Item 1.01 Entry Into A Material Definitive Agreement.
Explanatory Note
As previously reported in the Current Report on Form 8-K filed by Aurora
Acquisition Corp., a Cayman Island exempted company ("Aurora"), with the
Securities and Exchange Commission (the "SEC") on May 14, 2021, Aurora, on
May 10, 2021, entered into an Agreement and Plan of Merger (the "Merger
Agreement"), by and among Aurora, Aurora Merger Sub I, Inc., a Delaware
corporation and a direct wholly owned subsidiary of Aurora ("Merger Sub"), and
Better HoldCo, Inc., a Delaware corporation ("Better"), relating to, among other
things, (i) each of the mergers of (x) Merger Sub, with and into Better, with
Better surviving the merger as a wholly owned subsidiary of Aurora (the "First
Merger"), and (y) Better with and into Aurora, with Aurora surviving the merger
(together with the First Merger, the "Mergers" or "Business Combination"), and
(ii) as a condition to the effectiveness of the Mergers, the proposal of Aurora
to change its jurisdiction of incorporation by deregistering as an exempted
company in the Cayman Islands and domesticating as a Delaware corporation
pursuant to Section 388 of the General Corporation Law of the State of Delaware
(the "Domestication"), subject to the approval thereof by the shareholders of
Aurora.
As previously reported in the Current Report on Form 8-K filed by Aurora, with
the SEC on October 29, 2021, Aurora, on October 27, 2021, entered into Amendment
No. 1 (the "Amendment No. 1") to the Merger Agreement, by and among Aurora,
Merger Sub and Better. Pursuant to Amendment No. 1, the parties agreed to, among
other things, (i) eliminate the reference to a letter of transmittal in the
exchange procedures provisions of the Merger Agreement and (ii) amend the
proposed form of Certificate of Incorporation of Better Home & Finance Holding
Company to include the lock-up provision applicable to stockholders that
beneficially owned greater than 1% of Better capital stock as of the execution
date of the Merger Agreement that was previously contemplated to be included in
a letter of transmittal.
On November 9, 2021, Aurora entered into Amendment No. 2 (the "Amendment No. 2")
to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Amendment
No. 2 includes a further amendment to the proposed form of Certificate of
Incorporation of Better Home & Finance Holding Company to eliminate the lock-up
provision that was applicable to stockholders that beneficially owned greater
than 1% of Better capital stock as of the execution date of the Merger Agreement
that have not already signed the Better Holder Support Agreement (as defined in
the Merger Agreement).
On November 30, 2021, Aurora entered into Amendment No. 3 (the "Amendment
No. 3") to the Merger Agreement, by and among, Aurora, Merger Sub and Better.
Pursuant to Amendment No. 3, among other things, the parties (i) adjusted the
mix of consideration to be received by stockholders of Better, (ii) extended the
outside date pursuant to which the parties may elect to terminate the Merger
Agreement in accordance with its terms from February 12, 2022 to September 30,
2022 (subject to extensions relating to specified regulatory approvals), and
(iii) provided for certain additional amendments consistent with the foregoing
changes and changes contemplated by certain other documents previously described
and filed by Aurora in its Current Report on Form 8-K on December 2, 2021,
including a bridge note purchase agreement, amendments to certain existing
subscription agreements, and termination of the redemption subscription
agreement, all as described therein.
Amendment No. 4 to the Merger Agreement
On August 26, 2022, Aurora, Merger Sub and Better entered into Amendment No. 4
(the "Amendment No. 4") to the Merger Agreement, pursuant to which the parties
agreed to extend the Agreement End Date (as defined in the Merger Agreement) to
March 8, 2023.
In consideration of extending the Agreement End Date, Better will reimburse
Aurora for certain reasonable and documented expenses in an aggregate sum not to
exceed $15,000,000. The reimbursement payments will be structured in three
tranches, in each case subject to receipt by Better of reasonable documentation
related to the expenses: (i) the first payment of up to $7,500,000 will be made
within 5 business days after the date of Amendment No. 4; (ii) the second
payment of up to $3,750,000 will be made on January 2, 2023; and (iii) the third
payment of up to $3,750,000 will become due upon termination of the Merger
Agreement by mutual consent of the parties thereto, and shall be payable on
March 8, 2023 (or any earlier termination date, as applicable).
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The parties have also agreed to amend the Merger Agreement to provide a waiver
from the exclusivity provisions thereof to allow Better to discuss alternative
financing structures with SB Northstar LP.
The foregoing description of Amendment No. 4 does not purport to be complete and
is subject to, and qualified in its entirety by the terms and conditions of
Amendment No. 4, a copy of which is filed as Exhibit 2.1, to this Current
Report on Form 8-K (this "Current Report"), and incorporated herein by
reference.
Letter Agreement
As previously reported in the Current Report on Form 8-K filed by Aurora with
the SEC on December 2, 2021, Aurora previously entered into a convertible bridge
note purchase agreement (the "Bridge Note Purchase Agreement"), dated as of
November 30, 2021, with Better and the persons and entities named therein (the
"Purchasers"). Under the Bridge Note Purchase Agreement, Better issued
$750,000,000 of bridge notes that convert to shares of Class A common stock of
Aurora in connection with the closing of the Business Combination, with SB
Northstar LP and Novator Capital Sponsor Ltd. ("Novator"), as Purchasers,
purchasing $650 million and $100 million, respectively, of such bridge notes.
On August 26, 2022, Aurora, Better and Novator entered into a letter agreement
(the "Letter Agreement") to extend the maturity date of the bridge notes held by
Novator to March 8, 2023, subject to SB Northstar LP consenting to extending the
maturity of its bridge notes accordingly. Furthermore, pursuant to the Letter
Agreement, subject to Better receiving requisite shareholder approval therefor
(which Better has agreed to use reasonable best efforts to obtain), the parties
agreed that, if the Mergers have not been consummated by the maturity date of
the bridge notes, Novator will have the option, without limiting its rights
under the Bridge Note Purchase Agreement, to alternatively exchange its bridge
notes as follows: (x) $75 million of its $100 million aggregate principal amount
of bridge notes would be exchanged for newly issued shares of Better's Class B
common stock at a price per share reflecting a 75% discount to a $6.9 billion
pre-money equity valuation of Better and (y) the remaining $25 million of
Novator's bridge notes would be exchanged for Better preferred stock at price
per share reflecting a $6.9 billion pre-money equity valuation of Better.
Lastly, under the Letter Agreement, Novator and Aurora agreed to amend that
certain Subscription Agreement, dated as of May 10, 2021, by and among Aurora
and Novator (as amended, modified or supplemented from time to time in
accordance with its terms, the "Sponsor Subscription Agreement"), to provide
Novator with the option, but not the obligation, to fund the Total Sponsor Note
Commitment in respect of the Convertible Notes (as such terms are defined in the
Sponsor Subscription Agreement) on the Closing Date (as defined therein)
pursuant to Section 1.3 of the Sponsor Subscription Agreement (the "Additional
Commitment Option").
In connection with the amendment effectuating the Additional Commitment Option,
the parties agreed that if Novator does not fund all or a portion of the Total
Sponsor Note Commitment pursuant to the Additional Commitment Option, SB
Northstar LP's Total Note Commitment in respect of the Convertible Notes (as
such terms are defined in that certain Subscription Agreement, dated as of
May 10, 2021 (as amended, modified or supplemented from time to time in
accordance with its terms, the "SB Subscription Agreement") (i) shall be reduced
on a dollar-for-dollar basis by the amount of the Total Sponsor Note Commitment
that is not funded by Novator and (ii) SB Northstar LP shall be under no
obligation to fund any shortfall in the Sponsor Note Purchase Amount (as defined
in the SB Subscription Agreement), such that if Novator elects not to fund in
full the Total Sponsor Note Commitment, then SB Northstar LP's Total Note
Commitment Amount shall be reduced to $550,000,000.
The foregoing description of the Letter Agreement does not purport to be
complete and is subject to, and qualified in its entirety by the terms and
conditions of the Letter Agreement, a copy of which is filed as Exhibit 10.1 to
this Current Report, and is incorporated herein by reference.
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Item 8.01 Other Events.
Aurora strongly believes in Better and supports its market strategy. Although
Aurora and Better remain committed to completing the Business Combination,
Aurora and Better are in discussions regarding alternative financing
arrangements for Better pursuant to which the Merger Agreement and related
transactions would be terminated and Better would remain a private company. If
Better remains a private company because the Business Combination is not
completed before the Agreement End Date (as extended by Amendment No. 4) or
otherwise, and Aurora is not able to complete another business combination by
March 8, 2023, as such date may be extended pursuant to the Cayman
Constitutional Documents, Aurora would cease all operations except for the
purpose of winding-up and, as promptly as reasonably possible, but not more than
10 business days thereafter, redeem the Aurora public shares.
There is no assurance that the Business Combination will be completed or that
the parties will be able to agree and effect any such alternative financing
arrangements.
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Important Information for Investors and Shareholders
This communication relates to a proposed transaction between Aurora Acquisition
Corp. ("Aurora") and Better Holdco, Inc. ("Better"). This communication does not
constitute an offer to sell or exchange, or the solicitation of an offer to buy
or exchange, any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, sale or exchange would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. Aurora has filed with the U.S. Securities and Exchange Commission
(the "SEC"), a registration statement on Form S-4, which includes a preliminary
proxy statement/prospectus in connection with the proposed transaction. A
definitive proxy statement/prospectus will be sent to all Aurora shareholders.
Aurora also will file other documents regarding the proposed transaction with
the SEC. Before making any voting decision, investors and security holders of
Aurora are urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that will be
filed with the SEC in connection with the proposed transaction as they become
available because they will contain important information about the proposed
transaction. Neither the SEC nor any securities commission or any other U.S. or
non-U.S. jurisdiction has approved or disapproved of the business combination of
Aurora and Better (the "Business Combination") or information included herein.
Investors and security holders may obtain free copies of the registration
statement, the proxy statement/prospectus and all other relevant documents filed
or that will be filed with the SEC by Aurora through the website maintained by
the SEC at www.sec.gov. The documents filed by Aurora with the SEC also may be
obtained free of charge at Aurora's website at https://aurora-acquisition.com/
or upon written request to Aurora Acquisition Corp., 20 North Audley Street,
London W1K 6LX, United Kingdom, Attention: Arnaud Massenet, Chief Executive
Officer, +44 (0)20 3931 9785.
Participants in the Solicitation
Aurora and its directors and executive officers may be deemed participants in
the solicitation of proxies from Aurora's stockholders with respect to the
Business Combination. A list of the names of those directors and executive
officers and a description of their interests in Aurora is contained in Aurora's
registration statement on Form S-4, which was initially filed with the SEC on
August 3, 2021, as subsequently amended, and is available free of charge at the
SEC's web site at www.sec.gov, or by directing a request to Aurora Acquisition
Corp., 20 North Audley Street, London W1K 6LX, United Kingdom, Attention: Arnaud
Massenet, Chief Executive Officer, +44 (0)20 3931 9785.
Better and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the stockholders of Aurora in
connection with the Business combination. A list of the names of such directors
and executive officers and information regarding their interests in the Business
combination is contained in the registration statement.
Forward-Looking Statements
This Current Report on Form 8-K only speaks at the date hereof and contains, and
related discussions may contain, "forward- looking statements" within the
meaning of U.S. federal securities laws. These statements include descriptions
regarding the intent, belief, estimates, assumptions or current expectations of
Aurora, Better or their respective officers with respect to the consolidated
results of operations and financial condition, future events and plans of Aurora
and Better. These forward-looking statements may be identified by a reference to
a future period or by the use of forward-looking terminology. Forward-looking
statements are typically identified by words such as "expect", "believe",
"foresee", "anticipate", "intend", "estimate", "goal", "strategy", "plan",
"target" and "project" or conditional verbs such as "will", "may", "should",
"could" or "would" or the negative of these terms, although not all
forward-looking statements contain these words. Forward-looking statements by
their nature address matters that are, to different degrees, uncertain.
Forward-looking statements are not historical facts, and are based upon
management's current expectations, beliefs, estimates and projections, and
various assumptions, many of which are inherently uncertain and beyond Aurora's
and Better's control. Such expectations, beliefs, estimates and projections are
expressed in good faith, and management believes there is a reasonable basis for
them. However, there can be no assurance that management's expectations,
beliefs, estimates and projections will be achieved, and actual results
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may differ materially from what is expressed in or indicated by the
forward-looking statements. For example, there can be no assurance that the SEC
will declare Aurora's registration statement effective, that Aurora shareholders
will vote to approve the transaction or that the Business Combination will
close, or that Better will be able to identify and hire individuals for the
roles that it seeks to fill, nor can there be assurance that the steps Better
expects to take to improve its workplace culture and organization will have
their desired result. Any management or other changes could be disruptive to
Better's business.
Important factors that could cause actual results to differ materially from
those suggested by the forward-looking statements include, but are not limited
to, Better's performance, capabilities, strategy, and outlook; Better's rapid
growth and subsequent contraction and its ability to manage its growth
effectively and achieve and maintain profitability in the future; the demand for
Better's solutions and products and services, including the size of Better's
addressable market, market share, and market trends; Better's ability to operate
under and maintain Better's business model; Better's ability to develop and
protect its brand; the effect of workforce reductions and associated negative
media coverage on Better's ability to maintain and establish third-party
relationships (including with business partners, warehouse lenders and
investors), recruit and retain employees, management and directors and otherwise
achieve its business goals; Better's ability to maintain morale among its
workforce; Better's ability to achieve its operational and financial targets;
Better's ability to set and achieve its business goals and objectives in the
context of recent negative press and changes to its organizational structure in
response; Better's estimates regarding expenses, future revenue, capital
requirements and Better's need for additional financing; the degree of business
and financial risk associated with certain of Better's loans; the high
volatility in, or any inaccuracies in the estimates of, the value of Better's
assets; any changes in macro-economic conditions and in U.S. residential real
estate market conditions, including changes in prevailing interest rates or
monetary policies and the effects of the ongoing COVID-19 pandemic; the impact
of elevated interest rates and inflation on Better's business including on the
volume of consumers refinancing existing loans and the corresponding shift in
Better's product mix, Better's ability to produce loans, liquidity and
employees; Better's competitive position; Better's ability to improve and expand
its information technology and financial infrastructure, security and compliance
requirements and operating and administrative systems; Better's future
investments in its technology and operations; Better's intellectual property
position, including its ability to maintain, protect and enhance Better's
intellectual property; Better's ability in general, and its CEO's ability in
particular, to establish and maintain a larger, more experienced, executive team
in transitioning to public markets; Better's ability to obtain additional
capital and maintain cash flow or obtain adequate financing or financing on
terms satisfactory to us; the effects of Better's existing and future
indebtedness on its liquidity and Better's ability to operate its business;
Better's plans to adopt the secured overnight financing rate ("SOFR"); the
impact of laws and regulations and Better's ability to comply with such laws and
regulations including laws and regulations relating to fair lending, real estate
brokerage matters, title and settlement services, consumer protection,
advertising, tax, title insurance, loan production and servicing activities,
data privacy, and anti-corruption, as well as the impact of any investigations
related to these or other matters; any changes in certain U.S.
government-sponsored entities and government agencies, including Fannie Mae,
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The exhibits listed in the following Exhibit Index are filed as part of this
Current Report.
Exhibit
No. Description
2.1 Amendment No. 4 to the Agreement and Plan of Merger, dated
August 26, 2022, by and among Aurora Acquisition Corp., Aurora Merger
Sub I, Inc. and Better HoldCo., Inc.
10.1 Letter Agreement, dated August 26, 2022 by and among Aurora
Acquisition Corp., Better HoldCo, Inc., and Novator Capital Sponsor
Ltd.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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