GP-Act III Acquisition Enters Business Combination Agreement With Dronamics Group
Benzinga Newsdesk 5 hours ago
M&ANews
Pursuant to the Business Combination Agreement, (i) GP-Act III Merger Sub, Inc., a Delaware corporation to be incorporated following the date of the Business Combination Agreement as a wholly owned subsidiary of Holdco
Pursuant to the Business Combination Agreement, (i) GP-Act III Merger Sub, Inc., a Delaware corporation to be incorporated following the date of the Business Combination Agreement as a wholly owned subsidiary of Holdco ("Merger Sub"), will become a party to the Business Combination Agreement prior to the Closing (as defined below) and (ii) the Company will cause a Delaware corporation ("Newco") to be incorporated following the date of the Business Combination Agreement solely for the purpose of consummating the Company Reorganization (as defined below), the Merger (as defined below) and the other Transactions (as defined below), and will cause Newco to become a party to the Business Combination Agreement pursuant to a joinder agreement (the "Newco Joinder") promptly following its incorporation and in any event prior to the commencement of the Company Reorganization. Each of Holdco, Merger Sub, the Company and Newco will individually be referred to herein as a "Party" and, collectively, as the "Parties." Capitalized terms used but not defined herein have the meanings ascribed to them in the Business Combination Agreement.
Pursuant to the Business Combination Agreement, the Parties have agreed that, on the terms and subject to the conditions set forth in the Business Combination Agreement, (i) subject to receipt of the Holdco Shareholder Approval (as defined below), at least one business day prior to the Effective Time (as defined below), Holdco will de-register as an exempted company incorporated in the Cayman Islands and transfer by way of continuation to, and domesticate as a corporation under the laws of, the State of Delaware (the "Holdco Domestication"), (ii) prior to the Closing (as defined below), the Company will effect a reorganization pursuant to which, among other things, (A) the holders of shares in the capital of the Company (the "Company Shareholders" and such shares, the "Company Shares") will transfer each Company Share held by them to Newco by way of a share-for-share exchange in consideration for the issue of one share of common stock of Newco ("Newco Stock") for each Company Share so transferred, such that the Company will become a wholly owned subsidiary of Newco, (B) the Company will novate (or, solely to the extent novation is not available under the terms of the applicable instrument, assign) to Newco, and Newco will assume, the Company’s rights and obligations under the Company SAFEs (as so novated, the "Newco SAFEs") and under the Company Convertible Notes the holders of which have consented to such assignment and assumption (as so assigned, the "Newco Convertible Notes"), and, subject to the terms of the Business Combination Agreement, the Legacy Notes (as defined below) and Strategic Investor Instruments (as defined in the Business Combination Agreement) will be treated in accordance with Section 3.3 thereof, (C) Newco will adopt an equity incentive plan and assume the Company Options, subject to the consent of the applicable optionholders (as so assumed, each, a "Newco Option"), (D) any shares of Newco Stock issued in connection with Newco’s formation will be surrendered and cancelled without consideration and (E) following the completion of the foregoing steps, the Company will elect to be treated as an entity disregarded from Newco for U.S. federal income tax purposes (collectively, the "Company Reorganization") and (iii) on the Closing Date (as defined below), following the completion of the Holdco Domestication and the Company Reorganization, Merger Sub will merge with and into Newco (the "Merger" and, together with the Holdco Domestication, the Company Reorganization and the other transactions contemplated by the Business Combination Agreement, the "Transactions"), with Newco as the surviving entity and a wholly owned subsidiary of Holdco. It is also anticipated that, in connection with the Transactions, Holdco will change its name to "Dronamics Holdings, Inc." (or another name as designated by the Company).
The Company and Newco may not complete the Company Reorganization until (i) the conditions to the Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing or that relate to the Company Reorganization), (ii) Holdco has delivered its pre-Closing certificate setting forth, among other things, the amount of Closing Date Cash (as defined in the Business Combination Agreement) and (iii) Holdco has confirmed to the Company in writing that it reasonably expects the Minimum Cash Condition (as defined below) to be satisfied at the Closing. The closing of the Transactions (the "Closing") will take place on the date that is two business days after the first date on which all conditions to the Closing set forth in the Business Combination Agreement have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing), or at such other time as Holdco and the Company may mutually agree in writing (the date on which the Closing occurs, the "Closing Date"), and the Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware, or at such later time as may be agreed by Holdco and Newco and specified therein (the "Effective Time"). The Closing and the Effective Time will occur after the completion of the Holdco Domestication, the Holdco Conversion (as defined below) and the Company Reorganization, with at least two hours having elapsed between the completion of each of the foregoing and the Closing and the Effective Time.