| Item 1.01 |
Entry Into A Material Definitive
Agreement. |
Business Combination Agreement
On June 16, 2023, (i) AP Acquisition Corp, an exempted company
limited by shares incorporated under the laws of the Cayman Islands (“SPAC”), (ii) JEPLAN Holdings, Inc.,
a Japanese corporation (kabushiki kaisha) incorporated under the laws of Japan (“PubCo”), (iii) JEPLAN
MS, Inc., an exempted company limited by shares incorporated under the laws of the Cayman Islands and a direct wholly-owned subsidiary
of PubCo (“Merger Sub”), and (iv) JEPLAN, Inc., a Japanese corporation (kabushiki kaisha)
incorporated under the laws of Japan (the “Company” or “JEPLAN”), entered into a
Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business
Combination Agreement”).
The Business Combination Agreement
and the transactions contemplated thereby were unanimously approved by the board of directors of each of SPAC and the Company.
The Business Combination Agreement
provides for, among other things, the following transactions: (i) the share exchange involving PubCo, the Company and all shareholders
of the Company (the “Share Exchange”) and other ancillary transactions in connection therewith (the “Pre-Merger
Reorganization”) such that the Company will become a wholly-owned subsidiary of PubCo upon completion of the Pre-Merger
Reorganization; and (ii) immediately following the completion of the Pre-Merger Reorganization, the merger of Merger Sub with and
into SPAC, with SPAC being the surviving entity and becoming a wholly-owned subsidiary of PubCo (the “Merger”).
The Pre-Merger Reorganization, the Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter
referred to as the “Business Combination.”
The Business Combination
Subject
to, and in accordance with, the terms and conditions of the Business Combination Agreement, in connection with the Share Exchange, at
the effective time of the Share Exchange (the “Share Exchange Effective Time”), (a) each issued and outstanding
common share of the Company, including each share of the Company issued prior to the Share Exchange Effective Time in connection with
the conversion of all issued and outstanding convertible notes of the Company (each a “Company Share”), will
be exchanged for such fraction of a newly issued common share of PubCo (each a “PubCo Share”) equal to the
Exchange Ratio (as defined below and more fully defined in the Business Combination Agreement), provided that each shareholder of the
Company may elect to receive, in lieu of PubCo Shares, American depositary shares of PubCo, each representing one PubCo Share (each a
“PubCo ADS”) in connection with the Share Exchange; and (b) each issued and outstanding option of the
Company (each a “Company Option”) will be exchanged for an option to purchase such number of PubCo Shares equal
to such fraction of PubCo Shares that is equal to the Exchange Ratio (each such option,
a “PubCo Option”).
Subject to, and in accordance
with, the terms and conditions of the Business Combination Agreement, immediately following the Share Exchange Effective Time and at
the effective time of the Merger (the “Merger Effective Time”), (a) each outstanding Class A ordinary
share of SPAC (including Class A ordinary shares of SPAC converted from the outstanding Class B ordinary shares of SPAC, but
excluding (i) Class A ordinary shares of SPAC held by shareholders who have validly exercised their redemption rights, (ii) treasury
shares held by SPAC, if any, and (iii) Class A ordinary shares of SPAC held by shareholders who have validly exercised their
dissenters’ rights, if any) will automatically be cancelled in exchange for the right to receive one PubCo ADS; (b) each outstanding
public warrant of SPAC will automatically cease to exist in exchange for one PubCo Series 1 warrant (each a “PubCo Series 1
Warrant”) to purchase PubCo Shares to be delivered in the form of PubCo ADSs pursuant to the terms and conditions of that
certain amended and restated warrant agreement to be entered into by and between PubCo and its warrant agent at the Merger Effective
Time in substantially the form annexed to the Business Combination Agreement as Exhibit H (the “PubCo Warrant Agreement”);
and (c) each outstanding private placement warrant of SPAC will automatically cease to exist in exchange for one PubCo Series 2
warrant (each a “PubCo Series 2 Warrant”, and each of PubCo Series 1 Warrants and PubCo Series 2
Warrants is referred to as a “PubCo Warrant”) to purchase PubCo Shares to be delivered in the form of PubCo
ADSs pursuant to the terms and conditions of the PubCo Warrant Agreement.
The “Exchange Ratio”
is a ratio determined by dividing the Price per Share (as described below and more fully defined in the Business Combination Agreement)
by $10.00. “Price per Share” is defined in the Business Combination Agreement to mean an amount equal to $300,000,000
divided by an amount equal to (a) the aggregate number of Company Shares (i) that are issued and outstanding immediately prior
to the Share Exchange Effective Time and (ii) that are issuable upon the exercise or settlement of all Company Options, warrants,
convertible notes and other equity securities of the Company that are issued and outstanding immediately prior to the Share Exchange
Effective Time, minus (b) the number of Company Shares held by the Company or any of its subsidiaries as treasury shares, if any.
Representations and Warranties
The Business Combination Agreement
contains representations and warranties of the parties thereto that are customary for transactions of this nature, including with respect
to, among other things: (i) organization, good standing and qualification; (ii) capitalization; (iii) authorization; (iv) consents;
no conflicts; (v) compliance with laws; consents; permits; (vi) tax matters; (vii) financial statements; (viii) absence
of changes; (ix) actions; (x) liabilities; (xi) material contracts and commitments; (xii) title; properties; (xiii) intellectual
property rights; (xiv) labor and employment matters; (xv) employee benefits; (xvi) brokers; (xvii) proxy/registration
statement; (xviii) environmental matters; (xix) insurance; (xx) related parties and (xxi) data protection. The representations
and warranties of the respective parties to the Business Combination Agreement will not survive the closing of the Merger.
Covenants
The
Business Combination Agreement includes customary covenants of the parties with respect to operation of their respective businesses
prior to consummation of the Business Combination and efforts to satisfy conditions to consummation of the Business Combination. The
Business Combination Agreement contains additional covenants of the parties, including, among others: (i) covenants with
respect to the preparation of the registration statement on Form F-4, including
the proxy statement contained therein, to be filed in connection with the Business Combination (the “Registration
Statement”), (ii) covenants providing that the parties shall take further actions as may be necessary, proper or
advisable to consummate and make effective the Business Combination, (iii) a covenant of SPAC to convene a meeting of
SPAC’s shareholders and to solicit proxies from its shareholders in favor of the approval of the Merger and other related
shareholder proposals, (iv) a covenant of the Company to convene a meeting of the Company’s shareholders and to seek
approval from its shareholders to approve the Business Combination and other related shareholder proposals, (v) covenants
requiring the Company to consult with SPAC in good faith and keep SPAC reasonably informed of the Company’s ongoing
Series E financing, (vi) covenants requiring PubCo, the Company and SPAC to use their commercially reasonable efforts to
consummate the transactions contemplated by the subscription agreements with investors for the subscription by such investors of
newly issued PubCo Shares or PubCo ADSs at a price of $10.00 per PubCo Share or PubCo ADS concurrently with closing of the Merger
(the “PIPE Investment”), (vii) a covenant of PubCo to take all such
action within its power as may be necessary or appropriate such that the composition of PubCo’s board of directors following
the Merger Effective Time will include one person designated by AP Sponsor LLC,
a Cayman Islands limited liability company (the “Sponsor”), pursuant to a written notice to be delivered
to PubCo sufficiently in advance of the Merger Effective Time and reasonably acceptable to the Company,
(viii) a covenant of the Company not to solicit, initiate, submit, facilitate, discuss or negotiate, directly or indirectly,
any inquiry, proposal or offer with any third-party with respect to a Company Acquisition Proposal (as defined in the Business
Combination Agreement), (ix) a covenant of SPAC not to solicit, initiate, submit, facilitate, discuss or negotiate, directly or
indirectly, any inquiry, proposal or offer with any third-party with respect to a SPAC Acquisition Proposal (as defined in the
Business Combination Agreement); and (x) covenant providing that the Company shall use its commercially reasonable efforts to
(1) obtain the consents from certain shareholders of the Company required under certain existing agreements between such
shareholders and the Company and keep SPAC informed of the progress thereof, (2) cause certain major shareholders of the Company
to enter into a lock-up agreement in substantially the same form as the Shareholder Lock-Up Agreement (as defined below), other than with respect to the Lock-up Period, and (3) if necessary, cause one or more shareholders of the Company to enter into one
or more shareholder support agreements, each in substantially the same form as the Shareholder Support Agreement (as defined below).
Conditions to the Consummation of the Transaction
Consummation
of the transactions contemplated by the Business Combination Agreement is subject to customary closing conditions, including approval
of the Business Combination by the shareholders of SPAC and the Company. The Business Combination Agreement also contains other conditions,
including, among others: (i) the accuracy of representations and warranties according to various standards, from no materiality
qualifier to a material adverse effect qualifier, (ii) no continuing and uncured material adverse effect (both for SPAC and the
Company); (iii) material compliance with pre-closing covenants, (iv) the delivery of customary closing certificates, (v) the
absence of a legal prohibition on consummating the transactions, (vi) PubCo’s
listing application with the New York Stock Exchange having been conditionally approved and the PubCo ADSs to be issued in connection
with the Business Combination having been approved for listing on the New York Stock Exchange, subject to official notice of issuance,
(vii) SPAC having at least $5,000,001 of net tangible assets remaining after redemption, unless the SPAC’s memorandum and
articles of association have been amended prior to the closing of the Merger to remove such requirement and (viii) the
amount of cash available in the trust account established for the purpose of holding the
net proceeds of SPAC’s initial public offering following the extraordinary general meeting
of SPAC’s shareholders (after deducting (x) the aggregate amount payable to SPAC’s
shareholders exercising their redemption rights, (y) all out-of-pocket fees and expenses paid or payable by SPAC, Sponsor
or their respective affiliates in connection with the Business Combination or otherwise in connection with any ordinary course business
activities and operations of SPAC and (z) all out-of-pocket fees and expenses paid or payable by the
Company or its affiliates in connection with the Business Combination), plus cash proceeds
from the PIPE Investment that have been funded to, or that will be funded in connection with
the closing of the Merger, in the aggregate equaling no less than $30,000,000 (the “Minimum
Cash Condition”).
Termination
The
Business Combination Agreement may be terminated under
customary and limited circumstances prior to the Share Exchange Effective Time, including, but not limited to: (i) by mutual written
consent of SPAC and the Company, (ii) by
either SPAC or the Company if there is a final and nonappealable Governmental Order (as
defined in the Business Combination Agreement) prohibiting the Business Combination, (iii) by
either SPAC or the Company if the vote of SPAC’s
shareholders to approve the Transaction Proposals (as defined in the Business Combination Agreement) has not been obtained,
provided that such termination right shall not be exercisable by SPAC if SPAC has materially breached any of its obligations with respect
to the joint covenants set forth in the Business Combination Agreement, (iv) by SPAC if there is any breach of any representation,
warranty, covenant or agreement on the part of the Company, PubCo or Merger Sub, such that
certain conditions to closing cannot be satisfied at the closing date of the Merger and such breach is not cured or cannot be cured within
certain specified time period, (v) by the Company if there is any breach of any representation,
warranty, covenant or agreement on the part of SPAC, such that certain conditions to closing cannot be satisfied at the closing date
of the Merger and such breach is not cured or cannot be cured within certain specified time period, (vi) by SPAC if the
Business Combination and other related proposals are not approved by the Company’s shareholders, (vii) by SPAC if any
shareholder of Merger Sub revokes, or seeks to revoke, the written resolution of the sole shareholder of Merger Sub approving the Business
Combination, (viii) by either SPAC or the Company if the Business Combination has not
been consummated by the deadline for SPAC’s completion of its initial business combination, subject to one or more extensions as
further described in the Business Combination Agreement (the “Business Combination Deadline”), or (ix) by
the Company if, based upon the final amount of redemptions by SPAC’s shareholders
in connection with the Merger, it has reasonably determined that the Minimum Cash Condition is unlikely to be satisfied by the Business
Combination Deadline.
The foregoing description of the Business Combination Agreement and
the Business Combination does not purport to be complete and is qualified in its entirety by the terms and conditions of the Business
Combination Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The Business Combination
Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement
or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract
among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with
negotiating the Business Combination Agreement. The Business Combination Agreement has been included to provide investors with information
regarding its terms. It is not intended to provide any other factual information about the parties to the Business Combination Agreement.
In particular, the representations, warranties, covenants and agreements contained in the Business Combination Agreement, which were
made only for purposes of the Business Combination Agreement and as of specific dates, were solely for the benefit of the parties to
the Business Combination Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by
confidential disclosures made for the purposes of allocating contractual risk among the parties to the Business Combination Agreement
instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to investors and reports and documents filed with the U.S. Securities and Exchange Commission (the
“SEC”). Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions
thereof, as characterizations of the actual state of facts or condition of any party to the Business Combination Agreement. In addition,
the representations, warranties, covenants and agreements and other terms of the Business Combination Agreement may be subject to subsequent
waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may
change after the date of the Business Combination Agreement, which subsequent information may or may not be fully reflected in SPAC’s
or PubCo’s public disclosures.
Other Agreements
Sponsor Support Agreement
Concurrently with the execution of the Business Combination Agreement,
the Sponsor, the Company, SPAC, PubCo and certain directors and officers of SPAC listed thereto
entered into a sponsor support agreement and deed (the “Sponsor Support Agreement”),
pursuant to which each of the Sponsor and the independent directors of SPAC has agreed to, among other things, (i) vote all
Class B ordinary shares of SPAC held by such person as of the date of the Sponsor Support
Agreement and any ordinary shares of SPAC acquired by such person after the date of the
Sponsor Support Agreement (collectively, the “Sponsor Party Subject Shares”) in favor of the transactions contemplated
by the Business Combination Agreement and related transaction documents and transaction proposals, (ii) vote against any transactions,
proposals or amendment of the organizational documents of the SPAC that would be reasonably likely to in any material respect, interfere
with, delay or attempt to discourage, frustrate the purposes of, result in a breach by SPAC of, prevent or nullify any provision of the
Business Combination Agreement or any other related transaction document, the Merger or any other transaction contemplated by the
Business Combination Agreement and related transaction documents, or change the voting rights of any class of SPAC’s share
capital in any manner, (iii) not sell, transfer, tender, grant, pledge, assign or otherwise dispose of (including by gift, tender
or exchange offer, merger or operation of law), encumber, hedge or utilize a derivative to transfer the economic interest in (collectively,
“Transfer”), or enter into any contract, option or other arrangement with respect to the Transfer of, any Sponsor
Party Subject Shares or warrants of the SPAC held by such person until termination of the Sponsor Support Agreement, subject to
certain exceptions, (iv) waive or not otherwise perfect any anti-dilution or similar protection with respect to any Sponsor Party
Subject Shares, (v) not exercise such person’s redemption rights with respect to
any Sponsor Party Subject Shares in connection with the Business Combination, and (vi) not
exercise any dissenters’ rights with respect to any share of SPAC in connection with the Business Combination. In addition,
from the date of the Business Combination Agreement through the earlier of the closing or termination of the Business Combination Agreement,
Sponsor will use its commercially reasonable efforts to (i) retain funds in the trust account and minimize and mitigate the redemption
amount by SPAC’s public shareholders in connection with their redemption right, including entering into non-redemption agreements
with certain SPAC shareholders and (ii) raise the PIPE Investment, including cooperating with SPAC and the Company as required and
necessary in connection with the PIPE Investment; provided, however, that, in each case, Sponsor will be under no obligation to cancel
or transfer any of its Sponsor shares or otherwise fund incentives in connection with such commercially reasonable efforts. Each
of the Sponsor and the independent directors of SPAC has also agreed, for the period commencing on the Merger Effective Time and
ending on the earliest of (A) the date falling 12 months after the closing of the Merger,
(B) the date on which the last reported sale price of the PubCo ADSs equals or exceeds $12.00 per PubCo ADS, as adjusted, for any
20 trading days within a 30-trading day period commencing at least 150 days after the closing of
the Merger; and (C) the date following the closing of the Merger on which PubCo
completes a liquidation, merger, share exchange or other similar transaction that results in all shareholders of PubCo having the right
to exchange their PubCo Shares (including PubCo Shares in the form of PubCo ADSs) for cash, securities or other property (the “Lock-up
Period”), not to Transfer the PubCo Shares (including PubCo Shares in the form of PubCo ADSs) acquired by such person in
connection with the Merger, subject to certain exceptions. In addition, they have agreed that, for the period commencing on the Merger
Effective Time and ending on the date falling 30 days after the closing of the Merger, not
to Transfer the PubCo Warrants acquired by each such person in connection with the Merger and any PubCo Shares (including any PubCo Shares
in the form of PubCo ADSs) received by them upon the exercise of these PubCo Warrants, subject to certain exceptions.
The
foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Sponsor Support Agreement, a copy of which is attached hereto as Exhibit 10.1 and
is incorporated herein by reference.
Shareholder Support Agreement
Concurrently with the execution of the Business Combination Agreement,
SPAC, PubCo, the Company and certain shareholders of the Company entered into a shareholder support
agreement (the “Shareholder Support Agreement”), pursuant to which
each such shareholder of the Company has agreed to, among other things, (i) vote all Company Shares held by such shareholder
as of the date of the Shareholder Support Agreement and Company Shares acquired by such person after the date, and during the term, of
the Shareholder Support Agreement (collectively, the “Shareholder Subject Shares”) in favor of the transactions
contemplated by the Business Combination Agreement and related transaction documents, (ii) vote against any transactions, proposals
or amendment of the organizational documents of the Company that would be reasonably likely to in any material respect impede, interfere
with, delay or attempt to discourage, frustrate the purposes of, result in a breach by the Company of, prevent or nullify any provision
of the Business Combination Agreement or any other related transaction document, the Pre-Merger Reorganization, the Merger or any other
transaction contemplated by the Business Combination Agreement and related transaction documents,
and (iii) not Transfer any Company Share until termination of the Shareholder Support
Agreement, subject to certain exceptions.
The
foregoing description of the Shareholder Support Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Shareholder Support Agreement, a copy of which is attached hereto as Exhibit 10.2 and
is incorporated herein by reference.
Shareholder Lock-Up Agreement
Concurrently with the execution of the Business Combination Agreement,
SPAC, PubCo, the Company and certain shareholders of the Company entered into a shareholder lock-up
agreement (the “Shareholder Lock-Up Agreement”), pursuant to which
each such shareholder of the Company has agreed to, among other things, within the Lock-up Period and subject to certain exceptions,
not tender, transfer, grant, assign, offer, sell, contract to sell, pledge or otherwise dispose of (including by gift, tender or exchange
offer, merger or operation of law), encumber, hedge or utilize a derivative to transfer the economic interest in, or make a public announcement
of any intention to effect such Transfer in, any PubCo Shares (including PubCo Shares in the form of PubCo ADSs) acquired by such person
in connection with the Pre-Merger Reorganization, including any PubCo Shares (including PubCo Shares in the form of PubCo ADSs) that
such person may acquire upon the exercise of any PubCo Options in connection with the Pre-Merger Reorganization.
The
foregoing description of the Shareholder Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Shareholder Lock-Up Agreement, a copy of which is attached hereto as Exhibit 10.3 and
is incorporated herein by reference.
Registration Rights Agreement
At
the closing of the Merger, PubCo, the Sponsor, the independent directors of SPAC (the “SPAC Holders”)
and certain shareholders of the Company (the “Company Holders”)
will enter into a registration rights agreement in
substantially the form annexed to the Business Combination Agreement (the “Registration Rights Agreement”),
pursuant to which, among other things, PubCo will agree to undertake certain resale shelf registration obligations in accordance with
the U.S. Securities Act of 1933, as amended (the “Securities Act”) and the Sponsor, the SPAC Holders and the
Company Holders will be granted customary demand and piggyback registration rights.
The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Registration Rights Agreement, a form of which is attached hereto as Exhibit 10.4 and
is incorporated herein by reference.
Warrant Assumption Agreement
At the closing of the Merger,
SPAC, PubCo, Continental Stock Transfer & Trust Company (“Continental”), Computershare Inc. and Computershare
Trust Company, N.A. (“Computershare Trust”, and together with Computershare Inc., collectively, “Computershare”)
will enter into a Warrant Assignment and Assumption Agreement in substantially the form annexed to the Business Combination Agreement
(the “Warrant Assumption Agreement”), which will provide, among other things, that at the Merger Effective
Time, Computershare will serve as the successor warrant agent in place of Continental and PubCo will assume SPAC’s obligations
under the Warrant Agreement, dated as of December 16, 2021, by and between SPAC and Continental (the “Existing Warrant
Agreement”).
The
foregoing description of the Warrant Assumption Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Warrant Assumption Agreement, a form of which is attached hereto as Exhibit 10.5 and
is incorporated herein by reference.
PubCo Warrant Agreement
At the closing
of the Merger, PubCo and Computershare will enter into the PubCo Warrant Agreement to amend and restate the Existing Warrant Agreement,
which will provide, among other things, that from and after the Merger Effective Time, each outstanding PubCo Warrant exchanged from
warrants of SPAC at the closing of the Merger shall be exercisable for PubCo Shares to be delivered in the form of PubCo ADSs, subject
to the terms and conditions of the PubCo Warrant Agreement.
The
foregoing description of the PubCo Warrant Agreement does not purport to be complete and is qualified in its entirety by the terms and
conditions of the PubCo Warrant Agreement, a form of which is attached hereto as Exhibit 10.6 and
is incorporated herein by reference.
The disclosure contained in
Item 2.03 is incorporated by reference in this Item 1.01.