superior Proposal; |
(2) | in respect of any public announcement issued before the issue of the Scheme Booklet, subject to the Independent Expert concluding in the Independent Expert’s Report (and continuing to conclude) that the Scheme and the Capital Reduction are in the best interest of Carbon Revolution Shareholders; and |
(3) | in respect of the Scheme Booklet and any public announcements issued at the time of or after the issue of Scheme Booklet, subject to the Independent Expert continuing to conclude that the Scheme and the Capital Reduction are in the best interest of Carbon Revolution Shareholders, |
(d) | Without limiting the operation of clause 10 or the preceding provisions of this clause 5, if circumstances arise, including the receipt or expected receipt of an unfavourable report from the Independent Expert (including either the Independent Expert’s Report or any update of, or any revision, amendment or supplement to, that report) which is reasonably likely to lead to any one or more Carbon Revolution Board Members adversely changing, adversely modifying, adversely qualifying or withdrawing their recommendation to vote in favour of the Scheme and Capital Reduction, Carbon Revolution must: |
(1) | as soon as practicable, notify the SPAC of this fact; and |
(2) | consult with the SPAC in good faith for at least 2 Business Days after the date on which the notice under clause 5.11(d)(1) is given to consider and determine whether there are any steps that can be taken to avoid such a change, modification, qualification or withdrawal (as applicable). |
(e) | A statement made by Carbon Revolution or the Carbon Revolution Board to the effect that no action should be taken by Carbon Revolution Shareholders pending the assessment of a Competing Proposal by the Carbon Revolution Board or the completion of the matching right process set out in clause 10.4 shall not contravene this clause 5.11. |
SPAC Board Recommendation |
Responsibility Statements |
(a) | The Scheme Booklet will contain a responsibility statement to the effect that: |
(1) | MergeCo is responsible for the MergeCo Information contained in the Scheme Booklet; |
(2) | SPAC is responsible for the SPAC Information contained in the Scheme Booklet; |
(3) | Carbon Revolution is responsible for the Carbon Revolution Information contained in the Scheme Booklet; and |
(4) | the Independent Expert is responsible for the Independent Expert’s Report, and none of Carbon Revolution, MergeCo, SPAC or their respective directors or officers assumes any responsibility for the accuracy or completeness of the Independent Expert’s Report. |
(b) | If Carbon Revolution, MergeCo and the SPAC disagree on the form or content of the Scheme Booklet, they must consult in good faith to try to settle an agreed form of the Scheme Booklet. If after five Business Days of consultation, Carbon Revolution, MergeCo and the SPAC are unable to agree on the form or content of the Scheme Booklet: |
(1) | where the determination relates to SPAC Information, the SPAC will make the final determination, acting reasonably, as to the form and content of the SPAC Information; and |
(2) | in any other case, the final determination as to the form and content of the Scheme Booklet will be made by Carbon Revolution, acting reasonably, provided that, if the SPAC disagrees with such final form and content, Carbon Revolution must include a statement to that effect in the Scheme Booklet. |
Conduct of Court proceedings |
(a) | Carbon Revolution and MergeCo on the one hand and the SPAC on the other hand are entitled to separate representation at all Court proceedings affecting the Transaction. |
(b) | This deed does not give Carbon Revolution or the SPAC any right or power to give undertakings to the Court for or on behalf of the other of them without the other party’s written consent. |
(c) | Carbon Revolution and the SPAC must give all undertakings to the Court in all Court proceedings which are reasonably required to obtain Court approval and confirmation of the Transaction as contemplated by this deed. |
Representations and warranties |
SPAC’s representations and warranties |
Carbon Revolution’s representations and warranties |
MergeCo’s representations and warranties |
Qualifications on representations and warranties |
(a) | The Carbon Revolution Representations and Warranties made or given in clause 6.2 are each subject to matters that: |
(1) | have been Fairly Disclosed in the Disclosure Materials; |
(2) | have been Fairly Disclosed in: |
(A) | an announcement by Carbon Revolution to ASX, or |
(B) | a publicly available document lodged by Carbon Revolution with ASIC, |
(3) | are expressly required or permitted by this deed or the Scheme. |
(b) | Where a Carbon Revolution Representation and Warranty is given ‘so far as Carbon Revolution is aware’ or with a similar qualification as to Carbon Revolution’s awareness or knowledge, Carbon Revolution’s awareness or knowledge is limited to and deemed only to include those facts, matters or circumstances of which a Specified Individual is actually aware as at the date such Carbon Revolution Representation and Warranty is given. |
(c) | The SPAC Representations and Warranties made or given in clause 6.1 are each subject to matters that have been Fairly Disclosed in any report, schedule, form, statement or other document (including exhibits) filed with, or furnished to, the SEC by the SPAC from the date the SPAC was listed on the NYSE until the date of this deed. |
Survival of representations and warranties |
(a) | is severable; and |
(b) | does not survive the termination of this deed. |
Timing of representations and warranties |
No representation or reliance |
(a) | Each party acknowledges that no party (nor any person acting on its behalf) has made any representation or other inducement to it to enter into this deed, except for representations or inducements expressly set out in this deed and (to the maximum extent permitted by law) all other representations, warranties and conditions implied by statute or otherwise in relation to any matter relating to this deed, the circumstances surrounding the parties’ entry into it and the transactions contemplated by it are expressly excluded. |
(b) | Each party acknowledges and confirms that it does not enter into this deed in reliance on any representation or other inducement by or on behalf of any other party, except for any representation or inducement expressly set out in this deed. |
Releases |
Carbon Revolution and Carbon Revolution Board Members and officers |
(a) | MergeCo and SPAC each: |
(1) | releases its rights; and |
(2) | agrees with Carbon Revolution that it will not make, and in the case of MergeCo that after the Implementation Date it will procure that each Carbon Revolution Group Member does not make, any claim, |
(3) | any breach of any representations and warranties of Carbon Revolution or any other member of the Carbon Revolution Group in this deed or any breach of any covenant given by Carbon Revolution in this deed; |
(4) | any disclosures containing any statement which is false or misleading whether in content or by omission; or |
(5) | any failure to provide information, |
(b) | Clause 7.1(a) is subject to any Corporations Act restriction and will be read down accordingly. |
(c) | Carbon Revolution receives and holds the benefit of this clause 7.1 to the extent it relates to each Carbon Revolution Indemnified Party as trustee for each of them. |
SPAC and SPAC directors and officers |
(a) | Carbon Revolution and MergeCo: |
(1) | releases its rights; and |
(2) | agrees with the SPAC that it will not make a claim, |
(3) | any breach of any representations and warranties of the SPAC in this deed or any breach of any covenant given by the SPAC in this deed; |
(4) | any disclosure containing any statement which is false or misleading whether in content or by omission; or |
(5) | any failure to provide information, |
(b) | Clause 7.2(a) is subject to any Corporations Act restriction and will be read down accordingly. |
(c) | The SPAC receives and holds the benefit of this clause 7.2 to the extent it relates to each SPAC Indemnified Party as trustee for each of them. |
MergeCo and MergeCo directors and officers |
(a) | Carbon Revolution and SPAC each: |
(1) | releases its rights; and |
(2) | agrees with MergeCo that it will not make a claim, |
(3) | any breach of any representations and warranties of MergeCo in this deed or any breach of any covenant given by MergeCo in this deed; |
(4) | any disclosure containing any statement which is false or misleading whether in content or by omission; or |
(5) | any failure to provide information, |
(b) | Clause 7.2(a) is subject to any Corporations Act restriction and will be read down accordingly. |
(c) | MergeCo receives and holds the benefit of this clause 7.2 to the extent it relates to each MergeCo Indemnified Party as trustee for each of them. |
Public announcement |
Announcement of the Transaction |
(a) | Immediately after the execution of this deed, Carbon Revolution must issue a public announcement in a form which has been agreed to in writing by the SPAC (which agreement must not be unreasonably withheld or delayed). |
(b) | The Carbon Revolution announcement must include a unanimous recommendation by the Carbon Revolution Board to Carbon Revolution Shareholders that, in the absence of a Superior Proposal and |
(c) | Immediately after the execution of this deed, the SPAC must file a Current Report on Form 8-K pursuant to the SEC to report the execution of this deed, in a form which has been agreed to in writing by Carbon Revolution (which agreement must not be unreasonably withheld or delayed). |
(d) | The SPAC Proxy Statement must include a unanimous recommendation by the SPAC Board to the SPAC Shareholders that, in the absence of a SPAC Superior Transaction, SPAC Shareholders vote in favour of the SPAC Proposals and the SPAC Extension Proposal and each SPAC Board Member will vote (or will procure the voting of) all SPAC Shares held by that SPAC Board Member (or in respect of which that SPAC Board member controls the exercise of any voting rights attaching to the SPAC Shares) at the time of the SPAC Shareholders’ Meeting in favour of the SPAC Proposals and SPAC Extension Proposal at the SPAC Shareholders’ Meeting. |
Public announcements |
Required disclosure |
(a) | Where a party is required by applicable law or the Listing Rules to make any announcement or to make any disclosure in connection with the Transaction or any other transaction the subject of this deed or the Scheme, it may do so despite clause 8.2. |
(b) | Before any disclosure is made in reliance on clause 8.3(a), to the extent reasonably practicable and permitted by the relevant law or Listing Rule: |
(1) | the party required to make the disclosure (Disclosing Party) must use best endeavours to notify the other party as soon as reasonably practicable after it becomes aware that disclosure is required; and |
(2) | the Disclosing Party must use best endeavours to give the other party an opportunity to comment on the proposed form of the disclosure and amend any factual inaccuracy, and consider in good faith any other comments of the other party on the form of the disclosure, |
Confidentiality |
Exclusivity |
No shop and no talk |
(a) | (no shop) solicit, invite, encourage or initiate (including by the provision of non-public information to any Third Party) any inquiry, expression of interest, offer, proposal, discussion or other communication by any person in relation to, or which would reasonably be expected to encourage or lead to, in the case of Carbon Revolution an actual, proposed or potential Competing Proposal or in the case of the SPAC, an actual, proposed or potential SPAC Competing Transaction, or communicate to any person an intention to do anything referred to in this clause 10.1(a); or |
(b) | (no talk) subject to clause 10.2: |
(1) | facilitate, participate in or continue any negotiations, discussions or other communications with respect to any inquiry, expression of interest, offer, proposal or discussion with any person in relation to, or which would reasonably be expected to encourage or lead to, in the case of Carbon Revolution, an actual, proposed or potential Competing Proposal or in the case of the SPAC, an actual, proposed or potential SPAC Competing Transaction; |
(2) | negotiate, accept or enter into, or offer or agree to negotiate, accept or enter into, any agreement, arrangement or understanding regarding, in the case of Carbon Revolution an actual, proposed or potential Competing Proposal or in the case of the SPAC, an actual, proposed or potential SPAC Competing Transaction; |
(3) | disclose or otherwise provide or make available any non-public information about the business or affairs of the Carbon Revolution Group or the SPAC (as applicable) to a Third Party (other than a Government Agency that has the right to obtain that information and has sought it) in connection with, with a view to obtaining, or which would reasonably be expected to encourage or lead to the formulation, receipt or announcement of, in the case of Carbon Revolution, an actual, proposed or potential Competing Proposal or in the case of the SPAC, an actual, proposed or potential SPAC Competing Transaction (including, without limitation, providing such information for the purposes of the conduct of due diligence investigations in respect of the Carbon Revolution Group or the SPAC (as applicable)) whether by that Third Party or another person; or |
(4) | communicate to any person an intention to do anything referred to in the preceding paragraphs of this clause 10.1(b), |
Fiduciary exception |
(a) | in relation to an actual, proposed or potential Competing Proposal, the Carbon Revolution Board determines acting in good faith that: |
(1) | after consultation with its advisers, such actual, proposed or potential Competing Proposal is a Superior Proposal or could reasonably be expected to become a Superior Proposal; and |
(2) | after receiving written legal advice from its external legal advisers, compliance with that clause would, or would be reasonably likely to, constitute a breach of any of the fiduciary or statutory duties of the Carbon Revolution Board Members; or |
(b) | in relation to an actual, proposed or potential SPAC Competing Transaction, the SPAC Board determines acting in good faith that: |
(1) | after consultation with its advisers, such actual, proposed or potential SPAC Competing Transaction is a SPAC Superior Transaction or could reasonably be expected to become a SPAC Superior Transaction; and |
(2) | after receiving written legal advice from its external legal advisers, compliance with that clause would, or would be reasonably likely to, constitute a breach of any of the fiduciary or statutory duties of the SPAC Board Members, |
(c) | the actual, proposed or potential Competing Proposal or SPAC Competing Transaction (as applicable) was not directly or indirectly brought about by, or facilitated by, a breach of clause 10.1(a); and |
(d) | each action or inaction taken in reliance on this clause 10.2 is notified to the other party as soon as reasonably practicable (and in any event within 48 hours). |
Notification of approaches |
(a) | During the Exclusivity Period, Carbon Revolution and the SPAC must as soon as possible (and in any event within 24 hours) notify the other party in writing if it, any of its Related Bodies Corporate or any of their respective Related Persons, becomes aware of any: |
(1) | negotiations, discussions or other communications, approaches or attempt to initiate any negotiations, discussions or other communications, or intention to make such an approach or attempt to initiate any negotiations, discussions or other communications in respect of any inquiry, expression of interest, offer, proposal or discussion in the case of Carbon Revolution, in relation to a Competing Proposal or in the case of the SPAC, in relation to a SPAC Competing Transaction; |
(2) | proposal made to Carbon Revolution or the SPAC (as applicable), any of their Related Bodies Corporate or any of their respective Related Persons in connection with, or in respect of any exploration or completion of, in the case of Carbon Revolution, an actual, proposed or potential Competing Proposal or in the case of the SPAC, a SPAC Competing Transaction; or |
(3) | provision by Carbon Revolution or the SPAC (as applicable), any of their Related Bodies Corporate or any of their respective Related Persons of any non-public information concerning the business or operations of the Carbon Revolution Group or the SPAC (as applicable) to any Third Party (other than a Government Agency) in connection with, in the case of Carbon Revolution, an actual, proposed or potential Competing Proposal or in the case of the SPAC, a SPAC Competing Transaction, |
(b) | A notification given under clause 10.3(a) must include the identity of the relevant person making or proposing the relevant actual, proposed or potential Competing Proposal or SPAC Competing Transaction (as applicable), together with all material terms and conditions of the actual, proposed or potential Competing Proposal or SPAC Competing Transaction (including price and form of consideration, conditions precedent, proposed deal protection arrangements and timetable), in each case to the extent known by Carbon Revolution or the SPAC (as applicable) or any of their Related Persons. |
(c) | During the Exclusivity Period, Carbon Revolution must also notify the SPAC in writing as soon as possible after it, any of its Related Bodies Corporate or any of their respective Related Persons, becomes aware of any material developments in relation to the actual, proposed or potential Competing Proposal, including in respect of any of the information previously provided to the SPAC pursuant to this clause 10.3. |
Matching right |
(a) | Without limiting clause 10.1, during the Exclusivity Period, Carbon Revolution: |
(1) | must not, and must procure that each of its Related Bodies Corporate do not, enter into any legally binding agreement, arrangement or understanding (whether or not in writing) pursuant to which one or more of a Third Party, Carbon Revolution or any Related Body Corporate of Carbon Revolution proposes or propose to undertake or give effect to an actual, proposed or potential Competing Proposal; and |
(2) | must procure that none of the Carbon Revolution Board Members change their recommendation in favour of the Scheme and the Capital Reduction, publicly recommend an actual, proposed or potential Competing Proposal (or recommend against the Transaction) or make any public statement to the effect that they may do so at a future point (provided that a statement that no action should be taken by Carbon Revolution Shareholders pending the assessment of a Competing Proposal by the Carbon Revolution Board or the completion of the matching right process set out in this clause 10.4 shall not contravene this clause 10.4, provided that Carbon Revolution uses its best endeavours to procure that the Carbon Revolution Board publicly reaffirms its recommendation in favour of the Transaction when making any such statement and also subject to any change of recommendation by the Carbon Revolution Board that is permitted by clause 5.11(b)), |
(3) | the Carbon Revolution Board acting in good faith and in order to satisfy what the Carbon Revolution Board Members consider to be their statutory or fiduciary duties (having received written legal advice from its external Australian legal advisers) determines that the Competing Proposal is, or would be reasonably likely to be, an actual, proposed or potential, Superior Proposal; |
(4) | Carbon Revolution has provided the SPAC with the material terms and conditions of the actual, proposed or potential Competing Proposal (including price and form of consideration, conditions precedent, proposed deal protection arrangements and timetable) (in each case, to the extent known) and the identity of the Third Party making the actual, proposed or potential Competing Proposal; |
(5) | Carbon Revolution has given the SPAC at least five Business Days after the date of the provision of the information referred to in clause 10.4(a)(4) to provide a matching or superior counter-proposal to the terms of the actual, proposed or potential Competing Proposal; and |
(6) | the SPAC has not announced or otherwise formally proposed to Carbon Revolution a matching or superior counter-proposal to the terms of the actual, proposed or potential Competing Proposal by the expiry of the five Business Day period in clause 10.4(a)(5). |
(b) | If the SPAC proposes to Carbon Revolution, or announces amendments to the Scheme or a new proposal that constitutes a matching or superior proposal to the actual, proposed or potential Competing Proposal (SPAC Counterproposal) by the expiry of the five Business Day period in clause 10.4(a)(5), Carbon Revolution must procure that the Carbon Revolution Board considers the SPAC Counterproposal and if the Carbon Revolution Board, acting reasonably and in good faith, determines that the SPAC Counterproposal would provide an equivalent or superior outcome for Carbon Revolution Shareholders as a whole compared with the Competing Proposal, taking into account all of the terms and conditions of the SPAC Counterproposal, then Carbon Revolution and SPAC must use their best endeavours to agree the amendments to this deed, the Scheme and the Deed Poll (as applicable) that are reasonably necessary to reflect the SPAC Counterproposal and to implement the SPAC Counterproposal, in each case as soon as reasonably practicable, and Carbon Revolution must procure that each of the Carbon Revolution Board Members continues to recommend the Transaction (as modified by the SPAC Counterproposal) to Carbon Revolution Shareholders. |
(c) | Despite any other provision in this deed, a statement by Carbon Revolution or the Carbon Revolution Board to the effect that: |
(1) | the Carbon Revolution Board has determined that a Competing Proposal is a Superior Proposal and has commenced the matching right process set out in this clause 10.4; or |
(2) | Carbon Revolution Shareholders should take no action pending the completion of the matching right process set out in this clause 10.4 (provided that Carbon Revolution uses its best endeavours to procure that the Carbon Revolution Board publicly re-affirms its recommendation in favour of the Transaction when making any such statement), |
(3) | constitute a change, withdrawal, modification or qualification of the recommendation by the Carbon Revolution Board Members or an endorsement of a Competing Proposal; |
(4) | contravene this deed; |
(5) | give rise to an obligation to pay the Reimbursement Fee under clause 11.2; or |
(6) | give rise to a termination right under clause 12.1. |
No current discussions regarding a Competing Proposal or SPAC Competing Transaction |
(a) | is not a party to any agreement, arrangement or understanding with a Third Party entered into for the purpose of facilitating any actual, proposed or potential Competing Proposal or SPAC Competing Transaction (as applicable); |
(b) | is not directly or indirectly participating in any discussions, negotiations or other communications, and has terminated any existing discussions, negotiations or other communications, in relation to any actual, proposed or potential Competing Proposal or SPAC Competing Transaction (as applicable), or which could reasonably be expected to lead to a Competing Proposal or SPAC Competing Transaction (as applicable); and |
(c) | has ceased to provide or make available any non-public information to a Third Party where such information was provided for the purpose of facilitating, or could reasonably be expected to lead to, a Competing Proposal or SPAC Competing Transaction (as applicable). |
Compliance with law |
(a) | If it is finally determined by a court, or the Takeovers Panel, that the agreement by the parties under this clause 10 or any part of it: |
(1) | constituted, or constitutes, or would constitute, a breach of the fiduciary or statutory duties of the Carbon Revolution Board; |
(2) | constituted, or constitutes, or would constitute, ‘unacceptable circumstances’ within the meaning of the Corporations Act; or |
(3) | was, or is, or would be, unlawful for any other reason, |
(b) | The parties: |
(1) | must not make or cause to be made, any application to a court or the Takeovers Panel for or in relation to a determination referred to in this clause 10.6; and |
(2) | if any such application is made by a Third Party, use reasonable endeavours to defend or resist such application. |
Provision of information |
(a) | Subject to clause 10.7(b), during the Exclusivity Period, Carbon Revolution must as soon as possible and in any event within two Business Days of it being disclosed or provided to a Third Party, make available to the SPAC: |
(1) | in the case of written materials, a copy of; and |
(2) | in any other case, a written statement of, |
(b) | During the Exclusivity Period, Carbon Revolution must not, and must ensure that each of its Related Persons and Related Bodies Corporate and the Related Persons of those Related Bodies Corporate do not, directly or indirectly disclose or otherwise provide or make available any non-public information about the business or affairs of the Carbon Revolution Group to a Third Party in connection with an actual, proposed or potential Competing Proposal unless: |
(1) | permitted by clause 10.2; and |
(2) | before that information is disclosed or otherwise provided or made available to that Third Party, the Third Party has entered into a confidentiality agreement with Carbon Revolution that contains obligations on the Third Party that are on no less onerous terms in any material respect than the obligations of the SPAC under the Confidentiality Agreement. |
Usual provision of information |
(a) | making presentations or providing information to, engaging or negotiating the terms of any transaction with, Third Parties for the purposes of obtaining the Bridge Financing; |
(b) | providing any information to its Related Persons; |
(c) | providing any information to any Government Agency; |
(d) | providing any information required to be provided by any applicable law, including to satisfy its obligations under the Listing Rules or to any Government Agency; |
(e) | providing any information to its auditors, customers, financiers, joint venturers and suppliers acting in that capacity in the ordinary course of business; or |
(f) | making presentations to, or responding to enquiries from, brokers, portfolio investors, analysts and other third parties, and engaging with financiers and potential financiers, in the ordinary course of business or promoting the merits of the Transaction. |
Reimbursement Fee |
Background to Reimbursement Fee |
(a) | The SPAC and Carbon Revolution acknowledge that, if they enter into this deed and the Scheme is subsequently not implemented, each of them will incur significant costs, including those set out in clause 11.5. |
(b) | In the circumstances referred to in clause 11.1(a), each of Carbon Revolution and the SPAC has requested from the other party that provision be made for the payments outlined in clause 11.2 and 11.3 (as applicable), without which neither of them would have entered into this deed or otherwise agreed to implement the Scheme. |
(c) | Each of the SPAC and Carbon Revolution acknowledges having taken advice from its external legal advisers and Financial Adviser, that the implementation of the Scheme will provide benefits to it and its Shareholders and that it is appropriate for them to agree to the payments referred to in clause 11.2 and 11.3 (as applicable) in order to secure the other party’s participation in the Transaction. |
SPAC Reimbursement Fee triggers |
(a) | during the Exclusivity Period, one or more Carbon Revolution Board Members: |
(1) | withdraws, adversely changes, adversely modifies or adversely qualifies their support of the Scheme or their recommendation that Carbon Revolution Shareholders vote in favour of the Scheme; |
(2) | fails to recommend that Carbon Revolution Shareholders vote in favour of the Scheme in the manner described in clause 5.11; |
(3) | makes a public statement: |
(A) | to the effect that he or she no longer supports the Scheme or the Transaction; or |
(B) | supporting, endorsing or recommending (including support by way of accepting or voting, or by way of stating an intention to accept or vote, in respect of any Director Carbon Revolution Shares) a Competing Proposal (whether or not such proposal is stated to be subject to any pre-conditions), |
(4) | the Independent Expert concludes in the Independent Expert’s Report (or any update of, or revision, amendment or supplement to, that report) that the Scheme and Capital Reduction are not in the best interest of Carbon Revolution Shareholders (except where that conclusion is due to the existence, announcement or publication of a Competing Proposal), provided that any Carbon Revolution Board Member’s change of recommendation must only occur after the Independent Expert provides a report to Carbon Revolution (including either the Independent Expert’s Report or any update of, or any revision, amendment or supplement to, that report) that concludes that the Scheme is not in the best interest of Carbon Revolution Shareholders; |
(5) | the failure to recommend, or the change to or withdrawal of a recommendation to vote in favour of the Scheme occurs because of a requirement or request by a court or a Government Agency that one or more Carbon Revolution Board Members abstain or withdraw from making a recommendation that Carbon Revolution Shareholders vote in favour of the Scheme after the date of this deed due to a conflict of interest or duty or due to a material personal interest; |
(6) | Carbon Revolution is entitled to terminate this deed pursuant to clause 12.1(a) or 12.1(d), and has given the appropriate termination notice to the SPAC; |
(7) | this deed is terminated in accordance with clause 12.2; or |
(8) | Carbon Revolution is entitled to terminate this deed pursuant to clause 3.4 and has given the appropriate termination notice to the SPAC; |
(b) | a Competing Proposal of any kind is announced during the Exclusivity Period (whether or not such proposal is stated to be subject to any pre-conditions) and, within 12 months of the date of such announcement, the Third Party or any Associate of that Third Party: |
(1) | completes a Competing Proposal of a kind referred to in any of paragraphs 2, 3 or 4 of the definition of Competing Proposal; or |
(2) | enters into an agreement, arrangement or understanding with Carbon Revolution, with another member of the Carbon Revolution Group or with the board of directors of any of the foregoing entities, which is of the kind referred to in paragraph 5 of the definition of Competing Proposal; |
(c) | the SPAC has terminated this deed pursuant to: |
(1) | 12.1(a)(1) or clause 12.1(b); or |
(2) | clause 3.4, as a result of any of the following Conditions Precedent not being satisfied: 3.1(f) (No Carbon Revolution Prescribed Occurrence), 3.1(h) (No MergeCo Prescribed Occurrence), 3.1(t) (MergeCo Representations and Warranties), 3.1(s) (Carbon Revolution Representations and Warranties), |
(d) | the Court fails to approve the terms of the Scheme for which the approval of the requisite Carbon Revolution Shareholders has been obtained as a result of a material non-compliance by Carbon Revolution with any of its obligations under this deed; or |
(e) | the Scheme becomes Effective but the Merger does not occur due to a breach by Carbon Revolution or MergeCo of its obligations under this deed, the Scheme, the Deed Poll or the BCA. |
Carbon Revolution Reimbursement Fee triggers |
(a) | during the Exclusivity Period, one or more SPAC Board Members: |
(1) | withdraws, adversely changes, adversely modifies or adversely qualifies their support of the Transaction or their recommendation that SPAC Shareholders vote in favour of the SPAC Proposals and SPAC Extension Proposals; or |
(2) | fails to recommend that SPAC Shareholders vote in favour of the SPAC Proposals and SPAC Extension Proposals in the manner described in clause 5.12; or |
(3) | makes a public statement: |
(A) | to the effect that he or she no longer supports the Transaction; or |
(B) | supporting, endorsing or recommending (including support by way of accepting or voting, or by way of stating an intention to accept or vote in respect of any SPAC Shares held by that SPAC Board Member (or in respect of which that SPAC Board Member controls the exercise of any voting rights attaching to the SPAC Shares)) a SPAC Competing Transaction (whether or not such proposal is stated to be subject to any pre-conditions); |
(b) | a SPAC Competing Transaction of any kind is announced during the Exclusivity Period (whether or not such proposal is stated to be subject to any pre-conditions) and, within 12 months of the date of such announcement a SPAC Competing Transaction completes; |
(c) | Carbon Revolution is entitled to terminate this deed and has terminated this deed having given the appropriate termination notice to the SPAC pursuant to: |
(1) | clause 12.1(a)(1); |
(2) | clause 12.1(d); or |
(3) | clause 3.4, as a result of any of the following Conditions Precedent not being satisfied: 3.1(g) (No SPAC Prescribed Occurrence), 3.1(m)(Transaction Documents); 3.1(q) (CEF Agreement) and 3.1(u) (SPAC Representations and Warranties); |
(d) | the Scheme becomes Effective but the Merger does not occur due to a breach by the SPAC of its obligations under this deed, the Scheme, the Deed Poll or the BCA; or |
(e) | the Court fails to approve the terms of the Scheme for which the approval of the requisite Carbon Revolution Shareholders has been obtained as a result of a material non-compliance by the SPAC with any of its obligations under this deed. |
Payment of Reimbursement Fee |
(a) | A demand by a party for payment of the Reimbursement Fee under clause 11.2 or clause 11.3 must: |
(1) | be in writing; |
(2) | be made after the occurrence of the event in that clause giving rise to the right to payment; |
(3) | state the circumstances which give rise to the demand; |
(4) | include the information and evidence required by clause 11.5; and |
(5) | nominate an account in the name of the party to whom the Reimbursement Fee is to be paid. |
(b) | Carbon Revolution must pay the Reimbursement Fee into the account nominated by the SPAC, without set-off or withholding, within five Business Days after receiving a demand for payment where the SPAC is entitled under clause 11.2 to the Reimbursement Fee. |
(c) | The SPAC must pay the Reimbursement Fee into the account nominated by Carbon Revolution, without set-off or withholding, within five Business Days after receiving a demand for payment where Carbon Revolution is entitled under clause 11.3 to the Reimbursement Fee. |
Basis of Reimbursement Fee |
(a) | fees for legal, financial and other professional advice in planning and implementing the Transaction (excluding success fees); |
(b) | reasonable opportunity costs incurred in engaging in the Transaction or in not engaging in other alternative acquisitions or strategic initiatives; |
(c) | costs of management and directors’ time in planning and implementing the Transaction; |
(d) | out of pocket expenses incurred by the Recipient and the Recipient’s employees, advisers and agents in planning and implementing the Transaction; |
(e) | any damage to the Recipient’s reputation associated with a failed transaction and the implications of that damages to the Recipient’s business, |
(f) | the costs actually incurred by the Recipient will be of such a nature that they cannot all be accurately ascertained; and |
(g) | the Reimbursement Fee is a genuine and reasonable pre-estimate of those costs. |
Compliance with law |
(a) | If it is finally determined by a court, or the Takeovers Panel, that the agreement by the parties under this clause 11 or any part of it: |
(1) | constituted, or constitutes, or would constitute, ‘unacceptable circumstances’ within the meaning of the Corporations Act; or |
(2) | was, or is, or would be, unlawful for any other reason, |
(b) | The parties: |
(1) | must not make or cause to be made, any application to a court or the Takeovers Panel for or in relation to a determination referred to in this clause 11.6; and |
(2) | if any such application is made by a Third Party, use reasonable endeavours to defend or resist such application. |
Reimbursement Fees payable only once |
(a) | Where the Reimbursement Fee becomes payable to the SPAC under clause 11.2 and is actually paid to the SPAC, the SPAC cannot make any claim against Carbon Revolution for payment of any subsequent Reimbursement Fee. |
(b) | Where the Reimbursement Fee becomes payable to Carbon Revolution under clause 11.3 and is actually paid to Carbon Revolution, Carbon Revolution cannot make any claim against the SPAC for payment of any subsequent Reimbursement Fee. |
Other Claims |
(a) | Despite anything to the contrary in this deed or the BCA, the maximum aggregate amount which Carbon Revolution is required to pay in relation to this deed and the BCA (including as a result of any breach of this deed or the BCA by Carbon Revolution or any other Claim) is the amount of the Reimbursement Fee and in no event will the aggregate liability of Carbon Revolution under or in connection with this deed and the BCA or any Claim exceed the amount of the Reimbursement Fee. |
(b) | Despite anything to the contrary in this deed or the BCA, the maximum aggregate amount which the SPAC is required to pay in relation to this deed and the BCA (including as a result of any breach of this deed or the BCA by the SPAC or any other Claim) is the amount of the Reimbursement Fee and in no event will the aggregate liability of the SPAC under or in connection with this deed and the BCA or any Claim exceed the amount of the Reimbursement Fee. |
Exclusive remedy |
(a) | Where the Reimbursement Fee is paid to the SPAC under clause 11.2 (or would be payable if a demand was made), the SPAC cannot make any Claim (other than a claim for specific performance) against Carbon Revolution or the Carbon Revolution Indemnified Parties in relation to the event or occurrence referred to in clause 11.2. |
(b) | Where the Reimbursement Fee is paid to Carbon Revolution under clause 11.3 (or would be payable if a demand was made), Carbon Revolution cannot make any Claim (other than a claim for specific performance) against the SPAC or the SPAC Indemnified Parties in relation to the event or occurrence referred to in clause 11.3. |
No Reimbursement Fee if Scheme Effective |
Claims under the Deed Poll |
Termination |
Termination for material breach |
(a) | Carbon Revolution or the SPAC may terminate this deed by written notice to the other parties: |
(1) | at any time before 8.00am on the Second Court Date, if: |
(A) | the SPAC (in the case of a termination by Carbon Revolution); or |
(B) | Carbon Revolution, MergeCo or Merger Sub (in the case of termination by the SPAC), |
(2) | at any time before 8.00am on the Second Court Date if the Court or another Australian, United States or Irish Government Agency (including any other court) has taken any action permanently restraining or otherwise prohibiting or preventing the Transaction, or has refused to do anything necessary to permit the Transaction to be implemented by the End Date, and the action or refusal has become final and cannot be appealed or reviewed or the party, acting reasonably, believes that there is no realistic prospect of an appeal or review succeeding by the End Date; |
(3) | in the circumstances set out in, and in accordance with, clause 3.4; |
(4) | if the Effective Date for the Scheme has not occurred, or will not occur, on or before the End Date; or |
(5) | if Carbon Revolution Shareholders have not agreed to the Scheme and Capital Reduction at the Scheme Meeting by the requisite majorities and notice is not given or sent under clause 3.4(d). |
(b) | the SPAC may terminate this deed by written notice to Carbon Revolution and MergeCo at any time before 8.00am on the Second Court Date if: |
(1) | there is a Carbon Revolution Prescribed Occurrence or Carbon Revolution Regulated Event; |
(2) | any Carbon Revolution Board Member: |
(A) | fails to recommend the Scheme and the Capital Reduction; |
(B) | withdraws, adversely changes, adversely modifies or adversely qualifies their support of the Scheme or their recommendation that Carbon Revolution Shareholders vote in favour of the Scheme; or |
(C) | makes a public statement indicating that he or she no longer recommends the Transaction or recommends, supports or endorses another transaction (including any Competing Proposal but excluding a statement that no action should be taken by Carbon Revolution Shareholders pending assessment of a Competing Proposal by the Carbon Revolution Board or the completion of the matching right process set out in clause 10.4), |
(3) | if in any circumstances (including, for the avoidance of doubt, where permitted by clause 10.4) Carbon Revolution enters into any legally binding agreement, arrangement or understanding giving effect to any actual, proposed or potential Competing Proposal. |
(c) | Carbon Revolution may terminate this deed by written notice to the SPAC and MergeCo at any time before 8.00am on the Second Court Date if the Carbon Revolution Board or a majority of the Carbon Revolution Board has changed, withdrawn, modified or qualified its recommendation as permitted |
(d) | Carbon Revolution may terminate this deed by written notice to the SPAC and MergeCo: |
(1) | if there is a SPAC Prescribed Occurrence; |
(2) | Any SPAC Board Member: |
(A) | fails to recommend the Transaction or that SPAC Shareholders vote in favour of the SPAC Proposals and SPAC Extension Proposals in the manner described in clause 5.12; |
(B) | withdraws, adversely changes, adversely modifies or adversely qualifies their support of the Transaction or their recommendation that SPAC Shareholders vote in favour of the SPAC Proposals and SPAC Extension Proposals; or |
(C) | makes a public statement to the effect that he or she no longer supports the Transaction or supporting, endorsing or recommending (including support by way of accepting or voting, or by way of stating an intention to accept or vote in respect of any SPAC Shares held by that SPAC Board Member (or in respect of which that SPAC Board Member controls the exercise of any voting rights attaching to the SPAC Shares)) a SPAC Competing Transaction (whether or not such proposal is stated to be subject to any pre-conditions), |
(3) | if in any circumstances the SPAC enters into any legally binding agreement, arrangement or understanding giving effect to any actual, proposed or potential SPAC Competing Transaction; or |
(4) | if by 8 March 2023 the SPAC has not obtained SPAC Shareholder approval to extend the deadline for completing a business combination (as set forth in its Amended and Restated Memorandum and Articles of Association, effective 3 March 2021) as necessary to at least 31 May 2023 or such other date as the parties reasonably agree, or if, following exercise by SPAC Shareholders of their Redemption Rights in accordance with the SPAC Memorandum and Articles of Association in connection with the approval of the SPAC Extension Proposal, the SPAC fails to continue to satisfy the continued listing standards of the NYSE, NYSE American or NASDAQ or would not continue to satisfy such continued listing standards until the Implementation Date, including the Continued Listing Criteria applicable to “Acquisition Companies” set forth in Section 802.01 of the NYSE Listed Company Manual. |
Other termination events |
(a) | This deed is terminable if agreed to in writing by the SPAC and Carbon Revolution. |
(b) | This deed terminates automatically, with immediate effect, if the BCA has been terminated in accordance with its terms. |
Effect of termination |
(a) | each party will be released from its obligations under this deed, except that this clause 12.3, and clauses 1, 6.4 to 6.7, 7, 9, 11, 13, 14, 15 and 16 (except 16.9), will survive termination and remain in force; |
(b) | each party will retain the rights it has or may have against the other parties in respect of any past breach of this deed; and |
(c) | in all other respects, all future obligations of the parties under this deed will immediately terminate and be of no further force and effect including any further obligations in respect of the Scheme. |
Termination |
No other termination |
Duty, costs and expenses |
Stamp duty |
(a) | must pay all stamp duties and any fines and penalties with respect to stamp duty in respect of this deed or the Scheme or the steps to be taken under this deed or the Scheme; and |
(b) | indemnifies Carbon Revolution against any liability arising from its failure to comply with clause 13.1(a). |
Costs and expenses |
GST |
(a) | Any consideration or amount payable under this deed, including any non-monetary consideration |
(b) | Unless stated otherwise, all monetary amounts specified in this deed are specified exclusive of GST. |
(c) | If GST is or becomes payable on a Supply made under or in connection with this deed, an additional amount (Additional Amount) is payable by the party providing consideration for the Supply (Recipient) equal to the amount of GST payable on that Supply as calculated by the party making the Supply (Supplier) in accordance with the GST Law. |
(d) | The Additional Amount payable under clause 14(c) is payable at the same time and in the same manner as the Consideration for the Supply, and the Supplier must provide the Recipient with a Tax Invoice. However, the Additional Amount is only payable on receipt of a valid Tax Invoice. |
(e) | If for any reason (including the occurrence of an Adjustment Event) the amount of GST payable on a Supply (taking into account any Decreasing or Increasing Adjustments in relation to the Supply) varies from the Additional Amount payable by the Recipient under clause 14(c): |
(1) | the Supplier must provide a refund or credit to the Recipient, or the Recipient must pay a further amount to the Supplier, as applicable; |
(2) | the refund, credit or further amount (as the case may be) will be calculated by the Supplier in accordance with the GST Law; and |
(3) | the Supplier must notify the Recipient of the refund, credit or further amount within 14 days after becoming aware of the variation to the amount of GST payable. Any refund or credit must accompany such notification or the Recipient must pay any further amount within seven days after receiving such notification, as applicable. If there is an Adjustment Event in relation to the Supply, the requirement for the Supplier to notify the Recipient will be satisfied by the Supplier issuing to the Recipient an Adjustment Note within 14 days after becoming aware of the occurrence of the Adjustment Event. |
(f) | Despite any other provision in this deed if an amount payable under or in connection with this deed (whether by way of reimbursement, indemnity or otherwise) is calculated by reference to an amount |
(g) | Any reference in this clause to an Input Tax Credit to which a party is entitled includes an Input Tax Credit arising from a Creditable Acquisition by that party but to which the Representative Member of a GST Group of which the party is a member is entitled. |
(h) | Any term starting with a capital letter in this clause 14 that is not defined in this clause 14 has the same meaning as the term has in the A New Tax System (Goods & Services Tax) Act 1999 (Cth). |
Notices |
Form of Notice |
(a) | in writing and in English; and |
(b) | addressed to that party in accordance with the details nominated below (or any alternative details nominated to the sending party by Notice): |
Party | | | Address | | | Addressee | | | Email | | ||||
Carbon evolution or MergeCo 75 Pigdons Road, Warn Ponds VIC 3126 Australia | | | David Nock, General Counsel and Company Secretary | | | David Nock | | | david.nock@carbonrev.com | | ||||
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with a copy to: Herbert Smith Freehills | | | Level 24, 80 Collins St, Melbourne VIC 3000 | | | Michael Ziegelaar Alex Mackinnon | | | michael.ziegelaar@hsf.com alexander.mackinnon@hsf.com | | ||||
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SPAC | | | 999 Vanderbilt Beach Road, Suite 200 Naples, FL 34108 | | | William P Russell Jr; Sanjay Morey | | | wrussell@twinridgecapital.com; smorey@twinridgecapital.com | | ||||
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with a copy to: Kirkland & Ellis | | | 601 Lexington Avenue New York, NY 10022 Kirkland & Ellis 609 Main St Houston, TX 77002 | | | Peter Seligson Adam Larson Rami Totari | | | peter.segilson@kirkland.com; adam.larson@kirkland.com; rami.totari@kirkland.com | | ||||
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How Notice must be given and when Notice is received |
(a) | A Notice must be given by one of the methods set out in the table below. |
(b) | A Notice is regarded as given and received at the time set out in the table below. |
(c) | on a day that is not a Business Day, the Notice will instead be regarded as given and received at 9.00am on the next Business Day (or 8.00am if the next Business Day is the Second Court Date); or |
(d) | outside the period between 9.00am and 5.00pm (addressee’s time) on a Business Day (business hours period), then, other than in respect of any Notice given on, and prior to 8.00am on, the Second Court Date, the Notice will instead be regarded as given and received at the start of the following business hours period. |
Method of giving Notice | | | When Notice is regarded as given and received | |||
By email to the | | | The first to occur of: | |||
nominated email | | | 1 | | | the sender receiving an automated message confirming delivery; or |
address | | | 2 | | | two hours after the time that the email was sent (as recorded on the device from which the email was sent) provided that the sender does not, within the period, receive an automated message that the email has not been delivered. |
Notice must not be given by electronic communication |
General |
Governing law and jurisdiction |
(a) | This deed is governed by the law in force in Victoria, Australia. |
(b) | Each party irrevocably submits to the non-exclusive jurisdiction of courts exercising jurisdiction in Victoria, Australia and courts of appeal from them in respect of any proceedings arising out of or in connection with this deed. Each party irrevocably waives any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum. |
Service of process |
(a) | Without preventing any other mode of service, any document in an action (including any writ of summons or other originating process or any third or other party notice) may be served on any party by being delivered to or left for that party at its address for service of Notices under clause 15. |
(b) | The SPAC irrevocably appoints Ashurst Australia (whose details are below) as its agent for the service of process in Australia in relation to any matter arising out of this deed. If Ashurst Australia ceases to be able to act as such or have an address in Australia, the SPAC agrees to appoint a new process agent in Australia and deliver to the other parties within 5 Business Days a copy of a written acceptance of appointment by the process agent, upon receipt of which the new appointment becomes effective for the purpose of this deed. The SPAC must inform the other parties in writing of any change in the address of its process agent within 20 Business Days of the change. |
(c) | MergeCo irrevocably appoints Carbon Revolution as its agent for the service of process in Australia in relation to any matter arising out of this deed. If Carbon Revolution ceases to be able to act as such or have an address in Australia, MergeCo agrees to appoint a new process agent in Australia and deliver to the other parties within 5 Business Days a copy of a written acceptance of appointment by the process agent, upon receipt of which the new appointment becomes effective for the purpose of this deed. MergeCo must inform the other parties in writing of any change in the address of its process agent within 20 Business Days of the change. |
No merger |
Invalidity and enforceability |
(a) | If any provision of this deed is invalid under the law of any jurisdiction the provision is enforceable in that jurisdiction to the extent that it is not invalid, whether it is in severable terms or not. |
(b) | Clause 16.4(a) does not apply where enforcement of the provision of this deed in accordance with clause 16.4(a) would materially affect the nature or effect of the parties’ obligations under this deed. |
Waiver |
Term | | | Meaning |
conduct | | | includes delay in the exercise of a right. |
right | | | any right arising under or in connection with this deed and includes the right to rely on this clause. |
waiver | | | includes an election between rights and remedies, and conduct which might otherwise give rise to an estoppel. |
Variation |
Assignment of rights |
(a) | A party may not assign, novate, declare a trust over or otherwise transfer or deal with any of its rights or obligations under this deed without the prior written consent of the other parties or as expressly provided in this deed. |
(b) | A breach of clause 16.7(a) by a party shall be deemed to be a material breach for the purposes of clause 12.1(a)(1). |
(c) | Clause 16.7(b) does not affect the construction of any other part of this deed. |
No third party beneficiary |
Further action to be taken at each party’s own expense |
Entire agreement |
Counterparts |
(a) | This deed may be executed in any number of counterparts. |
(b) | This deed is binding on the parties on the exchange of duly executed counterparts. |
(c) | The parties agree that a copy of an original executed counterpart sent by email to the email address of the other parties specified in clause 15 instead of the original is sufficient evidence of the execution of the original and may be produced in evidence for all purposes in place of the original. |
Relationship of the parties |
(a) | Nothing in this deed gives a party authority to bind any other party in any way. |
(b) | Nothing in this deed imposes any fiduciary duties on a party in relation to any other party. |
Remedies cumulative |
Exercise of rights |
(a) | Unless expressly required by the terms of this deed, a party is not required to act reasonably in giving or withholding any consent or approval or exercising any other right, power, authority, discretion or remedy, under or in connection with this deed. |
(b) | A party may (without any requirement to act reasonably) impose conditions on the grant by it of any consent or approval, or any waiver of any right, power, authority, discretion or remedy, under or in connection with this deed. Any conditions must be complied with by the party relying on the consent, approval or waiver. |
Table of contents | | | |
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1 | Definitions |
1.1 | Definitions |
Term | | | Meaning | ||||||
Accounting Standards | | | the accounting standards required under the Corporations Act and the requirements of the Corporations Act about the preparation and contents of financial reports (including the Approved Accounting Standards issued by the Australian Accounting Standards Board) and other mandatory professional reporting requirements issued by the joint accounting bodies (including the Australian Accounting Standards issued either jointly by CPA Australia and the Institute of Chartered Accountants in Australia or by the Australian Accounting Research Foundation on behalf of CPA Australia and the Institute of Chartered Accountants in Australia). | ||||||
Adviser | | | any individual who is engaged to provide professional advice (including accounting, consulting, financial or legal advice). | ||||||
ASIC | | | the Australian Securities and Investments Commission. | ||||||
Associate | | | has the meaning set out in section 12 of the Corporations Act as if subsection 12(1) of the Corporations Act included a reference to this deed and the designated body was the body in this deed with reference to whom the associate reference was being interpreted. | ||||||
ASX | | | ASX Limited ABN 98 008 624 691 and, where the context requires, the financial market that it operates. | ||||||
ATO Ruling | | | the class ruling sought by Carbon Revolution from the Commissioner of Taxation confirming the availability of scrip-for-scrip rollover relief under Subdivision 124-M of the Tax Act for eligible Scheme Shareholders in respect of the exchange of the Carbon Revolution Shares for MergeCo Shares pursuant to the Scheme. | ||||||
Authorisations | | | any approval, licence, consent, authority or permit. | ||||||
BCA | | | the Business Combination Agreement entered into between Carbon Revolution, MergeCo, Merger Sub and the SPAC on or about the date of this deed. | ||||||
Bridge Financing | | | the issuance of equity, debt, convertible securities or any similar security by the Carbon Revolution Group and/or MergeCo or the entry by the Carbon Revolution Group and/or MergeCo into any other transaction or arrangement with the primary purpose of providing up to USD$30 million worth of funding to the Carbon Revolution Group between the date of this deed and the Implementation Date. | ||||||
Business Day | | | a business day that is not a Saturday, Sunday or a public holiday or bank holiday in Victoria, Australia; Delaware, United States of America; or Dublin, Ireland. | ||||||
Capital Reduction | | | the equal reduction of capital under section 256B of the Corporations Act, pursuant to which all Carbon Revolution Shares are to be cancelled in accordance with the terms of the Capital Reduction Resolution. |
Term | | | Meaning | ||||||
Capital Reduction Resolution | | | the resolution of Carbon Revolution Shareholders to approve the Capital Reduction. | ||||||
Carbon Revolution Board | | | the board of directors of Carbon Revolution and a Carbon Revolution Board Member means any director of Carbon Revolution comprising part of the Carbon Revolution Board. | ||||||
Carbon Revolution Group | | | Carbon Revolution and each of its Subsidiaries, and a reference to a Carbon Revolution Group Member or a member of the Carbon Revolution Group is to Carbon Revolution or any of its Subsidiaries. | ||||||
Carbon Revolution Indemnified Parties | | | Carbon Revolution, its Subsidiaries and their respective directors, officers and employees. | ||||||
Carbon Revolution Information | | | information regarding the Carbon Revolution Group prepared by Carbon Revolution for inclusion in the Scheme Booklet which for the avoidance of doubt comprises the entirety of the Scheme Booklet other than the SPAC Information, MergeCo Information, the Independent Expert’s Report, the Investigating Accountant’s Report or any description of the taxation effect of the Transaction on Scheme Shareholders prepared by an external adviser to Carbon Revolution. | ||||||
Carbon Revolution Locked-Up Persons | | | each of: | ||||||
| 1 | | | James Douglas; | |||||
| 2 | | | Jacob Dingle; | |||||
| 3 | | | Lucia Cade; | |||||
| 4 | | | Dale McKee; | |||||
| 5 | | | Mark Bernhard; | |||||
| 6 | | | David Nock; | |||||
| 7 | | | Gerard Buckle; | |||||
| 8 | | | Ashley Denmead; | |||||
| 9 | | | Jo Markham; | |||||
| 10 | | | Andrew Higginbotham; | |||||
| 11 | | | Ron Collins; | |||||
| 12 | | | Dave French; | |||||
| 13 | | | Sam Casabene; and | |||||
| 14 | | | Jesse Kalkman. | |||||
Carbon Revolution Locked-Up Shareholders | | | has the meaning given in clause 5.5(a). | ||||||
Carbon Revolution Material Adverse Effect | | | any event, change, condition matter, circumstance or thing occurring before, on or after the date of this deed which has, or would be reasonably likely to have, either individually or in aggregate with all such events, changes, conditions, matters, circumstances or things of a like kind that have occurred or are reasonably likely to occur, has had or would be reasonably likely to have an adverse effect on the consolidated net assets of the Carbon Revolution Group (taken as a whole and compared to what they would have been absent the event, change, condition, matter, circumstance or thing) of at least $20 million. | ||||||
Term | | | Meaning | ||||||
Carbon Revolution Nominees | | | each Carbon Revolution Board Member, each of whom has been nominated by Carbon Revolution for appointment to the MergeCo Board for the purposes of clause 5.10. | ||||||
Carbon Revolution Prescribed Occurrence | | | other than as: | ||||||
| 1 | | | required, expressly permitted or expressly contemplated by this deed, the Transaction or the transactions contemplated by either; | |||||
| 2 | | | Fairly Disclosed in the Disclosure Materials; or | |||||
| 3 | | | agreed to in writing by the SPAC, | |||||
| 4 | | | required by any applicable law, regulation or contract disclosed in the Disclosure Materials; or | |||||
| 5 | | | Fairly Disclosed by Carbon Revolution in an announcement made by Carbon Revolution to ASX in the one year period prior to the date of this deed, | |||||
| | | the occurrence of any of the following: | ||||||
| 6 | | | Carbon Revolution converting all or any of its shares into a larger or smaller number of shares; | |||||
| 7 | | | a Carbon Revolution Group Member resolving to reduce its share capital in any way; | |||||
| 8 | | | a Carbon Revolution Group Member: | |||||
| | | • | | | entering into a buy-back agreement; or | |||
| | | • | | | resolving to approve the terms of a buy-back agreement under the Corporations Act; | |||
| 9 | | | a member of the Carbon Revolution Group issuing shares or securities convertible into shares, or granting a performance right or an option over its shares, or agreeing to make such an issue or grant such an option or performance right, other than: | |||||
| | | • | | | in connection with the Bridge Financing; | |||
| | | • | | | to a directly or indirectly wholly-owned Subsidiary of Carbon Revolution for the purposes of implementing the Transaction; | |||
| | | • | | | on vesting or exercise of, or in respect of, a Carbon Revolution Performance Right; | |||
| | | • | | | to any director or employee in accordance with existing arrangements or in the ordinary course (which existing arrangements or ordinary course remuneration cycle has been Fairly Disclosed in the Disclosure Materials); | |||
| 10 | | | a member of the Carbon Revolution Group disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property; | |||||
| 11 | | | a member of the Carbon Revolution Group granting a Security Interest, or agreeing to grant a Security Interest, in the whole, or a substantial part, of its business or property (whether by way of a single transaction or a series of related transactions), other than in connection with existing facilities (or the refinancing of existing facilities), a lien which arises by operation of law or legislation securing an obligation that is not yet due, in connection with the Bridge Financing or in the ordinary course of business; or | |||||
| 12 | | | an Insolvency Event occurs in relation to a Carbon Revolution Group Member; or | |||||
| 13 | | | a Carbon Revolution Group Member directly or indirectly authorises, commits or agrees to take any of the actions referred to in paragraphs 6 to 12 above. | |||||
Carbon Revolution Registry | | | Link Market Service Limited ACN 083 214 537. | ||||||
Term | | | Meaning | ||||||
Carbon Revolution Regulated Event | | | other than as: | ||||||
| 1 | | | required or permitted by clause 5.6(b) or any other provision of this deed, the Scheme or the transactions contemplated by either; | |||||
| 2 | | | Fairly Disclosed in the Disclosure Materials; | |||||
| 3 | | | agreed to in writing by the SPAC; | |||||
| 4 | | | required by any applicable law, regulation, contract disclosed in the Disclosure Materials or by a Government Agency; | |||||
| 5 | | | Fairly Disclosed by Carbon Revolution in an announcement made by Carbon Revolution to ASX in the one year period prior to the date of this deed; or | |||||
| 6 | | | in the ordinary course of business, | |||||
| the occurrence of any of the following: | ||||||||
| 7 | | | acquisitions and disposals: a member of the Carbon Revolution Group acquiring, leasing or disposing of any business, assets, entity or undertaking, whether in one or a number of transactions, where the amounts or the value involved, or reasonably expected to be involved, in such transaction or transactions exceeds US$5 million (individually or in aggregate); | |||||
| 8 | | | capex: any member of the Carbon Revolution Group incurring, or committing to incur, in aggregate, capital expenditure which is, or is reasonably expected to be, in excess of US$5 million (other than any capital expenditure which has been Fairly Disclosed in the Disclosure Materials) or which has been committed under a contract entered into prior to the date of this deed; | |||||
| 9 | | | disputes: a member of the Carbon Revolution Group: | |||||
| | | • | | | waiving any material third party default where the financial impact on the Carbon Revolution Group will be in excess of US$2.5 million (individually or in aggregate); or | |||
| | | • | | | accepting as a compromise of a matter less than the full compensation due to a member of the Carbon Revolution Group where the financial impact of the compromise on the Carbon Revolution Group is more than US$2.5 million (individually or in aggregate), | |||
| | | other than as claimant in respect of the collection of trade debts arising in the ordinary course of the Carbon Revolution Group’s business; | ||||||
| 10 | | | Financial Indebtedness: a member of the Carbon Revolution Group incurring any additional, increasing any existing or issuing any additional Financial Indebtedness other than the increased utilisation of, draw down under or refinancing of existing facilities or in connection with the Bridge Financing or where any additional Financial Indebtedness is less than US$2 million; | |||||
| 11 | | | financial accommodation: a member of the Carbon Revolution Group providing financial accommodation other than to members of the Carbon Revolution Group (irrespective of what form of Financial Indebtedness that accommodation takes); | |||||
| 12 | | | accounting: a member of the Carbon Revolution Group changing any accounting method, practice or principle used by it, other than as a result of changes in generally accepted accounting standards or principles or the interpretation of any of them; | |||||
| 13 | | | employees: a member of the Carbon Revolution Group | |||||
| | | • | | | entering into any new employment agreement, or terminating any employment agreement, with an individual in respect of which the aggregate annual non-discretionary compensation is greater than A$500,000, except pursuant to contractual arrangements or Carbon Revolution’s policies and guidelines in effect on the date of this deed (to the extent such arrangements, policies and guidelines are Fairly Disclosed in the Disclosure Materials); |
Term | | | Meaning | ||||||
| | | | • | | | paying any bonus to, or increasing the compensation of, any officer or employee of any Carbon Revolution Group Member except where it is consistent with past practice and industry practice or pursuant to contractual arrangements or Carbon Revolution’s policies and guidelines in effect on the date of this deed (to the extent such arrangements, policies and guidelines are Fairly Disclosed in the Disclosure Materials)) (Relevant Bonuses and Increases), where the aggregate value of all such Relevant Bonuses and Increases exceeds US$1 million per annum; | ||
| | | | • | | | granting to any officer or employee of any Carbon Revolution Group Member any severance, termination or retention pay or superannuation entitlements (or increasing any such existing entitlements) except pursuant to contractual arrangements on Carbon Revolution’s policies and guidelines in effect on the date of this deed (to the extent such arrangements, policies and guidelines are Fairly Disclosed in the Disclosure Materials), or required by law or the terms of an award or enterprise bargaining agreement or Australian workplace agreement (or an equivalent or similar agreement or arrangement in any other jurisdiction); or | ||
| | | | • | | | establishing, adopting, entering into or amending in any material respect any enterprise bargaining agreement of any Carbon Revolution Group Member or relating to the officers or employees of any Carbon Revolution Group Member; | ||
| | 14 | | | new lines of business: a member of the Carbon Revolution Group commencing business activities not already carried out as at the date of this deed, whether by way of acquisition or otherwise; | ||||
| | 15 | | | tax elections: a member of the Carbon Revolution Group makes, changes or revokes any material Tax election or settles or compromises any material liability relating to a Tax dispute, files any amendment to a material Tax Return, enters into any Tax sharing, indemnification, allocation or similar agreement or arrangement, or consents to any extension or waiver of the limitation period applicable to or relating to any Tax audit, dispute, litigation or other proceeding; | ||||
| | 16 | | | related party transactions: a member of the Carbon Revolution Group entering into, or resolving to enter into, a transaction with any related party of Carbon Revolution (other than a related party which is a member of the Carbon Revolution Group), as defined in section 228 of the Corporations Act (excluding any transaction involving paying amounts or conferring benefits to directors of Carbon Revolution in accordance with their employment or engagement terms or their statutory or other entitlements); or | ||||
| | 17 | | | advisor arrangements: a member of the Carbon Revolution Group amending in any respect which is materially adverse to Carbon Revolution any arrangement with its Financial Adviser, or entering into arrangements with a new Financial Adviser, in respect of the Transaction, | ||||
| | provided that where any paragraph in this definition refers to a dollar amount, that amount will be increased if the parties agree, for the purposes of clause 5.1, to an Implementation Date that is later than the Implementation Date set out in the Timetable, according to the formula A=N*B/C, where: A = the increased dollar amount; N = the dollar amount set out in the relevant paragraph above; B = the number of days from the date of this deed to the revised Implementation Date; and |
Term | | | Meaning | ||||||
| | C = the number of days from the date of this deed to the original Implementation Date. | |||||||
Carbon Revolution Representations and Warranties | | | the representations and warranties of Carbon Revolution set out in Schedule 3, as each is qualified by clause 6.4. | ||||||
Carbon Revolution Share | | | a fully paid ordinary share in the capital of Carbon Revolution. | ||||||
Carbon Revolution Share Register | | | the register of members of Carbon Revolution maintained in accordance with the Corporations Act. | ||||||
Carbon Revolution Shareholder | | | each person who is registered as the holder of a Carbon Revolution Share in the Carbon Revolution Share Register. | ||||||
CEF Agreement | | | The agreement between SPAC and YA II PN, LTD dated on or about the date of this deed pursuant to which YA II PN, LTD has agreed to provide a committed equity facility in an aggregate amount of up to $60 million. In the event that the CEF Agreement is terminated by either party, SPAC may enter into a definitive document with a different investor, pursuant to which such investor will agree to provide a committed equity facility in an aggregate amount of $60 million, provided that any such agreement with is on terms no less favourable to MergeCo than the CEF Agreement between the SPAC and YA II PN, LTD, and such definitive document will be the CEF Agreement within this deed | ||||||
Claim | | | any claim, demand, legal proceedings or cause of action (including any claim, demand, legal proceedings or cause of action: | ||||||
| | | | | |||||
| 1 | | | based in contract, including breach of warranty; | |||||
| | | | | |||||
| 2 | | | based in tort, including misrepresentation or negligence; | |||||
| | | | | |||||
| 3 | | | under common law or equity; or | |||||
| | | | | |||||
| 4 | | | under statute, including the Australian Consumer Law (being Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA)) or Part VI of the CCA, or like provision in any state or territory legislation), | |||||
| in any way relating to this deed or the Transaction, and includes a claim, demand, legal proceedings or cause of action arising under an indemnity in this deed. | ||||||||
Closing | | | has the meaning given to that term in the BCA. | ||||||
Term | | | Meaning | ||||||
Competing Proposal | | | any proposal, offer, agreement, arrangement or transaction (or expression of interest therefor), which, if entered into or completed, would result in a Third Party (either alone or together with any Associate): | ||||||
| 1 | | | directly or indirectly acquiring a Relevant Interest in, or have a right to acquire, a legal, beneficial or economic interest in (including a cash settled equity or similar derivative), or control of 20% or more of the Carbon Revolution Shares or of the share capital of any Subsidiary of Carbon Revolution; | |||||
| 2 | | | acquiring Control of Carbon Revolution or any Subsidiary of Carbon Revolution; | |||||
| 3 | | | directly or indirectly acquiring or becoming the holder of, or otherwise acquiring or having a right to acquire, a legal, beneficial or economic interest in, or control of, all or a substantial part of Carbon Revolution’s business or assets or the business or assets of the Carbon Revolution Group; | |||||
| 4 | | | otherwise directly or indirectly acquiring or merging, or being involved in an amalgamation or reconstruction (as those terms are used in s 413(1) of the Corporations Act), with Carbon Revolution or a Subsidiary of Carbon Revolution; or | |||||
| 5 | | | requiring Carbon Revolution to abandon, or otherwise fail to proceed with, the Transaction, | |||||
| whether by way of takeover bid, members’ or creditors’ scheme of arrangement, reverse takeover, shareholder approved acquisition, capital reduction, buy back, sale or purchase of shares, other securities or assets, assignment of assets and liabilities, incorporated or unincorporated joint venture, dual-listed company (or other synthetic merger), deed of company arrangement, any debt for equity arrangement, recapitalisation, refinancing or other transaction or arrangement, other than where such proposal, offer, agreement, arrangement or transaction (or expression of interest therefor) arises in connection with any Bridge Financing. | ||||||||
| For the avoidance of doubt, each successive material modification or variation of any proposal, agreement, arrangement or transaction in relation to a Competing Proposal will constitute a new Competing Proposal. | ||||||||
Condition Precedent | | | each of the conditions set out in clause 3.1. | ||||||
Confidentiality Agreement | | | the confidentiality agreement between the SPAC and Carbon Revolution dated 28 October 2022. | ||||||
Consultation Notice | | | has the meaning given in clause 3.4(a). | ||||||
Control | | | has the meaning given in section 50AA of the Corporations Act. | ||||||
Corporations Act | | | the Corporations Act 2001 (Cth), as modified or varied by ASIC. | ||||||
Corporations Regulations | | | the Corporations Regulations 2001 (Cth). | ||||||
Court | | | the Federal Court of Australia or such other court of competent jurisdiction under the Corporations Act agreed to in writing by the SPAC and Carbon Revolution. | ||||||
Covid-19 | | | SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof (including any subsequent waves or outbreaks thereof). | ||||||
Term | | | Meaning | ||||||
Covid-19 Measures | | | any quarantine, “shelter in place”, “stay at home”, lockdown, workforce reduction, social distancing, shutdown, closure, sequester, safety or similar laws, rules, regulations, directives, guidelines or recommendations promulgated by any Government Agency in connection with or in response to COVID-19. | ||||||
Data Room | | | the online data room established by Carbon Revolution which is accessed at https://dataroom.ansarada.com/_mvc/d3gj92f0h12%7C107964/5620338/spa/workflow/view. | ||||||
Deed Poll | | | a deed poll to be entered into by MergeCo substantially in the form of Attachment 3 under which MergeCo covenants in favour of the Scheme Shareholders to perform the obligations attributed to MergeCo under the Scheme. | ||||||
Director Carbon Revolution Share | | | any Carbon Revolution Share: | ||||||
| 1 | | | held by or on behalf of a Carbon Revolution Board Member; or | |||||
| 2 | | | listed as an indirect interest in the latest Appendix 3X or Appendix 3Y lodged by Carbon Revolution with ASX in respect of each Carbon Revolution Board Member. | |||||
Disclosure Letter | | | Carbon Revolution’s disclosure letter to the SPAC, delivered in connection with this deed and dated on the date of this deed. | ||||||
Disclosure Materials. | | | 1 | | | the documents and information contained in the Data Room made available by Carbon Revolution to the SPAC and its Related Persons prior to 6.00pm on the day that is one day prior to the date of this deed; | |||
| 2 | | | written responses from Carbon Revolution and its Related Persons to requests for further information made by the SPAC and its Related Persons via the Data Room prior to 6.00pm on the day that is one day prior to the date of this deed; | |||||
| 3 | | | any other written information made available by Carbon Revolution or its Related Persons to the SPAC or its Related Persons prior to execution of this deed which is agreed by or on behalf of Carbon Revolution and the SPAC in writing to form part of the Disclosure Materials; and | |||||
| 4 | | | the Disclosure Letter | |||||
Duty | | | any stamp, transaction or registration duty or similar charge imposed by any Government Agency and includes any interest, fine, penalty, charge or other amount imposed in respect of any of them, but excludes any Tax | ||||||
Effective | | | when used in relation to the Scheme, the coming into effect, under subsection 411(10) of the Corporations Act, of the order of the Court made under paragraph 411(4)(b) of the Corporations Act in relation to the Scheme. | ||||||
Effective Date | | | the date on which the Scheme becomes Effective. | ||||||
End Date | | | 1 | | | the date that is 9 months after the date of this deed; or | |||
| 2 | | | such other date as agreed in writing by the parties. | |||||
Equity Incentive | | | a right, option or share existing at the date of this deed, whether issued under an employee incentive plan or otherwise and whether vested or unvested, which confers |
Term | | | Meaning | ||||||
| | on the holder a right to acquire or hold (on a restricted or unrestricted basis) a Carbon Revolution Share. | |||||||
Exchange Act | | | the United States Securities Exchange Act of 1934, as amended and the rules and regulations thereunder. | ||||||
Exclusivity Period | | | the period from and including the date of this deed to the earliest of: | ||||||
| 1 | | | the date of termination of this deed; | |||||
| 2 | | | the End Date; and | |||||
| 3 | | | the Effective Date. | |||||
Fairly Disclosed | | | disclosed to a sufficient extent, and with sufficient detail and context, so as to enable a reasonable and sophisticated recipient of the relevant information who is experienced in transactions similar to the Scheme to identify the nature, scope and potential impact of the relevant fact, matter, circumstance or event (including, in each case, that the potential financial effect of the relevant fact, matter, circumstance or event was reasonably ascertainable from the information disclosed). | ||||||
Term | | | Meaning | ||||||
Financial Adviser | | | any financial adviser retained by a party in relation to the Transaction from time to time. | ||||||
Financial Indebtedness | | | any debt or other monetary liability (whether actual or contingent) in respect of monies borrowed or raised or any financial accommodation including under or in respect of any: | ||||||
| 1 | | | bill, bond, debenture, note or similar instrument; | |||||
| 2 | | | acceptance, endorsement or discounting arrangement; | |||||
| 3 | | | guarantee; | |||||
| 4 | | | finance or capital lease; | |||||
| 5 | | | agreement for the deferral of a purchase price or other payment in relation to the acquisition of any asset or service; or | |||||
| 6 | | | obligation to deliver goods or provide services paid for in advance by any financier. | |||||
First Court Date | | | the first day on which an application made to the Court for an order under subsection 411(1) of the Corporations Act convening the Scheme Meeting is heard or, if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application is heard. | ||||||
GAAP | | | generally accepted accounting principles as in effect in the United States from time to time. | ||||||
Government Agency | | | any foreign or Australian government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity (including any stock or other securities exchange), or any minister of the Crown in right of the Commonwealth of Australia or any State, and any other federal, state, provincial, or local government, whether foreign or Australian. | ||||||
GST | | | goods and services tax or similar value added tax levied or imposed in Australian under the GST Law or otherwise on a supply. | ||||||
GST Law | | | has the same meaning as “GST Law” in A New Tax System (Goods and Services Tax) Act 1999 (Cth). | ||||||
IFRS | | | international financial reporting standards, as adopted by the International Accounting Standards Board. | ||||||
Implementation Date | | | the fifth Business Day after the Scheme Record Date, or such other date after the Scheme Record Date as the parties agree in writing. | ||||||
Independent Expert | | | the independent expert in respect of the Scheme and the Capital Reduction appointed by Carbon Revolution. | ||||||
Term | | | Meaning | | ||||||
Independent Expert’s Report | | | the report to be issued by the Independent Expert in connection with the Scheme and the Capital Reduction, such report to be included in or to accompany the Scheme Booklet and the Capital Reduction, and including any subsequent, updated or supplementary report, setting out the Independent Expert’s opinion whether or not the Scheme and Capital Reduction are in the best interest of Carbon Revolution Shareholders and the reasons for holding that opinion. | | ||||||
| ||||||||||
Input Tax Credit | | | has the meaning given by the GST Law. | | ||||||
| ||||||||||
Insolvency Event | | | in relation to an entity: | | ||||||
| 1 | | | the entity resolving that it be wound up or a court making an order for the winding up or dissolution of the entity; | ||||||
| 2 | | | a Controller (as defined in the Corporations Act, except that in respect of the SPAC, MergeCo and Merger Sub, with references to ‘security interest’ within that definition deemed to be references to Security Interest), liquidator, provisional liquidator, administrator, examiner, receiver, receiver and manager or other insolvency official being appointed to the entity or in relation to the whole, or a substantial part, of its assets; | ||||||
| 3 | | | the holder of a Security Interest or any agent on its behalf, appointing a Controller or taking possession of any of the person’s property (including seizing the person’s property within the meaning of section 123 of the PPSA) or otherwise enforcing or exercising any rights under the Security Interest or Chapter 4 of the PPSA; | ||||||
| 4 | | | an application is made to a court, a meeting is convened or a resolution is passed for the entity to be wound up or dissolved or for the appointment of a Controller (as defined in the Corporations Act, except that in respect of the SPAC, MergeCo and Merger Sub, with references to ‘security interest’ within that definition deemed to be references to Security Interest)), liquidator, provisional liquidator, administrator or examiner to the entity of any of its assets; | ||||||
| 5 | | | other than the Scheme, the entity taking any step toward entering into, executing, or resolving to enter into or execute, a scheme of arrangement, a deed of company arrangement or other compromise or arrangement with, or assignment for the benefit of, any of its members or creditors; | ||||||
| 6 | | | the entity ceases, or threatens to cease to, carry on substantially all the business conducted by it as at the date of this deed; | ||||||
| 7 | | | the entity suspends payment of its debts, ceases (or threatening to cease) to carry on all or a material part of its business, states that it is unable to pay its debts when they fall due, is or becomes unable to pay its debts when they fall due; | ||||||
| 8 | | | a court or other authority enforcing any judgment or order against the entity for the payment of money or the recovery of any property; or | ||||||
| 9 | | | the entity being deregistered as a company or otherwise dissolved (whether pursuant to Chapter 5A of the Corporations Act or otherwise); or | ||||||
| 10 | | | any other like event, matter or circumstance occurring in relation to an entity in another jurisdiction or which has a substantially similar effect. | ||||||
| ||||||||||
Intended Tax Treatment | | | has the meaning ascribed to “Intended Tax Treatment” in the BCA. | | ||||||
| ||||||||||
Investigating Accountant | | | the investigating accountant in respect of the financial information included in the Scheme Booklet appointed by Carbon Revolution. | | ||||||
|
Term | | | Meaning | ||||||
Investigating Accountant’s Report | | | the report to be issued by the Investigating Accountant in relation to the financial information included in the Scheme Booklet, with such report to be included in the Scheme Booklet. | ||||||
Listing Rules | | | the official listing rules of: | ||||||
| • | | | ASX; | |||||
| • | | | Nasdaq; or | |||||
| • | | | NYSE, | |||||
| • | | | as the context requires. | |||||
Material Contracts | | | each of the contracts listed in the document titled ‘Material Contracts List’ circulated to the SPAC and Carbon Revolution on exchange of this deed. | ||||||
MergeCo Board | | | the board of directors of MergeCo. | ||||||
MergeCo Indemnified Parties | | | MergeCo, and its directors, officers and employees. | ||||||
MergeCo Information | | | information regarding MergeCo provided by MergeCo to Carbon Revolution in writing for inclusion in the Scheme Booklet being: | ||||||
| | 1 | | | information about MergeCo, MergeCo’s interests and dealings in Carbon Revolution Shares, MergeCo’s intentions for Carbon Revolution and Carbon Revolution’s employees, and funding for the Scheme; and | ||||
| | 2 | | | any other information required under the Corporations Act, Corporations Regulations or RG 60 to enable the Scheme Booklet to be prepared that the parties agree is ‘MergeCo Information’ and that is identified in the Scheme Booklet as such. | ||||
| | For the avoidance of doubt, the MergeCo Information excludes the Carbon Revolution Information, SPAC Information and the Independent Expert’s Report and any description of the taxation effect of the Transaction on Scheme Shareholders prepared by an external adviser to Carbon Revolution. | |||||||
Term | | | Meaning | ||||||
MergeCo Prescribed Occurrence | | | other than as: | ||||||
| 1 | | | required, expressly permitted or expressly contemplated by this deed, the Transaction or the transactions contemplated by either; | |||||
| 2 | | | agreed to in writing by the SPAC (acting promptly and reasonably), | |||||
| 3 | | | required by any applicable law, regulation, contract; or | |||||
| | | the occurrence of any of the following: | ||||||
| 4 | | | MergeCo or any Subsidiary of MergeCo converting all or any of its shares into a larger or smaller number of shares; | |||||
| 5 | | | MergeCo or any Subsidiary of MergeCo resolving to reduce its share capital in any way; | |||||
| 6 | | | MergeCo or any Subsidiary of MergeCo: | |||||
| | | – | | | entering into a buy-back agreement; or | |||
| | | – | | | resolving to approve the terms of a buy-back agreement or other share repurchased under the Companies Act 2014; | |||
| 7 | | | MergeCo or any Subsidiary of MergeCo issuing shares or securities convertible into shares, or granting a performance right or an option over its shares, or agreeing to make such an issue or grant such an option or performance right (other than in in connection with the Bridge Financing or the issue of any such shares or securities by a Subsidiary of MergeCo to MergeCo or to any other directly or indirectly wholly-owned Subsidiary of MergeCo); or | |||||
| 8 | | | an Insolvency Event occurs in relation to MergeCo or a Subsidiary of MergeCo. | |||||
MergeCo Registration Statement | | | the registration statement on Form F-4 (or another applicable form if agreed by the parties) to be filed by MergeCo in connection with the registration under the Securities Act of the MergeCo Shares to be issued in connection with the Scheme containing the SPAC Proxy Statement. | ||||||
MergeCo Registration Statement Effective Date | | | the date on which the SEC declares the MergeCo Registration Statement effective. | ||||||
MergeCo Representations and Warranties | | | the representations and warranties of MergeCo set out in Schedule 4 or in the BCA. | ||||||
MergeCo Shares | | | fully paid ordinary shares in the capital of MergeCo. | ||||||
MergeCo Warrants | | | one warrant to acquire one (1) MergeCo Share at an exercise price of $11.50 per share | ||||||
Merger | | | the merger between the SPAC and Merger Sub, as more fully described in the BCA. | ||||||
Merger Sub | | | Poppettell Merger Sub | ||||||
Merger Sub Shares | | | fully paid ordinary shares in the capital of Merger Sub. | ||||||
Nasdaq | | | the Nasdaq Stock Market, LLC. | ||||||
Term | | | Meaning | ||||||
Notice | | | has the meaning given in clause 15. | ||||||
NYSE | | | the New York Stock Exchange. | ||||||
PCAOB | | | Public Company Accounting Oversight Board. | ||||||
Performance Rights | | | rights granted over Carbon Revolution Shares under Carbon Revolution’s short term incentives plan, long term incentives plan and employee rights plan, which, as at the date of this deed, comprises 1,381,551 performance rights. | ||||||
PPSA Security Interest | | | means a security interest as defined in the Personal Property Securities Act 2009 (Cth). | ||||||
Redemption Rights | | | rights of redemption provided for in Section 49 of the SPAC Memorandum and Articles of Association. | ||||||
Registered Address | | | in relation to a Carbon Revolution Shareholder, the address shown in the Carbon Revolution Share Register as at the Scheme Record Date. | ||||||
Registration Rights Agreement | | | that certain registration rights agreement, to be entered into on Closing, by: | ||||||
| | 1 | | | MergeCo; | ||||
| | 2 | | | Twin Ridge Capital Sponsor, LLC; | ||||
| | 3 | | | Twin Ridge Capital Sponsor Subsidiary Holdings LLC; | ||||
| | 4 | | | DDGN Advisors LLC; | ||||
| | 5 | | | Allison Burns; | ||||
| | 6 | | | Paul Henrys; | ||||
| | 7 | | | Gary Polnick; and | ||||
| | 8 | | | the Carbon Revolution signatories. | ||||
Regulator’s Draft | | | the draft of the Scheme Booklet in a form which is provided to ASIC for approval pursuant to subsection 411(2) of the Corporations Act. | ||||||
Regulatory Approval | | | a clearance, waiver, ruling, approval, relief, confirmation, exemption, consent or declaration set out in clause 3.2(f). | ||||||
Reimbursement Fee | | | USD$2 million (inclusive of any GST). | ||||||
Related Bodies Corporate | | | has the meaning set out in section 50 of the Corporations Act. | ||||||
Related Person | | | in respect of a person, including each party or its Related Bodies Corporate: | ||||||
| 1 | | | a director, officer, employee of that person; | |||||
| 2 | | | an Adviser of that person (and each director, officer, employee or contractor of that Adviser); | |||||
| 3 | | | an agent or representative of that person; | |||||
| 4 | | | a Related Body Corporate of that person; and | |||||
| 5 | | | with respect to the SPAC, Twin Ridge Capital Sponsor, LLC. |
Term | | | Meaning | ||||||
Relevant Interest | | | has the meaning given in sections 608 and 609 of the Corporations Act. | ||||||
RG 60 | | | Regulatory Guide 60 issued by ASIC in September 2020. | ||||||
Sarbanes-Oxley Act | | | the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations thereunder. | ||||||
Scheme | | | the scheme of arrangement under Part 5.1 of the Corporations Act between Carbon Revolution and the Scheme Shareholders, the form of which is attached as Attachment 2, subject to any alterations or conditions made or required by the Court under subsection 411(6) of the Corporations Act and agreed to in writing by the SPAC and Carbon Revolution. | ||||||
Scheme Booklet | | | the scheme booklet to be prepared by Carbon Revolution in respect of the Transaction in accordance with the terms of this deed (including clause 5.2(a)) to be despatched to the Carbon Revolution Shareholders and which must include or be accompanied by: | ||||||
| 1 | | | a copy of the Scheme; | |||||
| 2 | | | an explanatory statement complying with the requirements of the Corporations Act, the Corporations Regulations and RG 60; | |||||
| 3 | | | the Independent Expert’s Report; | |||||
| 4 | | | the Investigating Accountant’s Report; | |||||
| 5 | | | a copy or summary of this deed; | |||||
| 6 | | | a copy or summary of the executed Deed Poll; | |||||
| 7 | | | a notice of meeting; and | |||||
| 8 | | | a proxy form. | |||||
Scheme Consideration | | | has the meaning given in the Scheme. | ||||||
Scheme Meeting | | | the meeting of Carbon Revolution Shareholders ordered by the Court to be convened under subsection 411(1) of the Corporations Act to consider and vote on the Scheme and includes any meeting convened following any adjournment or postponement of that meeting. | ||||||
Scheme Record Date | | | 7.00pm on the third Business Day after the Effective Date or such other time and date as the parties agree in writing. | ||||||
Scheme Shareholder | | | a holder of Carbon Revolution Shares recorded in the Carbon Revolution Share Register as at the Scheme Record Date. | ||||||
Scheme Shares | | | all Carbon Revolution Shares held by the Scheme Shareholders as at the Scheme Record Date. | ||||||
SEC | | | United States Securities and Exchange Commission. | ||||||
Second Court Date | | | the first day on which an application made to the Court for an order under paragraph 411(4)(b) of the Corporations Act approving the Scheme is heard or, if the application is adjourned or subject to appeal for any reason, the day on which the adjourned application or appeal is heard. | ||||||
Term | | | Meaning | ||||||
Securities Act | | | the United States Securities Act of 1933, as amended, and the rules and regulations thereunder. | ||||||
Security Interest | | | 1 | | | any legal or equitable interest or power created, arising in or reserved in or over an interest in any property or asset; | |||
| 2 | | | any security for payment of money, performance of obligations or protection against default (including a mortgage, bill of sale, charge, lien, pledge, trust, power or retention of title arrangement, right of set-off, assignment of income, garnishee order, monetary claim and flawed deposit arrangement); | |||||
| 3 | | | any thing or preferential interest or arrangement of any kind giving a person priority or preference over claims or other persons with respect to any property or asset; | |||||
| 4 | | | a PPSA Security Interest; or | |||||
| 5 | | | any agreement or arrangement (whether legally binding or not) to grant or create anything referred to in paragraph 1, 2 or 3 above. | |||||
SPAC Board | | | the board of directors of the SPAC and a SPAC Board Member means any director of the SPAC comprising part of the SPAC Board. | ||||||
SPAC Class A Ordinary Shares | | | the Class A ordinary shares of the SPAC, par value USD$0.0001 per share. | ||||||
SPAC Class B Ordinary Shares | | | the Class B ordinary shares of the SPAC, par value USD$0.0001 per share. | ||||||
SPAC Competing Transaction | | | 1 | | | any sale of any material assets of SPAC or any of the outstanding capital stock or any conversion, consolidation, liquidation, dissolution or similar transaction involving the SPAC or any of SPAC’s Subsidiaries; or | |||
| 2 | | | any transaction or series of related transactions under which the SPAC or any of its affiliates, directly or indirectly, (1) acquires or otherwise purchases any other person, (2) engages in a business combination with any other person or (3) acquires or otherwise purchases all or a material portion of the assets or businesses of any other person (in the case of each of (1), (2) and (3), whether by merger, consolidation, recapitalisation, purchase or issuance of equity or debt securities, tender offer or otherwise). | |||||
SPAC Counterproposal | | | has the meaning given to it in clause 10.4(b). | ||||||
SPAC Extension Proposal | | | the approval of the following proposals at a meeting of the SPAC Shareholders convened for considering the following proposals: | ||||||
| 1 | | | the extension of the SPAC’s business combination deadline (as set forth in its Amended and Restated Memorandum and Articles of Association, effective 3 March 2021) to a date not earlier than 31 May 2023, or such other date as the parties reasonably agree; and | |||||
| 2 | | | the adjournment of such meeting of SPAC Shareholders (i) to solicit additional proxies for the purpose of obtaining approval of the SPAC Extension Proposals, or (ii) for the absence of a quorum. | |||||
Term | | | Meaning | ||||||
SPAC Group | | | the SPAC. | ||||||
SPAC Indemnified Parties | | | SPAC, and its directors, officers and employees. | ||||||
SPAC Information | | | information regarding the SPAC provided by the SPAC to Carbon Revolution in writing for inclusion in the Scheme Booklet being: | ||||||
| | 1 | | | information about the SPAC; and | ||||
| | 2 | | | any other information required under the Corporations Act, Corporations Regulations or RG 60 to enable the Scheme Booklet to be prepared that the parties agree is ‘SPAC Information’ and that is identified in the Scheme Booklet as such. | ||||
| | For the avoidance of doubt, the SPAC Information excludes the Carbon Revolution Information, the Independent Expert’s Report, Investigating Accountant’s Report and any description of the taxation effect of the Transaction on Scheme Shareholders prepared by an Adviser to Carbon Revolution. | |||||||
SPAC Locked-Up Persons | | | 1 | | | holders of SPAC Class B Ordinary Shares; | |||
| | 2 | | | Twin Ridge Capital Sponsor, LLC, including any of its members; and | ||||
| | 3 | | | Twin Ridge Capital Sponsor Subsidiary Holdings, including any of its members. | ||||
SPAC Memorandum and Articles of Association | | | has the meaning given in the BCA. | ||||||
Term | | | Meaning | ||||||
SPAC Prescribed Occurrence | | | other than as: | ||||||
| 1 | | | required, expressly permitted or expressly contemplated by this deed, the Transaction or the transactions contemplated by either; | |||||
| 2 | | | agreed to in writing by Carbon Revolution; | |||||
| 3 | | | required by any applicable law, regulation, contract; or | |||||
| 4 | | | Fairly Disclosed by the SPAC to NYSE, or a publicly available document lodged by it with the SEC, prior to the date of this deed or which would be disclosed in a search of the SEC records or NYSE announcements in relation to the SPAC or a Subsidiary of the SPAC (as relevant), prior to the date of this deed, | |||||
| the occurrence of any of the following: | ||||||||
| 5 | | | the SPAC converting all or any of its shares into a larger or smaller number of shares; | |||||
| 6 | | | the SPAC or any Subsidiary of the SPAC resolving to reduce its share capital in any way; | |||||
| 7 | | | the SPAC or any Subsidiary of the SPAC: | |||||
| | | • | | | entering into a buy-back agreement; or | |||
| | | • | | | resolving to approve the terms of a buy-back agreement; | |||
| 8 | | | the SPAC or any Subsidiary of the SPAC issuing shares or securities convertible into shares, or granting a performance right or an option over its shares, or agreeing to make such an issue or grant such an option or performance right, other than: | |||||
| | | • | | | to a directly or indirectly wholly-owned Subsidiary of the SPAC; | |||
| | | • | | | to any director or employee in accordance with existing arrangements or in the ordinary course (which existing arrangements or ordinary course remuneration cycle has been Fairly Disclosed by the SPAC to NYSE); | |||
| 9 | | | the SPAC or a Subsidiary of the SPAC disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property; | |||||
| 10 | | | the SPAC or a Subsidiary of the SPAC granting a Security Interest, or agreeing to grant a Security Interest, in the whole, or a substantial part, of its business or property other than a lien which arises by operation of law or legislation securing an obligation that is not yet due; or | |||||
| 11 | | | the SPAC or a Subsidiary of the SPAC is the subject of any: bankruptcy, dissolution, liquidation or reorganisation. | |||||
SPAC Proposals | | | the approval of the following proposals at the SPAC Shareholders Meeting: | ||||||
| 1. | | | the BCA, Scheme and the Merger; | |||||
| 2 | | | the adjournment of the SPAC Shareholders Meeting pursuant to clause 5.3(p) of this deed; | |||||
| 3 | | | any other proposals the parties deem necessary to give effect to the Scheme, Merger, BCA, this deed or other transactions contemplated by the BCA or this deed, or as required by the SEC, NYSE or applicable laws and regulations. | |||||
SPAC Proxy Statement | | | the proxy statement to be sent to SPAC Shareholders for the purposes of obtaining their approval of the SPAC Proposals. | ||||||
SPAC Representations and Warranties | | | the representations and warranties of the SPAC set out in Schedule 2. | ||||||
SPAC Shareholders | | | the holders of shares in the SPAC. | ||||||
Term | | | Meaning | ||||||
SPAC Shareholders’ Meeting | | | the meeting of SPAC Shareholders convened for the purposes of considering the SPAC Proposals. | ||||||
SPAC Superior Transaction | | | a bona fide SPAC Competing Transaction not resulting from a breach by the SPAC of any of its obligations under clause 10 of this deed (it being understood that any actions by the Related Persons of the SPAC not permitted by clause 10 will be deemed to be a breach by the SPAC for the purposes hereof), that the SPAC Board acting in good faith, and after receiving written legal advice from its external legal advisers who specialise in corporate law and written advice from its Financial Adviser determines: | ||||||
| 1. | | | is reasonably capable of being valued and completed in accordance with its terms in a reasonable timeframe (taking into account all aspects of the SPAC Competing Transaction, including its conditions); and | |||||
| 2 | | | would, if completed in accordance with its terms, provide a superior outcome for SPAC Shareholders (as a whole) than the Transaction. | |||||
SPAC Units | | | units consisting of one SPAC Class A Ordinary Share and one-third of one SPAC Warrant. | ||||||
SPAC Warrants | | | warrants to purchase one SPAC Class A Ordinary Share at an exercise price of USD$11.50. | ||||||
SPAC Working Capital Loans | | | Financial Indebtedness incurred by SPAC in order to finance working capital needs, which Financial Indebtedness permits or allows all or any portion of such Financial Indebtedness to be converted into the number of SPAC Warrants not to exceed USD $1,500,000 (with such SPAC Warrants issued at USD $1.50 per SPAC Warrant and at an exercise price of USD $11.50 per SPAC Warrant), or which may be otherwise repaid in cash. | ||||||
Specified Individual | | | 1. | | | Jake Dingle; | |||
| 2 | | | Gerard Buckle | |||||
| 3 | | | David Nock | |||||
| 4 | | | Nick Batchelor. | |||||
Sponsor Nominees | | | has the meaning given in clause 5.3(m). | ||||||
Staff | | | the staff of the SEC. | ||||||
Standard Tax Condition | | | any tax-related conditions which are in the form, or substantially in the form, of those set out in under the ‘Standard tax conditions’ heading in section D of FIRB Guidance Note 12 on ‘Tax Conditions’ (in the form released on 9 July 2021). | ||||||
Statement | | | the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies on April 12, 2021. | ||||||
Subsidiary | | | has the meaning given in Division 6 of Part 1.2 of the Corporations Act. | ||||||
Superior Proposal | | | a bona fide Competing Proposal not resulting from a breach by Carbon Revolution of any of its obligations under clause 10 of this deed (it being understood that any actions by the Related Persons of Carbon Revolution not permitted by clause 10 will be |
Term | | | Meaning | ||||||
| | deemed to be a breach by Carbon Revolution for the purposes hereof), that the Carbon Revolution Board acting in good faith, and after receiving written legal advice from its external Australian legal advisers who specialise in corporate law and written advice from its Financial Adviser determines: | |||||||
| | 1 | | | is reasonably capable of being valued and completed in accordance with its terms in a reasonable timeframe (taking into account all aspects of the Competing Proposal, including its conditions); and | ||||
| | 2 | | | would, if completed in accordance with its terms, provide a superior outcome for Carbon Revolution Shareholders (as a whole) than the Transaction (or any counterproposal from the SPAC made under clause 10.4), taking into account all aspects of the Competing Proposal, including the identity, reputation and financial condition of the proponent making such Competing Proposal, relevant legal, regulatory and financial matters (including the price and /or value placed upon Carbon Revolution Shares by the Competing Proposal) and the expected timing for the implementation of such Competing Proposal. | ||||
Supply | | | has the meaning given in the GST Law. | ||||||
Takeovers Panel | | | the Australian Takeovers Panel. | ||||||
Tax | | | (a) any and all U.S., Australian and other non-U.S. federal, state, local, provincial and other taxes, levies, duties, withholdings, assessments, fees or other charges in the nature of taxes, imposed, administered, or collected by any Government Agency, including wage taxes, income taxes, corporate taxes, capital gains taxes, franchise taxes, sales taxes, use taxes, payroll taxes, employment taxes, withholding taxes, value added taxes, gross receipts taxes, turnover taxes, environmental taxes, car taxes, energy taxes, customs and other import or export duties, escheat or unclaimed property obligations, transfer taxes or duties, property taxes, capital taxes, or duties, social security or other similar contributions, together with all related interest, fines, penalties, costs, charges and surcharges, whether disputed or not, (b) any liability for any amounts of the type described in clause (a) of another Person by operation of Law (including under Treasury Regulations section 1.1502-6 or analogous U.S. state or local or non-U.S. Law), as a transferee or successor, by contract or otherwise. | ||||||
Tax Act | | | the Income Tax Assessment Act 1997 (Cth). | ||||||
Tax Law | | | any law relating to Tax or Duty. | ||||||
Tax Return | | | means any return, report, statement, refund claim, election, declaration, information report, estimate or other document filed or required to be filed with a Government Agency with respect to Taxes, including any schedule or attachment thereto and including any amendments thereof. | ||||||
Third Party | | | a person other than MergeCo or the SPAC or either of their Related Bodies Corporate or other Associates. | ||||||
Timetable | | | the indicative timetable for the implementation of the Transaction set out in the document titled ‘Leopard Timetable’ circulated to the SPAC and Carbon Revolution on exchange of this deed. | ||||||
Term | | | Meaning | ||||||
Transaction | | | the: | ||||||
| 1 | | | cancellation of the Scheme Shares pursuant to the Capital Reduction, issue of the Scheme Consideration by MergeCo and issue of one Carbon Revolution Share to MergeCo through implementation of the Scheme in accordance with the terms of this deed; and | |||||
| 2 | | | the Merger | |||||
Transaction Documents | | | each of the: | ||||||
| 1. | | | Insider Lock-up Agreements and Outside Lock-Up Agreements; | |||||
| 2 | | | Registration Rights Agreement; and | |||||
| 3 | | | BCA. | |||||
Trust Agreement | | | the Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the SPAC dated March 8, 2021. | ||||||
Trust Fund | | | means the trust account maintained pursuant to the Trust Agreement. | ||||||
2 | Interpretation |
2.1 | Interpretation |
(a) | headings and bold type are for convenience only and do not affect the interpretation of this deed; |
(b) | the singular includes the plural and the plural includes the singular; |
(c) | words of any gender include all genders; |
(d) | other parts of speech and grammatical forms of a word or phrase defined in this deed have a corresponding meaning; |
(e) | a reference to a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Government Agency, as well as an individual; |
(f) | a reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to this deed; |
(g) | a reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them (whether passed by the same or another Government Agency with legal power to do so); |
(h) | a reference to a document (including this deed) includes all amendments or supplements to, or replacements or novations of, that document; |
(i) | a reference to ‘$’, ‘A$’ or ‘dollar’ is to the lawful currency of Australia; |
(j) | a reference to any time is, unless otherwise indicated, a reference to that time in Melbourne, Australia; |
(k) | a term defined in or for the purposes of the Corporations Act, and which is not defined in clause 1.1 of this Schedule 1, has the same meaning when used in this deed; |
(l) | a reference to a party to a document includes that party’s successors and permitted assignees; |
(m) | no provision of this deed will be construed adversely to a party because that party was responsible for the preparation of this deed or that provision; |
(n) | any agreement, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally; |
(o) | a reference to a body (including an institute, association or authority), other than a party to this deed, whether statutory or not: |
(1) | which ceases to exist; or |
(2) | whose powers or functions are transferred to another body, |
(p) | a reference to an agreement other than this deed includes a deed and any legally enforceable undertaking, agreement, arrangement or understanding, whether or not in writing; |
(q) | a reference to liquidation or insolvency includes appointment of an administrator, a reconstruction, winding up, dissolution, deregistration, assignment for the benefit of creditors, bankruptcy, or a scheme, compromise or arrangement with creditors (other than solely with holders of securities or derivatives), or any similar procedure or, where applicable, changes in the constitution of any partnership or Third Party, or death; |
(r) | if a period of time is specified and dates from a given day or the day of an act or event, it is to be calculated exclusive of that day; |
(s) | a reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later; |
(t) | if an act prescribed under this deed to be done by a party on or by a given day is done after 5.00pm on that day, it is taken to be done on the next day; |
(u) | a reference to the Listing Rules includes any variation, consolidation or replacement of these rules and is to be taken to be subject to any waiver or exemption granted to the compliance of those rules by a party; and |
(v) | a reference to something being “reasonably likely” (or to a similar expression) is a reference to that thing being more likely than not to occur when assessed objectively. |
2.2 | Interpretation of inclusive expressions |
2.3 | Business Day |
2.4 | Reasonable Endeavours |
(a) | to procure absolutely that that thing is done or happens; |
(b) | to pay any money or to provide any financial compensation, valuable consideration or any other incentive to or for the benefit of any person: |
(1) | in the form of an inducement or consideration to a Third Party; or |
(2) | in circumstances that are commercially onerous or unreasonable in the context of this deed, except for payment of any applicable fee for the lodgement or filing of any relevant application with any Government Agency or immaterial costs to procure that the thing is performed or occurs or does not occur; |
(3) | to agree to commercially onerous or unreasonable terms; or |
(4) | to commence any legal action or proceeding against any person. |
(a) | (validly existing): it is a validly existing corporation registered under the laws of its place of incorporation; |
(b) | (authority): the execution and delivery of this deed by the SPAC has been properly authorised by all necessary corporate action of the SPAC, and the SPAC has taken or will take all necessary corporate action to authorise the performance of this deed and the transactions contemplated by this deed; |
(c) | (power): it has full capacity, corporate power and lawful authority to execute, deliver and perform this deed, the BCA and the Transaction Documents to which it is a party and to carry out the transactions contemplated under them; |
(d) | (capitalisation): the authorised capital stock of SPAC consists of 500,000,000 SPAC Class A Ordinary Shares, 50,000,000 Class B Ordinary Shares and 1,000,000 preference shares, par value USD $0.0001 per share. As of the date of this deed, there are no shares of preferred stock of the SPAC outstanding. Each warrant of the SPAC is exercisable for one SPAC Class A Ordinary Share at an exercise price of $11.50. All outstanding equity of SPAC has been issued and granted in compliance with all applicable securities laws and other applicable Laws and were issued free and clear of all Liens other than transfer restrictions under applicable securities laws and the organisational documents of SPAC; |
(e) | (no default): neither this deed nor the carrying out by the SPAC of the transactions contemplated by this deed, the BCA and each other Transaction Documents to which it is a party does or will conflict with or result in the breach of or a default under: |
(1) | any provision of the SPAC’s constituent documents; |
(2) | any writ, order or injunction, judgment, law, rule or regulation to which it is party or subject or by which it is bound, |
(f) | (deed binding): this deed is a valid and binding obligation of the SPAC, enforceable in accordance with its terms; |
(g) | (SPAC Information): the SPAC Information provided for inclusion in the Scheme Booklet, as at the date the Scheme Booklet is despatched to Carbon Revolution Shareholders, will be accurate in all material respects and will not contain any statement, in light of the circumstances under which it was made, which is materially misleading or deceptive (with any statement of belief or opinion being honestly held and formed on a reasonable basis), including by way of omission from that statement; |
(h) | (basis of SPAC Information): the SPAC Information: |
(1) | will be provided to Carbon Revolution in good faith and on the understanding that Carbon Revolution and each other Carbon Revolution Indemnified Party will rely on that information for the purposes of preparing the Scheme Booklet and determining to proceed with the Transaction; and |
(2) | will comply in all material respects with the requirements of the Corporations Act, the Corporations Regulations, RG 60, applicable Takeovers Panel guidance notes and the Listing Rules; |
(i) | (Independent Expert): all information provided by or on behalf of SPAC to the Independent Expert will be prepared and provided in good faith and on the understanding that the Independent Expert will rely on that information for the purpose of preparing the Independent Expert’s Report; |
(j) | (new information): it will, as a continuing obligation, provide to Carbon Revolution all further or new information which arises after the Scheme Booklet has been despatched to Carbon Revolution Shareholders until the date of the Scheme Meeting which is necessary to ensure that the SPAC Information is not misleading or deceptive (including by way of omission); |
(k) | (Bankruptcy): SPAC is not the subject of any bankruptcy, dissolution, liquidation, reorganisation or other applicable laws affecting creditors’ rights generally and by general equitable principles; |
(l) | (other dealings): other than |
(1) | as Fairly Disclosed to Carbon Revolution in writing by or on behalf of the SPAC on or before the date of this deed; or |
(2) | as contemplated by this deed, the BCA or the Transaction, |
(m) | (no dealings with Carbon Revolution Board Members or employees): neither it nor any of its Associates has any agreement, arrangement or understanding with any director or employee of Carbon Revolution relating in any way to the Transaction or operations of Carbon Revolution after the Effective Date; |
(n) | (no interest in securities): as at the date of this deed, neither it, nor any of its Related Bodies Corporate or Associates: |
(1) | has a relevant interest in, or a right to acquire, any securities of Carbon Revolution (whether issued or not or held by Carbon Revolution or not); or |
(2) | has entered into any agreement or arrangement that confers rights the economic effect of which is equivalent or substantially equivalent to holding, acquiring or disposing of securities in or assets of Carbon Revolution or any of its Related Bodies Corporate; |
(o) | (no regulatory approvals): other than as contemplated by this deed, it does not require any approval, consent, clearance, waiver, ruling, relief, confirmation, exemption, declaration or notice from any Government Agency in order to execute and perform this deed, the BCA or the Transaction Documents; |
(p) | (no other financing arrangements): it is not nor will it be a party to any agreement, arrangement or understanding (whether written or oral) with a debt financier or equity financier in connection with the Transaction other than for SPAC Working Capital Loans, and as fully disclosed to Carbon Revolution prior to the date of this deed; |
(q) | (SPAC Shareholder Approval) the votes on the SPAC Proposals and the SPAC Extension Proposals, and the consent of the Sponsor are the only approvals of the holders of any class of share of the SPAC necessary under any applicable law or the Listing Rules, the SPAC’s organisational documents and any contract to which SPAC is a party or is bound necessary for SPAC to implement the Transaction in accordance with the Timetable; |
(r) | (trust fund) as at the date of this deed, the SPAC has no less than $200,000,000.00 in the Trust Fund; |
(s) | (taxes): |
(1) | Each member of the SPAC Group has submitted any necessary information, notices, computations and returns to the relevant Government Agency in respect of any Tax or any Duty relating to each member of the SPAC Group and all such documentation is true, complete and correct and prepared in compliance with applicable law; |
(2) | all Taxes for which a member of the SPAC Group is liable that are or have been due and payable, including any penalty or interest, have been paid or appropriately provided or reserved for in the financial statements of the SPAC Group, and any obligation on a member of the SPAC Group under any Tax Law to withhold amounts at source on account of Tax has been complied with; |
(3) | there is no active, pending or threatened Tax or Duty audit relating to a member of the SPAC Group; |
(4) | each member of the SPAC Group has maintained proper and adequate records to enable it to comply with its obligations to: |
(A) | prepare and submit any information, notices, computations, returns and payments required in respect of any Tax Law; |
(B) | prepare any accounts necessary for the compliance with any Tax Law; and |
(C) | retain necessary records as required by any Tax Law; |
(5) | no member of the SPAC Group is, nor has been, a member or part of or otherwise subject to any income tax consolidated group, GST group or other grouping arrangements in respect of Taxes, with an entity that is not a member of the SPAC Group; |
(6) | no member of the SPAC Group has a permanent establishment (within the meaning of an applicable Tax treaty) in, or otherwise conducts a trade or business in, any jurisdiction outside of the relevant member of the SPAC Group’s place of incorporation; |
(7) | to SPAC’s knowledge, no member of the SPAC Group has entered into or been party to any transaction which contravenes the anti-avoidance provisions of any Tax Law; |
(8) | no member of the SPAC Group has taken any action which has or might alter or prejudice any arrangement, agreement or Tax ruling which has previously been negotiated with or obtained from the relevant Government Agency or under any Tax Law; |
(9) | no member of the SPAC Group is or is expected to become liable to pay, reimburse or indemnify any person in respect of any Tax because of the failure of any other person to discharge that Tax; |
(10) | each member of the SPAC Group has been a resident for Tax purposes solely in the jurisdiction of its incorporation; |
(11) | since it commenced carrying on business or deriving income, the office of public officer of each member of the SPAC Group as required under any Tax Law has been occupied without vacancy thereof; |
(12) | to the extent required by applicable law, each member of the SPAC Group has complied with the provisions of Part 3-6 of the Tax Act and no dividend or other distribution has been paid or will be paid by SPAC: |
(A) | in respect of which the required franking amount (as provided for in Subdivision 202-D of the Tax Act) exceeded the franked amount (as defined in section 200-15 of the Tax Act) of the dividend; |
(B) | giving rise to franking deficit tax as provided for in section 205-45 of the Tax Act; |
(C) | which has been franked with franking credits in excess of the maximum franking credit for the distribution (as provided for in Subdivision 202-D of the Tax Act); or |
(D) | which has been franked in breach of the benchmark rule and which would result in SPAC either being liable to pay over-franking tax where the franking percentage for the distribution exceeds the entity’s benchmark franking percentage or gives rise to a franking debit where the franking percentage is less than the entity’s benchmark franking percentage (as provided for in Division 203 of the Tax Act); |
(13) | all documents and transactions entered into or made by a member of the SPAC Group which are required to be stamped have been duly stamped and appropriately lodged with the relevant Government Agency, and there are no outstanding assessments of duty (including fines, penalties and interest) in respect of any document, instrument or statement which a member of the SPAC Group is liable to pay stamp duty on, nor any requirement on the part of a member of the SPAC Group to upstamp any document or instrument in the future on account of any interim stamping or assessment nor any requirement on the part of a member of the SPAC Group to lodge and pay stamp duty for any transaction that has occurred but for which the liability to stamp duty has not yet arisen; |
(14) | no member of the SPAC Group has obtained, wholly or in part, any corporate reconstruction concession, exemption or ex gratia relief from payment of duty in any Australian jurisdiction; |
(15) | no event has occurred which has resulted in any duty from which a member of the SPAC Group obtained relief (including but not limited to corporate reconstruction exemption or concession or ex gratia relief), becoming payable, and the implementation of the Scheme will not result in any such duty becoming payable; |
(16) | no SPAC unit is an Indirect Australian Real Property Interest within the meaning of section 855-25 of the Tax Act; |
(17) | each member of the SPAC Group is in material compliance with all applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practices and methodology between members of the SPAC Group. All intercompany agreements have been adequately documented, and such documents have been duly executed in a timely manner. The prices for any property or services (or for the use of any property) provided by or to a member of the SPAC Group are arms-length prices for purposes of all applicable transfer pricing laws; |
(18) | no member of the SPAC Group has a share capital account that is tainted under Division 197 or section 160ARDM of the Tax Act; |
(19) | the commercial debt forgiveness rules contained in Division 245 of the Tax Act (or its predecessor provisions in Schedule 2C of the Tax Act) have not resulted in a net forgiven amount (as defined in those rules) for any member of the SPAC Group; |
(20) | no member of the SPAC Group has claimed any research and development Tax incentives; |
(21) | where a member of the SPAC Group has claimed any support, financial assistance, payment, deferral or relief in connection with COVID-19 from any Government Agency or under any law (including the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth)), the member of the SPAC Group: has satisfied all requirements under applicable laws and administrative practices of the Government Agency; and has satisfied, received and otherwise complied with all applicable authorisations (including administrative practices of the Government Agency), to receive such support, assistance, payment or relief. |
(t) | (SEC Filings): |
(1) | SPAC has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be field by it with the SEC together with any amendments, restatements or supplements thereto (SPAC SEC Reports). SPAC has furnished to Carbon Revolution, true and correct copies of all amendments and modifications that have not been filed by SPAC with the SEC to all agreements, documents and other instruments that previously had been filed by SPAC with the SEC and are currently in effect. As of their respective dates, the SPAC SEC Reports, at the time they were filed, or, if amended, as of the date of such amendment, (i) complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder; and (ii) did not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. |
(2) | Each of the financial statements (including, in each case, any notes thereto) contained in the SPAC SEC Reports was prepared in accordance with GAAP (applied on a consistent basis) and Regulation S-X and Regulation S-K, as applicable, throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the financial position, results of operations, changes in stockholders equity and cash flows of SPAC as at the respective dates thereof and for the respective periods indicated therein, (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which have not had, and would not reasonably be expected to individually or in the aggregate be material). SPAC has no off-balance sheet arrangements that are not disclosed in the SPAC SEC Reports. Carbon Revolution acknowledges that (i) the Staff issued the Statement, (ii) SPAC continues to review the Statement and its implications, including on the financial statements and other information |
(3) | Except as and to the extent set forth in the SPAC SEC Reports, the SPAC does not have any liability or obligation of a nature (whether accrued, absolute, contingent or otherwise) required to be reflected on a balance sheet prepared in accordance with GAAP, except for liabilities and obligations arising in the ordinary course of SPAC’s business. |
(4) | SPAC is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the NYSE. |
(5) | SPAC has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP and to maintain accountability for SPAC’s and its Subsidiaries’ assets. SPAC maintains and, for all periods covered by the SPAC’s financial statements, has maintained books and records of SPAC in the ordinary course of business that are accurate and complete and reflect the revenues, expenses, assets and liabilities of SPAC in all material respects. Carbon Revolution acknowledges that (i) the Staff issued the Statement, (ii) SPAC continues to review the Statement and its implications, including on the financial statements and other information included in the SPAC SEC Reports and (iii) any restatement, revision or other modification of the SPAC SEC Reports in connection with such review of the Statement or any subsequent agreements, orders, comments or other guidance from the Staff regarding the accounting policies of SPAC shall be deemed not material for purposes of this deed. |
(6) | There are no outstanding loans or other extensions of credit made by SPAC to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of SPAC. SPAC has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act. |
(7) | Neither SPAC (including any employee thereof) nor SPAC’s independent auditors has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilised by SPAC; (ii) any fraud, whether or not material, that involves SPAC’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilised by SPAC; or (iii) any claim or allegation regarding any of the foregoing, except for such material weakness in the SPAC’s internal control over financial reporting, as further described in the SPAC SEC Reports. Carbon Revolution acknowledges that (i) the Staff issued the Statement, (ii) SPAC continues to review the Statement and its implications, including on the financial statements and other information included in the SPAC SEC Reports and (iii) any restatement, revision or other modification of the SPAC SEC Reports in connection with such review of the Statement or any subsequent agreements, orders, comments or other guidance from the Staff regarding the accounting policies of SPAC shall be deemed not material for purposes of this deed. |
(8) | As of the date hereof, there are no outstanding SEC comments from the SEC with respect to the SPAC SEC Reports. |
(u) | (Board Approval): The SPAC Board, by resolutions duly and unanimously adopted by the directors voting at a meeting duly called and held and not subsequently rescinded or modified in any way, has duly (i) approved and adopted this deed and declared their advisability and approved the Transaction; and (ii) recommended that the SPAC Shareholders approve and adopt this deed and the Transaction, and directed that this deed and the Transaction be submitted for consideration by the SPAC Shareholders at the SPAC Shareholders Meeting. The votes on the SPAC Proposals and the SPAC Extension Proposals, and the consent of the Sponsor are the only approvals of the holders of any class |
(v) | (Listing): The issued and outstanding SPAC Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE under the symbol “TRCA.U.” The issued and outstanding SPAC Class A Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE under the symbol “TRCA.” The issued and outstanding public SPAC Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on NYSE under the symbol “TRCA WS.” As of the date of this Scheme Implementation Deed, there is no action pending or, to the knowledge of SPAC, threatened in writing against SPAC by the NYSE or the SEC with respect to any intention by such entity to deregister the SPAC Units, the SPAC Class A Ordinary Shares, or public SPAC Warrants or terminate the listing of SPAC on the NYSE. None of SPAC or any of its affiliates has taken any action in an attempt to terminate the registration of the SPAC Units, the SPAC Class A Ordinary Shares, or the public SPAC Warrants under the Exchange Act. |
(a) | (validly existing): it is a validly existing corporation registered under the laws of its place of incorporation; |
(b) | (authority): the execution and delivery of this deed by Carbon Revolution has been properly authorised by all necessary corporate action of Carbon Revolution and Carbon Revolution has taken or will take all necessary corporate action to authorise the performance of this deed and the transactions contemplated by this deed; |
(c) | (power): it: |
(1) | has full capacity, corporate power and lawful authority to execute, deliver and perform this deed and the Transaction Documents to which it is a party and to carry out the transactions contemplated under them; |
(2) | and each other member of the Carbon Revolution Group has the corporate power and authority to own, lease or operate all of its properties and assets and to carry on its business as it is now being conducted, except in relation to such other members, where the failure to have such power and authority would not have a Carbon Revolution Material Adverse Effect; |
(d) | (no default): neither this deed nor the carrying out by Carbon Revolution of the transactions contemplated by this deed, the BCA and each other Transaction Document to which it is a party does or will conflict with or result in the breach of or a default under: |
(1) | any provision of Carbon Revolution’s constitution; or |
(2) | any material writ, order or injunction, judgment, law, rule or regulation to which it is party or subject or by which it or any other Carbon Revolution Group Member is bound, |
(e) | (deed binding): this deed is a valid and binding obligation of Carbon Revolution, enforceable in accordance with its terms; |
(f) | (Carbon Revolution Information) the Carbon Revolution Information contained in the Scheme Booklet, and supplied or to be supplied for inclusion or incorporation by reference in the MergeCo Registration Statement and any other document submitted or to be submitted to any other Governmental Agency or any announcement or public statement regarding the Transaction contemplated hereby (including, without limitation, the announcement of the Transaction under clause 8.1 of this deed) shall not contain (1) any material statement which is materially misleading or deceptive (with any statement of belief or opinion being honestly held and formed on a reasonable |
(g) | (basis of Carbon Revolution Information): the Carbon Revolution Information: |
(1) | will be prepared and included in the Scheme Booklet in good faith and on the understanding that SPAC and each other SPAC Indemnified Party will rely on that information for the purposes of determining to proceed with the Transaction and considering and approving the SPAC Information; and |
(2) | will comply in all material respects with the requirements of the Corporations Act, the Corporations Regulations, RG 60, applicable Takeovers Panel guidance notes and the Listing Rules, |
(h) | (Independent Expert): all information provided by or on behalf of Carbon Revolution to the Independent Expert will be prepared and provided in good faith and on the understanding that the Independent Expert will rely on that information for the purpose of preparing the Independent Expert’s Report; |
(i) | (provision of information to Investigating Accountant) all information provided by or on behalf of Carbon Revolution to the Investigating Accountant to enable the Investigating Accountant’s Report to be prepared and completed will be provided in good faith and on the understanding that the Investigating Accountant will rely upon that information for the purpose of preparing the Investigating Accountant’s Report; |
(j) | (new information): it will, as a continuing obligation (but in respect of the SPAC Information, only to the extent that SPAC provides Carbon Revolution with updates to the SPAC Information), ensure that the Scheme Booklet and MergeCo Registration Statement are updated or supplemented to include all further or new information which arises after the Scheme Booklet has been despatched to Carbon Revolution Shareholders, and the MergeCo Registration Statement has been declared effective by the SEC, respectively, until the date of the Scheme Meeting, and the date of the SPAC Shareholders’ Meeting, respectively, which is necessary to ensure that the Scheme Booklet and MergeCo Registration Statement (1) are not misleading or deceptive (including by way of omission) in any material respect and (2) do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; |
(k) | (continuous disclosure): as at the date of this deed, Carbon Revolution: |
(1) | is in compliance with its continuous disclosure obligations under Listing Rule 3.1 in all material respects; and |
(2) | other than for this Transaction, it is not relying on the carve-out in Listing Rule 3.1A to withhold any material information from public disclosure; |
(l) | (capital structure): as at the date of this deed, its capital structure, including all issued securities as at the date of this deed, is in all material respects as set out in Part 1 of Schedule 5, and other than as set out in Part 1 of Schedule 5, no other Carbon Revolution Group Member has issued or granted (or agreed to issue or grant) any other securities, options, warrants, performance rights or other instruments which are still |
(m) | (interest): except as would not have a Carbon Revolution Material Adverse Effect, the Disclosure Materials Fairly Disclose details of any company, partnership, trust, joint venture (whether incorporated or unincorporated) or other enterprise in which Carbon Revolution or another Carbon Revolution Group Member owns or otherwise holds any interest; |
(n) | (Insolvency Event): no Insolvency Event has occurred in relation to it or another Carbon Revolution Group Member; |
(o) | (regulatory action): no regulatory action of any nature of which it is aware been taken in relation to it or another Carbon Revolution Group Member that would reasonably be likely to prevent or restrict its ability to fulfil its obligations under this deed or under the Scheme; |
(p) | (compliance): except as would not have a Carbon Revolution Material Adverse Effect each member of the Carbon Revolution Group has complied with all Australian and foreign laws and regulations applicable to them and orders of Australian and foreign Government Agencies having jurisdiction over them; |
(q) | (material licences): except as would not have a Carbon Revolution Material Adverse Effect as at the date of this deed, the Carbon Revolution Group has all licences, authorisations and permits necessary for it to conduct the business of the Carbon Revolution Group as it is being conducted as at the date of this deed; |
(r) | (Disclosure Materials): it has collated and prepared all of the Disclosure Materials in good faith for the purposes of a due diligence process and in this context, as far as Carbon Revolution is aware except as would not have, individually or in the aggregate, a Carbon Revolution Material Adverse Effect, the Disclosure Materials are accurate and not misleading (including by omission). For the purpose of this clause (r), the Disclosure Materials are deemed not to include any information, document, representation, statement, view or opinion to the extent that it contains or expresses a forecast, prediction or projection or is otherwise forward looking at the date of this deed; |
(s) | (all information): it is not aware of any information relating to the Carbon Revolution Group or its respective businesses or operations as at the date of this deed that has or would reasonably be expected to give rise to a Carbon Revolution Material Adverse Effect that has not been disclosed in an announcement by Carbon Revolution to ASX or in the Disclosure Materials; |
(t) | (no contravention of Corporations Act or Listing Rules): since the date Carbon Revolution was admitted to the official list of ASX, neither ASIC nor ASX has notified Carbon Revolution in writing that they have made a determination against any member of the Carbon Revolution Group for any contravention of the requirements of the Corporations Act or the Listing Rules or any rules or regulations under the Corporations Act or the Listing Rules (other than a determination that has been withdrawn or resolved prior to the date of this deed) and, as far as Carbon Revolution is aware, no event has occurred which would reasonably be likely to result in such a determination being made; |
(u) | (litigation): except as would not have, a Carbon Revolution Material Adverse Effect: |
(1) | no Carbon Revolution Group Member is: |
(A) | a party to or the subject of any legal action, formal investigation, proceeding, dispute, claim, demand, notice, direction, inquiry, arbitration, mediation, dispute resolution or litigation, in any such case which is material and which is not initiated by or involves any SPAC Group Member; or |
(B) | the subject of any ruling, judgement, order, declaration or decree by any Government Agency, in any such case which is material; and |
(2) | so far as Carbon Revolution is aware, there is no such legal action, investigation, proceeding, dispute, claim, demand, notice, direction, inquiry, arbitration, mediation, dispute resolution, litigation, ruling, judgement, order, declaration or decree pending, threatened or anticipated, against any Carbon Revolution Group Member; |
(v) | (consents and approvals) except for: |
(1) | the filing of any required applications, filings and notices, as applicable, with the Nasdaq or NYSE (as applicable), SEC, ASX, FIRB, or ASIC; |
(2) | approval of the Scheme by Court; and |
(3) | in relation to any grants provided by any Government Agency, |
(4) | the execution and delivery by it of this deed and each Transaction Document to which it is a party; or |
(5) | the implementation of the Scheme and the other transactions contemplated by this deed, the BCA and each Transaction Document to which it is a party, |
(w) | (encumbrances): as at the date of this deed and except as would not have a Carbon Revolution Material Adverse Effect there is no Security Interest over all or any of the Carbon Revolution Group’s present or future assets or revenues; |
(x) | (intellectual property): except as would not have a Carbon Revolution Material Adverse Effect |
(1) | each Carbon Revolution Group Member owns, holds, possesses or is authorised to use all patents, patent rights, licences, inventions, copyrights, know-how (including trade secrets and other unpatented or unpatentable proprietary or confidential information, systems, processes or procedures), trademarks, service marks and other trade names currently used by them in connection with the business now operated by them (Intangible Rights); and |
(2) | no Carbon Revolution Group Member has received any notice of any claim of infringement (and no Carbon Revolution Group Member knows of any such claim of infringement) of any asserted rights of others with respect to the use of any of the Intangible Rights. |
(y) | (data protection) so far as Carbon Revolution is aware and except as would not have, a Carbon Revolution Material Adverse Effect, there have been no security breaches, violations of any security policy or applicable law or instances of unauthorised access to data or information used by any member of the Carbon Revolution Group. The Carbon Revolution Group maintains commercially reasonable policies and procedures regarding data security and privacy, and administrative, technical and physical safeguards, and the foregoing policies, procedures and safeguards are, in each case and in all material respects, in compliance with all applicable contractual obligations and applicable laws. |
(z) | (no defects) except as would not have a Carbon Revolution Material Adverse Effect, there is no defect, fault or other condition, actual, potential or threatened, of any product line supplied or manufactured by a member of the Carbon Revolution Group; |
(aa) | (no product recall) and except as would not have a Carbon Revolution Material Adverse Effect no product of any member of the Carbon Revolution Group is involved in any product recall, an after sale warning, or an investigation by a Government Agency as to its safety or as to its compliance with applicable law or standards, or with any warranty given or representation made by that member of the Carbon Revolution Group, and as far as Carbon Revolution is aware there are no circumstances that could give rise to such recall, warning or investigation; |
(bb) | (no default) no member of the Carbon Revolution Group is in default under any document, agreement or instrument binding on it or its assets nor has anything occurred which is or would with the giving |
(cc) | (Carbon Revolution Shares not indirect Australian real property interests) the relevant Carbon Revolution Shares held by each Scheme Participant are not, and until (and including) the Implementation Date will not be, indirect Australian real property interests within the meaning of Division 855 of the Tax Act for the Scheme Participant; |
(dd) | (financial information and filings): |
(1) | the financial statements of the Carbon Revolution Group included (or incorporated by reference) in Carbon Revolution Reporting Documents (as defined below) (Financial Statements), including the related notes, where applicable: |
(1) | have been prepared from the books and records of the Carbon Revolution Group; |
(A) | have been prepared in all material respects in accordance with the requirements of the Corporations Act and any other applicable laws and in accordance with the Accounting Standards; and |
(B) | give a true and fair view in all material respects of the consolidated financial position of the Carbon Revolution Group and the consolidated results of operations and changes in cash flows and equity of the Carbon Revolution Group as of the respective dates and for the periods therein set forth; |
(2) | the Financial Statements (including the notes thereto) (i) fairly present, in all material respects, the consolidated financial position of Carbon Revolution Group, as of the respective dates thereof and the consolidated results of their operations, their consolidated comprehensive incomes or losses, their consolidated changes in shareholders’ equity and their consolidated cash flows for the respective periods then ended (subject, in the case of the Unaudited Financial Statements, to normal year end adjustments (none of which are, individually or in the aggregate, material to Carbon Revolution’s business taken as a whole) and the absence of footnotes or inclusion of limited footnotes), (ii) were prepared in accordance with IFRS, applied on a consistent basis during the periods covered (except as may be specifically indicated in the notes thereto and, in the case of the Unaudited Financial Statements, the absence of footnotes or the inclusion of limited footnotes), and (iii) were prepared from, and are in accordance in all material respects with, the books and records of Carbon Revolution’s business; |
(3) | each of the financial statements or similar reports of Carbon Revolution required to be included in the F-4, Proxy Statement, Form 6-K filed in connection with and announcing the Closing or any other filings to be made with the SEC in connection with the transactions contemplated by the BCA or any Ancillary Agreement (the financial statements described in this sentence, which the Parties acknowledge shall, with respect to historical financial statements, solely consist of such financial statements when delivered), (i) will fairly present, in all material respects, the consolidated financial position of Carbon Revolution Group, as of the respective dates thereof and the consolidated results of their operations, their consolidated comprehensive incomes or losses, their consolidated changes in stockholders’ equity and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited financial statements, to normal year end adjustments (none of which are, individually or in the aggregate, material to Carbon Revolution’s business take, (ii) prepared in accordance with IFRS, applied on a consistent basis during the periods covered (except as may be specifically indicated in the notes thereto and, in the case of the unaudited financial statements, the absence of footnotes or the inclusion of limited footnotes) (iii) in the case of any audited financial statements, will be audited in accordance with the standards of the PCAOB and IFRS and will contain an unqualified report of |
(4) | to the extent any of the books and records of each Carbon Revolution Group Member are required to be maintained in accordance with the Accounting Standards, the Corporations Act and other applicable laws, such books and records have been, and are being, maintained in all material respects in accordance with the relevant requirements; |
(5) | as at the date of this deed, no member of the Carbon Revolution Group has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), other than those liabilities: |
(C) | that are reflected or reserved against on the consolidated balance sheet of the Carbon Revolution Group included in its report for the full year ended June 30, 2022 (including any notes thereto), |
(D) | incurred in the ordinary course of business since June 30, 2022, or |
(E) | incurred in connection with this deed and the transactions contemplated by this deed; |
(6) | since June 30, 2022: |
(A) | no member of the Carbon Revolution Group, nor, to the knowledge of Carbon Revolution, any director, officer, auditor, accountant or Representative of any member of the Carbon Revolution Group, has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or, to the knowledge of Carbon Revolution, oral, regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to reserves, write-downs, charge- offs and accruals) of any member of the Carbon Revolution Group or their respective internal accounting controls, including any complaint, allegation, assertion or claim that a member of the Carbon Revolution Group has engaged in inappropriate accounting or auditing practices; and |
(B) | no employee of or legal adviser representing a member of the Carbon Revolution Group, whether or not employed by a member of the Carbon Revolution Group, has reported in writing evidence of a breach of securities laws, breach of fiduciary duty or similar breach by a member of the Carbon Revolution Group or any of its directors, officers, employees or agents to the Carbon Revolution Board or any committee thereof or the board of directors or similar governing body of any Subsidiary of Carbon Revolution or any committee thereof, or to the knowledge of Carbon Revolution, to any officer of a member of the Carbon Revolution Group; |
(2) | since the admission of Carbon Revolution to the official list of ASX, it has timely filed with ASIC and the ASX all required material reports, schedules, prospectuses, forms, statements, notices and other documents required to be filed with ASIC and the ASX, including any notices required to be filed by the Listing Rules (all of those documents being the “Carbon Revolution Reporting Documents”); |
(3) | as of its date, each Carbon Revolution Reporting Document complied in all material respects with the requirements of the Corporations Act and the Listing Rules and all rules, regulations and policy statements under the Corporations Act and the Listing Rules; and |
(4) | none of the Carbon Revolution Reporting Documents as of the date of their respective filings (or, if amended or superseded by a filing prior to the date of this document, on the date of such amended or superseding filing) contained an untrue statement of a material fact or omitted to state a material fact required to be stated in it or necessary to prevent the statement made from being false or misleading in the circumstances in which it has been made; |
(ee) | (certain payments) no member of the Carbon Revolution Group or, to Carbon Revolution’s knowledge, any of its respective officers, directors, employees, agents or representatives has, directly or indirectly, in connection with the business of the Carbon Revolution Group: (i) made, offered or |
(ff) | (broker’s fees) no member of the Carbon Revolution Group, nor any of their respective officers or directors has employed any broker, finder or financial adviser or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Transaction or transactions contemplated by this deed; |
(gg) | (absence of certain changes or events) |
(1) | since June 30, 2022 through to the date of this deed, there has not been any Carbon Revolution Material Adverse Effect; and |
(2) | since June 30, 2022 through to the date of this deed, the Carbon Revolution Group has carried on its business in all material respects in the ordinary course; |
(hh) | (taxes) except as would not have a Carbon Revolution Material Adverse Effect: |
(1) | it has submitted any necessary information, notices, computations and returns to the relevant Government Agency in respect of any Tax or any Duty relating to each Carbon Revolution Group Member and all such documentation is true, complete and correct and prepared in compliance with applicable law; |
(2) | all Taxes for which a member of the Carbon Revolution Group is liable that are or have been due and payable, including any penalty or interest, have been paid, and any obligation on a member of the Carbon Revolution Group under any Tax Law to withhold amounts at source on account of Tax has been complied with; |
(3) | there is no active, pending or threatened Tax or Duty audit relating to a member of the Carbon Revolution Group; |
(4) | each member of the Carbon Revolution Group has maintained proper and adequate records to enable it to comply with its obligations to: |
(A) | prepare and submit any information, notices, computations, returns and payments required in respect of any Tax Law; |
(B) | prepare any accounts necessary for the compliance with any Tax Law; |
(C) | support any position taken by a member of the Carbon Revolution Group; and |
(D) | retain necessary records as required by any Tax Law; |
(5) | no member of the Carbon Revolution Group is, nor has been, a member or part of or otherwise subject to any income tax consolidated group, GST group or other grouping arrangements in respect of Taxes, with an entity that is not a member of the Carbon Revolution Group; |
(6) | no member of the Carbon Revolution Group has a permanent establishment (within the meaning of an applicable Tax treaty) in, or otherwise conducts a trade or business in, any jurisdiction outside of the relevant member of the Carbon Revolution Group’s place of incorporation; |
(7) | no member of the Carbon Revolution Group has entered into or been party to any transaction which contravenes any anti-avoidance provisions of any Tax Law; |
(8) | no member of the Carbon Revolution Group has taken any action which has altered or prejudiced or might alter or prejudice any arrangement, agreement or Tax ruling which has previously been negotiated with or obtained from the relevant Government Agency or under any Tax Law; |
(9) | no member of the Carbon Revolution Group is or is expected to become liable to pay, reimburse or indemnify any Tax of any other person; |
(10) | each member of the Carbon Revolution Group has been a resident for Tax purposes solely in the jurisdiction of its incorporation; |
(11) | since it commenced carrying on business or deriving income, the office of public officer of each member of the Carbon Revolution Group as required under any Tax Law has been occupied without vacancy thereof; |
(12) | all documents and transactions entered into or made by a member of the Carbon Revolution Group which are required to be stamped have been duly stamped and appropriately lodged with the relevant Government Agency, and there are no outstanding assessments of Duty (including fines, penalties and interest) in respect of any document, instrument or statement which a member of the Carbon Revolution Group is liable to pay stamp Duty on, nor any requirement on the part of a member of the Carbon Revolution Group to upstamp any document or instrument in the future on account of any interim stamping or assessment nor any requirement on the part of a member of the Carbon Revolution Group to lodge and pay stamp duty for any transaction that has occurred but for which the liability to stamp duty has not yet arisen; |
(13) | no member of the Carbon Revolution Group has obtained, wholly or in part, any corporate reconstruction or corporate consolidation, concession, exemption or ex gratia relief from payment of duty in any Australian jurisdiction; |
(14) | no event has occurred which has resulted in any Duty from which a member of the Carbon Revolution Group obtained relief (including but not limited to corporate reconstruction or corporate consolidation, exemption or concession or ex gratia relief), becoming payable, and the implementation of the Scheme will not result in any such Duty becoming payable; |
(15) | no member of the Carbon Revolution Group is or has been (i) a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code or (ii) treated as a U.S. corporation under Section 7874(b) of the Code; |
(16) | each member of the Carbon Revolution Group is in material compliance with all applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practices and methodology between members of the Carbon Revolution Group. All intercompany agreements have been adequately documented, and such documents have been duly executed in a timely manner. The prices for any property or services (or for the use of any property) provided by or to a member of the Carbon Revolution Group are arm’s-length prices for the purposes of all applicable transfer pricing laws; |
(17) | no member of the Carbon Revolution Group has a share capital account that is tainted under Division 197 or section 160ARDM of the Tax Act; |
(18) | the commercial debt forgiveness rules contained in Division 245 of the Tax Act (or its predecessor provisions in Schedule 2C of the Tax Act) have not resulted in a net forgiven amount (as defined in those rules) for any member of the Carbon Revolution Group; |
(19) | no member of the Carbon Revolution Group has consented to extend or waive the time in which any Tax may be assessed or collected by any Government Agency; |
(20) | no member of the Carbon Revolution Group will be required to include any item in taxable income, or exclude any item of deduction, for any period ending after the Closing by reason of (i) a change in method of accounting for any period (or portion thereof) ending on or before the |
(21) | no written claims have ever been made by any Government Agency in a jurisdiction where any member of the Carbon Revolution Group does not file Tax Returns that such member of the Carbon Revolution Group is or may be subject to taxation by that jurisdiction; |
(22) | where a member of the Carbon Revolution Group has claimed any support, financial assistance, payment, deferral or relief in connection with COVID-19 from any Government Agency or under any law (including the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth)), the member of the Carbon Revolution Group: |
(A) | has satisfied all requirements under applicable laws and administrative practices of the Government Agency; and |
(B) | has satisfied, received and otherwise complied with all applicable authorisations (including administrative practices of the Government Agency), to receive such support, assistance, payment or relief; |
(ii) | (employees) except as would not have a Carbon Revolution Material Adverse Effect: |
(1) | the Disclosure Materials accurately set out the period of service, remuneration package (including bonuses, profit share, and employee incentive plan entitlements), applicable allowances, redundancy or termination entitlements and accrued leave (including long service leave, annual leave and personal leave) for each employee of the Carbon Revolution Group as at the date specified in the relevant Disclosure Materials; |
(2) | except as arising in the ordinary course of business before the Implementation Date, no Carbon Revolution Group Member is under, nor will it assume before the Implementation Date, any liability to any employee of the Carbon Revolution Group for any pension, lump sum retiring allowance or redundancy payment or any liability with respect to annual, long service or personal leave; |
(3) | each Carbon Revolution Group Member materially complies with all obligations under employment contracts, industrial agreements and awards, and with all codes of conduct and practice relevant to conditions of service and to the relations between it and the employees employed by it; |
(4) | no Carbon Revolution Group Member is a party to any workplace agreement with a trade union or industrial organisation, group of employees or individual employees in respect of the Carbon Revolution Group and no industrial awards or workplace agreements apply to any employees of a Carbon Revolution Group Member; |
(5) | no Carbon Revolution Group Member has been involved in any dispute with any union or employee of a Carbon Revolution Group Member at any time within the 6 months preceding the date of this deed. |
(jj) | (superannuation) except as would not have a Carbon Revolution Material Adverse Effect: |
(1) | the external superannuation funds disclosed in the Disclosure Materials are the only superannuation funds in operation in relation to employees of the Carbon Revolution Group and to which a Carbon Revolution Group Member contributes or is obliged to contribute in respect of employees of the Carbon Revolution Group; and |
(2) | with respect to the External Superannuation Funds the prescribed minimum level of superannuation support in respect of each employee of the Carbon Revolution Group has been provided so as not to incur a shortfall amount under the Superannuation Guarantee (Administration) Act 1992 (Cth). |
(kk) | (real property) |
(1) | there are no freehold properties owned by the Carbon Revolution Group; |
(2) | Carbon Revolution or another member of the Carbon Revolution Group is the lessee of all leasehold estates reflected in the audited financial statements included in Carbon Revolution’s annual report for the financial year ended June 30, 2022 or acquired after that date (except for leases that have expired by their terms since that date), free and clear of all material Encumbrances and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the knowledge of Carbon Revolution, the lessor, except as would not have a Carbon Revolution Material Adverse Effect; and |
(3) | to the knowledge of Carbon Revolution, no Carbon Revolution Group Member has received a notice to vacate or notice to quit from any third party pursuant to any real property leased by a member of the Carbon Revolution Group, except as would not have a Carbon Revolution Material Adverse Effect; |
(ll) | (Material Contracts) except as would not have a Carbon Revolution Material Adverse Effect: |
(1) | the Disclosure Materials contain a true and complete copy of each Material Contract; |
(2) | each Material Contract is in full force and effect and is valid and binding on the applicable member of the Carbon Revolution Group and the relevant Carbon Revolution Group Member has in all material respects complied with and performed all obligations required to be complied with or performed by it to date under each Material Contract; |
(3) | as at the date of this deed, no member of the Carbon Revolution Group has knowledge of, or has received notice of, any breach of any Material Contract by any of the other parties thereto; and |
(4) | as at the date of this deed, no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material breach or default on the part of the Carbon Revolution Group or, to the knowledge of Carbon Revolution, any other party thereto, of or under any Material Contract, or which constitutes an event of default, prepayment event or similar event, or gives another party a termination right or right to accelerate any right or obligation (including a right or obligation to any payment or fees); |
(mm) | (related party transactions) no member of the Carbon Revolution Group has entered into, or agreed to enter into, a transaction which requires, or would require, the approval of the holders of Carbon Revolution Shareholders under Chapter 10 of the Listing Rules; |
(nn) | (insurance) the Disclosure Materials contain complete and accurate particulars of all current insurance policies and cover notes taken out in respect of each member of the Carbon Revolution Group (Insurances) and, except as would not have a Carbon Revolution Material Adverse Effect: |
(1) | each Insurance is currently in full force and effect and all applicable premiums have been paid. |
(2) | as at the date of this deed, there are no outstanding claims made by a member of the Carbon Revolution Group or any person on its behalf under an Insurance or an insurance policy held by a member of the Carbon Revolution Group; and |
(3) | as of the date of this deed, no member of the Carbon Revolution Group has received written notice of any threatened termination of, premium increase with respect to, or alteration of coverage under, any Insurance. |
(a) | (validly existing): each of MergeCo and Merger Sub is a validly existing corporation registered under the laws of its place of incorporation; |
(b) | (authority): the execution and delivery of this deed by MergeCo has been properly authorised by all necessary corporate action of MergeCo and MergeCo has taken or will take all necessary corporate action to authorise the performance of this deed, and each other Transaction Document and the transactions contemplated by this deed; |
(c) | (power) it has power to enter into this deed, and each other Transaction Document to which it is a party in order to comply with its obligations under it and exercise its rights under it; |
(d) | (no default): neither this deed nor the carrying out by MergeCo or Merger Sub of the transactions contemplated by this deed, the BCA and each other Transaction Document to which it is a party does or will conflict with or result in the breach of or a default under: |
(1) | any provision of MergeCo’s or Merger Sub’s constituent documents (as applicable); or |
(2) | any writ, order or injunction, judgment, law, rule or regulation to which it is party or subject or by which it is bound, |
(e) | (validity of obligations): its obligations under this deed are valid and binding and are enforceable against it in accordance with its terms; |
(f) | (deed binding): this deed is a valid and binding obligation of MergeCo, enforceable in accordance with its terms; |
(g) | (MergeCo Information): the MergeCo Information provided for inclusion in the Scheme Booklet, as at the date the Scheme Booklet is despatched to Carbon Revolution Shareholders, will be accurate in all material respects and will not contain any statement which is materially misleading or deceptive (with any statement of belief or opinion being honestly held and formed on a reasonable basis), including by way of omission from that statement; |
(h) | (basis of MergeCo Information): the MergeCo Information: |
(1) | will be provided to Carbon Revolution in good faith; and |
(2) | will comply in all material respects with the requirements of the Corporations Act, the Corporations Regulations, RG 60, applicable Takeovers Panel guidance notes and the Listing Rules; |
(i) | (new information): it will, as a continuing obligation, provide to Carbon Revolution all further or new information which arises after the Scheme Booklet has been despatched to Carbon Revolution Shareholders until the date of the Scheme Meeting which is necessary to ensure that the MergeCo Information is not misleading or deceptive (including by way of omission); |
(j) | (Insolvency Event or regulatory action): no Insolvency Event has occurred in relation to it or Merger Sub, nor has any regulatory action of any nature been taken that would reasonably be likely to prevent or restrict its ability to fulfil its obligations under this deed, under the Deed Poll or under the Scheme; |
(k) | (no regulatory approvals): other than as contemplated by this deed, it does not require any approval, consent, clearance, waiver, ruling, relief, confirmation, exemption, declaration or notice from any Government Agency in order to execute and perform this deed, the BCA or the Transaction Documents; |
(l) | (ownership and operations): MergeCo was formed on 5 July 2017 and since that date has engaged in no other business activities, acquired no assets, engaged no employees, and has no liabilities or obligations (other than incurred in connection with the transactions contemplated by this deed, the BCA or any other Transaction Document) and has conducted its operations only as contemplated by this deed, the BCA or any other Transaction Document. |
(m) | (Brokers): No broker, finder or banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transaction, or the transaction contemplated under the Transaction Documents, based upon arrangements made by or on behalf of MergeCo or Merger Sub; and |
(n) | (capital structure): as at the date of this deed the capital structure of MergeCo and Merger Sub is as set out in Part 2 of Schedule 5 and neither MergeCo nor Merger Sub has agreed to issue any other shares or other securities, including any securities which may be converted or exchanged into MergeCo or Merger Sub shares or other securities. |
Security | | | Total number on issue |
Fully paid ordinary shares | | | 206,909,911 |
Performance rights | | | 1,381,551 |
Unquoted options (ASX: CBRAE) | | | 4,996,896 |
Unquoted options (ASX: CBRAI) | | | 6,303,901 |
Security | | | Total number on issue |
MergeCo fully paid ordinary shares | | | 100 |
Merger Sub fully paid ordinary shares | | | 1 |
Executed as a deed | | ||||||||
| | | | | | ||||
| | Carbon Revolution | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Carbon Revolution Limited under section 127 of the Corporations Act 2001 (Cth) by | | | | | |||
| | | | | | ||||
sign here ► | | | /s/ James Douglas | | | sign here ► | | | /s/ Dale Anthony McKee |
| | Director | | | | | Director | ||
| | | | | | ||||
print name | | | James Douglas | | | print name | | | Dale Anthony McKee |
| | SPAC | | | | | |||
| | | | | | ||||
| | Signed sealed and delivered by Twin Ridge Capital Acquisition Corp in the presence of | | | | | Seal | ||
| | | | | | ||||
sign here ► | | | /s/ William P. Russell Jr. | | | sign here ► | | | /s/ Bonnie Purcell |
| | Authorised signatory | | | | | Witness | ||
| | | | | | ||||
print name | | | William P. Russell Jr. | | | print name | | | Bonnie Purcell |
SIGNED SEALED AND DELIVERED for and on behalf of and as the deed of POPPETELL LIMITED by its lawfully appointed attorney l [insert name of attorney] in the presence of: | | | Seal |
| | ||
/s/ Rodney O’Rourke | | | /s/ Ronan Donohoe |
Signature of witness | | | Signature of attorney |
| | ||
Rodney O’Rourke | | | Ronan Donohoe - Director |
Name of witness | | | Print name of attorney |
| | ||
Palmerston House, Denzille Lane, Dublin 2 | | | |
Address of witness | | | |
| | ||
Solicitor | | | |
Occupation of witness | | |
1. | The name of the Company is CARBON REVOLUTION PUBLIC LIMITED COMPANY. |
2. | The Company is a public limited company, registered under Part 17 of the Companies Act 2014. |
3. | The objects for which the Company is established are: |
3.1 | To carry on the business of a holding company and to co-ordinate the administration, finances and activities of any subsidiary companies or associated companies, to do all lawful acts and things whatever that are necessary or convenient in carrying on the business of such a holding company and in particular to carry on in all its branches the business of a management services company, to act as managers and to direct or coordinate the management of other companies or of the business, property and estates of any company or person and to undertake and carry out all such services in connection therewith as may be deemed expedient by the Company’s board of directors and to exercise its powers as a shareholder of other companies. |
3.2 | To carry on the businesses of manufacturer, distributor, wholesaler, retailer, service provider, investor, designer, trader and any other business (except the issuing of policies of insurance) which may seem to the Company’s board of directors capable of being conveniently carried on in connection with these objects or calculated directly or indirectly to enhance the value of or render more profitable any of the Company’s property. |
3.3 | To carry on all or any of the businesses as aforesaid either as a separate business or as the principal business of the Company. |
3.4 | To invest and deal with the property of the Company in such manner as may from time to time be determined by the Company’s board of directors and to dispose of or vary such investments and dealings. |
3.5 | To borrow or raise money or capital in any manner and on such terms and subject to such conditions and for such purposes as the Company’s board of directors shall think fit or expedient, whether alone or jointly and/or severally with any other person or company, including, without prejudice to the generality of the foregoing, whether by the issue of debentures or debenture stock (perpetual or otherwise) or otherwise, and to secure, with or without consideration, the payment or repayment of any money borrowed, raised or owing or any debt, obligation or liability of the Company or of any other person or company whatsoever in such manner and on such terms and conditions as the Company’s board of directors shall think fit or expedient and, in particular by mortgage, charge, lien, pledge or debenture or any other security of whatsoever nature or howsoever described, perpetual or otherwise, charged upon all or any of the Company’s property, both present and future, and to purchase, redeem or pay off any such securities or borrowings and also to accept capital contributions from any person or company in any manner and on such terms and conditions and for such purposes as the Company’s board of directors shall think fit or expedient. |
3.6 | To lend and advance money or other property or give credit or financial accommodation to any company or person in any manner either with or without security and whether with or without the payment of interest and upon such terms and conditions as the Company’s board of directors shall think fit or expedient. |
3.7 | To guarantee, indemnify, grant indemnities in respect of, enter into any suretyship or joint obligation, or otherwise support or secure, whether by personal covenant, indemnity or undertaking or by mortgaging, charging, pledging or granting a lien or other security over all or any part of the Company’s property (both present and future) or by any one or more of such methods or any other method and whether in support of such guarantee or indemnity or suretyship or joint obligation or otherwise, on such terms and conditions as the Company’s board of directors shall think fit, the payment of any debts or the performance or discharge of any contract, obligation or liability of any person or company (including, without prejudice to the generality of the foregoing, the payment of any capital, principal, dividends or interest on any stocks, shares, debentures, debenture stock, notes, bonds or other securities of any person, authority or company) including, without prejudice to the generality of the foregoing, any company which is for the time being the Company’s holding company or another subsidiary (as defined by the Act) of the Company’s holding company or a subsidiary of the Company or otherwise associated with the Company (including any arrangements of the Company or any of its subsidiaries), in each case notwithstanding the fact that the Company may not receive any consideration, advantage or benefit, direct or indirect, from entering into any such guarantee or indemnity or suretyship or joint obligation or other arrangement or transaction contemplated herein. |
3.8 | To grant, convey, assign, transfer, exchange or otherwise alienate or dispose of any property of the Company of whatever nature or tenure for such price, consideration, sum or other return whether equal to or less than the market value thereof or for shares, debentures or securities and whether by way of gift or otherwise as the Company’s board of directors shall deem fit or expedient and where the property consists of real property to grant any fee farm grant or lease or to enter into any agreement for letting or hire of any such property for a rent or return equal to or less than the market or rack rent therefor or at no rent and subject to or free from covenants and restrictions as the Company’s board of directors shall deem appropriate. |
3.9 | To purchase, take on, lease, exchange, rent, hire or otherwise acquire any property and to acquire and undertake the whole or any part of the business and property of any company or person. |
3.10 | To develop and turn to account any land acquired by the Company or in which it is interested and in particular by laying out and preparing the same for building purposes, constructing, altering, pulling down, decorating, maintaining, fitting out and improving buildings and conveniences and by planting, paving, draining, farming, cultivating, letting and by entering into building leases or building agreements and by advancing money to and entering into contracts and arrangements of all kinds with builders, contractors, architects, surveyors, purchasers, vendors, tenants and any other person. |
3.11 | To construct, improve, maintain, develop, work, manage, carry out or control any property which may seem calculated directly or indirectly to advance the Company’s interest and to contribute to, subsidise or otherwise assist or take part in the construction, improvement, maintenance, working, management, carrying out or control thereof. |
3.12 | To draw, make, accept, endorse, discount, execute and issue promissory notes, bills of exchange, bills of lading, warrants, debentures and other negotiable or transferable instruments. |
3.13 | To engage in currency exchange, interest rate and commodity transactions including, but not limited to, dealings in foreign currency, spot and forward rate exchange contracts, futures, options, forward rate agreements, swaps, caps, floors, collars and any other foreign exchange, interest rate or commodity hedging arrangements and such other instruments as are similar to, or derived from, any of the foregoing whether for the purpose of making a profit or avoiding a loss or managing a currency, interest rate or commodity exposure or any other exposure or for any other purpose. |
3.14 | As a pursuit in itself or otherwise and whether for the purpose of making a profit or avoiding a loss or managing a currency, interest rate or commodity exposure or any other exposure or for any other purpose whatsoever, to engage in any currency exchange transactions, interest rate transactions and |
3.15 | To apply for, establish, create, purchase or otherwise acquire, sell or otherwise dispose of and hold any patents, trade marks, copyrights, brevets d’invention, registered designs, licences, concessions and the like conferring any exclusive or non-exclusive or limited rights to use or any secret or other information and any invention and to use, exercise, develop or grant licences in respect of or otherwise turn to account or exploit the property, rights or information so held. |
3.16 | To enter into any arrangements with any governments or authorities, national, local or otherwise and to obtain from any such government or authority any rights, privileges and concessions and to carry out, exercise and comply with any such arrangements, rights, privileges and concessions. |
3.17 | To establish, form, register, incorporate or promote any company or companies or person, whether inside or outside of Ireland. |
3.18 | To procure that the Company be registered or recognised whether as a branch or otherwise in any country or place. |
3.19 | To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transaction and to engage in any transaction in connection with the foregoing. |
3.20 | To acquire or amalgamate with any other company or person. |
3.21 | To acquire and undertake the whole or any part of the business, good-will and assets of any person, firm or company carrying on or proposing to carry on any of the businesses which this Company is authorised to carry on, and as part of the consideration for such acquisition to undertake all or any of the liabilities of such person, firm or company, or to acquire an interest in, amalgamate with, or enter into any arrangement for sharing profits, or for co-operation, or for mutual assistance with any such person, firm or company and to give or accept by way of consideration for any of the acts or things aforesaid or property acquired, any shares, debentures, debenture stock or securities that may be agreed upon, and to hold and retain or sell, mortgage or deal with any shares, debentures, debenture stock or securities so received. |
3.22 | To promote freedom of contract, and to resist, insure against, counteract and discourage interference therewith, to join any lawful federation, union or association, or do any other lawful act or thing with a view to preventing or resisting directly or indirectly any interruption of or interference with the Company’s or any other trade or business or providing or safeguarding against the same, or resisting or opposing any strike, movement or organisation which may be thought detrimental to the interests of the Company or its employees and to subscribe to any association or fund for any such purposes. |
3.23 | To make gifts to any person or company including, without prejudice to the generality of the foregoing, capital contributions and to grant bonuses to the directors or any other persons or companies who are or have been in the employment of the Company including substitute directors and any other officer or employee. |
3.24 | To establish and support or aid in the establishment and support of associations, institutions, funds, trusts and conveniences calculated to benefit directors, ex-directors, employees or ex-employees of the Company or any subsidiary of the Company or the dependants or connections of such persons, and to grant pensions and allowances upon such terms and in such manner as the Company’s board of directors think fit, and to make payments towards insurance and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition or for any public, general or useful object, or any other object whatsoever which the Company’s board of directors may think advisable. |
3.25 | To establish and contribute to any scheme for the purchase of shares or subscription for shares in the Company, its holding company or any of its or their respective subsidiaries, to be held for the benefit of the employees or former employees of the Company or any subsidiary of the Company including any person who is or was a director holding a salaried employment or office in the Company or any subsidiary of the Company and to lend or otherwise provide money to the trustees of such schemes or the employees or former employees of the Company or any subsidiary of the Company to enable them to purchase shares of the Company, its holding company or any of its or their respective subsidiaries and to formulate and carry into effect any scheme for sharing the profits of the Company, its holding company or any of its or their respective subsidiaries with its employees and/or the employees of any of its subsidiaries. |
3.26 | To remunerate any person or company for services rendered or to be rendered in placing or assisting to place or guaranteeing the placing of any of the shares of the Company’s capital or any debentures, debenture stock or other securities of the Company or in or about the formation or promotion of the Company or the conduct of its business. |
3.27 | To obtain any Act of the Oireachtas or provisional order for enabling the Company to carry any of its objects into effect or for effecting any modification of the Company’s constitution or for any other purpose which may seem expedient and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Company’s interests. |
3.28 | To adopt such means of making known the products of the Company as may seem expedient and in particular by advertising in the press, by circulars, by purchase and exhibition of works of art or interest, by publication of books and periodicals and by granting prizes, rewards and donations. |
3.29 | To undertake and execute the office of trustee and nominee for the purpose of holding and dealing with any property of any kind for or on behalf of any person or company; to act as trustee, nominee, agent, executor, administrator, registrar, secretary, committee or attorney generally for any purpose and either solely or with others for any person or company; to vest any property in any person or company with or without any declared trust in favour of the Company. |
3.30 | To pay all costs, charges, fees and expenses incurred or sustained in or about the promotion, establishment, formation and registration of the Company. |
3.31 | To do all or any of the above things in any part of the world, and as principals, agents, contractors, trustees or otherwise and by or through trustees, agents or otherwise and either alone or in conjunction with any person or company. |
3.32 | To distribute the property of the Company in specie among the members or, if there is only one, to the sole member of the Company. |
3.33 | To do all such other things as the Company’s board of directors may think incidental or conducive to the attainment of the above objects or any of them. |
a) | the word “company”, except where used in reference to this Company, shall be deemed to include a body corporate, whether a company (wherever formed, registered or incorporated), a corporation aggregate, a corporation sole and a national or local government or other legal entity; and |
b) | the word “person”, shall be deemed to include any individual, firm, body corporate, association or partnership, government or state or agency of a state, local authority or government body or any joint venture association or partnership (whether or not having a separate legal personality) and that person’s personal representatives, successors or permitted assigns; and |
c) | the word “property”, shall be deemed to include, where the context permits, real property, personal property including choses or things in action and all other intangible property and money and all estates, rights, titles and interests therein and includes the Company’s uncalled capital and future calls and all and every other undertaking and asset; and |
d) | a word or expression used in this memorandum of association which is not otherwise defined and which is also used in the Companies Act 2014 shall have the same meaning here, as it has in the Companies Act 2014; and |
e) | any phrase introduced by the terms “including”, “include” and “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms, whether or not followed by the phrases “but not limited to”, “without prejudice to the generality of the foregoing” or any similar expression; and |
f) | words denoting the singular number only shall include the plural number and vice versa and references to one gender includes all genders; and |
g) | it is intended that the objects specified in each paragraph in this clause shall, except where otherwise expressed in such paragraph, be separate and distinct objects of the Company and shall not be in any way limited or restricted by reference to or inference from the terms of any other paragraph or the order in which the paragraphs of this clause occur or the name of the Company. |
4. | The liability of the members is limited. |
5. | The authorised share capital of the Company is US$100,000,000 divided into 800,000,000,000 Ordinary Shares with a nominal value of US$0.0001 each and 200,000,000,000 Preferred Shares with a nominal value of US$0.0001 each and €25,000 divided into 25,000 Deferred Ordinary Shares with a nominal value of €1.00 each. |
6. | The shares forming the capital may be increased or reduced and be divided into such classes and issued with any special rights, privileges and conditions or with such qualifications as regards preference, dividend, capital, voting or other special incidents, and be held upon such terms as may be attached thereto or as may from time to time be provided by the original or any substituted or amended articles of association and regulations of the Company for the time being, but so that where shares are issued with any preferential or special rights attached thereto such rights shall not be alterable otherwise than pursuant to the provisions of the Company’s articles of association for the time being. |
1. | Sections 83, 84 and 117(9) of the Act shall apply to the Company but, subject to that, the provisions set out in these Articles shall constitute the whole of the regulations applicable to the Company and no other “optional provisions” as defined by section 1007(2) of the Act shall apply to the Company. |
2. | In these Articles: |
2.1 | “Act” means the Companies Act 2014 and every statutory modification and re-enactment thereof for the time being in force; |
2.2 | “Acting in Concert” has the meaning given to it in Rule 2.1(a) and Rule 3.3 of Part A of the Takeover Rules; |
2.3 | “Adoption Date” means the effective date of adoption of these Articles; |
2.4 | “Adjourned Meeting” has the meaning given in Article 115.1; |
2.5 | “Agent” has the meaning given in Article 12.3; |
2.6 | “Approved Nominee” means a person appointed under contractual arrangements with the Company to hold shares or rights or interests in shares of the Company on a nominee basis; |
2.7 | “Article” means an article of these Articles; |
2.8 | “Articles” means these articles of association as from time to time and for the time being in force; |
2.9 | “Auditors” means the auditors for the time being of the Company; |
2.10 | “Board” means the board of Directors of the Company; |
2.11 | “Chairperson” means the person occupying the position of Chairperson of the Board from time to time; |
2.12 | “Chief Executive Officer” shall include any equivalent office; |
2.13 | “Clear Days” means, in relation to a period of notice, that period excluding the day when the notice is given or deemed to be given and excluding the day for which notice is being given or on which an action or event for which notice is being given is to occur or take effect; |
2.14 | “committee” has the meaning given in Article 187; |
2.15 | “Company” means the company whose name appears in the heading to these Articles; |
2.16 | “Company Secretary” means the person or persons appointed as company secretary or joint company secretary of the Company from time to time and shall include any assistant or deputy secretary; |
2.17 | “Concert Party” means, in relation to any person, a party who is deemed or presumed to be Acting in Concert with that person for the purposes of the Takeover Rules; |
2.18 | “contested election” has the meaning given in Article 159; |
2.19 | “Deferred Shares” means the Deferred Ordinary Shares with a nominal value of €1.00 each in the capital of the Company; |
2.20 | “Directors” means the directors for the time being of the Company or any of them acting as the Board; |
2.21 | “Director’s Certified Email Address” has the meaning given in Article 190.3; |
2.22 | “disponee” has the meaning given in Article 46.1; |
2.23 | “elected by a plurality” has the meaning given in Article 159; |
2.24 | “electronic communication” has the meaning given to that word in the Electronic Commerce Act 2000 and in addition includes in the case of notices or documents issued on behalf of the Company, such documents being made available or displayed on a website of the Company (or a website designated by the Board); |
2.25 | “Exchange” means any securities exchange or other system on which the shares of the Company may be listed or otherwise authorised for trading from time to time in circumstances where the Company has approved such listing or trading; |
2.26 | “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended; |
2.27 | “Group” means the Company and its subsidiaries from time to time and for the time being; |
2.28 | “Independent Directors” has the meaning given in Article 238.4; |
2.29 | “Institutional Investor” has the meaning given in Article 238.5 |
2.30 | “Interested Person” has the meaning given in Article 238.6; |
2.31 | “member” means, in relation to any share, the member whose name is entered in the Register as the holder of the share or, where the context permits, the members whose names are entered in the Register as the joint holders of shares and shall include a member’s personal representatives in consequence of his or her death or bankruptcy; |
2.32 | “Memorandum” means the memorandum of association of the Company; |
2.33 | “Office” means the registered office for the time being of the Company; |
2.34 | “Ordinary Shares” means the Ordinary Shares with a nominal value of US$0.0001 each in the capital of the Company; |
2.35 | “Preferred Shares” means the Preferred Shares with a nominal value of US$0.0001 each in the capital of the Company; |
2.36 | “Proceedings” has the meaning given in Article 253; |
2.37 | “Redeemable Shares” means redeemable shares as defined by section 64 of the Act; |
2.38 | “Re-designation Event” means; |
(a) | the transfer of Restricted Voting Ordinary Shares from a Restricted Shareholder to a Shareholder or other person who is not a Restricted Shareholder; |
(b) | an event whereby a Restricted Shareholder ceases to be restricted from holding securities conferring voting rights in the Company without a Takeover Rules Event occurring by virtue of Rule 9 of the Takeover Rules, except in these circumstances the number of Restricted Voting Ordinary Shares which shall be re-designated as Ordinary Shares shall be the maximum number of Restricted Voting Ordinary Shares that can be re-designated without the former Restricted Shareholder becoming or remaining a Restricted Shareholder on the Re-designation Event; or |
(c) | a Restricted Shareholder of the Company undertaking a Takeover Rules Event and the Takeover Panel consenting to some or all of the Restricted Voting Ordinary Shares being re-designated as Ordinary Shares, in which case only those Restricted Voting Ordinary Shares the re-designation of which has been consented to by the Takeover Panel shall be re-designated as Ordinary Shares; |
2.39 | “Register” means the register of members of the Company to be kept as required by the Act; |
2.40 | “Restricted Shareholder” means a member of the Company or other person who is restricted from holding securities conferring voting rights in the Company without a Takeover Rules Event occurring by virtue of Rule 9 of the Takeover Rules or a member or person who would be so restricted but for the limitations on voting rights set out under Article 7, provided that where two or more persons are deemed or presumed (and such presumption has not been rebutted) to be Acting in Concert for the purpose of Rule 9 of the Takeover Rules, only the person who acquired the securities conferring voting |
2.41 | “Restricted Voting Ordinary Shares” means |
(a) | an Interest in Securities acquired by a Restricted Shareholder where the Restricted Shareholder has not elected for a Takeover Rules Event to occur; or |
(a) | Ordinary Shares the subject of a notification by a Shareholder by at least 10 Business Days’ notice in writing to the Company that such Shareholder wishes for such Ordinary Shares to be designated as Restricted Voting Ordinary Shares; |
2.42 | “Rights” has the meaning given in Article 242; |
2.43 | “Rights Plan” has the meaning given in Article 241; |
2.44 | “SEC” means the U.S. Securities and Exchange Commission; |
2.45 | “securities conferring voting rights” shall be construed in accordance with the definitions of “security” and “interest in a security” in section 1 of the Irish Takeover Panel Act 1997; |
2.46 | “Shareholder” means a holder of shares in the capital of the Company; |
2.47 | “Takeover Panel” means the Irish Takeover Panel established under the Irish Takeover Panel Act 1997; |
2.48 | “Takeover Rules” means the Takeover Panel Act 1997, Takeover Rules 2022; and |
2.49 | “Takeover Rules Event” means either of the following events: |
(a) | a Restricted Shareholder and/or its Concert Parties (if any) extending an offer to the holders of each class of equity shares of the Company in accordance with Rule 9 of the Takeover Rules; or |
(b) | the Company obtaining approval of the Takeover Panel for a waiver of Rule 9 of the Takeover Rules in respect of a Restricted Shareholder or any of its Concert Parties (as applicable). |
a) | the word “company”, except where used in reference to this Company, shall be deemed to include a body corporate, whether a company (wherever formed, registered or incorporated), a corporation aggregate, a corporation sole and a national or local government or other legal entity; and |
b) | the word “person”, shall be deemed to include any individual, firm, body corporate, association or partnership, government or state or agency of a state, local authority or government body or any joint venture association or partnership (whether or not having a separate legal personality) and that person’s personal representatives, successors or permitted assigns; and |
c) | the word “property”, shall be deemed to include, where the context permits, real property, personal property including choses or things in action and all other intangible property and money and all estates, rights, titles and interests therein and includes the Company’s uncalled capital and future calls and all and every other undertaking and asset; and |
d) | a word or expression used in the Articles which is not otherwise defined and which is also used in the Act shall have the same meaning here, as it has in the Act; and |
e) | any phrase introduced by the terms “including”, “include” and “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms, whether or not followed by the phrases “but not limited to”, “without prejudice to the generality of the foregoing” or any similar expression; and |
f) | words denoting the singular number only shall include the plural number and vice versa and references to one gender includes all genders. |
3. | The authorised share capital of the Company is US$100,000,000 divided into 800,000,000,000 Ordinary Shares with a nominal value of US$0.0001 each and 200,000,000,000 Preferred Shares with a nominal value of US$0.0001 each and €25,000 divided into 25,000 Deferred Ordinary Shares with a nominal value of €1.00 each |
4. | The Ordinary Shares shall rank pari passu in all respects and shall: |
4.1 | subject to the right of the Company to set record dates for the purposes of determining the identity of members entitled to notice of and/or to vote at a general meeting and the authority of the Board and chairperson of the meeting to maintain order and security, include the right to attend any general meeting of the Company and to exercise one vote per Ordinary Share held at any general meeting of the Company; |
4.2 | include the right to participate pro rata in all dividends declared by the Company; and |
4.3 | include the right, in the event of the Company’s winding up, to participate pro rata in the total assets of the Company. |
5. | The rights attaching to the Ordinary Shares may be subject to the terms of issue of any series or class of Preferred Shares allotted by the Directors from time to time in accordance with Article 9. |
6. | If a Restricted Shareholder acquires securities conferring voting rights in the Company, unless the Restricted Shareholder elects to acquire such securities with a Takeover Rules Event occurring, the Ordinary Shares referable to such securities conferring voting rights in the Company shall be designated as Restricted Voting Ordinary Shares having the restrictions set out in Article 7 and any share certificates to be issued in respect of such Ordinary Shares shall bear a legend making reference to the shares as Restricted Voting Ordinary Shares. A Shareholder may also, by at least 10 Clear Days’ notice in writing to the Company or such shorter time as the Company may agree, request that the Company redesignate some or all of the Ordinary Shares that it holds as Restricted Voting Ordinary Shares. |
7. | The following restrictions shall attach to Restricted Voting Ordinary Shares: |
7.1 | until a Re-designation Event occurs, the rights attaching to such shares shall be restricted as set out in this Article 7; |
7.2 | the Restricted Voting Ordinary Shares shall carry no rights to receive notice of or to attend or vote at any general meeting of the Company; |
7.3 | save as provided herein, the Restricted Voting Ordinary Shares shall rank pari passu at all times and in all respects with all other Ordinary Shares; |
7.4 | forthwith upon a Re-designation Event, each holder of Restricted Voting Ordinary Shares that are to be re-designated shall send to the Company the certificates, if any, in respect of the Restricted Voting Ordinary Shares held immediately prior to the Re-designation Event and thereupon, but subject to receipt of such certificates, the Company shall issue to such holders respectively replacement certificates for the Ordinary Shares without a legend making reference to the shares as Restricted Voting Ordinary Shares; and |
7.5 | re-designation of the Restricted Voting Ordinary Shares shall be effected by way of a deemed automatic re-designation of such shares as Ordinary Shares immediately upon and subject to a Re-designation Event, without the requirement of any approval by the Board or any shareholders of the Company. |
8. | Any Restricted Voting Ordinary Shares in issue shall comprise a single class with any other Ordinary Shares in issue. |
9. | The Board is empowered to cause the Preferred Shares to be issued from time to time as shares of one or more series of Preferred Shares, and in the resolution or resolutions providing for the issue of Preferred Shares of each particular series, before issuance, the Board is expressly authorised to fix: |
9.1 | the distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except as otherwise provided by the Board in creating such series) or decreased (but not below the number of shares thereof then in issue) from time to time by resolution of the Board; |
9.2 | the rate of dividends payable on shares of such series, if any, whether or not and upon what conditions dividends on shares of such series shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate and the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or on any other series of share capital; |
9.3 | the procedures for, and the terms, if any, on which shares of such series may be redeemed, including without limitation, the redemption price or prices for such series, which may consist of a redemption price or scale of redemption prices applicable only to redemption in connection with a sinking fund (which term as used herein shall include any fund or requirement for the periodic purchase or redemption of shares), and the same or a different redemption price or scale of redemption prices applicable to any other redemption; |
9.4 | the terms and amount of any sinking fund provided for the purchase or redemption of shares of such series; |
9.5 | the amount or amounts which shall be paid to the holders of shares of such series in case of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary; |
9.6 | the terms, if any, upon which the holders of shares of such series may convert shares thereof into shares of any other class or classes or of any one or more series of the same class or of another class or classes; |
9.7 | the voting rights, full or limited, if any, of the shares of such series; and whether or not and under what conditions the shares of such series (alone or together with the shares of one or more other series having similar provisions) shall be entitled to vote separately as a single class, for the election of one or more additional Directors in case of dividend arrears or other specified events, or upon other matters; |
9.8 | whether or not the holders of shares of such series, as such, shall have any pre-emptive or preferential rights to subscribe for or purchase shares of any class or series of shares of the Company, now or hereafter authorised, or any securities convertible into, or warrants or other evidences of optional rights to purchase or subscribe for, shares of any class or series of the Company, now or hereafter authorised; |
9.9 | the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends, or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, any other class or classes of shares ranking junior to the shares of such series either as to dividends or upon liquidation, dissolution or winding up; |
9.10 | the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issuance of any additional shares (including additional shares of such series or of any other class) ranking on a parity with or prior to the shares of such series as to dividends or distribution of assets upon liquidation; and |
9.11 | such other rights, preferences and limitations as may be permitted to be fixed by the Board of the Company under the laws of Ireland as in effect at the time of the creation of such series. |
10. | The Board is authorised to change the designations, rights, preferences and limitations of any series of Preferred Shares theretofore established, no shares of which have been issued. |
11. | The rights conferred upon the member of any pre-existing shares in the share capital of the Company shall be deemed not to be varied by the creation, issue and allotment of any series of Preferred Shares in accordance with these Articles. |
12. | The Deferred Shares shall have the rights and privileges and be subject to the restrictions set out in this Article 12: |
12.1 | the Deferred Shares are non-voting shares and do not convey upon the holder the right to be paid a dividend or to receive notice of or to attend, vote or speak at a general meeting; |
12.2 | the Deferred Shares confer the right on a return of capital, on a winding-up or otherwise, only to the repayment of the nominal value paid up on the Deferred Shares after repayment of the nominal value of the Ordinary Shares; and |
12.3 | any Director (the “Agent”) is appointed the attorney of the holder of a Deferred Share, with an irrevocable instruction to the Agent to execute all or any forms of transfer and/or renunciation and/or surrender and/or other documents in the Agent’s discretion in relation to the Deferred Shares in favour of the Company or as it may direct and to deliver such forms of transfer and/or renunciation and/or surrender and/or other documents together with any certificate(s) and/or other documents for registration and to do all such other acts and things as may in the reasonable opinion of the Agent be necessary or expedient for the purpose of, or in connection with, the surrender of the Deferred Shares, the purchase by the Company of the Deferred Shares for nil consideration or such other consideration as the Board may determine and to vest the said Deferred Shares in the Company. |
13. | Without prejudice to any special rights conferred on the members of any existing shares or class of shares and subject to the provisions of the Act, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine. |
14. | The following provisions shall apply: |
14.1 | Subject to the provisions of these Articles relating to new shares, the shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Act) allot, grant options over or otherwise dispose of them to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the Company and its members, but so that no share shall be issued at a discount and so that, in the case of shares offered to the public for subscription, the amount payable on application on each share shall not be less than one-quarter of the nominal amount of the share and the whole of any premium thereon. |
14.2 | Without prejudice to the generality of the powers conferred on the Directors by other paragraphs of these Articles, and subject to any requirement to obtain the approval of the members under any laws, regulations or the rules of any Exchange, the Directors may grant from time to time options to subscribe for the unallotted shares in the capital of the Company to Directors and other persons in the service or employment of the Company or any subsidiary or associate company of the Company on such terms and subject to such conditions as may be approved from time to time by the Directors or by any committee thereof appointed by the Directors for the purpose of such approval and on the terms and conditions required to obtain the approval of any statutory authority in any jurisdiction. |
14.3 | Subject to the provisions of these Articles including but not limited to Article 6, the Directors are hereby generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities within the meaning of section 1021 of the Act. The maximum amount of relevant securities which may be allotted under the authority hereby conferred shall be the amount of the authorised but unissued share capital of the Company at the Adoption Date. The authority hereby conferred shall expire on the date which is five (5) years after the Adoption Date unless and to the extent that such authority is renewed, revoked or extended prior to such date. The Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities in pursuance of such offer or agreement, notwithstanding that the authority hereby conferred has expired. |
14.4 | The Directors are hereby empowered pursuant to sections 1022 and 1023 of the Act to allot equity securities (within the meaning of the said section 1023) for cash pursuant to the authority conferred by Article 14.3 as if section 1022(1) of the Act did not apply to any such allotment. The authority |
14.5 | The Company may issue permissible letters of allotment (as defined by section 1019 of the Act) to the extent permitted by the Act. |
14.6 | Unless otherwise determined by the Directors or the rights attaching to or by the terms of issue of any particular shares, or to the extent required by the Act, any Exchange, depository or any operator of any clearance or settlement system, no person whose name is entered as a member in the Register shall be entitled to receive a share certificate for any shares of any class held by him or her in the capital of the Company (nor on transferring part of a holding, to a certificate for the balance). |
14.7 | Any share certificate, if issued, shall specify the number of shares in respect of which it is issued and the amount paid thereon or the fact that they are fully paid, as the case may be, and may otherwise be in such form as shall be determined by the Directors. Such certificates may be under seal. All certificates for shares in the capital of the Company shall be consecutively numbered or otherwise identified and shall specify the shares in the capital of the Company to which they relate. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered in the Register. All certificates surrendered to the Company for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares in the capital of the Company shall have been surrendered and cancelled. The Directors may authorise certificates to be issued with the seal and authorised signature(s) affixed by some method or system of mechanical process. In respect of a share or shares in the capital of the Company held jointly by several persons, the Company shall not be bound to issue a certificate or certificates to each such person, and the issue and delivery of a certificate or certificates to one of several joint holders shall be sufficient delivery to all such holders. If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating such evidence, as the Directors may prescribe, and, in the case of defacement or wearing out, upon delivery of the old certificate. |
15. | The Company: |
15.1 | may give financial assistance for the purpose of an acquisition of its shares or, where the Company is a subsidiary, its holding company where permitted by sections 82 and 1043 of the Act, and |
15.2 | is authorised, for the purposes of section 105(4)(a) of the Act, but subject to section 1073 of the Act, to acquire its own shares. |
16. | The Directors (and any committee established under Article 186 and so authorised by the Directors and any person so authorised by the Directors or such committee) may without prejudice to Article 168: |
16.1 | allot, issue, grant options over and otherwise dispose of shares in the Company; and |
16.2 | exercise the Company's powers under Article 14, |
on such terms and subject to such conditions as they think fit, subject only to the provisions of the Act and these Articles. |
17. | Unless the Board determines otherwise, any share in the capital of the Company shall be deemed to be a Redeemable Share on, and from the time of, the existence or creation of an agreement, transaction or trade between the Company and any person (who may or may not be a member) pursuant to which the Company acquires or will acquire a share in the capital of the Company, or an interest in shares in the capital of the Company, from the relevant person, save for an acquisition for nil consideration pursuant to section 102(1)(a) of the Act. In these circumstances, the acquisition of such shares by the Company, save where acquired for nil consideration in accordance with the Act, shall constitute the redemption of a Redeemable Share in accordance with Chapter 6 of Part 3 of the Act. No resolution, whether special or otherwise, shall be required to be passed to deem any share in the capital of the Company a Redeemable Share. |
18. | Without prejudice to the authority conferred on the Directors pursuant to Article 9 to issue Preferred Shares in the capital of the Company, where the shares in the Company are divided into different classes, the rights attaching to a class of shares may only be varied or abrogated if (a) the holders of 75% in nominal value of the issued shares of that class consent in writing to the variation, or (b) a special resolution, passed at a separate general meeting of the holders of that class, sanctions the variation. The quorum at any such separate general meeting, other than an Adjourned Meeting, shall be two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class in question and the quorum at an Adjourned Meeting shall be one person holding or representing by proxy shares of the class in question or that person’s proxy. The rights conferred upon the holders of any class of shares issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by a purchase or redemption by the Company of its own shares or by the creation or issue of further shares ranking pari passu therewith or subordinate thereto. |
19. | The redemption or purchase of Preferred Shares or any class or series of Preferred Shares shall not constitute a variation of rights of the holders of Preferred Shares. |
20. | The issue, redemption or purchase of any of the Preferred Shares shall not constitute a variation of the rights of the holders of Ordinary Shares. |
21. | The issue of Preferred Shares or any class or series of Preferred Shares which rank pari passu with, or junior to, any existing Preferred Shares or class of Preferred Shares shall not constitute a variation of the existing Preferred Shares or class of Preferred Shares. |
22. | The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith. |
23. | Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as by these Articles or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the member. This shall not preclude (i) the Company from requiring the members or a transferee of shares to furnish the Company with information as to the beneficial ownership of any share when such information is reasonably required by the Company, or (ii) the Directors, where they consider it appropriate, providing the information given to the members of shares to the holders of depositary instruments in such shares. |
24. | The Directors may from time to time make calls upon the members in respect of any consideration unpaid on their shares in the Company (whether on account of the nominal value of the shares or by way of premium), provided that in the case where the conditions of allotment or issuance of shares provide for the payment of consideration in respect of such shares at fixed times, the Directors shall only make calls in accordance with such conditions. |
25. | Each member shall (subject to receiving at least thirty days’ notice specifying the time or times and place of payment, or such lesser or greater period of notice provided in the conditions of allotment or issuance of the shares) pay to the Company, at the time or times and place so specified, the amount called on the shares. |
26. | A call may be revoked or postponed, as the Directors may determine. |
27. | Subject to the conditions of allotment or issuance of the shares, a call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed and may be required to be paid by instalments if specified in the call. |
28. | The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it. |
29. | If the consideration called in respect of a share or in respect of a particular instalment is not paid in full before or on the day appointed for payment of it, the person from whom the sum is due shall pay interest in cash on the unpaid value from the day appointed for payment of it to the time of actual payment of such rate, not exceeding five per cent per annum or such other rate as may be specified by an order under section 2(7) of the Act, as the Directors may determine, but the Directors may waive payment of such interest wholly or in part. |
30. | Any consideration which, by the terms of issue of a share, becomes payable on allotment or issuance or at any fixed date (whether on account of the nominal value of the share or by way of premium) shall, for the purposes of these Articles, be deemed to be a call duly made and payable on the date on which, by the terms of issue, that consideration becomes payable, and in the case of non-payment of such a consideration, all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise, shall apply as if such consideration had become payable by virtue of a call duly made and notified. |
31. | The Directors may, on the issue of shares, differentiate between the holders of different classes as to the amount of calls to be paid and the times of payment. |
32. | The Directors may, if they think fit: |
(a) | receive from any member willing to advance such consideration, all or any part of the consideration uncalled and unpaid upon any shares held by him or her; and/or |
(b) | pay, upon all or any of the consideration so advanced (until the amount concerned would, but for such advance, become payable) interest at such rate (not exceeding, unless the Company in a general meeting otherwise directs, five per cent per annum or such other rate as may be specified by an order under section 2(7) of the Act) as may be agreed upon between the Directors and the member paying such consideration in advance. |
33. | The Company may: |
(a) | acting by its Directors, make arrangements on the issue of shares for a difference between the members in the amounts and times of payment of calls on their shares; |
(b) | acting by its Directors, accept from any member the whole or a part of the amount remaining unpaid on any shares held by him or her, although no part of that amount has been called up; |
(c) | acting by its Directors and subject to the Act, pay a dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others; and |
(d) | by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the Company being wound up; upon the Company doing so, that portion of its share capital shall not be capable of being called up except in that event and for those purposes. |
34. | The Company shall have a first and paramount lien on every share (not being a fully paid share) for all consideration (whether immediately payable or not) called, or payable at a fixed time, in respect of that share. |
35. | The Directors may at any time declare any share in the Company to be wholly or in part exempt from Article 34. |
36. | The Company’s lien on a share shall extend to all dividends payable on it. |
37. | The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien, but no sale shall be made unless (i) a sum in respect of which the lien exists is immediately payable; and (ii) the following conditions are satisfied: |
37.1 | a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is immediately payable, has been given to the registered holder of the share for the time being, or the person entitled thereto by reason of his or her death or bankruptcy; and |
37.2 | a period of 14 days after the date of giving of that notice has expired. |
38. | The following provisions apply in relation to a sale referred to in Article 37: |
38.1 | to give effect to any such sale, the Directors may authorise some person to transfer the shares sold to the purchaser of them; |
38.2 | the purchaser shall be registered as the holder of the shares comprised in any such transfer; |
38.3 | the purchaser shall not be bound to see to the application of the purchase consideration, nor shall his or her title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale; and |
38.4 | the proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is immediately payable, and the residue, if any, shall (subject to a like lien for sums not immediately payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale. |
39. | If a member of the Company fails to pay any call or instalment of a call on the day appointed for payment of it, the Directors may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on the member requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. |
40. | The notice referred to in Article 39 shall: |
40.1 | specify a further day (not earlier than the expiration of 14 days after the date of service of the notice) on or before which the payment required by the notice is to be made; and |
40.2 | state that, if the amount concerned is not paid by the day so specified, the shares in respect of which the call was made will be liable to be forfeited. |
41. | If the requirements of the notice referred to in Article 40 are not complied with, any share in respect of which the notice has been served may at any time after the day so specified (but before, should it occur, the payment required by the notice has been made) be forfeited by a resolution of the Directors to that effect. |
42. | On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the member sued is entered in the Register as the holder, or one of the holders, of the shares in the capital of the Company in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that notice of such call was duly given to the member sued, in pursuance of these Articles, and it shall not be necessary to prove the appointment of the Directors who made such call nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt. |
43. | A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. |
44. | A person whose shares have been forfeited shall cease to be a member of the Company in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the Company all consideration which, at the date of forfeiture, were payable by him or her to the Company in respect of the shares, but his or her liability shall cease if and when the Company shall have received payment in full of all such consideration in respect of the shares. |
45. | A statement in writing that the maker of the statement is a Director or the Company Secretary, and that a share in the Company has been duly forfeited on a date stated in the statement, shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share. |
46. | The following provisions apply in relation to a sale or other disposition of a share referred to in Article 43: |
46.1 | the Company may receive the consideration, if any, given for the share on the sale or other disposition of it and may execute a transfer of the share in favour of the person to whom the share is sold or otherwise disposed of (the “disponee”); |
46.2 | upon such execution, the disponee shall be registered as the holder of the share; and |
46.3 | the disponee shall not be bound to see to the application of the purchase consideration, if any, nor shall his or her title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share. |
47. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share in the capital of the Company, becomes payable at a fixed time, whether on account of the nominal value of the share in the capital of the Company or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
48. | The Directors may accept the surrender of any share in the capital of the Company which the Directors have resolved to have been forfeited upon such terms and conditions as may be agreed and, subject to any such terms and conditions, a surrendered share in the capital of the Company shall be treated as if it has been forfeited. |
49. | Subject to the provisions of these Articles, the Company may, by ordinary resolution and in accordance with section 83 of the Act, do any one or more of the following, from time to time: |
49.1 | consolidate and divide all or any of its classes of shares into shares of a larger nominal value than its existing shares; |
49.2 | subdivide its classes of shares, or any of them, into shares of a smaller nominal value, so however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; |
49.3 | increase the nominal value of any of its shares by the addition to them of any undenominated capital; |
49.4 | reduce the nominal value of any of its shares by the deduction from them of any part of that value, subject to the crediting of the amount of the deduction to undenominated capital, other than the share premium account; |
49.5 | without prejudice or limitation to Articles 89 to 94 and the powers conferred on the Directors thereby, convert any undenominated capital into shares for allotment as bonus shares to holders of existing shares; |
49.6 | increase its share capital by new shares of such amount as it thinks expedient; or |
49.7 | cancel shares of its share capital which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. |
50. | Subject to the provisions of these Articles, the Company may: |
50.1 | Without prejudice to Article 17, by special resolution, and subject to the provisions of the Act governing the variation of rights attached to classes of shares and the amendment of these Articles, convert any of its shares into Redeemable Shares; or |
50.2 | by special resolution, and subject to the provisions of the Act (or as otherwise required or permitted by applicable law) alter or add to the Memorandum with respect to any objects, powers or other matters specified therein or alter or add to these Articles. |
51. | The Company may, in accordance with the provisions of sections 84 to 87 of the Act, reduce its company capital in any way it thinks expedient and, without prejudice to the generality of the foregoing, may thereby: |
51.1 | extinguish or reduce the liability on any of its shares in respect of share capital not paid up; |
51.2 | either with or without extinguishing or reducing liability on any of its shares, cancel any paid up company capital which is lost or unrepresented by available assets; or |
51.3 | either with or without extinguishing or reducing liability on any of its shares, pay off any paid up company capital which is in excess of the wants of the Company. |
Unless the special resolution provides otherwise, a reserve arising from the reduction of company capital is to be treated for all purposes as a realised profit in accordance with section 117(9) of the Act. Nothing in this Article 51 shall, however, prejudice or limit the Company’s ability to perform or engage in any of the actions described in section 83(1) of the Act by way of ordinary resolution only. |
52. | Subject to the Act and to the provisions of these Articles as may be applicable, any member may transfer all or any of his shares (of any class) by an instrument of transfer in the usual common form or in any other form which the Board may from time to time approve. The instrument of transfer may be endorsed on the certificate. |
53. | The instrument of transfer of a share shall be signed by or on behalf of the transferor and, if the share is not fully paid, by or on behalf of the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect of it. All instruments of transfer may be retained by the Company. |
54. | The instrument of transfer of any share may be executed for and on behalf of the transferor by the Company Secretary or any other party designated by the Board for such purpose, and the Company Secretary or any other party designated by the Board for such purpose shall be deemed to have been irrevocably appointed agent for the transferor of such share or shares with full power to execute, complete and deliver in the name of and on behalf of the transferor of such share or shares all such transfers of shares held by the members in the share capital of the Company. Any document which records the name of the transferor, the name of the transferee, the class and number of shares agreed to be transferred, the date of the agreement to transfer shares and the price per share, shall, once executed by the transferor or the Company Secretary or any other party designated by the Board for such purpose as agent for the transferor, be deemed to be a proper instrument of transfer for the purposes of the Act. The transferor shall be deemed to remain the member holding the share until the name of the transferee is entered on the Register in respect thereof, and neither the title of the transferee nor the title of the transferor shall be affected by any irregularity or invalidity in the proceedings in reference to the sale should the Directors so determine. |
55. | Subject to the Act, the Company, at its absolute discretion, may, or may procure that a subsidiary of the Company shall, pay Irish stamp duty arising on a transfer of shares on behalf of the transferee of such shares of the Company. If stamp duty resulting from the transfer of shares in the Company which would otherwise be payable by the transferee is paid by the Company or any subsidiary of the Company on behalf of the transferee, then in those circumstances, the Company shall, on its behalf or on behalf of its subsidiary (as the case may be), be entitled to (i) reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty against any dividends payable to the transferee of those shares and (iii) to the extent permitted by section 1042 of the Act, claim a first and paramount lien on the shares on which stamp duty has been paid by the Company or its subsidiary for the amount of stamp duty paid. The Company’s lien shall extend to all dividends paid on those shares. |
56. | The Directors shall have power to permit any class of shares to be held in uncertificated form and to implement any arrangements they think fit for such evidencing and transfer which accord with such regulations and in particular shall, where appropriate, be entitled to disapply or modify all or part of the provisions in these Articles with respect to the requirement for written instruments of transfer and share certificates (if any), in order to give effect to such regulations. |
57. | The Board may, in its absolute discretion and without assigning any reason for its decision, decline to register any transfer of any share which is not a fully-paid share. The Board may also decline to register any transfer if: |
57.1 | the instrument of transfer is not duly stamped, if required, and lodged at the Office or any other place as the Board may from time to time specify for the purpose, accompanied by the certificate (if any) for the shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; |
57.2 | the instrument of transfer is in respect of more than one class of share; |
57.3 | the instrument of transfer is in favour of more than four persons jointly; |
57.4 | it is not satisfied that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Ireland or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; or |
57.5 | it is not satisfied that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are party or subject. |
58. | Subject to any directions of the Board from time to time in force, the Company Secretary or any other party designated by the Board for such purpose may exercise the powers and discretions of the Board under Article 57, Article 81, Article 88 and Article 90. |
59. | If the Board declines to register a transfer it shall, within one month after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal. |
60. | No fee shall be charged by the Company for registering any transfer or for making any entry in the Register concerning any other document relating to or affecting the title to any share (except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed on it in connection with such transfer or entry). |
61. | In the case of the death of a member, the survivor or survivors, where the deceased was a joint holder, and the personal representatives of the deceased where he or she was a sole holder, shall be the only persons recognised by the Company as having any title to his or her interest in the shares. |
62. | Nothing in Article 61 shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him or her with other persons. |
63. | Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as may from time to time properly be required by the Directors and subject to Article 64, elect either: (a) to be registered himself or herself as holder of the share; or (b) to have some person nominated by him or her (being a person who consents to being so registered) registered as the transferee thereof. |
64. | The Directors shall, in either of those cases, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that member before his or her death or bankruptcy, as the case may be. |
65. | If the person becoming entitled as mentioned in Article 63: (a) elects to be registered himself or herself, the person shall furnish to the Company a notice in writing signed by him or her stating that he or she so elects; or (b) elects to have another person registered, the person shall testify his or her election by executing to that other person a transfer of the share. |
66. | All the limitations, restrictions and provisions of Articles 61 to 65 shall be applicable to a notice or transfer referred to in Article 65 as if the death or bankruptcy of the member concerned had not occurred and the notice or transfer were a transfer signed by that member. |
67. | Subject to Article 68 and Article 69, a person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he or she would be entitled if he or she were the registered holder of the share. |
68. | A person referred to in Article 67 shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company. |
69. | The Directors may at any time serve a notice on any such person requiring the person to make the election provided for by Article 63 and, if the person does not make that election (and proceed to do, consequent on that election, whichever of the things mentioned in Article 65 is appropriate) within ninety days after the date of service of the notice, the Directors may thereupon withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with. |
70. | The Company may charge a fee not exceeding €10 on the registration of every probate, letters of administration, certificate of death, power of attorney, notice as to stock or other instrument or order. |
71. | The Directors may determine such procedures as they shall think fit regarding the transmission of shares in the Company held by a body corporate that are transmitted by operation of law in consequence of a merger or division. |
72. | For the purpose of determining members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or members entitled to receive payment of any dividend, or in order to make a determination of members for any other proper purpose, the Board may provide, subject to the requirements of section 174 of the Act, that the Register shall be closed for transfers at such times and for such periods, not exceeding in the whole thirty days in each year. If the Register shall be so closed for the purpose of determining members entitled to notice of, or to vote at, a meeting of members, such Register shall, subject to applicable law and Exchange rules, be so closed for at least five days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the Register. |
73. | In lieu of, or apart from, closing the Register, the Board may fix in advance a date as the record date (a) for any such determination of members entitled to notice of or to vote at a meeting of the members, which record date shall not, subject to applicable law and Exchange rules, be more than sixty days before the date of such meeting, and (b) for the purpose of determining the members entitled to receive payment of any dividend or other distribution, or in order to make a determination of members for any other proper purpose, which record date shall not, subject to applicable law and Exchange rules, be more than sixty days prior to the date of payment of such dividend or other distribution or the taking of any action to which such determination of members is relevant. |
74. | If the Register is not so closed and no record date is fixed for the determination of members entitled to notice of or to vote at a meeting of members, the date immediately preceding the date on which notice of the meeting is deemed given under these Articles shall be the record date for such determination of members. Where a determination of members entitled to vote at any meeting of members has been made as provided in these Articles, such determination shall apply to any adjournment thereof; provided, however, that the Directors may fix a new record date of the Adjourned Meeting, if they think fit. |
75. | The Company in a general meeting may declare dividends, but no dividends shall exceed the amount recommended by the Directors. Any general meeting declaring a dividend and any resolution of the Directors declaring an interim dividend may direct payment of such dividend or interim dividend wholly or partly by the distribution of specific assets including paid up shares, debentures or debenture stocks of any other company or in any one or more of such ways, and the Directors shall give effect to such resolution. |
76. | The Directors may from time to time: |
76.1 | pay to the members such dividends (whether as either interim dividends or final dividends) as appear to the Directors to be justified by the profits of the Company, subject to section 117 and Chapter 6 of Part 17 of the Act; |
76.2 | before declaring any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion either be employed in the business of the Company or be held as cash or cash equivalents or invested in such investments as the Directors may lawfully determine; and |
76.3 | without placing the profits of the Company to reserve, carry forward any profits which they may think prudent not to distribute. |
77. | Unless otherwise specified by the Directors at the time of declaring a dividend, the dividend shall be a final dividend. |
78. | Where the Directors specify that a dividend is an interim dividend at the time it is declared, such interim dividend shall not constitute a debt recoverable against the Company and the declaration may be revoked by the Directors at any time prior to its payment provided that the holders of the same class of share are treated equally on any revocation. |
79. | Subject to the rights of persons, if any, entitled to shares with special rights as to dividend (and to the rights of the Company under Articles 34 to 38 and Article 81) all dividends shall be declared and paid such that shares of the same class shall rank equally irrespective of the premium credited as paid up on such shares. |
80. | If any share is issued on terms providing that it shall rank for a dividend as from a particular date, such share shall rank for dividend accordingly. |
81. | The Directors may deduct from any dividend payable to any member, all sums of money (if any) immediately payable by him or her to the Company on account of calls or otherwise in relation to the shares of the Company. |
82. | The Directors when declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and, in particular, paid up shares, debentures or debenture stock of any other company or in any one or more of such ways. |
83. | Where any difficulty arises in regard to a distribution, the Directors may settle the matter as they think expedient and, in particular, may: |
83.1 | issue fractional certificates (subject always to the restriction on the issue of fractional shares) and fix the value for distribution of such specific assets or any part of them; |
83.2 | determine that cash payments shall be made to any members upon the footing of the value so fixed, in order to adjust the rights of all the parties; and |
83.3 | vest any such specific assets in trustees as may seem expedient to the Directors. |
84. | Any dividend, interest or other moneys payable in cash in respect of any shares may be paid: |
84.1 | by cheque or negotiable instrument sent by post directed to or otherwise delivered to the registered address of the holder, or where there are joint holders, to the registered address of that one of the joint holders who is first named on the register or to such person and to such address as the holder or the joint holders may in writing direct; or |
84.2 | by transfer to a bank account nominated by the payee or where such an account has not been so nominated, to the account of a trustee nominated by the Company to hold such moneys, |
provided that the debiting of the Company’s account in respect of the relevant amount shall be evidence of good discharge of the Company’s obligations in respect of any payment made by any such methods. |
85. | Any such cheque or negotiable instrument referred to in Article 84 shall be made payable to the order of the person to whom it is sent. |
86. | Any one of two or more joint holders may give valid receipts for any dividends, bonuses or other moneys payable in respect of the shares held by them as joint holders, whether paid by cheque or negotiable instrument or direct transfer. |
87. | No dividend shall bear interest against the Company. |
88. | If the Directors so resolve, any dividend or distribution which has remained unclaimed for twelve years from the date of its declaration shall be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend, distribution or other moneys payable in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. |
89. | Any capitalisation provided for in Articles 90 to 94 inclusive will not require approval or ratification by the members. |
90. | The Directors may resolve to capitalise any part of a relevant sum (within the meaning of Article 91) by applying such sum in paying up in full unissued shares of a nominal value or nominal value and premium, equal to the sum capitalised, to be allotted and issued as fully paid bonus shares, to those members of the Company who would have been entitled to that sum if it were distributed by way of dividend (and in the same proportions). |
91. | For the purposes of Article 90, “relevant sum” means: (a) any sum for the time being standing to the credit of the Company’s undenominated capital; (b) any of the Company’s profits available for distribution; (c) any sum representing unrealised revaluation reserves; or (d) a merger reserve or any other capital reserve of the Company. |
92. | The Directors may in giving effect to any resolution under Article 90 make: (a) all appropriations and applications of the undivided profits resolved to be capitalised by the resolution; and (b) all allotments and issues of fully paid shares, if any, and generally shall do all acts and things required to give effect to the resolution. |
93. | Without limiting Article 92, the Directors may: |
93.1 | make such provision as they think fit for the case of shares becoming distributable in fractions (and, again, without limiting the foregoing, may sell the shares represented by such fractions and distribute the net proceeds of such sale amongst the members otherwise entitled to such fractions in due proportions); |
93.2 | authorise any person to enter, on behalf of all the members concerned, into an agreement with the Company providing for the allotment to them, respectively credited as fully paid up, of any further shares to which they may become entitled on the capitalisation concerned or, as the case may require, for the payment by the application thereto of their respective proportions of the profits resolved to be capitalised of the amounts remaining unpaid on their existing shares, |
94. | Where the Directors have resolved to approve a bona fide revaluation of all the fixed assets of the Company, the net capital surplus in excess of the previous book value of the assets arising from such revaluation may be: (a) credited by the Directors to undenominated capital, other than the share premium account; or (b) used in paying up unissued shares of the Company to be issued to members as fully paid bonus shares. |
95. | Subject to Article 96, the Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year, and shall specify the meeting as such in the notices calling it; and not more than 15 months shall elapse between the date of one annual general meeting of the Company and that of the next. |
96. | The Company will hold its first annual general meeting within eighteen months of its incorporation. |
97. | The annual general meeting shall be held in such place and at such time as the Directors shall determine. |
98. | All general meetings of the Company other than annual general meetings shall be called extraordinary general meetings. |
99. | The Directors may, whenever they think fit, convene an extraordinary general meeting. An extraordinary general meeting shall also be convened by the Directors on the requisition of members, or if the Directors fail to so convene an extraordinary general meeting, such extraordinary general meeting may be convened by the requisitioning members, in each case in accordance with section 178(3) to (7) of the Act. |
100. | If at any time the number of Directors is less than two, any Director or any member that satisfies the criteria under section 178 of the Act may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetings may be convened by the Directors. |
101. | An annual general meeting or extraordinary general meeting of the Company may be held outside of Ireland. The Company shall make, at its expense, all necessary arrangements to ensure that members can by technological means participate in any such meeting without leaving Ireland. |
102. | A general meeting of the Company may be held in two or more venues (whether inside or outside of Ireland) at the same time using any technology that provides members, as a whole, with a reasonable opportunity to participate, and such participation shall be deemed to constitute presence in person at the meeting. |
103. | The only persons entitled to notice of general meetings of the Company are: |
103.1 | the members; |
103.2 | the personal representatives of a deceased member, which member would but for his death be entitled to vote; |
103.3 | the assignee in bankruptcy of a bankrupt member of the Company (being a bankrupt member who is entitled to vote at the meeting); |
103.4 | the Directors and Company Secretary; and |
103.5 | unless the Company is entitled to and has availed itself of the audit exemption under the Act, the Auditors (who shall also be entitled to receive other communications relating to any general meeting which a member is entitled to receive). |
104. | Subject to the provisions of the Act allowing a general meeting to be called by shorter notice, an annual general meeting and an extraordinary general meeting called for the passing of a special resolution shall be called by at least twenty-one days’ notice. Any other extraordinary general meeting shall also be called by at least twenty-one days’ notice, except that it may be called by fourteen days’ notice where: |
104.1 | all members, who hold shares that carry rights to vote at the meeting, are permitted to vote by electronic means at the meeting; and |
104.2 | a special resolution reducing the period of notice to fourteen days has been passed at the immediately preceding annual general meeting, or at a general meeting held since that meeting. |
105. | Any notice convening a general meeting shall specify the time and place of the meeting and, in the case of special business, the general nature of that business and, in reasonable prominence, that a member entitled to attend, speak, ask questions and vote is entitled to appoint a proxy to attend, speak, ask questions and vote in his place and that a proxy need not be a member of the Company. Every notice shall specify such other details as are required by applicable law or the relevant code, rules and regulations applicable to the listing of the shares on any Exchange. Subject to any restrictions imposed on any shares, the notice shall be given to all the members and to the Directors and Auditors. |
106. | The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting. |
107. | In cases where instruments of proxy are sent out with notices, the accidental omission to send such instrument of proxy to, or the non-receipt of such instrument of proxy by, any person entitled to receive such notice shall not invalidate any resolution passed or any proceeding at any such meeting. A member present, either in person or by proxy, at any general meeting of the Company or of the holders of any class of shares in the Company will be deemed, subject to Article 110, to have received notice of that meeting and, where required, of the purpose for which it was called. |
108. | Where, by any provision contained in the Act, extended notice is required of a resolution, the resolution shall not be effective (except where the Directors have resolved to submit it) unless notice of the intention to move it has been given to the Company not less than twenty-eight days (or such shorter period as the Act permits) before the meeting at which it is moved, and the Company shall give to the members notice of any such resolution as required by and in accordance with the provisions of the Act. |
109. | In determining the correct period of notice for a general meeting, only Clear Days shall be counted. |
110. | Whenever any notice is required to be given by law or by these Articles to any person or persons, a waiver thereof in writing, signed by the person or persons entitled to the notice whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. |
111. | For so long as the Company has more than one shareholder, unanimous consent of the holders of the Ordinary Shares shall be required before the shareholders may act by way of written resolution in lieu of holding a meeting. |
112. 112.1 | Except in the case of the removal of statutory auditors or Directors and subject to the Act and the provisions of Article 111, anything which may be done by resolution in general meeting of all or any class of members may be done by resolution in writing, signed by all of the holders or any class thereof or their proxies (or in the case of a holder that is a corporation (whether or not a company within the meaning of the Acts) on behalf of such holder) being all of the members of the Company or any class thereof, who at the date of the resolution in writing would be entitled to attend a meeting and vote on the resolution and shall be valid and effective for all purposes as if the resolution had been passed at a general meeting of the Company or any class thereof duly convened and held, and if described as a Special Resolution shall be deemed to be a Special Resolution within the meaning of the Acts. Any such resolution in writing may be signed in as many counterparts as may be necessary. |
112.2 | For the purposes of any written resolution under Article 112, the date of the resolution in writing is the date when the resolution is signed by, or on behalf of, the last holder to sign and any reference in any enactment to the date of passing of a resolution is, in relation to a resolution in writing made in accordance with this section, a reference to such date. |
112.3 | A resolution in writing made in accordance with Article 112 is valid as if it had been passed by the Company in general meeting or, if applicable, by a meeting of the relevant class of holders of the Company, as the case may be. A resolution in writing made in accordance with this section shall constitute minutes for the purposes of the Act and these Articles. |
113. | At any time that the Company is a single-member company, its sole member may pass any resolution as a written decision in accordance with section 196 of the Act. |
114. | Two members present in person or by proxy and having the right to attend and vote at the meeting and together holding shares representing more than 50% of the votes that may be cast by all members at the relevant time shall be a quorum at a general meeting; provided, however, that at any time when the Company is a single-member company, one member of the Company present in person or by proxy at a general meeting of it shall be a quorum. |
115. | If within 15 minutes (or such greater time determined by the chairperson) after the time appointed for a general meeting a quorum is not present, then: |
115.1 | the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Directors may determine (the “Adjourned Meeting”); and |
115.2 | if at the Adjourned Meeting a quorum is not present within half an hour (or such greater time determined by the chairperson) after the time appointed for the meeting, the members present shall be a quorum. |
116. | Every member entitled to attend, speak, ask questions and vote at a general meeting may appoint a proxy or proxies to attend, speak, ask questions relating to items on the agenda and vote on his behalf and may appoint more than one proxy to attend, speak, ask questions and vote at the same general meeting provided that, where a member appoints more than one proxy in relation to a general meeting, each proxy must be appointed to exercise the rights attached to different shares held by that member. |
117. | The appointment of a proxy shall be in writing in any usual form or in any other form which the Directors may approve and shall be signed by or on behalf of the appointor. The signature on such appointment need not be witnessed. A body corporate may sign a form of proxy under its common seal or under the hand of a duly authorised officer thereof or in such other manner as the Directors may approve. A proxy need not be a member of the Company. A member shall be entitled to appoint a proxy by electronic means, to an address |
118. | Any body corporate which is a member, or a proxy for a member, of the Company may by resolution of its directors or other governing body authorise such person or persons as it thinks fit to act as its representative or representatives at any meeting of the Company or of any class of members of the Company and, subject to evidence being furnished to the Company of such authority as the Directors may reasonably require, any person(s) so authorised shall be entitled to exercise the same powers on behalf of the body corporate which he represents as that body corporate could exercise if it were an individual member of the Company or, where more than one such representative is so authorized, all or any of the rights attached to the shares in respect of which he is so authorised. Where a body corporate appoints more than one representative in relation to a general meeting, each representative must be appointed to exercise the rights attached to different shares held by that body corporate. |
119. | Where the appointment of a proxy and any authority under which it is signed or a copy certified notarially or in some other way approved by the Directors is to be received by the Company: |
119.1 | in physical form, it shall be deposited at the Office or (at the option of the member) at such other place or places (if any) as may be specified for that purpose in or by way of note to the notice convening the meeting; |
119.2 | in electronic form, it may be so received where an address has been specified by the Company for the purpose of receiving electronic communications: |
(a) | in the notice convening the meeting; or |
(b) | in any appointment of proxy sent out by the Company in relation to the meeting; or |
(c) | in any invitation contained in an electronic communication to appoint a proxy issued by the Company in relation to the meeting; |
provided that it is so received by the Company no later than 3 hours, or such other time as may be communicated to the members, before the time for holding the meeting or Adjourned Meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting or Adjourned Meeting) for the taking of the poll at which it is to be used, at which the person named in the proxy proposes to vote and in default shall not be treated as valid or, in the case of a meeting which is adjourned to, or a poll which is to be taken on, a date not later than the record date applicable to the meeting which was adjourned or the poll, it shall be sufficient if the appointment of a proxy and any such authority and certification thereof as aforesaid is so received by the Company at the commencement of the Adjourned Meeting or the taking of the poll. An appointment of a proxy relating to more than one meeting (including any adjournment thereof) having once been so received for the purposes of any meeting shall not be required to be delivered, deposited or received again for the purposes of any subsequent meeting to which it relates. |
120. 120.1 | Receipt by the Company of an appointment of a proxy in respect of a meeting shall not preclude a member from attending and voting at the meeting or at any adjournment thereof. However, if that member votes at the meeting or at any adjournment thereof, then as regards to the resolution(s) any proxy notice delivered to the Company by or on behalf of that same member shall on a poll, be invalid to the extent that such member votes in respect of the shares to which the proxy notice relates. |
120.2 | An appointment of a proxy shall be valid, unless the contrary is stated therein, as well for any adjournment of the meeting as for the meeting to which it relates and shall be deemed to confer authority to speak at a general meeting and to demand or join in demanding a poll. |
121. | A proxy shall have the right to exercise all or any of the rights of his appointor, or (where more than one proxy is appointed) all or any of the rights attached to the shares in respect of which he is appointed as the proxy to attend, and to speak and vote, at a general meeting of the Company. Unless his appointment provides otherwise, a proxy may vote or abstain at his discretion on any resolution put to the vote. |
122. | A vote given or poll demanded in accordance with the terms of an appointment of a proxy or a resolution authorising a representative to act on behalf of a body corporate shall be valid notwithstanding the previous death, insanity or winding up of the principal, or the revocation of the appointment of a proxy or of the authority under which the proxy was appointed or of the resolution authorising the representative to act or the transfer of the share in respect of which the proxy was appointed or the authorisation of the representative to act was given, provided that no notice in writing (whether in electronic form or otherwise) of such death, insanity, winding up, revocation or transfer is received by the Company at the Office before the commencement of the meeting. |
123. | The Directors may send to the members, at the expense of the Company, by post, electronic mail or otherwise, forms for the appointment of a proxy (with or without reply paid envelopes for their return) for use at any general meeting or at any class meeting, either in blank or nominating any one or more of the Directors or any other persons in the alternative. If, for the purpose of any meeting, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the expense of the Company, such invitations shall be issued to all (and not to some only) of the members entitled to be sent a notice of the meeting and to vote thereat by proxy, but the accidental omission to issue such invitations to, or the non-receipt of such invitations by, any member shall not invalidate the proceedings at any such meeting. |
124. | All business shall be deemed to be special business that is transacted at an extraordinary general meeting or that is transacted at an annual general meeting other than, in the case of an annual general meeting, the business specified in Article 128 which shall be ordinary business. |
125. | At any meeting of the members, only such business shall be conducted as shall have been properly brought before such meeting. To be properly brought before an annual general meeting, business must be: |
125.1 | specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board; |
125.2 | otherwise properly brought before the meeting by or at the direction of the Board; or |
125.3 | otherwise properly brought before the meeting by a member. |
126. | Without prejudice to any procedure which may be permitted under the Act, for business to be properly brought before an annual general meeting by a member, the member must have given timely notice thereof in writing to the Company Secretary. To be timely, a member’s notice must be received not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual general meeting; provided, however, that in the event that the date of the annual general meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary, notice by the member to be timely must be so received not earlier than the 90th day prior to such annual general meeting and not later than the close of business on the later of (i) the 60th day prior to such annual general meeting or (ii) the tenth day following the date on which notice of the date of the annual general meeting was mailed or public disclosure thereof was made by the Company, |
126.1 | a brief description of the business desired to be brought before the annual general meeting and the reasons for conducting such business at the meeting; |
126.2 | the name and address, as they appear on the Register, of the member proposing such business; |
126.3 | the class, series and number of shares of the Company which are beneficially owned by the member; |
126.4 | whether and the extent to which any hedging, derivative or other transaction is in place or has been entered into within the prior six months preceding the date of delivery of the notice by or for the benefit of the member with respect to the Company or its subsidiaries or any of their respective securities, debt instruments or credit ratings, the effect or intent of which transaction is to give rise to gain or loss as a result of changes in the trading price of such securities or debt instruments or changes in the credit ratings for the Company, its subsidiaries or any of their respective securities or debt instruments (or, more generally, changes in the perceived creditworthiness of the Company or its subsidiaries), or to increase or decrease the voting power of the member, and if so, a summary of the material terms thereof; and |
126.5 | any material interest of the member in such business. |
To be properly brought before an extraordinary general meeting, other than pursuant to Article 125, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board or by the Company Secretary pursuant to the applicable provisions of these Articles or (ii) otherwise properly brought before the meeting by or at the direction of the Board. |
127. | The chairperson of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of these Articles, and if he or she should so determine, any such business not properly brought before the meeting shall not be transacted. Nothing herein shall be deemed to affect any rights of members to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act. |
128. | The business of the annual general meeting shall include: |
128.1 | the consideration of the Company’s statutory financial statements and the report of the Directors and the report of the Auditors on those statements and that report; |
128.2 | the review by the members of the Company’s affairs; |
128.3 | the authorisation of the Directors to approve the remuneration of the Auditors (if any); and |
128.4 | the appointment or re-appointment of Auditors. |
129. | The Chairperson, if any, shall preside as chairperson at every general meeting of the Company, or if there is no such Chairperson, or if he or she is not present at the time appointed for the holding of the meeting or is unwilling to act, the Directors present shall elect one of their number to be chairperson of the meeting. |
130. | If at any meeting no Director is willing to act as chairperson or if no Director is present at the time appointed for holding the meeting, the members present shall choose one of their number to be chairperson of the meeting. |
131. | At each meeting of members, the chairperson of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the members will vote at the meeting and shall determine the order of business and all other matters of procedure. |
132. | The Directors may adopt such rules, regulations and procedures for the conduct of any meeting of the members as they deem appropriate. Except to the extent inconsistent with any applicable rules, regulations |
133. | The chairperson of the meeting may, with the consent of any meeting at which a quorum is present, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place. |
134. | No business shall be transacted at any Adjourned Meeting other than the business left unfinished at the meeting from which the adjournment took place. |
135. | When a meeting is adjourned for thirty days or more, notice of the Adjourned Meeting shall be given as in the case of an original meeting but, subject to that, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an Adjourned Meeting. |
136. | Each Director and the Auditors shall be entitled to attend and speak at any general meeting of the Company. |
137. | For business to be properly requested by a member to be brought before a general meeting, the member must comply with the requirements of the Act or: |
137.1 | be a member at the time of the giving of the notice for such general meeting; |
137.2 | be entitled to vote at such meeting; and |
137.3 | have given timely and proper notice in writing to the Company Secretary in accordance with Article 126. |
138. | Except where a greater majority is required by the Act or these Articles, any question proposed for a decision of the members at any general meeting of the Company or a decision of any class of members at a separate meeting of any class of shares shall be decided by an ordinary resolution. |
139. | At any general meeting, a resolution put to the vote of the meeting shall be decided on a poll. |
140. | Save as provided in Article 141 of these Articles, a poll shall be taken in such manner as the chairperson of the meeting directs and he or she may appoint scrutineers (who need not be members) and fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
141. | A poll demanded on the election of a chairperson of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or at such time and place as the chairperson of the meeting may direct. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll was demanded. |
142. | No notice need be given of a poll not taken forthwith if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case at least seven Clear Days’ notice shall be given specifying the time and place at which the poll is to be taken. |
143. | If authorised by the Directors, any vote taken by written ballot may be satisfied by a ballot submitted by electronic and/or telephonic transmission, provided that any such electronic or telephonic submission must either set forth or be submitted with information from which it can be determined that the electronic or telephonic submission has been authorised by the member or proxy. |
144. | Subject to the provisions of these Articles and any rights or restrictions for the time being attached to any class or classes of shares in the capital of the Company, every member of record present in person or by proxy shall have one vote for each share registered in his or her name in the Register. |
145. | Where there are joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holder or holders; and for this purpose, seniority shall be determined by the order in which the names of the joint holders stand in the Register. |
146. | A member who has made an enduring power of attorney, or a member in respect of whom an order has been made by any court having jurisdiction in cases of unsound mind, may vote by his or her committee, donee of an enduring power of attorney, receiver, guardian or other person appointed by the foregoing court, and any such committee, donee of an enduring power of attorney, receiver, guardian or other persons appointed by the foregoing court may speak or vote by proxy. |
147. | No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairperson of the general meeting whose decision shall be final and conclusive. |
148. | A person shall be entered on the Register by the record date specified in respect of a general meeting in order to exercise the right of a member to participate and vote at the general meeting and any change to an entry on the Register after the record date shall be disregarded in determining the right of any person to attend and vote at the meeting. |
149. | Votes may be given either personally (including by a duly authorised representative of a corporate member) or by proxy. On a poll taken at a meeting of the members of the Company or a meeting of any class of members of the Company, a member, whether present in person or by proxy, entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way. |
150. | Subject to such requirements and restrictions as the Directors may specify, the Company may permit members to vote by correspondence in advance of a general meeting in respect of one or more of the resolutions proposed at a meeting. Where the Company permits members to vote by correspondence, it shall only count votes cast in advance by correspondence, where such votes are received at the address and before the date and time specified by the Company, provided the date and time is no more than 24 hours before the time at which the vote is to be concluded. |
151. | Subject to such requirements and restrictions as the Directors may specify, the Company may permit members who are not physically present at a meeting to vote by electronic means at the general meeting in respect of one or more of the resolutions proposed at a meeting. |
152. | Where there is an equality of votes, the chairperson of the meeting shall not have a second or casting vote. |
153. | No member shall be entitled to vote at any general meeting of the Company unless all calls or other sums immediately payable by him or her in respect of shares in the Company have been paid. |
154. | The provisions of these Articles relating to general meetings shall, as far as applicable, apply in relation to any meeting of any class of member of the Company. |
155. | The number of Directors from time to time shall be not less than two nor more than thirteen. |
156. | The Board, upon recommendations of the nomination and governance committee (or equivalent committee established by the Board), shall propose nominees for election to the office of Director at each annual general meeting. |
157. | The Directors may be appointed by the members in general meeting, provided that no person other than a Director retiring at the meeting shall, save where recommended by the Board, be eligible for election to the office of Director at any general meeting unless the requirements of Article 164 as to his or her eligibility for that purpose have been complied with. |
158. | The Directors shall be divided into three classes, designated Class I, Class II and Class III. The initial division of the Board into classes shall be made by the decision of the affirmative vote of a majority of the Directors in office and each class need not be of equal size or number. |
158.1 | The term of the initial Class I directors shall terminate at the conclusion of the Company’s 2024 annual general meeting; the term of the initial Class II directors shall terminate on the conclusion of the Company’s 2025 annual general meeting; and the term of the initial Class III directors shall terminate on the conclusion of the Company’s 2026 annual general meeting. |
158.2 | At each annual general meeting of the Company beginning with the Company’s 2024 annual general meeting, all of the Directors of the class of directors whose term expires on the conclusion of that annual general meeting shall retire from office, unless re-elected, and successors to that class of directors shall be elected for a three-year term. |
158.3 | The resolution appointing any Director must designate the Director as a Class I, Class II or Class III Director. |
158.4 | Every Director of the class retiring shall be eligible to stand for re-election at an annual general meeting. |
158.5 | If the number of Directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible or as the Chairperson may otherwise direct. In no case will a decrease in the number of Directors shorten the term of any incumbent Director. |
158.6 | A Director shall hold office until the conclusion of the annual general meeting for the year in which his term expires and until he shall be re-elected or his successor shall be elected or appointed and subject, however, to prior death, resignation, retirement, disqualification or removal from office. |
158.7 | Any vacancy on the Board, including a vacancy that results from an increase in the number of directors or from the death, resignation, retirement, disqualification or removal of a Director, shall be deemed a casual vacancy. Subject to the terms of any one or more classes or series of Preferred Shares, any casual vacancy shall only be filled by the decision of a majority of the Board then in office, provided that a quorum is present and provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with these articles as the maximum number of Directors. |
158.8 | Any Director of such class elected to fill a vacancy resulting from an increase in the number of Directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any Director elected to fill a vacancy not resulting from an increase in the number of Directors shall have the same remaining term as that of his predecessor or if there is no such remaining term, the Director shall retire, and be eligible to stand for re-election, at the annual general meeting immediately following their appointment at which time, if reelected, the Director shall hold office for a term that shall coincide with the remaining term of that class. A Director retiring at a meeting shall retain office until the close or adjournment of the meeting. |
159. | Each Director shall be elected by an ordinary resolution at such meeting, provided that if, as of, or at any time prior to, fourteen days before the filing of the Company’s definitive proxy statement with the SEC relating to such general meeting, the number of Director nominees exceeds the number of Directors to be elected (a “contested election”), each of those nominees shall be voted upon as a separate resolution and the Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at any such meeting and entitled to vote on the election of Directors. |
For the purposes of this Article, “elected by a plurality” means the election of those director nominees, equalling in number to the number of positions to be filled at the relevant general meeting, that received the highest number of votes. |
160. | Any nominee for election to the Board who is then serving as a Director and, in an uncontested election (where the number of Director nominees does not exceed the number of Directors to be elected), receives a greater number of “against” votes than “for” votes shall promptly tender his or her resignation following certification of the vote. The nomination and governance committee of the Board shall then consider the resignation offer and recommend to the Board whether to accept or reject the resignation, or whether other action should be taken; provided that any Director whose resignation is under consideration shall not participate in the nomination and governance committee’s recommendation regarding whether to accept, reject or take other action with respect to his/her resignation. The Board shall take action on the nomination and governance committee’s recommendation within 90 days following certification of the vote, and promptly thereafter publicly disclose its decision and the reasons therefor. |
161. | The Directors are not entitled to appoint alternate directors. |
162. | The Company may from time to time, by ordinary resolution, increase or reduce the number of Directors provided that any resolution to appoint a director approved by the members that would result in the maximum number of Directors being exceeded shall be deemed to constitute an ordinary resolution increasing the maximum number of Directors to the number that would be in office following such a resolution of appointment. |
163. | The Company may by ordinary resolution, appoint another person in place of a Director removed from office under section 146 of the Act and, without prejudice to the powers of the Directors under Article 158.7, the Company in a general meeting may appoint any person to be a Director either to fill a casual vacancy or as an additional Director. |
164. | The following are the requirements mentioned in Article 157 for the eligibility of a person (the “person concerned”) for election as a Director at a general meeting, namely, any member entitled to vote in the election of Directors generally may nominate one or more persons for election as Directors at an annual general meeting only pursuant to the Company’s notice of such meeting or if written notice of such member’s intent to make such nomination or nominations has been received by the Company Secretary at the Company’s Office not less than 60 nor more than 90 days prior to the first anniversary of the preceding year’s annual general meeting; provided, however, that in the event that the date of the annual general meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary, notice by the member to be timely must be so received not earlier than the 90th day prior to such annual general meeting and not later than the close of business on the later of (i) the 60th day prior to such annual general meeting and (ii) the 10th day following the day on which notice of the date of the annual general meeting was mailed or public disclosure thereof was made by the Company, whichever event in this clause (ii) first occurs. Each such member’s notice shall set forth: |
164.1 | the name and address of the member who intends to make the nomination and of the person or persons to be nominated; |
164.2 | a representation that the member is a holder of record of shares of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; |
164.3 | a description of all arrangements or understandings between the member and each nominee and any other person or persons (naming such person or persons) relating to the nomination or nominations; |
164.4 | the class and number of shares of the Company which are beneficially owned by such member and by any other members known by such member to be supporting such nominees as of the date of such member’s notice; |
164.5 | whether and the extent to which any hedging, derivative or other transaction is in place or has been entered into within the prior six months preceding the date of delivery of the notice by or for the benefit of the member with respect to the Company or its subsidiaries or any of their respective securities, debt instruments or credit ratings, the effect or intent of which transaction is to give rise to gain or loss as a result of changes in the trading price of such securities or debt instruments or changes in the credit ratings for the Company, its subsidiaries or any of their respective securities or debt instruments (or, more generally, changes in the perceived creditworthiness of the Company or its subsidiaries), or to increase or decrease the voting power of the member, and if so, a summary of the material terms thereof; |
164.6 | such other information regarding each nominee proposed by such member as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC; |
164.7 | the consent of each nominee to serve as a Director if so elected; and |
164.8 | for each nominee who is not an incumbent Director: |
(a) | their name, age, business address and residential address; |
(b) | their principal occupation or employment; |
(c) | the class, series and number of securities of the Company that are owned of record or beneficially by such person; |
(d) | the date or dates the securities were acquired and the investment intent of each acquisition; |
(e) | any other information relating to such person that is required to be disclosed in proxies for the election of Directors under any applicable securities legislation; and |
(f) | any information the Company may require any proposed director nominee to furnish such as it may reasonably require to comply with applicable law and to determine the eligibility of such proposed nominee to serve as a Director and whether such proposed nominee would be considered independent as a Director or as a member of the audit or any other committee of the Board under the various rules and standards applicable to the Company. |
165. | Subject to the provisions of these Articles and in addition to the circumstances described in sections 146, 148(1) and 196(2) of the Act, the office of Director shall be vacated ipso facto, if that Director: |
165.1 | is restricted or disqualified to act as a Director under the Act; or |
165.2 | resigns his or her office by notice in writing to the Company or in writing offers to resign and the Directors resolve to accept such offer; or |
165.3 | is requested to resign in writing by not less than three quarters of the other Directors. |
166. | The remuneration of the Directors shall be such as is determined, from time to time, by the Board and such remuneration shall be deemed to accrue from day to day. The Board may from time to time determine that, subject to the requirements of the Act, all or part of any fees or other remuneration payable to any Director shall be provided in the form of shares or other securities of the Company or any subsidiary of the Company, or options or rights to acquire such shares or other securities, on such terms as the Board may decide. |
167. | The Directors may also be paid all travelling, hotel and other expenses properly incurred by them: (a) in attending and returning from: (i) meetings of the Directors or any committee; or (ii) general meetings of the Company, or (b) otherwise in connection with the business of the Company. |
168. | The business of the Company shall be managed by its Directors who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not, by the Act or by the Memorandum of these Articles, required to be exercised by the Company in a general meeting, but subject to: |
168.1 | any regulations contained in these Articles; |
168.2 | the provisions of the Act; and |
168.3 | such directions, not being inconsistent with the foregoing regulations or provisions, as the Company in a general meeting may (by special resolution) give. |
169. | No direction given by the Company in a general meeting under Article 168.3 shall invalidate any prior act of the Directors which would have been valid if that direction had not been given. |
170. | Without prejudice to the generality of Article 168, Article 168 operates to enable, subject to a limitation (if any) arising under any of paragraphs 168.1 to 168.3 of it, the Directors exercise all powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof. |
171. | Without prejudice to section 40 of the Act, the Directors may delegate any of their powers (including any power referred to in these Articles) to such person or persons as they think fit, including committees; any such person or committee shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Directors. |
172. | Any reference to a power of the Company required to be exercised by the Company in a general meeting includes a reference to a power of the Company that, but for the power of the members to pass a written resolution to effect the first-mentioned power’s exercise, would be required to be exercised by the Company in a general meeting. |
173. | The acts of the Board or of any committee established by the Board or any delegee of the Board or any such committee shall be valid notwithstanding any defect which may afterwards be discovered in the appointment or qualification of any Director, committee member or delegee. |
174. | The Directors may appoint a sole or joint company secretary, an assistant company secretary and a deputy company secretary for such term, at such remuneration and upon such conditions as they may think fit; and any such person so appointed may be removed by them. |
175. | The Directors may from time to time appoint one or more of themselves to the office of Chief Executive Officer (by whatever name called including managing director) or such other office or position with the Company and for such period and on such terms as to remuneration, if any (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and, subject to the terms of any agreement entered into in any particular case, may revoke such appointment. |
176. | Without prejudice to any claim the person so appointed under Article 175 may have for damages for breach of any contract of service between the person and the Company, the person’s appointment shall cease upon his or her ceasing, for any reason, to be a Director. |
177. | The Board may appoint any person whether or not he or she is a Director, to hold such executive or official position (except that of Auditor) as the Board may from time to time determine. The same person may hold more than one office of executive or official position. |
178. | The Board shall determine from time to time, the powers and duties of any such office holder or official appointed under Articles 175 and/or Article 177, and subject to the provisions of the Act and these Articles, the Directors may confer upon an office holder or official any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit and in conferring any such powers, the Directors may specify that the conferral is to operate either: (a) so that the powers concerned may be exercised concurrently by them and the relevant office holder; or (b) to the exclusion of their own such powers. |
179. | The Directors may (a) revoke any conferral of powers under Article 178 or (b) amend any such conferral (whether as to the powers conferred or the terms, conditions or restrictions subject to which the conferral is made). The use or inclusion of the word “officer” (or similar words) in the title of any executive or other position shall not be deemed to imply that the person holding such executive or other position is an “officer” of the Company within the meaning of the Act. |
180. 180.1 | The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. |
180.2 | The Directors may establish attendance and procedural guidelines from time to time about how their meetings are to be conducted consistent with good corporate governance and applicable tax requirements. |
180.3 | Such meetings shall take place at such time and place as the Directors may determine. |
180.4 | Questions arising at any such meeting shall be decided by a majority of votes and where there is an equality of votes, the chairperson of the meeting shall not have a second or casting vote. |
180.5 | A Director may, and the Company Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. |
181. | All Directors shall be entitled to reasonable notice of any meeting of the Directors. |
182. | Nothing in Article 181 or any other provision of the Act enables a person, other than a Director, to object to the notice given for any meeting of the Directors. |
183. | The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority of the Directors in office at the time when the meeting is convened. |
184. | The continuing Directors may act notwithstanding any vacancy in their number, provided that if the number of the Directors is reduced below the prescribed minimum the remaining Director or Directors shall appoint |
185. | The Directors may elect a Chairperson and determine the period for which he or she is to hold office, but if no such Chairperson is elected, or, if at any meeting the Chairperson is not present after the time appointed for holding it, the Directors present may choose one of their members to be chairperson of a Board meeting. The Chairperson shall vacate office if he or she vacates his or her office as a Director (otherwise than by the expiration of his or her term of office at a general meeting of the Company at which he or she is re-appointed). |
186. | The Directors may establish one or more committees consisting in whole or in part of members of the Board. The composition, function, power and obligations of any such committee will be determined by the Board from time to time. |
187. | A committee established under Article 186 (a “committee”) may elect a chairperson of its meetings; if no such chairperson is elected, or if at any meeting the chairperson is not present after the time appointed for holding it, the members of the committee present may choose one of their number to be chairperson of the meeting. |
188. | A committee may meet and adjourn as it thinks proper. Committee meetings shall take place at such time and place as the relevant committee may determine. Questions arising at any meeting of a committee shall be determined (subject to Article 186) by a majority of votes of the members of the committee present, and where there is an equality of votes, the chairperson of the committee shall not have a second or casting vote. |
189. | Where any committee is established by the Directors : |
189.1 | the meetings and proceedings of such committee shall be governed by the provisions of these Articles regulating the meetings and proceedings of the Directors so far as the same are applicable and are not superseded by any regulations imposed upon such committee by the Directors; and |
189.2 | the Directors may authorise, or may authorise such committee to authorise, any person who is not a Director to attend all or any meetings of any such committee on such terms as the Directors or the committee think fit, provided that any such person shall not be entitled to vote at meetings of the committee. |
190. | The following provision shall apply: |
190.1 | A resolution in writing signed by all the Directors, or by all the Directors being members of a committee referred to in Article 186, and who are for the time being entitled to receive notice of a meeting of the Directors or, as the case may be, of such a committee, shall be as valid as if it had been passed at a meeting of the Directors or such a committee duly convened and held. |
190.2 | A resolution in writing shall be deemed to have been signed by a Director where the Chairperson, Company Secretary or other person designated by the Board has received an email from that Director’s Certified Email Address which identifies the resolution and states, unconditionally, “I hereby sign the resolution”. |
190.3 | A Director’s Certified Email Address is such email address as the Director has, from time to time, notified to such person and in such manner as may from time to time be prescribed by the Board. |
190.4 | The Company shall cause a copy of every email referred to in Article 190.2 to be entered in the books kept pursuant to section 166 of the Act. |
191. | Subject to Article 192, where one or more of the Directors (other than a majority of them) would not, by reason of: |
191.1 | the Act or any other enactment; |
191.2 | these Articles; or |
191.3 | an applicable rule of law or an Exchange, be permitted to vote on a resolution such as is referred to in Article 190, if it were sought to pass the resolution at a meeting of the Directors duly convened and held, then such a resolution, notwithstanding anything in Article 190.1, shall be valid for the purposes of that subsection if the resolution is signed by those of the Directors who would have been permitted to vote on it had it been sought to pass it at such a meeting. |
192. | In a case falling within Article 191, the resolution shall state the name of each Director who did not sign it and the basis on which he or she did not sign it. |
193. | For the avoidance of doubt, nothing in Articles 190 to 192 dealing with a resolution that is signed by other than all of the Directors shall be read as making available, in the case of an equality of votes, a second or casting vote to the one of their number who would, or might have been, if a meeting had been held to transact the business concerned, chairperson of that meeting. |
194. | The resolution referred to in Article 190 may consist of several documents in like form each signed by one or more Directors and for all purposes shall take effect from the time that it is signed by the last Director. |
195. | A meeting of the Directors or of a committee referred to in Article 186 may consist of a conference between some or all of the Directors or, as the case may be, members of the committee who are not all in one place, but each of whom is able (directly or by means of telephonic, video or other electronic communication) to speak to each of the others and to be heard by each of the others and: |
195.1 | a Director or as the case may be a member of the committee taking part in such a conference shall be deemed to be present in person at the meeting and shall be entitled to vote (subject to Article 191) and be counted in a quorum accordingly; and |
195.2 | such a meeting shall be deemed to take place: |
(a) | where the largest group of those Directors participating in the conference is assembled; |
(b) | if there is no such group, where the chairperson of the meeting then is; or |
(c) | if neither subparagraph (a) or (b) applies, in such location as the meeting itself decides. |
196. | A Director may have regard to the interests of any other companies in a group of which the Company is a member to the full extent permitted by the Act. |
197. | A Director is expressly permitted (for the purposes of section 228(1)(d) of the Act) to use vehicles, telephones, computers, aircraft, accommodation and any other Company property where such use is approved by the Board or by a person so authorised by the Board or where such use is in accordance with a Director’s terms of employment, letter of appointment or other contract or in the course of the discharge of the Director’s duties or responsibilities or in the course of the discharge of a Director’s employment. |
198. | Nothing in section 228(1)(e) of the Act shall restrict a Director from entering into any commitment which has been approved by the Board or has been approved pursuant to such authority as may be delegated by the Board in accordance with these Articles. It shall be the duty of each Director to obtain the prior approval of the Board, before entering into any commitment permitted by sections 228(1)(e)(ii) and 228(2) of the Act. |
199. | It shall be the duty of a Director who is in any way, whether directly or indirectly, interested (within the meaning of section 231 of the Act) in a contract or proposed contract with the Company, to declare the nature of his or her interest at a meeting of the Directors. |
200. | Subject to any applicable law or the relevant code, rules and regulations applicable to the listing of the shares on any Exchange, a Director may vote in respect of any contract, appointment or arrangement in which he or she is interested and shall be counted in the quorum present at the meeting and is hereby released from his or her duty set out in section 228(1)(f) of the Act and a Director may vote on his or her own appointment or arrangement and the terms of it. For the purposes of section 228(1)(f), the Board may release any Director from his or her duty to avoid a conflict between the Director’s duties to the Company and the Director’s other interests (including personal interests) in connection with any matter brought to the attention of the Board |
201. | The Directors may exercise the voting powers conferred by the shares of any other company held or owned by the Company in such manner in all respects as they think fit and, in particular, they may exercise the voting powers in favour of any resolution: (a) appointing the Directors or any of them as directors or officers of such other company; or (b) providing for the payment of remuneration or pensions to the directors or officers of such other company. |
202. | Subject to any applicable law or the relevant code, rules and regulations applicable to the listing of the shares on any Exchange, any Director may vote in favour of the exercise of such voting rights notwithstanding that he or she may be or may be about to become a Director or officer of the other company referred to in Article 201 and as such or in any other way is or may be interested in the exercise of such voting rights in the foregoing manner. |
203. | A Director may hold any other office or place of profit under the Company (other than Auditor) in conjunction with his or her office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine. |
204. | Without prejudice to the provisions of section 228 of the Act, a Director may be or become a director or other officer of, or otherwise interested in, any company promoted by the Company or in which the Company may be interested as member or otherwise. |
205. | A Director may act by himself or herself, or his or her firm, in a professional capacity for the Company; and any Director, in such a case, or his or her firm, shall be entitled to remuneration for professional services as if he or she were not a Director, but nothing in this Article authorises a Director, or his or her firm, to act as Auditor. |
206. | No Director or nominee for Director shall be disqualified by his or her office from contracting with the Company either with regard to his or her tenure of any such other office or place of profit or as vendor, purchaser or otherwise. |
207. | In particular, neither shall: |
207.1 | any contract with respect to any of the matters referred to in Article 200 nor any contract or arrangement entered into by or on behalf of the Company in which a Director is in any way interested, be liable to be avoided; nor |
207.2 | a Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement, by reason of such Director holding that office or of the fiduciary relation thereby established. |
208. | A Director, notwithstanding his or her interest, may be counted in the quorum present at any meeting at which: |
208.1 | that Director or any other Director is appointed to hold any such office or place of profit under the Company as is mentioned in Article 203; or |
208.2 | the terms of any such appointment are arranged, and he or she may vote on any such appointment or arrangement, subject to any applicable law or the relevant code, rules and regulations applicable to the listing of the shares on any Exchange. |
209. | Any seal of the Company shall be used only by the authority of the Directors, a committee authorised by the Directors to exercise such authority or by any one or more persons severally or jointly so authorised by the Directors or such a committee, and the use of the seal shall be deemed to be authorised for these purposes where the matter or transaction pursuant to which the seal is to be used has been so authorised. |
210. | Any instrument to which a Company’s seal shall be affixed shall be signed by any one of the following: |
210.1 | a Director; |
210.2 | the Company Secretary; or |
210.3 | any other person authorised to sign by (i) the Directors or (ii) a committee, and the countersignature of a second such person shall not be required. |
211. | The Company may have one or more duplicate common seals or official seals for use in different locations including for use abroad. |
212. | A notice required or authorised to be served on or given to a member of the Company pursuant to a provision of the Act or these Articles shall, save where the means of serving or giving it specified in Article 212.4 is used, be in writing and may be served on or given to the member in one of the following ways: |
212.1 | by delivering it to the member; |
212.2 | by leaving it at the registered address of the member; |
212.3 | by sending it by post in a prepaid letter to the registered address of the member; or |
212.4 | subject to Article 217, by electronic mail or other means of electronic communication approved by the Directors to the contact details notified to the Company by any such member for such purpose (or if not so notified, then to the contact details of the member last known to the Company). A notice or document may be sent by electronic means to the fullest extent permitted by the Act. |
213. | Without prejudice or limitation to the foregoing provisions of Article 212.1 to 212.4, for the purposes of these Articles and the Act, a document shall be deemed to have been sent to a member if a notice is given, served, sent or delivered to the member and the notice specifies the website or hotlink or other electronic link at or through which the member may obtain a copy of the relevant document. |
214. | Any notice served or given in accordance with Article 212 shall be deemed, in the absence of any agreement to the contrary between the Company (or, as the case may be, the officer of it) and the member, to have been served or given: |
214.1 | in the case of its being delivered, at the time of delivery (or, if delivery is refused, when tendered); |
214.2 | in the case of its being left, at the time that it is left; |
214.3 | in the case of its being posted on any day other than a Friday, Saturday or Sunday, 24 hours after despatch and in the case of its being posted: |
(a) | on a Friday — 72 hours after despatch; or |
(b) | on a Saturday or Sunday — 48 hours after despatch; |
214.4 | in the case of electronic means being used in relation to it, twelve hours after despatch,but this Article is without prejudice to section 181(3) of the Act. |
215. | Every legal personal representative, committee, receiver, curator bonis or other legal curator, assignee in bankruptcy, examiner or liquidator of a member shall be bound by a notice given as aforesaid if sent to the last registered address of such member, or, in the event of notice given or delivered pursuant to Article 212.4, if sent to the address notified to the Company by the member for such purpose notwithstanding that the Company may have notice of the death, his or her being of unsound mind, bankruptcy, liquidation or disability of such member. |
216. | Notwithstanding anything contained in these Articles to the contrary, the Company shall not be obliged to take account of or make any investigations as to the existence of any suspension or curtailment of postal services within or in relation to all or any part of any jurisdiction. |
217. | Any requirement in these Articles for the consent of a member in regard to the receipt by such member of electronic mail or other means of electronic communications approved by the Directors, including the receipt of the Company’s annual report, statutory financial statements and the Directors’ and Auditor’s reports thereon, shall be deemed to have been satisfied where the Company has written to the member informing him or her of its intention to use electronic communications for such purposes and the member has not, within four weeks of the issue of such notice, served an objection in writing on the Company to such member. Where a member has given, or is deemed to have given, his/her consent to the receipt by such member of electronic mail or other means of electronic communications approved by the Directors, she/he may revoke such consent at any time by requesting the Company to communicate with him or her in documented form; provided, however, that such revocation shall not take effect until five days after written notice of the revocation is received by the Company. Notwithstanding anything to the contrary in this Article 217, no such consent shall be necessary, and to the extent it is necessary, such consent shall be deemed to have been given, if electronic communications are permitted to be used under the rules and regulations of any Exchange on which the shares in the capital of the Company or other securities of the Company are listed or under the rules of the SEC. |
218. | If at any time by reason of the suspension or curtailment of postal services in any territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a public announcement (as defined below) and such notice shall be deemed to have been duly served on all members entitled thereto at noon (Ireland time) on the day on which the said public announcement is made. In any such case the Company shall put a full copy of the notice of the general meeting on its website. |
219. | Notice shall be given by the Company to the joint holders of a share in the capital of the Company by giving the notice to both such holders whose names stand in the Register in respect of the share. |
220. 220.1 | Every person who becomes entitled to a share in the capital of the Company shall, before his or her name is entered in the Register in respect of the share, be bound by any notice in respect of that share which has been duly given to a person from whom he or she derives his or her title. |
220.2 | A notice may be given by the Company to the persons entitled to a share in the capital of the Company in consequence of the death or bankruptcy of a member by sending or delivering it, in any manner authorised by these Articles for the giving of notice to a member, addressed to them at the address, if any, supplied by them for that purpose. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy had not occurred. |
221. | The signature (whether electronic signature, an advanced electronic signature or otherwise) to any notice to be given by the Company may be written (in electronic form or otherwise) or printed. |
222. | In addition to the means of service of documents set out in section 51 of the Act, a notice or other document may be served on the Company by an officer of the Company by email provided, however, that the Directors have designated an email address for that purpose and notified that email address to its officers for the express purpose of serving notices on the Company. |
223. | The Company may send by post, electronic mail or any other means of electronic communication: |
223.1 | the Company’s statutory financial statements; |
223.2 | the directors’ report; and |
223.3 | the statutory auditors’ report, and copies of those documents shall also be treated, for the purposes of the Act, as sent to a person where: |
(a) | the Company and that person have agreed to his or her having access to the documents on a website (instead of their being sent to him or her); |
(b) | the documents are documents to which that agreement applies; and |
(c) | that person is notified, in a manner for the time being agreed for the purpose between him or her and the Company, of: |
(i) | the publication of the documents on a website; |
(ii) | the address of that website; and |
(iii) | the place on that website where the documents may be accessed, and how they may be accessed. |
223.4 | Documents treated in accordance with Article 223 as sent to any person are to be treated as sent to him or her not less than 21 days before the date of a meeting if, and only if: |
(a) | the documents are published on the website throughout a period beginning at least 21 days before the date of the meeting and ending with the conclusion of the meeting; and |
(b) | the notification given for the purposes of Article 223.3(c) is given not less than 21 days before the date of the meeting. |
224. | Any obligation by virtue of section 339(1) or (2) of the Act to furnish a person with a document may, unless these Articles provide otherwise, be complied with by using electronic communications for sending that document to such address as may for the time being be notified to the Company by that person for that purpose. |
225. | The Directors shall, in accordance with Chapter 2 of Part 6 of the Act, cause to be kept adequate accounting records, whether in the form of documents, electronic form or otherwise, that: |
225.1 | correctly record and explain the transactions of the Company; |
225.2 | will at any time enable the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy; |
225.3 | will enable the Directors to ensure that any financial statements of the Company, required to be prepared under sections 290 or 293 of the Act, comply with the requirements of the Act; and |
225.4 | will enable those financial statements of the Company to be readily and properly audited. |
226. | The accounting records shall be kept on a continuous and consistent basis and entries therein shall be made in a timely manner and be consistent from year to year. Adequate accounting records shall be deemed to have been maintained if they comply with the provisions of Chapter 2 of Part 6 of the Act and explain the Company's transactions and facilitate the preparation of financial statements that give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and, if relevant, the Group and include any information and returns referred to in section 283(2) of the Act. |
227. | The accounting records shall be kept at the Office or, subject to the provisions of the Act, at such other place as the Directors think fit and shall be open at all reasonable times to the inspection of the Directors. |
228. | The Directors shall determine from time to time whether and to what extent and at what times and places and under what conditions or regulations the accounting records of the Company shall be open to the inspection of members, not being Directors. No member (not being a Director) shall have any right of inspecting any financial statement or accounting record of the Company except as conferred by the Act or authorised by the Directors or by the Company in a general meeting. |
229. | In accordance with the provisions of the Act, the Directors shall cause to be prepared and to be laid before the annual general meeting of the Company from time to time such statutory financial statements of the Company and reports as are required by the Act to be prepared and laid before such meeting. |
230. | A copy of every statutory financial statement of the Company (including every document required by law to be annexed thereto) which is to be laid before the annual general meeting of the Company together with a copy of the Directors’ report and Auditors’ report, or summary financial statements prepared in accordance with section 1119 of the Act, shall be sent, by post, electronic mail or any other means of electronic communications, not less than twenty-one Clear Days before the date of the annual general meeting, to every person entitled under the provisions of the Act to receive them; provided that where the Directors elect to send |
231. | Auditors shall be appointed and their duties regulated in accordance with the Act. |
232. | Subject to the provisions of the Act as to preferential payments, the property of the Company on its winding up shall be distributed among the members according to their rights and interests in the Company. |
233. | Unless the conditions of issue of the shares in question provide otherwise, dividends declared by the Company more than six years preceding the commencement date of a winding up of the Company, being dividends which have not been claimed within that period of six years, shall not be a claim admissible to proof against the Company for the purposes of the winding up. |
234. | If the Company shall be wound up and the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid up or credited as paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the shares in the capital of the Company held by them respectively. If in a winding up the assets available for distribution among the members shall be more than sufficient to repay the whole of the share capital paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the members in proportion to the capital at the commencement of the winding up paid up or credited as paid up on the said shares held by them respectively; provided that this Article shall be subject to any specific rights attaching to any class of share capital. |
234.1 | In case of a sale by the liquidator under section 601 of the Act, the liquidator may by the contract of sale agree so as to bind all the members, for the allotment to the members directly, of the proceeds of sale in proportion to their respective interests in the Company and may further, by the contract, limit a time at the expiration of which obligations or shares in the capital of the Company not accepted or required to be sold shall be deemed to have been irrevocably refused and be at the disposal of the Company, but so that nothing herein contained shall be taken to diminish, prejudice or affect the rights of dissenting members conferred by the said section. |
234.2 | The power of sale of the liquidator shall include a power to sell wholly or partially for debentures, debenture stock, or other obligations of another company, either then already constituted or about to be constituted for the purpose of carrying out the sale. |
235. | If the Company is wound up, the liquidator, with the sanction of a special resolution and any other sanction required by the Act, may divide amongst the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not), and, for such purpose, may value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator, with the like sanction, may vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as, with the like sanction, he or she determines, but so that no member shall be compelled to accept any assets upon which there is a liability. |
236. | In addition to any affirmative vote or consent required by law or these Articles, and except as otherwise expressly provided in Article 237, a Business Transaction (as defined in Article 238.3) with, or proposed by or on behalf of, any Interested Person (as defined in Article 238.6) or any Affiliate (as defined in Article 238.1) of any Interested Person or any person who thereafter would be an Affiliate of such Interested Person shall require approval by the affirmative vote of members of the Company holding not less than two-thirds (2/3) of the paid up ordinary share capital of the Company, excluding the voting rights attached to any shares beneficially owned by such Interested Person. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any Exchange or otherwise. |
237. | The provisions of Article 236 shall not be applicable to any particular Business Transaction, and such Business Transaction shall require only such affirmative vote, if any, as is required by law or by any other provision of these Articles, or any agreement with any Exchange, if either (i) the Business Transaction shall have been approved by a majority of the Board prior to such Interested Person first becoming an Interested Person or (ii) prior to such Interested Person first becoming an Interested Person, a majority of the Board shall have approved such Interested Person becoming an Interested Person and, subsequently, a majority of the Independent Directors (as hereinafter defined) shall have approved the Business Transaction. |
238. | The following definitions shall apply with respect to Articles 236 to 240: |
238.1 | The term “Affiliate” shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person. |
238.2 | A person shall be a “beneficial owner” of any shares of the Company (a) which such person or any of its Affiliates beneficially owns, directly or indirectly; (b) which such person or any of its Affiliates has, directly or indirectly, (i) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time or the occurrence of one or more events), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the beneficial owner of any security if the agreement, arrangement or understanding to vote such security arises solely from a revocable proxy or consent solicitation made pursuant to and in accordance with the Act; or (c) which is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of the Company (except to the extent permitted by the proviso of clause (b)(ii) above). For the purposes of determining whether a person is an Interested Person pursuant to Article 238.6, the number of shares of the Company deemed to be outstanding shall include shares deemed beneficially owned by such person through application of this Article 238.2, but shall not include any other shares of the Company that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. |
238.3 | The term “Business Transaction” shall mean any of the following transactions when entered into by the Company or a subsidiary of the Company with, or upon a proposal by or on behalf of, any Interested Person or any Affiliate of any Interested Person: |
(a) | any merger or consolidation of the Company or any subsidiary with (i) any Interested Person, or (ii) any other body corporate which is, or after such merger or consolidation would be, an Affiliate of an Interested Person; |
(b) | any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a member of the Company, to or with the Interested Person of assets of the Company (other than shares of the Company or of any subsidiary of the Company which assets have an aggregate market value equal to ten percent (10%) or more of the aggregate market value of all the issued share capital of the Company); |
(c) | any transaction that results in the issuance of shares or the transfer of treasury shares by the Company or by any subsidiary of the Company of any shares of the Company or any shares of such subsidiary to the Interested Person, except (i) pursuant to the exercise, exchange or |
(d) | any reclassification of securities, recapitalization or other transaction involving the Company or any subsidiary of the Company which has the effect, directly or indirectly, of (i) increasing the proportionate amount of the shares of any class or series, or securities convertible into the shares of any class or series, of the Company or of any such subsidiary which is owned by the Interested Person, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares not caused, directly or indirectly, by the Interested Person or (ii) increasing the voting power, whether or not then exercisable, of an Interested Person in any class or series of shares of the Company or any subsidiary of the Company; |
(e) | the adoption of any plan or proposal by or on behalf of an Interested Person for the liquidation, dissolution or winding-up of the Company; or |
(f) | any receipt by the Interested Person of the benefit, directly or indirectly (except proportionately as a member of the Company), of any loans, advances, guarantees, pledges, tax benefits or other financial benefits (other than those expressly permitted in subparagraphs (a) through (e) above) provided by or through the Company or any subsidiary thereof. |
238.4 | The term “Independent Directors” shall mean the members of the Board who are not Affiliates or representatives of, or associated with, an Interested Person and who were either Directors prior to any person becoming an Interested Person or were recommended for election or elected to succeed such directors by a vote which includes the affirmative vote of a majority of the Independent Directors. |
238.5 | The term “Institutional Investor” shall mean a person that (a) has acquired, or will acquire, all of its shares in the Company in the ordinary course of its business and not with the purpose nor with the effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect, including any transaction subject to rule 13d-3(b) under the Exchange Act, and (b) is a registered broker dealer; a bank as defined in section 3(a)(6) of the Exchange Act; an insurance company as defined in, or an investment company registered under, the Investment Company Act of 1940 of the United States; an investment advisor registered under the Investment Advisors Act of 1940 of the United States; an employee benefit plan or pension fund subject to the Employee Retirement Income Security Act of 1974 of the United States or an endowment fund; a parent holding company, provided that the aggregate amount held directly by the parent and directly and indirectly by its subsidiaries which are not persons specified in the foregoing subclauses of this clause (b) does not exceed one percent (1%) of the securities of the subject class; or a group, provided that all the members are persons specified in the foregoing subclauses of this clause (b). |
238.6 | The term “Interested Person” shall mean any person (other than the Company, any subsidiary, any profit-sharing, employee share ownership or other employee benefit plan of the Company or any subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who (a) is the beneficial owner of shares of the Company representing ten percent (10%) or more of the votes entitled to be cast by the holders of all the paid up share capital of the Company; (b) has stated in a filing with any governmental agency or press release or otherwise publicly disclosed a plan or intention to become or consider becoming the beneficial owner of shares of the Company representing ten percent (10%) or more of the votes entitled to be cast by the holders of all paid up |
238.7 | The term “person” shall mean any individual, body corporate, partnership, unincorporated association, trust or other entity. |
238.8 | The term “subsidiary” has the meaning ascribed to it in section 7 of the Act. |
239. | A majority of the Independent Directors shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, for the purposes of (i) Articles 236 and 237, all questions arising under Articles 236 and 237 including, without limitation (a) whether a person is an Interested Person, (b) the number of shares of the Company or other securities beneficially owned by any person; and (c) whether a person is an Affiliate of another; and (ii) these Articles, the question of whether a person is an Interested Person. Any such determination made in good faith shall be binding and conclusive on all parties. |
240. | Nothing contained in Articles 236 to 239 shall be construed to relieve any Interested Person from any fiduciary obligation imposed by law. |
241. | Subject to applicable law, the Directors are hereby expressly authorised to adopt any shareholder rights plan (a “Rights Plan”), upon such terms and conditions as the Directors deem expedient and in the best interests of the Company, including, without limitation, where the Directors are of the opinion that a Rights Plan could grant them additional time to gather relevant information or pursue strategies in response to or anticipation of, or could prevent, a potential change of control of the Company or accumulation of shares in the Company or interests therein. |
242. | The Directors may exercise any power of the Company to grant rights (including approving the execution of any documents relating to the grant of such rights) to subscribe for ordinary shares or preferred shares in the share capital of the Company (“Rights”) in accordance with the terms of a Rights Plan. |
243. | For the purposes of effecting an exchange of Rights for ordinary shares or preferred shares in the share capital of the Company (an “Exchange”), the Directors may: |
243.1 | resolve to capitalise an amount standing to the credit of the reserves of the Company (including, but not limited to, the share premium account, capital redemption reserve, any undenominated capital and profit and loss account), whether or not available for distribution, being an amount equal to the nominal value of the ordinary shares or preferred shares which are to be exchanged for the Rights; and |
243.2 | apply that sum in paying up in full ordinary shares or preferred shares and allot such shares, credited as fully paid, to those holders of Rights who are entitled to them under an Exchange effected pursuant to the terms of a Rights Plan. |
244. | The duties of the Directors to the Company under applicable law, including, but not limited to, the Act and common law, are hereby deemed amended and modified such that the adoption of a Rights Plan and any actions taken thereunder by the Directors (if so approved by the Directors) shall be deemed to constitute an action in the best interests of the Company in all circumstances, and any such action shall be deemed to be immediately confirmed, approved and ratified. |
245. | The Company shall be entitled to sell at the best price reasonably obtainable any share of a member or any share to which a person is entitled by transmission if and provided that: |
245.1 | for a period of twelve years no cheque or warrant sent by the Company through the post in a pre-paid letter addressed to the member or to the person entitled by transmission to the share at his address on the Register or at the last known address given by the member or the person entitled by transmission to which cheques and warrants are to be sent has been cashed and no communication has been received by the Company from the member or the person entitled by transmission (provided that during such twelve year period at least three dividends shall have become payable in respect of such share); |
245.2 | at the expiration of the said period of twelve years by advertisement in a national daily newspaper published in Ireland and in a newspaper circulating in the area in which the address referred to in Article 245.1 is located the Company has given notice of its intention to sell such share; |
245.3 | during the further period of three months after the date of the advertisement and prior to the exercise of the power of sale the Company has not received any communication from the member or person entitled by transmission; and |
245.4 | the Company has first given notice in writing to the appropriate sections of the Exchanges of its intention to sell such shares. |
246. | Where a share, which is to be sold as provided in Article 245, is held in uncertificated form, the Directors may authorise any person to do all that is necessary to change such share into certificated form prior to its sale. |
247. | To give effect to any such sale the Company may appoint any person to execute as transferor an instrument of transfer of such share and such instrument of transfer shall be as effective as if it had been executed by the member or the person entitled by the transmission to such share. The transferee shall be entered in the Register as the member of the shares comprised in any such transfer and he shall not be bound to see to the application of the purchase moneys nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale. |
248. | The Company shall account to the member or other person entitled to such share for the net proceeds of such sale by carrying all moneys in respect thereof to a separate account which shall be a permanent debt of the Company and the Company shall be deemed to be a debtor and not a trustee in respect thereof for such member or other person. Moneys carried to such separate account may be either employed in the business of the Company or held as cash or cash equivalents, or invested in such investments as the Directors may think fit, from time to time. |
249. | The Company shall be entitled to destroy all instruments of transfer which have been registered at any time after the expiration of six years from the date of registration thereof, all notifications of change of name or change of address however received at any time after the expiration of two years from the date of recording thereof and all share certificates and dividend mandates which have been cancelled or ceased to have effect at any time after the expiration of one year from the date of such cancellation or cessation. It shall be presumed conclusively in favour of the Company that every entry in the Register purporting to have been made on the basis of an instrument of transfer or other document so destroyed was duly and properly made and every instrument duly and properly registered and every share certificate so destroyed was a valid and effective document duly and properly cancelled and every other document hereinbefore mentioned so destroyed was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company. Provided always that: |
249.1 | the provision aforesaid shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties thereto) to which the document might be relevant; |
249.2 | nothing herein contained shall be construed as imposing upon the Company any liability in respect of the destruction of any document earlier than as aforesaid or in any other circumstances which would not attach to the Company in the absence of this Article; and |
249.3 | references herein to the destruction of any document include references to the disposal thereof in any manner. |
250. 250.1 | Subject to the provisions of and so far as may be permitted by the Act, each person who is or was a Director, officer or employee of the Company, and each person who is or was serving at the request of the Company as a director, officer or employee of another company, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Company (including the heirs, executors, administrators and estate of such person) shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him or her in the execution and discharge of his or her duties or in relation thereto, including any liability incurred by him or her in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him or her as a director, officer or employee of the Company or such other company, partnership, joint venture, trust or other enterprise, and in which judgment is given in his or her favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his or her part) or in which he or she is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him or her by the court. |
250.2 | In the case of any threatened, pending or completed action, suit or proceeding by or in the right of the Company, the Company shall indemnify, to the fullest extent permitted by the Act, each person indicated in Article 250.1 against expenses, including attorneys’ fees actually and reasonably incurred in connection with the defence or the settlement thereof, except no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for fraud or dishonesty in the performance of his or her duty to the Company unless and only to the extent that the courts of Ireland or the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court shall deem proper. |
250.3 | As far as permissible under the Act, expenses, including attorneys' fees, incurred in defending any action, suit or proceeding referred to in this Article shall be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of a written affirmation by or on behalf of the Director, officer, employee or other indemnitee of a good faith belief that the criteria for indemnification have been satisfied and a written undertaking to repay such amount if it shall ultimately be determined that such Director, officer or employee or other indemnitee is not entitled to be indemnified by the Company as authorised by these Articles. |
250.4 | It being the policy of the Company that indemnification of the persons specified in this Article shall be made to the fullest extent permitted by law, the indemnification provided by this Article shall not be deemed exclusive of: (a) any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Memorandum, these Articles, any agreement, any insurance purchased by the Company, any vote of members or disinterested Directors, or pursuant to the direction (however embodied) of any court of competent jurisdiction, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, or (b) any amendments or replacements of the Act which permit for greater indemnification of the persons specified in this Article and any such amendment or replacement of the Act shall hereby be incorporated into these Articles. As used in this Article 250.4, references to the “Company” include all constituent companies in a consolidation or merger in which the Company or any predecessor to the Company by consolidation or merger was involved. The indemnification provided by this Article shall continue as to a person who has ceased to be a Director, officer or employee and shall inure to the benefit of the heirs, executors, and administrators of such Directors, officers, employees or other indemnitees. |
250.5 | The Directors shall have power to purchase and maintain for any Director, the Company Secretary or other officers or employees of the Company insurance against any such liability as referred to in section 235 of the Act. |
250.6 | The Company may additionally indemnify any agent of the Company or any director, officer, employee or agent of any of its subsidiaries to the fullest extent provided by law, and purchase and maintain insurance for any such person as appropriate. |
251. | Subject to the provisions of the Act and so far as may be permitted by the Act, no person shall be personally liable to the Company or its members for monetary damages for breach of fiduciary duty as a Director, provided, however, that the foregoing shall not eliminate or limit the liability of a Director: |
251.1 | for any breach of the Director’s duty of loyalty or duty of care to the Company or its members; |
251.2 | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or |
251.3 | for any transaction from which the Director derived an improper personal benefit. |
If any applicable law or the relevant code, rules and regulations applicable to the listing of the Company’s shares on any Exchange is amended hereafter to authorise corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director shall be eliminated or limited to the fullest extent permitted by the relevant law, as so amended. Any amendment, repeal or modification of this Article 251 shall not adversely affect any right or protection of a Director existing hereunder with respect to any act or omission occurring prior to such amendment, repeal or modification. |
252. | This constitution and any dispute or claim arising out of or in connection with it or its subject matter, formation, existence, negotiation, validity, termination or enforceability (including non-contractual obligations, disputes or claims) will be governed by and construed in accordance with the laws of Ireland. |
253. | Subject to Article 254, the courts of Ireland are to have exclusive jurisdiction to settle any dispute arising out of or in connection with this constitution and, for such purposes, the Company and each shareholder irrevocably submit to the exclusive jurisdiction of such courts. Any proceeding, suit or action arising out of or in connection with this Constitution (the “Proceedings”) will therefore be brought in the courts of Ireland. Each shareholder irrevocably waives any objection to Proceedings in the courts referred to in this Article on the grounds of venue or on the grounds of forum non conveniens. |
254. | Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Exchange Act or the Securities Act of 1933 of the United States. Any person or entity purchasing or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to this provision. |
Notices to SPAC and the Sponsor: | | | with a copy to (which shall not constitute notice): |
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Twin Ridge Capital Acquisition Corp. 999 Vanderbilt Beach Road, Suite 200 Naples, FL 34108 Attention: William P. Russell, Jr.; Sanjay Morey Email: wrussell@twinridgecapital.com; smorey@twinrdigecapital.com | | | Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10022 Attention: Christian Nagler; Peter Seligson E-mail: christian.nagler@kirkland.com; peter.seligson@kirkland.com |
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| | and | |
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| | Kirkland & Ellis LLP 609 Main St Houston, TX 77002 |
| | Attention: Adam Larson; Rami Totari E-mail: adam.larson@kirkland.com; rami.totari@kirkland.com | |
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Notices to Company, MergeCo: | | | with a copy to (which shall not constitute notice): |
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Carbon Revolution Limited 75 Pigdons Road VIC 3126 Australia Attention: David Nock E-mail: david.nock@carbonrev.com | | | Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 Attention: Jocelyn M. Arel E-mail: jarel@goodwinlaw.com |
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| | and | |
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| | Goodwin Procter LLP 620 Eighth Avenue New York, NY 10018 Attention: Jeffrey Letalien E-mail: jletalien@goodwinlaw.com |
| | SPONSOR: | |
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| | TWIN RIDGE CAPITAL SPONSOR, LLC | |
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| | By: /s/ William P. Russell, Jr. Name: William P. Russell, Jr. Title: Co-Chief Executive Officer | |
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| | TRCA SUBSIDIARY: | |
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| | TWIN RIDGE CAPITAL SPONSOR SUBSIDIARY, LLC | |
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| | By: /s/ William P. Russell, Jr. Name: William P. Russell, Jr. Title: Authorized Signatory | |
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| | INDEPENDENT DIRECTORS: | |
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| | By: /s/ Alison Burns Alison Burns | |
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| | By: /s/ Paul Henrys Paul Henrys | |
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| | By: /s/ Gary Pilnick Gary Pilnick | |
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| | OTHER INSIDERS: | |
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| | By: /s/ Dale Morrison Dale Morrison | |
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| | By: /s/ Sanjay K. Morey Sanjay K. Morey |
| | By: /s/ William P. Russell, Jr. William P. Russell, Jr. | |
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| | SPAC: | |
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| | TWIN RIDGE CAPITAL ACQUISITION CORP. | |
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| | By: /s/ William P. Russell, Jr. Name: William P. Russell, Jr. Title: Co-Chief Executive Officer | |
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| | COMPANY: | |
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| | CARBON REVOLUTION LIMITED ACN 128 274 653 | |
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| | By: /s/ Dale McKee Name: Dale Anthony McKee Title: Director | |
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| | MERGECO: | |
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| | POPPETELL LIMITED | |
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| | By: /s/ Ronan Donohoe Name: Ronan Donohoe Title: Director |
SECTION 1. | GENERAL PURPOSE OF THE PLAN; DEFINITIONS |
SECTION 2. | ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS |
SECTION 3. | SHARE ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION |
SECTION 4. | ELIGIBILITY |
SECTION 5. | SHARE OPTIONS |
SECTION 6. | SHARE APPRECIATION RIGHTS |
SECTION 7. | RESTRICTED SHARE AWARDS |
SECTION 8. | RESTRICTED SHARE UNITS |
SECTION 9. | UNRESTRICTED SHARE AWARDS |
SECTION 10. | CASH-BASED AWARDS |
SECTION 11. | DIVIDEND EQUIVALENT RIGHTS |
SECTION 12. | Transferability of Awards |
SECTION 13. | TAX WITHHOLDING |
SECTION 14. | Section 409A awards |
SECTION 15. | TERMINATION OF SERVICE RELATIONSHIP, TRANSFER, LEAVE OF ABSENCE, ETC. |
SECTION 16. | AMENDMENTS AND TERMINATION |
SECTION 17. | STATUS OF PLAN |
SECTION 18. | GENERAL PROVISIONS |
SECTION 19. | EFFECTIVE DATE OF PLAN |
SECTION 20. | GOVERNING LAW |
Voluntary escrow deed [insert name] | | | |
The party specified in Item 1 of Schedule 1 (Holder) | | | |
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The party specified in Item 3 of Schedule 1(Controller) | | | |
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Carbon Revolution Limited ACN 128 274 653 (Company) | | |
80 Collins Street Melbourne Vic 3000 Australia | | | T +61 3 9288 1234 F +61 3 9288 1567 |
GPO Box 128 Melbourne Vic 3001 Australia | | | herbertsmithfreehills.com |
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Voluntary escrow deed | |||
Date ► | | | 2022 |
Between the parties | | | |
Company | | | Carbon Revolution Limited |
| | ACN 128 274 653 of Building NR Geelong Technology Precinct, 75 Pigdons Road, Waurn Ponds Victoria 3216 | |
Holder | | | The party identified in Item 1 of Schedule 1 |
Controller | | | The party identified in Item 3 of Schedule 1 |
This deed witnesses as follows: |
Definitions |
Term | | | Meaning | |||
Affiliate | | | any other person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Holder or the Controller, as applicable (for the purposes of this definition, control of a person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise, and controlled has a corresponding meaning), and Affiliated has the corresponding meaning. | |||
ASIC | | | the Australian Securities and Investments Commission. | |||
ASX | | | ASX Limited (ACN 008 624 691) or the market it operates, as the context requires. | |||
ASX Settlement | | | ASX Settlement Pty Ltd (ABN 49 008 504 532). | |||
Business Day | | | a day on which banks are open for business in Melbourne, other than a Saturday, Sunday or public holiday in Melbourne. | |||
Business Hour | | | 9.00am to 5.00pm on any Business Day. | |||
Controller | | | the party specified in Item 3 of Schedule 1. | |||
Controller Interest | | | in respect of a Controller, the securities, economic interests or other interests in the Holder or the Restricted Shares in which the Controller has a direct or indirect interest and each intermediate entity through which that interest occurs, as set out in Item 3 of Schedule 1. | |||
Corporations Act | | | Corporations Act 2001 (Cth). | |||
Dealing | | | in respect of any Restricted Share or Controller Interest, means to directly or indirectly: | |||
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| | 1 | | | sell, assign, transfer or otherwise Dispose of, or agree or offer to sell, assign, transfer or otherwise Dispose of, that Restricted Share or Controller Interest or any legal, beneficial or economic interest in that Restricted Share or Controller Interest; | |
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| | 2 | | | create, or agree or offer to create, any Security Interest in that Restricted Share or Controller Interest or any legal, beneficial or economic interest in that Restricted Share or Controller Interest; | |
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| | 3 | | | enter into any option which, if exercised, enables or requires the relevant security holder to sell, assign, transfer or otherwise Dispose of that Restricted Share or Controller Interest; or | |
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| | 4 | | | do, or omit to do, any act if the act or omission would have the effect of transferring effective ownership or control of that Restricted Share or Controller Interest or any legal, beneficial or economic interest in that Restricted Share or Controller Interest. | |
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| | Deal and Dealt each have a corresponding meaning. | ||||
Dispose | | | has the meaning given to that term in the Listing Rules. | |||
Escrow Period | | | the period set out in Item 2 of Schedule 1. | |||
Effective Date | | | has the meaning given to that term in the SID. | |||
Governmental Agency | | | any government (in any jurisdiction, whether federal, state, territorial or local), or representative of a government (including any minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government or in which any government is interested) or any governmental, semi-governmental, administrative, fiscal, regulatory, self-regulatory or judicial body, department, commission, authority, tribunal, agency, competition authority or entity in Australia. It includes without limitation, ASIC, any non-government regulatory authority including the ASX and any other stock exchange. | |||
Holder | | | the party specified in Item 1 of Schedule 1. | |||
Holding Lock | | | has the meaning in Section 2 of the Settlement Operating Rules. | |||
Issuer Sponsored Subregister | | | the part of the Company’s register for shares that is administered by the Company (and not ASX Settlement) and records uncertificated holdings of Shares. | |||
Listing Rules | | | the listing rules of the ASX (or such other financial market on which the Company is listed) and any other rules of the ASX (or such other financial market on which the Company is listed) that are applicable while the Company is admitted to the official list of the ASX (or such other financial market on which the Company is listed), each as amended or replaced from time to time, except to the extent of any express written waiver by the ASX (or such other financial market on which the Company is listed). | |||
Restricted Shares | | | 1 | | | all of the Shares in the Company held by the Holder on the date of this deed; |
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| | 2 | | | any securities in the Company attaching to or arising out of those Shares; and | |
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| | 3 | | | any securities convertible into or exchangeable for Shares. | |
Scheme | | | the scheme of arrangement under Part 5.1 of the Corporations Act between Carbon Revolution and the Scheme Shareholders. | |||
Scheme Shareholders | | | has the meaning given in the SID. | |||
Security Interest | | | an interest or power: | |||
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| | 1 | | | reserved in or over an interest in any securities including, but not limited to, any retention of title; | |
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| | 2 | | | created or otherwise arising in or over any interest in any securities under a bill of sale, mortgage, charge, lien, pledge, trust or power, and | |
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| | 3 | | | any agreement to grant or create any interest or power referred to in paragraphs 1 or 2 of this definition. | |
Settlement Operating Rules | | | means the operating rules of ASX Settlement. | |||
Share | | | a fully paid ordinary share in the Company. | |||
SID | | | the scheme implementation deed between the Company, Twin Ridge Capital Acquisition Corp (a Cayman Islands Corporation) and Poppetell Limited (a private limited company incorporated in Ireland with registered number 607450) to be dated on or about the date of this deed. | |||
Trading Day | | | a ‘trading day’ as defined in the Listing Rules. | |||
Voluntary Escrow Deed | | | a voluntary escrow deed entered into in connection with the Scheme. | |||
Interpretation |
(a) | the singular includes the plural and vice versa; |
(b) | a reference to a party includes its successors, personal representatives and transferees; |
(c) | words and expressions defined in the Listing Rules, and not in this deed, have the meanings given to them in the Listing Rules; |
(d) | every warranty or agreement (express or implied) in which more than one person is joined, binds them individually and any combination of them as a group; |
(e) | references to “applicable law” include all laws and regulations of jurisdictions applicable to the Company, or its related bodies corporate, as the case may be (including the Corporations Act and any other laws and regulations of a jurisdiction outside Australia), and rules, policies, official directives, orders or requirements of any Governmental Agency, including the Listing Rules, Settlement Operating Rules and the applicable listing requirements of the ASX, except to the extent compliance is modified, waived or exempted in favour of a person in the relevant circumstances; and |
(f) | the schedules form part of this deed. |
Compliance with Listing Rules |
(a) | notwithstanding anything contained in this deed, if the Listing Rules prohibit an act being done, that act must not be done; |
(b) | nothing contained in this deed prevents an act being done that the Listing Rules require to be done; |
(c) | if the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be); |
(d) | if the Listing Rules require this deed to contain a provision and it does not contain such a provision, this deed is deemed to contain that provision; |
(e) | if the Listing Rules require this deed not to contain a provision and it contains such a provision, this deed is deemed not to contain that provision; and |
(f) | if any provision of this deed is or becomes inconsistent with the Listing Rules, this deed is deemed not to contain that provision to the extent of the inconsistency. |
Holder restrictions during Escrow Period |
Controller restrictions during Escrow Period |
Escrow restrictions |
(a) | the Restricted Shares will be registered and held for the Holder on the Issuer Sponsored Subregister; |
(b) | the Company will apply a Holding Lock to the Restricted Shares and the Holder hereby agrees to the application of the Holding Lock; and |
(c) | the Company will do all things necessary to ensure that the Holding Lock is released: |
(1) | to the extent necessary to permit Dealings in Restricted Shares permitted by this deed; and |
(2) | in full at the conclusion of the Escrow Period, |
Exceptions |
(a) | During the Escrow Period, with the prior approval of the Board, the Holder or a Controller may Deal in any of its Restricted Shares or Controller Interests (as relevant) in any of the following circumstances: |
(1) | to fund the liability associated with any tax, duty, levy, fee, penalty or charge imposed by any Governmental Agency on the Holder or Controller in connection with any securities issued under any executive or employee incentive plan of the Company; and |
(2) | to realise a maximum of A$100,000. |
(b) | During the Escrow Period, the Holder or a Controller may Deal in any of its Restricted Shares or Controller Interests (as relevant) to the extent the Dealing is required in connection with the Scheme or contemplated by the SID. |
(c) | During the Escrow Period, the Holder or a Controller may Deal in any of its Restricted Shares or Controller Interests (as relevant) if the Dealing arises solely as a result of a requirement of applicable law (including an order of a court of competent jurisdiction); |
(d) | During the Escrow Period, the Holder and the Controller may grant a Security Interest over any (or all) of the Restricted Shares or Controller Interests (as applicable) to a bona fide third party financial institution (Financial Institution) as security for a loan, hedge or other financial accommodation provided that: |
(1) | the Security Interest does not in any way constitute a direct or indirect disposal of (or Dealing in, other than for part 2 of the definition of “Dealing”) the economic interests, or a decrease of an economic interest, that the Holder or Controller (as applicable) has in any Restricted Shares or Controller Interests (as applicable); |
(2) | no Restricted Shares or Controller Interests (as applicable) are to be transferred or delivered to the Financial Institution or any other person in connection with the Security Interest; and |
(3) | the Financial Institution agrees that the Restricted Shares or Controller Interests (as applicable) are to remain in escrow and be subject to the terms of this deed as if the Financial Institution were a party to this deed. |
(e) | During the Escrow Period, the Holder and the Controller may dispose of any or all Restricted Shares or Controller Interests (as applicable) to an Affiliate of the Holder or Controller (as applicable) provided that such Affiliate transferee agrees to be bound by the terms and conditions of this deed by entering into such further agreements as the Company may reasonably require. |
Notice |
(a) | that a Dealing in any Restricted Shares or Controller Interests has occurred, or is likely to occur, during the Escrow Period; or |
(b) | of any matter which is likely to give rise to a Dealing in any Restricted Shares or Controller Interests during the Escrow Period, |
Giving of warranties |
(a) | the date of this deed; and |
(b) | at all times until expiry of the Escrow Period. |
Warranties |
(a) | it has full power and authority, without the consent of any other person, to enter into and perform its obligations under this deed (including, if the Holder or Controller have entered into this deed as a trustee (Trustee), under the trust deed for the relevant trust (Trust)); |
(b) | it has taken all necessary action to authorise the execution, delivery and performance of this deed in accordance with its terms; |
(c) | this deed constitutes legal, valid and binding obligations and, subject to any necessary stamping and registration, is enforceable in accordance with its terms; |
(d) | the execution, delivery and performance by it of this deed does not and will not violate, breach or result in a contravention of: |
(1) | any applicable law, regulation or authorisation; |
(2) | its constitution or other constituent documents (or, if the Holder or Controller is a Trustee, the trust deed for the Trust); or |
(3) | any agreement, undertaking, Security Interest or document that is binding on it; |
(e) | prior to the Escrow Period, it has not done, or omitted to do, any act that would result in it Dealing in Restricted Shares such that it will take effect during the Escrow Period; |
(f) | with the exception of a Security Interest that is granted in accordance with clause 2.4(d), the Restricted Shares are free from all Security Interests and other third party interests or rights and will remain so during the Escrow Period; |
(g) | there is no person who has any economic or beneficial interest in the equity or Restricted Shares of the Holder other than the Controller; |
(h) | subject to any exceptions in clause 2.4, the Holder will hold the Restricted Shares and the Controller will hold the Controller Interests at all times during the Escrow Period; |
(i) | the Restricted Shares are all the securities, economic interests or other interests that the Holder has directly or indirectly in the Company; |
(j) | the Controller Interests are all the securities, economic interests or other interests in the Holder or the Restricted Shares in which the Controller has an interest; |
(k) | if the Holder or Controller is a Trustee, the Trustee is the trustee of the Trust and, to the best of its knowledge and belief, there is no proposal to remove it as trustee of the Trust; |
(l) | if the Holder or Controller is a Trustee: |
(1) | the Holder or Controller has the right to be fully indemnified out of the assets of the Trust in respect of any liability arising under, or in connection with, this deed and the right has not been modified, released or diminished in any way. The assets of the Trust are sufficient to satisfy that right in full and the Holder or Controller has not released or disposed of its equitable lien over that trust; and |
(2) | the Trust has not been terminated and there is no effective proposal or requirement to wind up, |
Acknowledgment |
Survival of representations and warranties |
(a) | If the Holder or Controller breaches this deed (a Defaulting Party), each of the following applies: |
(1) | the Company may take the steps necessary to enforce the deed, or to rectify the breach, as soon as practicable after becoming aware of the breach; and |
(2) | the Company may, in addition to its other rights and remedies, refuse to acknowledge, deal with, accept or register any sale, assignment, transfer or conversion of any of the Defaulting Party’s Restricted Shares (this is in addition to other rights and remedies of the Company). |
(b) | If the Holder or Controller breach this deed, the Holder and Controller each acknowledge and agree that such a breach could cause substantial commercial and financial detriment to the Company and other third parties. |
(c) | The parties agree that damages would be an insufficient remedy for breach of clause 2.1 or clause 2.2 and each of the Holder and Controller agrees that the Company is entitled to seek and obtain an injunction or specific performance to enforce the Holder or Controller’s obligation under clause 2.1 or clause 2.2 without proof of actual damage and without prejudice to any of its other rights or remedies. |
Governing law and jurisdiction |
(a) | This deed is governed by the laws of Victoria, Australia. |
(b) | Each of the parties irrevocably submits to the non-exclusive jurisdiction of the courts of Victoria, Australia. |
(c) | Each of the parties irrevocably waives any objection to the venue of any legal process on the basis that the process has been brought in an inconvenient forum. |
(d) | Each of the parties irrevocably waives any immunity in respect of its obligations under this deed which that party may acquire from the jurisdiction of any court or any legal process for any reason including, but not limited to, the service of notice, attachment prior to judgment, attachment in aid of execution or execution. |
Counterparts |
Further assurances |
Notices |
(a) | delivery of that Notice to the address of the other party; or |
(b) | by sending an email to the email address specified in the address of that other party, |
Time of Essence |
Details | ||||||
Item 1 | | | 1 Holder | | | [insert] |
| | 2 Holder address | | | of [insert] | |
| | 3 Holder email address | | | [insert] | |
Item 2 | | | Escrow Period | | | from the date of this deed until the Effective Date of the Scheme. |
Item 3 | | | Controller | | | [insert if applicable] |
| | Controller Interests | | | [insert if applicable] | |
Executed as a deed | |||
Carbon Revolution | | | |
Signed sealed and delivered by | | | |
Carbon Revolution Limited | | | |
under section 127 of the Corporations Act 2001 (Cth) | | | |
by | | |
sign here ► | | | | | sign here ► | | | ||
| | Company Secretary/Director | | | | | Director | ||
print name | | | | | print name | | |
| | Holder | | | ||
| | Signed sealed and delivered by | | | ||
| | [insert] | | |
sign here ► | | | | | | | |||
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print name | | | | | | |
| | Holder | | | ||
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| | Signed sealed and delivered by | | | ||
| | [insert] | | | ||
| | under section 127 of the Corporations Act 2001 (Cth) | | | ||
| | by | | |
sign here ► | | | | | sign here ► | | | ||
| | Company Secretary/Director | | | | | Director | ||
print name | | | | | print name | | |
| | Controller | | | ||
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| | Signed sealed and delivered by | | | ||
| | [insert details] | | |
sign here ► | | | | | | | |||
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print name | | | | | | |
(a) | Advance Notice. At any time during the Commitment Period the Company may require the Investor to purchase Shares by delivering an Advance Notice to the Investor, subject to the satisfaction or waiver by the Investor of the conditions set forth in Section 7.01, and in accordance with the following provisions: |
(i) | The Company shall, in its sole discretion, select the number of Advance Shares, not to exceed the Maximum Advance Amount, it desires to issue and sell to the Investor in each Advance Notice and the time it desires to deliver each Advance Notice and the Pricing Period to be used. |
(ii) | There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount or any part thereof. |
(b) | Date of Delivery of an Option 1 Advance Notice. Option 1 Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit A. An Option 1 Advance Notice shall be deemed delivered (i) the day it is received by the Investor if such notice is received by email prior on or before 9:00 a.m. Eastern Time (or later if waived by the Investor in its sole discretion), or (ii) if such notice is received after 9:00 a.m. Eastern Time, upon receipt by the Investor, which receipt and commencement of the Option 1 Pricing Period is confirmed by the Investor to the Company by email or other writing, in each case in accordance with the instructions set forth on the bottom of Exhibit A. |
(c) | Date of Delivery of an Option 2 Advance Notice. Option 2 Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit B. An Advance Notice shall be deemed delivered on (i) the day it is received by the Investor if such notice is received by email prior on or before 9:00 a.m. Eastern Time (or later if waived by the Investor in its sole discretion) in accordance with the instructions set forth on the bottom of Exhibit B, or (ii) the immediately succeeding day if it is received by email after 9:00 a.m. Eastern Time, in each case in accordance with the instructions set forth on the bottom of Exhibit B. |
(d) | Advance Limitations. Regardless of the number of Advance Shares requested by the Company in the Advance Notice, the final number of Shares to be issued and sold pursuant to an Advance Notice shall be reduced (if at all) in accordance with each of the following limitations: |
(i) | Ownership Limitation; Commitment Amount. At the request of the Company, the Investor shall (within one business day of such request) inform the Company of the amount of Common Shares the Investor then beneficially owns. Notwithstanding anything to the contrary contained in this Agreement, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any Common Shares under this Agreement which, when aggregated with all other Common Shares beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor and its affiliates (on an aggregated basis) to exceed 9.99% of the then outstanding voting power or number of Common Shares (the “Ownership Limitation”). Upon the written request of the Investor, the Company shall promptly (but no later than one business day after the next business day on which the transfer agent for the Common Shares is open for business) confirm orally or by email or other writing to the Investor the number of Common Shares then outstanding. In connection with each Advance Notice delivered by the Company, any portion of the number of Advance Shares that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate number of Shares issued and sold to the Investor hereunder (excluding, for the avoidance of doubt, the Commitment Fee Shares) to exceed the Commitment Amount, shall automatically be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically modified to reduce the number of Advance Shares requested by an amount equal to such withdrawn portion; provided that in the event of any such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event. |
(ii) | Registration Limitation and Exchange Cap. In no event shall an Advance exceed the amount registered under the Registration Statement then in effect (the “Registration Limitation”) or the Exchange Cap, to the extent applicable. In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation or the Exchange Cap shall automatically be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice; provided that in the event of any such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event. |
(e) | Option 1 Advance Notice Volume Threshold. |
(i) | In connection with an Advance Notice where the Company selected an Option 1 Pricing Period, if the aggregate Daily Traded Volume traded during the applicable Option 1 Pricing Period is less than the Volume Threshold, then the number of Advance Shares issued and sold pursuant to such Advance Notice shall be reduced to the greater of (a) 35% of the Daily Traded Volume of the Common Shares on the Principal Market during the applicable Option 1 Pricing Period, or (b) the number of Common Shares sold by the Investor during such Option 1 Pricing Period, but not to exceed the amount requested in the Advance Notice. |
(f) | Option 2 Advance Notice Minimum Acceptable Price. |
(i) | With respect to an Option 2 Advance Notice, the Company may notify the Investor of the MAP with respect to such Advance by indicating a MAP on such Advance Notice. If no MAP is specified in an Advance Notice, then no MAP shall be in effect in connection with such Advance. Each Trading Day during an Option 2 Pricing Period for which (A) with respect to each Advance Notice with a MAP, the VWAP of the Common Shares is below the MAP in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an “Excluded Day”), shall result in an automatic reduction to the number of Advance Shares set forth in such Advance Notice by one-third (1/3) (the resulting amount of each Advance being the “Adjusted Advance Amount”), and each Excluded Day shall be excluded from the Option 2 Pricing Period for purposes of determining the Market Price. |
(ii) | The total Advance Shares in respect of each Advance (after reductions have been made to arrive at the Adjusted Advance Amount, if any) shall be automatically increased by such number of Common Shares (the “Additional Shares”) equal to the number of Common Shares sold by the Investor on such |
(g) | Unconditional Contract. Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree that upon the Investor’s receipt of a valid Advance Notice the parties shall be deemed to have entered into an unconditional contract binding on both parties for the purchase and sale of Advance Shares pursuant to such Advance Notice in accordance with the terms of this Agreement and (i) subject to Applicable Laws and (ii) subject to Section 3.08, the Investor may sell Common Shares during the Pricing Period. |
(a) | On each Advance Date, the Investor shall deliver to the Company a written document, in the form attached hereto as Exhibit C for an Option 1 Advance Notice and as Exhibit D for an Option 2 Advance Notice (each a “Settlement Document”), setting forth the final number of Advance Shares to be purchased by the Investor (taking into account any adjustments pursuant to Section 2.01), the Market Price, the Purchase Price, the aggregate proceeds to be paid by the Investor to the Company, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in accordance with the terms and conditions of this Agreement. In the case of an Option 2 Advance Notice where a MAP has been elected the final number of Advance Shares to be purchased by the Investor at the Closing for such Advance shall equal the sum of (i) the Adjusted Advance Amount which shall be purchased at the Purchase Price, plus (ii) the aggregate number of Additional Shares elected to be purchased by the Investor on Excluded Days during such Pricing Period (as contemplated by Section 2.01(f)(ii)) which shall be purchased at the applicable MAP. |
(b) | Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event, not later than one Trading Day after such receipt), the Company will, or will cause its transfer agent to, electronically transfer such number of Advance Shares to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor’s account or its designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto, and transmit notification to the Investor that such share transfer has been requested. Promptly upon (and in any event within one Trading Day after) receipt of such notification, the Investor shall pay to the Company the aggregate purchase price of the Advance Shares (as set forth in the Settlement Document) in cash in immediately available funds to an account designated by the Company by email or other writing and transmit notification to the Company that such funds transfer has been requested. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next higher whole number of shares. To facilitate the transfer of the Common Shares by the Investor, the Common Shares will not bear any restrictive legends so long as there is an effective Registration Statement covering the resale of such Common Shares (it being understood and agreed by the Investor that notwithstanding the lack of restrictive legends, the Investor may only sell such Common Shares pursuant to the Plan of Distribution set forth in the Prospectus included in the Registration Statement and otherwise in compliance with the requirements of the Securities Act (including any applicable prospectus delivery requirements) or pursuant to an available exemption). |
(c) | On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. |
(d) | Notwithstanding anything to the contrary in this Agreement, if on any day during the Pricing Period (i) the |
(a) | In the event the Investor sells Common Shares after receipt of an Advance Notice and the Company fails to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws, the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement. |
(b) | In the event the Company provides an Advance Notice and the Investor fails to perform its obligations as mandated in Section 2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws, the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement. |
(a) | Filing of a Registration Statement. The Company shall use commercially reasonable efforts to prepare and file with the SEC a Registration Statement, or multiple Registration Statements for the resale by the Investor of the Registrable Securities. The Company in its sole discretion may choose when to file such Registration Statements; provided, however, that the Company shall not have the ability to request any Advances until the effectiveness of a Registration Statement. |
(b) | Maintaining a Registration Statement. The Company shall use commercially reasonable efforts to maintain the effectiveness of any Registration Statement with respect to the Shares that has been declared effective at all times during the Commitment Period, provided, however, that if the Company has received notification pursuant to Section 2.04 that the Investor has completed resales pursuant to the Registration Statement for the full Commitment Amount, then the Company shall be under no further obligation to maintain the effectiveness of the Registration Statement. Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. During the Commitment Period, the Company shall notify the Investor promptly if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Shares shall cease to be authorized for listing on the Principal Market, or (iii) the Common Shares cease to be registered under Section 12(b) or Section 12(g) of the Exchange Act. or (iv) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act. |
(c) | Filing Procedures. The Company shall (A) permit counsel to the Investor an opportunity to review and comment upon (i) each Registration Statement prior to its filing with the SEC and (ii) all amendments and supplements to each Registration Statement (including, without limitation, the Prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports or Prospectus Supplements the contents of which is limited to that set forth in such reports) within a reasonable number of days prior to their filing with the SEC, and (B) shall reasonably consider any comments of the Investor and its counsel on any such Registration Statement or amendment or supplement thereto or to any Prospectus contained therein. The Company shall promptly furnish to the Investor, without charge, to the extent permitted by Applicable Laws, (i) electronic copies of any correspondence from the SEC or the Staff to the Company or its representatives relating to each Registration Statement (which correspondence shall be redacted to exclude any material, non-public information regarding the Company or any of its Subsidiaries), (ii) after the same is prepared and filed with the SEC, one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto; provided, however, the Company shall not be required to furnish any document to the extent such document is available on EDGAR). |
(d) | Amendments and Other Filings. The Company shall use commercially reasonable efforts to (i) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Commitment Period, and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related prospectus to be amended or supplemented by any required prospectus supplement (subject to the terms of this Agreement), and as so |
(e) | Blue-Sky. The Company shall use its commercially reasonable efforts to, if required by Applicable Laws, (i) register and qualify the Common Shares covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Commitment Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Commitment Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Common Shares for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its certificate of incorporation or bylaws or any other organizational documents of the Company or any of its Subsidiaries, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.01, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Common Shares for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual written notice of the initiation or threat of any proceeding for such purpose. |
(a) | Establishment of a Black Out Period. During the Commitment Period, the Company from time to time may suspend the use of the Registration Statement by written notice to the Investor in the event that the Company determines in its sole discretion in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the Registration Statement or Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a “Black Out Period”). |
(b) | No Sales by Investor During the Black Out Period. During such Black Out Period, the Investor agrees not to sell any Common Shares of the Company pursuant to such Registration Statement, but may sell Common Shares pursuant to an exemption from registration, if available, subject to the Investor’s compliance with Applicable Laws. |
(c) | Limitations on the Black Out Period. The Company shall not impose any Black Out Period that is longer than 60 consecutive days (or 90 days in any calendar year) or in a manner that is more restrictive (including, without limitation, as to duration) than the comparable restrictions that the Company may impose on transfers of the Company’s equity securities by its directors and senior executive officers. In addition, the Company shall not deliver any Advance Notice during any Black Out Period. If the public announcement of such material, nonpublic information is made during a Black Out Period, the Black Out Period shall terminate immediately after such announcement, and the Company shall immediately notify the Investor of the termination of the Black Out Period. |
(a) | Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of each Advance Notice Date (other than representations and warranties that are made as of another date, which shall be true and correct in all material respects as of such other date). |
(b) | Registration of the Common Shares with the SEC. There is an effective Registration Statement pursuant to which the Investor is permitted to utilize the Prospectus thereunder to resell all of the Common Shares issuable pursuant to such Advance Notice. The Company shall have filed with the SEC all reports, notices and other documents required under the Exchange Act and applicable SEC regulations during the twelve-month period immediately preceding the applicable Condition Satisfaction Date or such shorter period during which the Company shall have been subject to such requirements. |
(c) | Authority. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of all the Common Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions therefrom. The sale and issuance of such Common Shares shall be legally permitted by all laws and regulations to which the Company is subject. |
(d) | No Material Outside Event. No Material Outside Event shall have occurred and be continuing. |
(e) | Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the applicable Condition Satisfaction Date. |
(f) | No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits any of the transactions contemplated by this Agreement. |
(g) | No Suspension of Trading in or Delisting of Common Shares. The Common Shares are quoted for trading on the Principal Market and all of the Shares issuable pursuant to such Advance Notice will be listed or quoted for trading on the Principal Market. The issuance of Common Shares with respect to the applicable Advance Notice will not violate the stockholder approval requirements of the Principal Market. |
(h) | Authorized. There shall be a sufficient number of authorized but unissued and otherwise unreserved Common Shares for the issuance of all of the Shares issuable pursuant to such Advance Notice. |
(i) | Executed Advance Notice. The representations contained in the applicable Advance Notice shall be true and correct in all material respects as of the applicable Condition Satisfaction Date. |
(j) | Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company shall have delivered all Shares relating to all prior Advances. |
(a) | Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the Effective Date, (ii) the date on which the Investor shall have made payment of Advances pursuant to this Agreement for Common Shares equal to the Commitment Amount, or (iii) the termination of the Merger Agreement (other than in connection with the consummation of the Business Combination). |
(b) | The Company may terminate this Agreement effective upon five Trading Days’ prior written notice to the Investor; provided that (i) there are no outstanding Advance Notices, the Common Shares under which have yet to be issued, and (ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement. This Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent. |
(c) | Nothing in this Section 10.01 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement. Section 12.07 and the indemnification provisions contained in Article V shall survive termination hereunder. |
(d) | Notwithstanding anything to the contrary in this Agreement, no obligation, including the obligation to issue to the Investor the Commitment Fee Shares, shall arise until the consummation of the Business Combination. If the Merger Agreement is terminated, other than in connection with the consummation of the Business Combination, then this Agreement shall be terminated and of no further effect, without any liability of any party hereunder. |
If to the Company prior to the consummation of the Business Combination, to: | | | Twin Ridge Capital Acquisition Corp. 999 Vanderbilt Beach Road, Suite 200 Naples, FL 34108 Attention: William P Russell, Jr; Sanjay Morey Email: wrussell@twinridgecapital.com; smorey@twinridgecapital.com | |||
| | | ||||
With a copy to (which shall not constitute notice or delivery of process) to: | | | Peter Seligson Kirkland & Ellis 601 Lexington Avenue New York, NY 10022 Email: peter.segilson@kirkland.com; | |||
| | | | |||
| | Adam Larson; Rami Totari Kirkland & Ellis 609 Main St Houston, TX 77002 Email: adam.larson@kirkland.com; rami.totari@kirkland.com | ||||
| | |||||
If to the Company following the consummation of the Business Combination, to: | | | Carbon Revolution Limited 75 Pigdons Road, Warn Ponds VIC 3126 Australia Attention: David Nock Email: david.nock@carbonrev.com | |||
| | |||||
With a copy (which will not constitute notice) to: | | | Peter Seligson Kirkland & Ellis 601 Lexington Avenue New York, NY 10022 Email: peter.segilson@kirkland.com; | |||
| | | | |||
| | Adam Larson; Rami Totari Kirkland & Ellis 609 Main St Houston, TX 77002 | ||||
| | Email: adam.larson@kirkland.com;rami.totari@kirkland.com. | ||||
| | | | |||
| | Jocelyn M. Arel 100 Northern Avenue Boston, MA 02210 Email: jarel@goodwinlaw.com |
| | | | |||
| | Jeffrey Letalien 620 Eighth Avenue New York, NY 10018 Email: jletalien@goodwinlaw.com | ||||
| | |||||
If to the Investor(s): | | | YA II PN, Ltd. | |||
| | 1012 Springfield Avenue | ||||
| | Mountainside, NJ 07092 | ||||
| | Attention: | | | Mark Angelo | |
| | | | Portfolio Manager | ||
| | Telephone: | | | (201) 985-8300 | |
| | Email: mangelo@yorkvilleadvisors.com | ||||
| | | | |||
With a Copy (which shall not constitute notice or delivery of process) to: | | | David Gonzalez, Esq. 1012 Springfield Avenue | |||
| | Mountainside, NJ 07092 | ||||
| | Telephone: | | | (201) 985-8300 | |
| | Email: | | | legal@yorkvilleadvisors.com |
| | COMPANY: TWIN RIDGE CAPITAL ACQUISITION CORP. | |||||||
| | | | | | ||||
| | By: | | | /s/ William P. Russell, Jr. | ||||
| | Name: | | | William P. Russell, Jr. | ||||
| | Title: | | | Co-Chief Executive Officer |
| | INVESTOR: YA II PN, LTD. | |||||||
| | | | | | ||||
| | By: | | | Yorkville Advisors Global, LP | ||||
| | Its: | | | Investment Manager | ||||
| | | | | | ||||
| | | | By: | | | Yorkville Advisors Global II, LLC | ||
| | | | Its: | | | General Partner |
| | By: | | | /s/ David Gonzalez | ||||
| | Name: | | | David Gonzalez | ||||
| | Title: | | | General Counsel |
(i) | reviewed a draft of the SID, dated November 16, 2022, provided to us on November 16, 2022, as well as a draft of the BCA, dated November 25, 2022, provided to us on November 26, 2022; |
(ii) | reviewed certain financial, operating and business information related to the Company provided to us by management of the Company; |
(iii) | reviewed the Company’s audited financial statements for the fiscal years ended June 30, 2020, 2021 and 2022, as well as reviewed financial reports for the six- month periods ended December 31, 2019, 2020 and 2021; |
(iv) | reviewed a detailed Company financial projection model for the years ending December 31, 2022 through 2024, provided to us by management of the Company; |
(v) | reviewed other internal documents, including the data room prepared by the Company and its advisors, relating to the history, past and current operations, financial conditions and expected future outlook of the Company, provided to us by management of the Company; |
(vi) | reviewed various press releases, internal presentation and marketing materials prepared by the management of the Company, industry and market reports, research reports and white papers; |
(vii) | discussed the information above with members of the management of Parent and the Company and had |
(viii) | performed certain valuation and comparative analyses using generally accepted valuation and analytical techniques including an analysis of comparable public companies that Craig-Hallum deemed relevant and an analysis of comparable M&A transactions that Craig-Hallum deemed relevant. |
1 | Poppettell Merger Sub (the “Surviving Company”); and |
2 | Twin Ridge Capital Acquisition Corp. (the “Merging Company” and together with the Surviving Company, the “Companies”). |
A | The Merging Company is a Cayman Islands exempted company and is entering into this Plan of Merger pursuant to the provisions of Part XVI of the Companies Act (as revised) (the “Act”). |
B | The Surviving Company is a Cayman Islands exempted company and is entering into this Plan of Merger pursuant to the provisions of Part XVI of the Act. |
C | The directors of the Merging Company and the sole director of the Surviving Company have approved the merger of the Companies with the Surviving Company continuing as the surviving company (as defined in the Act) (the “Merger”), upon the terms and subject to the conditions of the Business Combination Agreement dated 29 November 2022 by and among the Merging Company, the Surviving Company, Carbon Revolution Limited and Poppetell Limited (the “Business Combination Agreement”) and this Plan of Merger and pursuant to the provisions of Part XVI of the Act. |
1 | Definitions and Interpretation |
2 | Plan of Merger |
2.1 | Details of the Companies: |
(a) | The constituent companies (as defined in the Act) to this Merger are the Surviving Company and the Merging Company. |
(b) | The surviving company (as defined in the Act) is the Surviving Company. |
(c) | The registered office of the Surviving Company is c/o Campbells Corporate Services Limited of Floor 4, Willow House, Cricket Square, Grand Cayman KY1-9010, Cayman Islands. |
(d) | The registered office of the Merging Company is c/o Maples Corporate Services Limited of PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
(e) | Immediately prior to the Effective Date (as defined below), the share capital of the Surviving Company will be US$50,000 divided into 50,000 ordinary shares of a par value of US$1.00 each and the Surviving Company will have 1 ordinary share in issue. |
(f) | Immediately prior to the Effective Date (as defined below), the share capital of the Merging Company will be US$55,100 divided into 500,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, 50,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and 1,000,000 Preference Shares of a par value of US$0.0001 each and the Merging Company will have __________ Class A Ordinary Shares, __________ Class B Ordinary Shares and no Preference Shares in issue. |
2.2 | Effective Time |
2.3 | Terms and Conditions |
2.4 | Constitutional Documents of Surviving Company |
2.5 | Share Rights |
2.6 | Directors’ Interests in the Merger |
(a) | There are no amounts or benefits which are or shall be paid or payable to any director of either constituent company or the Surviving Company consequent upon the Merger. |
(b) | The name and address of the sole director of the surviving company (as defined in the Act) after the Merger is: Robert Duggan, 233 Waterways, 132 Lime Tree Bay Avenue, PO Box 30501, Grand Cayman KY1-1203, Cayman Islands. |
2.7 | Secured Creditors |
(a) | The Merging Company has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger. |
(b) | The Surviving Company has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger. |
3 | Corporate Authorities |
3.1 | This Plan of Merger has been authorised by the shareholders of the Merging Company pursuant to section 233(6) of the Act by way of resolutions passed at an extraordinary general meeting of the Merging Company. |
3.2 | This Plan of Merger has been approved by the board of directors of each of the Surviving Company and the Merging Company pursuant to section 233(3) of the Act. |
3.3 | This Plan of Merger has been authorised by the shareholder of the Surviving Company pursuant to section 233(6) of the Act. |
4 | Variation |
(a) | change the Effective Date provided that such changed date shall not be a date later than the ninetieth day after the date of registration of this Plan of Merger with the Registrar of Companies; and |
(b) | effect any other changes to this Plan of Merger which the directors of both the Surviving Company and the Merging Company deem advisable, provided that such changes do not materially adversely affect any rights of the shareholders of the Surviving Company or the Merging Company, as determined by the directors of both the Surviving Company and the Merging Company, respectively. |
5 | Termination |
6 | Counterparts |
7 | Governing Law |
SIGNED by | | | | | ) | | | ||
for and on behalf of | | | ) | | | ||||
Twin Ridge Capital Acquisition Corp. | | | ) | | | Director |
SIGNED by Robert Duggan | | | ) | | | ||||
for and on behalf of | | | ) | | | ||||
Poppettell Merger Sub | | | ) | | | Director |
1. | The Republic of Albania |
2. | The Republic of Armenia |
3. | Australia |
4. | The Republic of Austria |
5. | The Kingdom of Bahrain |
6. | The Republic of Belarus |
7. | Belgium |
8. | Bosnia and Herzegovina |
9. | The Republic of Botswana |
10. | The Republic of Bulgaria |
11. | Canada |
12. | The Republic of Chile |
13. | The People’s Republic of China |
14. | The Republic of Croatia |
15. | Cyprus |
16. | Czech Republic |
17. | The Kingdom of Denmark |
18. | The Arab Republic of Egypt |
19. | The Republic of Estonia |
20. | The Federal Democratic Republic of Ethiopia |
21. | Finland |
22. | France |
23. | Georgia |
24. | The Federal Republic of Germany |
25. | The Republic of Ghana |
26. | The Hellenic Republic (Greece) |
27. | Hong Kong |
28. | The Republic of Hungary |
29. | The Republic of Iceland |
30. | The Republic of India |
31. | The State of Israel |
32. | Italy |
33. | Japan |
34. | The Republic of Kazakhstan |
35. | Kenya |
36. | The Republic of Korea |
37. | Kosovo |
38. | The State of Kuwait |
39. | The Republic of Latvia |
40. | The Republic of Lithuania |
41. | The Grand Duchy of Luxembourg |
42. | The Republic of Macedonia (now the Republic of North Macedonia) |
43. | Malaysia |
44. | Malta |
45. | The United Mexican States (Mexico) |
46. | The Republic of Moldova |
47. | Montenegro |
48. | The Kingdom of Morocco |
49. | The Kingdom of the Netherlands |
50. | New Zealand |
51. | The Kingdom of Norway |
52. | The Islamic Republic of Pakistan |
53. | The Republic of Panama |
54. | The Republic of Poland |
55. | Portuguese Republic |
56. | State of Qatar |
57. | Romania |
58. | Russian Federation |
59. | Kingdom of Saudi Arabia |
60. | The Republic of Serbia |
61. | The Republic of Singapore |
62. | Slovak Republic |
63. | The Republic of Slovenia |
64. | The Republic of South Africa |
65. | Kingdom of Spain |
66. | Sweden |
67. | Switzerland |
68. | Kingdom of Thailand |
69. | The Republic of Turkey |
70. | United Kingdom |
71. | Ukraine |
72. | United Arab Emirates |
73. | The Republic of Uzbekistan |
74. | United States of America |
75. | The Socialist Republic of Vietnam |
76. | The Republic of Zambia |
Item 20. | Indemnification of Directors |
Item 21. | Exhibits and Financial Statement Schedules. |
Exhibit No. | | | Description |
| | Business Combination Agreement, dated as of November 29, 2022, by and among Twin Ridge Capital Acquisition Corp., Carbon Revolution Limited, Poppetell Limited and Poppettell Merger Sub (included as Annex A to the proxy statement/prospectus). | |
| | Scheme Implementation Deed, dated as of November 30, 2022, by and among Carbon Revolution Limited, Twin Ridge Capital Acquisition Corp. and Poppetell Limited (included as Annex B to the proxy statement/prospectus). | |
| | Memorandum and Articles of Association of Carbon Revolution Public Limited Company (formerly known as Poppetell Limited). | |
| | Form of the Amended and Restated Memorandum and Articles of Association of Carbon Revolution Public Limited Company (formerly known as Poppetell Limited and Carbon Revolution Limited) (included as Annex C to the proxy statement/prospectus). | |
| | Specimen Ordinary Shares Certificate of Carbon Revolution Public Limited Company (formerly known as Poppetell Limited). | |
| | Specimen Warrant Certificate of Carbon Revolution Public Limited Company (formerly known as Poppetell Limited). | |
| | Warrant Agreement, dated March 3, 2021, by and among Twin Ridge Capital Acquisition Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of Twin Ridge Capital Acquisition Corp.’s Form 8-K, filed with the SEC on March 9, 2021). | |
4.4** | | | Form of Assignment and Assumption Agreement between Twin Ridge Capital Acquisition Corp., Carbon Revolution Public Limited Company (formerly known as Poppetell Limited), Continental Stock Transfer & Trust Company, Computer Share Inc. and Computershare Trust Company, N.A. (included as Annex D to the proxy statement/prospectus). |
5.1** | | | Opinion of Arthur Cox LLP. |
| | Opinion of Goodwin Procter LLP. | |
| | Tax Opinion of Kirkland & Ellis LLP. | |
| | Letter Agreement, dated March 3, 2021, by and among Twin Ridge Capital Acquisition Corp., Barclays Capital Inc. and Evercore Group, LLC (incorporated by reference to Exhibit 10.4 of Twin Ridge Capital Acquisition Corp.’s Form 8-K, filed with the SEC on March 9, 2021). | |
| | Sponsor Side Letter, dated as of November 29, 2022, by and among Twin Ridge Capital Sponsor, LLC, Twin Ridge Capital Sponsor Subsidiary, LLC, the independent directors party thereto, the other insiders party thereto, Twin Ridge Capital Acquisition Corp., Carbon Revolution Limited, and Poppetell Limited (included as Annex E to the proxy statement/prospectus). | |
| | Proceeds Disbursing and Security Agreement, dated May 23, 2023 by and among UMB Bank, N.A., as trustee and disbursing Agent, Newlight Capital LLC, as servicer, collateral agent and security trustee and Carbon Revolution Operations PTY LTD. | |
| | Form of Equity Incentive Plan (included as Annex F to the proxy statement/prospectus). | |
| | Service Agreement with Jacob Dingle, dated March 14, 2017. | |
| | Service Agreement with Gerard Buckle, dated August 7, 2019. | |
| | Form of Voluntary Escrow Deed (included as Annex G to the proxy statement/prospectus). | |
| | Form of Indemnification Agreement between Carbon Revolution Public Limited Company and each of its directors and officers. | |
| | List of Subsidiaries of Carbon Revolution Public Limited Company (formerly known as Poppetell Limited). | |
| | Consent of Deloitte Touche Tohmatsu. | |
| | Consent of Marcum LLP. | |
24.1** | | | Consent of Arthur Cox LLP (included in Exhibit 5.1). |
| | Consent of Goodwin Procter LLP (included in Exhibit 5.2). | |
| | Power of Attorney (included on the signature page hereto). |
Exhibit No. | | | Description |
99.1** | | | Form of Preliminary Proxy Card. |
| | Consent of Mark Bernhard. | |
| | Consent of Lucia Cade. | |
| | Consent of James Douglas. | |
| | Consent of Dale McKee. | |
| | Consent of Craig-Hallum Capital Group LLC. | |
| | Filing Fee Table. |
* | Previously filed |
** | To be filed by amendment. |
# | Management contract or compensatory plan or arrangement. |
† | Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the SEC. |
[*] | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). Carbon Revolution agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
1. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
1. | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”); |
2. | 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; |
3. | 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. |
1. | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
2. | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
3. | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, will be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
4. | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
1. | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
2. | 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; |
3. | 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 |
4. | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
5. | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
6. | That every prospectus: (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
| | Carbon Revolution Public Limited Company | ||||
| | | | |||
| | By: | | | /s/ Jacob Dingle | |
| | Name: | | | Jacob Dingle | |
| | Title: | | | Director and Principal Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Jacob Dingle | | | Chief Executive Officer and Director (Principal Executive Officer) | | | June 13, 2023 |
Jacob Dingle | | |||||
| | | | |||
* | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | June 13, 2023 |
Gerard Buckle | | |||||
| | | | |||
* | | | Director | | | June 13, 2023 |
Ronan Donohoe | | | | | ||
| | | | |||
* | | | Director | | | June 13, 2023 |
Rolando Ebuna | | | | |
*By: | | | /s/ Jacob Dingle | | | |
Name: | | | Jacob Dingle | | | |
Title: | | | Attorney-in-Fact | | |
| | By: | | | /s/ Donald J. Puglisi | |
| | Name: | | | Donald J. Puglisi | |
| | Title: | | | Managing Director |
NUMBER
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SHARES
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This Certifies that
|
CUSIP
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DIRECTOR
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DIRECTOR / SECRETARY
|
TEN COM
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–
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as tenants in common
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UNIF GIFT MIN ACT
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-
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Custodian
|
|||
TEN ENT
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–
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as tenants by the entireties
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(Cust)
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(Minor)
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||||
JT TEN
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–
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as joint tenants with right of survivorship and not as tenants in common
|
under Uniform Gifts to Minors Act
|
|||||
(State)
|
shares
|
_____________________________________________________________________________Attorney to transfer the said stock on the books of the within named Company will full power of substitution in the premises.
|
Dated
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Notice:
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The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
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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).
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CARBON REVOLUTION PUBLIC LIMITED COMPANY
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||
By:
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||
Name:
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||
Title:
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||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
AS WARRANT AGENT
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||
By:
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||
Name:
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||
Title:
|
Date: , 20
|
||
(Signature)
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||
(Address)
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||
(Tax Identification Number)
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||
Signature Guaranteed:
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|
|
Goodwin Procter LLP
New York Times Bldg
620 8th Ave
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|
|
|
|
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goodwinlaw.com
+1 212 813 8800
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Carbon Revolution Public Limited Company
June 13, 2023
Page 2
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Carbon Revolution Public Limited Company
June 13, 2023
Page 3
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Very truly yours,
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/s/ Goodwin Procter LLP
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GOODWIN PROCTER LLP
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Exhibit 10.3
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
This Proceeds Disbursing and Security Agreement (this “Agreement”) is entered into as of May 23, 2023 by and among UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee (“Trustee”), solely in its capacity as disbursing agent (the “Disbursing Agent”), NEWLIGHT CAPITAL LLC, a North Carolina limited liability company, as servicer for the benefit of the Disbursing Agent under the Disbursement Documents and as collateral agent for the benefit of the Trustee under the Trust Transaction Documents and as Security Trustee for the benefit of the Security Beneficiaries under the Security Trust Deed (in such capacities, the “Servicer”) and CARBON REVOLUTION OPERATIONS PTY LTD ACN 154 435 355, a company limited by shares and incorporated in Australia (the “Issuer”) and the other Co-Obligors from time to time party hereto.
RECITALS
Disbursing Agent is the Trustee under (and as defined in) the Trust Indenture. Issuer is the Issuer of the Series 2023-A Notes under the Trust Indenture. This Agreement sets forth the terms on which Disbursing Agent will disburse to Issuer the proceeds of the Series 2023-A Notes.
In this Agreement, any obligations of the Issuer to pay principal and interest on the Term Advance are not intended to be separate to, or in addition to, the obligations of the Issuer to pay principal or interest on the Series 2023-A Notes.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms shall have the following definitions:
“Accounts” means, with respect to any Person, all presently existing and hereafter arising accounts, contract rights, rights to payment of monetary obligations, payment intangibles, and all other forms of obligations owing to such Person arising out of the sale, lease, licensing, assignment (or other disposal) of goods, (including, without limitation, the licensing of software and other technology) or the rendering of services by such Person, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by such Person and such Person’s Books relating to any of the foregoing.
“Adjusted EBITDA” means for any period, Net Income (loss), plus (in each case to the extent deducted in determining Net Income for such period) (a) depreciation and amortization expense, (b) stock-based compensation expense, (c) interest expense, (d) income tax expense, (e) amortization of foreign currency (gain) loss, (f) fees, costs and expenses paid or payable in cash (including without limitation all Insurance Policy Premiums and all other amounts payable under Section 2.5 below) incurred or paid by Issuer and any of its Subsidiaries in connection with the Term Advances, the Disbursement Documents, the Series 2023-A Notes, the Trust Indenture, other Trust Transaction Documents and the transactions contemplated thereby up to and including the Closing Date, and (g) one-time transactional fees and costs incurred in connection with the TRCA SPAC Transaction and Qualified Capital Raises, and (h) non-cash expenses and charges and non-recurring expenses and charges as may be pre-approved by Servicer in Servicer’s sole discretion, less capitalized research and development costs.
“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that directly or indirectly, controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners and Persons holding equivalent positions.
“Agreement” has the meaning specified in the introductory paragraph hereto.
“Anti-Terrorism Laws” are any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC and any successors and replacements to such laws and replacements and in each case as amended, modified or supplemented from time to time.
“Australia” means the Commonwealth of Australia.
“Australian Account Control Deed” means the account control deed to be entered into between, among others, [***] (or other banking institution acceptable to Servicer) as account bank, the Security Trustee as the financier and Carbon Revolution Operations Pty Ltd as security provider.
“Australian Co-Obligors” means each Co-Obligor that is incorporated, established or tax resident in Australia.
“Australian Controller” has the meaning given to “Controller” in the Australian Corporations Act.
“Australian Corporate Cards” means the Co-Obligor’s employee corporate credit card accounts.
“Australian Corporations Act” means the Corporations Act 2001 (Cth) (Australia).
“Australian General Security Deed” means the general security deed dated on or about the date of this Agreement between certain Australian Co-Obligors and the Security Trustee.
“Australian Insolvency Proceeding” means in respect of a Co-Obligor or any of its Subsidiaries, the happening of any of the following: (a) an order is made that it be wound up; (b) the appointment of a liquidator to it; (c) the appointment of a provisional liquidator to it and the provisional liquidator is required to admit all debts to proof or pay all debts capable of being admitted to proof proportionately; (d) it is under administration or wound up or has had an Australian Controller appointed to its property (e) it is subject to any arrangement, assignment, moratorium or composition, protected from creditors under any statute, or dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the Servicer); or (f) entry by it into a scheme of arrangement or deed of company arrangement, composition with, or assignment for the benefits of, all or any class of, its creditors.
“Australian Lease” means any lease or similar document that is the subject of an Australian Right of Entry Deed including, for the avoidance of doubt, [***].
“Australian PPSA” means the Personal Property Securities Act 2009 (Cth) and any regulations in force at any time under the Australian PPSA, including the Personal Property Securities Regulations 2010 (Cth).
“Australian PPSR” shall have the meaning given to the term “Register” under the Australian PPSA.
“Australian Right of Entry Deeds” means [***].
“Australian Security Documents” means, collectively, the Security Trust Deed, the Australian General Security Deed, the Australian Account Control Deed, the Australian Right of Entry Deeds and each of the mortgages, collateral assignments, security agreements, pledge agreements, account control agreements or other similar agreements delivered to the Security Trustee pursuant to this Agreement or any of the Finance Documents, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Security Trustee as security for the Secured Obligations.
“Available Cash” means, at any time, the amount of Unrestricted Cash held at such time by the Issuer or its Subsidiaries, other than Unrestricted Cash held in accounts outside the United States of America and Australia.
“Blocked Person” is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which Disbursing Agent or Servicer is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.
“Books” means, with respect to any Person, all of such Person’s books and records including: ledgers; records concerning such Person’s assets or liabilities, Collateral, business, operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.
“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of New York or in Melbourne, Australia are authorized or required to close. Any days referenced within this Agreement that are not defined as Business Days shall be calendar days.
“Capital Expenditures” means all liabilities incurred or expenditures for the acquisition of fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one year in conformance with IFRS. For the avoidance of doubt, capitalized research and development costs shall not constitute Capital Expenditures.
“Carbon Revolution (USA)” means Carbon Revolution (USA) LLC, a Delaware limited liability company.
“Carbon Revolution (USA) Cash Assets” means all cash of Carbon Revolution (USA), including, but not limited to, amounts held in deposit accounts.
“Cash Equivalents” means (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued by a nationally-insured bank and (iv) any such bank’s money market accounts.
“Change in Control” means (A) prior to the consummation of the TRCA SPAC Transaction (which shall not be deemed to be a Change in Control), (i) one or more entities obtain control (as defined in section 50AA of the Australian Corporations Act) of the Parent Company, and/or (ii) an event or series of events by which Parent Company fails at any time to own, directly or indirectly, 100% of the Equity Interests of Issuer and each other Co-Obligor and their respective Subsidiaries free and clear of all Liens (other than the Permitted Liens), and/or (iii) [***], and (B) after the consummation of the TRCA SPAC Transaction, (i) the acquisition by any Person or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) of Persons acting in concert of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934, as amended), directly or indirectly, of [***] or more of the outstanding shares of voting stock of the Issuer, other than in connection with any transaction or transactions in which the Issuer shall become the Subsidiary of a Parent Company, and thereafter, the foregoing shall instead apply to such Parent Company, and/or (ii) [***].
“[***]” [***].
“Closing Date” means the date of this Agreement.
“Co-Obligors” means, collectively, Issuer, Carbon Revolution Limited ACN 128 274 653, Carbon Revolution Technology Pty Ltd ACN 155 413 219, any other Persons required to execute a joinder to this Agreement and the Guarantors, and “Co-Obligor” means any of Issuer, any other Person required to execute a joinder to this Agreement or any Guarantor. For purposes of clarification, Carbon Revolution (USA) and Carbon Revolution (UK) Limited shall not be deemed to be Co-Obligors.
“Code” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.
“Collateral” means the property described on Exhibit A attached hereto.
“Collective Bargaining Agreement” means that certain Enterprise Agreement among the Issuer and The Australian Manufacturing Workers’ Union, to be executed on or about May 23, 2023.
“Compliance Certificate” has the meaning set forth for such term in Section 6.3(b) below.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person or any other Person; and (iii) all obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Servicer in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Control Agreement” means any control agreement, in form and substance satisfactory to the Servicer in all respects, entered into among the depository institution at which Issuer or any other Co-Obligor, as applicable, maintains a deposit account or the securities intermediary or commodity intermediary at which Issuer or any other Co-Obligor, as applicable, maintains a securities account or a commodity account, Issuer (or other Co-Obligor), and Servicer pursuant to which Servicer, for the benefit of the Disbursing Agent, is granted and obtains control (within the meaning of the Code) over any such account, and without limitation includes the Australian Account Control Deed.
“Copyrights” means any and all (a) copyrights, copyright rights, copyright applications, copyright registrations, (b) all like protections in each work or authorship and derivative work thereof, all income, royalties, damages, and payments due and/or payable under any of the foregoing, including damages or payments for past or future infringements for any of the foregoing, (c) the right to sue for past, present, and future infringements of any of the foregoing (d) all moral rights of authors and (e) all rights corresponding or equivalent to any of the foregoing anywhere in the world.
Covenant Breach Payment” has the meaning set forth for such term in Section 2.3(b) below.
“[***]” [***].
“Current Ratio” means the ratio of the Co-Obligors’ total current assets divided by total current liabilities, calculated in accordance with IFRS and as reflected on the most recently delivered Compliance Certificate. For the avoidance of doubt, in determining the Co-Obligor’s current total assets, the Co-Obligor’s Available Cash shall not include Earmarked Funds, Carbon Revolution (USA) Cash Assets, or any other cash that is restricted or pledged to secure any other indebtedness.
“[***]” [***].
“Debt Service Reserve” has the meaning set forth for such term in Section 6.28 below.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“[***]” [***].
“Default Rate” has the meaning set forth for such term in Section 2.2(b) below.
“Disbursement Documents” means, collectively, this Agreement, any note or notes executed by Issuer evidencing the Term Advance, the Disbursement Letter, the Disbursement Monitoring Agreement, the Insurance Policy, the Fee Letter, the Australian Security Documents, the Security Trust Deed, any intellectual property security agreements, any Control Agreements, any landlord waivers, bailee waivers or similar documents, the Perfection Certificates, any guaranties, any Subordination Agreements, any other collateral security agreements and any other agreement entered into by Issuer or any other Co-Obligor pursuant to or in connection with this Agreement and any other document, certificate or other writing executed or delivered by Issuer or any other Co-Obligor pursuant to this Agreement or any of the foregoing, in each case as amended, modified or supplemented from time to time; provided, for the avoidance of doubt, “Disbursement Documents” shall exclude the Series 2023-A Notes, the Trust Indenture and the other Trust Transaction Documents.
“Disbursement Letter” is that certain Disbursement Letter agreement in the form of Exhibit C hereto.
“Disbursement Monitoring Agreement” means the Disbursement Monitoring Agreement, by and among Issuer, any other Co-Obligors, the Insurer, Disbursing Agent and the Monitor, dated as of even date herewith, as amended, modified and supplemented from time to time.
“Disbursing Agent” has the meaning specified in the introductory paragraph hereto.
“Disbursing Agent and Related Expenses” means (i) all reasonable costs and expenses (including reasonable attorneys’ fees, costs and expenses) incurred by the Disbursing Agent and the Servicer in connection with the preparation, negotiation, administration, and enforcement of the Finance Documents and the transactions related thereto (including any amendments, waivers, consents or other documents with respect thereto), underwriting, diligence and collateral filings; (ii) all reasonable Collateral audit fees and rating agency fees, and such other fees owing to Disbursing Agent and/or Servicer from time to time pursuant to the Finance Documents; and (iii) Disbursing Agent’s and Servicer’s reasonable attorneys’ fees, costs and expenses incurred in connection with the administration of, amending, enforcing or defending the Finance Documents (including fees, costs and expenses of appeal), whether incurred before, during and after an Insolvency Proceeding, and whether or not suit is brought.
“Disqualified Equity Interests” means any Equity Interest, which, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior Payment in Full of the Secured Obligations and otherwise subordinated on terms satisfactory to the Servicer), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends or distributions in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any Equity Interest that would constitute Disqualified Equity Interests, in each case, at any time on or prior to the date that is ninety-one (91) days after the Term Advance Maturity Date.
“Dividing Person” has the meaning assigned to it in the definition of “Division.”
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“[***]” [***].
“Equipment” means, with respect to any Person, all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which such Person has any interest.
“Equity Cure Reserve Fund” has the meaning assigned to such term in the Trust Indenture.
“Equity Interests” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Co-Obligor, is treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended from time to time (the “IRC”), or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the IRC, is treated as a single employer under Section 414 of the IRC.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the IRC or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Co-Obligor or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Co-Obligor or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Co-Obligor or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of any Co-Obligor or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any Co-Obligor or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Co-Obligor or any ERISA Affiliate of any notice, concerning the imposition upon any Co-Obligor or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.
“Event of Default” has the meaning assigned to such term in Article 8 below.
“Excluded Accounts” has the meaning assigned to such term in Section 6.7(b) below.
“Excluded Intellectual Property” means the following:
(a) the Innovation IP to the extent that consent of a counterparty is required for a Lien to be granted by the Issuer or other Co-Obligor over the Innovation IP;
(b) each software licensing agreement in respect of “off-the-shelf” software that is commercially available to the public; and
(c) Intellectual Property Collateral jointly owned pursuant to the [***],
unless, in the case of paragraph (a), such consent has been obtained, in which case the Innovation IP will form part of the Collateral on and from the time such consent has been obtained. The exclusion does not extend to any proceeds of the Issuer or other Co-Obligors in respect of any such Excluded Intellectual Property to the extent that the relevant agreement does not restrict a Lien being given in respect of those proceeds.
“Excluded Tax” means:
(a) any Tax assessed on a Finance Party if that Tax is imposed by a jurisdiction on the net income derived by that Finance Party, but not:
(i) a Tax calculated on or by reference to the gross amount of any payment (without allowance for any deduction) derived by a Finance Party under a Transaction Document, the Series 2023-A Notes, or any other document referred to in a Transaction Document; or
(ii) a Tax imposed as a result of a Finance Party being considered a resident of, or organized or doing business in, that jurisdiction solely as a result of it being a party to a Transaction Document or the Notes or any transaction contemplated by a Transaction Document or the Series 2023-A Notes;
(b) a Tax which would not be required to be deducted by a Co-Obligor if, before the Co-Obligor makes a relevant payment, the relevant Finance Party, or an entity acting on behalf of the Finance Party, provided the Co-Obligor with any of its name, address, tax file number, Australian business number, registration number or similar details or details of any relevant Tax exemption, in each case, to the extent requested by the Co-Obligor and available to such Finance Party; or
(c) any withholding or deduction on account of the Co-Obligor receiving a direction under section 255 of the Tax Act or section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth).
“Excluded Property” has the meaning assigned to such term on Exhibit A.
“Fee Letter” means the Fee Letter, by and between the Co-Obligors and the Servicer, dated as of even date herewith, as amended, modified and supplemented from time to time.
“[***]” [***].
“Finance Document” means each of the Trust Transaction Documents and the Disbursement Documents.
“Finance Party” means:
(a) any Noteholder;
(b) the Trustee;
(c) the Disbursing Agent;
(d) the Servicer;
(e) Security Trustee; and
(f) Insurer,
in each case acting in any capacity under the Finance Documents.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.
“[***]” [***].
“Good Faith Deposit” has the meaning assigned to such term in Section 2.5(d) below.
“Group Tax Liabilities” means the tax related liabilities set out in subsection 721 10(2) of the Tax Act.
“GST Act” means the A New Tax System (Goods and Services Tax) Act 1999 (Cth) of Australia.
“GST Group” has the meaning given in the GST Act.
“Guarantor” means any Subsidiary (or other Affiliate) of Issuer that provides a guarantee of the Secured Obligations and performance of all obligations by the Issuer and any other Co-Obligor with respect to this Agreement and the other Finance Documents in favor of Disbursing Agent and the Servicer.
“Guaranty” has the meaning assigned to such term in Section 8.9 below.
“Guaranty Documents” has the meaning assigned to such term in Section 8.9 below.
“Head Company” means the head company (as defined in the Tax Act) of a Tax Consolidated Group.
“IFRS” means International Financial Reporting Standards issued by International Accounting Standards Board, as in effect from time to time.
“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, (d) all obligations that accrue interest or that are of a type upon which interest charges are customarily paid, (e) all obligations that are issued or assumed as full or partial payment for any property, (f) all obligations that are secured by a Lien, (g) all reimbursement obligations with respect to letters of credit and (h) all Contingent Obligations.
“Indirect Tax Amount” has the meaning given by section 444-90(1) of Schedule 1 to the Taxation Administration Act 1953 (Cth).
“Innovation IP” has the meaning given to such term in the [***] as in effect on the date hereof.
“Insolvency Proceeding” means, with respect to any Person, any proceeding commenced by or against any Person under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. “Insolvency Proceeding” shall include any Australian Insolvency Proceeding.
“Insurance Policy” means that certain Lender Collateral Residual Value Insurance Policy no. [***] with a $60,000,000 limit, issued by the Insurer, dated as of the “Effective Date” (as defined therein), and any supplementary contracts or agreements issued in connection therewith, with respect to Co-Obligors and the Intellectual Property Collateral, with respect to which Disbursing Agent is the “Named Insured;” provided that such Insurance Policy shall be in form and substance acceptable to Servicer in its sole and absolute discretion.
“Insurance Policy Premium” means the amount described in the Insurance Policy as the insurance premium as consideration for the Insurer’s issuance of the Insurance Policy.
“Insurer” means [***].
“Intellectual Property Collateral” means all of Issuer’s and any other Co-Obligor’s right, title, and interest in and to the following: (a) any intellectual property of every kind and nature, including without limitation, all Copyrights, Trademarks and Patents; all trade secrets, domain names, design rights, inventions, software and databases, claims for damages by way of past, present and future infringement of any of the rights included above; (b) all licenses or other rights to use any Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use; (c) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and (d) all proceeds and products of the foregoing, including without limitation all payments under insurance (including without limitation the Insurance Policy) or any indemnity or warranty payable in respect of any of the foregoing.
“Inventory” means, with respect to any Person, all inventory in which such Person has or acquires any interest, including work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of such Person, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and such Person’s Books relating to any of the foregoing.
“Investment” means as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) any loan, advance or extension of credit, (b) any capital contribution or purchase of Equity Interests, (c) any acquisition of property other than upon full payment at fair market value (including the acquisition of equipment and goods in the ordinary course of business) and/or (d) the provision of, or payment for, services to or for the benefit of another Person other than upon full payment at fair market value.
“Issuer” has the meaning specified in the introductory paragraph hereto.
“ITFA” means an agreement where a member of a GST Group may be required to pay an amount to the representative member of the GST Group to fund an Indirect Tax Amount or to reimburse the representative member of the GST Group after payment of an Indirect Tax Amount.
“ITSA” means an agreement of the type contemplated by section 444-90(1A) of Schedule 1 to the Taxation Administration Act 1953 (Cth) and which has the effect that a relevant Indirect Tax Amount is covered by the agreement within the meaning of that section.
“[***]” [***].
“Late Fee” has the meaning set forth for such term in Section 2.3(b) below.
“Legal Fee Deposit” has the meaning assigned to such term in Section 2.5(d) below.
“Lien” means any mortgage, lien (statutory or otherwise), deed of trust, charge, encumbrance charge, pledge, hypothecation, assignment, deposit arrangement, or preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, (i) any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property and any financing lease having substantially the same economic effect as any of the foregoing and (ii) intangible property right, claim, infringement, option, right of first refusal, preemptive right, community property interest or similar restriction of any nature (including any restriction on the voting of any security or restriction on the transfer, use or ownership of any security or other asset)). A license agreement is a Lien if either (a) it is to a related party and is either fully paid or below market or (b) it is exclusive and transfers a substantial portion of the economic value to a third party.
“Loan Monitoring Fees” has the meaning assigned to such term in the Disbursement Monitoring Agreement.
“Material Adverse Effect” means a material adverse effect on (i) the business, properties, liabilities, operations or condition (financial or otherwise) or prospects of Issuer and the other Co-Obligors taken as a whole or
(ii) the ability of Issuer or any other Co-Obligor to repay the Secured Obligations or otherwise perform its obligations under the Finance Documents or (iii) the value or priority of Servicer’s security interests in the Collateral of any Co-Obligor or (iv) the legality, validity, binding effect or enforceability against the Issuer or any Co-Obligor of any Finance Document to which it is a party.
“Monitor” means Servicer, in its capacity as the provider of Monitoring Services and Collateral Enforcement Services (and as such terms are defined in the Disbursement Monitoring Agreement) under and any other services under the Disbursement Monitoring Agreement.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Negotiable Collateral” means, with respect to any Person, all letters of credit of which such Person is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and such Person’s Books relating to any of the foregoing.
“Net Income” means, as calculated on a consolidated basis for Issuer and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for Taxes, of Issuer and its Subsidiaries for such period taken as a single accounting period.
“Non-Call Period” has the meaning assigned to such term in Section 2.1(a) below.
“Noteholder” has the meaning given to that term in the Trust Indenture.
“Obligations” means, subject to the qualification below, all debt, principal, interest, liabilities, obligations, covenants and duties, fees, indemnities, Disbursing Agent and Related Expenses and other amounts owed to Disbursing Agent, Servicer, Security Trustee and/or the Insurer (including, without limitation the Reimbursement Obligation and Qualified Capital Raise Premiums) by any Co-Obligor pursuant to this Agreement or any other Finance Document, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including any interest and fees that accrue after the commencement of an Insolvency Proceeding (regardless of whether such interest and fees are allowed claims in such proceeding) and including any debt, liability, or obligation owing by any Co-Obligor to others that Disbursing Agent, Servicer and/or the Insurer may have obtained by assignment, subrogation or otherwise
Issuer’s obligation to make principal and interest payments to Disbursing Agent shall not be construed as an obligation that is separate from Issuer’s obligation to make principal and interest payments to the Noteholders. In such instances, Disbursing Agent operates as a conduit to whom Issuer pays amounts necessary to fund its underlying obligations to make principal and interest payments to the Noteholders.
“OEM Customer” means the relevant counterparties to the Other OEM Program Terms.
“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“Other OEM Program Terms” means [***].
“Parent Company” means (i) initially after the Closing Date, Carbon Revolution Limited ACN 128 274 653, and (ii) after the consummation of the TRCA SPAC Transaction, the entity that owns 100% of the outstanding shares of voting stock of Carbon Revolution Limited.
“Patents” means (a) all patents, letters patent of the United States of America or the equivalent thereof in any other country, all patent registrations and recordings, all patent applications, (b) all like protections including without limitation divisions, continuations, renewals, reissues, extensions, re-examinations and continuations-in-part of the same, utility models and similar industrial rights, and the inventions disclosed or claimed therein, (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including damages or payments for past or future infringements for any of the foregoing, (d) the right to sue for past, present, and future infringements of any of the foregoing, and (e) all rights corresponding or equivalent to any of the foregoing anywhere in the world.
“Patriot Act” has the meaning assigned to such term in Section 13.9 below.
“Payment in Full” means the indefeasible payment in dollars in full in cash of all Secured Obligations and payment in full in cash and performance in full of all other obligations, agreements, covenants and duties under the Finance Documents (excluding contingent indemnification obligations for which a claim has not been asserted). For the avoidance of doubt, repayment of the Series 2023-A Notes with the proceeds of the Insurance Policy or other payment by the Insurer shall not constitute “Payment in Full” hereunder. “Paid in Full” shall have the correlative meaning.
“Payment Reserve Fund” has the meaning assigned to such term in the Trust Indenture.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Perfection Certificates” mean, collectively, the Perfection Certificate, dated as of the Closing Date, executed and delivered by the Co-Obligors, any and all information questionnaires and the responses thereto provided by Issuer and/or any other Co-Obligor and delivered to Servicer, including those delivered on the Closing Date and those delivered after the Closing Date pursuant to Section 3.1 below and Section 4.5 below.
“Permitted Indebtedness” means:
(a) Indebtedness of Issuer or any other Co-Obligor in favor of Disbursing Agent arising under this Agreement or any other Finance Document;
(b) Indebtedness of Issuer or any other Co-Obligor arising under the Series 2023-A Notes, Trust Indenture or any other Trust Transaction Document;
(c) Indebtedness of Issuer or any other Co-Obligor existing on the Closing Date that is disclosed in Schedule 7.4 hereto;
(d) Indebtedness of Issuer or any other Co-Obligor secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness and (ii) the outstanding amount of such Indebtedness does not exceed [***] in the aggregate for Issuer and all other Co-Obligors at any time;
(e) Subordinated Debt issued by Issuer or any other Co-Obligor (and otherwise expressly permitted hereunder);
(f) Indebtedness to trade creditors of Issuer or any other Co-Obligor incurred in the ordinary course of business;
(g) Indebtedness of Issuer or any other Co-Obligor arising from the endorsement of instruments for deposit or collection in the ordinary course of business;
(h) intercompany Indebtedness among or between one or more of Issuer and any other Co-Obligor;
(i) Indebtedness consisting of the financing of insurance premiums (other than the Insurance Policy Premium) by the Issuer or any other Co-Obligors in the ordinary course of business, not to exceed [***] of premiums in the aggregate with respect to the Issuer and all other Co-Obligors while this Agreement is in effect;
(j) Indebtedness of Issuer or any other Co-Obligor incurred in the ordinary course of business in connection with corporate credit cards issued for the benefit of Issuer or such other Co-Obligor, not to exceed [***] in the aggregate with respect to the Issuer and all other Co-Obligors outstanding at any time;
(k) unsecured obligations (contingent or otherwise) existing or arising under any hedging or swap contracts entered into in by Issuer or any other Co-Obligor in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and not for speculative purposes;
(l) Indebtedness of Issuer or any other Co-Obligor arising from judgments not constituting an Event of Default;
(m) Indebtedness of Issuer or any other Co-Obligor with respect to and resulting from customer deposits and advance payments received by them in the ordinary course of business;
(n) Indebtedness of Issuer with respect to [***];
(o) Indebtedness of Issuer with respect to [***];
(p) [***];
(q) Indebtedness of Issuer or any other Co-Obligor with respect to Australian Corporate Cards in an aggregate principal amount not to exceed [***] outstanding at any time;
(r) other Indebtedness of Issuer or any other Co-Obligors in an aggregate principal amount not to exceed [***] with respect to the Issuer and any other Co-Obligors outstanding at any time;
(s) extensions, refinancings and renewals of any items of Permitted Indebtedness referred to in clause (c) above, provided that the principal amount thereof is not increased or the terms modified to impose more burdensome terms upon Issuer or any Subsidiary or other Co-Obligor, as the case may be; and
(t) cash and cash equivalents of Issuer or any other Co-Obligors pledged to secure leased location security deposits in an aggregate principal amount not to exceed [***] with respect to the Issuer and any other Co-Obligors outstanding at any time.
“Permitted Investment” means:
(a) Investments of Issuer or any other Co-Obligor existing on the Closing Date that are disclosed in Schedule 7.7 hereto;
(b) with respect to Issuer or any other Co-Obligor, Investments consisting of Cash Equivalents;
(c) with respect to Issuer or any other Co-Obligor the repurchase of stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase and would not exist after giving effect to such repurchase, provided that the aggregate amount of all such repurchases does not exceed [***] for Issuer and any other Co-Obligors per fiscal year;
(d) Investments made by any Co-Obligor in another Co-Obligor;
(e) Investments not to exceed [***] in the aggregate with respect to Issuer and any other Co-Obligors in any fiscal year consisting of travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business;
(f) Investments (including debt obligations) received by Issuer or any other Co-Obligor in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of such Issuer’s or Co-Obligor’s business;
(g) to the extent constituting an Investment, guaranties by Issuer or any other Co-Obligor of Permitted Indebtedness; and
(h) other Investments not to exceed [***] in the aggregate by Issuer and any other Co-Obligors while this Agreement is in effect.
“Permitted Liens” means the following:
(a) (i) any Liens existing on the Closing Date that are disclosed in Schedule 7.5 hereto; and (ii) any Liens arising under this Agreement, the other Finance Documents, the Trust Indenture or the other Trust Transaction Documents securing the Series 2023-A Notes or the Secured Obligations;
(b) Liens for Taxes, fees, assessments or other governmental charges or levies owed by Issuer or any other Co-Obligor, that are either not delinquent or are being contested in good faith by appropriate proceedings, provided the same have no priority over any of Servicer’s security interests;
(c) (i) Liens upon or in any equipment which was not financed under this Agreement acquired or held by Issuer or any other Co-Obligor to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, or (ii) Liens securing Indebtedness in respect of equipment at the time of its acquisition by Issuer or such other Co-Obligor, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, provided that the Liens in this clause (c) hereof do not exceed [***] in the aggregate for Issuer and all other Co-Obligors at any time;
(d) Liens in favor of customs and revenue authorities imposed as a matter of law to secure payments of customs duties owed by Issuer or any other Co-Obligor in connection with the importation of goods in the ordinary course of business of Issuer or any other Co-Obligor;
(e) Liens or retentions of title or similar arrangement in favor of a seller of goods to the Issuer or any other Co-Obligor to the extent that it secures goods acquired in the ordinary course of business of the Issuer or any other Co-Obligor;
(f) Liens securing the amount of any judgment, decree or attachment involving Issuer or any other Co-Obligor not constituting an Event of Default hereunder (including without limitation under Section 8.4 below (Attachment) or Section 8.7 below (Judgments));
(g) easements, rights-of-way, restrictions and other similar encumbrances on real property of Issuer or any other Co-Obligor, incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of Issuer or any Co-Obligor;
(h) statutory or contractual Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of such parties against Issuer or any other Co-Obligor and arising in the ordinary course of business;
(i) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations imposed by law and incurred in the ordinary course of business (other than Liens imposed by ERISA);
(j) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a)(i) or (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase;
(k) deposits made by Issuer or any other Co-Obligor to secure the performance of bids, tenders, trade contracts, leases, government contracts, statutory obligations, surety, stay, customs and appeal bonds, performance and return money bonds, other security indebtedness and other obligations of a like nature incurred in the ordinary course of business and which do not represent an obligation for borrowed money;
(l) Liens in favor of other financial institutions arising in connection with Issuer’s or any Co-Obligor’s deposit and/or securities accounts held at such institutions, provided that Servicer has a perfected security interest in such accounts to the extent required under Section 6.7 below;
(m) Liens on insurance proceeds securing the payment of financed insurance premiums (other than the Insurance Policy Premium), which financing is permitted by clause (i) of the definition of “Permitted Indebtedness.”
“Permitted Transfers” means the conveyance, sale, lease, transfer or disposition by Issuer or any other Co-Obligor of:
(a) Inventory or other assets, or the expenditure of cash of such Issuer or other Co-Obligor in the ordinary course of business;
(b) worn-out, surplus or obsolete Equipment of Issuer or other Co-Obligor disposed of in the ordinary course of business;
(c) Assets of the Issuer or any other Co-Obligor in connection with a transaction or transactions involving Issuer or any other Co-Obligor permitted pursuant to Section 7.3 below; or
(d) other assets of Issuer or any other Co-Obligor that do not exceed [***] in the aggregate with respect to the Issuer and all other Co-Obligors during any fiscal year.
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the IRC or Section 302 of ERISA, and in respect of which any Co-Obligor or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Qualified Capital Raise” means any of the Co-Obligors’ (i) issuance of Qualified Equity Interests, or (ii) issuance of Subordinated Debt (or any combination of the forgoing) and, in each case, subject to a Subordination Agreement. For the avoidance of doubt, a Qualified Capital Raise does not include $60,000,000 committed by Yorkville assumed in financial model 2023; provided that for the avoidance of doubt, the capital raised as contemplated by clause (p) of the definition of Permitted Indebtedness shall be considered a Qualified Capital Raise.
“Qualified Capital Raise Premium” has the meaning assigned to such term in the Fee Letter.
“Qualified Equity Interests” means any Equity Interest that is not a Disqualified Equity Interest.
“[***]” [***]
“Reimbursement Obligation” has the meaning assigned to such term in Section 2.2(b).
“Responsible Officer” means, with respect to Issuer or any other Co-Obligor, each of the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer of such Person.
“Secured Obligations” has the meaning given to such term in the Security Trust Deed.
“Security Beneficiary” has the meaning given to such term in the Security Trust Deed.
“Security Trust Deed” means the security trust deed dated on or about the date of this Agreement between, among others, the Australian Co-Obligors and the Security Trustee.
“Security Trustee” means Newlight Capital LLC, in its capacity as trustee of the security trust established under the Security Trust Deed, and any of its successors and permitted assigns.
“Series 2023-A Notes” means the fully registered “Series 2023-A Notes” issued under and as defined in the Trust Indenture.
“Servicer” has the meaning specified in the introductory paragraph hereto.
“Servicer Agent” has the meaning assigned to such term in Section 9.8 below.
“Servicing Agreement” means the Trustee Services Agreement by and among, Issuer, any other Co-Obligors, the Servicer and the Disbursing Agent, dated as of even date herewith, as amended, modified or supplemented from time to time.
“Shares” means, with respect to any Person, all of the issued and outstanding capital stock, membership units, Equity Interests or other securities owned or held of record by such Person in any Subsidiary of such Person.
“Solvent” means, (a) with respect to an Australian Co-Obligor and any Subsidiary incorporated in Australia, that entity is, on an individual basis, solvent for the purposes of s. 95A(1) of the Australian Corporations Act, and (b) with respect to any other Person on a particular date, that on such date (i) at fair market value, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (ii) the present fair saleable value of the properties and assets of such Person is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its properties and assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature and (v) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged.
“Specified Existing Debt” means the means the indebtedness set forth in Section 5.b. of the Perfection Certificate, other than [***].
“Subordination Agreement” has the definition set forth for such term in the definition of “Subordinated Debt” below.
“Subordinated Debt” means debt incurred by Issuer or any other Co-Obligor the terms and conditions of which are acceptable to Servicer and do not provide for cash payments of principal or interest during the term thereof, none of the principal of which is payable until at least 180 days after the termination of this Agreement and that is subordinated to the Secured Obligations in a written subordination agreement (which may be in the form of subordination provisions included in any related note purchase agreement and notes) in favor of Servicer and/or the Disbursing Agent, in each case on terms and in form and substance acceptable to Servicer (and identified as being such by Issuer or such Co-Obligor and Servicer) (each, a “Subordination Agreement”).
“Subsidiary” means any corporation, company or partnership in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors, managers, trustees or other governing body of the entity, at the time as of which any determination is being made, is owned, by Issuer and/or any other Co-Obligor, either directly or through an Affiliate or Affiliates.
“Tax” or “Taxes” means all present or future taxes (including any consumption tax, goods and services tax and value added tax), levies, imposts, duties (including stamp duty, financial institutions duty, transaction duty and bank account debit tax), deductions, withholdings (including backup withholding), assessments, fees or other charges assessed, levied, imposed or collected by any governmental authority, including any interest, additions to tax or penalties applicable thereto.
“Tax Act” means the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953 (Cth), as the context requires.
“Tax Consolidated Group” means a “consolidated group” or a “MEC group” as defined in the Tax Act.
“Tax Deduction” shall mean a deduction or withholding (to the extent permitted by law) for or on account of Tax from a payment under a Transaction Document or any of the Series 2023-A Notes.
“Tax Funding Agreement” means a tax funding agreement between the members of a Tax Consolidated Group, which includes:
(a) reasonably appropriate arrangements for the funding by members of the Tax Consolidated Group of Group Tax Liabilities payable by the Head Company having regard to the stand alone tax position of each member of the Tax Consolidated Group;
(b) an undertaking from the Head Company of the Tax Consolidated Group to compensate each other member of the Tax Consolidated Group adequately for the use by the Head Company of Tax attributes (including tax losses and tax offsets) generated by that member; and
(c) an undertaking from the Head Company to pay all Group Tax Liabilities of the Tax Consolidated Group.
“Tax Sharing Agreement” means an agreement of the type contemplated by section 721 25 of the Tax Act and which has the effect that each Group Tax Liability is covered by the agreement within the meaning of that section.
“Term Advance” is defined in Section 2.1(a) below.
“Term Advance Maturity Date” means May 1, 2027.
“Term Advance Payment” is defined in Section 2.1(d) below.
“[***]” is [***].
“TRCA SPAC Transaction” means the transaction under which Carbon Revolution Limited (Irish Registered number 607450) will directly or indirectly acquire both Carbon Revolution Limited and Twin Ridge Capital Acquisition Corp.
“Trademarks” means, with respect to any Person, (a) any and all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, common law marks, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter acquired, whether registered or unregistered, applications to register and registrations of the same and like protections, (b) all goodwill of the business of such Person connected with and symbolized by the foregoing, (c) all other assets, rights and interests that uniquely reflect or embody such goodwill, (d) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including damages or payments for past or future infringements for any of the foregoing, (e) the right to sue for past, present, and future infringements of any of the foregoing, and (f) all rights corresponding or equivalent to any of the foregoing anywhere in the world.
“Transfer” is defined in Section 7.1 below.
“Trustee” has the meaning specified in the introductory paragraph hereto.
“Trust Indenture” means that certain Trust Indenture of even date herewith, by and between Issuer, as “Issuer,” and Disbursing Agent, as “Trustee,” pursuant to which certain Note Purchasers (as defined therein) will purchase the Series 2023-A Notes, all as more particularly described, and subject to the terms and conditions therein.
“Trust Transaction Documents” mean the Series 2023-A Notes, Trust Indenture, Placement Agreement (as such term is defined in the Trust Indenture), Servicing Agreement and any other agreement entered into by Issuer or any other Co-Obligor pursuant or in connection with the foregoing documents and any other document, certificate or other writing executed or delivered by Issuer or any other Co-Obligor pursuant to the Trust Indenture or any of the foregoing, in each case as amended, modified or supplemented from time to time; provided that for the avoidance of doubt, “Trust Transaction Documents” shall not include Disbursement Documents.
“Unrestricted Cash” means, as of any date, unrestricted cash and cash equivalents owned by the Issuer and its Subsidiaries that are not, and are not presently required under the terms of any agreement or other arrangement binding on the Issuer or its Subsidiaries on such date to be, (a) pledged to or held in one or more accounts under the control of one or more creditors of the Issuer or its Subsidiaries or (b) otherwise segregated from the general assets of the Issuer and its Subsidiaries, in one or more special accounts or otherwise, for the purpose of securing or providing a source of payment for indebtedness or other obligations that are or from time to time may be owed to one or more creditors of the Issuer or its Subsidiaries. It is agreed that cash and cash equivalents held in ordinary deposit or security accounts and not subject to any existing or contingent restrictions on transfer by the Issuer or its Subsidiaries will not be excluded from Unrestricted Cash by reason of setoff rights or other Liens created by law or by applicable account agreements in favor of the depositary institutions or security intermediaries. [***]
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.2 Accounting Terms and Currency Translation. All accounting terms not specifically defined herein shall be construed in accordance with IFRS and all calculations made hereunder shall be made in accordance with IFRS. When used herein, the terms “financial statements” shall include the notes and schedules thereto.
1.3 Australian Terms. In this Agreement, where it relates to a person or entity incorporated or established under the laws of Australia and including, for the avoidance of doubt, the Australian Co-Obligors, a reference to (a) a person being insolvent means such person being insolvent within the meaning of section 95A of the Australian Corporations Act, (b) a lien or security interest includes any “security interest” as defined in sections 12(1) or (2) of the Australian PPSA and (c) a deposit account includes an “ADI Account” as defined in section 10 of the Australian PPSA.
1.4 Australian PPSA Provisions. Where the Security Trustee has a “security interest” (as defined in section 12(1) and 12(2) the Australian PPSA) under any Finance Document, to the extent the law permits
(i) for the purposes of sections 115(1) and 115(7) of the Australian PPSA: (A) the Security Trustee with the benefit of the security interest need not comply with sections 95, 118, 121(4), 125, 130, 132(3)(d) or 132(4) of the Australian PPSA; and (B) sections 142 and 143 of the Australian PPSA are excluded; (ii) for the purposes of section 115(7) of the Australian PPSA, the Security Trustee with the benefit of the security interest need not comply with sections 132 and 137(3); (iii) each party to this Agreement waives its right to receive from the Security Trustee any notice required under the Australian PPSA (including a notice of a verification statement); and (iv) if the collateral agent with the benefit of a security interest exercises a right, power or remedy in connection with it, that exercise is taken not to be an exercise of a right, power or remedy under the Australian PPSA unless the Security Trustee states otherwise at the time of exercise (however, this clause does not apply to a right, power or remedy which can only be exercised under the Australian PPSA). This does not affect any rights a person has or would have other than by reason of the Australian PPSA and applies despite any other clause in any Finance Document.
1.5 Australian Code of Banking Practice. The parties hereto agree that Code of Banking Practice published by the Australian Banking Association (as amended, revised or amended and restated from time to time) does not apply to the Finance Documents or the transactions under them.
2. TERMS OF PAYMENT.
2.1 Term Advance.
(a) Term Advance. Subject to the terms and conditions of this Agreement, Disbursing Agent shall disburse to Issuer on the Closing Date, or as soon thereafter as practical, the proceeds of the Series 2023-A Notes issued under the Trust Indenture, in an aggregate amount of Sixty Million Dollars ($60,000,000) (such advance, the “Term Advance”).
(b) Repayments to Disbursing Agent in Satisfaction of Obligation to Noteholders. Issuer promises to pay to the order of Disbursing Agent, in lawful money of the United States of America, the aggregate unpaid principal amount of the Term Advance disbursed by Disbursing Agent to Issuer hereunder. Issuer shall also pay interest on the unpaid principal amount of the Term Advance at rates and at times in accordance with the terms hereof. Notwithstanding anything to the contrary contained herein or in any other Finance Document, Issuer’s promise to pay to the order of Disbursing Agent the aggregate unpaid principal amount of the Term Advance and interest on the unpaid principal amount of the Term Advance shall not give rise to an obligation of Issuer to that is separate to its obligation to pay principal and interest on the Series 2023-A Notes. At all times, Issuer’s payment of the aggregate unpaid principal amount of the Term Advance and interest on the unpaid principal amount of the Term Advance is to be construed solely as the whole or partial satisfaction of Issuer’s obligation to make payments of principal and interest to the Noteholders.
(c) Relationship with Series 2023-A Notes. Notwithstanding any provision to the contrary contained herein or in any Finance Document, the Term Advance shall be deemed to be repaid or prepaid to the same extent, in the same amounts and at the same times, as the Series 2023-A Notes are redeemed with funds provided by the Issuer, and/or amounts from the Expense Fund (as defined in the Trust Indenture) supplied by the Issuer and/or the “Trust Estate” (as defined in the Trust Indenture) (but not to the extent repaid or prepaid with the proceeds of the Insurance Policy, or other payment by the Insurer), applied, under and in accordance with the Trust Indenture to the payment of the Series 2023-A Notes, and to the extent that funds sufficient to pay the Series 2023-A Notes in full have been irrevocably deposited by the Issuer with the Trustee (but not to the extent repaid or prepaid with the proceeds of the Insurance Policy, or other payment by the Insurer), the corresponding liability of Issuer to Disbursing Agent for the payment of the Term Advance will forthwith cease, be satisfied and be completely discharged. For the avoidance of doubt, it is understood that, notwithstanding the foregoing, (i) any Secured Obligations (or any other obligations owed to Servicer, Disbursing Agent or Insurer by the Issuer under the Finance Documents not included within the Secured Obligations) not so paid shall remain outstanding and this Agreement and any other Finance Documents shall remain and be in full force and effect, (ii) no portion of the Term Advance shall be deemed to be repaid to the extent that the Series 2023-A Notes are redeemed or paid from the proceeds of the Insurance Policy, and in such event the outstanding Term Advance and all other Secured Obligations and this Agreement and any other Finance Documents shall be deemed to remain outstanding and shall remain and be in full force and effect and (iii) the foregoing shall not impair the Reimbursement Obligation of the Issuer under the Disbursement Documents.
(d) Repayment. Subject to Sections 2.1(b) and 2.1(c) above, with respect to the Term Advance, Issuer shall make interest only payments on the unpaid principal amount of the Term Advance in arrears, commencing on the first (1st) day of each month beginning June 1, 2023 (for interest accruing from the Closing Date through May 31, 2023) and ending on November 30, 2024. Beginning on December 1, 2024, Issuer shall repay the Term Advance in thirty (30) equal installments of principal in the amount of $2,000,000.00, plus accrued interest on the unpaid principal amount of the Term Advance (each a “Term Advance Payment”), in each case payable on the first (1st) day of each month ending on Term Advance Maturity Date. All remaining Obligations (including, without limitation, outstanding principal of, and accrued and unpaid interest on, the Term Advance) outstanding after the final Term Advance Payment (if any), shall be due and payable on the Term Advance Maturity Date. The Term Advance (or any portion thereof), once prepaid or repaid, may not be reborrowed.
(e) Prepayment. Subject to Sections 2.1(b) and 2.1(c) above:
(i) Voluntary Prepayment. Issuer shall have the option, but only after November 23, 2023 (the “Non-Call Period”), to prepay all or any part of the Term Advance disbursed by Disbursing Agent under this Agreement, without premium or penalty, provided that Issuer (A) delivers written notice to Disbursing Agent and Servicer of its election to prepay the Term Advance (and the principal amount of the prepayment) at least twenty (20) days prior to such prepayment and (B) pays, on the date of such prepayment, (a) the outstanding principal to be prepaid with respect to the Term Advance, plus any accrued but unpaid interest thereon, plus (b) all other outstanding Obligations, including Disbursing Agent and Related Expenses, if any, that shall have become due and payable hereunder. Any principal prepayments of the Term Advance shall be applied pro rata to the remaining scheduled installments of the Term Advance. The Issuer may revoke the notice delivered under clause (A) hereof by providing written notice to the Trustee of such revocation at least three (3) Business Days prior to such prepayment date as further set forth in Sections 4.07 and 4.08 of the Trust Indenture.
(ii) Mandatory Prepayment Upon an Acceleration. If the Term Advance is accelerated following the occurrence and continuance of an Event of Default or otherwise in accordance with this Agreement, Issuer shall immediately pay to Disbursing Agent an amount equal to the sum of (x) all outstanding principal of the Term Advance, plus all accrued but unpaid interest thereon, plus (y) all other Obligations, including Disbursing Agent and Related Expenses, including interest at the Default Rate with respect to any past due amounts.
(iii) [***]. [***]
(f) Insurance Reimbursement. Notwithstanding the forgoing, or anything to the contrary contained herein or in any other Finance Document, Issuer and each other Co-Obligor shall be obligated to reimburse the Insurer for any payment made by the Insurer under the Insurance Policy (the “Reimbursement Obligation”). The Co-Obligors’ Reimbursement Obligation shall be absolute and unconditional, without regard to (i) the genuineness, validity, regularity, discharge, release or enforceability of any instrument or document evidencing any of the Secured Obligations or the Reimbursement Obligation, or any other collateral security therefor or right of offset with respect thereto at any time or from time to time held by the Servicer or Disbursing Agent (or the Insurer), (ii) any defense, set-off or counterclaim which may at any time be available to or be asserted by any Co-Obligor or any other Person against the Servicer, Disbursing Agent, Trustee, any Noteholder (as defined in the Trust Indenture), the Insurer or any other Person, (iii) whether any or all Secured Obligations or the Reimbursement Obligation, at any particular time, shall have been paid in full, or (iv) any other circumstance whatsoever (with or without notice to or knowledge of any of the Co-Obligors) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Co-Obligors for any of the Secured Obligations or the Reimbursement Obligation, in bankruptcy or in any other instance.
2.2 Interest Rates, Payments, and Calculations.
(a) Interest Rate. The interest rate on the Term Advance shall be the same as the interest rate under the Series 2023-A Notes and shall be calculated by reference to the Series 2023-A Notes.
(b) Late Fee; Default Rate; Covenant Breach Payment. If any payment of any of the Obligations is not made when due, Issuer shall immediately pay for each payment not made when due a late fee (“Late Fee”) (in addition to any other amounts payable in connection with such late payment) [***] for each such payment not made when due. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable to the Series 2023-A Notes immediately prior to the occurrence of an Event of Default (the “Default Rate”). Any and all Late Fees, and interest (including any interest paid at the Default Rate) shall be nonrefundable. Any Late Fee, and the portion of any interest payable at Default Rate that is above the amount of the interest payable at the interest rate applicable immediately prior to the occurrence and during the continuance of an Event of Default shall be paid directly to Servicer or if paid to or collected by the Disbursing Agent shall be for the sole benefit of Servicer and shall be immediately remitted to Servicer. [***]
In addition, the Issuer shall pay, promptly upon demand therefor, any costs and expenses (including legal fees and expenses) incurred by or on behalf of Servicer incurred in connection with such Event of Default.
(c) Payments. Interest on each Term Advance shall be due and payable in arrears, on the first (1st) calendar day of each month during the term hereof, commencing with the first such day of the first full month to occur after the date of such Term Advance. Any payment of interest under the Term Advance will be taken to be a payment of interest under the Series 2023-A Notes. Servicer may, at its option, charge any or all Disbursing Agent and Related Expenses, other Obligations and Late Fees against Issuer’s deposit accounts, all as provided in the Trust Indenture. All payments shall be subject to Sections 2.6 and 2.7 below.
(d) Computation. All interest chargeable under the Disbursement Documents shall be computed on the basis of a three-hundred-sixty (360) day year consisting of twelve (12) months of thirty (30) days for the actual number of days elapsed.
(e) Debit of Accounts. In connection with the Servicer’s exercise of remedies hereunder after the occurrence and during the continuance of an Event of Default, the Servicer is authorized by Issuer and each other Co-Obligor to give notice of sole control or any other instruction under any Control Agreement.
2.3 Crediting Payments. Prior to the occurrence of an Event of Default, Disbursing Agent shall credit a wire transfer of funds, check or other item of payment to such account held by the Disbursing Agent, as Trustee, under the Trust Indenture, as Issuer specifies. After the occurrence of an Event of Default, the receipt by Disbursing Agent of any wire transfer of funds, check, or other item of payment shall be deposited with the Disbursing Agent, as Trustee under the Trust Indenture, for application in accordance with the Trust Indenture. In no event shall any item be considered a payment on account unless and until such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Disbursing Agent after 12:00 noon Pacific time shall be deemed to have been received by Disbursing Agent as of the opening of business on the immediately following Business Day. Whenever any payment to Disbursing Agent under the Finance Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.
2.4 Fees. Issuer shall pay to Servicer (for the account of the respective recipient thereof), the amounts set forth in the Fee Letter and the amounts set forth on the Disbursement Letter that are being paid on the Closing Date) and any and all Disbursing Agent and Related Expenses incurred through the Closing Date, and, after the Closing Date, all Disbursing Agent and Related Expenses, as and when they are incurred by Disbursing Agent or Servicer.
2.5 Term. This Agreement shall become effective on the Closing Date and, subject to Section 13.7 below, shall continue in full force and effect for so long as (i) any Secured Obligations (other than contingent indemnification obligations for which no claim has been made) remain outstanding and have not been Paid in Full, and/or (ii) the Disbursing Agent has any obligation to disburse the Term Advance under this Agreement. Notwithstanding the foregoing, the Disbursing Agent shall have the right to terminate its obligation to make the Term Advance under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default. Notwithstanding termination of this Agreement, Servicer’s Lien on the Collateral and each Australian Security Document shall remain in effect for so long as any Obligations are outstanding (other than contingent indemnification obligations for which no claim has been made).
2.6 Tax gross-up.
(a) Each Co-Obligor shall make all payments to be made by it under the Transaction Documents or the Notes without any Tax Deduction, unless a Tax Deduction is required by law.
(b) If a Tax Deduction is required by law to be made by a Co-Obligor except in relation to an Excluded Tax, such Co-Obligor shall pay an additional amount together with the payment so that, after making any Tax Deduction, the Finance Party receives an amount equal to the payment which would have been received if no Tax Deduction had been required.
(c) If a Co-Obligor is required to make a Tax Deduction, the Co-Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(d) The Co-Obligor shall, promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Disbursing Agent accordingly. If the Disbursing Agent receives such notification from the Co-Obligor, it shall notify the Finance Party.
(e) Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Co-Obligor shall deliver to the Finance Party entitled to the payment evidence satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
2.7 Tax indemnity.
(a) The Co-Obligors shall (within 5 Business Days of demand by a Finance Party) pay an amount equal to the loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly) incurred or suffered for or on account of Tax by that Finance Party in respect of a Finance Document or the Notes or a transaction or payment under a Finance Document or the Notes, except to the extent that the loss, liability or cost has been compensated for by the payment of an additional amount under Section 2.6, and other than an Excluded Tax.
(b) A Finance Party making, or intending to make, a claim pursuant to clause (a) above shall promptly notify the Co-Obligors of the event which will give, or has given, rise to the claim.
2.8 Deed poll.
The laws of New South Wales govern Section 2.6, 2.7 and this Section 2.8 which are executed as a deed poll in favor of Finance Parties from time to time. The Finance Parties accept the benefit of this deed poll.
3. CONDITIONS OF DISBURSEMENTS OF PROCEEDS.
3.1 Conditions Precedent to Term Advance. The obligation of Disbursing Agent to disburse the proceeds of the Series 2023-A Notes to Issuer is subject to the condition precedent that Servicer shall have received, in form and substance satisfactory to Servicer, the following:
(a) this Agreement duly executed by the parties hereto;
(b) a certificate of the Secretary (or other Responsible Officer) of Issuer and any other Co-Obligors in the form of Exhibit E attached hereto, (or, in respect of an Australian Co-Obligor, a verification certificate), attaching and certifying to (i) the Issuer’s and any other Co-Obligors’ certificate of formation, articles of incorporation (or other applicable formation document), (ii) the Issuer’s and any other Co-Obligors’ Bylaws, Operating Agreement (or other governing document), (iii) good standing and foreign qualification certificates (with respect to each jurisdiction where failure to be foreign qualified could reasonably be expected to have a Material Adverse Effect), (iv) incumbency, (v) resolutions of the appropriate governing bodies (or, in respect of an Australian Co-Obligor, an extract thereof) authorizing the execution and delivery and performance of this Agreement and the other Finance Documents by the Co-Obligors, and (vi) in respect of an Australian Co-Obligor, a certificate of the Responsible Officer of that Australian Co-Obligor confirming that (a) it is solvent for the purposes of section 95A of the Australian Corporations Act and there are no grounds for suspecting that it will not continue to be so after executing and complying with its obligations under the Finance Documents to which it is (or will become) a party; (b) its entry into the Finance Documents to which it is a party and its granting of the Australian Security Documents to which it is expressed to be a party has been, if applicable, approved in compliance with the provisions of Part 2J.3 of the Australian Corporations Act (including compliance with the timing and notice requirements under section 260B); and (c) it has complied with the provisions of Chapter 2E or Part 2J.3 of the Australian Corporations Act in connection with its entry into and performance of any of its obligations under the Finance Documents to which it is (or will become) a party;
(c) a UCC-1 Financing Statement with respect to the Issuer and any other Co-Obligor;
(d) an Intellectual Property Security Agreement and short form intellectual property security agreement, each duly executed by the parties thereto;
(e) the Australian Security Documents;
(f) [***], evidence in form satisfactory to Servicer that Parent Company owns all registered intellectual property of the Co-Obligors’ and a license agreement granting the use of such registered intellectual property from Parent Company to the Issuer in form satisfactory to Servicer;
(g) subject to Section 3.3 below, evidence of insurance pursuant to Section 6.6 below, and the duly executed Insurance Authorization Letter attached hereto as Exhibit D;
(h) payment of the fees and Disbursing Agent and Related Expenses then due specified in Section 2.5 above;
(i) the consolidated and consolidating annual financial statements of Issuer and its Subsidiaries for the period ending June 30, 2022;
(j) if any Shares representing Collateral are evidenced by certificates, the certificate(s) representing such Shares, together with stock powers (or, in the case of an Australian company, share transfer form) with respect thereto, duly executed in blank;
(k) a duly executed and properly completed Perfection Certificate with respect to the Issuer, any other Co-Obligor and their Subsidiaries on the Closing Date;
(l) a binder evidencing coverage contemplated under the Insurance Policy, fully executed by all parties thereto and in full force and effect;
(m) the Disbursement Monitoring Agreement, duly executed by all parties thereto;
(n) the Servicing Agreement, duly executed by all parties thereto;
(o) the Trust Indenture and the other Trust Transaction Documents, duly executed by all parties thereto;
(p) a legal opinion of the Co-Obligors’ counsel (including local New York counsel and local Australian counsel), covering matters reasonably requested by the Servicer, in form and substance satisfactory to the Servicer;
(q) an executed payoff letter (or letters) with respect to the Specified Existing Debt, in form and substance satisfactory to the Servicer, together with such other financing statement terminations, notices of termination and releases, requested by the Servicer, held in escrow;
(r) a Right of Entry Deed with respect to (i) the Issuer’s chief executive office located at 75 Pigdons Road, Waurn Ponds, Victoria 3216 Australia, and (ii) each other location where Issuer or any Co-Obligor maintains Collateral having a book value in excess of [***], in each case, duly executed by the Issuer and the landlord in favor of the Servicer, in form and substance satisfactory to the Servicer;
(s) no payment default shall have occurred and be continuing under the Specified Existing Debt;
(t) The Co-Obligors shall have identified at least two (2) Persons who have significant automotive experience and which are reasonably acceptable to Servicer that will be added to the Parent Company’s Board of Directors upon consummation of the TRCA SPAC Transaction; and
(u) such other documents, and completion of such other matters (including diligence matters), as Disbursing Agent or Servicer may reasonably deem necessary or appropriate.
3.2 Additional Conditions Precedent to Term Advances. The obligation of Disbursing Agent to disburse the proceeds of the Series 2023-A Notes to Issuer is further subject to the following conditions:
(a) timely receipt by Disbursing Agent of the Disbursement Letter duly executed by the parties thereto;
(b) the absence of any circumstance or circumstances that could reasonably be expected to have a Material Adverse Effect;
(c) the representations and warranties contained in Section 5 below, or which are contained in any other document furnished at any time under or in connection herewith or therewith shall be true and correct in all material respects (provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects) on and as of the date of such Disbursement Letter and on the effective date of each Term Advance as though made at and as of each such date (provided, that those representations and warranties expressly referring to a specific date shall be true and correct in all material respects (or in all respects, if such representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language) as of such date), and no Event of Default shall have occurred and be continuing, or would exist after giving effect to the making of the Term Advance; and
(d) the making of any Term Advance shall be deemed to be a representation and warranty by Issuer and each other Co-Obligor as to the accuracy of the facts and matters referred to in this Section 3.2 on the date of such Term Advance.
3.3 Conditions Subsequent.
(a) Within one (1) Business Day after the Closing Date, the Issuer shall have delivered to the Servicer evidence in form and substance to its satisfaction of the payoff of the Specified Existing Debt and the release of all Liens in connection therewith.
(b) Within thirty (30) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall have delivered to the Servicer all Control Agreements duly executed by the parties thereto (or such other financial institutions reasonably acceptable to Servicer) in respect of all deposit or securities accounts, other than Excluded Accounts, required to be delivered pursuant to Section 6.7(a) hereof.
(c) Within thirty (30) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall have delivered to the Servicer all insurance endorsements required to be delivered pursuant to Section 6.6 hereof.
(d) Within thirty (30) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Co-Obligors shall have delivered to the Servicer [***].
(e) Within sixty (60) days after the Closing Date (or such later date as the Servicer may agree in its reasonable judgment), the Issuer shall use best efforts to deliver evidence to Servicer to its satisfaction (unless otherwise agreed) that the Issuer has recorded the Servicer’s first priority security interest in all registered Intellectual Property Collateral of the Issuer and/or Carbon Revolution Limited on the relevant intellectual property registers in each jurisdiction of registration
(f) Within ninety (90) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall have delivered to Servicer evidence to its satisfaction of the dissolution of Carbon Revolution (UK) Limited.
(g) Within ninety (90) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall obtain the approval of the [***], and thereafter promptly deliver evidence of the same to Servicer, for the grant of security over [***].
(h) The Co-Obligors shall utilize (to the Servicer’s satisfaction) the Intellectual Property Collateral in connection with [***] no later than [***], with the exception of any Intellectual Property Collateral that the Issuer and the Servicer agree is of immaterial value.
(i) The Co-Obligors shall use reasonable best efforts to obtain the approval of [***], and thereafter promptly deliver evidence of the same to Servicer, for the grant of security over [***].
The failure to deliver any of the foregoing within any time set forth above (or such later time as Servicer may extend such times in writing) shall be deemed to constitute an immediate Event of Default under this Agreement.
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest.
(a) Each of Issuer and each other Co-Obligor hereby pledges, assigns and grants to Servicer in its capacity as Security Trustee (and its successors and permitted assigns), for the benefit of the Security Beneficiaries including not limited to the Disbursing Agent, a continuing security interest in all of its right, title and interest in, to and under the Collateral, whether presently existing or hereafter acquired or arising, and regardless of where located, in order to secure prompt payment and performance of any and all Obligations and in order to secure prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants, obligations and duties under the Disbursement Documents.
(b) Each of Issuer and each other Co-Obligor also hereby pledges, assigns and grants to Servicer in its capacity as Security Trustee (and its successors and permitted assigns), for the benefit of the Security Beneficiaries including not limited to the Trustee under the Trust Indenture, a continuing security interest in all of its right, title and interest in, to and under the Collateral, whether presently existing or hereafter acquired or arising in order to secure prompt repayment of any and all obligations of Issuer and each Co-Obligor under the Trust Transaction Documents and in order to secure prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants and duties under the Trust Transaction Documents.
(c) Each of Issuer and each other Co-Obligor also hereby pledges, assigns and grants to Servicer in its capacity as Security Trustee (and its successors and permitted assigns) for the benefit of the Security Beneficiaries including not limited to (x) the Servicer for its own benefit and (y) the Insurer, a continuing security interest in all of its right, title and interest in, to and under the Collateral, whether presently existing or hereafter acquired or arising, and regardless of where located, in order to secure prompt payment and performance of any and all Obligations owing to the Servicer and/or the Insurer (including without limitation the Reimbursement Obligation), and in order to secure prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants, obligations and duties with or to the Servicer and/or the Insurer under the Disbursement Documents.
Such security interests constitute valid, perfected, first priority (subject to Permitted Liens) security interests in the presently existing Collateral, and will constitute valid, perfected, first priority (subject to Permitted Liens) security interests in Collateral acquired after the date hereof.
4.2 Delivery of Additional Documentation Required. Issuer and each other Co-Obligor shall from time to time execute and deliver to Servicer, for the benefit Disbursing Agent, at the request of Servicer or Disbursing Agent, all Negotiable Collateral, all financing statements and other documents (including with respect to any Commercial Tort Claim) that Servicer or Disbursing Agent may reasonably request, in form reasonably satisfactory to Servicer, to perfect and continue the perfection of Servicer’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Finance Documents.
4.3 Right to Inspect. Servicer (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Issuer’s usual business hours to inspect Issuer’s and each other Co-Obligor’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify Issuer’s and the other Co-Obligors’ financial condition or the amount, condition of, or any other matter relating to, the Collateral.
4.4 Pledge of Collateral.
(a) Each of Issuer and each other Co-Obligor hereby pledges and grants to Servicer in its capacity as Security Trustee (and its successors and permitted assigns), for the benefit of the Security Beneficiaries including not limited to the Disbursing Agent, a security interest in all Shares owned by it (or held of record), if any, together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the prompt payment and performance of any and all of the Obligations and the prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants and duties under the Disbursement Documents.
(b) Each of Issuer and each other Co-Obligor also pledges and grants to Servicer in its capacity as Security Trustee, (and its successors and permitted assigns), as collateral agent for the benefit of the Security Beneficiaries including not limited to the Trustee under the Trust Indenture, a security interest in all Shares owned by it (or held of record), if any, together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the prompt payment of the obligations of Issuer and each other Co-Obligor under the Trust Transaction Documents and the prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants and duties under the Trust Transaction Documents.
(c) Each of Issuer and each other Co-Obligor hereby pledges and grants to Servicer in its capacity as Security Trustee (and its successors and permitted assigns) for the benefit of the Security Beneficiaries including not limited to (x) the Servicer for its own benefit and (y) the Insurer, a security interest in all Shares owned by it (or held of record), if any, together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the prompt payment and performance of any and all of the Obligations owing to Servicer and/or the Insurer (including, without limitation, the Reimbursement Obligation) and the prompt performance by Issuer and each other Co-Obligor of each of their agreements, covenants and duties with or to Servicer and/or the Insurer under the Disbursement Documents.
On the Closing Date, or, to the extent not certificated as of the Closing Date or acquired after the Closing Date, within ten (10) days of the certification or acquisition of any Shares owned by Issuer or any Co-Obligor, the certificate or certificates for the Shares (if any) will be delivered to Servicer, accompanied by stock power (or, in the case of an Australian company, share transfer form) duly executed in blank by the applicable Co-Obligor. To the extent required by the terms and conditions governing any such Shares, the applicable Co-Obligor shall cause the books of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder, Servicer may effect the transfer of any securities included in the Collateral (including but not limited to any Shares) into the name of Servicer, for the benefit of Disbursing Agent and/or as the collateral agent for the benefit of the Trustee, the Disbursing Agent and/or the Trustee and cause new (as applicable) certificates representing such securities to be issued in the name of Servicer, Disbursing Agent, Trustee or their respective transferees. Issuer and each other Co-Obligor will execute and deliver such documents, and take or cause to be taken such actions, as Servicer may reasonably request from time to time to maintain the attachment perfection and first priority (subject to Permitted Liens), and the ability of Servicer to enforce, the Servicer’s security interest in the Shares. Unless an Event of Default shall have occurred and be continuing, Issuer or such other Co-Obligor shall be entitled to exercise any voting rights with respect to such Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the terms of this Agreement or any other Finance Documents or which would constitute or create any violation of any of such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of Default.
4.5 Updates to Perfection Certificate; Collateral Searches. Not later than thirty (30) days after March 31st, June 30th, September 30th and December 31st of each year, commencing with June 30, 2023 the Co-Obligors shall deliver to Servicer an updated Perfection Certificate, with the information required therein updated through such date. Issuer and each other Co-Obligor acknowledges that Servicer may undertake collateral and other searches from time to time with respect to Issuer and the other Co-Obligors and their assets. The Issuer and the other Co-Obligors agree to pay the reasonable fees and expenses of Servicer in connection with such searches.
4.6 Additional Actions. Each of the Issuer and each other Co-Obligor shall take or cause to be taken all such action that Servicer may reasonably request from time to time so as to at all times maintain the attachment, perfection and first priority (subject to Permitted Liens) of, and the ability of Servicer to enforce, the security interest of Servicer in any and all of the Collateral, including at Servicer’s reasonable request, (i) executing, delivering and filing financing statements and amendments relating thereto under the Code or other law (executing such financing statements to the extent, if any, that such Person’s signature thereon is required thereon by law), (ii) complying with any provision of any statute, regulation or treaty if compliance with such provision is a condition to attachment, perfection or priority of, or the ability of Servicer to enforce, the security interest of Servicer in such Collateral, (iii) using Issuer’s and Co-Obligor’s commercial reasonable efforts to obtain the consents and approvals of any Person required or desirable in connection therewith, including any consent of any licensor, lessor or other Person with respect to the Collateral, and (iv) taking all actions required by the Code or other applicable law. Issuer and each other Co-Obligor hereby authorizes Servicer to file against Issuer and each other Co-Obligor, one or more financing, continuation or amendment statements pursuant to the Code and in form and substance satisfactory to Servicer (which statements may have a description of collateral which is broader than that set forth herein, including a description of Collateral as “all assets” and/or “all personal property” of Issuer or any Co-Obligor) and the Servicer is further authorized to file with the United States Patent and Trademark Office (the “USPTO”) and/or the United States Copyright Office (the “USCO”) and/or any other patent-granting, copyright-registration or trademark-registration authorities (or similar office or agency) anywhere in the world, such documents as may be reasonably necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted to the Servicer, hereunder.
4.7 Appointment of Servicer as Security Trustee for the Australian Security Documents
(a) In this Agreement, any rights and remedies exercisable by, any documents to be delivered to, or any other indemnities or obligations in favor of Servicer shall be, as the case may be, exercisable by, delivered to, or be indemnities or other obligations in favor of Servicer (or any other Person acting in such capacity) in its capacity as Security Trustee to the extent that the rights, remedies, deliveries, indemnities or other obligations relate to, the Security Beneficiaries, the Australian Security Documents or the security thereby created. Any obligations of Servicer (or any other Person acting in such capacity) in this Agreement shall be obligations of Servicer in its capacity as Security Trustee or the security thereby created to the extent that such obligations relate to the Australian Security Documents or the security thereby created. Additionally, in its capacity as Security Trustee, Servicer (or any other Person acting in such capacity) shall have: (i) all the rights, remedies and benefits in favor of the Servicer contained in the provisions of the whole of this Section 4.7; (ii) all the powers of an absolute owner of the security constituted by the Australian Security Documents; and (iii) all the rights, remedies and powers granted to it and be subject to all the obligations and duties owed by it under the Australian Security Documents.
(b) Each Security Beneficiary appoints the Security Trustee under the terms of the Security Trust Deed to act as its security trustee under and in relation to the Australian Security Documents and to hold the assets subject to the security thereby created as trustee for the Security Beneficiaries on trust and on the terms contained in the Australian Security Documents and Servicer and each Security Beneficiary authorizes the Security Trustee under the terms of the Security Trust Deed to exercise such rights, remedies, powers and discretions as are specifically delegated to Security Trustee by the terms of the Australian Security Documents together with all such rights, remedies, powers and discretions as are reasonably incidental thereto and Security Trustee accepts that appointment.
(c) On and from the date the Security Trust Deed is entered into, each Security Beneficiary hereby: (i) acknowledges that they are aware of, and consent to, the terms of the Security Trust Deed; (ii) agrees to comply with and be bound by the Security Trust Deed as a Security Beneficiary (as that term is defined in the Security Trust Deed); (iii) acknowledges that it has received a copy of the Security Trust Deed together with the other information which it has required in connection with the Security Trust Deed and this Agreement; and (iv) without limiting the general application of paragraph (a) above, for consideration received, irrevocably appoints as its attorney each person who under the terms of the Security Trust Deed is appointed an attorney of a Security Beneficiary (as defined in the Security Trust Deed) on the same terms and for the same purposes as contained in the Security Trust Deed.
(d) The Security Beneficiaries agree that at any time that the Security Trustee shall be a Person other than Servicer, such other Person shall have the rights, remedies, benefits and powers granted to the Servicer in its capacity as Security Trustee in this Agreement.
The laws of New South Wales govern this Section 4.7 which is executed as a deed poll in favor of the Security Trustee and the Security Beneficiaries from time to time. The Security Beneficiaries accept the benefit of this deed poll.
5. REPRESENTATIONS AND WARRANTIES.
Issuer and each other Co-Obligor jointly and severally represents and warrants to Disbursing Agent and Servicer as follows:
5.1 Due Organization and Qualification. Issuer and each other Co-Obligor is a corporation or limited liability company duly existing under the laws of its state of organization or formation, as applicable, and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
5.2 Due Authorization; No Conflict; Validity and Binding Nature. The execution, delivery, and performance of the Finance Documents to which any Issuer or other Co-Obligor is a party are within Issuer’s or such other Co-Obligor’s, as applicable, corporate (or equivalent) powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in such Person’s constituent or organizational documents, nor will they constitute an event of default under any material agreement to which such Person is a party or by which such Person is bound. Neither Issuer nor any other Co-Obligor is in default under any material agreement to which it is a party or by which it is bound. Each of this Agreement and each other Finance Document to which any Co-Obligor is a party is the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.
5.3 No Prior Encumbrances. Issuer and each other Co-Obligor has good and marketable title to its property (including the Collateral), free and clear of Liens, except for Permitted Liens.
5.4 Merchantable Inventory. All Inventory of Issuer and each other Co-Obligor is in all material respects of good and marketable quality, free from all material defects, except for such Inventory for which adequate reserves have been made.
5.5 Intellectual Property Collateral; Insurance Policy. Schedule I to the Perfection Certificate contains a true, correct and complete list of all of the Co-Obligors’ registered and material unregistered Intellectual Property Collateral as of the date of the most recently delivered Perfection Certificate. Issuer and each other Co-Obligor is the sole owner of its Intellectual Property Collateral. For the avoidance of doubt, for the purpose of this Section 5.5, the Issuer’s and each other Co-Obligor’s Intellectual Property Collateral excludes any and all right, title and interest of: (i) Issuer or any Co-Obligor rights as licensee to “off-the-shelf” software that is commercially available to the public and (ii) Intellectual Property Collateral jointly owned pursuant to that certain [***]; and (iii) Intellectual Property Collateral which was jointly developed and is jointly owned under any OEM vehicle programs to which [***]. [***], the Issuer and the Co-Obligors own or license or otherwise have the right to use all intellectual property used in the operation of their businesses as presently conducted. [***], the Intellectual Property Collateral of the Issuer and each other Co-Obligor is valid and enforceable, and no part of the Intellectual Property Collateral of Issuer, or any other Co-Obligor has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Intellectual Property Collateral of Issuer or any other Co-Obligor or any Subsidiary thereof, or manufacture, use or sale of any products or services thereunder, violates the rights of any third party, and to the Co-Obligor’s knowledge, the Co-Obligors’ and their Subsidiaries’ respective businesses as presently conducted do not infringe any intellectual property owned by any other person, in each case, except in each case as has been disclosed in writing by Issuer or such other Co-Obligor and approved by the Servicer, in its sole discretion. [***]. No event has occurred which permits or would permit after notice or passage of time or both, the revocation, suspension or termination of any of the Co-Obligor’s intellectual property (other than expiration pursuant to the applicable statutory term of the Co-Obligor’s registered intellectual property). Except as set forth in Section 4.d. of the Perfection Certificate, neither Issuer nor any other Co-Obligor is a party to, or bound by, any agreement that restricts the grant by such Issuer or such other Co-Obligor of a security interest in any of Issuer’s or any such other Co-Obligor’s rights under such agreement. The Issuer and each other Co-Obligor shall cooperate with the Servicer and the Disbursing Agent to cause the Insurance Policy to remain in full force and effect at all times (i) prior to the Payment in Full of the Obligations (other than contingent indemnification obligations for which no claim has been made) and/or (ii) that the Disbursing Agent or Trustee has any obligation to make any disbursements to Issuer under this Agreement or the Trust Indenture.
5.6 Name; Location of Chief Executive Office. Neither the Issuer nor any other Co-Obligor has done business under any name within the immediately preceding five year period other than as specified in the applicable Perfection Certificate. The chief executive office of Issuer and the chief executive office of each other Co-Obligor is set forth in its Perfection Certificate (or at such other location to which it may be changed in accordance with Section 7.2 below, and then set forth in its subsequent Perfection Certificate). All Inventory and material Equipment of Issuer and any other Co-Obligor is located only at the locations set forth in the applicable Perfection Certificate.
5.7 Litigation. Except as described in Section 6 of the applicable Perfection Certificate, there are no actions or proceedings pending or, to any Issuer Responsible Officer’s or any other Co-Obligor’s Responsible Officer’s knowledge, threatened in writing by or against Issuer or any other Co-Obligor before any court or administrative agency (a) involving amounts claimed against a Co-Obligor in an indefinite amount or in excess of [***] or (b) in which an adverse decision could reasonably be expected to have a Material Adverse Effect.
5.8 No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Issuer and any Subsidiary (which statements shall include any other Co-Obligors and their Subsidiaries) that Servicer has received from Issuer fairly present in all material respects Issuer’s, any other Co-Obligors’ and their Subsidiaries’ consolidated and consolidating financial condition as of the date thereof and Issuer, any other Co-Obligors’ and their Subsidiaries’ consolidated and consolidating results of operations and cash flows for the period then ended. There has not been a material adverse change in the consolidated or consolidating financial condition or the consolidated or consolidating results of operation or cash flows of Issuer, the other Co-Obligors and their Subsidiaries since the date of the most recent of such financial statements delivered to Servicer. There has been no Material Adverse Effect since December 31, 2022. The Co-Obligors and their Subsidiaries are not subject to any contingent liability except as disclosed in such consolidated and consolidating financial statements delivered to the Servicer.
5.9 Solvency, Payment of Debts. Issuer and each other Co-Obligor is Solvent and able to pay its debts (including trade debts) as they mature.
5.10 Regulatory Compliance. To the extent applicable, Issuer and each other Co-Obligor and each of their Subsidiaries has met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has occurred resulting from Issuer’s any other Co-Obligor’s failure to comply with ERISA that could reasonably be expected to result in Issuer or any other Co-Obligor incurring any material liability. Neither Issuer nor any other Co-Obligor is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Neither Issuer nor any other Co-Obligor is engaged principally, or as one of the important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System). Issuer and each other Co-Obligor has complied with all the provisions of the Federal Fair Labor Standards Act and the Foreign Corrupt Practices Act (or any other applicable anti-corruption law). Neither Issuer nor any other Co-Obligor has violated any statute, law, ordinance or rule applicable to it, violation of which has or is likely to have a Material Adverse Effect.
None of Issuer nor any other Co-Obligor, nor any Subsidiary or Affiliate thereof, nor any of their agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement or the other Finance Documents is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of Issuer nor any other Co-Obligor nor, to the knowledge of any Co-Obligor, any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement or the Finance Documents, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.
5.11 Environmental Condition. Except as disclosed on Schedule 5.11 hereof, and approved by Servicer, in its reasonable discretion, none of Issuer’s nor any other Co-Obligor’s properties or assets has ever been used by Issuer or any such other Co-Obligor or, to the best knowledge of Issuer or such Co-Obligor, by any previous owner or operator, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance, other than in accordance with applicable law. None of any of Issuer’s or any other Co-Obligor’s properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute. No lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by Issuer or any other Co-Obligor; and neither Issuer or any other Co-Obligor has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning any action or omission by Issuer or any other Co-Obligor relating to the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment.
5.12 Taxes. Issuer and each other Co-Obligor has filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all material Taxes reflected therein; for purposes of this section, “material” means, individually or in the aggregate, in excess of [***].
5.13 Subsidiaries. Schedule 5.13 sets forth all Shares owned by the Issuer and/or any other Co-Obligor. Neither Issuer nor any other Co-Obligor owns Equity Interests of any Person, except for Equity Interests constituting Permitted Investments.
5.14 Government Consents. Issuer and each other Co-Obligor has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Issuer’s and such other Co-Obligor’s business, as currently conducted, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. All licenses and permits necessary for the continued operation of Issuer’s and each other Co-Obligor’s business are transferable, upon obtaining customary consents from governmental authorities that would not be reasonably expected to be withheld, and may be transferred to or by Servicer in connection with the exercise any of its remedies hereunder.
5.15 Accounts. Section 4.e. of the Perfection Certificate sets forth all of the Issuer’s and any other Co-Obligor’s deposit accounts, securities accounts and commodities accounts, and subject to Section 3.3(b), none of Issuer’s or any other Co-Obligor’s cash or Cash Equivalents is maintained or invested other than in accounts subject to Control Agreements in favor of Servicer, except to the extent permitted under Section 6.7 below.
5.16 Shares. The Issuer and each other Co-Obligor has full corporate power and authority to create a first lien on and grant a security interest to the Servicer in its capacity as Security Trustee (as set forth herein) in any and all Shares owned or held of record by it, and no contractual obligation exists that would prohibit Issuer or any other Co-Obligor from pledging such Shares (if any) pursuant to this Agreement, the other Finance Documents. There are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to, the Shares (if any) owned or held of record by the Issuer or any other Co-Obligor. The Shares (if any) owned or held of record by Issuer and each other Co-Obligor, and the Shares of each Co-Obligor have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To the knowledge of Issuer and each other Co-Obligor, the Shares (if any) owned or held by record by Issuer or any other Co-Obligor are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and neither Issuer nor any other Co-Obligor knows of any reasonable grounds for the institution of any such proceedings.
5.17 No Default. No Default or Event of Default exists or would result from the incurrence by any Co-Obligor of any Indebtedness (or other Secured Obligations) hereunder or under any other Finance Document.
5.18 Full Disclosure. No written representation, warranty or other statement of Issuer or any other Co-Obligor in this Agreement, any other Finance Document or in any certificate or written statement given to Disbursing Agent or Servicer, as of the date such representation, warranty, or other statement was made, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements, in light of the circumstances under which such statements were made, not misleading (it being recognized by Disbursing Agent and Servicer that the projections and forecasts provided by Issuer or any other Co-Obligor in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).
5.19 Perfected First Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 5.19 (which, in the case of all filings and other documents referred to on Schedule 5.19, have been delivered to Servicer in completed and duly executed form) will constitute valid perfected security interests in all of the Collateral in favor of Servicer in its capacity as Security Trustee for the benefit of the Security Beneficiaries including but not limited to the Disbursing Agent, Trustee, Servicer and the Insurer as collateral security for each Co-Obligor’s Secured Obligations, enforceable in accordance with the terms hereof against all creditors of each Co-Obligor and any Persons purporting to purchase any Collateral from each Co-Obligor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Permitted Liens for which priority is accorded under applicable law. The filings and other actions specified on Schedule 5.19 constitute all of the filings and other actions necessary to perfect all security interests granted hereunder.
5.20 Material Contracts. Neither Issuer nor any Co-Obligor is in default under or with respect to (i) any contract set forth in Section 4.d. of the Perfection Certificate, (ii) any other material contract to which it is a party, and any payments due from the Co-Obligors under any of the foregoing contracts have been timely paid and are not past due.
5.21 Labor Matters. [***]
5.22 Tax consolidation.
(a) Each Australian Co-Obligor is a member of a Tax Consolidated Group for which the Head Company is Carbon Revolution Limited.
(b) Each Australian Co-Obligor that is a member of a Tax Consolidated Group will become a party to a valid Tax Sharing Agreement and Tax Funding Agreement in respect of all Group Tax Liabilities of the Tax Consolidated Group within 60 Business Days after the Closing Date.
(c) Each Co-Obligor that is a member of a GST Group will become a party to a valid ITSA and ITFA in respect of all Indirect Tax Amounts of the GST Group within 40 Business Days after the Closing Date.
(d) If a Co-Obligor is not registered for GST at the Closing Date and subsequently registers for GST or is required to register for GST, that Co-Obligor undertakes that it will become a member of the GST Group and will become a party to a valid ITSA and ITFA in respect of all Indirect Tax Amounts of the GST Group as soon as reasonably practicable after it registers for GST or is required to register for GST.
5.23 Public offer. The Issuer makes the representations and warranties set out at Section 11.01 of the Trust Indenture.
5.24 Intellectual Property Matters.
(a) No Intellectual Property Collateral was developed under that certain [***].
(b) No jointly owned Intellectual Property Collateral was developed under [***].
(c) No jointly owned Intellectual Property Collateral was developed under [***].
(d) The project set forth in [***] was completed before [***].
5.25 Australian Representations. (a) No Australian Co-Obligor is the trustee of any trust or settlement except as disclosed to, and accepted by, the Disbursing Agent and Servicer in writing (acting reasonably). (b) No Australian Co-Obligor has contravened nor will it contravene Chapter 2E or Part 2J.3 of the Australian Corporations Act by entering into any Financing Document to which it is a party or participating in any transaction in connection with any Financing Document to which it is a party. (c) Except as disclosed in writing by it, or on its behalf, each Credit Party’s details set out in any Financing Document governed by the laws of Australia (or the states and territories thereof) are true and correct in all respects and reflects the information contained in the source from which information in relation to it must be taken for the purposes of the Australian PPS Law in order to register a financing statement in respect of any security interests granted under an Australian Security Document or any other Financing Document. (d) To the best of its knowledge, there is no present right to terminate, rescind, repudiate or vary any Australian Lease or refuse to perform any of the relevant lessor or service provider’s obligations under an Australian Lease.
6. AFFIRMATIVE COVENANTS.
Issuer and each other Co-Obligor jointly and severally covenants that it shall do all of the following (or that):
6.1 Good Standing. Maintain its and each of its Subsidiaries’ existence and good standing in its (and its Subsidiaries’) jurisdiction of organization and maintain qualification in each jurisdiction in which the failure to maintain such qualification could reasonably be expected to have a material adverse effect on its business; and maintain, and cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse Effect.
6.2 Government Compliance. To the extent applicable, meet, and cause each of its Subsidiaries to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA; and comply, and cause each of its Subsidiaries to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse Effect.
6.3 Financial Statements, Reports, Certificates, Audits, and Appraisals.
(a) Cause Issuer to deliver the following to the Servicer, which financial statements and calculations shall be in Australian Dollars:
(i) as soon as available, but in any event within the earlier of (a) thirty (30) days of completion and (b) two hundred forty (240) days after the end of each fiscal year of Issuer, a consolidated and consolidating balance sheet, income statement, and cash flow statement covering Issuer’s, any other Co-Obligors’ and their Subsidiaries’ consolidated and consolidating financial condition as of such date and consolidated and consolidating operations and cash flow during such period, prepared in accordance with IFRS, consistently applied, reflecting comparative financial statements for the preceding year and in a form reasonably acceptable to Servicer, which such financial statements shall be audited by an independent, certified public accounting firm selected by Issuer and reasonably acceptable to Servicer, and delivered with the opinion of such accountants with respect thereto (which shall be unqualified as to the scope of the audit performed and as to the “going concern” status of Issuer, any other Co-Obligors and their Subsidiaries and without any qualification or exception not reasonably acceptable to Servicer);
(ii) as soon as available, but in any event within thirty (30) days after the end of each fiscal month, a company prepared consolidated and consolidating balance sheet, income statement and cash flow statement covering Issuer’s, any other Co-Obligors’ and their Subsidiaries’ consolidated and consolidating financial condition as of such date and operations and cash flow during such period, prepared in accordance with IFRS, consistently applied and containing a reconciliation to GAAP beginning on December 31, 2023 and quarterly thereafter, reflecting comparative financial statements for the preceding year and plan, and containing detailed financial covenant calculations, the budget, accompanied by a customary management discussion and analysis report, the value of the Carbon Revolution (USA) Cash Assets, the amount of any cash securing the Australian Corporate Cards, the amount of the outstanding obligations of the Co-Obligors in respect of clause (t) of the definition of “Permitted Indebtedness,” and the Debt Service Reserve, all in a form reasonably acceptable to Servicer and certified by a Responsible Officer of the Issuer;
(iii) copies of all statements, reports and notices sent or made available generally by Issuer or any other Co-Obligor to its security holders or to any holders of any Indebtedness and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission;
(iv) promptly upon receipt of notice thereof, a report of any legal actions pending or, to the knowledge of a Responsible Officer of the Issuer or any Co-Obligor, threatened in writing against Issuer, any other Co-Obligor or any Subsidiary (i) with respect to the Intellectual Property Collateral of Issuer, any other Co-Obligor or any Subsidiary or (ii) that could reasonably be expected to result in damages or costs to Issuer, any other Co-Obligor and/or their Subsidiaries, individually or in the aggregate, of [***] or more;
(v) with respect to Issuer and each other Co-Obligor, as soon as available, but in any event no later than sixty (60) days after the end of each fiscal year of the Issuer, an annual operating budget and financial projections (including income statements, balance sheets and cash flow statements) for the next fiscal year, presented in a monthly format, approved by Issuer’s or such other Co-Obligor’s Board of Directors (or other governing body), and in a form and substance reasonably acceptable to Servicer;
(vi) within thirty (30) days after the last day of each month, Issuer shall deliver to the Servicer an aged listing of accounts receivable and accounts payable for Issuer, any other Co-Obligors and any Subsidiaries;
(vii) within thirty (30) days after the last day of each month, Issuer shall deliver to the Servicer month end bank statements for Issuer, other Co-Obligors and any Subsidiaries, which shall tie to closing cash balance set forth in the monthly financials delivered pursuant to clause (iii) above;
(viii) not later than thirty (30) days after March 31st, June 30th, September 30th and December 31st of each year, commencing with June 30, 2023, an updated Perfection Certificate in accordance with Section 4.5; and
(ix) such other budgets, sales projections, operating plans or other financial or other information as Servicer may reasonably request from time to time.
(b) Issuer shall deliver to the Servicer, together with each delivery of the monthly, quarterly and annual financial statements required to be delivered pursuant to Section 6.3(a) above, a Compliance Certificate signed by a Responsible Officer of the Issuer in substantially the form of Exhibit B hereto (each a “Compliance Certificate”).
(c) Disbursing Agent, for itself and/or by and through the Servicer, shall have a right from time to time hereafter to audit Issuer’s and any other Co-Obligors’ Accounts and appraise Collateral at Issuer’s expense, provided that such audits will be conducted no more often than once per calendar year unless an Event of Default has occurred and is continuing or as otherwise expressly provided in the Finance Documents.
6.4 Inventory; Returns. Keep, and cause each of its Subsidiary to keep, all Inventory in good and marketable condition, free from all material defects except for Inventory for which adequate reserves have been made; ensure, and cause each Subsidiary to ensure, that all returns and allowances, if any, as with respect to its account debtors shall be on the same basis and in accordance with the usual customary practices of Issuer, as they exist at the time of the execution and delivery of this Agreement; and promptly notify, and cause each Subsidiary to promptly notify, Servicer of all returns and recoveries and of all disputes and claims, where any returns, recoveries, disputes or claims that individually or in the aggregate with respect to Issuer, any other Co-Obligors and their Subsidiaries involve more than [***].
6.5 Taxes.
(a) Make, and cause each of its Subsidiaries to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law; and execute and deliver, and cause each Subsidiary to execute and deliver, to Servicer, on demand, appropriate certificates attesting to the payment or deposit thereof; and make, and cause each of its Subsidiaries to make, timely payment or deposit of all material tax payments and withholding Taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income Taxes; and upon request, furnish, and cause each of its Subsidiaries to furnish, Servicer with proof reasonably satisfactory to Servicer indicating that the Issuer, any other Co-Obligor or Subsidiary has made such payments or deposits; provided that neither Issuer nor such Co-Obligor or such Subsidiary need to make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and appropriate reserves are established, to the extent required by IFRS, by such Person.
(b) Each Co-Obligor which is a member of a Tax Consolidated Group must be a party to, and procure that the Head Company and each other member of that Tax Consolidated Group (including any member that subsequently joins the Tax Consolidated Group) is a party to, a valid Tax Sharing Agreement and a Tax Funding Agreement in respect of all Group Tax Liabilities of the Tax Consolidated Group, and such Tax Sharing Agreement and Tax Funding Agreement will be maintained in full force and effect at all times and not amended or varied in any respect that is materially adverse to the interests of the Noteholders or Trustee, except with the prior written consent of the Trustee.
(c) Each Co-Obligor which is incorporated in Australia is a member of the Tax Consolidated Group of which the Issuer is the Head Company.
(d) Each Co-Obligor which is a member of a Tax Consolidated Group will ensure that it gives the Australian Taxation Office a copy of the Tax Sharing Agreement within the period required by section 721-25(3)(b) of the Tax Act if the Australian Taxation Office gives a notice under section 721-25(3) of the Tax Act requiring a copy of that agreement to be given to the Commissioner of Taxation.
(e) Each Co-Obligor which becomes a member of a GST Group must be a party to, and procure that each other member of that GST Group (including any member that subsequently joins the GST Group) is a party to, a valid ITSA and ITFA in respect of all Indirect Tax Amounts of the GST Group and such ITSA and ITFA will be maintained in full force and effect at all times and not amended or varied in any respect, except with the prior written consent of the Trustee.
6.6 Insurance.
(a) Keep, for Issuer, the other Co-Obligors and their Subsidiaries, at their expense, its and their Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where its business is conducted; and maintain for Issuer, the other Co-Obligors and their Subsidiaries insurance relating to such Person’s business, ownership and use of its Collateral in amounts and of a type that are customary to businesses similar to such Person.
(b) All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Servicer. All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form and substance reasonably satisfactory to Servicer, showing Servicer as a lender loss payee thereunder, and all liability insurance policies shall show the Servicer as an additional insured (in each case without any liability for premiums) and shall specify that the insurer must give at least thirty (30) days’ notice to Servicer before canceling its policy for any reason. Upon Servicer’s request, the Co-Obligors and its Subsidiaries shall deliver to Servicer certified copies of such policies of insurance and evidence of the payments of all premiums therefor. All proceeds payable under any such policy shall, at the option of Servicer, be payable to Disbursing Agent to be applied on account of the Secured Obligations.
6.7 Accounts.
(a) Subject to Section 3.3(b), except with respect to Excluded Accounts, maintain, all of its depository, operating, and investment accounts, securities accounts and commodities accounts subject to Control Agreements in favor of Servicer.
(b) In addition to and without limiting the restrictions in (a) above, Issuer shall provide Servicer at least five (5) days prior written notice before Issuer, or any other Co-Obligor or any Subsidiary establishes any banking or investment account at or with any bank or financial institution other than those covered by Control Agreements in favor of Servicer (or such shorter period as Servicer may agree in its sole discretion in writing). For each banking or investment account that Issuer or any other Co-Obligor at any time maintains, Issuer and any such Co-Obligor shall cause the applicable bank or financial institution at or with which any such account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such account to perfect Servicer’s Lien in such account in accordance with the terms hereof, which Control Agreement may not be terminated by Issuer or any other Co-Obligor without the prior written consent of Servicer. The provisions of the previous sentence shall not apply to (i) deposit accounts exclusively used by Issuer, any other Co-Obligor or any Subsidiary for payroll, payroll Taxes, and other employee wage and benefit payments to or for the benefit of such Person’s employees, which accounts have been identified to Servicer by Issuer and its Subsidiaries as such, (ii) accounts listed on the Perfection Certificate as Excluded Accounts and (iii) such other accounts that the Servicer agrees, in writing, in its sole discretion to constitute an Excluded Accounts hereunder (collectively, the “Excluded Accounts”).
6.8 Financial Covenants.
(a) [***]
(i) [***]
[***] | [***] |
[***] | [***] |
[***] | [***] |
(ii) [***]
(b) [***]
(c) [***]
(d) [***]
________________
(e) [***]. [***]
6.9 Intellectual Property Rights.
(a) Promptly give, and cause its Subsidiaries to promptly give, Servicer written notice of any applications or registrations of intellectual property rights filed by it or its Subsidiaries with the USPTO (or any other patent-granting or trademark-registration authority (or like office) anywhere in the world), including the date of such filing and the registration or application numbers, if any; give and cause its Subsidiaries to give, Servicer not less than sixty (60) days prior written notice of the filing by such Person of any applications or registrations with the USCO (or any other copyright-registration authority (or like office) anywhere in the world), including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed, and prior to the filing of any such applications or registrations with the USCO, and within 7 days after filing any such applications or registrations with the USPTO or any other patent-granting, trademark-registration or copyright-registration authority (or like office) anywhere in the world, execute, and cause its Subsidiaries to execute, such documents as Servicer may reasonably request for Servicer to perfect or maintain its perfection and priority of the security interest in such intellectual property rights to be registered and, upon the request of Servicer, file, and cause its Subsidiaries to file, such documents simultaneously with, or in the case of patent applications within 7 days of, the filing of any such applications or registrations; and upon or as otherwise within 7 days (in the case of patent application) of filing any such applications or registrations with the USCO or the USPTO (or any other patent-granting, trademark-registration or copyright-registration authority (or like office) anywhere in the world), and promptly provide, and cause its Subsidiaries to promptly provide, Servicer with (i) a copy of such applications or registrations, with the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Servicer to be filed for Servicer to perfect or maintain its perfection and the priority of its security interest in such intellectual property rights, and (iii) the date of such filing.
(b) Servicer may audit Intellectual Property Collateral of Issuer or any other Co-Obligor to confirm compliance with this Section, provided such audit may not occur more often than twice per year and on reasonable advanced notice, unless an Event of Default has occurred and is continuing or as otherwise expressly provided in the Finance Documents. Servicer shall have the right, but not the obligation, to take, at the expense of Issuer and the other Co-Obligors, any actions that Issuer or any other Co-Obligor is required under this Section to take but fails to take, after 15 days’ notice to the Issuer. Issuer and the other Co-Obligors shall jointly and severally reimburse and indemnify Disbursing Agent and Servicer for all reasonable costs and expenses incurred in the reasonable exercise of its rights under this Section.
(c) Issuer and each other Co-Obligor jointly and severally covenants that it shall (i) subject to the provisions of Section 7.13 below, protect, defend and maintain the validity and enforceability of all of its Intellectual Property Collateral; (ii) upon becoming aware of the matter promptly advise Servicer in writing of infringement by a third party of its Intellectual Property Collateral; and (iii) subject to the provisions of Section 7.13 below, not allow any of its Intellectual Property Collateral to be abandoned, forfeited or dedicated to the public without Servicer’s prior written consent.
6.10 Landlord Waivers; Bailee Waivers. In the event that Issuer, any Co-Obligor or any of their Subsidiaries, after the Closing Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee, permitted pursuant to Section 7.2 below or Section 7.10 below, other than in connection with temporary storage as part of incoming or outgoing freight in the ordinary course of business, then Issuer or such Co-Obligor or Subsidiary will first obtain the written consent of Servicer and, in the event that the Collateral at any new location is valued in excess of [***] in the aggregate at any time, the bailee or landlord, as applicable, for such location must execute and deliver a bailee waiver or landlord waiver (unless otherwise agreed to by the Servicer, in writing, in its sole discretion), as applicable, in form and substance reasonably satisfactory to Servicer prior to locating any Collateral at any such new offices or business locations, or storage with or delivery to any such bailee, as the case may be. All Collateral of Issuer, any other Co-Obligor and any of their Subsidiaries at such location or with any such Person shall be aggregated for purposes of determining whether such threshold amount has been met.
6.11 Creation/Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Section 7.3 below and Section 7.7 below, at any time after the Closing Date, if any direct or indirect Subsidiary of Issuer or any other Co-Obligor is formed or any Person is acquired by Issuer or any other Co-Obligor or any of their direct or indirect Subsidiaries and becomes a direct or indirect Subsidiary of Issuer or another Co-Obligor, Issuer (or other relevant Co-Obligor) shall, or shall cause its Subsidiaries (including such newly formed or acquired direct or indirect Subsidiary and its Subsidiaries) to, within twenty (20) Business Days thereafter (a) provide Servicer with a properly completed and executed Perfection Certificate with respect to such Person and its Subsidiaries, (b) provide to Servicer and Disbursing Agent a joinder to this Agreement to become a Co-Obligor hereunder or a secured Guaranty to become a Guarantor with respect hereto and the Disbursement Documents and the Secured Obligations, at Servicer’s discretion, and in form and substance reasonably satisfactory to Servicer, and (c) execute and deliver all such other agreements, documents, certificates and other writings, and take or cause to be taken all such actions that Servicer may request from time to time, including without limitation (and except as Servicer may otherwise agree) executing and delivering all such agreements, documents, certificates and other writings as would be required to be executed or delivered by such Person if it were the Issuer or a Co-Obligor on the Closing Date and sufficient to grant, and at all times to maintain the attachment, perfection and first priority (subject to Permitted Liens) of and the ability of Servicer to enforce, a security interest in favor of Servicer, for the benefit of the Disbursing Agent as collateral agent for the benefit of the Trustee, in any and all of its presently existing and hereafter acquired or arising Collateral (which Collateral may be subject to Permitted Liens). Such documents, agreements, other writings and certificates and actions shall include without limitation the following (and in the case of any documents, agreements, writings or other certificates shall be in form and substance reasonably satisfactory to Servicer): duly executed and delivered security agreements, pledge agreements, Control Agreements with respect to any depository, operating or investment accounts (other than Excluded Accounts), intellectual property security agreements, certificates for any certificated Shares and powers and assignments duly executed in blank with respect thereto sufficient to pledge all of ownership interests in such Person to Servicer, for the benefit of Disbursing Agent and as collateral agent for the Trustee, financing statements (which may have a description of collateral which is broader than that set forth herein, including a description of the collateral as “all assets” and/or “all personal property”), landlord’s, warehousemen and bailee waiver or letters and all such other documents, agreements, certificates and other writings as the Servicer may reasonably require, the filing such financing statements, complying with any provision of any statute, regulation or treaty if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Servicer to enforce, its security interest, providing to Servicer copies of such Person’s certified copies of such Person’s current organizational documents (including any bylaws) and good standing certificates, certified resolutions of such Person’s Board of Directors or other governing body (and, if required by law or its organizational documents, its equity holders) authorizing the execution, delivery and performance of all required agreements, documents, certificates and other writings and all actions required to be taken, and, if requested by Servicer, a written opinion of counsel, as to such matters and such Persons as Servicer may reasonably require, in each case in form and substance reasonably satisfactory to Servicer. Any document, agreement, or instrument executed or issued pursuant to this Section 6.11 shall be a Finance Document.
6.12 Litigation Cooperation. Make available, and cause each of its respective Subsidiaries to make available, to Disbursing Agent and Servicer, without expense to Disbursing Agent or Servicer, each of such Person’s officers, employees and agents and such Person’s Books, to the extent that Disbursing Agent or Servicer may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding instituted by or against Disbursing Agent or Servicer with respect to any Collateral of such Persons or relating to such Persons.
6.13 Insurance Policy. Issuer and each other Co-Obligor shall, and shall cause each of their Subsidiaries to, cooperate with the Servicer and the Disbursing Agent to remain in compliance with the terms of the Insurance Policy at all times prior to the Payment in Full of the Secured Obligations (other than contingent indemnification obligations for which no claim has been made), and at all times that the Disbursing Agent or Trustee has any obligation to make any disbursements to Issuer under this Agreement or the Trust Indenture.
6.14 Notice of Default, Litigation, and Other Matters. Promptly upon becoming aware of any of the following, the applicable Co-Obligor shall deliver to the Servicer written notice describing the same and the steps being taken by the applicable Co-Obligor or the Subsidiary affected thereby with respect thereto:
(a) the occurrence of an Event of Default or a Default;
(b) any litigation, arbitration or governmental investigation or proceeding not previously disclosed by any Co-Obligor to the Servicer which has been instituted or, to the knowledge of any Co-Obligor, is threatened against any Co-Obligor or to which any of the properties of any thereof is subject which might reasonably be expected to have a Material Adverse Effect;
(c) any cancellation or material change in any insurance maintained by any Co- Obligor;
(d) any Lien (other than Permitted Liens) on any of the Collateral which would adversely affect the ability of Servicer to exercise any of its remedies hereunder;
(e) the occurrence of any other event which could reasonably be expected to have a Material Adverse Effect; or
(f) the occurrence of any pending or (to the best of any Co-Obligor’s knowledge) threatened, strike, work stoppage, material unfair labor practice claim, or other material labor dispute against or affecting the employees of any Co-Obligor.
6.15 Use of Proceeds. The proceeds of the Term Advance shall be used solely to payoff the Specified Existing Debt, for working capital purposes, and for Capital Expenditures and for other general business and corporate purposes.
6.16 Maintenance of Perfected Security Interest. Each Co-Obligor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 5.19 and shall defend such security interest against the claims and demands of all Persons whomsoever.
6.17 Payment Reserve Fund. The Co-Obligors shall at all times maintain restricted cash on deposit in the Payment Reserve Fund in such amounts required by the Trust Indenture.
6.18 Observer Rights. Grant the Servicer the right to have two (2) non-voting attendees present at all meetings of the Issuer’s and the other Co-Obligors Boards of Directors, Boards of Managers (or other applicable governing bodies), and to receive all information made available to the members of the Boards of Directors, Boards of Managers (or other applicable governing bodies), as further described in Section 3(c) of the Disbursement Monitoring Agreement; provided that, for purposes of clarification, any attendee may be excluded from any portion of a meeting which is in executive session or in which attorney-client privileged matters will be discussed; provided, further, that, the Issuer, the other Co-Obligors shall give the Servicer prior written notice of any such meeting concurrently with the transmission of such notice to such applicable governing body, but in any event, no less than ten (10) days prior to the date of such meeting (or such shorter period of time of not less than seven (7) days if the notice is provided simultaneously with the notice to the other members of the applicable governing body), which notice shall specify in reasonable detail the topics that are intended to be covered at such meeting at the time the notice is sent.
6.19 Permits. The Co-Obligors shall at all times maintain (and renew, to the extent applicable) the licenses, permits, authorizations and/or certifications set forth in Schedule 4A of the Perfection Certificate delivered on the Closing Date.
6.20 Further Assurances. At any time and from time to time, Issuer and each other Co-Obligor shall, and shall cause each of its Subsidiaries to, execute and deliver all such further instruments, agreements, documents, certificates and other writings and take all such further action as may reasonably be requested by Disbursing Agent and/or Servicer to effect the purposes of this Agreement.
6.21 [Reserved].
6.22 TRCA SPAC Transaction. The Co-Obligors shall complete the TRCA SPAC Transaction on or before August 31, 2023.
6.23 TRCA SPAC Transaction Parent. Simultaneously with the completion of the TRCA SPAC Transaction, the Co-Obligors shall cause the Parent Company to execute a joinder to this Agreement and become a Co-Obligor hereunder.
6.24 TRCA SPAC Transaction Board of Directors. The Co-Obligors shall appoint at least two Persons who have significant automotive experience and which are reasonably acceptable to Servicer that will be added to the Parent Company’s Boards of Directors upon consummation of the TRCA SPAC Transaction.
6.25 [***] The Co-Obligors shall pay all Indebtedness under [***] no later than June 30, 2024.
6.26 [***]. [***]
6.27 Australian Covenants.
(a) No Australian Co-Obligor shall become a trustee of any trust or settlement except as disclosed to, and accepted by, the Servicer in writing (acting reasonably).
(b) Each Australian Co-Obligor must comply in all material respects with Chapter 2E and Part 2J.3 of the Australian Corporations Act to the extent applicable to it.
(c) No Australian Co-Obligor shall:
(i) vary or amend any Australian Lease;
(ii) surrender or accept any surrender of an Australian Lease;
(iii) assign or allow assignment of any Australian Lease; or
(iv) fail to renew any Australian Lease,
without the prior written consent of the Servicer.
(d) If a lessor or service provider (as applicable) under an Australian Lease sells or otherwise disposes of its interest in the Premises (as defined in the relevant Australian Right of Entry Deed), each Australian Co-Obligor:
(i) will use its reasonable endeavours to ensure that any purchaser, assignee or transferee of an interest in the Premises enters into a form of deed acceptable to the Security Trustee pursuant to which such purchaser, assignee or transferee agrees to be bound by the terms and conditions of the relevant Australian Right of Entry Deed; and
(ii) will otherwise provide a copy of the relevant Australian Right of Entry Deed to any purchaser, assignee or transferee prior to the settlement of such sale or disposal.
6.28 Debt Service Reserve. The Co-Obligors shall maintain a reserve in U.S. Dollars in a deposit account at [***] or such other account bank as may be acceptable to Servicer in an amount of not less than the debt service payments on the Term Advance consisting of the sum of (i) the next [***] (clauses (i), (ii), and (iii), collectively, the “Debt Service Reserve”).
6.29 Labor Matters. The Co-Obligors shall at all times (a) act in accordance with its obligations under the Collective Bargaining Agreement, (b) have a plan in place reasonably acceptable to Servicer to prevent work stoppages and (c) take such measures that are necessary to mitigate business interruptions due to labor unrest.
7. NEGATIVE COVENANTS.
Neither the Issuer nor any Co-Obligor will do any of the following:
7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (including pursuant to a Division) (collectively, a “Transfer”), or permit any of their Subsidiaries to Transfer, all or any part of its business or property, other than Permitted Transfers; provided, however, that neither Issuer nor any other Co-Obligor or any of their Subsidiaries may Transfer all or any part of the Intellectual Property Collateral without the Servicer’s prior written consent, except (i) non-exclusive licenses granted in the ordinary course of business and (ii) registered Intellectual Property Collateral including the rights to the relevant underlying works, designs or inventions in the same from the Issuer to the Parent Company.
7.2 Change in Business; Change in Control or Executive Office. Engage in any business, or permit any of their Subsidiaries to engage in any business, other than the businesses currently engaged in and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business substantially in the manner conducted as of the Closing Date; or suffer or permit a Change in Control; or without thirty (30) days prior written notification to Servicer (or such shorter period as the Servicer may agree in writing), relocate its chief executive office, except in connection with the TRCA SPAC Transaction and with prior written notice to Servicer, change its state of incorporation or formation, as applicable, or change its legal name; or without Servicer’s prior written consent, change the date on which its fiscal year ends; or without at least thirty (30) days’ prior written notice to Servicer, add any new offices or business locations, including warehouses, provided, however that only five (5) days prior written notice to Servicer shall be required if such new offices or business locations, including warehouses, shall contain less than [***] of Collateral. All Collateral of Issuer, any other Co-Obligor and any of their Subsidiaries at any such location shall be aggregated for purposes of determining whether such threshold amount has been met. Neither Issuer nor any Co-Obligor shall amend or modify its charter, bylaws or other organizational documents in any way which could reasonably be expected to materially adversely affect the interests of the Servicer or the Disbursing Agent.
7.3 Mergers or Acquisitions. Except for the TRCA SPAC Transaction (which is expressly permitted), merge or consolidate (or undergo a Division), or permit any of their Subsidiaries to merge or consolidate (or divide), with or into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, equity securities or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a Co-Obligor and has complied with all of the provisions of Section 6.11 above) or with (or into) Issuer provided Issuer is the surviving legal entity, in each case so long as no Event of Default has occurred prior thereto or arises as a result therefrom.
7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrances.
(a) Create, incur, assume or suffer to exist any Lien with respect to any of its property (including without limitation, its Intellectual Property Collateral (including, without limitation any foreign intellectual property)), or assign or otherwise convey any right to receive income, including the sale of any of its Accounts, or permit any of their Subsidiaries to do so (except in the case of Permitted Liens); or
(b) enter into any agreement, document, instrument or other arrangement (except with or in favor of the Servicer) with any Person which directly or indirectly prohibits or has the effect of prohibiting any Co-Obligor from creating, incurring, assuming or allowing any Lien with respect to any of such Co-Obligor’s or Subsidiary’s property (including without limitation, its Intellectual Property Collateral), or permit any of their Subsidiaries to so agree; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by the Finance Documents, (ii) the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness described in clause (c) or clause (d) of the definition of “Permitted Liens” provided such restrictions or conditions apply only to the property or assets acquired with such Indebtedness and (iii) the foregoing shall not apply to customary provisions in leases and other contracts generally restricting assignments thereof that do not specifically prohibit the granting of a security interest therein or to customary covenants in merger or acquisition agreements restricting the granting of security interests in the Issuer’s or its Subsidiaries’ property pending the closing of such transactions (provided that such covenants in such merger or acquisition agreements do not at any time prohibit the Issuer any other Co-Obligor or their Subsidiaries from granting any Liens in favor of Servicer hereunder or as described in clause (a)(ii) of the definition of “Permitted Liens”).
7.6 Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of their Subsidiaries to do so, except that the Issuer and Co-Obligors may (i) repurchase the stock of former employees pursuant to stock repurchase agreements as long as no Event of Default shall exist prior to such repurchase and/or would occur after giving effect to such repurchase and provided that the aggregate amount of all such repurchases by Issuer and the other Co-Obligors does not exceed [***] per fiscal year, (ii) convert any of its convertible securities into other equity securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (iii) make cash payments in lieu of issuing fractional shares of its stock provided that the amount of such cash payments do not exceed [***] in the aggregate in any fiscal year and (iv) pay dividends solely in common stock or preferred stock that has the same rights and preferences as preferred stock that is permitted in accordance with this Agreement (payment in kind).
7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of their Subsidiaries to do so, other than Permitted Investments; or maintain or invest any of its cash, Cash Equivalents, investment property or property (other than to the extent held in an Excluded Account) with any financial institution or other Person unless such Person has entered into a Control Agreement in favor of Servicer in form and substance reasonably satisfactory to Servicer with respect thereto; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends, or otherwise distributing property to, Issuer.
7.8 Transactions with Affiliates. Except for (a) the intra-group company licenses between the Issuer and the Parent Company in the form approved by the Servicer prior to the date of this Agreements and (b) the Transfer of registered Intellectual Property Collateral including all underlying copyright, designs or inventions in the same from the Issuer to the Parent Company, directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Issuer or any other Co-Obligor, except for transactions that are in the ordinary course of such Person’s business, upon fair and reasonable terms that are no less favorable to Issuer and any such Co-Obligor than would be obtained in an arm’s length transaction with a non-affiliated Person.
7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit their Subsidiaries to make any payment in respect of Subordinated Debt, except in compliance with the terms of such Subordinated Debt and the applicable required subordination agreement with Servicer and/or Disbursing Agent with respect to such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest or other payments thereon, provide any collateral or greater rights to the holder thereof or otherwise adversely affect the subordination thereof to Secured Obligations or otherwise to the extent not permitted by the applicable subordination agreement, without Servicer’s prior written consent.
7.10 Inventory and Equipment. Store Inventory (other than in connection with temporary storage as part of incoming or outgoing freight in the ordinary course of business) or Equipment having an aggregate book value of more than [***]at any time with a bailee, warehouseman, or other third party, or permit their Subsidiaries to do so, unless (a) the third party has been notified of Servicer’s security interest and (b) Servicer (i) has received an acknowledgment from the third party that it is holding or will hold such Inventory or Equipment for Servicer’s benefit or (ii) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment; or store or maintain any Equipment or Inventory having an aggregate book value of more than [***] at any time at a location as to which the provisions in Section 6.10 above have not been satisfied. All Equipment and Inventory and other Collateral of Issuer, any other Co-Obligor and any of their Subsidiaries stored at any location or with any such Person shall be aggregated for purposes of determining whether such threshold amount has been met.
7.11 Compliance. Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Term Advance for such purpose, or permit any of their Subsidiaries to do so; or fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could reasonably be expected to have a Material Adverse Effect, or permit any of their Subsidiaries to do so.
7.12 Compliance with Anti-Terrorism Laws. None of Issuer or any other Co-Obligor shall, nor shall they permit any of their Subsidiaries to, nor shall Issuer, any other Co-Obligor nor any of their Subsidiaries permit any Affiliate of any of the foregoing to, directly or indirectly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists. Issuer and each other Co-Obligor shall, and shall cause their Subsidiaries to, immediately notify Disbursing Agent and Servicer if any of them has knowledge that Issuer, any other Co-Obligor or any Subsidiaries or any Affiliates of any of the foregoing is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering. None of Issuer or any other Co-Obligor shall, nor shall they permit any of their Subsidiaries to, nor shall Issuer, any other Co-Obligor nor any of their Subsidiaries permit any Affiliate of any of the foregoing to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
Disbursing Agent hereby notifies Issuer, each other Co-Obligor and each of their Subsidiaries that pursuant to the requirements of Anti-Terrorism Laws, and Disbursing Agent’s policies and practices, Disbursing Agent is required to obtain, verify and record certain information and documentation that identifies each of them and their principals, which information includes the name and address of Issuer, each Co-Obligor and each of their Subsidiaries and their principals and such other information that will allow Disbursing Agent to identify such party in accordance with Anti-Terrorism Laws.
7.13 No Enforcement. Seek to enforce any of their Intellectual Property Collateral (or any other intellectual property thereof) against any 3rd party for infringement without the prior written consent of the Servicer.
7.14 Foreign Assets. At any time permit the aggregate fair market value of all cash and other assets owned by any Subsidiary of Issuer that is not a Co-Obligor, on a consolidated basis, to exceed five percent (5%) of the consolidated total assets of the Issuer and its Subsidiaries in accordance with IFRS.
7.15 Carbon Revolution (USA). The Co-Obligors shall not permit the value of the assets of Carbon Revolution (USA) to exceed [***], at any point.
7.16 Australian Corporate Cards. The Co-Obligors shall not, at any time, permit the aggregate liabilities in respect of the Australian Corporate Cards to exceed [***].
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:
8.1 Payment Default. If Issuer or any Co-Obligor fails to pay, when due, any principal or any interest on the Term Advance, or any of the other Secured Obligations;
8.2 Covenant Default.
(a) If Issuer or any other Co-Obligor fails to perform any obligation (or violates any covenant) under Article 6 (provided that the Co-Obligors shall have a sixty (60) day cure period with respect to Section 6.22) or violates any of the covenants contained in Article 7 above; or
(b) If Issuer or any other Co-Obligor fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the other Finance Documents, or in any other present or future agreement with Servicer and/or Disbursing Agent and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten (10) Business Days after receiving notice thereof or any officer thereof becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) Business Day period or cannot after diligent attempts by Issuer or such other Co-Obligor be cured within such ten (10) Business Day period, and such default is likely to be cured within a reasonable time, then Issuer or such Co-Obligor shall have an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default, provided that in each case Issuer or such other Co-Obligor is making diligent efforts to effect such cure;
8.3 Material Adverse Effect; Change in Control. If (a) there occurs any circumstance or circumstances that has or is likely to have a Material Adverse Effect or (b) there occurs a Change in Control.
8.4 Attachment. If any portion of Issuer’s or any Co-Obligor’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver, Australian Controller or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if Issuer or any other Co-Obligor is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Issuer’s or any other Co-Obligor’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Issuer’s or any other Co-Obligor’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten (10) days after Issuer or any other Co-Obligor receives notice thereof;
8.5 Insolvency. If Issuer or any other Co-Obligor becomes insolvent, or if an Insolvency Proceeding is commenced by Issuer or any other Co-Obligor, or if an Insolvency Proceeding is commenced against Issuer or any other Co-Obligor that is not dismissed or stayed within thirty (30) days, or if the Issuer or any other Co-Obligor applies for or consents to the appointment of any receiver, interim receiver, monitor, trustee, custodian, conservator, liquidator, rehabilitator, Australian Controller or similar officer for it or for all or any material part of its property; or a proceeding shall be commenced or a petition filed, without the application or consent of such Person, seeking or requesting the appointment of any receiver, interim receiver, monitor, trustee, custodian, conservator, liquidator, rehabilitator, Australian Controller or similar officer is appointed and the appointment continues undischarged, undismissed or unstayed for thirty (30) days.
8.6 Other Agreements. (i) If there is a default or other failure to perform under any agreement to which Issuer or any other Co-Obligor is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of [***], individually or in the aggregate, for Issuer and all other Co-Obligors, or which would have a Material Adverse Effect, (ii) if an event, circumstance or condition shall occur relating to any Indebtedness in an amount in excess of [***] or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or circumstance shall occur or condition exist, the effect of which event, circumstance or condition is to (x) cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice of acceleration, or any lapse of time prior to the effectiveness of any notice of acceleration, is required), any such Indebtedness to become accelerated, (y) require any Co-Obligor to make any prepayment, redemption or other similar payment thereunder, or (z) cause such Indebtedness to otherwise become due prior to its stated maturity; or (iii) if any Indebtedness in excess of [***] shall be declared to be due and payable other than in accordance with the terms of such Indebtedness or required to be prepaid, other than by a regularly scheduled required prepayment or as a mandatory prepayment, prior to the stated maturity thereof;
8.7 Judgments. If one or more judgments for the payment of money in an amount, individually or in the aggregate (for all such judgments), exceeding [***] with respect to Issuer and all other Co-Obligors when taken together, shall be rendered against Issuer or any other Co-Obligor and shall remain unsatisfied and unstayed for a period of ten (10) days;
8.8 Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in this Agreement or in any other Finance Document (including any certificate delivered to Disbursing Agent or Servicer by any Responsible Officer or any other officer of Issuer or any other Co-Obligor pursuant to this Agreement or any other Finance Document) or to induce Disbursing Agent or Servicer to enter into this Agreement or any other Finance Document;
8.9 Guaranty. If any guaranty of all or a portion of the Secured Obligations (a “Guaranty”) ceases for any reason to be in full force and effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty or any other agreement, document, certificate or writing executed pursuant to or in connection with any Guaranty (collectively, each Guaranty, each security agreement and any other agreement, document, certificate or writing executed now or hereafter pursuant to or in connection with any Guaranty, the “Guaranty Documents”), or any event of default occurs under any of the Guaranty Document or any guarantor revokes or purports to revoke any Guaranty Document, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any certificate delivered to Disbursing Agent or Servicer in connection with any Guaranty Document, or if any of the circumstances of a type described in Sections 8.2(b) through 8.8 above, inclusive, occur with respect to any guarantor or any Guaranty Document or any guarantor dies or becomes subject to any criminal prosecution, or any circumstances arise causing Disbursing Agent or Servicer, in good faith, to become insecure as to the satisfaction of any of any guarantor’s obligations under any Guaranty Document;
8.10 Indebtedness. (i) A default or breach occurs and is continuing (after giving effect to any applicable cure or grace periods) under any agreement between Issuer, any other Co-Obligor or any of their Subsidiaries and any creditor of Issuer, any other Co-Obligor or any of their Subsidiaries that has signed a subordination, intercreditor or other similar agreement with Disbursing Agent and/or Servicer; (ii) any creditor that has signed such a subordination, intercreditor or other similar agreement with Disbursing Agent and/or Servicer, breaches, or there is any default under, any of the terms of any such subordination, intercreditor or other similar agreement or there is a default thereunder; or (iii) an event, circumstance or condition shall occur relating to any Subordinated Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or circumstance shall occur or condition exist, the effect of which event, circumstance or condition is to (x) cause, or to permit the holder or holders of such Subordinated Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice of acceleration, or any lapse of time prior to the effectiveness of any notice of acceleration, is required), any such Subordinated Debt to become accelerated, (y) require any Co-Obligor to make any prepayment, redemption or other similar payment thereunder, or (z) cause such Subordinated Debt to otherwise become due prior to its stated maturity;
8.11 Governmental Approvals. Any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any governmental authority shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or non-renewal has resulted in or could reasonably be expected to result in a Material Adverse Effect; or
8.12 Insurance Policy; Disbursement Monitoring Agreement. The Insurance Policy is invalidated, coverage is terminated or modified in any manner without the prior written consent of Disbursing Agent and Servicer (which consent may be granted or withheld in Disbursing Agent’s and Servicer’s sole and absolute discretion), or the Insurance Policy is no longer in full force and effect. The Disbursement Monitoring Agreement is invalidated, terminated or modified in any manner without the prior written consent of Servicer and Disbursing Agent (which consent may be granted or withheld in Servicer and Disbursing Agent’s sole and absolute discretion), or such Disbursement Monitoring Agreement is no longer in full force and effect.
8.13 Invalidity of Finance Documents. Any Finance Document, or any Lien granted thereunder, at any time after its execution and delivery and for any reason, other than as expressly permitted hereunder or upon Payment in Full of all Secured Obligations, ceases to be in full force and effect; or any Co-Obligor or any other Person contests in any manner the validity or enforceability of any Finance Document or any Lien granted to the Servicer, pursuant to the Finance Documents; or any Co-Obligor purports to revoke, terminate or rescind any Finance Document.
8.14 ERISA. An ERISA Event shall have occurred that (when taken together with all other ERISA Events that have occurred), has resulted, and/or could reasonably be expected to result in a Material Adverse Effect.
8.15 Trust Documents. An Extraordinary Redemption Event (as defined in the Trust Indenture), an Event of Special Redemption (as defined in the Trust Indenture) or an Event of Default (as defined in the Trust Indenture) has occurred under the Trust Indenture.
9. SERVICER'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Servicer may, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Issuer and each Co-Obligor:
(a) Declare all Secured Obligations, whether evidenced by this Agreement, by any of the other Finance Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5 above, all Secured Obligations shall become immediately due without any action by Servicer);
(b) Cause the advancing of money or extending of credit (or commitment to so advance or extend credit) to or for the benefit of Issuer or any Co-Obligor under this Agreement or under any other agreement between Issuer and any other Co-Obligor and Disbursing Agent to cease;
(c) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Servicer reasonably considers advisable;
(d) Make such payments (at the expense of the Co-Obligors) and do such acts as Servicer considers necessary or reasonable to protect its security interest in any of the Collateral. Issuer and each other Co-Obligor agrees to assemble the Collateral if Servicer so requires, and to make the Collateral available to Disbursing Agent as Servicer may designate. Issuer and each other Co-Obligor authorizes Servicer to enter the premises where any of the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Servicer’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any premises owned by Issuer or any other Co-Obligor, Issuer and each other Co-Obligor hereby grants Servicer a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Servicer’s rights or remedies provided herein, at law, in equity, or otherwise;
(e) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) any of the Collateral of Issuer and of any other Co-Obligor. Servicer is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Issuer’s and each other Co-Obligor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, advertising material, logos, other intellectual property and any other property of a similar nature, as it pertains to any of the Collateral, in completing production of, advertising for sale, and selling any of the Collateral and, in connection with Servicer’s exercise of its rights under this Section 9.1, all rights of Issuer and any other Co-Obligor under all licenses and all franchise agreements shall inure to Servicer’s benefit;
(f) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including the premises of Issuer and any other Co-Obligor) as Servicer determines is commercially reasonable, and apply any proceeds to the Secured Obligations in whatever manner or order Servicer deems appropriate;
(g) Servicer, for Disbursing Agent’s account, may credit bid and purchase at any public sale; and
(h) In addition to other rights and remedies provided for herein, in the other Finance Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Co-Obligor or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Co-Obligor’s Deposit Accounts in which Servicer’s Liens (for the benefit of the Disbursing Agent) are perfected by control under the Code, instruct the bank maintaining such Deposit Account for the applicable Co-Obligor to pay the balance of such Deposit Account to or for the benefit of Servicer (for the Disbursing Agent’s account), and (ii) with respect to any Co-Obligor’s Securities Accounts in which Servicer’s Liens (for the benefit of the Disbursing Agent) are perfected by control under the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Co-Obligor to (A) transfer any cash in such Securities Account to or for the benefit of the Servicer (for the Disbursing Agent’s account) or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of Servicer (for the Disbursing Agent’s account).
Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Issuer and the other Co-Obligors.
Without limiting the foregoing, upon an Event of Default, or in the event that any covenant hereunder is modified, the Servicer may require the Issuer to deposit an amount not to exceed one monthly payment of principal plus interest into the Payment Reserve Fund.
9.2 Power of Attorney. Effective upon the occurrence and during the continuance of an Event of Default, Issuer and each Co-Obligor hereby irrevocably appoints Servicer (and any of Servicer’s designated officers, employees or agents) as such Person’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Servicer’s security interest in the Accounts; (b) endorse the name of Issuer or such other Co-Obligor on any checks or other forms of payment or security that may come into Servicer’s possession; (c) sign the name of Issuer or such other Co-Obligor on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Issuer’s or such other Co-Obligor’s policies of insurance of Issuer and any other Co-Obligor; (f) settle and adjust disputes and claims respecting the Accounts directly with account debtors, for amounts and upon terms which Servicer determines to be reasonable; and (g) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral. The appointment of Servicer as attorney in fact for Issuer and the other Co-Obligors, and each and every one of Servicer’s rights and powers, being coupled with an interest, is irrevocable until the Payment in Full of all the Secured Obligations (other than contingent indemnification obligations for which no claim has been made) and the termination of Trustee’s obligation to disburse proceeds of the Series 2023-A Notes under the Trust Indenture has been terminated.
9.3 Accounts Collection. At any time after the occurrence and during the continuance of an Event of Default, Servicer may notify any Person owing funds to Issuer or any other Co-Obligor of Servicer’s security interest in such funds and verify the amount of such Account. Issuer and each other Co-Obligor shall collect all amounts owing to Issuer or such other Co-Obligor for Servicer, for the benefit of Disbursing Agent, receive in trust all such payments as Servicer’s, for the benefit of Disbursing Agent, and immediately deliver such payments to Servicer, for the benefit of Disbursing Agent, in their original form as received from the account debtor, with proper endorsements for deposit.
9.4 Disbursing Agent and Related Expenses. If Issuer or any Co-Obligor fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, Servicer, for the benefit of Disbursing Agent, may do any or all of the following after reasonable notice to Issuer: (a) make payment of the same or any part thereof; or (b) obtain and maintain insurance policies of the type discussed in Section 6.6 above, and take any action with respect to such policies as Servicer deems prudent. Any amounts so paid or deposited by Servicer shall constitute Disbursing Agent and Related Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral of the Issuer and the other Co-Obligors. Any payments made by Disbursing Agent or Servicer shall not constitute an agreement by Disbursing Agent or Servicer to make similar payments in the future or a waiver by Disbursing Agent or Servicer of any Event of Default under this Agreement.
9.5 Disbursing Agent’s and Servicer’s Liability for Collateral. Neither Disbursing Agent nor Servicer shall in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person whomsoever. All risk of loss, damage or destruction of, or diminution in the value of, the Collateral shall be borne by Issuer and the other Co-Obligors.
9.6 Remedies Cumulative. Servicer’s and Disbursing Agent’s rights and remedies under this Agreement, the Finance Documents, and all other agreements shall be cumulative. Servicer and Disbursing Agent shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Disbursing Agent or Servicer of one right or remedy shall be deemed an election, and no waiver by Disbursing Agent or Servicer of any Event of Default on the part of Issuer or any Co-Obligor shall be deemed a continuing waiver. No delay by Disbursing Agent or Servicer shall constitute a waiver, election, or acquiescence by it. No waiver by Disbursing Agent or Servicer shall be effective unless made in a written document signed on behalf of Disbursing Agent or Servicer, as applicable, and then shall be effective only in the specific instance and for the specific purpose for which it was given.
9.7 Demand; Protest. Except as otherwise specifically stated in this Agreement, Issuer and each other Co-Obligor waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, and/or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Disbursing Agent or Servicer on which Issuer or any other Co-Obligor may in any way be liable.
9.8 Assistance with Enforcement of Rights and Remedies. Issuer and each other Co-Obligor acknowledges and agrees that, upon the occurrence and during the continuance of an Event of Default, Issuer and each other Co-Obligor shall use its best efforts to retain, at the sole cost and expense of Issuer and each such other Co-Obligor, certain key employees (or former employees) of Issuer and each such other Co-Obligor, as designated by Servicer (or Servicer’s agent, representative, designee or assign; each, a “Servicer Agent”), to cooperate with and assist Disbursing Agent, Insurer, and/or Servicer, with the exercise of Disbursing Agent’s, Insurer’s and/or Servicer’s rights and remedies under this Agreement and the other Finance Documents, and such other matters incidental thereto as Disbursing Agent, Insurer and/or Servicer may designate; all on terms and conditions acceptable to Servicer. In addition, the Co-Obligors shall cooperate with any actions reasonably requested by the Servicer, Insurer or Disbursing Agent in connection with the marketing and sale of the Co-Obligor’s Intellectual Property Collateral and other assets, whether as a going concern or otherwise. The Co-Obligors agree that they will use their best efforts and work in good faith with the Servicer and the Servicer Agents to achieve the sale of the Intellectual Property Collateral and other assets prior to the termination date of the Insurance Policy. The parties hereto acknowledge and agree that they shall comply with the instructions issued by Insurer in connection with any such enforcement action or marketing and/or sale of the Co-Obligor’s Collateral (to the extent the Insurer has the right to issue instructions in connection therewith).
9.9 Intellectual Property. In the event of any sale or other disposition or Transfer of any of the Intellectual Property Collateral of any Co-Obligor, the goodwill symbolized by any Trademarks subject to such sale or other disposition shall be included therein, and such Co-Obligor shall supply to the Servicer or its designee such Co-Obligor’s know-how and expertise, and documents and things relating to any Intellectual Property Collateral subject to such sale or other disposition, and such Co-Obligor’s customer lists and other records and documents relating to such Intellectual Property Collateral and to the manufacture, distribution, advertising and sale of products and services of such Co-Obligor.
10. NOTICES.
All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Finance Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Disbursing Agent, Servicer, Issuer or any other Co-Obligor may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.
If to any Co-Obligor: | |
Carbon Revolution Operations Pty Ltd | |
75 Pigdons Road | |
Waurn Ponds, Victoria 3216 | |
Australia | |
[***] | |
With a copy to (which shall not constitute notice): | |
Coblentz Patch Duffy & Bass LLP | |
One Montgomery Street, Suite 3000 | |
San Francisco, California 94104 | |
[***] | |
UMB Bank, National Association, as Trustee 100 | |
William Street, Suite 1850 | |
New York, NY 10038 | |
[***] | |
If to Disbursing Agent: | |
Newlight Capital LLC | |
1135 Kildaire Farm Road, Suite 200 | |
Cary, North Carolina 27511 | |
[***] | |
If to Servicer: | With a copy to (which shall not constitute notice): |
Morgan, Lewis & Bockius LLP | |
One Federal Street | |
Boston, MA 02110-1726 | |
[***] | |
The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to each other party hereto.
11. GUARANTY; ADDITIONAL WAIVERS AND PROVISIONS.
11.1 Guaranty. Each Co-Obligor hereby unconditionally guarantees, as a primary obligor and not merely as a surety, jointly and severally with each other Co-Obligor when and as due, whether at maturity, by acceleration, by notice of prepayment or otherwise, the due payment of all Secured Obligations (including, without limitation, the Reimbursement Obligation) and the punctual performance of all agreements, covenants and duties of each Co-Obligor under this Agreement and the other Disbursement Documents. Each payment made by any Co-Obligor shall be made in lawful money of the United States.
11.2 Waivers. Each Co-Obligor hereby absolutely, unconditionally and irrevocably waives (i) promptness, diligence, notice of acceptance, notice of presentment of payment and any other notice hereunder, (ii) demand of payment, protest, notice of dishonor or nonpayment, notice of the present and future amount of the Secured Obligations and any other notice with respect to the Secured Obligations, (iii) any requirement that Servicer, Insurer, Disbursing Agent or Trustee protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right or take any action against any other Co-Obligor or any other Person or any Collateral, (iv) any other action, event or precondition to the enforcement hereof or payment by each such Co-Obligor of the Secured Obligations or the performance of any agreements, covenants and duties of any Co-Obligor under this Agreement and the other Finance Documents (except as is expressly provided for herein or therein), and (v) to the fullest extent permitted by law, any defense arising by any lack of capacity or authority or any other defense of any Co-Obligor or any notice, demand or defense by reason of cessation from any cause of Secured Obligations or any other agreements, covenants and duties of any Co-Obligor under this Agreement and the other Finance Documents, other than payment and performance in full of the Secured Obligations and any agreements, covenants and duties of the Co-Obligors under this Agreement and the other Finance Documents, and any defense that any other guarantee or security was or was to be obtained by Servicer, Disbursing Agent, Insurer or the Trustee.
11.3. No Defense. No invalidity, irregularity, voidableness, voidness or unenforceability of this Agreement or any of the other Finance Documents or any other agreement or instrument relating thereto, or of all or any part of the Secured Obligations, or of any collateral security therefor or the performance of agreements, covenants and duties of the Co-Obligor under this Agreement and the other Finance Documents shall affect, impair or be a defense hereunder.
11.4. Guaranty of Payment. The guaranty of any Co-Obligor hereunder or under any Guaranty is one of payment and performance, not collection, and the obligations of each Co-Obligor hereunder are independent of the obligations of the other Co-Obligors, and a separate action or actions may be brought and prosecuted against any Co-Obligor to enforce the terms and conditions of this Agreement and any Disbursement Document, including any Guaranty, irrespective of whether any action is brought against any other Co-Obligor or other Persons or whether any other Co-obligor or other Persons are joined in any such action or actions. Each Co-Obligor waives any right to require that any resort be had by Servicer, Disbursing Agent or Trustee to any security held for payment of the Secured Obligations or to any balance of any deposit account or credit on the books of Servicer, Disbursing Agent or Trustee in favor of any Co-Obligor or any other Person. No election to proceed in one form of action or proceedings, or against any Person, or on any Secured Obligations or any other obligations under any other agreements, covenants and duties of under this Agreement or any of the Disbursement Documents, shall constitute a waiver of Servicer’s, Disbursing Agent’s or Trustee’s right to proceed in any other form of action or proceeding or against any other Person, unless such Servicer, Disbursing Agent or Trustee has expressed such waiver in writing. Without limiting the generality of the foregoing, no action or proceeding by Servicer, Disbursing Agent or Trustee against any Co-Obligor under any document evidencing or securing indebtedness or obligations of any Co-Obligor shall diminish the liability of any other Co-Obligor hereunder, except to the extent Servicer receives actual payment on account of Secured Obligations or actual performance of such obligations by such action or proceeding, notwithstanding the effect of any such election, action or proceeding upon the right of subrogation, if any, of any Co-Obligor in respect of any other Co-Obligor.
11.5. Liabilities Absolute. The liability of each Co-Obligor hereunder shall be absolute, unlimited and unconditional and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any claim, defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any other Secured Obligation or otherwise. Without limiting the generality of the foregoing, the obligations of each Co-Obligor shall not be discharged or impaired, released, limited or otherwise affected by:
(a) any change in the manner, place or terms of payment or performance, and/or any change or extension of the time of payment or performance of, release, renewal or alteration of, or any new agreements relating to any Secured Obligations or other obligations, any security therefor, or any liability incurred directly or indirectly in respect thereof, or any rescission of, or amendment, waiver or other modification of, or any consent to departure from, this Agreement or any other Document, including any increase in the Secured Obligations or other obligations, and/or any offset there against, or failure to perfect, or continue the perfection of, any Lien in any such property, or delay in the perfection of any such Lien, or any amendment or waiver of or consent to departure from any other guaranty for all or any of the Secured Obligations;
(b) the failure of Servicer, Disbursing Agent or Trustee to assert any claim or demand or to enforce any right or remedy against any other Person under the provisions of this Agreement or any other Finance Document or any other document or instrument executed and delivered in connection herewith or therewith;
(c) any settlement or compromise of any Obligation or other obligation, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and any subordination of the payment of all or any part thereof to the payment of any obligation (whether due or not) of any Co-Obligor to creditors of any Co-Obligor;
(d) any manner of application of Collateral, or proceeds thereof, to all or any of the Secured Obligations, or any manner of sale or other disposition of any Collateral for all or any of the Secured Obligations or the other or of any other assets of any Co-Obligor; and
(e) to the fullest extent permitted by applicable law, any other agreements or circumstance of any nature whatsoever that may or might in any manner or to any extent vary the risk of any Co-Obligor, or that might otherwise at law or in equity constitute a defense available to, or a discharge of, any guaranty and/or the other obligations of any Co-Obligor, or a defense to, or discharge of, any Co-Obligor or any other Person or party hereto or the Secured Obligations or other obligations with respect to any Co-Obligor pursuant to this Agreement and/or the other Finance Documents.
11.6. Waiver of Notice. Servicer, Disbursing Agent and Trustee shall have the right to take or not take any such actions set forth in Section 11.5 above without notice to or the consent of any Co-Obligor and each Co-Obligor expressly waives any right to notice of, consent to, knowledge of and participation in any agreements relating to any of the above or any other present or future event relating to Secured Obligations or other obligations, whether under this Agreement or any other Disbursement Agreement or otherwise or any right to challenge or question any of the above and waives any defenses of such Co-Obligor which might arise as a result of such actions.
11.7. Discretion. Except as otherwise expressly provided in Section 2.3(e) above and Section 2.4 above, Servicer may at any time and from time to time (whether prior to or after the revocation or termination of this Agreement) without the consent of, or notice to, any Co-Obligor, and without incurring responsibility to any Co-Obligor or impairing or releasing any of the Secured Obligations or other obligations, apply any sums by whomsoever paid or howsoever realized to any Secured Obligations regardless of what Secured Obligations remain unpaid.
11.8 Reinstatement. (a) The foregoing provisions herein contained shall continue to be effective or be reinstated, as the case may be, if claim is ever made upon Servicer or Disbursing Agent or the Trustee for repayment or recovery of any amount or amounts received by such Person in payment or on account of any of the Secured Obligations and such Person repays all or part of said amount for any reason whatsoever, including by reason of any judgment, decree or order of any court or administrative body having jurisdiction over such Person or the respective property of each, or any settlement or compromise of any claim effected by such Person with any such claimant (including any Co-Obligor); and in such event each Co-Obligor hereby agrees that any such judgment, decree, order, settlement or compromise or other circumstances shall be binding upon such Co-Obligor, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing any Obligation, and each Co-Obligor shall be and remain liable to Servicer, Disbursing Agent and Trustees for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Person(s).
(b) Servicer shall not be required to marshal any assets in favor of any Co-Obligor, or against or in payment of Secured Obligations.
(c) No Co-Obligor shall be entitled to claim against any present or future security held by Servicer, individually or on behalf of any other Person, from any Person for Secured Obligations or other obligations in priority to or equally with any claim of Servicer or Disbursing Agent, or assert any claim for any liability of any Co-Obligor to any other Co-Obligor in priority to or equally with claims of Servicer or Disbursing Agent for Obligations, and no Co-Obligor shall be entitled to compete with Servicer, Disbursing Agent or Trustee with respect to, or to advance any equal or prior claim to any security held by Servicer for Secured Obligations.
(d) If any Co-Obligor makes any payment on account of this Agreement or any other Finance Document, which payment is wholly or partly subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to any Person under any federal or provincial statute or at common law or under equitable principles, then to the extent of such payment, the Secured Obligations intended to be paid shall be revived and continued in full force and effect as if the payment had not been made, and the resulting revived Obligation shall continue to be guaranteed, uninterrupted, by each Co-Obligor hereunder.
(e) All present and future monies payable by any Co-Obligor to any other Co-Obligor, whether arising out of a right of subrogation or otherwise, are assigned to Servicer for its benefit and for the benefit of Disbursing Agent and Trustee as security for such Co-Obligor’s liability to Servicer, Disbursing Agent and Trustee hereunder and upon the occurrence and during the continuance of any Event of Default are postponed and subordinated to Servicer’s and Disbursing Agent’s prior right to payment and performance in full of the Secured Obligations and any other obligations under this Agreement and any other Finance Documents. Upon the occurrence and during the continuance of any Event of Default, all monies received by any Co-Obligor from any other Co-Obligor shall be held by such Co-Obligor as agent and trustee for Servicer and Disbursing Agent. This assignment, postponement and subordination shall only terminate when the Secured Obligations are paid in full in cash and this Agreement is irrevocably terminated. Each Co-Obligor acknowledges this assignment, postponement and subordination and, except as otherwise set forth herein, agrees to make no payments to any other Co-Obligor upon the occurrence and during the continuance of any Event of Default without the prior written consent of Servicer. Each Co-Obligor agrees to give full effect to the provisions hereof.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
NEW YORK LAW GOVERNS THE DISBURSEMENT DOCUMENTS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF A STATE OTHER THAN NEW YORK. ISSUER, EACH OTHER CO-OBLIGOR, SERVICER AND DISBURSING AGENT EACH SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN. NOTWITHSTANDING THE FOREGOING, DISBURSING AGENT AND SERVICER EACH SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ISSUER OR ANY OTHER CO-OBLIGOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH DISBURSING AGENT OR SERVICER DEEMS NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE DISBURSING AGENT’S AND/OR SERVICER’S RIGHTS AGAINST ANY CO-OBLIGOR OR ITS PROPERTY. ISSUER AND EACH OTHER CO-OBLIGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND ISSUER AND EACH OTHER CO-OBLIGOR HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. ISSUER AND EACH OTHER CO-OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINTS, AND OTHER PROCESS ISSUED IN SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS, AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO ISSUER OR ANY OTHER CO-OBLIGOR AT THE ADDRESS SET FORTH IN, OR SUBSEQUENTLY PROVIDED BY ISSUER OR SUCH OTHER CO-OBLIGOR IN ACCORDANCE WITH, SECTION 10 ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER TO OCCUR OF THE ACTUAL RECEIPT THEREOF BY ISSUER OR SUCH OTHER CO-OBLIGOR OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, FIRST CLASS, REGISTERED OR CERTIFIED MAIL RETURN RECEIPT REQUESTED, PROPER POSTAGE PREPAID.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ISSUER, EACH OTHER CO-OBLIGOR, SERVICER AND DISBURSING AGENT EACH WAIVES THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER DISBURSEMENT DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
NO CLAIM MAY BE MADE BY ANY CO-OBLIGOR AGAINST THE DISBURSING AGENT OR THE SERVICER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER DISBURSEMENT DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH CO-OBLIGOR HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13. GENERAL PROVISIONS.
13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns (including by way of subrogation to the rights of the Disbursing Agent and/or the Trustee) of each of the parties hereto; provided, however, that neither this Agreement nor any rights or obligations hereunder may be assigned by any Issuer or any other Co-Obligor without Disbursing Agent’s and Servicer’s prior written consent, which consent may be granted or withheld in Disbursing Agent’s and Servicer’s sole discretion. Disbursing Agent, with the consent of Servicer, shall have the right without the consent of Issuer or any other Co-Obligor to sell, transfer, assign, or grant a participation interest in all or any part of, or any interest in, the Term Advance and Disbursing Agent’s and Servicer’s obligations, rights and benefits hereunder to any Person. The Servicer may resign as Servicer hereunder and such resignation shall be effective only upon the Servicer providing written notice of its resignation to the Issuer and the Disbursing Agent and the appointment of a successor Servicer; provided that if no such successor is appointed by Servicer (x) prior to the occurrence of a Default or Event of Default, the Issuer may appoint a successor Servicer hereunder, and (y) after a Default or Event of Default has occurred and is continuing, the Insurer may appoint a successor Servicer hereunder without any further action.
13.2 Indemnification; Expenses. Issuer and each other Co-Obligor shall jointly and severally defend, indemnify and hold harmless Disbursing Agent and Servicer and their Affiliates, and each of their respective officers, employees, directors, partners, advisors, representatives, trustees, investment advisors and other agents and each of their respective successors and assigns, against: (a) all losses, damages, penalties, actions, suits, costs, expenses, judgments, obligations, demands, claims, and liabilities claimed or asserted by any Person arising out of, or in any way related to, or by reason of, the transactions contemplated by this Agreement or any other Finance Document; and (b) all losses, damages, costs and/or Disbursing Agent and Related Expenses in any way suffered, incurred, or paid by Disbursing Agent or Servicer as a result of or in any way arising out of, in any way related to, following, or consequential to transactions among Disbursing Agent and/or Servicer and any one or more Issuer any other Co-Obligor, whether under this Agreement, any other Finance Document, or otherwise (including without limitation reasonable attorneys’ fees, costs and expenses and the costs relating to the enforcement of Issuer’s or any other Co-Obligor’s indemnity obligations hereunder), except (x) with respect to the Disbursing Agent, for losses caused by the Disbursing Agent’s gross negligence or willful misconduct, and (y) with respect to the Servicer, for losses caused by the Servicer’s gross negligence or willful misconduct, in each case, as determined by a court of competent jurisdiction in a final, non-appealable order or judgment. The Co-Obligors shall, jointly and severally, pay all Disbursing Agent and Related Expenses to the Servicer not later than ten (10) days following demand therefor (or such earlier times provided for herein or in the other Finance Documents).
13.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.
13.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
13.5 Amendments in Writing, Integration. Neither this Agreement nor any other Finance Documents can be amended or terminated orally. No amendment or waiver of any provision of this Agreement or any other Finance Document, and no consent with respect to any departure by any Co-Obligor therefrom, shall be effective unless the same shall be in writing and signed by the Servicer, Disbursing Agent and Co-Obligors, and in the case of any waiver, such waiver shall be effective only in the specific instance and for the specific purpose for which given. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the Disbursement Documents, if any, are merged into this Agreement and any other Finance Documents.
13.6 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed signature page or counterpart (or electronic image or scan transmission (such as a “pdf” file) thereof), whether by facsimile transmission, e-mail, similar form of electronic transmission or otherwise (and whether executed manually, electronically or digitally), shall be effective as delivery of a manually executed counterpart and shall create a valid and binding obligation of the party executing the same or on whose behalf such signature page or counterpart is executed.
13.7 Survival. All agreements, covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as (i) any Secured Obligations (other than contingent indemnification obligations for which no claim has been asserted) remain outstanding and have not been Paid in Full and/or (ii) the Disbursing Agent has any obligation to disburse proceeds of the Series 2023-A Notes to Issuer. The obligations to indemnify Disbursing Agent and Servicer contained in this Agreement or any other Finance Document (including pursuant to Section 13.2 above) shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Disbursing Agent and/or Servicer have run.
13.8 Confidentiality. In handling any confidential information Disbursing Agent and Servicer and all employees and agents of each, including but not limited to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Disbursing Agent or Servicer in connection with their present or prospective business relations with Issuer and any other Co-Obligors, (ii) to prospective transferees or purchasers of any interest in this Agreement, any other Finance Documents or the Secured Obligations provided that the recipient is subject to a customary confidentiality agreement, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in connection with the examination, audit or similar investigation of Disbursing Agent or Servicer and (v) as Disbursing Agent and/or Servicer may determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of Disbursing Agent or Servicer when disclosed to Disbursing Agent or Servicer, as applicable, or becomes part of the public domain after disclosure to Disbursing Agent or Servicer through no fault of either, as applicable; or (b) is disclosed to Disbursing Agent or Servicer by a third party, provided Disbursing Agent does not have actual knowledge that such third party is prohibited from disclosing such information, or (c) is independently developed without the use of any such confidential information or breach of the terms and provisions of this Section 13.8. Paragraphs (iii) and (iv) do not permit the disclosure of any information under section 275(1) of the Australian PPSA and, to the extent permitted by section 275(7) of the Australian PPSA, each Co-Obligor agrees not to disclose or authorize the disclosure of such information. For purposes of clarification, the Parent Company may disclose this Agreement as required to comply with applicable disclosure or other regulatory requirements.
13.9 Patriot Act Notice. Disbursing Agent notifies Issuer and any other Co-Obligors that, pursuant to the requirements of Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (signed into law October 26, 2001), as amended by the USA PATRIOT Improvement and Reauthorization Act, Pub. L. 109-177 (signed into law March 9, 2006) (as amended from time to time) (the “Patriot Act”), it is required to obtain, verify and record information that identifies Issuer and any other Co-Obligor, which information includes names and addresses and other information that will allow Disbursing Agent to identify Issuer and such Co-Obligors in accordance with the Patriot Act.
13.10 The Trustee. It is expressly understood and agreed by the parties hereto that this agreement is executed and delivered by UMB Bank, National Association, as Trustee, and not individually or personally, but solely as Trustee in the exercise of the powers and authority conferred and vested in it under the Trust Indenture and that in executing this Agreement and acting hereunder, the Trustee shall be entitled to the rights, benefits, protections, indemnities and immunities afforded to the Trustee under the Trust Indenture.
13.11 Marketing Materials. The Issuer and each other Co-Obligor hereby consents to the publication by the Servicer and/or the Disbursing Agent, or their respective representatives of advertising material, including any “tombstone,” press release or comparable advertising, on its website or in other marketing materials of such Person, relating to the transactions contemplated by this Agreement or any other Finance Document using any Co-Obligor’s name, product photographs, logo, trademark or other insignia.
13.12 Direction. Servicer directs the Disbursing Agent to execute this Agreement, the other Finance Documents to which Disbursing Agent is a party and the other Finance Documents that provide for or require the acknowledgement of Disbursing Agent.
13.13 Costs and expenses. The Co-Obligors shall:
(a) pay; and
(b) within 5 Business Days of demand, indemnify each Finance Party against,
any cost, expense, fee, loss or liability (including administrative costs) the Finance Party incurs in relation to all stamp duty, registration or other similar Tax payable in respect of any Transaction Document and the Notes except any document pursuant to which a Noteholder assigns or transfers its rights under the Notes.
13.14 GST. Except where the context suggests otherwise, terms used in this Section 11.06 that have a specific meaning in the GST law (as defined in the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (as amended from time to time)) shall have the same meaning in this Section 13.13.
All payments (including the provision of any non monetary consideration) to be made by a Co-Obligor under or in connection with any Transaction Document or the Notes (other than under this Section 13.13) are exclusive of GST.
(a) If all or part of that payment is the consideration for a taxable supply made by a Finance Party for GST purposes then:
(i) the Co-Obligor must pay to the Finance Party an additional amount equal to that payment (or part) multiplied by the appropriate rate of GST (a “GST Amount”);
(ii) subject to the prior receipt of a tax invoice from the Finance Party, the GST Amount is to be paid at the same time as the other consideration is provided for that supply; and
(iii) if a tax invoice is not received prior to the provision of that other consideration, the GST Amount is payable within 10 days of the receipt of a tax invoice from the Finance Party.
(b) If an adjustment event occurs in relation to a supply made under or in connection with a Transaction Document or the Notes:
(i) the Finance Party must issue an adjustment note;
(ii) the GST Amount will be recalculated to reflect that adjustment; and
(iii) the parties will make such payment between them as necessary to reflect the adjustment to the amount of GST charged.
(c) Where under any Transaction Document or the Notes, a Co-Obligor is required to reimburse or indemnify for a cost, expense or other amount paid or incurred by a Finance Party, that Co-Obligor will pay the relevant cost, expense or other amount (including any sum in respect of GST) less any input tax credit entitlement in respect of that cost, expense or other amount.
14. NOTICE OF FINAL AGREEMENT.
BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT AND THE OTHER DISBURSEMENT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR ORAL UNDERSTANDINGS OF THE PARTIES.
[Balance of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Signed, sealed and delivered by Carbon
Signed, sealed and delivered by Carbon | ||
Revolution Operations Pty Ltd ACN 154 435 355 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Jacob Dingle, Managing Director | David Nock, Company Secretary | |
Name of director (print) | Name of director/secretary (print) |
Signed, sealed and delivered by Carbon | ||
Revolution Technology Pty Ltd ACN 155 413 219 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Jacob Dingle, Managing Director | David Nock, Company Secretary | |
Name of director (print) | Name of director/secretary (print) |
Signed, sealed and delivered by Carbon | ||
Revolution Limited ACN 128 274 653 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Jacob Dingle, Managing Director | David Nock, Company Secretary | |
Name of director (print) | Name of director/secretary (print) |
Address for Notices: | ||
Carbon Revolution Operations Pty Ltd 75 Pigdons Road |
||
Waurn Ponds, Victoria 3216 | ||
Australia | ||
Attn: | Jacob Dingle, Managing Director | |
David Nock, General Counsel |
Email: | Jake.dingle@carbonrev.com | |
David.nock@carbonrev.com |
[Signature Page to Intellectual Property Security Agreement]
DISBURSING AGENT: | |
UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee, solely in its capacity as Disbursing Agent |
By: |
Name: | Julius R. Zamora | |
Title: | Vice President | |
Servicer: | ||
NEWLIGHT CAPITAL LLC |
By: |
Name: | ||
Title: |
[Signature Page to Proceeds Disbursing and Security Agreement]
DISBURSING AGENT: | |
UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee, solely in its capacity as Disbursing Agent |
By: |
Name: | ||
Title: |
Servicer: | |
NEWLIGHT CAPITAL LLC |
By: |
Name: | Joseph Agiato | |
Title: | CEO |
[Signature Page to Proceeds Disbursing and Security Agreement]
Schedule 5.5
Intellectual Property Disclosures
# | Description |
[***] | [***] |
[***] | [***] |
[***] |
Schedule 5.11
Environmental Conditions
None.
Schedule 5.13
Subsidiaries
Co-Obligor | Subsidiary | Ownership Percentage | Certificated (Y/N) |
Carbon Revolution Limited | Carbon Revolution Operations Pty Ltd | 100% | N |
Carbon Revolution Limited | Carbon Revolution Technology Pty Ltd | 100% | N |
Carbon Revolution Limited | Carbon Revolution (USA) LLC | 100% | N |
Carbon Revolution Limited | Carbon Revolution (UK) Limited1 | 100% | N |
1 Within sixty (60) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall have delivered to Servicer evidence to its satisfaction of the dissolution of Carbon Revolution (UK) Limited.
Schedule 5.19
Filing Offices
Entity | Filing Type | Filing Office |
Carbon Revolution Limited | UCC- Financing Statement | Recorder of Deeds, Washington D.C. |
Carbon Revolution Limited (membership interests in Carbon Revolution (USA) LLC) | UCC- Financing Statement | Recorder of Deeds, Washington D.C. |
Carbon Revolution Limited | Short Form Intellectual Property Security Agreement | United States Patent and Trademark Office and United States Copyright Office |
Carbon Revolution Operations Pty Ltd | UCC- Financing Statement | Recorder of Deeds, Washington D.C. |
Carbon Revolution Operations Pty Ltd | Short Form Intellectual Property Security Agreement | United States Patent and Trademark Office and United States Copyright Office |
Carbon Revolution Technology Pty Ltd | UCC- Financing Statement | Recorder of Deeds, Washington D.C. |
Carbon Revolution Technology Pty Ltd | Short Form Intellectual Property Security Agreement | United States Patent and Trademark Office and United States Copyright Office |
Schedule 6.8
Financial Covenants2
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2 | For the avoidance of doubt, all financial covenant calculations shall be in Australian Dollars. |
[***] | [***] | [***] | [***] | [***] |
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Schedule 7.4
Closing Date Indebtedness
Creditor Name | Title/Date of Contract | Termination Date | Amount Outstanding |
[***] | [***] | [***] | [***] |
[***] | [***] | [***] | [***] |
[***]
Schedule 7.5
Closing Date Liens
None.
Schedule 7.7
Closing Date Investments
Owner | Investment | Ownership Percentage | Description |
Carbon Revolution Limited | Carbon Revolution Operations Pty Ltd | 100% | Ownership of Subsidiary |
Carbon Revolution Limited | Carbon Revolution Technology Pty Ltd | 100% | Ownership of Subsidiary |
Carbon Revolution Limited | Carbon Revolution (USA) LLC | 100% | Ownership of Subsidiary |
Carbon Revolution Limited | Carbon Revolution (UK) Limited | 100% | Inactive Subsidiary4 |
4 Within sixty (60) days after the Closing Date (or such later date as the Servicer may agree in its sole discretion) the Issuer shall have delivered to Servicer evidence to its satisfaction of the dissolution of Carbon Revolution (UK) Limited.
EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
TO PROCEEDS DISBURSING AND SECURITY AGREEMENT
“Collateral” means, with respect to any Co-Obligor, all of such Co-Obligor’s present and after-acquired property. It includes anything in respect of which the Co-Obligor, has at any time a sufficient right, interest or power to grant a Lien, including without limitation all right, title and interest of such Co-Obligor in, to and under any and all of its assets, property and interests in property, in each case whether presently existing or hereafter created or acquired or arising, and wherever located, including, but not limited to:
(a) all Accounts (other than Excluded Accounts), Chattel Paper (including without limitation Tangible Chattel Paper and Electronic Chattel Paper), Deposit Accounts, Securities Accounts, Commodities Accounts (and any other demand, deposit, time, savings, cash management, passbook and similar accounts, and all monies, securities, Instruments and other investments deposited therein), Documents (including without limitation negotiable documents), Equipment (including without limitation all accessions and additions thereto), General Intangibles (including without limitation Payment Intangibles and Software), intellectual property, Trademarks, Patents, Copyrights and all other Intellectual Property Collateral, Goods (including without limitation Fixtures), Instruments (including without limitation Promissory Notes), Inventory (including without limitation all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), Investment Property (including without limitation securities and securities entitlements), Letters of Credit and Letter of Credit Rights, money, cash, cash equivalents, contract rights, rights to payment of money, certificates of deposit, insurance claims, Commercial Tort Claims described in any Perfection Certificate and all books and records with respect to any of the foregoing, and all computers and equipment containing said books and records;
(b) all “IP Collateral” as defined in the Intellectual Property Security Agreement dated as of May 23, 2023, made by Issuer (and the other Co-Obligors, as applicable) in favor of Servicer (as restated, amended, modified or supplemented from time to time) and all property in which a security interest or Lien is granted pursuant to any short form intellectual property security agreement (as restated, amended, modified or supplemented from time to time), contemplated thereby or executed and delivered pursuant thereto or in connection therewith; and
(c) any and all Proceeds and products of any and all of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing in whatever form, including, without limitation, all Proceeds of any insurance, indemnity, warranty or guaranty and all Supporting Obligations and the security therefor or for any right to payment.
Each capitalized term used but not defined in this Exhibit A shall have the meaning specified in the Proceeds Disbursing and Security Agreement, dated May 23, 2023 (the “PDSA”), by and among UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee, solely in its capacity as disbursing agent, NEWLIGHT CAPITAL LLC, a North Carolina limited liability company, as servicer for the benefit of the Disbursing Agent under the Disbursement Documents and as collateral agent for the benefit of the Trustee under the Trust Transaction Documents and as Security Trustee for the benefit of the Secured Beneficiaries under the Security Trust Deed and CARBON REVOLUTION OPERATIONS PTY LTD a company limited by shares and incorporated in Australia, as Issuer (to which this Exhibit A is attached), provided that, if not otherwise defined in the PDSA, each such capitalized term defined in the Uniform Commercial Code of the State of New York (as amended or supplemented from time to time) shall have the meaning specified therein.
Notwithstanding the foregoing, the Collateral shall not include the following (“Excluded Property”): (1) any license or contract, in each case if the granting of a security interest in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition (I) was not created in contemplation of the security interest granted by the Issuer and the other Co-Obligors under the PDSA and the other Finance Documents and (II) is enforceable under applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 (or any other Section) of Article 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, or the waiver of such provision or consent thereto, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Servicer and become part of the Collateral, or (2) any equipment subject to a purchase money security interest permitted to be incurred under the PDSA as to which the corresponding purchase money Indebtedness remains outstanding, to the extent that a grant of a security interest or Lien therein would require a consent not obtained or violate or invalidate such purchase money arrangement or create a right of termination in favor of any party thereto (other than the Issuer or any Co-Obligor), after giving effect to the applicable anti-assignment provisions of the Code and other applicable law, or (3) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon submission to and acceptance by the federal Patent and Trademark Office of an amendment to allege use, such intent-to-use trademark application shall automatically be subject to the security interest granted in favor of Servicer and become part of the Collateral, or (4) any Excluded Intellectual Property;
provided, however, that notwithstanding anything to the contrary set forth above (1) the Excluded Property shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless the proceeds, products, substitutions or replacements would otherwise constitute Excluded Property) and (2) immediately upon the ineffectiveness, lapse or termination of any restriction or condition causing or resulting in such property being Excluded Property, the Collateral shall include, and such Co-Obligor shall be deemed to have granted a security interest in, to and under all such property referred to in above, as if such restriction or condition had never been in effect.
EXHIBIT B
COMPLIANCE CERTIFICATE
TO: | Newlight Capital LLC, in its capacity as Servicer for UMB Bank, National Association, as Trustee, solely in its capacity as Disbursing Agent |
FROM: | CARBON REVOLUTION OPERATIONS PTY LTD |
The undersigned authorized officer of CARBON REVOLUTION OPERATIONS PTY LTD, a company limited by shares and incorporated in Australia (the “Issuer”) hereby certifies that in accordance with the terms and conditions of the Proceeds Disbursing and Security Agreement among Issuer, the other Co-Obligors from time to time party thereto, Servicer and Disbursing Agent (the “Agreement”), (i) Issuer and each other Co-Obligor is in complete compliance for the period ending _____________ with all required covenants except as noted in any attachment to this Certificate and (ii), all representations and warranties of Issuer and each other Co-Obligor in the Agreement are true and correct in all material respects (provided that that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language is true and correct in all respects) on the date of this Compliance Certificate (provided that those representations and warranties expressly referring to a specific date are true and correct in all material respects (or in all respects, with respect to any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language) as of such date), except as noted in any attachment hereto. Attached herewith are the required documents supporting the above certification. The undersigned further certifies that (i) any financial statements enclosed herewith fairly present in all material respects the consolidated and consolidating financial condition of the Issuer, the other Co-Obligors and their Subsidiaries as of the end of such period and the consolidated and consolidating results of operations and cash flows of the Issuer, the other Co-Obligors and their Subsidiaries for such period in accordance with International Financial Reporting Standards (IFRS) consistently applied from one period to the next, except (A) as explained in an accompanying letter attached to this Certificate or footnotes and (B) with respect to unaudited financial statements, for the absence of footnotes and subject to normal year-end adjustments (if any). [The audited financial statements include the required opinion of the independent, certified public accounting firm.]1 The undersigned further certifies that, except as noted below (stating the nature and status of any such event and the action the Issuer, the other Co-Obligors and/or their Subsidiaries have taken or intend to take with respect thereto), no Default or Event of Default exists and is continuing.
Please indicate compliance status by circling Yes/No under “Complies” column.
Reporting Covenant2 | Required | Complies | |
Annual financial statements and Compliance Certificate (audited) | The earlier of (a) thirty (30) days of completion and (b) two hundred forty (240) days after the end of each fiscal year of Issuer | Yes | No |
Monthly financial statements (in accordance with Section 6.3(a)(ii))3 | Monthly within 30 days | Yes | No |
Report in form acceptable to Servicer containing management discussion and analysis | Monthly within 30 days | Yes | No |
1 | Include for Compliance Certificates delivered in connection with FY end audited financials. |
2 | Include all financial covenant calculations in monthly and annual certificates. |
3 | Reconciliation with GAAP beginning on December 31, 2023 and quarterly thereafter. |
Covenants (See 6.3(a)(ii)) | Required | Actual | Complies | |
Carbon Revolution (USA) Cash Assets | [***] | $___________ | Yes | No |
Cash and cash equivalents pledged to secure Australian Corporate Cards | Yes | No | ||
[***] | $___________ | |||
Cash and cash equivalents pledged to secure Indebtedness of the Co-Obligors in respect of clause (t) of the definition of “Permitted Indebtedness” | [***] | $___________ | Yes | No |
The Debt Service Reserve | The next [***] Total |
$___________ | Yes | No |
$___________ | $___________ | |||
$___________ | ||||
Actual | ||||
$___________ | ||||
Compliance Certificate | Together with monthly /annual financial statements | Yes | No | |
10K and 10Q | (as applicable) | Yes | No | |
Annual operating budget, sales projections and operating plans approved by board of directors | Annually no later than 60 days of fiscal year end | Yes | No | |
A/R & A/P Agings | Monthly within 30 days | Yes | No | |
Bank Statements | Monthly within 30 days | Yes | No | |
Updated Perfection Certificate | Within 30 days after March 31st, June 30th, September 30th and December 31st of each year4 | Yes | No |
4 NTD: To be delivered with related Compliance Certificates for such months.
5 NTD: For the avoidance of doubt, all financial covenant calculations shall be in Australian Dollars.
Financial Covenants5 | Required | Actual | Complies | |
[***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] |
[***] | [***] | [***] | [***] | [***] |
[***] | [***] | [***] | [***] | |
[***] Required Disclosures |
[***]
Disclosures | Frequency | ||
Has the Issuer/Co-Obligor engaged in any M&A activity? | Monthly | Yes | No |
Has any allegation been made that any part of the Intellectual Property Collateral or any part of Issuer/Co-Obligor’s operations or its manufacture, use or sale of any products or services violates the Intellectual Property rights of any third party (via any type of communication or actual lawsuit)? | Monthly | Yes | No |
Has any actual or threatened legal dispute of any other kind been made by or against the Issuer/Co-Obligor that could have a Material Adverse Effect? | Monthly | Yes | No |
Has any governmental administrative proceeding, subpoena, or civil or criminal investigation of any kind been instituted against the Issuer/ Co-Obligor? | Monthly | Yes | No |
Have any Intellectual Property rights of Issuer/ Co-Obligor been legally challenged by a third party? | Monthly | Yes | No |
Have any Intellectual Property rights of Issuer/ Co-Obligor been revoked, suspended, terminated, abandoned? | Monthly | Yes | No |
Has Issuer/Co-Obligor taken any legal action to enforce any of its Intellectual Property rights? | Monthly | Yes | No |
Has the Issuer/Co-Obligor transferred any of the Intellectual Property Collateral (other within Co- Obligor parties)? | Monthly | Yes | No |
Have any of Issuer/Co-Obligor’s assets been attached, seized, subject to a warrant or judgment, or levied upon? | Monthly | Yes | No |
Has Issuer/Co-Obligor been enjoined, restrained, or in any way prevented by court order from conducting business? | Monthly | Yes | No |
Has the Issuer/Co-Obligor provided evidence of renewal of each line of required insurance? | Within 30 days of insurance renewal date | Yes | No |
Comments Regarding Exceptions: See Attached.
Signed by Carbon Revolution Operations Pty Ltd ACN 154 435 355 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Name of director (print) | Name of director/secretary (print) |
MONITOR USE ONLY
Received by: | |
AUTHORIZED SIGNER |
Date: |
Verified: | |
AUTHORIZED SIGNER |
Date: |
Compliance Status | Yes | No |
EXHIBIT C
DISBURSEMENT LETTER
May 23, 2023
The undersigned, being respectively the duly elected and acting Managing Director and Company Secretary of CARBON REVOLUTION OPERATIONS PTY LTD, a company limited by shares and incorporated in Australia (“Issuer”), does hereby certify to NEWLIGHT CAPITAL LLC, as Servicer (“Servicer”) for UMB BANK, NATIONAL ASSOCIATION, as Trustee, solely in its capacity as Disbursing Agent (“Disbursing Agent”), in connection with that certain Proceeds Disbursing and Security Agreement dated as of May 23, 2023 by and among Issuer, Carbon Revolution Limited and Carbon Revolution Technology Pty Ltd, each as a Co-Obligors, and the other Co-Obligors party thereto, Servicer and Disbursing Agent (the “Disbursing Agreement”; other capitalized terms used below having the meanings set forth in the Disbursing Agreement to the extent defined therein) that on the date hereof and the date of any disbursement hereunder:
1. The representations and warranties made by Issuer and any other Co-Obligor in Section 5 of the Disbursing Agreement and in the other Finance Documents are true and correct in all material respects (provided that that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language is true and correct in all respects) as of the date hereof and the date of any disbursement hereunder; provided that those representations and warranties expressly referring to a specific date are true and correct in all material respects (or in all respects, with respect to any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language) as of such date.
2. No Default or Event of Default has occurred and is continuing or will exist after giving effect to any disbursement requested hereunder.
3. Issuer and any other Co-Obligors are in compliance with the agreements, covenants and requirements contained in Section 4, Section 6 and Section 7 of the Disbursing Agreement.
4. All conditions precedent to the making of the Term Advance set forth in Section 3 of the Disbursing Agreement have been satisfied.
5. Since December 31, 2023 no circumstance or circumstances exist or have occurred that could reasonably be expected to have a Material Adverse Effect.
6. Either (i) no consents, licenses or approvals are required in connection with the execution, delivery and performance by any Co-Obligor, and the validity against such Co-Obligor, of the Finance Documents to which such Co-Obligor is a party, or (ii) all such consents, licenses and approvals have been obtained and are in full force and effect;
7. As of the date hereof, and after giving effect to the consummation of the transactions contemplated by the Disbursing Agreement and the other Finance Documents (including, without limitation, any disbursement requested hereunder), the Issuer and the other Co-Obligors, on a consolidated basis, are Solvent
8. The undersigned is a Responsible Officer.
9. The Issuer hereby requests that the proceeds of the Term Advance shall be disbursed in accordance with the flow of funds attached hereto as Schedule I.
[Balance of Page Intentionally Left Blank]
Dated as of the date first set forth above.
Signed by Carbon Revolution Operations Pty Ltd ACN 154 435 355 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Name of director (print) | Name of director/secretary (print) |
Received as of the 23rd Day of MAY, 2023
by:
NEWLIGHT CAPITAL LLC
By |
Name: |
Title: |
[Signature Page to Disbursement Letter]
Schedule I
(see attached)
EXHIBIT D
INSURANCE AUTHORIZATION LETTER
[ ], 20[ ]
In accordance with the insurance coverage requirements of the Proceeds Disbursing and Security Agreement dated as of [ ], 20[ ] (the “Agreement”) among UMB BANK, NATIONAL ASSOCIATION, as Trustee, solely in its capacity as Disbursing Agent (“Disbursing Agent”), NEWLIGHT CAPITAL LLC, as Servicer (“Servicer”) and [ ] a [ ] (“Issuer”), coverage is to be provided as set forth below:
COVERAGE: | All risk including liability and property damage. |
INSURED: | [ ] AND ITS DIRECT AND INDIRECT SUBSIDIARIES |
LOCATION(S) OF COLLATERAL:
1. | [ ] |
2. | [ ] |
Insurance Broker: | [ ] |
Address: | [ ] |
Phone Number: | [ ] |
Fax Number: | [ ] |
ADDITIONAL INSURED AND LENDER LOSS PAYEE:
Newlight Capital LLC, as Servicer, as its interests may appear below.
SERVICER:
Newlight Capital LLC, as Servicer for
UMB Bank, National Association, as Trustee,
solely in its capacity as Disbursing Agent
1135 Kildaire Farm Road, Suite 200
Cary, North Carolina 27511
[***]
COVERAGE:
[ ]
[Remainder of page intentionally left blank; signature page follows]
The above coverage is to be provided prior to funding the Agreement. Issuer hereby agrees to pay for the coverage above and by signing below acknowledges its obligation to do so.
Signed by Carbon Revolution Operations Pty Ltd ACN 154 435 355 in accordance with section 127 of the Corporations Act 2001 (Cth) by: |
||
Signature of director | Signature of director/secretary | |
Name of director (print) | Name of director/secretary (print) |
Date: [ ], 20[ ]
Exhibit E
FORM OF VERIFICATION CERTIFICATE
[____]
Date: [_____ ___], 20[__]
This [Secretary’s] Certificate is delivered pursuant to Section 3.1(b) of that certain Proceeds Disbursing and Security Agreement, dated as of the date hereof, by and among [____] a [____] (the “Issuer”), UMB Bank, National Association, not in its individual capacity, but solely as trustee, solely in its capacity as Disbursing Agent, and Newlight Capital LLC, as Servicer (the “Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meaning given to such term in the Agreement).
I, the undersigned [Secretary] of the Issuer, HEREBY CERTIFY that the Issuer is organized and existing under and by virtue of the laws of the State of [____].
I Further Certify that attached hereto as Attachment 1 is a true and complete copy of the Certificate of Formation, Articles of Incorporation (or other applicable formation document) (collectively, the “Formation Documents”) of the Issuer, including all amendments thereto, if any, as certified by the Secretary of State of [____] as of recent date, and such Formation Documents have not been otherwise amended, modified or revoked and are in full force and effect on the date hereto.
I Further Certify that attached hereto as Attachment 2 is a true and complete copy of the Bylaws, Operating Agreement (or other applicable governing document) (collectively, the “Governing Documents”) of the Issuer, including all amendments thereto, if any, as in effect on the date hereof, and such Governing Documents have not been otherwise modified or amended and remain in full force and in effect on the date hereof.
I Further Certify that attached hereto as Attachment 3, is a true, correct and complete copy of the resolutions duly adopted at a meeting of the board of directors, board of managers, shareholders (or other applicable governing body) of the Issuer, duly called and held, at which a quorum was present and voting (or by other duly authorized corporate action in lieu of a meeting).
I Further Certify that each person listed on Attachment 4 hereto is as of the date hereof a duly appointed, qualified and acting officer of the Issuer, and the signature set forth opposite said officer’s name is the true, correct and genuine signature of such officer, and each such officer is authorized to execute and deliver on behalf of the Issuer, the Agreement and the Finance Documents (as defined therein).
I Further Certify that attached hereto as Attachment 5 is a true, accurate and complete copy of the certificate of good standing, certificate of status or other applicable document in respect of the Issuer issued by the Secretary of State of [____], certifying that the Issuer is duly incorporated, in good standing and has legal existence under the laws of the State of [____], and certificates of foreign qualification with respect to the Issuer certifying as to the Issuer’s foreign qualification in each jurisdiction where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name as of the date first written above.
By: |
Name: |
Title: |
The undersigned, [_______] of the Issuer, hereby certifies that [______] is the duly elected and qualified [______] of the Issuer and the signature set forth above is [__] true and genuine signature.
By: |
Name: |
Title: |
attachment 1
Formation Documents of the Issuer
(see attached)
attachment 2
Governing Documents of the Issuer
(see attached)
attachment 3
Unanimous Written Consent of the [_______] of [____]
Dated: [_____ ___], 20[__]
The undersigned, being all of the [______] (the “Governing Body”) of [____] a [____] (the “Company”), acting by written consent without a meeting pursuant to [______] of the State of [____], hereby adopt the following resolutions:
WHEREAS, we, the undersigned, being all of the members of the [_______] of the Company, have been presented with the proposed transaction whereby the Company shall issue $[_______] in Fixed Rate Senior Notes pursuant to that certain Trust Indenture to be dated on or around the date hereof between the Company and UMB Bank, National Association, as Trustee (the “Trustee”), as amended, modified or supplemented from time to time (the “Indenture”), the proceeds of which shall be disbursed in accordance with the terms of that certain Proceeds Disbursing and Security Agreement to be dated on or about the date hereof among the Company, UMB Bank, National Association, as Disbursing Agent, and Newlight Capital LLC, as servicer, collateral agent and Security Trustee(“Servicer”) (the “Disbursement Agreement”);
WHEREAS, in connection with the Indenture and the Disbursement Agreement, the Company is required to issue certain notes (the “Notes”) and enter into the Finance Documents (as defined in the Disbursement Agreement);
WHEREAS, it is in the best interests of the Company that the Company enter into the Finance Documents (as defined in the Disbursement Agreement) and to issue the Notes;
WHEREAS, the Company and each of the undersigned members of the Governing Body of the Company does hereby consent to adopt and confirm the following resolutions with the intent that said resolutions shall be as valid and effective as if they had been passed and confirmed at one or more meetings duly convened.
NOW, THEREFORE, BE IT:
Resolved, that the form, terms and conditions of the Indenture, the Disbursement Agreement, the Notes, and the other Finance Documents and Trust Transaction Documents are hereby approved.
Resolved, that each of the [Chief Executive Officer and Chief Financial Officer], or any other executive officer of the Company (each an “Authorized Officer”), acting for and on behalf of the Company and as its act and deed be, and they hereby are, authorized and empowered:
Note Proceeds. To receive from time to time from UMB Bank, National Association, as Trustee, solely in its capacity as Disbursing Agent (“Disbursing Agent”), on such terms as agreed in the Disbursement Agreement the proceeds of the Notes.
Execute Finance Documents. To execute and deliver to the Servicer, Disbursing Agent and/or the Trustee, as applicable, and perform, the Indenture, the Disbursement Agreement and the, and any and all other Finance Documents to which the Company is a party or required to execute or deliver, and also to execute or deliver to Disbursing Agent, the Trustee and/or Servicer, as applicable, any amendments, modifications, supplements, renewals, extensions, refinancings, consolidations, or substitutions for the Finance Documents that may be requested or as they may in their discretion deem advisable, such determination to be conclusively evidenced by such Authorized Officers’ execution of the same.
Grant Security. To grant a security interest to Servicer in its capacity as Security Trustee, for itself and/or the benefit of the Security Beneficiaries, in the Collateral described in the Finance Documents, which security interest may secure any and all of the Company’s Obligations (as defined in the Disbursing Agreement) and of the Company’s other obligations under the Finance Documents and the Trust Transaction Documents and take all such actions may be required or requested by Servicer, the Trustee, and/or Disbursing Agent to perfect and maintain a perfected, first priority security interest in such Collateral.
Negotiate Items. To draw, endorse, and discount with Disbursing Agent, Servicer and/or the Trustee, as applicable, all drafts, trade acceptances, promissory notes, or other evidences of indebtedness payable to or belonging to the Company or in which the Company may have an interest, and either to receive cash for the same or to cause such proceeds to be credited to the account of the Company, or to cause such other disposition of the proceeds derived therefrom as they may deem advisable.
Further Acts. To designate additional or alternate individuals as being authorized under these Resolutions, and in all cases, to do and perform such other acts and things, to pay any and all fees, costs and expenses, and to execute and deliver such other documents, agreements certificates and other writings as they may in their discretion deem reasonably necessary or proper or advisable in order to carry into effect, the provisions of these Resolutions, such determination to be conclusively evidenced by such Authorized Officer’s execution of the same.
Be It Further Resolved, that any and all acts authorized pursuant to these resolutions and performed prior to the passage of these resolutions are hereby ratified and approved, that these Resolutions shall remain in full force and effect and Disbursing Agent, Servicer and Trustee may rely on these Resolutions until written notice of their revocation shall have been delivered to and actually received by Disbursing Agent and Servicer. Any such notice shall not affect any of the Company’s agreements or commitments in effect at or prior to the time such notice is given.
We Further Certify that the officers, employees, and agents named above are duly elected, appointed, or employed by or for the Company, as the case may be, and occupy the positions set opposite their names in the incumbency delivered in connection herewith; that the foregoing Resolutions now stand of record on the books of the Company, and that the Resolutions have not been rescinded, revoked, superseded or modified in any manner and are in full force and effect on the date set forth above.
[remainder of page intentionally left blank]
In Witness Whereof, each of the undersigned has duly executed this Unanimous Written Consent to be effective as of the date first written above.
By: | ||
By: | ||
By: | ||
By: | ||
Each as a member of the [______] of [____] |
attachment 4
Incumbency of Issuer
Name | Office | Signature | ||
attachment 5
Good Standing Certificate and foreign qualification certificate of Issuer
(see attached)
Exhibit F
Financial Covenant Supplement
[***]: [***]
[***]: [***]
[***]: [***]
[***]: [______]
[***]
[***]
[***]
[***] |
By: |
Name: |
Title: |
[***]
[***] | ||
[***] | [***] | |
[***] | [***] |
[***] | |
[***] | [***] |
Name of Subsidiary
|
Jurisdiction
|
Carbon Revolution Limited
|
Australia
|
Carbon Revolution Operations Pty Ltd
|
Australia
|
Carbon Revolution Technology Pty Ltd
|
Australia
|
Carbon Revolution (USA) LLC
|
United States
|
Carbon Revolution (UK) Limited
|
United Kingdom
|
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