Spac Agreement

Here are the most important steps after entering into a final acquisition agreement with a target company: the stock market rules do not always require a vote of PSPC shareholders, but the structure of the PSPC transaction (e.g. B if PSPC does not survive a merger or restructures it in another jurisdiction) may require a vote. and if more than 20% of the eligible PSPC shares are issued as part of the PSPC Transaction (to the target company`s seller, PIPE investors or a combination), the stock exchange rules require a shareholder vote. This leads to most of PSPC`s operations involving a public vote of PSPC shareholders, which involves filing a proxy statement with the SEC, auditing and commenting by the SEC, sending the proxy statement to PSPC shareholders, and holding a shareholders` meeting. The proxy process can take three to five months or more from the date of signing of a final agreement for the PSPC transaction. Private equity managers considering sponsoring a PSPC face unique considerations, including the location of the sponsor in the fund structure and whether the fund documents allow for the formation of a PSPC. A common question is whether the sponsor should be a portfolio company of one or more existing funds or a subsidiary of the investment manager. Fund agreements may limit the investment manager`s ability to establish a PSPC outside of an existing fund. Alternatively, the types of assets that PSPC is expected to track may not fall within the overall investment mandate of an existing fund. In addition, the private equity manager will likely need to consider how to allocate investment opportunities between PSPC and existing funds.

In addition to the contracts and documents described above, PSPC also adopts, as part of its creation, relatively standardized articles among Delaware SPACs that contain customary provisions for a publicly traded company of Delaware Corporation. PSPC also enters into an investment management trust agreement with an agent who regulates the investment and release of funds held in the trust account after the IPO. Finally, PSPC generally enters into agreements with their directors and officers to provide contractual compensation in addition to the Charter indemnity. 7SPCSacers have shorter lead times to complete the PSPC transaction, with examples of only 12 months or more often 18 or 21 months. Most of them include features to automatically extend the period if a final agreement or statement of intent is signed before the end of the specified period or when the sponsor has provided additional capital on the trust account. (back) In a traditional IPO, the sponsor and the directors and officers sign a lock-in agreement for 180 days from the pricing of the IPO. For a PSPC IPO, the typical lock-in close runs for up to one year from the closing of the PSPC transaction, subject to early termination if the common shares are traded above a fixed price (normally $12.00 per share) for 20 days out of 30 from 150 days after the closing of the PSPC transaction. . . .