PONO CAPITAL TWO, INC. Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
This section describes the material provisions of the Merger Agreement (as defined below) but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1. Unless otherwise defined herein, the capitalized terms used below are defined in the Merger Agreement.
The Business Combination
As previously disclosed, on
Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the "Closing"), Merger Sub will merge with and into SBC, with SBC continuing as the surviving corporation (the "Surviving Corporation"). The transactions contemplated by the Merger Agreement are referred to herein as the "Business Combination."
As a condition to closing of the Business Combination, as soon as reasonably
practical following execution of the Merger Agreement, SBC will complete certain
restructuring transactions pursuant to which SBC or a subsidiary will acquire
the economic or other interests of
Merger Consideration
As consideration for the Business Combination, the holders of SBC securities
collectively shall be entitled to receive from Pono, in the aggregate, a number
of Pono securities with an aggregate value equal to (the "Merger Consideration")
(a)
The Merger Consideration otherwise payable to SBC stockholders at the Closing is subject to a number of shares of Pono Class A common stock equal to three percent (3.0%) of the Merger Consideration being placed in escrow with an escrow agent to be agreed by the parties, for post-closing adjustments (if any) to the Merger Consideration.
The Merger Consideration is subject to adjustment after the Closing based on
confirmed amounts of the Closing Net Indebtedness,
Sponsor Shares
In connection with and contingent upon the Closing, Pono's sponsor,
Representations and Warranties
The Merger Agreement contains customary representations and warranties by each of Pono and SBC. Certain of the representations are subject to specified exceptions and qualifications contained in the Merger Agreement or in information provided pursuant to certain disclosure schedules to the Merger Agreement.
Covenants of the Parties
Under the Merger Agreement, each party agrees to use its commercially reasonable efforts to effect the Closing. The Merger Agreement also contains certain customary covenants by the parties during the period between the signing of the Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement in accordance with its terms, including covenants regarding the conduct of their respective businesses, efforts, access, confidentiality and public announcements, the Pono proxy statement for the transaction (which includes the adoption of a new equity incentive plan for Pono with a number of awards thereunder equal to 15% of the issued and outstanding shares of Pono immediately after the Closing), notice of breaches, no insider trading, indemnification of directors and officers, and other customary covenants. The parties also have agreed to the following covenants:
? Each party is subject to a "no-shop" obligation between signing of the Merger
Agreement and Closing or earlier termination of the Merger Agreement, and will
not be allowed to solicit or discuss competing transactions with other
potential parties during such time period.
? The Pono board of directors as of the Closing will consist of at least five
directors, including: (i) three persons designated prior to the Closing by SBC,
two of whom must qualify as independent directors; (ii) one person designated
prior to the Closing by Pono; and (iii) one person mutually agreed upon and
designated prior to the Closing by Pono and SBC, who must qualify as an
independent director.
? Prior to the closing of the Business Combination, SBC will deliver audited
financial statements prepared in accordance with GAAP and audited in accordance
with PCAOB auditing standards for the fiscal years ended
? On the date that is the earlier of (a) the six (6) month anniversary of the
Closing and (b) the expiration of the lock-up of Pono's founder shares, the
Surviving Corporation will issue to the Sponsor, the Sponsor Shares for no
additional consideration.
? SBC will complete the Restructuring promptly following execution of the Merger
Agreement.
? SBC will deliver disclosure schedules and due diligence materials in a form and
substance acceptable to Pono and the parties will reasonably negotiate on any
additional or amended provisions required to the Merger Agreement or the
schedules to the Merger Agreement, in each case by
to so deliver the due diligence materials or disclosure schedules by such date,
Pono has the right to terminate the Merger Agreement and if the parties are
unable to so agree on such additional or amended provisions, either Pono or SBC
has a right to terminate the Merger Agreement.
Indemnification
The representations and warranties of SBC and Pono contained in the Merger Agreement will not survive the Closing, and from and after the Closing, SBC and Pono will not have any further obligations, nor shall any claim be asserted or action be brought against SBC and Pono or their respective representatives with respect thereto. The covenants and agreements made by SBC and Pono in the Merger Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).
Conditions to Consummation of the Business Combination
The consummation of the Business Combination is subject to customary Closing conditions unless waived, including:
? the approval of the Business Combination by the stockholders of each of SBC and
Pono;
? approvals of any required governmental authorities and the expiration or
termination of any anti-trust waiting periods and no governmental authority
having imposed any terms or conditions on the Restructuring which would . . .
Item 7.01 Regulation FD Disclosure.
On
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 (the "Securities Act") or the Exchange Act.
Forward Looking Statements
Certain statements herein are "forward-looking statements" within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995 with respect to the proposed business combination. These forward-looking
statements generally are identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "aim," "future," "opportunity,"
"plan," "may," "should," "will," "would," "will be," "will continue," "will
likely result" and similar expressions, but the absence of these words does not
mean that a statement is not forward-looking. 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. Actual results may differ from their expectations, estimates
and projections and consequently, you should not rely on these forward-looking
statements as predictions of future events. Many factors could cause actual
future events to differ materially from the forward-looking statements contained
herein, including but not limited to: (i) the risk that the Business Combination
may not be completed in a timely manner or at all, which may adversely affect
the price of Pono's securities; (ii) the failure to satisfy the conditions to
the consummation of the Business Combination, including the approval of the
Merger Agreement by the stockholders of Pono; (iii) the occurrence of any event,
change or other circumstance that could give rise to the termination of the
Merger Agreement; (iv) the outcome of any legal proceedings that may be
instituted against any of the parties to the Merger Agreement following the
announcement of the entry into the Merger Agreement and proposed business
combination; (v) redemptions exceeding anticipated levels or the failure to meet
Additional Information and Where to Find It
Pono intends to file with the
No Offer or Solicitation
This Current Report on Form 8-K does not constitute (i) a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed business combination, or (ii) 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. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act.
Participants in the Solicitation
SBC and Pono and their respective directors and officers and other members of
management and employees may be deemed participants in the solicitation of
proxies in connection with the Business Combination. Pono stockholders and other
interested persons may obtain, without charge, more detailed information
regarding directors and officers of Pono in Pono's initial public offering
prospectus, which was declared effective the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed herewith:
Exhibit No. Description 2.1† Agreement and Plan of Merger, datedJanuary 31, 2023 , by and among Pono, Merger Sub, SBC, the Purchaser Representative, and the Seller Representative. 10.1 Form of Lock-up Agreement. 10.2 Form of Non-Competition Agreement. 10.3 Form of Registration Rights Agreement. 10.4 Purchaser Support Agreement. 10.5 Voting Agreement. 99.1 Press Release, datedFebruary 2, 2023 . 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). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the Securities and Exchange
Commission upon its request.
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