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Item 1.01
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Entry Into
a Material Definitive Agreement.
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Business Combination Agreement
On
May 1, 2021, Montes Archimedes Acquisition Corp., a Delaware corporation (“MAAC”), entered into a Business Combination
Agreement (the “Business Combination Agreement”) with Roivant Sciences Ltd., a Bermuda exempted limited company (“Roivant”),
and Rhine Merger Sub, Inc., a Delaware corporation (“Merger Sub”).
The Business Combination Agreement and the transactions contemplated
thereby (collectively, the “Business Combination”) were approved by the boards of directors of each of MAAC, Roivant
and Merger Sub, the requisite shareholders of Roivant and Roivant in its capacity as the sole stockholder of Merger Sub.
The Business Combination and Consideration
The
Business Combination Agreement provides for, among other things, the following transactions: (i) Roivant’s bye-laws will be
amended and restated, each outstanding share of Roivant will be subdivided (and in the case of certain non-voting shares of Roivant,
converted) into common shares of Roivant (the “Roivant Common Shares”) based on a fixed exchange ratio of 2.9262 (the
“Roivant Exchange Ratio”), and each outstanding equity award of Roivant will be subdivided and adjusted into comparable
equity awards of Roivant, based on the Roivant Exchange Ratio (the steps contemplated by this clause (i), collectively, the “Pre-Closing
Steps”); and (ii) Merger Sub will merge with and into MAAC, with MAAC surviving the merger as a wholly-owned subsidiary of
Roivant (the “Merger”). At the effective time of the Merger (the “Effective Time”), (a) each outstanding
share of MAAC Class A common stock and MAAC Class B common stock (other than treasury shares and any shares held by Patient Square Capital
LLC, a Delaware limited liability company (the “MAAC Sponsor”), or its affiliates) will be exchanged for one Roivant
Common Share, (b) each outstanding share of MAAC Class B common stock held by the MAAC Sponsor or its affiliates will be exchanged for
a number of Roivant Common Shares based on an exchange ratio (the “MAAC Sponsor Exchange Ratio”), with a portion of
such Roivant Common Shares issued to the MAAC Sponsor by virtue of the Merger being subject to the vesting and other terms and conditions
set forth in the Sponsor Support Agreement (as more fully described in the section entitled “Sponsor Support Agreement” below),
and (c) each outstanding warrant to purchase shares of MAAC Class A common stock will be converted into a comparable warrant to purchase
Roivant Common Shares on the terms and subject to the conditions set forth in the Warrant Agreement, dated as of October 6, 2020, by
and between MAAC and the Continental Stock Transfer & Trust Company. The MAAC Sponsor Exchange Ratio is 1.0, subject to reduction
in an amount equal to one-half of the percentage of shares of MAAC Class A common stock redeemed in connection with the Business Combination
(i.e., if 10% of the shares of MAAC Class A common stock are so redeemed, then the MAAC Sponsor Exchange Ratio will be equal to 0.95),
provided that in no event will the MAAC Sponsor Exchange Ratio be less than 0.75.
The
Business Combination is expected to close (the “Closing”) in the third quarter of 2021, subject to the required approvals
by MAAC’s stockholders and the fulfillment of other closing conditions.
All Roivant Common Shares that are outstanding and held by Roivant equityholders immediately prior to the Closing (including Roivant Common
Shares issued after the Closing upon the exercise or settlement of incentive equity awards that were held by Roivant equityholders immediately
prior to the Closing) will be subject to restrictions on transfer for six months following the Closing, subject to customary exceptions.
In addition, the MAAC Sponsor and certain Roivant equityholders have entered into Lock-Up Agreements and are subject to extended transfer
restrictions (as more fully described in the section entitled “Lock-Up Agreements” below).
Representations and Warranties; Covenants
The
Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for
transactions of this type, including a covenant to use reasonable best efforts to consummate the Business Combination as promptly as
reasonably practicable. Roivant has also agreed to take all actions within its power as may be necessary or appropriate such that, effective
immediately after the Effective Time, the Roivant board of directors will be divided into three classes and consist of a total number
of directors to be determined by Roivant (upon reasonable consultation with MAAC) prior to the Closing, with one director being designated
by MAAC and the remaining directors being designated by Roivant. In addition, Roivant has agreed
to adopt a post-closing equity incentive plan and may adopt a post-closing employee stock purchase plan, each as described in the Business
Combination Agreement.
Conditions to Each Party’s Obligations
The
obligation of each of MAAC and Roivant to consummate the Business Combination is subject to certain closing conditions, including, but
not limited to, (i) the absence of any order, law or other legal restraint or prohibition issued by any court of competent jurisdiction
or other governmental entity of competent jurisdiction in the United States or any other jurisdiction in which Roivant conducts material
operations or is otherwise material, in each case, preventing the consummation of the Business Combination, (ii) the effectiveness
of the Registration Statement on Form S-4 to be filed by Roivant in connection with the Business Combination (the “Registration
Statement”) and in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”),
registering the Roivant Common Shares to be issued in the Business Combination, (iii) the required approvals of MAAC’s stockholders, (iv) Roivant
having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) remaining immediately after the Closing, and (v) the approval by the Nasdaq
Capital Market of Roivant’s initial listing application in connection with the Business Combination.
The
obligation of Roivant to consummate the Business Combination is also subject to, among other conditions, (i) the aggregate cash
proceeds from MAAC’s trust account being no less than $210,000,000 (after deducting any amounts paid to MAAC stockholders that
exercise their redemption rights in connection with the Business Combination) and (ii) there being no MAAC Material Adverse Effect
(as defined in the Business Combination Agreement) that is continuing. The obligation of MAAC to consummate the Business Combination
is also subject to, among other conditions, (a) the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”), with respect to the Notification and Report Form
to be filed by the MAAC Sponsor as an acquiring person (as that term is defined by 16 C.F.R. 801.2) in connection with the Business
Combination, (b) the consummation of the Pre-Closing Steps and (c) there being no Company Material Adverse Effect (as defined in the
Business Combination Agreement) that is continuing.
Termination
The Business Combination Agreement may be terminated under certain
customary circumstances prior to the Closing, including, but not limited to, (i) by mutual written consent of MAAC and Roivant, (ii) by
MAAC, if the representations and warranties of Roivant or Merger Sub are not true and correct or if Roivant or Merger Sub fails to perform
any covenant or agreement set forth in the Business Combination Agreement such that certain conditions to closing cannot be satisfied
and the breach or breaches of such representations or warranties or the failure to perform such covenants or agreements, as applicable,
are not cured or cannot be cured within certain specified time periods, (iii) by Roivant, if the representations and warranties of MAAC
are not true and correct or if MAAC fails to perform any covenant or agreement set forth in the Business Combination Agreement such that
certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform
such covenants or agreements, as applicable, are not cured or cannot be cured within certain specified time periods, (iv) by either MAAC
or Roivant, if the Business Combination is not consummated by November 30, 2021, (v) by either MAAC or Roivant, if any governmental entity
of competent jurisdiction shall have issued an order permanently enjoining or prohibiting the Business Combination and such order shall
have become final and nonappealable, or (vi) by either MAAC or Roivant, if the required approvals of the MAAC stockholders are not obtained
from the MAAC stockholders after the conclusion of a meeting of MAAC’s stockholders held for such purpose at which such stockholders
voted on such approvals.
If
the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability
or any further obligation under the Business Combination Agreement, except in the case of Willful Breach or Fraud (each as defined in
the Business Combination Agreement) and for customary provisions and obligations that survive the termination thereof (such as confidentiality
obligations).
A
copy of the Business Combination Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by
reference, and the foregoing description of the Business Combination Agreement is qualified in its entirety by reference thereto. The
Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of
the date of the Business Combination Agreement or other specific dates, as specified therein. The assertions embodied in those representations,
warranties and covenants were made for purposes of the contract among the respective parties, including for the purpose of allocating
risk among the parties rather than establishing matters as facts, and are subject to important qualifications and limitations agreed
to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Business Combination
Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly, and are subject to
a contractual standard of materiality different from that generally applicable to stockholders. MAAC does not believe that these schedules
contain information that is material to an investment decision.
Sponsor Support Agreement
Concurrently
with the execution of the Business Combination Agreement, MAAC, the MAAC Sponsor, Roivant and each of James C. Momtazee, George
Barrett, Stephen Oesterle and Maria C. Walker, each of whom is a member of MAAC’s board of directors and/or management
(collectively, the “MAAC Insiders”), entered into the Sponsor Support Agreement (the “Sponsor Support
Agreement”), pursuant to which, among other things: (i) the MAAC Sponsor and the MAAC Insiders have each reaffirmed his,
her or its obligations in existing arrangements with MAAC to vote in favor of each of the proposals to be voted upon at the meeting
of MAAC stockholders in connection with the Business Combination, including approval of the Business Combination Agreement and the
transactions contemplated thereby; (ii) the MAAC Sponsor has waived any adjustment to the conversion ratio set forth in the
governing documents of MAAC or any other anti-dilution or similar protection with respect to the shares of MAAC Class B common stock
that may result from the transactions contemplated by the Business Combination; (iii) subject to, and conditioned upon, the
occurrence of and effective as of, the Effective Time, the MAAC Sponsor and the MAAC Insiders have each agreed to terminate certain
existing arrangements with MAAC, including existing registration rights and the existing lock-up obligations with respect to his,
her or its shares of MAAC common stock; (iv) the MAAC Sponsor and the MAAC Insiders that hold Roivant Common Shares immediately
following the Effective Time will be granted the right to include his, her or its Roivant Common Shares in a resale registration
statement to be filed in connection with the transactions contemplated by the PIPE Subscription Agreements (as defined below)
following the Effective Time; (v) the MAAC Sponsor, Roivant and MAAC have each agreed to certain covenants related to the expiration
or termination of the waiting period under the HSR Act with respect to the issuance of Roivant Common Shares to the MAAC Sponsor in
connection with the Business Combination; and (vi) subject to, and conditioned upon the occurrence of, and effective as of
immediately after, the Effective Time, (a) twenty percent of the Roivant Common Shares issued to the MAAC Sponsor in respect of its
shares of MAAC Class B common stock will be subject to the vesting conditions described below and the other restrictions set forth
in the Sponsor Support Agreement (the “$15 Earn-Out Shares”) and (b) ten percent of the Roivant Common Shares
issued to the MAAC Sponsor in respect of its shares of MAAC Class B common stock will be subject to the vesting conditions described
below and the other restrictions set forth in the Sponsor Support Agreement (the “$20 Earn-Out Shares” and,
together with the $15 Earn-Out Shares, the “Earn-Out Shares”).
The
$15 Earn-Out Shares will vest if the closing price of the Roivant Common Shares is greater than
or equal to $15.00 over any twenty out of thirty trading day period during the five year period following the Closing, and the
$20 Earn-Out Shares will vest if the closing price of the Roivant Common Shares is greater than
or equal to $20.00 over any twenty out of thirty trading day period during the five year period following the Closing. The five year
vesting period described in the preceding sentence will, if a definitive purchase agreement with respect to a Sale (as defined in the
Sponsor Support Agreement) is entered into on or prior to the end of such period, be extended to the earlier of one day after the consummation
of such Sale and the termination of such definitive transaction agreement, and if a Sale occurs during such five year (or, as applicable,
longer) vesting period, then all of the Earn-Out Shares unvested as of such time will automatically vest immediately prior to the consummation
of such Sale. If any Earn-Out Shares have not vested on or prior to the end of the five year (or, as applicable, longer) vesting period,
then such Earn-Out Shares will be forfeited.
A
copy of the Sponsor Support Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference,
and the foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference thereto.
PIPE Financing (Private Placement)
Concurrently
with the execution of the Business Combination Agreement, MAAC and Roivant entered into subscription agreements (collectively, the
“Subscription Agreements”) with certain institutional and accredited investors, pursuant to which such investors
agreed to subscribe for and purchase, and MAAC agreed to issue and sell to such investors, prior to and substantially concurrently
with the Closing, an aggregate of 20,000,000 shares of MAAC Class A common stock at a purchase price of $10.00 per share, for
aggregate gross proceeds of $200,000,000 (the “PIPE Financing”). Each share of MAAC Class A common stock
issued in the PIPE Financing will be converted into one Roivant Common Share in the Merger.
The
closing of the PIPE Financing is subject to customary conditions for a financing of this nature, including the substantially concurrent
consummation of the Business Combination. The Subscription Agreements provide that Roivant will grant the investors in the PIPE Financing
certain customary registration rights with respect to their Roivant Common Shares following the Closing.
A
copy of the form of Subscription Agreement is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by
reference, and the foregoing description of the Subscription Agreements is qualified in its entirety by reference thereto.
Transaction Support Agreements
Concurrently
with the signing of the Business Combination Agreement, certain shareholders of Roivant entered into a Transaction Support Agreement
(collectively, the “Transaction Support Agreements”) with MAAC and Roivant, pursuant to which such shareholders of
Roivant have agreed to, among other things, certain covenants and agreements, to support, or that are otherwise related to, the Business
Combination, including an agreement to terminate certain existing agreements between Roivant and such shareholders, an agreement to not
transfer his, her or its Roivant shares prior to the Closing and, in the case of certain Roivant shareholders also participating in the
PIPE Financing, certain covenants related to the expiration or termination of the waiting period under the HSR Act, to the extent applicable,
with respect to the issuance of Roivant Common Shares to such shareholder in connection with the Business Combination.
A
copy of the form of Transaction Support Agreement is filed with this Current Report on Form 8-K as Exhibit 10.3 and is incorporated herein
by reference, and the foregoing description of the Transaction Support Agreements is qualified in its entirety by reference thereto.
Lock-Up Agreements
Concurrently with the
signing of the Business Combination Agreement, Roivant, on the one hand, and the MAAC Sponsor and certain Roivant equityholders, on
the other hand, entered into lock-up agreements (the “Lock-Up Agreements”), pursuant to which, among other
things, the MAAC Sponsor and such Roivant equityholders have agreed not to, subject to, and conditioned upon the effectiveness of,
the Closing, effect any sale or distribution of the Roivant Common Shares (including those underlying incentive equity awards) held
by such equityholders as of immediately following the Closing during the applicable lock-up period, subject to customary exceptions.
The lock-up period applicable to Roivant Common Shares held by the MAAC Sponsor will be (i) with respect to 25% of the Roivant
Common Shares held by the MAAC Sponsor, six months following the Closing, (ii) with respect to an additional 25% of the Roivant
Common Shares held by the MAAC Sponsor, the earlier of twelve months following the achievement of certain price-based vesting
restrictions or six years from the Closing and (iii) with respect to 50% of the Roivant Common Shares held by the MAAC Sponsor,
thirty-six months following the Closing. The Roivant warrants and the Roivant Common Shares underlying warrants held by the MAAC
Sponsor as of immediately following the Closing will be subject to a corresponding lock-up period for (i) with respect to 25% of
such warrants held by the MAAC Sponsor, six months from the Closing, (ii) with respect to an additional 25% of such warrants held by
the MAAC Sponsor, twelve months from Closing and (iii) with respect to 50% of such warrants held by the MAAC Sponsor, thirty-six
months from the Closing. The lock-up period applicable to Roivant Common Shares (including those underlying incentive equity awards)
held by certain Roivant equityholders will be (i) with respect to 25% of the Roivant Common Shares (including those underlying
incentive equity awards) held by such Roivant equityholders, six months following the Closing, (ii) with respect to an additional of
the Roivant Common Shares (including those underlying incentive equity awards) held by such Roivant equityholders, twelve months
following the Closing and (iii) with respect to 50% of the Roivant Common Shares (including those underlying incentive equity
awards) held by such Roivant equityholders, thirty-six months following the Closing.
A copy of the form of Lock-Up
Agreement is filed with this Current Report on Form 8-K as Exhibit 10.4 and is incorporated herein by reference, and the foregoing description
of the Lock-Up Agreements is qualified in its entirety by reference thereto.