EG ACQU Item 1.01 Entry Into A Material Definitive Agreement.
Equity Purchase Agreement
The Equity Purchase Agreement, dated
Business Combination
Pursuant to the Equity Purchase Agreement, following the closing of the Business
Combination (the "Closing"),
• EG will amend its existing certificate of incorporation to: (a) change its
name to "flyExclusive, Inc.", (b) convert all then-outstanding shares of
class B common stock, par value $0.0001 per share, of EG (the "EG Class B
Common Stock"), held by Sponsor (the "Sponsor Stock"), into shares of class A
common stock, par value $0.0001 per share, of PubCo (such class A common
stock, the "PubCo Class A Common Stock"), and (c) issue to the LGM Existing
Equityholders class B common stock, par value $0.0001 per share, of PubCo
(the "PubCo Class B Common Stock"), which carries one vote per share but no
economic rights;
• LGM and its members will adopt the Amended and Restated Limited Liability
Company Agreement of LGM (the "A&R Operating Agreement") to: (a) restructure
its capitalization to (i) issue to EG the number of common units of LGM equal
to the number of outstanding shares of PubCo Class A Common Stock immediately
after giving effect to the Business Combination (taking into account any
redemption of EG Common Stock, any potential PIPE investment (the "PIPE
Investment ") and the conversion of the Bridge Notes (as described below))
(the "PubCo Units"); and (ii) reclassify the existing LGM common units into
LGM common units, and (b) appoint PubCo as the managing member of LGM;
• As consideration for the PubCo Units, EG will contribute to LGM the amount
held in the trust fund established for the benefit of its stockholders held
in the trust account (the "Trust Account"), less the amount of cash required
to fund the redemption of class A common stock, par value $0.0001 per share,
of EG (the "EG Class A Common Stock") held by eligible stockholders who elect
to have their shares redeemed as of the Closing, plus the aggregate proceeds
from the PIPE Investment and the deemed contribution of the aggregate
proceeds of the Bridge Notes (each defined below), less the deferred
underwriting commission payable to BTIG, LLC (collectively, the "Contribution
Amount"). Immediately after the contribution of the Contribution Amount, LGM
will pay the amount of unpaid fees, commissions, costs or expenses that have
been incurred by LGM and EG in connection with the Business Combination (the
"Transaction Expenses") by wire transfer of immediately available funds on
behalf of LGM and EG to those persons to whom such amounts are owed; and
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• Without any action on the part of any holder of a warrant to purchase one
whole share of EG Class A Common Stock (an "EG Warrant"), each EG Warrant
that is issued and outstanding immediately prior to the Closing will be
converted into a warrant to purchase one whole share of PubCo Class A Common
Stock in accordance with its terms.
Secondary Option of Existing Equityholders
In the event the Closing Date Cash Repurchase Amount (as defined in the Equity
Purchase Agreement) is more than
Representations and Warranties, Covenants
Under the Equity Purchase Agreement, parties to the agreement made customary representations and warranties for transactions of this type regarding themselves. The representations and warranties made under the Equity Purchase Agreement will not survive the Closing. In addition, the parties to the Equity Purchase Agreement agreed to be bound by certain covenants that are customary for transactions of this type, including obligations of the parties to use commercially reasonable efforts to operate their respective businesses in the ordinary course, and to refrain from taking certain specified actions without the prior written consent of the applicable party, in each case, subject to certain exceptions and qualifications. Additionally, the parties have agreed not to solicit, negotiate or enter into a competing transaction and Sponsor has agreed to vote all shares owned by it in favor of the Business Combination. The covenants of the parties set forth in the Equity Purchase Agreement will not survive the Closing, except for covenants and agreements that by their terms are to be performed in whole or in part after the Closing.
Termination
The Equity Purchase Agreement may be terminated under certain customary and
limited circumstances at any time prior to the Closing, including, among others,
the following: (i) by written notice from LGM or EG to the other party if the
Closing has not occurred by
Conditions to
Under the Equity Purchase Agreement, the obligations of the parties to
consummate the Business Combination are subject to the satisfaction or waiver of
certain customary closing conditions of the respective parties, including,
without limitation: (a) the representations and warranties of the respective
parties being true and correct subject to the materiality standards contained in
the Equity Purchase Agreement; (b) material compliance by the parties of their
respective pre-closing covenants and agreements, subject to the standards
contained in the Equity Purchase Agreement; (c) the approval by EG's
stockholders of the transactions contemplated by the Equity Purchase Agreement;
(d) the absence of a Company Material Adverse Effect (as defined in the Equity
Purchase Agreement) since the Effective Date that is continuing and uncured;
(e) EG having at least
Agreements to be Entered into at Closing
At the Closing, the LGM Existing Equityholders,
At the Closing of the Business Combination,
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savings, if any, in
Item 3.02 Unregistered Sales of
The disclosure set forth above under the headings "Equity Purchase Agreement - Business Combination" and "Bridge Note" in Item 1.01 of this Current Report are incorporated by reference into this Item 3.02. The shares of PubCo Class A Common Stock to be issued to the Lenders and the shares of PubCo Class B Common Stock to be issued to the LGM Existing Equityholders in connection with the Closing will not be registered under the Securities Act of 1933 (the "Securities Act"), as amended, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
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Additional Information
EG intends to file a preliminary proxy statement with the
Participants in the Solicitation
EG, Sponsor and their respective directors, executive officers, other members of
management, and employees, under
LGM and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from EG's stockholders 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 will be included in the proxy statement for the Business Combination when available.
No Offer or Solicitation
This communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the Business Combination or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of EG's securities, (ii) the risk that the transaction may not be completed
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by EG's business combination deadline and the potential failure to obtain an
extension of the business combination deadline if sought by EG, (iii) the
failure to satisfy the conditions to the consummation of the transaction,
including the approval by the stockholders of EG and the receipt of certain
governmental and regulatory approvals, (iv) the lack of a third party valuation
in determining whether or not to pursue the transaction, (v) the occurrence of
any event, change or other circumstance that could give rise to the termination
of the Equity Purchase Agreement, (vi) the effect of the announcement or
pendency of the transaction on LGM's business relationships, operating results
and business generally, (vii) risks that the proposed transaction disrupts
current plans and operations of LGM and potential difficulties in LGM employee
retention as a result of the transaction, (viii) the outcome of any legal
proceedings that may be instituted against LGM or against EG related to the
Equity Purchase Agreement or the transaction, (ix) the ability to maintain the
listing of the EG's securities a national securities exchange, (x) the price of
EG's securities may be volatile due to a variety of factors, including changes
in the competitive and highly regulated industries in which EG plans to operate
or LGM operates, variations in operating performance across competitors, changes
in laws and regulations affecting EG's or LGM's business and changes in the
combined capital structure, (xi) the ability to implement business plans,
forecasts, and other expectations after the completion of the proposed
transaction, and identify and realize additional opportunities, and (xii) the
risk of downturns and a changing regulatory landscape in the highly competitive
aviation industry. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of EG's registration on Form S-1, the
proxy statement that will be filed as discussed herein and other documents filed
by EG from time to time with the
EG cautions that the foregoing list of factors is not exclusive. EG cautions
readers not to place undue reliance upon any forward-looking statements, which
speak only as of the date made. For information identifying important factors
that could cause actual results to differ materially from those anticipated in
the forward-looking statements, please refer to the Risk Factors section of EG's
Annual Report on Form 10-K filed with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Description 2.1† Equity Purchase Agreement, dated as ofOctober 17, 2022 , by and amongLGM Enterprises, LLC ,EG Acquisition Corp. ,EG Sponsor LLC , the LGM Existing Equityholder Representative and the LGM Existing Equityholders listed on Annex A thereto. 10.1† Senior Subordinated Convertible Note, dated as ofOctober 17, 2022 , by and amongLGM Enterprises , as the Borrower,EnTrust Emerald (Cayman) LP , as the Initial Noteholder, any noteholders party thereto from time to time andEG Acquisition Corp. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). EG agrees to furnish supplementally a copy of all omitted exhibits and schedules to theSEC upon its request. - 6 -
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