Item 1.01 Entry Into A Material Definitive Agreement.
Amendment to the Business Combination Agreement
As previously disclosed in the Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "SEC") on November 8, 2021 (the "Current
Report"), on November 7, 2021, Duddell Street Acquisition Corp., a Cayman
Islands exempted company ("DSAC"), entered into an Agreement and Plan of Merger
(as it may be amended, supplemented or otherwise modified from time to time, the
"Business Combination Agreement"), by and among DSAC, Grassroots Merger
Sub, Inc., a Delaware corporation ("Merger Sub"), and FiscalNote Holdings, Inc.,
a Delaware corporation ("FiscalNote"). The Business Combination Agreement
provides for, among other things, the following transactions on the closing
date: (i) DSAC will domesticate as a Delaware corporation ("Newco", and such
transaction, the "Domestication") and, in connection with the Domestication,
(A) each then issued and outstanding Class A ordinary share of DSAC will convert
automatically into one share of Class A common stock of Newco (the "Newco
Class A Common Stock"), (B) each then issued and outstanding Class B ordinary
share of DSAC will convert automatically into one share of Newco Class A Common
Stock, and (C) each then issued and outstanding common warrant of DSAC will
convert automatically into one warrant to purchase one share of Newco Class A
Common Stock; and (ii) at least one day after the Domestication, Merger Sub will
merge with and into FiscalNote, with FiscalNote as the surviving company in the
merger and, after giving effect to such merger, continuing as a wholly-owned
subsidiary of Newco (the "Merger"). The Domestication, the Merger and the other
transactions contemplated by the Business Combination Agreement are hereinafter
referred to as the "Business Combination" and the closing of the Business
Combination is referred to as the "Closing."
On May 9, 2022, DSAC, FiscalNote and Merger Sub entered into a First Amendment
to the Business Combination Agreement (the "Amendment"). Pursuant to the
Amendment, the parties thereto agreed to (i) an additional triggering event (the
volume-weighted average price of the Newco Class A Common Stock for certain
trading periods post-Closing reaching $10.50) for issuing an additional tranche
of earnout consideration pursuant to the Business Combination Agreement, (ii) an
extension of the Termination Date (as defined in the Business Combination
Agreement) to August 7, 2022 and (iii) a bonus issuance of 0.57 shares of Newco
Class A Common Stock to the holders of DSAC's Class A ordinary shares that do
not elect to redeem their shares for each share of Newco Class A Common Stock
received by such holders in the Domestication and to the Backstop Purchasers (as
defined below) for each Backstop Purchase Share (as defined below) pursuant to
the Backstop Amendment (as defined below). In addition, certain provisions of
the Business Combination Agreement were amended to reflect the transactions
contemplated by the Debt Commitment Letter (as defined below), the termination
of the Subscription Agreements (as defined below) and the removal of the PIPE
Financing (as defined below).
The foregoing description of the Amendment is subject to and qualified in its
entirety by reference to the full text of the Amendment, a copy of which is
included as Exhibit 2.1 hereto, and the terms of which are incorporated herein
by reference.
Termination of the PIPE Financing
As previously disclosed in the Current Report, in connection with the signing of
the Business Combination Agreement, DSAC entered into subscription agreements
(the "Subscription Agreements") with certain investors, including affiliates of
DSAC's sponsor, pursuant to which such investors agreed to subscribe for and
purchase, and DSAC agreed to issue and sell to such investors, on the closing
date of, and immediately prior to (but subject to), the Merger, an aggregate of
10,000,000 shares of Newco Class A Common Stock for a purchase price of $10.00
per share, for aggregate gross proceeds of $100,000,000 (the "PIPE Financing").
In connection with the execution of the Amendment and the Debt Commitment
Letter, the parties to the Subscription Agreements agreed to terminate such
agreements and the transactions contemplated thereby.
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Amendment to the Backstop Agreement
As previously disclosed in the Current Report, in connection with the signing of
the Business Combination Agreement, DSAC and certain affiliates of its sponsor
(the "Backstop Purchasers") entered into a backstop agreement (the "Backstop
Agreement") whereby the Backstop Purchasers have agreed, subject to the other
terms and conditions included therein, at the BPS Closing (as defined in the
Backstop Agreement), to subscribe for shares of Newco Class A Common Stock in
order to fund any redemptions by shareholders of DSAC in connection with the
Business Combination, in an amount of up to $175,000,000.
On May 9, 2022, in connection with the execution of the Amendment, DSAC and the
Backstop Purchasers entered into an Amendment to the Backstop Agreement (the
"Backstop Amendment"). Pursuant to the Backstop Amendment, DSAC has agreed to a
bonus issuance to each Backstop Purchaser of 0.57 shares of Newco Class A Common
Stock for each Backstop Purchase Share (as defined in the Backstop Agreement)
("Backstop Purchase Share") immediately prior to the effective time of the
Merger.
The foregoing description of the Backstop Amendment is subject to and qualified
in its entirety by reference to the full text of the Backstop Amendment, a copy
of which is included as Exhibit 10.1 hereto, and the terms of which are
incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 9, 2022, DSAC and FiscalNote issued a joint press release announcing
their entry into the Amendment, FiscalNote Inc.'s entry into the Debt Commitment
Letter and the other developments described herein. The press release is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
The foregoing (including Exhibit 99.1) is being furnished pursuant to Item 7.01
and will not be deemed to be filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be subject
to the liabilities of that section, nor will it be deemed to be incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act.
Item 8.01 Other Events
On May 9, 2022, FiscalNote, Inc., a wholly owned indirect subsidiary of
FiscalNote, entered into a debt commitment letter (the "Debt Commitment Letter")
with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC
and ACM ASOF VIII SaaS FinCo LLC (the "Commitment Parties"), pursuant to which
the Commitment Parties have committed to provide term loans to FiscalNote, Inc.
concurrent with the Closing, which funds are expected to be used, in part, to
retire certain existing indebtedness of FiscalNote and its subsidiaries, as well
as for working capital and general corporate purposes (the "Debt Financing").
The Debt Financing is expected to consist of a senior secured term loan facility
in an aggregate principal amount of up to $150.0 million. The annual interest is
expected to consist of the greater of (a) Prime Rate (as referenced in the Debt
Commitment Letter) plus 5.0% and (b) 9.0% and PIK interest (as referenced in the
Debt Commitment Letter) of 1.00%. The term loan facility is expected to mature
five years after the Closing.
The funding of the Debt Financing is expected to be contingent on the
satisfaction or waiver of certain conditions set forth in the Debt Commitment
Letter, including, without limitation, execution and delivery of definitive
documentation consistent with the final terms of the Debt Commitment Letter and
a requirement for unrestricted cash on the balance sheet of Newco on a
consolidated basis (after giving effect to the Business Combination and the
other transactions contemplated by the Business Combination Agreement) to be no
less than $100 million. The funding of the Debt Financing is available until the
earliest of (a) the termination of the Business Combination Agreement by
FiscalNote, prior to closing of the Merger, (b) the consummation of the Merger
without the use of the Debt Financing and (c) 11:59 p.m., New York City time, on
August 7, 2022.
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Additional Information and Where to Find It
For additional information on the proposed Business Combination, see the
relevant materials that DSAC has filed with the SEC, including a registration
statement on Form S-4 (the "Form S-4") with the SEC, which includes a proxy
statement/prospectus of DSAC. DSAC's shareholders and other interested persons
are advised to read the preliminary proxy statement/prospectus and the
amendments thereto and, when available, the definitive proxy statement and
documents incorporated by reference therein filed or to be filed with the SEC in
connection with the proposed Business Combination, as these materials contain
important information about FiscalNote, DSAC and the proposed Business
Combination. Promptly after the Form S-4 is declared effective by the SEC, DSAC
will mail the definitive proxy statement/prospectus and a proxy card to each
shareholder entitled to vote at the meeting relating to the approval of the
Business Combination and other proposals set forth in the proxy
statement/prospectus. Before making any voting or investment decision, investors
and shareholders of DSAC are urged to carefully read the entire registration
statement and proxy statement/prospectus, when they become available, and any
other relevant documents filed with the SEC, as well as any amendments or
supplements to these documents, because they will contain important information
about the proposed Business Combination. The documents filed by DSAC with the
SEC may be obtained free of charge at the SEC's website at www.sec.gov.
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
Participants in the Solicitation
DSAC and its directors and executive officers may be deemed participants in the
solicitation of proxies from DSAC's shareholders with respect to the Business
Combination. A list of the names of those directors and executive officers and a
description of their interests in DSAC are included in the proxy
statement/prospectus for the Business Combination, which is available at
www.sec.gov. Information about DSAC's directors and executive officers and their
ownership of DSAC shares are other information regarding the interests of the
participants in the proxy solicitation are also included in the proxy
statement/prospectus pertaining to the Business Combination when it becomes
available. These documents can be obtained free of charge from the source
indicated above.
FiscalNote and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of DSAC in
connection with the Business Combination. A list of the names of such directors
and executive officers and information regarding their interests in the proposed
Business Combination will be included in the proxy statement/prospectus for the
Business Combination when available.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about future financial and operating results,
plans, objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified by words such
as "will," "are expected to," "is anticipated," "estimated," "believe,"
"intend," "plan," "projection," "pro forma," "outlook" or words of similar
meaning. These forward-looking statements include, but are not limited to,
statements regarding FiscalNote's industry and market sizes, future
opportunities for FiscalNote and DSAC, FiscalNote's estimated future results and
the proposed Business Combination between DSAC and FiscalNote, including pro
forma market capitalization, pro forma revenue, the expected transaction and
ownership structure and the likelihood, timing and ability of the parties to
successfully consummate the proposed Business Combination. Such forward-looking
statements are based upon the current beliefs and expectations of DSAC's and
FiscalNote's management and are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
difficult to predict and generally beyond DSAC's or FiscalNote's control. Actual
results and the timing of events may differ materially from the results
anticipated in these forward-looking statements.
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Nothing in this Current Report on Form 8-K should be regarded as a
representation by any person that the forward-looking statements set forth
herein will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place undue reliance
on forward-looking statements, which speak only as of the date they are made.
Except as may be required by law, neither DSAC nor FiscalNote undertakes any
duty to update these forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 Amendment to Agreement and Plan of Merger, dated as of May 9, 2022,
by and among Duddell Street Acquisition Corp., Grassroots Merger
Sub, Inc. and FiscalNote Holdings, Inc.
10.1 First Amendment to Backstop Agreement, dated as of May 9, 2022, by
and among Duddell Street Acquisition Corp. and certain backstop
purchasers.
99.1 Joint Press Release, dated May 9, 2022.
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