EJF ACQUISITION CORP. Item 1.01 Entry into Material Definitive Agreements.
Merger Agreement
On
Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, Merger Sub will merge with and into EJFA (the "Merger"), with EJFA continuing as the surviving company after the Merger (the "Surviving Company"). As a result of the Merger and the other transactions contemplated by the Merger Agreement (the "Transactions" or the "Business Combination"), EJFA will become a direct, wholly-owned subsidiary of Pagaya. The Merger Agreement and the Transactions were unanimously approved by the boards of directors of each of EJFA and Pagaya.
Immediately prior to the effective time of the Merger (the "Effective Time"),
(i) each preferred share, with no par value, of Pagaya (each, a "Pagaya
Preferred Share") will be converted into ordinary shares, with no par value, of
Pagaya (each, a "Pagaya Ordinary Share") in accordance with Pagaya's
organizational documents (the "Conversion"), (ii) immediately following such
conversion but prior to the Effective Time, Pagaya will adopt an amended and
restated articles of association of Pagaya and (iii) immediately following such
adoption but prior to the Effective Time, Pagaya will effect a stock split of
each Pagaya Ordinary Share and each Pagaya Ordinary Share underlying any
outstanding options to acquire Pagaya Ordinary Shares, whether vested or
unvested, into such number of Pagaya Ordinary Shares calculated in accordance
with the terms of the Merger Agreement such that each Pagaya Ordinary Share will
have a value of
Pursuant to the Merger Agreement, each (i) Class B ordinary share, par value
The Transactions are targeted to be consummated in the second quarter of 2022, after receipt of the required approval by the shareholders of Pagaya (the "Pagaya Shareholder Approval"), and the required approval by the shareholders of EJFA (the "EJFA Shareholder Approval") and the fulfillment of certain other conditions set forth in the Merger Agreement.
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Representations and Warranties
The Merger Agreement contains representations and warranties of Pagaya and its subsidiaries, including Merger Sub, relating, among other things, to proper organization and qualification; Pagaya's subsidiaries; capitalization; the authorization, performance and enforceability against Pagaya of the Merger Agreement; absence of conflicts; governmental consents and filings; compliance with laws and possession of requisite governmental permits, approvals and orders; financial statements; absence of undisclosed liabilities; absence of certain changes; litigation; employee benefits; labor relations; real and tangible property; tax matters; environmental matters; governmental grants and benefits; intellectual property; privacy and data security; material contracts and commitments; insurance; transactions with affiliates; supplied information; anti-bribery and anti-corruption; anti-money laundering; international trade and sanctions; investment adviser matters; broker's fees; board approval and the requisite shareholder approval; foreign private issuer status; emerging growth company status; and status under the Investment Company Act of 1940, as amended.
The Merger Agreement contains representations and warranties of EJFA, relating,
among other things, to proper organization and qualification; capitalization;
the authorization, performance and enforceability against EJFA of the Merger
Agreement; absence of conflicts; compliance with laws and possession of
requisite governmental permits, approvals and orders; reports filed with the
The representations and warranties made in the Merger Agreement will not survive the consummation of the Merger.
Incentive Equity Plan
The Merger Agreement provides that prior to the effective time of the Merger, Pagaya will adopt an Incentive Equity Plan (the "Plan"), to hire and incentivize its and its subsidiaries' directors, individual independent contractors, managers, executives and other employees following the effective time of the Merger. The number of Pagaya Ordinary Shares to be reserved for issuance under the Plan will be equal to (i) 10% of the total outstanding number of Pagaya Ordinary Shares as of immediately after the effective time of the Merger, calculated on a fully-diluted basis including all equity awards, warrants and other convertible securities outstanding as of such time, plus, (ii) prior to the tenth anniversary of the effective date of the Plan, an annual increase equal to the lesser of 5% of the total number of Pagaya Ordinary Shares outstanding and the number of Pagaya Ordinary Shares determined for such purpose by the board of directors of Pagaya.
The foregoing description of the Incentive Equity Plan does not purport to be complete and is qualified in its entirety by the terms and conditions of the Incentive Equity Plan, a form of which is attached as Exhibit C to the Merger Agreement.
Covenants
The Merger Agreement includes customary covenants of the parties with respect to
efforts to satisfy conditions to the consummation of the Transactions. The
Merger Agreement also contains additional covenants of the parties, including,
among others, a covenant providing for EJFA and Pagaya to cooperate in the
preparation of the Registration Statement on Form F-4 required to be prepared in
connection with the Merger (the "Registration Statement"), covenants requiring
EJFA and Pagaya to establish a record date for, duly call and give notice of,
convene and hold an extraordinary general meeting of EJFA's shareholders and a
special meeting of Pagaya's shareholders, respectively, as promptly as
practicable following the date that the Registration Statement is declared
effective by the
Conditions to Closing
The consummation of the Transactions is conditioned upon, among other things:
• receipt of the Pagaya Shareholder Approval and the EJFA Shareholder
Approval;
• EJFA having at least $5,000,001 of net tangible assets upon the closing
of the Transactions (the "Closing"), immediately after giving effect to
any redemption of SPAC Class A Shares by the shareholders of EJFA (the
"EJFA Shareholder Redemption");
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• the absence of any injunction or other order of any governmental
authority of competent jurisdiction prohibiting, enjoining or making
illegal the consummation of the Transactions;
• effectiveness of the Registration Statement in accordance with the
provisions of the Securities Act, the absence of any stop order issued by
the SEC , and the absence of any proceeding seeking such a stop order
having been threatened or initiated by the SEC ;
• the approval for listing of the Class A Pagaya Ordinary Shares issuable
to EJFA shareholders as consideration for the Merger and Pagaya Warrants
to be issued in connection with the Closing upon the Closing on the
NASDAQ (or any other public stock market or exchange in the United States
as may be agreed by Pagaya and EJFA), subject only to official notice of
issuance thereof; and
• the expiration or termination of any waiting period or periods applicable
to the Transactions under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
The obligations of Pagaya and Merger Sub to consummate the Transactions are also conditioned upon, among other things:
• the accuracy of the representations and warranties of EJFA (subject to
certain materiality standards set forth in the Merger Agreement);
• material compliance by EJFA with its pre-closing covenants;
• the absence of any change, event, state of facts, development or
occurrence since the date of the Merger Agreement that, individually or
in the aggregate with all other changes, events, states of facts,
developments or occurrences, has had or would reasonably be expected to
have a material adverse effect with respect to EJFA; and
• the funds contained in EJFA's trust account (after giving effect to the
EJFA Shareholder Redemption), together with the aggregate amount of
proceeds from the purchase of Class A Pagaya Ordinary Shares by the PIPE
Investor (as defined below) and any other investors executing
subscription agreements with Pagaya for the purchase of Class A Pagaya
Ordinary Shares at the Closing, equaling or exceeding $200,000,000 .
The obligations of EJFA to consummate the Transactions are also conditioned upon, among other things:
• the accuracy of the representations and warranties of Pagaya (subject to
certain materiality standards set forth in the Merger Agreement);
• material compliance by Pagaya with its pre-closing covenants; and
• the absence of any change, event, state of facts, development or
occurrence since the date of the Merger Agreement that, individually or
in the aggregate with all other changes, events, states of facts,
developments or occurrences, has had or would reasonably be expected to
have a material adverse effect with respect to Pagaya.
Governance
After the consummation of the Transactions, (i) the current officers of Pagaya will remain officers of Pagaya, (ii) the board of directors of Pagaya will be . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1 Merger Agreement, datedSeptember 15 , 20211 10.1 Subscription Agreement, datedSeptember 15 , 20212 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 1 Schedules and certain portions of the exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. EJFA agrees to furnish supplementally a copy of such schedules, or any section thereof, to theSEC upon request. 2 Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. EJFA agrees to furnish supplementally an unredacted copy of the exhibit to theSEC upon its request. 7
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