The SPAcs enter into a correspondence agreement with their officers, directors and sponsors. The correspondence agreement may include, among other things, a voting agreement requiring executives, directors and sponsors to choose their founding shares and public shares, if any, for the benefit of the SPAC transaction and certain other issues, a blocking agreement, a sponsor blocking agreement for the compensation of the SPAC for certain claims that may be filed against the trust account , an obligation to compensate the founders as long as the green shoe is not fully exercised. , and an agreement not to sponsor other CAPS until SPAC concludes a final agreement for a SPAC transaction. The correspondence agreement also documents the agreement of senior executives, directors and sponsors to waive any right of withdrawal regarding their founding and public shares, if any, in connection with the SPAC transaction, an amendment to the SPAC charter to extend the deadline for the conclusion of the SPAC transaction or the failure of SPAC to complete the SPAC transaction within the prescribed time frame (although able to complete the SPAC transaction within the prescribed time frame). , directors and sponsors are authorized to enter into withdrawal and liquidation rights to all public shares they hold if SPAC has not completed the SPAC transaction within the prescribed timeframe). In addition to the contracts and documents described above, SPAC also adopts, as part of its creation, statutes that are relatively standardized within delaware SPACs and which contain the usual provisions applicable to a publicly traded delaware company. SPAC also enters into an investment management agreement with an agent that regulates the investment and release of funds held in the trust account after the IPO. Finally, SpaCs generally enter into agreements with their directors and executives to award them contractual compensation in addition to the Charter award. These investors will eventually buy unregistered shares, sometimes with warrants, and obtain registration rights to register their securities for resale.
This registration is also important because it is the only way to sell on the public market until Rule 144 is available. Private equity-based SPAs often have independent management of SPAC, for example. B of a CEO or president with publicly traded companies and experience in the target sector. The private equity group and SPAC management often negotiate a private agreement (usually included in the sponsor`s organizing documents) that includes, among other things, the level of private equity financing, participation in term purchase commitments (as described below) and the reduction in equity (including incentive capital).