UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): November 18, 2021

 

WEJO GROUP LIMITED

(Exact name of registrant as specified in its charter)

 

Bermuda   001-41091   Not Applicable

(State or other jurisdiction

of incorporation)

  (Commission
File Number)
  (IRS Employer
Identification No.)

 

         

Canon’s Court

22 Victoria Street

Hamilton, Bermuda

  HM12
(address of principal executive offices)   (zip code)

 

+44 8002 343065

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

         
Title of each class   Trading
Symbol(s)
  Name of each exchange
on which registered
Common shares, par value $0.001 per share   WEJO   NASDAQ Stock Market LLC
Warrants, each whole warrant exercisable for one share of common shares at an excercised price of $11.50 per share   WEJOW   NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Introductory Note

 

On November 18, 2021 (the “Closing Date”), Wejo Group Limited, an exempted company limited by shares incorporated under the laws of Bermuda (the “Company”), consummated the previously announced business combination (the “Closing”) pursuant to that certain Agreement and Plan of Merger, dated as of May 28, 2021 (the “Business Combination Agreement”) by and among the Company, Virtuoso Acquisition Corp., a Delaware corporation (“Virtuoso”), Yellowstone Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Wejo Bermuda Limited an exempted company limited by shares incorporated under the laws of Bermuda, (“Limited”), and Wejo Limited, a private limited company incorporated under the laws of England and Wales with company number 08813730 (“Wejo”). The transactions contemplated by the Business Combination Agreement are collectively referred to herein as the “Business Combination.” Unless the context otherwise provides, the terms “we,” “us,” “our,” and the “Company” refer to the registrant and, where appropriate, its subsidiaries following the Closing.

 

Pursuant to the Business Combination Agreement and in connection therewith, at the Closing, among other things, (i) Merger Sub merged with and into Virtuoso, with Virtuoso being the surviving corporation in the merger and a direct, wholly-owned subsidiary of the Company (the “Merger”) and (ii) all Wejo shares were purchased by the Company in exchange for Company Common Shares. The consideration paid to Wejo shareholders consisted of 65,625,896 Company Common Shares, which corresponds to (A)(i) $682,500,000, minus (ii)(a) the aggregate indebtedness for borrowed money of Wejo and its subsidiaries, minus (b)(x) cash and cash equivalents of Wejo and its subsidiaries, plus (y) the amount of any cash payments made in respect of Wejo’s transaction expenses prior to closing, divided by (B) $10.00. Each Wejo shareholder received a portion of such number of Company Common Shares in accordance with an allocation schedule prepared and delivered in accordance with the terms of the Business Combination Agreement.

 

In connection with the Merger, Virtuoso’s outstanding Class A common stock, par value $0.0001 per share (“Virtuoso Class A Common Stock”), and Class B common stock, par value $0.0001 per share (“Virtuoso Class B Common Stock” and, together with the Virtuoso Class A Common Stock, the “Virtuoso Common Stock”), were converted on a one-for-one basis into common shares of the Company, par value $0.001 (“Company Common Shares”), and Virtuoso’s outstanding public warrants to purchase Virtuoso Class A Common Stock were converted on a one-for-one basis into warrants to purchase Company Common Shares, with each whole warrant exercisable for one Company Common Share at an exercise price of $11.50 per share (“Company Warrants”). Prior to the Closing, the private placement warrants (the “Private Placement Warrants”) held by Virtuoso Sponsor LLC (the “Sponsor”) were exchanged for shares of Virtuoso Class C Common Stock, par value $0.001 per share (“Class C Common Stock”), and immediately thereafter the Sponsor transferred and contributed such shares of Class C Common Stock to Limited in exchange for exchangeable preferred shares of Limited (as provided for in the letter agreement, dated May 28, 2021, by and among Virtuoso, the Company and the Sponsor and certain insiders). Such exchangeable preferred shares will be exchangeable into Company Common Shares or cash, as determined by Limited, on the same terms as the Private Placement Warrants, following the first anniversary of the Closing Date.

 

On the Closing Date, the Company consummated the previously announced issuance and sale of 12,850,000 Company Common Shares for an aggregate consideration of approximately $128.5 million in a private placement (the “PIPE Financing”) pursuant to Subscription Agreements, entered into on May 28, 2021, June 25, 2021 and November 10, 2021 (as further amended, or assigned, the “Subscription Agreements”) with certain qualified institutional buyers and accredited investors.

 

As of the Closing Date, and following completion of the Business Combination, the PIPE Financing, the Company had the following outstanding equity securities:

 

·93,950,205 Company Common Shares; and

 

·11,500,000 Company Warrants.

 

In addition, the Sponsor holds 6,600,000 preferred shares of Limited, each exchangeable for one Company Common Share, at a price of $11.50 per share. The preferred shares of Limited may be exchangeable into Company Common Shares or cash, as determined by Limited.

 

 

 

 

Immediately following completion of the Business Combination and the PIPE Financing, the ownership interests of the Company’s stockholders (including ownership interests in Limited) were as follows:

 

·Virtuoso’s public stockholders owned 9,724,309 Company Common Shares, representing an aggregate voting and economic interest of 10.4% in the Company;

 

·Sponsor and its affiliates owned 5,750,000 Company Common Shares (excluding shares purchased in the PIPE Financing), representing an aggregate voting and economic interest of 6.1% in the Company;

 

·Directors and executive officers of the Company owned 18,922,935 Company Common Shares, representing an aggregate voting and economic interest of 20.1% in the Company;

 

·Investors in the PIPE Financing (including Alan Masarek and Samuel Hendel) owned 12,850,000 Company Common Shares, representing an aggregate voting and economic interest of 13.7% in the Company;

 

·Wejo shareholders owned 65,625,896 Company Common Shares, representing an aggregate voting and economic interest of 69.9% in the Company; and

 

·Sponsor and its affiliates owned 6,600,000 preferred shares of Limited, which are exchangeable in accordance with the terms thereof into 6,600,000 Company Common Shares.

 

Item 1.01 Entry into a Material Definitive Agreement

 

The information set forth in the “Introductory Note” above is incorporated into this Item 1.01 by reference.

 

Amended and Restated Bye-Laws of the Company

 

On the Closing Date, in connection with the consummation of the Business Combination, the Company adopted the proposed amended and restated bye-laws (the “Amended and Restated Bye-laws”) in the form attached as Annex D to the Company’s proxy statement/prospectus filed with the Securities and Exchange Commission (the “Commission”) on October 22, 2021 (the “Proxy Statement/Prospectus”). The material terms of the Amended and Restated Bye-laws and the general effect upon the rights of holders of the Company’s capital stock are included under the sections “Proposal No. 3 – Governance Proposal” beginning on page 141 in the Company’s Definitive Proxy Statement/Prospectus and “Comparison of Corporate Governance and Stockholders’ Rights” beginning on page 238 in the Proxy Statement/Prospectus, each of which are incorporated herein by reference.

 

The foregoing description of the Amended and Restated Bye-laws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bye-laws, which is attached hereto as Exhibit 3.1, and is incorporated herein by reference.

 

Registration Rights Agreement

 

On the Closing Date, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Sponsor and certain existing equityholders of Virtuoso and Wejo (the “RRA Holders”), pursuant to which the Company is obligated to, subject to the terms thereof and in the manner contemplated thereby, register for resale under the Securities Act, (i) all or any portion of the Company Common Shares and Company Warrants then held by the RRA Holders, and (ii) all or any portion of the Company Common Shares and Company Warrants that the RRA Holders may thereafter acquire (including, upon the conversion, exchange or redemption of any other security therefor) (the “Registrable Securities”).

 

Under the Registration Rights Agreement, the Company shall file a registration statement covering the Registrable Securities within fifteen (15) business days after the Closing, and will provide certain RRA Holders with certain customary demand registration rights. Under the Registration Rights Agreement, the RRA Holders have “piggyback” registration rights that allow them to include their Registrable Securities in certain registrations initiated by the Company. Subject to customary exceptions, RRA Holders have the right to request up to three (3) underwritten offerings of Registrable Securities. If the sale of Registrable Securities under a registration statement requires disclosure of certain material information that would not otherwise be disclosed, the Company may postpone the effectiveness of the applicable registration statement or require the suspension of the sale thereunder. The Company may not delay or suspend a registration statement on more than one occasion for more than ninety (90) total calendar days during any twelve (12) month period.

 

 

 

 

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.

 

Warrant Assumption Agreement

 

On the Closing Date, the Company entered into a Warrant Assumption Agreement (the “Warrant Assumption Agreement”) with Virtuoso and Continental Stock Transfer & Trust Company (“Continental”). Pursuant to the Warrant Assumption Agreement, the Company assumed all of Virtuoso’s rights and obligations under that certain Warrant Agreement, dated as of January 21, 2021, by and among Virtuoso and Continental (the “Warrant Agreement”).

 

Under the Warrant Assumption Agreement, each Virtuoso public warrant entitling the holder thereof to purchase shares of Virtuoso Common Stock (each a “Public Warrant”) was converted into a warrant to acquire a number of Company Common Shares equal to the number of shares of Virtuoso’s Common Stock underlying such Public Warrant, subject to the same terms and conditions as were applicable to the Public Warrant.

 

The foregoing description of the Warrant Assumption Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Warrant Assumption Agreement, which is attached hereto as Exhibit 10.2, and is incorporated herein by reference.

 

Equity Incentive Plan / ESP Plan / SAYE Plan

 

2021 Plan

 

In connection with the closing of the Business Combination, the Board adopted the 2021 Equity Incentive Plan (the “2021 Plan”), subject to stockholder approval, under which the Company may grant stock options (both incentive and non-qualified), SARs, restricted stock awards, RSUs and stock-based awards to eligible service providers in order to attract, retain and motivate key personnel upon whose judgment, initiative and effort the successful conduct of the Company’s business is largely dependent.

 

An initial aggregate of 14,092,530 Company Common Shares are available for issuance under the 2021 Plan, and the maximum number of Company Common Shares that may be issued pursuant to the exercise of incentive stock options granted under the 2021 Plan is 14,092,530. The aggregate number of Company Common Shares that may be issued pursuant to awards under the 2021 Plan will be subject to an annual increase on January 1 of each calendar year (commencing with January 1, 2022 and ending on and including January 1, 2031) equal to the lesser of a number of shares equal to 3% of the aggregate Company Common Shares outstanding as of December 31 of the immediately preceding calendar year and a number of Company Common Shares as determined by the Board.

 

The foregoing description of the terms of the 2021 Plan does not purport to be complete and is qualified in its entirety by the provisions of the 2021 Plan filed as Exhibit 10.3 to this Current Report on Form 8-K.

 

ESPP

 

In connection with the closing of the Business Combination, the Board adopted the 2021 Employee Share Purchase Plan (the “ESPP”), under which eligible employees and/or eligible service providers of either the Company or an affiliate may be given an opportunity to purchase Company Common Shares at a discount. The ESPP includes two components: a “423 Component”, which is intended to qualify as an employee stock purchase plan pursuant to Section 423 of the U.S. Tax code, and a “Non-423 Component.” In addition, the ESPP authorizes grants of (i) purchase rights under the Non-423 Component that do not meet the requirements of an employee stock purchase plan under Section 423 of the Code and (ii) purchase rights under sub-plans including the SAYE Plan. Eligible employees will be able to participate in the 423 Component or Non-423 Component of the ESPP. Eligible service providers (who may or may not be eligible employees) will only be able to participate in the Non-423 Component of the ESPP.

 

 

 

 

An initial aggregate of 1,879,004 Company Common Shares are available for issuance under the ESPP and the SAYE Plan. The aggregate number of Company Common Shares will be subject to an annual increase on January 1 of each calendar year (commencing with January 1, 2022 and ending on and including January 1, 2031) of a number of Company Common Shares equal to the least of (i) 1% of the aggregate Company Common Shares outstanding as of December 31 of the immediately preceding calendar year, (ii) a number of Company Common Shares as determined by the Board, and (iii) 2% the outstanding Company Common Shares issued and outstanding as of the closing of the Business Combination, subject to adjustment by the plan administrator in the event of certain changes in our corporate structure.

 

The foregoing description of the terms of the ESPP does not purport to be complete and is qualified in its entirety by the provisions of the ESPP filed as Exhibit 10.4 to this Current Report on Form 8-K.

 

SAYE Plan

 

In connection with the closing of the Business Combination, the Board adopted the Save As You Earn Share Option Plan 2021 as a sub-plan of the ESPP (the “SAYE Plan”), under which eligible employees of either the Company or a subsidiary may be given an opportunity to purchase Company Common Shares at a discount. The SAYE plan allows for employees in the United Kingdom to be given the opportunity to make regular savings towards the exercise price of an option which, on exercise, benefits from tax-advantaged treatment under the tax laws of the United Kingdom.

 

The SAYE Plan is a sub-plan of the ESPP and as such shares subject to awards under the SAYE Plan count towards the overall number of shares available for issue under the ESPP, as set out in the preceding section.

 

The foregoing description of the terms of the SAYE Plan does not purport to be complete and is qualified in its entirety by the provisions of the SAYE Plan filed as Exhibit 10.5 to this Current Report on Form 8-K.

 

Indemnity Agreements

 

On the Closing Date, the Company entered into indemnity agreements with Messrs. Craig Smith, Chris Hasenbein, David Burns, Samuel Hendel, Nick Goode, Barry Nightingale, Richard Barlow, Diarmid Ogilvy, Lawrence Burns, Timothy Lee, Alan Masarek and John Maxwell, and Mses. Mina Bhama, Sarah Larner, Ann M. Schwister and Den Power, each of whom is a director and/or executive officer of the Company following the Business Combination (collectively, the “Indemnity Agreements”). The Indemnity Agreements provide that, subject to limited exceptions specified therein, the Company will indemnify the director and/or executive officer, as applicable, to the fullest extent not prohibited by either (i) the provisions of the Amended and Restated Bye-laws and (ii) the laws of Bermuda, for claims arising out of such individual’s performance as a director and/or executive officer of the Company.

 

The foregoing description of the Indemnity Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Indemnity Agreements, the form of which is attached hereto as Exhibit 10.6, and is incorporated herein by reference.

 

 

 

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

The information set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. On November 16, 2021, the Business Combination was approved by the stockholders of Virtuoso at its special meeting of stockholders. The Business Combination was consummated on the Closing Date.

 

In connection with the Business Combination, holders of 13,275,691 public shares of Virtuoso Class A Common Stock exercised their right to redeem those shares for cash at a price of approximately $10.00 per share for an aggregate consideration of approximately $132.8 million (the “Redemption Amount”), which was paid to such holders promptly following the Closing Date.

 

FORM 10 INFORMATION

 

Prior to the Closing, Virtuoso was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose only assets consist of equity interests in Wejo, Limited and Virtuoso. Accordingly, pursuant to Item 2.01(f) of Form 8-K, the Company is providing below the information that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided below relates to the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

 

Cautionary Statement Regarding Forward-Looking Information

 

Certain statements in this Current Report on Form 8-K, or incorporated herein by reference, may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: (i) the size, demands and growth potential of the markets for the Company’s products and services and the Company’s ability to serve those markets, (ii) the degree of market acceptance and adoption of the Company’s products and services, (iii) the Company’s ability to develop innovative products and services and compete with other companies engaged in the automotive technology industry and (iv) the Company’s ability to attract and retain customers. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that 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. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the Proxy Statement/Prospectus and other documents filed by the Company from time to time with the United States Securities and Exchange Commission (the “SEC”). These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. These cautionary statements are being made pursuant to federal securities laws with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. The Company does not give any assurance that it will achieve its expectations. Forward-looking statements in this Current Report on Form 8-K may include, for example, statements about:

 

·The projected financial information, anticipated growth rate and market opportunity of the Company;

 

·The ability to obtain or maintain the listing of the Company Common Shares and Company Warrants on the NASDAQ;

 

·The Company’s public securities’ potential liquidity and trading;

 

·The Company’s ability to raise financing in the future;

 

 

 

 

·The Company’s success in retaining or recruiting, or changes required in, our officers, key employees or directors;

 

·The impact of the regulatory environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal law and data/privacy law in “internet of things” milieu;

 

·Factors relating to the business, operations and financial performance of the Company and its subsidiaries following the Business Combination; and

 

·Other factors detailed in the Proxy Statement/Prospectus in the section entitled “Risk Factors” beginning on page 51 in the Proxy Statement/Prospectus, which are incorporated herein by reference.

 

The forward-looking statements contained in this Current Report on Form 8-K, and in any document incorporated by reference, are based on our current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors detailed in the Proxy Statement/Prospectus in the section entitled “Risk Factors” beginning on page 51 in the Proxy Statement/Prospectus, which are incorporated herein by reference. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

Business

 

Our business is described in the section entitled “Information about Wejo” beginning on page 169 in the Proxy Statement/Prospectus, and that information is incorporated herein by reference.

 

Properties

 

The mailing address of our registered office is c/o Canon’s Court, 22 Victoria Street, Hamilton, HM12, Bermuda. It is the intention that, in the longer term, our affairs will be conducted so that the central management and control of the Company is exercised in the UK with our corporate headquarters and principal executive offices to be located at ABC Building, 21-23 Quay St., Manchester, United Kingdom, X0 M3 4AE. We believe that our facilities are adequate to meet our needs for the immediate future and that we will be able to secure additional space to accommodate expansion of our operations, as necessary, and if needed.

 

Risk Factors

 

The risk factors related to our business and operations are described in the section entitled “Risk Factors” beginning on page 51 in the Proxy Statement/Prospectus, and that information is incorporated herein by reference.

 

Financial Information

 

The financial information of Wejo is described in the Proxy Statement/Prospectus in the Section entitled “Wejo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 186 thereof, and is incorporated herein by reference.

 

The financial information of Virtuoso is described in the Proxy Statement/Prospectus in the Section entitled “Virtuoso’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 166 thereof, and is incorporated herein by reference.

 

 

 

 

Reference is made to the disclosure set forth in Item 9.01 of this Form 8-K relating to the financial information of Wejo and Virtuoso which is incorporated herein by reference.

 

WEJO’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes to those financial statements appearing elsewhere in this Current Report on Form 8-K and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2020 included in the Proxy Statement/Prospectus. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth in our Proxy Statement/Prospectus, which are incorporated herein by reference, our actual results may differ materially from those anticipated in these forward-looking statements.

 

Overview

 

Business Overview

 

Wejo Group Limited (“Wejo Group”) currently maintains early leadership in the connected vehicle data market and was incorporated by Wejo Limited (“Wejo”), a private limited liability company incorporated under the laws of England and Wales on December 13, 2013. Wejo Group Limited (“We”) was incorporated under the laws of Bermuda on May 21, 2021 for the purpose of effectuating the Business Combination described herein and becoming the parent company of the combined business following the consummation of the Business Combination with Virtuoso, a blank check company incorporated on August 25, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Until the consummation of the business combination, Virtuoso did not engage in any operations nor generate any revenue; however, it did generate interest on the funds held in the trust account and incurred costs around its formation and other operating costs.

 

On January 26, 2021, Virtuoso consummated the IPO of 23,000,000 units (the “Units” and, with respect to the common shares included in the Units being offered, the “public share”), at $10.00 per Unit, generating gross proceeds of $230.0 million. Simultaneously with the closing of the IPO, Virtuoso consummated the sale of 6,600,000 warrants (the “Private Placement Warrant”), at a price of $1.00 per Private Placement Warrant.

 

On May 28, 2021, Virtuoso entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Virtuoso, Wejo Group, Yellowstone Merger Sub, Inc., a Delaware corporation and direct, wholly-owned Subsidiary of the Company (“Merger Sub”), Wejo Bermuda Limited, a Bermuda private company limited by shares, (“Limited”), and Wejo. Pursuant to the Merger Agreement, the parties entered into a the business combination, pursuant to which, among other things, (i) Merger Sub merged with and into Virtuoso, with Virtuoso being the surviving corporation in the merger and a direct, wholly-owned subsidiary of the Wejo Group (the “Merger”), and together with the transactions contemplated by the Merger Agreement and the other related agreements entered into in connection therewith, the “Transactions”); and (ii) all Wejo shares were purchased by the Wejo Group in exchange for common shares of the Wejo Group, par value $0.001 (the “Wejo Group Common Shares”).

 

Prior to 2018, Wejo tested proof of concept and implemented OEM engagement activities to assess and build the case for connected vehicle data business and to create our capabilities to process data using data sources such as vehicle plug-in devices.

 

These activities helped Wejo understand the potential for the connected vehicle data business and design our platform for processing large volume data flows. After obtaining its first OEM data contract in December 2018, Wejo launched its Wejo ADEPT Platform for processing OEM data and began generating revenue from its Data Marketplace solution in 2019. Connected vehicles contain hundreds of data sensors, emitting information such as location, speed, direction and events such as braking, temperature and weather conditions. This raw data when harnessed can create intelligence, both historical and in real-time that is unavailable from any other source.

 

 

 

 

Based on both external and internal research completed by our management, connected vehicles will make up 44% of all vehicles in 2030. This is a greater than three-fold gain, increasing from 196 million connected vehicles in 2021 to approximately 600 million connected vehicles in 2030. We have 12 million connected vehicles on platform in which we ingest and standardize this data, tracking over 73 million journeys and 16 billion data points a day, primarily in the United States. Based on existing OEM, Automotive suppliers(Tier 1) and Distributors (Dealers) relationships, we expect that near-real time live streaming vehicles on our platform will increase to 124 million connected vehicles by 2030. Wejo data, insights, and solutions enable customers including departments of transportation, retailers, construction firms and research departments to unlock unique insights about vehicle journeys, city infrastructures, electric vehicle usage, road safety and more.

 

In addition to the strength of our intellectual property, we have relationships with 17 OEMs and Tier 1 suppliers of connected vehicle data components. The OEMs on our platform provide the unique data sets that we ingest regularly in Wejo ADEPT 24 hours a day. To date, no industry standard for connected vehicle data exists. This is where Wejo technology has a singular leadership position in the market, and by creating that standard, we will enable future product developments such as vehicle-to-vehicle communications, pay-as-you-drive insurance, automated breakdown recovery, predictive maintenance and touchless “pay by car” commerce for parking, retail and more.

 

We are also working with the OEMs and Tier 1s to provide Automotive Business Insight Solutions (SaaS) (comprised of platforms as a service, data processing capabilities, customer privacy management or business insights derived from connected vehicle data) such as component intelligence and 3D parking assistance in vehicle. Data For Good™: from our inception, this mantra has captured our Company’s values that connected vehicle data will reduce emissions, make roads safer and create positive driver experiences. The Company’s foundation is built upon a total commitment to data privacy and security, including compliance with regulations such as GDPR and CCPA. We plan to leverage our leading position in North America and continue expansion into Europe, Asia and the rest of the world. We continue to evolve, scaling past data traffic management solutions into a host of new compelling proprietary offerings and fields of use. We are also creating Automotive Business Insight Solutions (SaaS) offerings to provide OEMs, Tier 1s, and automotive service providers with additional capabilities to meet different privacy, regulation, storage, visualization, and data insight needs. As the business progresses, we expect an increasing level of subscription and licensing revenue to be generated by our Data Marketplaces and Automotive Business Insight Solutions (SaaS).

 

We operate our business to take advantage of a sizeable market opportunity. Through our own bottoms-up analysis coupled with third party research, we estimate our Serviceable Addressable Market (“SAM”) to be worth approximately $61 billion by 2030. We determined the SAM as two components: Data Marketplace Solutions and Automotive Business Insight Solutions (SaaS). For Data Marketplace Solutions, we used the data and research from the connected vehicle analyst firm Ptolemus. The Company has projected Total Addressable Market numbers (“TAMs”) for each of the eight products (traffic management, advertising, fleet management systems & leasing, usage-based insurance, remote diagnostic services, car sharing & rental, roadside assistance, integrated payments: “pay by car”) by region and timeframe. We then applied a discount factor by calculating 70% of each TAM to create the Wejo SAM. For Automotive Business Insight Solutions (SaaS), we worked with Gartner research to determine the total spend in this area of SaaS solutions for the automotive industry and calculated the SAM as 5%.

 

We have demonstrated our ability to standardize and generate valuable data insights, and in the process, created a growing network effect of attracting additional OEMs, automotive suppliers, and customers. These forces converge to grow the products and services that consumers, and enterprises in the transportation industry want and are willing to pay for.

 

We build privacy by design into the core of our Wejo ADEPT platform, enabling compliance with existing privacy laws and regulations. We operate to high global data privacy standards and are a leader in the industry on protection of data, assuring that we play a pivotal role in our industry.

 

 

 

 

In establishing our business, we have incurred significant operating losses since our inception. We incurred total net losses of $161.9 million, $54.9 million and $29.0 million, respectively, for the nine months ended September 30, 2021, and for the fiscal years ended December 31, 2020 and 2019. As of September 30, 2021, we had an accumulated deficit of $308.7 million. Our historical losses resulted principally from costs incurred in connection with technology and development, sales and marketing and general and administrative costs associated with our operations, and changes in the fair value of our derivative liability and advanced subscription agreements. In the future, we intend to continue to develop our technology and conduct business development activities that, together with anticipated general and administrative expenses, will result in incurring further significant losses for at least the next several years. Furthermore, since the completion of the Business Combination, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. The Business Combination provided substantial additional funding that we will need to support our continuing operations and our growth strategy. Until such time as we can generate significant revenue, if ever, we expect to finance our operations through a combination of equity offerings and debt financings. Our inability to raise capital when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurances, however, that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.

 

As of September 30, 2021, we had cash of $8.6 million. In the fourth quarter of 2021, we issued further notes in a principal amount of $7.5 million under the Loan Note Instrument. In November 2021, as part of the Business Combination, we raised net proceeds of $178.8 million, consisting of $230.0 million cash received in the trust, less redemptions of $132.8 million, and $128.5 million, through a Private Investment in Public Entity (“PIPE”) investment, net of expenses of $46.9 million. In addition, we paid $75.0 million to Apollo as stipulated in the Forward Purchase Transaction. After considering the fundraising noted herein, based on our current level of expenditures, we believe that we will have sufficient financial resources to fund our activities and execute our business plan beyond the next 12 months from the date of the issuance of these financial statements. See “— Liquidity and Capital Resources — Funding Requirements” below.

 

Key Factors Affecting Our Results of Operations

 

COVID-19

 

With the ongoing COVID-19 pandemic, we have implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on our business. The COVID-19 pandemic has had a material impact on our expansion efforts as travel restrictions decrease the amount of vehicle data in use and demand for our products. On April 21, 2020, we committed to a restructuring plan in response to the changes in business and economic conditions arising as a result of the COVID-19 pandemic. The plan was designed to support our long-term financial resilience, simplify our operations, strengthen our competitive positioning and better serve our customers. The extent to which the COVID-19 pandemic impacts our business, product development and expansion efforts, corporate development objectives and the value of and market for our ordinary shares will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the UK and U.S. and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global supply chains and distribution systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

 

Attract, Retain and Grow our Customer Base

 

Our recent growth is driven by the expansion of our customer base particularly in the area of traffic management, related mapping and logistics, and high customer retention rates. Substantially all of our current sales come from U.S. connected vehicle data. The Company is in the early stages of monetization in its eight planned markets, starting with traffic management, including mapping. Early-stage demand for connected vehicle data is very strong, and we believe that we will continue to see this demand in the future as we expand in traffic management and launch additional markets.

 

 

 

 

We continue to add functionality to our Wejo ADEPT Platform to offer new and more valuable services to our customers. We believe that our business is at the genesis of the connected vehicle ecosystem, demonstrating new services that will one day be viewed as necessary, and positioned to pioneer even more desirable services in the future. As these services continue to demonstrate their value, many of our customers will move a greater percentage of their funds to connected vehicle data. We will fuel this growth with marketing efforts to increase awareness of our offerings.

 

Investment in Growth — Data Marketplace and Automotive Business Insight Solutions (SaaS) to the Automotive Industry

 

We forecast the connected vehicle data marketplace will grow to greater than $30.0 billion by 2030. We know from the internal and external market sizing our available connected vehicle data set has substantial value in expanded marketplaces and we will leverage the data set to deliver products and revenues across those markets.

 

We are receiving inbound inquiries which we plan to convert into additional revenue opportunities to provide cloud services to OEMs and automotive suppliers as a core revenue stream. We forecast that the Automotive Business Insight Solutions(SaaS) market for OEMs and automotive suppliers served by Wejo will exceed $31.0 billion by 2030.

 

Key Components of Results of Operations

 

Revenues

 

We work with the world’s leading OEMs to obtain, process, and create products using vast amounts of connected vehicle data. OEMs provide this data through license agreements. We process the data in our Wejo ADEPT Platform running in cloud data centers and offer services including live data feeds, batch feeds and analytics. These services provide customers with traffic intelligence, high frequency vehicle movements, and common driving events and trends, among other insights. Our customers pay license fees to obtain one or more of these data services that may include a portion or all the data in their market. Our revenue is the amount of consideration we expect to receive in the form of gross sales to customers, reduced by associated revenue share due under our data sharing agreements with OEMs.

 

Cost of Revenue (exclusive of depreciation and amortization)

 

Cost of revenue consists primarily of hosting service expenses for our Wejo ADEPT Platform, as well as hardware, software and human resources to support the revenue process.

 

Technology and Development

 

Technology and development expenses consist primarily of compensation-related expenses incurred for our data scientists and other technology human resources for the research and development of, enhancements to, and maintenance and operation of our products, equipment and related infrastructure.

 

Sales and Marketing

 

Sales and marketing expenses consist primarily of compensation-related expenses to our direct sales and marketing human resources, as well as costs related to advertising, industry conferences, promotional materials, other sales and marketing programs, and facility costs related to sales and marketing functions. Advertising costs are expensed as incurred.

 

 

 

 

General and Administrative

 

General and administrative expenses consist primarily of compensation related expenses for executive management, finance, accounting, human resources, legal, and corporate information systems functions, professional fees and facilities costs related to general and administrative functions.

 

Change in Fair Value of Derivative Liability

 

We issued convertible notes that contain redemption features, which met the definition of a derivative instrument. We classified these derivative instruments as a liability on our condensed consolidated balance sheet. We remeasured this derivative liability to fair value at each reporting date and recognized changes in the fair value of the derivative liability as a component of other (expense) income, net in our condensed consolidated statement of operations.

 

Change in Fair Value of Advanced Subscription Agreements

 

We issued Advanced Subscription Agreements (“ASAs”) that contained an automatic conversion feature, which is triggered by either the occurrence of Series C round financing or share sale triggering a change of control. We concluded that it was appropriate to apply the fair value option to the ASAs because there were no non-contingent beneficial conversion features related to the ASAs. We classified these ASAs as a liability on our condensed consolidated balance sheet and remeasure them to fair value at each reporting date and recognized changes in the fair value of the ASAs as a component of other (expense), income net in our condensed consolidated statement of operations.

 

Loss on Issuance of Convertible Notes

 

We issued convertible notes in December 2020, January 2021 and April 2021 for which the initial fair value of the convertible notes was greater than the proceeds we received. We recognized the loss on issuance as the difference between the initial fair value of the convertible notes and cash proceeds received as a component of other (expense), income net in our consolidated statement of operations.

 

Other (Expense), Income, net

 

Other (expense) income, net primarily consists of foreign exchange gain or loss arising from foreign currency transactions and a benefit from research and development tax credits.

 

Income Taxes

 

Wejo is a tax resident in the UK with business units taxable in other territories, including the U.S. Due to the nature of our business, we have generated losses since inception and therefore have not paid corporation tax in the UK or other territories.

 

UK losses may be carried forward indefinitely and may be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of UK taxable profits. After accounting for tax credits receivable, we had accumulated tax losses for carry forward in the UK of $97.4 million and $60.5 million as of December 31, 2020 and 2019, respectively. We do not recognize these losses on the statement of financial position.

 

Wejo Group is incorporated under the laws of Bermuda and is a resident in Bermuda for tax purposes.

 

 

 

 

Results of Operations

 

Comparison of the Three Months Ended September 30, 2021 and 2020

 

The following table summarizes our results of operations for the three months ended September 30, 2021, and 2020 (in thousands):

 

   Three Months Ended September 30,   Increase 
   2021   2020   (Decrease) 
Revenue, net  $351   $313   $38 
Costs and operating expenses:               
Cost of revenue (exclusive of depreciation and amortization shown separately below)   1,422    265    1,157 
Technology and development   7,446    3,191    4,255 
Sales and marketing   5,233    808    4,425 
General and administrative   6,106    1,560    4,546 
Depreciation and amortization   1,108    1,050    58 
Total costs and operating expenses   21,315    6,874    14,441 
Loss from operations   (20,964)   (6,561)   (14,403)
Loss of issuance of convertible loan notes            
Change in fair value of derivative liability   (1,637)   (3,138)   1,501 
Change in fair value of advanced subscription agreements   288    (723)   1,011 
Interest expense   (2,954)   (919)   (2,035)
Other (expense) income, net   (383)   639    (1,022)
Net loss  $(25,650)  $(10,702)  $(14,948)

 

Revenue, net

 

Revenue, net increased by less than $0.1 million, or 12%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. Revenue, net increased based on a 51% increase in gross sales to our customers to $1.4 million from $0.9 million for the three months ended September 30, 2021 and 2020, respectively. The change is primarily due to a 67% increase in the total number of customers from September 30, 2020 to September 30, 2021. Revenue, net during these periods was primarily related to Data Marketplace customers. In addition, the number of vehicles on the ADEPT platform increased 19% year over year, which increases the value of the company’s license agreements, further driving revenue increases.

 

Cost of Revenue (exclusive of depreciation and amortization)

 

Cost of revenue increased $1.2 million, or 437%, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The change is primarily due to an increase in staff cost as a result of the additional personnel hired to support our current period and expected increases in revenue. Total headcount for employees allocated to cost of revenue increased by fifteen from September 30, 2020 to September 30, 2021. During these early stages of growth in Data Marketplace and Automotive Business Insight Solutions (SaaS), we expect that our costs will scale at a rate greater than our growth in revenue until we are offering our solutions through multiple products in the Data Marketplace and through Automotive Business Insight Solutions (SaaS) to multiple OEMs, Tier 1s, Distributors, or Automotive Ecosystem customers. We expect to achieve this scale by late 2022, when we expect our sales in both the Data Marketplace and Automotive Business Insight Solutions (SaaS)to increase substantially over 2021 levels.

 

Technology and Development

 

Technology and development expenses increased by $4.3 million, or 133%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is primarily due to an increase of $3.8 million in IT expenses, to support the growth of our business, as well as $0.6 million in staff costs, which were low in 2020 due to COVID-19 reductions. These increases were offset by a decrease in consulting expenses of $0.2 million as a result of hiring additional permanent resources to support our technology and development activities.

 

 

 

 

Sales and Marketing

 

Sales and marketing expenses increased by $4.4 million, or 548%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is primarily due to an increase of $3.0 million in staffing costs and a $1.3 million increase in marketing and advertising, as well as a $0.2 million increase in rent and other costs, offset by a decrease of $0.1 million in consulting expenses.

 

General and Administrative

 

General and administrative expenses increased by $4.5 million, or 291%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is principally related to an increase of $2.2 million in professional services as well as a $1.7 million increase in staffing costs.

 

Depreciation and Amortization

 

Depreciation and amortization increased by $0.1 million, or 6%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is primarily due to a reduction in depreciation as certain computer software was fully depreciated between periods.

 

Change in Fair Value of Derivative Liability

 

Change in fair value of derivative liability decreased by $1.5 million during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is due to the decrease in the embedded derivative liabilities that were bifurcated from the convertible loans issued between July 2020 and September 2021.

 

Change in Fair Value of Advanced Subscription Agreements

 

Change in fair value of advanced subscription agreements decreased by $1.0 million or 140% during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is due to the fair value of the underlying shares decreasing by £0.59 per share during the period from July 1, 2021 to July 31, 2021 (the date of conversion of advanced subscription agreements), compared with the increment of £3.49 per share during the three months ended September 30, 2020.

 

Interest Expense

 

Interest expense increased by $2.0 million, or 221%, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The change is due to an increase of $0.8 million related to the secured loan notes issued in April 2021 that bear interest at a fixed rate of 9.2% per annum, and an increase of $1.5 million related to the convertible loans issued between July 2020 and June 2021 that bear interest at a fixed rate of 8.0% per annum, offset by a decrease of $0.3 million related to GM loan which was repaid in April 2021.

 

 

 

 

Other (Expense) Income, net

 

Other expense was ($0.4) million as of September 30, 2021, as opposed to other income of $0.6 million for the three months ended September 30, 2020. The change is primarily due to a to foreign exchange loss of ($0.4) million versus a foreign exchange gain of $0.5 in the three months ended September 30, 2021 and September 30, 2020, respectively.

 

Comparison of the Nine Months Ended September 30, 2021 and 2020

 

The following table summarizes our results of operations for the nine months ended September 30, 2021, and 2020 (in thousands):

 

   Nine Months Ended September 30,   Increase 
   2021   2020   (Decrease) 
Revenue, net  $1,198   $836   $362 
Costs and operating expenses:               
Cost of revenue (exclusive of depreciation and amortization shown separately below)   3,764    1,139    2,625 
Technology and development   13,941    6,289    7,652 
Sales and marketing   11,372    4,109    7,263 
General and administrative   14,055    6,385    7,670 
Depreciation and amortization   3,263    3,297    (34)
Total costs and operating expenses   46,395    21,219    25,176 
Loss from operations   (45,197)   (20,383)   (24,814)
Loss of issuance of convertible loan notes   (44,242)       (44,242)
Change in fair value of derivative liability   (58,253)   (3,138)   (55,115)
Change in fair value of advanced subscription agreements   (6,477)   693    (7,170)
Interest expense   (7,271)   (1,346)   (5,925)
Other (expense) income, net   (468)   1,289    (1,757)
Net loss  $(161,908)  $(22,885)  $(139,023)

 

Revenue, net

 

Revenue, net increased by $0.4 million, or 43%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. Revenue, net increased based on a 69% increase in gross sales to our customers to $4.1 million from $2.4 million during nine months ended September 30, 2021 and 2020, respectively. The change is primarily due to a 65% increase in the total number of customers from September 30, 2020 to September 30, 2021. Revenue, net during these periods was primarily related to Data Marketplace customers. In addition, the number of vehicles on the ADEPT platform increased 19% year over year, which increases the value of the company’s license agreements, further driving revenue increases.

 

Cost of Revenue (exclusive of depreciation and amortization)

 

Cost of revenue increased $2.6 million, or 230%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The change is primarily due to an increase in staff cost as a result of the additional personnel hired to support our current period and expected increases in revenue. During these early stages of growth in Data Marketplace and Automotive Business Insight Solutions (SaaS), we expect that our costs will scale at a rate greater than our growth in revenue until we are offering our solutions through multiple products in the Data Marketplace and through Automotive Business Insight Solutions (SaaS)to multiple OEMs, Tier 1s, Distributors, or Automotive Ecosystem Partners. We expect to achieve this scale by late 2022 when we expect our sales in both the Data Marketplace and Automotive Business Insight Solutions (SaaS) to increase substantially over 2021 levels.

 

 

 

 

Technology and Development

 

Technology and development expenses increased by $7.7 million, or 122%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is primarily due to an increase of $4.7 million in IT expenses, comprised of a $3.1 million increase in technology costs to support the growth of our business and a $1.0 million increase in hosting fees, as well as an increase of $2.9 million in staff costs, which were low in 2020 due to COVID-19 reductions. Additionally, there was an increase of $0.1 million in rent and other related expenses to support our technology and development activities.

 

Sales and Marketing

 

Sales and marketing expenses increased by $7.3 million, or 177%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is primarily due to an increase of $3.8 million in staff costs as well as a $3.5 million increase in marketing and advertising activities.

 

General and Administrative

 

General and administrative expenses increased by $7.7 million, or 120%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is primarily due to an increase of $5.2 million in professional services as well as a $1.9 million increase in staffing costs as a result of additional personnel hired to support our growth.

 

Depreciation and Amortization

 

Depreciation and amortization decreased by less than $0.1 million, or 1%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is primarily due to a reduction in depreciation as certain computer software was fully depreciated between periods.

 

Loss on Issuance of Convertible Loans

 

Loss on issuance of convertible loans increased by $44.2 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is due to the convertible loans issued during the nine months ended September 30, 2021 including a beneficial conversion feature, a bifurcated derivative liability, and debt issuance costs which in aggregate, exceeded the allocated proceeds of the convertible loans by $44.2 million.

 

Change in Fair Value of Derivative Liability

 

Change in fair value of derivative liability increased by $55.1 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is due to the increase in the embedded derivative liabilities that were bifurcated from the convertible loans issued between July 2020 and June 2021.

 

Change in Fair Value of Advanced Subscription Agreements

 

Change in fair value of advanced subscription agreements increased by $7.2 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is due to the fair value of the underlying shares increasing by £13.94 per share during the period from January 1, 2021 to July 31, 2021, which is higher than the increment of £0.21 per share during the nine months ended September 30, 2020.

 

 

 

 

Interest Expense

 

Interest expense increased by $5.9 million, or 440%, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The change is due to an increase of $1.3 million related to the secured loan notes issued in April 2021 that bear interest at a fixed rate of 9.2% per annum, and an increase of $4.9 million related to the convertible loans issued between July 2020 and June 2021 that bear interest at a fixed rate of 8.0% per annum, offset by a decrease of $0.3 million related to GM loan which was repaid in April 2021.

 

Other (Expense) Income, net

 

Other expense was ($0.5) million for the nine months ended September 30, 2021, as compared to other income of $1.3 million for the nine months ended September 30, 2020. The change is primarily due to an unfavorable change in foreign exchange rates of $0.9 million as well as a decrease of $0.7 million in grant income.

 

Liquidity and Capital Resources

 

Sources of Liquidity

 

We have incurred significant operating losses since our formation and expect to continue incurring operating losses for the next several years. As a result, we will need additional capital to fund our operations, which we may obtain through the sale of equity, debt financings, collaborations, licensing arrangements, revenue from customers or other sources. Through September 30, 2021, we have received gross proceeds of $175.6 million through sales of equity, advanced subscription agreements, convertible loan notes and debt financings. As of September 30, 2021, we had cash of $8.6 million, of which $3.8 million was held outside the United States. In the fourth quarter of 2021, we issued notes with a principal amount of $7.5 million and have the capacity to issue another $4.0 million under this facility.

 

On November 18, 2021 we completed the Business Combination, which raised $178.8 million, which consisting of $230.0 million of cash received in the trust, less redemptions of $132.8 million, as well as $128.5 million, through a PIPE investment, net of expenses of $46.9 million offset by a payment of $75.0 million from the Company to Apollo as stipulated in the Forward Purchase Transaction (see Note 15). The Company believes that the additional loans together with the funds raised from the Business Combination and PIPE investment will be sufficient to fund our operating expenses for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. As such, the Company’s financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

 

Cash Flows

 

The following table summarizes our cash flows for each of the periods presented (in thousands):

 

   Nine Months Ended September 30, 
   2021   2020 
Net cash used in operating activities  $(29,927)  $(16,256)
Net cash used in investing activities   (2,618)   (2,023)
Net cash provided by financing activities   26,836    23,250 
Effect of exchange rate changes on cash   (101)   (208)
Net (decrease) increase in cash  $(5,810)  $4,763 

 

 

 

 

Cash Used in Operating Activities

 

During the nine months ended September 30, 2020, net cash used in operating activities was $29.9 million, primarily resulting from our net loss of $161.9 million, which includes non-cash expenses including: changes in fair value of derivative liability of $58.3 million, loss on issuance of convertible loans notes of $44.2 million, changes in fair value of advanced subscription agreements of $6.5 million, non-cash interest expense of $4.2 million, non-cash charges for depreciation and amortization of $3.3 million and non-cash loss on foreign currency remeasurement. The net loss was also offset by $15.0 million related to changes in components of working capital, including an increase of $0.2 million in accounts receivable, an increase of $5.2 million in accounts payable due to more vendors’ payments to support the revenue growth, a decrease of $3.7 million in prepaid expenses and other assets due to receipt of $4.0 million compensation for an insurance claim offset by $0.5 million increase in prepayments and VAT recoverable and an increase of $6.4 million in accrued expenses and other liabilities mainly due to increase in professional fee accrual of $3.2 million, increase in accrued interest of $2.2 million, increase in accrued development and technology expense of $1.5 million and increase of accrued compensation and benefits cost of $3.5 million, offset by settlement of accrued claim of $4.0 million.

 

During the nine months ended September 30, 2020, net cash used in operating activities was $16.3 million, primarily resulting from our net loss of $22.9 million, which is offset by non-cash charges for depreciation and amortization of $3.3 million, changes in fair value of derivative liability of $3.1 million, and non-cash interest expense of $0.4 million. The net loss was also adjusted by changes in fair value of advanced subscription agreements of $0.7 million and foreign currency adjustments of $0.1 million, offset by $0.5 million related to changes in components of working capital, including an increase of $0.2 million in accounts receivable, an increase of $1.4 million in accounts payable due to more vendors’ payments to support the revenue growth and a decrease of $0.6 million in accrued expenses and other liabilities mainly due to payment of bonus accrued at the end of December 31, 2019.

 

The increase in cash used by operating activities in 2021 compared to 2020 is the Company’s significant increased spending on technology and development and sales and marketing related to its expansion into marketplaces and automotive business insights, as well as increases in general and administrative expenses related to his expansion and becoming a public company.

 

Cash Used in Investing Activities

 

During the nine months ended September 30, 2021, net cash used in investing activities was $2.6 million, primarily driven by capitalized internally developed software costs of $2.1 million and purchase of office equipment of $0.5 million.

 

During the nine months ended September 30, 2020, net cash used in investing activities was $2.0 million, respectively, primarily driven by our capitalized internally developed software costs.

 

Cash Provided by Financing Activities

 

During the nine months ended September 30, 2021, net cash provided by financing activities was $26.8 million, primarily driven by $15.2 million net cash proceeds received from issuance of convertible notes and $25.0 million net cash proceeds received from issuance of fixed rate secured loan notes, offset by a $10.1 million repayment of our related party debt, a $3.1 million payment of deferred financing costs and a $0.1 million repayment of our loan’s payable.

 

During the nine months ended September 30, 2020, net cash provided by financing activities was $23.3 million, primarily driven by $10.1 million cash proceeds received from issuance of credit facility with GM, $1.0 million of the remaining cash proceeds received from B Ordinary shares issued during the year ended December 31, 2018, $11.8 million cash proceeds received from issuance of convertible notes and $0.3 million cash proceeds received from the issuance of advanced subscription agreements.

 

 

 

 

Contractual Obligations

 

We lease office space and data center space under operating lease agreements.

 

The following table sets forth our future contractual obligations as of December 31, 2020 (in thousands):

 

   2021   2022   2023   2024   2025   Total 
General Motors debt (1)  $10,503   $   $   $   $   $10,503 
Operating lease obligations (2)   799    266                1,065 
Convertible loan notes (3)           59,621              —    59,621 
   $11,302   $266   $59,621   $   $   $71,189 

 

 

(1)Amounts reflect the outstanding principal and accrued interest as of December 31, 2020. The principal and accrued interest was due on December 31, 2021 but was repaid in full in April 2021 with the proceeds from the debt financing secured in the same month.

 

(2)Amounts reflect payments due for our leased office space in Manchester, UK under one operating lease agreement that expires in April 2022.

 

(3)Amounts reflect our aggregate obligation if all convertible loan noteholders elected to receive repayment of their loans upon maturity rather than allowing the loans to convert into shares of equity. The amounts are comprised of the outstanding principal balance, unpaid accrued interest as of the maturity date, and a redemption premium equal to 100% of the outstanding principal. Not included in the above table is the aggregate principal of $21.2 million received for the additional convertible loans issued in 2021, resulting in an additional potential obligation to convertible loan noteholders of $46.5 million due during the year ended December 31, 2023.

 

Palantir Master Subscription Agreement

 

In May 2021, we entered into a master subscription agreement with Palantir Technologies Inc. (“Palantir”) for access to Palantir’s proprietary software for a six-year period. The remaining payments for this software subscription are $50.0 million.

 

Microsoft Customer Agreement

 

In June 2021, we entered into a cloud hosting agreement with Microsoft Corporation (“Microsoft”) for access to Microsoft’s Azure cloud services platform for a five-year period. The remaining payments for this cloud computing service are £70.8 million ($95.4 million) which are due in 2026.

 

Amazon Web Services

 

The Company is party to a cloud hosting agreement with Amazon Web Services, Inc. and Amazon Web Services EMEA SARL (collectively, “AWS”) for access to AWS’s cloud services platform for a three-year period. The remaining payments for this cloud computing service are $1.7 million in 2021, $7.1 million in 2022 and $9.4 million in 2023.

 

 

 

 

Fixed Rate Secured Loan Notes Issuance

 

In April 2021, we entered a Loan Note Instrument agreement in which it issued fixed rate secured loan notes in a principal amount of $21.5 million that bears interest at a fixed per annum rate of 9.2% until its maturity date in April 2024. Pursuant to the agreement, we issued further notes of $10.0 million in July 2021. In the fourth quarter of 2021 we issued an additional $7.5 million under the Loan Note Instrument.

 

Critical Accounting Policies and Significant Judgments and Estimates

 

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our estimates form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information available at the time. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

 

An accounting policy is critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements.

 

We believe that of our significant accounting policies, which are described in Note 2, Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations.

 

Revenue Recognition

 

We recognize revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers for all periods presented.

 

Our customer agreements include one or a combination of the following contractual promises for a fixed contractual fee: (i) the supply of specified connected vehicle data and derived insights through the Wejo ADEPT Platform made available via a secured access to the Wejo ADEPT platform or via a web-based portal; (ii) the granting of a non-transferrable license to use the specified data in the manner described in each customer agreement; and, only if required, (iii) Wejo ADEPT Platform set up and connectivity services. We assess our customer agreements under ASC 606 and determined that the above contractual promises collectively represent a single performance obligation.

 

The transaction price is comprised of the contractual fixed fee specified in each customer agreement and is allocated to the single performance obligation. We recognize revenue when our performance obligation is satisfied through the fulfillment of the contractual promises. Our performance obligation is generally fulfilled when we provide access to the specified data either throughout the duration of each customer agreement’s contractual term or upon delivery of a one-time batch of historic data. We may deliver data and the license without supplying connectivity services. As such, we recognize revenue for customers with a contractual agreement to provide data over a period ratably over the term of the contract which is typically one year. We recognize revenue for historic batches of data to the customer, upon delivery of such data. Standard payment terms are 14 days from the date of the invoice which is typically sent to the customer monthly or upon delivery of the one-time historic batch of data.

 

 

 

 

In arrangements where another party (i.e. OEMs) is involved in providing specified services to a customer, we evaluate whether we are the principal or agent. In this evaluation, we consider if we obtain control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment and discretion in establishing price. Pursuant to the terms of the Data Sharing Agreements, certain rights retained by the OEMs over the connected vehicle data being supplied to the customers were determined to provide the OEMs with control over the data and we have determined that we act as the agent in this arrangement and recognize revenue on a net basis.

 

We applied the practical expedient in ASC 606 to expense as incurred those costs to obtain a contract with a customer for which the amortization period would have been one year or less.

 

Internally Developed Software Costs

 

We capitalize certain costs incurred for the internal development of software. Internally developed software includes our proprietary portal software and related applications and various applications used in our management’s portals. We expense costs incurred during the preliminary project stage for internal software programs as incurred. We capitalize external and internal costs incurred during the application development stage of new software development, as well as for upgrades and enhancements for software programs that result in additional functionality. Where applicable, we amortize over a software’s estimated useful life costs for the internally developed software. We take impairment charges when circumstances indicate that the carrying values of the assets were not fully recoverable. In the nine months ended September 30, 2021 and 2020 and the years ended December 31, 2020 and 2019, we have not recognized any impairment charges.

 

Valuation of Advanced Subscription Agreements and Derivative Liability

 

We record our ASAs at fair value with changes in fair value recorded in the condensed consolidated statement of operations and comprehensive loss.

 

Our outstanding convertible notes contained redemption features that meet the definition of a derivative instrument. We classified these instruments as a liability on our condensed consolidated balance sheets because the redemption features were not clearly and closely related to its host instrument and met the definition of a derivative. The derivative liability was initially recorded at fair value upon issuance of the convertible notes and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liability were recognized on the condensed consolidated statements of operations and comprehensive loss.

 

The fair value of the ASAs and derivative liability were determined using a scenario-based analysis. Five primary scenarios were considered: qualified financing, unqualified financing, merger or acquisition, held to maturity, and insolvency (“Exit Events”). The fair value of the advanced subscription agreements and derivative liability is comprised of the value of a conversion component and a put option component. The estimated fair value of each component is calculated independently and the added together to determine the total estimated fair value of the advanced subscription agreements or derivative liability under each scenario. The value of the advanced subscription agreements and derivative liability under each scenario was then probability weighted to arrive at the respective instrument’s recorded estimated fair value.

 

Assumptions and inputs used to calculate the value of the conversion component include the following:

 

·the amount of principal and accrued interest, if applicable;

 

·the conversion price;

 

·the estimated time until the scenario’s respective Exit Event; and

 

·the current estimated fair value of our Ordinary share

 

 

 

 

The fair value of the put options was estimated using the Black-Scholes option pricing model (“OPM”).

 

Assumptions used in the OPM include the following:

 

Expected volatility — We applied re-levered equity volatility based on the historical unlevered and re- levered equity volatility of our publicly traded peer companies.

 

Expected dividend — Expected dividend yield of zero is because we have never paid cash dividends on ordinary shares and do not expect to pay any cash dividends in the foreseeable future.

 

Expected term — The estimated time until the scenario’s respective Exit Event.

 

Risk-free interest rate — The risk-free interest rate is determined by reference to the UK Treasury yield curve for the period commensurate with the expected timing of the exit event.

 

Fair value of ordinary share — See “Share-Based Compensation” below for discussion of how the fair value of our ordinary share is determined.

 

Share-Based Compensation

 

We measure share-based awards granted to employees and directors based on the fair value on the date of the grant using the Black-Scholes option-pricing model for options, which uses as inputs the fair value of our ordinary and A ordinary shares and assumptions we make for the volatility of our ordinary and A ordinary shares, the expected term of our share-based awards, the risk-free interest rate for a period that approximates the expected term of our share-based awards and our expected dividend yield. For employee shares with a combination of service and performance conditions, we recognize non-cash share-based compensation expense on a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable of being met based on the relative satisfaction of the performance condition as of the reporting date.

 

We have not recognized any share-based compensation as of September 30, 2021, September 30, 2020, December 31, 2020 and December 31, 2019 as the performance condition triggering the options to become exercisable has not been deemed probable of occurring.

 

Determination of the fair value of our ordinary and A ordinary shares

 

As there has been no public market for our ordinary and A ordinary shares to date, the estimated fair value of our ordinary and A ordinary shares has been determined by our board of directors as of the date of each option grant, with input from management, considering our most recently available third-party valuations of ordinary and A ordinary shares. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Our ordinary and A ordinary shares valuations were prepared using either an option pricing method, or OPM, which used market approaches and income approaches to estimate our enterprise value. The OPM treats ordinary and A ordinary shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. A discount for lack of marketability of the ordinary and A ordinary shares is then applied to arrive at an indication of value for the ordinary and A ordinary shares.

 

 

 

 

In addition to considering the results of these third-party valuations, our board of directors considered various objective and subjective factors to determine the fair value of our ordinary shares as of each grant date, including:

 

·the prices at which we sold ordinary shares;

 

·our stage of development and our business strategy;

 

·external market conditions affecting the industry, and trends within the industry;

 

·our financial position, including cash on hand, and our historical and forecasted performance and operating results;

 

·the lack of an active public market for our ordinary and A ordinary shares;

 

·the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or a sale of our company in light of prevailing market conditions; and

 

·the analysis of IPOs and the market performance of similar companies in the industry.

 

The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of management’s judgment. As a result, if we had used significantly different assumptions or estimates, the fair value of our ordinary and A ordinary shares and our share- based compensation expense could be materially different.

 

Off-balance sheet arrangements

 

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

 

Recently issued accounting pronouncements

 

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing at the end of this prospectus.

 

 

 

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information known to the Company as of the Closing Date regarding the beneficial ownership of Company Common Shares by:

 

·Each person who is known by the Company to beneficially own more than 5% of Company Common Shares;

 

·Each person who is an executive officer or director of the Company; and

 

·All executive officers and directors of the Company, as a group.

 

The information below is based on an aggregate of 93,950,205 Company Common Shares issued and outstanding as of the Closing Date. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security or has the right to acquire such securities within 60 days, including options and warrants that are currently exercisable or exercisable within 60 days.

 

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of Company Common Shares beneficially owned by them.

 

Unless otherwise noted, the business address of each of those listed in the table is c/o Wejo Ltd., ABC Building, 21-23 Quay St., Manchester, United Kingdom X0 M3 4AE.

 

 

Name and Address of

Beneficial Owners

   

Number of Company

Common Shares

   

Percentage of Company

Common Shares

 
5% Holders                            
General Motors Holdings LLC(1)         18,781,681           20.0%      
Virtuoso Sponsor LLC(2)         5,750,000           6.1%      
Richard Barlow(3)         10,323,349           11.0%      
Executive Officers and Directors                            
Diarmid Ogilvy(4)         4,000,599           4.3%      
Timothy E Lee(5)         3,817,667           4.1%      
John Maxwell         8,541           *      
Mina Bhama         255,389           *      
Den Power         127,851           *      
David Burns         8,541           *      
Sarah Larner         260,998           *      
Samuel Hendel         20,000           *      
Ann Schwister                        
Alan Masarek         100,000           *      
Lawrence Burns                        
All Executive Officers and Directors as a Group (12 individuals)         18,922,935           20.1%      
                                   

 

* Less than 1%
(1) The business address of this entity is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808.
(2) The business address of this entity is c/o Virtuoso Acquisition Corp., 180 Post Road East, Westport, CT 06880.
(3)Includes 1,879,004 restricted share units which fully vest in the event of termination of service for any reason other than for cause as defined in the award agreement.
(4) Includes 80,210 common shares, held by Fleury Capital Ltd. Also includes 939,502 shares that are not exercisable within 60 days but that will vest under any termination scenario.
(5) Includes 107,634 common shares, held by Calibogue Capital Fund One LLC, as to which Mr. Lee has shared voting and investment power. Mr. Lee disclaims such beneficial ownership. Includes 939,502 restricted share units which settle upon separation from service as defined under Section 409A of the Internal Revenue Code.

 

 

 

 

Directors and Executive Officers

 

Effective as of immediately after the Closing, Messrs. Richard Barlow, John Maxwell, Timothy Lee, Diarmid Ogilvy, Samuel Hendel, Alan Masarek and Lawrence Burns, and Ms. Ann M. Schwister were appointed to serve as directors of the Company. At a meeting of the Board on November 19, 2021, Mr. Lee was appointed as Chairman of the Board. Biographical information for these individuals is set forth in the section titled “Management of Wejo Group Limited Following the Business Combination” beginning on page 201 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

The Board appointed Samuel Hendel, Alan Masarek, and Ann Schwister to serve on the Audit Committee, with Ann Schwister serving as its Chair. The Board appointed Lawrence Burns, Samuel Hendel, and Timothy Lee to serve on the Compensation Committee, with Timothy Lee serving as its Chair. The Board appointed Lawrence Burns, Timothy Lee and Alan Masarek to serve on the Nominating and Corporate Governance Committee, with Alan Masarek serving as its Chair. The Board appointed Richard Barlow, Lawrence Burns, Samuel Hendel and Diarmid Ogilvy to serve on the Risk Management, Security and Data Privacy Committee, with Lawrence Burns serving as its Chair. Information with respect to the Company’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Risk Management, Security and Data Privacy Committee is set forth in the section entitled “Management of Wejo Group Limited Following the Business Combination” beginning on page 201 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

In accordance with the Amended and Restated Bye-Laws of the Company, the Board is divided into three classes, each comprising as nearly as possible one-third of the directors and serving three-year terms with only one class of directors being elected in each year. Mr. Lee, Dr. Lawrence Burns and Ms. Schwister were assigned to Class I, Messrs. Ogilvy, Maxwell and Masarek were assigned to Class II, and Messrs. Barlow and Hendel were assigned to Class III.

 

In connection with the consummation of the Business Combination, on November 17, 2021, Mr. Barlow was appointed to serve as the Company’s Chief Executive Officer, Mr. Maxwell was appointed to serve as the Company’s Chief Financial Officer, Ms. Bhama was appointed to serve as the Company’s General Counsel and Company Secretary, Ms. Power was appointed to serve as the Company’s Chief People Officer, Mr. David Burns was appointed to serve as the Company’s Chief Technology Officer and Ms. Larner was appointed to serve as the Company’s Executive Vice President of Strategy and Innovation. Biographical information for these individuals is set forth in the section entitled “Management of Wejo Group Limited Following the Business Combination” beginning on page 201 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

 

 

 

Executive Compensation

 

Pre-Closing Compensation of Executive Officers and Directors

 

The compensation of Virtuoso’s executive officers and directors before the consummation of the Business Combination is set forth in the section entitled “Information About Virtuoso” on page 160 in the Proxy Statement/Prospectus and is incorporated herein by reference.

 

Historical compensation information regarding the named executive officers of Wejo is set forth in the section entitled “Wejo’s Executive and Director Compensation” beginning on page 209 in the Proxy Statement/Prospectus and is incorporated herein by reference.

 

Certain Relationships and Related Party Transactions

 

Information about the Company’s relationships and related party transactions is set forth in the section entitled “Certain Relationships and Related Party Transactions” beginning on page 232 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

Legal Proceedings

 

Information about legal proceedings of the Company is set forth in the section entitled “Legal Matters” beginning on page 259 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

Virtuoso’s Class A Common Stock and public warrants were listed on the NASDAQ under the symbols “VOSO” and “VOSOW,” respectively, and certain of Virtuoso’s Class A Common Stock and public warrants were quoted as units consisting of one Class A Common Stock and one half of one warrant, and were listed on the NASDAQ under the symbol “VOSU.” The units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as an independent security. On November 19, 2021, the Company Common Shares and Company Warrants began trading on the NASDAQ under the symbols “WEJO” and “WEJOW,” respectively.

 

As of the Closing Date, there were 412 holders of record of Company Common Shares and 1 holder of record of the Company Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose shares of common stock and warrants are held of record by banks, brokers and other financial institutions.

 

Virtuoso had not paid any cash dividends on its Class A Common Stock as of the Closing Date. The Company currently intends to retain its future earnings, if any, to fund the development and growth of its business and accordingly does not anticipate paying any cash dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition, subject to the discretion of the Company’s Board of Directors at such time.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K under the subheading “Equity Incentive Plan” is incorporated herein by reference.

 

Recent Sales of Unregistered Securities

 

The information set forth in Item 3.02 of this Current Report on Form 8-K is incorporated herein by reference.

 

Description of the Company’s Securities

 

A description of the Company’s securities is included in the section entitled “Description of Wejo Group Limited Securities” beginning on page 250 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

 

 

 

Indemnification of Directors and Officers

 

Information about indemnification of the Company’s directors and officers is set forth in the section entitled “Description of Wejo Group Limited Securities” beginning on page 250 in the Proxy Statement/Prospectus, which is incorporated herein by reference.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K under the subheading “Indemnity Agreements” is incorporated herein by reference.

 

Financial Statements and Exhibits

 

The information set forth in Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities

 

On the Closing Date, the Company consummated the PIPE Financing. The offering of the shares of Company Common Shares issued in the PIPE Financing was not registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

 

The Company used the proceeds from the PIPE Financing to pay transaction fees and expenses, and the remainder of funds were contributed to the Company’s balance sheet.

 

Item 3.03 Material Modification to Rights of Security Holders

 

The information set forth under Item 1.01 – “Amended and Restated Bye-laws of the Company” of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 5.01 Changes in Control of Registrant

 

The information set forth under “Introductory Note” and Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

The information set forth under Item 2.01 of this Current Report on Form 8-K under the subheadings “Executive Directors and Officers,” “Executive Compensation” and “Equity Incentive Plan / ESP Plan / SAYE Plan” is incorporated herein by reference.

 

Compensatory Arrangements of Certain Officers

 

Mr. Barlow’s Awards

 

In connection with the Business Combination and effective as of the effectiveness of the Company’s Registration Statement on Form 8-A, the Board granted Richard Barlow, the Company’s Chief Executive Officer, a restricted stock unit award of 1,879,004 Company Common Shares (the “Barlow RSUs”) pursuant to a sub-plan of the 2021 Plan, which represents the right to receive 1,879,004 Company Common Shares upon vesting. One-half of the Barlow RSUs vest on the 18-month anniversary of the Closing Date, and one-half of the Barlow RSUs vest on the 30-month anniversary of the Closing Date.

 

In the event of Mr. Barlow’s termination of employment by the Company for any reason other than Cause or on a Change in Control (both as defined in the 2021 Plan), any then unvested Barlow RSUs shall vest in full.

 

 

 

 

The foregoing description of the terms of the Barlow RSUs does not purport to be complete and is qualified in its entirety by the provisions of the Barlow RSU Award Agreement. The Barlow RSU Award Agreement is filed as Exhibit 10.7 to this Form 8-K, and incorporated by reference herein.

 

Subject to Mr. Barlow and the Compensation Committee agreeing to an alternative arrangement within 60 days following the Closing Date, Mr. Barlow will also be granted a restricted stock unit award of 4,697,510 Company Common Shares (the “Barlow Price-Linked RSUs”) pursuant to a sub-plan of the 2021 Plan, which represents the right to receive 4,697,510 Company Common Shares upon vesting. The Barlow Price-Linked RSUs will vest on the date on which the closing trading price of the Company Common Shares (on the NASDAQ or other principal exchange on which the Company Common Shares are traded) exceeds $50.00 per Company Common Share for any 20 trading days during any 30 trading-day period.

 

Mr. Maxwell’s Awards

 

In connection with the Business Combination and effective as of the effectiveness of the Company’s Registration Statement on Form 8-A, the Board granted John Maxwell, the Company’s Chief Financial Officer, a restricted stock unit award of 469,751 Company Common Shares (the “Maxwell RSUs”) pursuant to the 2021 Plan, which represents the right to receive 469,751 Company Common Shares upon vesting. The Maxwell RSUs will vest in equal annual installments over three years, with 1/3 of the Maxwell RSUs vesting on each of November 19, 2022, November 19, 2023 and November 19, 2024.

 

In connection with the Business Combination and effective as the effectiveness of the Company’s Registration Statement on Form 8-A, the Board granted Mr. Maxwell an option to purchase 469,751 Company Common Shares (the “Options”), pursuant to the 2021 Plan. The Options will vest in equal annual installments over three years, with 1/3 of the Options vesting on each of November 19, 2022, November 19, 2023 and November 19, 2024.

 

In the event of Mr. Maxwell’s termination of employment by the Company without Cause or his resignation for Good Reason (as such terms are defined in the Employment Agreement between the Company and Mr. Maxwell dated as of July 30, 2021), any unvested Options and Maxwell RSUs will vest, and vested Options will remain exercisable until the earlier of the second anniversary of such termination and the tenth anniversary of the grant date, subject to Mr. Maxwell’s execution of a general of release of claims within 60 days of termination of employment. If Mr. Maxwell’s employment terminates for any other reason, any unvested Options and Maxwell RSUs will be forfeited immediately, automatically, and without consideration, and vested Options will remain exercisable in accordance with the schedule set forth in the award agreement. In the event Mr. Maxwell’s service is terminated for Cause, all vested Options and Maxwell RSUs will also be forfeited immediately, automatically, and without consideration.

 

The foregoing descriptions of the terms of the Options and Maxwell RSUs do not purport to be complete and are qualified in their entirety by the provisions of the Maxwell Stock Option Award Agreement and the Maxwell RSU Award Agreement filed as Exhibits 10.8 and 10.9 to this Form 8-K, respectively, and incorporated by reference herein.

 

Director Awards

 

In connection with the Business Combination and effective as of the effectiveness of the Company’s Registration Statement on Form 8-A, the Board granted Timothy Lee, a member of the Board, a fully vested restricted stock unit award of 939,502 Company Common Shares (the “Lee RSUs”) pursuant to the 2021 Plan, which represents the right to receive 939,502 Company Common Shares on future payment dates. Fifty percent of the Lee RSUs will be paid on each of the first and second anniversaries of the grant date, and such payment will be made 60% in the form of Company Common Shares and 40% in cash, or such other mix of Company Common Shares and cash as the plan administrator determines. In the event that a Change in Control (as defined in the Plan) or a separation from service occurs, in each case prior to one or more payment dates, the Lee RSUs will instead be paid on the occurrence of such event.

 

In connection with the Business Combination and effective as of the effectiveness of the Company’s Registration Statement on Form 8-A, the Board granted Diarmid Ogilvy, a member of the Board, a restricted stock unit award of 939,502 Company Common Shares (the “Ogilvy RSUs”), pursuant to the 2021 Plan, which represents the right to receive 939,502 Company Common Shares upon vesting. One-half of the Ogilvy RSUs vest on the 18-month anniversary of the Closing Date, and one-half of the Ogilvy RSUs vest on the 30-month anniversary of the Closing Date (the “Vesting Schedule”). In the event of the termination of Mr. Ogilvy’s service by reason of the resignation of Mr. Ogilvy, any unvested RSUs will continue to exist and will then vest in accordance with the Vesting Schedule. In the event of a Change in Control (as defined in the Plan) or termination of service occurs for such reason other than the resignation of Mr. Ogilvy, in each case prior to one or more vesting dates, the Ogilvy RSUs will instead vest on the occurrence of such event.

 

The foregoing descriptions of the terms of the Lee RSUs and Ogilvy RSUs are qualified in their entirety by reference to the applicable award agreements, copies of which are included as Exhibits 10.10 and 10.11 to this Current Report on Form 8-K, respectively, and incorporated herein by reference.

 

 

 

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 5.06 Change in Shell Company Status.

 

The information set forth under “Introductory Note” and Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(a) Financial Statements of Business Acquired

 

The audited consolidated financial statements of Wejo as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019 included beginning on page F-35 in the Proxy Statement/Prospectus are incorporated herein by reference.

 

The Unaudited Condensed Consolidated Financial Statements of Wejo as of and for the nine months ended September 30, 2021 and September 30, 2020 are attached hereto as Exhibit 99.1 and are incorporated herein by reference.

 

The audited consolidated financial statements of Virtuoso as of December 31, 2020 and for the period from August 25, 2020 (inception) through December 31, 2020 included beginning on page F-3 in the Proxy Statement/Prospectus are incorporated herein by reference.

 

The Unaudited Condensed Consolidated Financial Statements of Virtuoso as of September 30, 2021 and September 30, 2020 and for the nine-month period ending September 30, 2021 and the period from August 25, 2020 (inception) through September 30, 2020 are attached hereto as Exhibit 99.2 and are incorporated herein by reference.

 

Financial Information

 

(b) Pro Forma Financial Information

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

Wejo Group Limited is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

 

The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2021 combines the unaudited condensed consolidated balance sheet of Wejo Limited (“Accounting Predecessor”) as of September 30, 2021 and the unaudited condensed balance sheet of Virtuoso Acquisition Corp (“Virtuoso”) as of September 30, 2021 on a pro forma basis as if the Business Combination had been consummated on September 30, 2021. The Unaudited Pro Forma Condensed Combined Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2021 and the year ended December 31, 2020 combine the unaudited condensed consolidated statement of operations and comprehensive loss of the Accounting Predecessor for the nine months ended September 30, 2021, the audited consolidated statement of operations and comprehensive loss of the Accounting Predecessor for the year ended December 31, 2020 and unaudited condensed statement of operations of Virtuoso for the nine months ended September 30, 2021 and audited statement of operations from August 25, 2020 (inception) through December 31, 2020 on a pro forma basis as if the Business Combination had been consummated on January 1, 2020, the beginning of the earliest period presented. The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2021 and the Unaudited Pro Forma Condensed Combined Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2021 and the year ended December 31, 2020, together with the accompanying notes, are the Unaudited Pro Forma Condensed Combined Financial Statements.

 

The historical financial information of the Accounting Predecessor was derived from the Wejo Limited Unaudited 2021 Condensed Consolidated Interim Financial Statements and the Wejo Limited 2020 Audited Consolidated Financial Statements, which are included elsewhere in the Proxy Statement/Prospectus. The historical financial information of Virtuoso was derived from the Unaudited Condensed Financial Statements of Virtuoso as of September 30, 2021 and for the period from August 25, 2020 (inception) to December 31, 2020, which are included elsewhere in the Proxy Statement/Prospectus. This information should be read together with the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements, the Wejo Limited Unaudited 2021 Condensed Consolidated Interim Financial Statements and related notes, the Wejo Limited Audited 2020 Consolidated Financial Statements and related notes, the Unaudited Condensed Financial Statements of Virtuoso and related notes, the sections titled “Wejo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Virtuoso’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in the Proxy Statement/Prospectus.

 

Description of the Transaction

 

On May 28, 2021, Wejo Group Limited, Virtuoso, Yellowstone Merger Sub Inc. (“Merger Sub”), Wejo Bermuda Limited, and the Accounting Predecessor entered into a Business Combination Agreement to effectuate the Business Combination. In order to effectuate the Business Combination, Wejo Limited created a newly formed wholly owned entity, Wejo Group Limited, which acquired all of the shares of the Accounting Predecessor. Following the acquisition of the Accounting Predecessor’s shares, Wejo Group Limited acquired Virtuoso. The acquisition of Virtuoso was effectuated through a merger between Merger Sub and Virtuoso. Merger Sub was a newly formed wholly owned entity of Wejo Group Limited. Virtuoso survived the merger. The Accounting Predecessor and Virtuoso will be indirect wholly owned subsidiaries of Wejo Group Limited following the Business Combination. Wejo Group Limited currently has no material operations, assets or liabilities. For more information about the Business Combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal” in the Proxy Statement/Prospectus

 

 

 

 

Earnout Shares

 

During the seven-year period following the closing of the Business Combination (the “Earnout Period”), Wejo Group Limited may issue up to 6,000,000 Company Common Shares to the equityholders of the Accounting Predecessor, comprised of four separate tranches of 1,500,000 Company Common Shares each, issuable upon the occurrence of each Earnout Triggering Event (defined below). The issuance of these shares would dilute all Company Common Shares outstanding at that time. An “Earnout Triggering Event” means the date on which the closing volume weighted average price of one share of common stock quoted on the New York Stock Exchange (or the exchange on which the Company Common Shares are then listed) is greater than or equal to certain specified prices for any 20 trading days within any 30 consecutive trading day period within the Earnout Period.

 

The Earnout Shares were recognized at fair value upon the closing of the Business Combination and classified in stockholders’ equity. Because the Business Combination is accounted for as a reverse recapitalization, the issuance of the Earnout Shares were treated as a deemed dividend and since the Company does not have retained earnings, the issuance was recorded within additional-paid-in capital (“APIC”) and has a net nil impact on APIC. The unaudited pro forma condensed combined financial statements do not reflect pro forma adjustments related to the recognition of the Earnout Shares because there is no net impact on stockholders’ equity on a pro forma combined basis.

 

Forward Purchase Agreement

 

On November 10, 2021, each of Apollo A-N Credit Fund (Delaware), L.P., Apollo Atlas Master Fund, LLC, Apollo Credit Strategies Master Fund Ltd., Apollo PPF Credit Strategies, LLC and Apollo SPAC Fund I, L.P. (each a “Seller”) entered into an agreement, on a several and not joint basis, with Wejo Group Limited (the “Forward Purchase Agreement”) for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). Each Seller intends, but is not obligated, to purchase shares of Virtuoso Class A common stock (the “VOSO Shares”) from holders of VOSO Shares, including holders (other than the Company or affiliates of the Company) who have redeemed VOSO Shares or indicated an interest in redeeming VOSO Shares pursuant to the redemption rights set forth in Company’s Certificate of Incorporation in connection with the Business Combination (such redeemed or redeeming holders, the “Redeeming Holders”). Pursuant to the terms of the Forward Purchase Agreement, each Seller has agreed to waive any redemption rights with respect to any such VOSO Shares purchased from the Redeeming Holders in connection with the Business Combination.

 

Subject to certain termination provisions, the Forward Purchase Agreement provides that on the 2-year anniversary of the effective date of the Forward Purchase Transaction (the “Maturity Date”), each Seller will sell to the Company the number of shares purchased by such Seller (up to a maximum of 7,500,000 shares across all Sellers) of VOSO Shares (or any shares received in a share-for-share exchange pursuant to the Business Combination) (the “FPA Shares”) at a price equal to the per share redemption price of VOSO Shares calculated pursuant to Section 9.2 of Virtuoso’s Certificate of Incorporation (the “Forward Price”). In consideration for such sale, one business day following the closing of the Business Combination, such Seller will be paid an amount equal to the Forward Price multiplied by the number of FPA Shares underlying the Transaction between such Seller and Wejo (the “Prepayment Amount”).

 

At any time, and from time to time, after the closing of the Business Combination, each Seller may sell FPA Shares at its sole discretion in one or more transactions, publicly or privately and, in connection with such sales, terminate the Forward Purchase Transaction in whole or in part in an amount corresponding to the number of FPA Shares sold (the “Terminated Shares”) with notice required to the Company within one business day following any such sale. On the settlement date of any such early termination, such Seller will pay to the Company a pro rata portion of the Prepayment Amount representing the Forward Price for the Terminated Shares. At the Maturity Date, each Seller will transfer any remaining FPA Shares to Wejo Group in satisfaction of its obligations under the Forward Purchase Agreement.

 

Anticipated Accounting Treatment

 

The Business Combination will be accounted for as a capital reorganization whereby Wejo Group Limited will be the successor to the Accounting Predecessor. The capital reorganization will be immediately followed by Wejo Group Limited acquiring Virtuoso, which will be effectuated by Merger Sub merging with Virtuoso with Virtuoso being the surviving entity. As Virtuoso will not be recognized as a business under U.S. GAAP given it consists primarily of cash in the Trust Account, Wejo Group Limited’s acquisition of Virtuoso will be treated as a recapitalization. Under this method of accounting, the ongoing financial statements of Wejo Group Limited will reflect the net assets of the Accounting Predecessor and Virtuoso at historical cost, with no additional goodwill recognized.

 

 

 

 

The Accounting Predecessor has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

The Accounting Predecessor’s shareholder group will have the largest portion of relative voting rights in Wejo Group Limited;

 

The senior management team of the Accounting Predecessor will continue to serve in such positions with substantially similar responsibilities and duties at Wejo Group Limited following consummation of the Business Combination; and

 

The purpose and intent of the Business Combination is to create an operating public company, with management continuing to use the Wejo Limited platform to grow the business and the combined company will be named Wejo Group Limited.

 

Basis of Pro Forma Presentation

 

Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the Unaudited Pro Forma Condensed Combined Financial Statements are described in the accompanying notes. The Unaudited Pro Forma Condensed Combined Financial Statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated. Further, the Unaudited Pro Forma Condensed Combined Financial Statements do not purport to project the future operating results or financial position of Wejo Group Limited following the consummation of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these Unaudited Pro Forma Condensed Combined Financial Statements and are subject to change as additional information becomes available and analyses are performed.

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

 

AS OF SEPTEMBER 30, 2021
(U.S. dollars in thousands, except share data)

 

    Historical                    
    Accounting
Predecessor
    VOSO     Reclassification
Adjustments
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
 
ASSETS                                        
Current assets:                                        
Cash and cash equivalents   $ 8,611     $ 680             $ 97,256 (A)   $ 115,047  
                              122,718 (B)        
                              7,918 (C)        
                              1,733 (D)        
                              (8,050 )(E)        
                              (17,941 )(H)        
                              (22,878 )(I)        
                              (75,000 )(G)        
Accounts receivable, net     930                               930  
Prepaid expenses and other current assets     12,577               304       (8,334 )(I)     41,896  
                              (151 )(H)        
                              37,500 (G)        
Prepaid expenses             304       (304 )                
Total current assets     22,118       984       -       134,771       157,873  
Property and equipment, net     603                       -       603  
Intangible assets, net     9,917                       -       9,917  
Prepaid expenses - non-current             86       -       -       86  
Other assets                             37,500 (G)     37,500  
Marketable Securities Held in Trust account             230,035       -       (230,035 )(A)     -  
Total assets   $ 32,638     $ 231,105     $ -     $ (57,764 )   $ 205,979  
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities:                                        
Accounts payable   $ 7,282             $ 122     $ (530 )(I)   $ 6,874  
Accounts payable and accrued expenses             122       (122 )     -       -  
Accrued expenses and other current liabilities     20,957               233       (3,090 )(F)     14,990  
                              (6,904 )(I)        
                              3,811 (J)        
                              (17 )(H)        
Franchise tax payable             150       (150 )             -  
Due to related party     34       83       (83 )             34  
Total current liabilities     28,273       355       -       (6,730 )      21,898  
Convertible loan notes     8,809                       (8,809 )(F)     -  
Derivative liability     126,927                       (126,927 )(F)     -  
Long term debt     26,313                               26,313  
Warrant Liabilities             20,947               (7,722 )(N)     13,225  
Deferred underwriter's discount             8,050               (8,050 )(E)     -  
Total liabilities     190,322       29,352       -       (158,238 )     61,436  
Commitments and contingent liabilities                                        
Class A Common stock subject to possible redemption     -       230,000               (132,779 )(A)     -  
                              (97,221 )(K)        
Shareholders’ Equity:                                        
Wejo Limited                                        
Ordinary Shares     89                       - (D)     -  
                              42 (F)        
                              11 (C)        
                              (142 )(M)        
A Ordinary Shares     -                       80 (D)     -  
                              (80 )(M)        
B Ordinary Shares     70                       (70 )(M)     -  
Additional paid-in capital     146,768                       10,063 (D)     -  
                              144,656 (F)        
                              7,907 (C)        
                              (23,778 )(I)        
                              (285,616 )(M)        
Accumulated deficit     (308,678 )                     (8,410 )(D)     -  
                              (5,872 )(F)        
                              (3,811 )(J)        
                              326,771 (M)        
Accumulated other comprehensive loss     4,067                       (4,067 )(M)     -  
VOSO                                        
Class A Common Stock             -               1 (K)     -  
                              (1 )(L)        
Class B Common Stock             1               (1 )(L)     -  
Class C Common Stock             -               1 (N)     -  
                              (1 )(O)        
Additional paid-in capital             -               97,220 (K)     -  
                              (18,075 )(H)        
                              7,721 (N)        
                              (7,721 )(O)        
                              (79,145 )(L)        
Accumulated deficit             (28,248 )             28,248 (L)     -  
Wejo Group Limited                                        
Common stock                             13 (B)     98  
                              15 (L)        
                              66 (M)        
                              4 (P)        
Additional paid-in capital                             122,705 (B)     497,007  
                              50,884 (L)        
                              285,842 (M)        
                              37,576 (P)        
Accumulated deficit                             (326,771 )(M)     (364,351 )
                              (37,580 )(P)        
Accumulated other comprehensive loss                             4,067 (M)     4,067  
Total shareholders' equity     (157,684 )     (28,247 )     -       322,752       136,821  
Non-controlling Interest     -                       7,722 (O)     7,722  
Total liabilities, shareholders’ equity (deficit),
   and non-controlling interest
  $ 32,638     $ 231,105     $ -     $ (57,764 )   $ 205,979  

 

 

See accompanying notes to unaudited pro forma condensed combined financial information.

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS AND
COMPREHENSIVE LOSS

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
(U.S. dollars in thousands, except share data)

 

    Historical                      
    Accounting
Predecessor
    VOSO     Reclassification
Adjustments
    Transaction
Accounting
Adjustments
      Pro Forma
Combined
 
Revenue, net   $ 1,198     $ -     $ -     $ -         1,198  
Costs and operating expenses:                                          
    Cost of revenue     3,764       -                         3,764  
    Technology and development     13,941       -                         13,941  
    Sales and marketing     11,372       -                         11,372  
    General and administrative     14,055       -       850       5,494    (JJ)      22,223  
                              1,824    (KK)         
    Formation and operating costs     -       850       (850 )               -  
    Depreciation and amortization     3,263       -                         3,263  
     Total costs and operating expenses     46,395       850       -       7,318         54,563  
Operating loss:     (45,197 )     (850 )     -       (7,318 )       (53,365 )
Loss of issuance of convertible loan notes     (44,242 )                     44,242    (AA)      -  
Change in fair value of derivative liability     (58,253 )                     58,253    (CC)      -  
Change in fair value of advanced subscription agreements     (6,477 )                     6,477    (DD)      -  
Change in fair value of warrant liabilities             (6,154 )             2,244    (FF)      (3,910 )
Offering expenses related to warrant issuance             (529 )     529                 -  
Interest expense     (7,271 )                     5,562    (AA)      (1,709 )
Interest income             35               (35 )  (EE)      -  
Other income (expense), net     (468 )             (529 )               (997 )
Net loss     (161,908 )     (7,498 )     -       109,425         (59,981 )
Other comprehensive income (loss):                                          
Foreign exchange translation adjustment     4,026       -               -         4,026  
Comprehensive loss   $ (157,882 )   $ (7,498 )   $ -     $ 109,425       $ (55,955 )
Weighted average common shares outstanding, basic and diluted     11,453,864       26,643,773                         97,708,213  
Basic and diluted net loss per share   $ (14.14 )   $ (0.28 )                     $ (0.61 )

 

See accompanying notes to unaudited pro forma condensed combined financial information.

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS AND
COMPREHENSIVE LOSS

 

FOR THE YEAR ENDED DECEMBER 31, 2020
(U.S. dollars in thousands, except share data)

 

    Historical                      
    Accounting
Predecessor
    VOSO     Reclassification
Adjustments
    Transaction
Accounting
Adjustments
      Pro Forma
Combined
 
Revenue, net   $ 1,336     $ -     $ -     $ -         1,336  
Costs and operating expenses:                                          
    Cost of revenue     1,688       -               1,051   (GG)     3,350  
                              611    (HH)         
    Technology and development     7,683       -               2,303    (GG)      10,446  
                              460    (HH)         
    Sales and marketing     7,039       -               2,889    (GG)      11,744  
                              1,816    (HH)         
    General and administrative     10,173       -       1       2,167    (GG)      60,603  
                              924    (HH)         
                              37,580    (II)         
                              7,325    (JJ)         
                              2,433    (KK)         
    Formation and operating costs     -       1       (1 )               -  
    Depreciation and amortization     4,077       -                         4,077  
    Total costs and operating expenses     30,660       1       -       59,559         90,220  
Operating loss:     (29,324 )     (1 )     -       (59,559 )       (88,884 )
Loss of issuance of convertible loan notes     (13,112 )                     13,112    (AA)      -  
Change in fair value of derivative liability     (8,724 )                     8,724    (CC)      -  
Change in fair value of advanced subscription agreements     (1,808 )                     1,808    (DD)      -  
Loss on conversion of convertible loan notes     -                       (5,872 )  (BB)      (5,872 )
Interest expense     (2,594 )                     1,556    (AA)      (1,038 )
Other income (expense), net     687                                 687  
Net loss     (54,875 )     (1 )     -       (40,231 )       (95,107 )
Other comprehensive income (loss):                                          
Foreign exchange translation adjustment     (2,220 )     -               -         (2,220 )
Comprehensive loss   $ (57,095 )   $ (1 )   $ -     $ (40,231 )     $ (97,327 )
Weighted average common shares outstanding, basic and diluted     11,324,677       5,000,000                         97,708,213  
Basic and diluted net loss per share   $ (4.85 )   $ (0.00 )                     $ (0.97 )

 

See accompanying notes to unaudited pro forma condensed combined financial information.

 

 

 

 

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Note 1 — Basis of Presentation

 

The Business Combination will be accounted for as a capital reorganization whereby Wejo Group Limited will be the successor to the Accounting Predecessor. The capital reorganization will be immediately followed by Wejo Group Limited acquiring Virtuoso, which will be effectuated by Merger Sub merging with and into Virtuoso, with Virtuoso being the surviving entity. As Virtuoso will not be recognized as a business under U.S. GAAP given it consists primarily of cash in the Trust Account, Wejo Group Limited’s acquisition of Virtuoso will be treated as a recapitalization. Under this method of accounting, the ongoing financial statements of Wejo Group Limited will reflect the net assets of the Accounting Predecessor and Virtuoso at historical cost, with no additional goodwill recognized.

 

The unaudited pro forma condensed combined balance Sheet as of September 30, 2021 assumes the Business Combination occurred on September 30, 2021. The Unaudited Pro Forma Condensed Combined Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2021 and the year ended December 31, 2020 present the pro forma effect to the Business Combination as if it had been completed on January 1, 2020 the beginning of the earliest year presented. These periods are presented on the basis of the Accounting Predecessor as the accounting acquirer.

 

The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2021 has been prepared using, and should be read in conjunction with, the following:

 

The Accounting Predecessor’s unaudited condensed consolidated balance sheet as of September 30, 2021 and the related notes, included elsewhere in this Current Report on Form 8-K; and

 

Virtuoso’s unaudited condensed balance sheet as of September 30, 2021 and the related notes, included elsewhere in this Current Report on Form 8-K.

 

The Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021 has been prepared using, and should be read in conjunction with, the following:

 

The Accounting Predecessor’s unaudited condensed consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2021 and the related notes, included elsewhere in this Current Report on Form 8-K; and

 

Virtuoso’s unaudited condensed statement of operations for the nine months ended September 30, 2021 and the related notes, included elsewhere in this Current Report on Form 8-K.

 

The Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss for the year ended December 31, 2020 has been prepared using, and should be read in conjunction with, the following:

 

The Accounting Predecessor’s audited consolidated statement of operations and comprehensive loss for the year ended December 31, 2020 and the related notes, included in the Proxy Statement/Prospectus; and

 

Virtuoso’s audited condensed statement of operations for the period from August 25, 2020 (inception) through December 31, 2020 and the related notes, included in the Proxy Statement/Prospectus.

 

The pro forma adjustments reflecting the consummation of the Business Combination are based on currently available information and certain assumptions and methodologies that Wejo Group Limited believes is reasonable under the circumstances. The unaudited pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. Wejo Group Limited believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

 

The Unaudited Pro Forma Condensed Combined Financial Statements are not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-combination company. They should be read in conjunction with the Wejo Unaudited 2021 Interim Condensed Consolidated Financial Statements and related notes, the Wejo Limited Audited 2020 Consolidated Financial Statements and related notes, and the Virtuoso Unaudited Condensed Financial Statements as of September 30, 2021 and for the period from August 25, 2020 (inception) to December 31, 2020 included in the Proxy Statement/Prospectus.

 

 

 

 

Note 2 — Conforming Accounting Policies

 

During the preparation of the unaudited pro forma condensed combined financial information, management performed an initial review of the accounting policies of Virtuoso to determine if differences in accounting policies require reclassification or adjustment. As a result of that review, management did not become aware of any material differences between the accounting policies of the two companies, other than certain reclassifications necessary to conform Virtuoso to the Accounting Predecessor’s financial statement presentation. These reclassifications are described in Note 3 below. When management completes a final review of Virtuoso’s accounting policies, additional differences may be identified that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial information.

 

Note 3 — Reclassifications

 

Certain reclassification adjustments have been made to conform Virtuoso’s financial statement presentation to that of Wejo Group Limited’s as noted below:

 

a)

Virtuoso’s prepaid expenses line item was reclassified to prepaid expenses and other current assets to conform with Accounting Predecessor’s balance sheet presentation. This reclassification has no impact on Total assets.

 

b)Virtuoso’s accounts payable and accrued expenses line item was reclassified to accounts payable to conform with the Accounting Predecessor’s balance sheet presentation. This reclassification has no impact on Total liabilities.

 

c)Virtuoso’s franchise tax payable and due to related party lines items were reclassified to accrued expenses and other current liabilities to conform with the Accounting Predecessor’s balance sheet presentation. This reclassification has no impact on total liabilities.

 

d)Virtuoso’s formation and operating costs was reclassified to general and administrative to conform with the Accounting Predecessor’s statement of operations and comprehensive loss presentation. This reclassification has no impact on total costs and operating costs.

 

e)Virtuoso’s offering expenses related to warrant issuance was reclassified to other income (expense), net to conform with the Accounting Predecessor’s statement of operations and comprehensive loss presentation. This reclassification has no impact on total costs and operating costs.

 

Note 4 — Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.

 

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” which has been early adopted in its entirety. Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Wejo Group Limited has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the following unaudited pro forma condensed combined financial information.

 

The pro forma condensed combined financial information does not include an income tax adjustment. Upon closing of the Business Combination, it is likely that the combined company will record a valuation allowance against the total U.S. and state deferred tax assets as the recoverability of the tax assets is uncertain. The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the combined company filed consolidated income tax returns during the periods presented.

 

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations and comprehensive loss are based upon the number of the post-combination company’s shares outstanding, assuming the Business Combination occurred on January 1, 2020.

 

See accompanying notes to unaudited pro forma condensed combined financial information.

 

 

 

 

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

 

The Transaction Accounting Adjustments included in the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2021 are as follows:

 

(A)

Reflects the reclassification of $230.0 million of cash and marketable securities held in Trust Account that became available to fund the Business Combination, which was further reduced as a result of redemption of 13,275,691 shares by Virtuoso public stockholders resulting in $132.8 million returned to Virtuoso public stockholders. Accordingly, an adjustment of $97.3 million was recorded to increase cash and cash equivalents, with corresponding adjustments of $132.8 million to reduce Class A common stock subject to possible redemption.

 

(B)Reflects the gross proceeds of $128.5 million received through the issuance of Wejo Group Limited shares with a par value of $0.001 to the PIPE Investors, which will be offset by the PIPE fee of 4.5% of gross proceeds, or $5.8 million. Issuance costs, payable at closing, are accounted for through a reduction of cash and cash equivalents and a corresponding reduction in Wejo Group Limited additional paid-in capital.

 

(C)Reflects the gross proceeds of $7.9 million received through the issuance of ordinary shares of the Accounting Predecessor with a par value of £0.01, upon the exercise of all warrants.

 

(D)

Reflects the acceleration of historical Accounting Predecessor stock-based compensation awards that vested upon the Closing of the Business Combination and the gross proceeds of $1.7 million received through the issuance of ordinary shares of the Accounting Predecessor with a par value of £0.01 upon the exercise of awards. Share-based compensation expense of $8.4 million is based on the grant date fair value of the awards.

 

(E)

Reflects the settlement of $8.1 million of deferred underwriters’ fees incurred during Virtuoso’s IPO that became payable upon completion of the Business Combination.

 

(F)

Reflects the automatic conversion of the Accounting Predecessor’s Convertible Loan Notes into ordinary shares of the Accounting Predecessor. Upon the conversion, the carrying value of the debt of $8.8 million, and the related accrued interest of $3.1 million and derivative liability of $126.9 million were derecognized. The ordinary shares of the Accounting Predecessor issued in exchange for the debt were recorded at fair value to ordinary shares and additional paid-in capital in the aggregate amount of $144.7 million, with the resulting difference being accounted for as a loss on extinguishment of $5.9 million in earnings (see note AA below).

 

(G)

Reflects the reduction of cash and cash equivalents for the Prepayment Amount of $75.0 million relating to the Forward Purchase Agreement and the recognition of the corresponding receivable, 50.0% recognized to both prepaid expenses and other current assets and other assets.

 

(H)Reflects estimated direct and incremental transaction costs incurred by Virtuoso related to the Business Combination of approximately $18.1 million for advisory, legal, accounting and auditing fees and other professional fees reflected as a direct reduction to the additional paid in capital and are assumed to be cash settled. As of September 30, 2021, Virtuoso had deferred transaction costs incurred of $0.2 million, all of which had been paid.

 

(I)Reflects estimated direct and incremental transaction costs incurred by the Accounting Predecessor’s related to the Business Combination of approximately $23.8 million for advisory, legal, accounting and auditing fees and other professional fees reflected as a direct reduction to the additional paid in capital and are assumed to be cash settled. As of September 30, 2021, the Accounting Predecessor had deferred transaction costs incurred of $8.3 million, of which $7.4 million was unpaid.

 

(J)Reflects the accrual of $3.8 million of the Accounting Predecessor’s additional one-time transaction costs that are not directly attributable to the Business Combination (see note HH below).

 

 

 

 

(K)

Represents the reclassification of approximately 9,724,309, shares of Virtuoso Class A common stock not previously redeemed by Virtuoso common stockholders to permanent equity at a par value of $0.001 (see note A above).

 

(L)

Reflects the merger between Merger Sub and Virtuoso with Virtuoso as the surviving entity. All outstanding Virtuoso Class B common stock automatically converted into Virtuoso Class A common stock, subsequently, all Virtuoso Class A stockholders were exchanged for Company Common Shares. Accordingly, Virtuoso’s Class A and B common stock, accumulated deficit and additional paid-in capital was eliminated, while the Company’s Common shares and additional paid-in capital were increase by approximately $15,000 and $50.9 million, respectively. Also, part of the merger, all Founder Virtuoso warrants were exchanged for equity units in Wejo Bermuda Limited that are exchangeable into Company Common Shares or cash, as determined by Wejo Bermuda Limited, on the same terms as such warrants (see notes N and O below).

 

(M)The financial statements going forward will be consolidated at the Wejo Group Limited level. As a result, the adjustments reflect the reclassification of certain equity balances: (a) reclassification of $326.8 million of Accounting Predecessor accumulated deficit to Wejo Group Limited accumulated deficit, (b) reclassification of $4.1 million of Accounting Predecessor accumulated other comprehensive loss to Wejo Group Limited accumulated other comprehensive loss, (c) the issuance of Company Common Shares to shareholders of the Accounting Predecessor, and (d) reclassification of Accounting Predecessor additional paid-in capital to Wejo Group Limited additional paid-in capital with a reduction in Wejo Group Limited additional paid-in capital equal to the Company Common Shares less Accounting Predecessor additional paid-in capital.

 

(N)Prior to the contribution by the Sponsor’s shares of Virtuoso Class C stock into Wejo Bermuda Limited, which is a consolidated subsidiary of Wejo Group Limited, the Sponsor’s Virtuoso warrants were exchanged for Virtuoso Class C common stock. Accordingly, a decrease of $7.7 million to Warrant liability related to the Virtuoso warrants is recorded with a corresponding increase of Class C common stock and Additional paid-in capital.

 

(O)Reflects the contribution of Sponsor’s shares of Class C common stock in exchange for a non-controlling equity interest in Wejo Bermuda Limited. After the contribution, holders of the equity units in Wejo Bermuda Limited may exchange their interest for Company Common Shares or for cash, at Wejo Bermuda Limited’s option. Therefore, the pro forma adjustment removes the Virtuoso Class C shares and corresponding $7.7 million in additional paid-in capital related to the recapitalization and increases the Wejo Group Limited’s non-controlling interest by $7.7 million.

 

(P)

Reflects the additional stock-based compensation and impact on the par value of £0.01 for the issuance of Wejo Group Limited common shares to certain directors and officers subsequent to the closing of the Business Combination. Estimated share-based compensation expense of $37.6 million is based on an estimated price of $10.00 per share and 3,758,008 shares issued immediately subsequent to the closing of the Business Combination. (see note II below).

 

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss

 

The Transaction Accounting Adjustments included in the Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021 and the year ended December 31, 2020 are as follows:

 

(AA)Reflects an adjustment to eliminate interest expense, debt issuance cost, amortization of discount on debt, and loss on issuance of the debt upon the automatic conversion of the Accounting Predecessor’s Convertible Loan Notes as it is assumed that the Convertible Loan Notes have been converted to ordinary shares of the Accounting Predecessor and then to Company Common Shares as if the Business Combination had occurred on January 1, 2020.

 

(BB)

Reflects an adjustment to record a loss of $5.9 million on conversion of the Accounting Predecessor’s Convertible Loan Notes as it is assumed that the Convertible Loan Notes have been converted to ordinary shares of the Accounting Predecessor and then to Company Common Shares as if the Business Combination had occurred on January 1, 2020. It should be noted that the Accounting Predecessor’s Convertible Loan Notes were issued after January 1, 2020, and therefore, the loss on conversion of $5.9 million was calculated based on the carrying amounts of the convertible notes and derivative liability as of September 30, 2021, which represents the best available information.

 

 

 

 

(CC)Reflects an adjustment to eliminate the impact of the change in the fair value of derivative liability for the Convertible Loan Notes issued by the Accounting Predecessor as it is assumed that the derivative liability would have been extinguished upon conversion of the Accounting Predecessor’s Convertible Loan Notes as if the Business Combination had occurred on January 1, 2020.

 

(DD)Reflects an adjustment to eliminate the impact of the change in the fair value of advanced subscription agreements issued by the Accounting Predecessor as it is assumed that the advanced subscription agreements would have been converted to ordinary shares of the Accounting Predecessor and then to Company Common Shares as if the Business Combination had occurred on January 1, 2020.

 

(EE)Reflects the elimination of interest income related to the marketable securities held in the Trust Account.

 

(FF)Reflects change in fair value of warrant liabilities related to the Sponsor’s Virtuoso warrants recognized in Virtuoso’s condensed statement of operations as it is assumed that the Sponsor’s Virtuoso warrants have been exchanged for Virtuoso Class C common stock and then immediately exchanged for a non-controlling equity interest in Wejo Bermuda Limited as if the Business Combination had occurred on January 1, 2020.

 

(GG)Reflects the expense related to employee share-based compensation as a result of the Business Combination. The employee awards of Accounting Predecessor included performance conditions that vested upon a qualifying Exit Event, which was previously not probable. Therefore, in connection with the Business Combination, Accounting Predecessor recognized share-based compensation related to share-based compensation awards that vested upon the occurrence of the Business Combination. This expense, which is non-taxable, is a non-recurring item.

 

(HH)Reflects an accrual of $3.8 million for additional transaction costs not directly attributable to the Business Combination (see note J above). This one-time adjustment was made only to the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020.

 

(II)

Reflects the share-based compensation expense of $37.6 million related to the 3,758,008 Wejo Group Limited common shares granted to certain directors and officers subsequent to the closing of the Business Combination under Wejo Group Limited’s new equity incentive plan. The holders' right to the shares are not contingent upon provision of future service. Therefore, in connection with the Business Combination, the Company recognized the full share-based compensation related to the awards subsequent to the occurrence of the Business Combination. This expense, which is non-taxable, is a non-recurring item (see note P above).

 

(JJ)

Reflects the additional stock-based compensation of $5.5 million and $7.3 million during the nine months ended September 30, 2021 and the year ended December 31, 2020, respectively, related to the unvested restricted stock units ("RSUs") of Wejo Group Limited common shares granted to a certain executive subsequent to the closing of the Business Combination under Wejo Group Limited's new equity incentive plan. Vesting of this award is based on the Company's share price hitting a certain target. The RSUs are determined to be market-based awards (“Market Based Awards”) for which the Company has estimated a fair value as of January 1, 2020 using a Monte Carlo model to simulate a distribution of future stock prices and derived a service period through which to expense the related fair value. The RSUs had a day one fair value of $6.69 per share and a derived service period of 4.3 years.

 

(KK)

Reflects the additional stock-based compensation of $1.8 million and $2.4 million during the nine months ended September 30, 2021 and the year ended December 31, 2020, respectively, related to the unvested stock options and RSUs of Wejo Group Limited common shares granted to a certain executive subsequent to the closing of the Business Combination under Wejo Group Limited's new equity incentive plan. The award vests annually over a three-year period. The Company determined the fair value of the options using a Black-Scholes Model and the fair value of the RSUs is based on the PIPE investment of $10.00 per share.

  

 

 

 

Note 5 — Loss Per Share

 

Represents the net loss per share calculated using the weighted average shares outstanding, and the issuance of additional Wejo Group Limited shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2020. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire periods presented:

 

(U.S. dollars in thousands, except share data)  Nine Months Ended
September 30, 2021
   Year Ended
December 31, 2020
 
Pro forma net loss attributable to the Company  $(59,981)  $(95,107)
Weighted average Company Common Shares outstanding—basic and diluted   97,708,213    97,708,213 
Net loss per Common share—basic and diluted  $(0.61)  $(0.97)

 

 

(1)For the purposes of calculating the weighted average number of shares of Company Common Shares outstanding, the effect of outstanding Virtuoso warrants and exchangeable units to purchase 18,100,000 of Company Common Shares was not considered in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive.

 

(2)For the purposes of calculating the weighted average number of shares of Company Common Shares outstanding, the contingent RSUs and Earnout Shares have been excluded from the basic loss per share as they are contingently issuable based upon the price of the Company Common Shares reaching specified thresholds that are not currently met. The RSUs and Earnout Shares should be considered for diluted losses per share, however, these securities would be anti-dilutive given the historical pro forma net loss and have therefore been excluded from diluted pro forma loss per share.

 

The following summarizes the number of shares of Company Common Shares outstanding following the Business Combination(1):

 

   Ownership in shares   Percent of ownership 
Equity Capitalization Summary          
Wejo Limited shareholders   65,625,896    69.9%
PIPE Investors   12,850,000    13.7%
Virtuoso Public Stockholders   9,724,309    10.4%
Sponsor   5,750,000    6.1%
Total Company Common Shares   93,950,205    100.0%

 

 

(1)

If the Company Common Shares expected to be issued from: (i) the Equity Incentive Plan after closing of the Business Combination are deemed issued as of consummation of the Business Combination, (ii) the Earnout Shares issuable to certain Wejo Limited shareholders upon the achievement of price triggers of $15.00, $18.00, $21.00 and $24.00 during the Earnout Period are deemed issued as of consummation of the Business Combination and (iii) the exchangeable units of Limited are deemed exchanged for Company Common Shares, the Wejo Limited shareholders would hold 64.9%, the PIPE Investors would hold 11.6%, the Sponsor would hold 11.2%, Virtuoso’s Public Stockholders would hold 8.8%, and the recipients of such grant of Company Common Shares would represent 3.4% of the 110,308,213 pro forma Company Common Shares. The table and the preceding sentence do not include 11,500,000 Company Common Shares issuable upon the exercise of the Virtuoso Public Warrants. See “Wejo’s Executive and Director Compensation — Equity Compensation”.

 

 

 

 

(d) Exhibits. The following exhibits are filed with this Current Report on Form 8-K:

 

Exhibit No.   Description of Exhibits
2.1*   Agreement and Plan of Merger, dated May 28, 2021, by and among Virtuoso Acquisition Corp., Wejo Group Limited, Yellowstone Merger Sub, Inc., Wejo Limited and Wejo Bermuda Limited (incorporated by reference to Exhibit 2.1 to Wejo Group Limited’s Registration on Form S-4 filed with the SEC on October 7, 2021 (File No. 333-257964)).
3.1   Amended and Restated Bye-Laws of Wejo Group Limited.  
10.1   Registration Rights Agreement, dated November 18, 2021, by and among Wejo Group Limited, Wejo Limited, Virtuoso Sponsor LLC and the other holders party thereto.  
10.2   Warrant Assumption Agreement, dated November 18, 2021, by and among Wejo Group Limited, Virtuoso Acquisition Corp. and Continental Stock Transfer & Trust Company.  
10.3   Wejo Group Limited 2021 Equity Incentive Plan.
10.4   Wejo Group Limited 2021 Employee Share Purchase Plan.
10.5   Wejo Group Limited Save as You Earn Option Plan.
10.6   Form of Indemnity Agreement for Directors and Executive Officers of Wejo Group Limited.
10.7   Richard Barlow Restricted Share Unit Award Agreement.
10.8   John Maxwell Share Option Award Agreement.
10.9   John Maxwell Restricted Share Unit Award Agreement.
10.10   Timothy Lee Restricted Share Unit Award Agreement.
10.11   Diarmid Ogilvy Restricted Share Unit Award Agreement.
10.12   Forward Purchase Agreement, dated November 10, 2021, between and among Apollo A-N Credit Fund (Delaware), L.P., Apollo Atlas Master Fund, LLC, Apollo Credit Strategies Master Fund Ltd., Apollo PPF Credit Strategies, LLC, Apollo SPAC Fund I, L.P. and Wejo Limited.
10.13   Loan Note Instrument, dated April 21, 2021, by and among Wejo Limited and Securis Investment Partners LLP, as security agent.
10.14   Consent and Purchase Agreement, dated July 23, 2021, by and between Wejo Limited Securis 1 Master Fund Securis II Fund – SPC, Segregated Portfolio Eight – Non Life and Life and Securis II Fund – SPC, Segregated Portfolio Eleven IST - ILS.
10.15   Amendment Agreement, dated October 28, 2021, by and between Wejo Limited Securis 1 Master Fund Securis II Fund – SPC, Segregated Portfolio Eight – Non Life and Life and Securis II Fund – SPC, Segregated Portfolio Eleven IST - ILS.
21.1   List of Subsidiaries of Wejo Group Limited.
99.1   Unaudited Condensed Consolidated Financial Statements of Wejo Limited for the nine months ended September 30, 2021 and 2020
99.2   Unaudited Condensed Consolidated Financial Statements of Virtuoso Acquisition Corp. as of and for September 30, 2021 and 2020 and for the Nine Months Ended and the Period from August 25, 2020 (Inception) through September 30, 2020.

 

* Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request.

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

WEJO GROUP LIMITED

 

November 24, 2021By:/s/ John Maxwell
 Name:John Maxwell
 Title:Chief Financial Officer

 

 

 

 

Exhibit 3.1

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED BYE-LAWS OF WEJO GROUP LIMITED

 

The undersigned HEREBY CERTIFIES that the attached Bye-Laws are a true copy of the Bye-Laws of Wejo Group Limited (Company) adopted by the Shareholder(s) of the Company on November 17, 2021.

 

/s/ John Maxwell  
Director  

 

1 

 

 

AMENDED AND RESTATED BYE-LAWS OF WEJO GROUP LIMITED

 

INDEX

 

Bye-Law   Page
DEFINITIONS AND INTERPRETATION   4
REGISTERED OFFICE   6
SHARE CAPITAL   6
MODIFICATION OF RIGHTS   9
SHARES   9
CERTIFICATES   10
LIEN   10
CALLS ON SHARES   12
FORFEITURE OF SHARES   13
REGISTER OF SHAREHOLDERS   14
REGISTER OF DIRECTORS AND OFFICERS   14
TRANSFER OF SHARES   14
TRANSMISSION OF SHARES   15
INCREASE OF CAPITAL   16
ALTERATION OF CAPITAL   16
REDUCTION OF CAPITAL   17
GENERAL MEETINGS AND RESOLUTIONS IN WRITING   17
NOTICE OF GENERAL MEETINGS   17
GENERAL MEETINGS AT MORE THAN ONE PLACE   18
PROCEEDINGS AT GENERAL MEETINGS   19
VOTING   20
PROXIES AND CORPORATE REPRESENTATIVES   22
APPOINTMENT AND REMOVAL OF DIRECTORS   24
RESIGNATION AND DISQUALIFICATION OF DIRECTORS   26
DIRECTORS’ INTERESTS   27
POWERS AND DUTIES OF THE BOARD   27
FEES, GRATUITIES AND PENSIONS   28
DELEGATION OF THE BOARD’S POWERS   28
PROCEEDINGS OF THE BOARD   29
OFFICERS   30
MINUTES   31
SECRETARY AND RESIDENT REPRESENTATIVE   31
THE SEAL   32

 

2 

 

 

DIVIDENDS AND OTHER PAYMENTS   32
RESERVES   33
CAPITALISATION OF PROFITS   33
RECORD DATES   34
ACCOUNTING RECORDS   35
AUDIT   35
SERVICE OF NOTICES AND OTHER DOCUMENTS   35
 DESTRUCTION OF DOCUMENTS   37
UNTRACED SHAREHOLDERS   37
WINDING UP   38
INDEMNITY AND INSURANCE   38
AMALGAMATION AND MERGER   40
CONTINUATION   40
BUSINESS COMBINATIONS   40
ALTERATION OF BYE-LAWS   42

 

3 

 

 

AMENDED AND RESTATED BYE-LAWS OF WEJO GROUP LIMITED

 

(Adopted by a Resolution dated November 17, 2021)

 

DEFINITIONS AND INTERPRETATION

 

1.In these Bye-Laws, unless the context otherwise requires:

 

Auditor: the person or firm for the time being appointed as auditor of the Company;

 

Bermuda: the Islands of Bermuda;

 

Board: the Directors of the Company appointed or elected pursuant to these Bye-Laws and acting by resolution as provided for in the Companies Acts and in these Bye-Laws or the Directors present at a meeting of Directors at which there is a quorum;

 

clear days: means, in relation to the period of a notice, that period excluding the day on which the notice is given or served, or deemed to be given or served, and the day for which it is given or on which it is to take effect;

 

Companies Acts: every Bermuda statute from time to time in force concerning companies insofar as the same applies to the Company;

 

Company: Wejo Group Limited, a company incorporated in Bermuda on 21 May 2021;

 

Director: any person duly elected or appointed as a director of the Company, and any person occupying the position of director of the Company by whatever name called;

 

Electronic Record: has the same meaning as in the Electronic Transactions Act 1999;

 

Indemnified Person: any Director, Officer, Resident Representative, member of a committee duly constituted under these Bye-Laws and any liquidator, manager or trustee for the time being acting in relation to the affairs of the Company (including anyone previously acting in such capacity), and his heirs, executors and administrators, administrators, personal representatives or successors or assigns;

 

Officer: a person appointed by the Board pursuant to these Bye-Laws but shall not include the Auditor;

 

paid up: paid up or credited as paid up;

 

Register: the Register of Shareholders of the Company maintained by the Company in Bermuda;

 

Registered Office: the registered office for the time being of the Company in Bermuda;

 

Resident Representative: (if any) the individual or the company appointed to perform the duties of resident representative set out in the Companies Acts and includes any assistant or deputy Resident Representative appointed by the Board to perform any of the duties of the Resident Representative;

 

4 

 

 

Resolution: a resolution of the Shareholders passed in a general meeting or, where required, of a separate class or separate classes of shareholders passed in a separate general meeting or in either case adopted by resolution in writing, in accordance with the provisions of these Bye-Laws;

 

Seal: the common seal of the Company (if any) and includes every authorised duplicate seal;

 

Secretary: the secretary for the time being of the Company and any person appointed to perform any of the duties of the secretary;

 

share: a share in the capital of the Company and includes stock, treasury shares and a fraction of a share/stock;

 

Shareholder: a shareholder or member of the Company, provided that for the purposes of Bye-Laws 186 to 191 (Indemnity and Insurance) it shall also include any holder of notes, debentures or bonds issued by the Company;

 

Specified Place: the place, if any, specified in the notice of any meeting of the shareholders, or adjourned meeting of the shareholders, at which the chairman of the meeting shall preside;

 

Subsidiary and Holding Company: have the same meanings as in section 86 of the Companies Act 1981, except that references in that section to a company shall include any body corporate or other legal entity, whether incorporated or established in Bermuda or elsewhere;

 

these Bye-Laws: the bye-laws of the Company in their present form.

 

1.1For the purposes of these Bye-Laws, a corporation which is a shareholder shall be deemed to be present in person at a general meeting if, in accordance with the Companies Acts, its authorised representative(s) is/are present.

 

1.2For the purposes of these Bye-Laws, a corporation which is a Director shall be deemed to be present in person at a meeting of the Board if a person authorised to attend on its behalf is present, and shall be deemed to discharge its duties and carry out any actions required under these Bye-Laws and the Companies Acts, including the signing and execution of documents, deeds and other instruments, if a person authorised to act on its behalf so acts.

 

1.3Words importing the singular number include the plural number and vice versa.

 

1.4Words importing the masculine gender include the feminine gender.

 

1.5Words importing persons include any company or association or body of persons, whether corporate or unincorporated and natural persons.

 

1.6Any reference to writing includes all modes of representing or reproducing words in a visible form, including in the form of an Electronic Record.

 

1.7Unless the context otherwise requires, words and expressions defined in the Companies Acts bear the same meanings in these Bye-Laws.

 

1.8Headings are used for convenience only and shall not affect the construction of these Bye-Laws.

 

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1.9A reference to anything being done by electronic means includes its being done by means of any electronic or other communications equipment or facilities and reference to any communication being delivered or received, or being delivered or received at a particular place, includes the transmission of an Electronic Record to a recipient identified in such manner or by such means as the Board may from time to time approve or prescribe, either generally or for a particular purpose.

 

1.10A reference to a signature or to anything being signed or executed include such forms of electronic signature or other means of verifying the authenticity of an Electronic Record as the Board may from time to time approve or prescribe, either generally or for a particular purpose.

 

1.11A reference to any statute or statutory provision (whether in Bermuda or elsewhere) includes a reference to any modification or re-enactment of it for the time being in force and to every rule, regulation or order made under it (or under any such modification or re-enactment) and for the time being in force and any reference to any rule, regulation or order made under any such statute or statutory provision includes a reference to any modification or replacement of such rule, regulation or order for the time being in force.

 

1.12In these Bye-Laws:

 

(a)powers of delegation shall not be restrictively construed but the widest interpretation shall be given thereto;

 

(b)the word Board in the context of the exercise of any power contained in these Bye-Laws includes any committee consisting of one or more Directors, any Director holding executive office and any local or divisional Board, manager or agent of the Company to which or, as the ease may be, to whom the power in question has been delegated;

 

(c)no power of delegation shall be limited by the existence or, except where expressly provided by the terms of delegation, the exercise of any other power of delegation; and

 

(d)except where expressly provided by the terms of delegation, the delegation of a power shall not exclude the concurrent exercise of that power by any other body or person who is for the time being authorised to exercise it under these Bye-Laws or under another delegation of the powers.

 

REGISTERED OFFICE

 

2.The Registered Office shall be at such place in Bermuda as the Board shall from time to time appoint.

 

SHARE CAPITAL

 

3.The authorised share capital of the Company at the date of adoption of these Bye-Laws is divided into 634,000,000 Common Shares of par value $0.001 each and 1,000,000 Undesignated Shares of par value $0.001 each.

 

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4.Common Shares

 

4.1The Common Shares shall, subject to the other provisions of these Bye-Laws, entitle the holders thereof to the following rights:

 

(a)as regards dividend:

 

after making all necessary provisions, where relevant, for payment of any preferred dividend in respect of any preference shares in the Company then outstanding, the Company shall apply any profits or reserves which the Board resolves to distribute in paying such profits or reserves to the holder of the Common Shares in respect of their holding of such shares pari passu and pro rata to the number of Common Shares held by each of them;

 

(b)as regards capital:

 

on a return of assets on liquidation, reduction of capital or otherwise, the holders of the Common Shares shall be entitled to be paid the surplus assets of the Company remaining after payment of its liabilities (subject to the rights of holders of any preferred shares in the Company then in issue having preferred rights on the return of capital) in respect of their holdings of Common Shares pari passu and pro rata to the number of Common Shares held by each of them;

 

(c)as regards voting in general meetings:

 

the holders of the Common Shares shall be entitled to receive notice of, and to attend and vote at, general meetings of the Company; every holder of Common Shares present in person or by proxy shall on a poll have one vote for each Common Share held by him.

 

5.Undesignated Shares

 

5.1The rights attaching to the Undesignated Shares, subject to these Bye-Laws generally and to Bye-Law 6 in particular, shall be as follows:

 

(a)each Undesignated Share shall have attached to it such preferred, qualified or other special rights, privileges and conditions and be subject to such restrictions, whether in regard to dividend, return of capital, redemption, conversion into Common Shares or voting or otherwise, as the Board may determine on or before its allotment;

 

(b)the Board may allot the Undesignated Shares in more than one series and, if it does so, may name and designate each series in such manner as it deems appropriate to reflect the particular rights and restrictions attached to that series, which may differ in all or any respects from any other series of Undesignated Shares;

 

(c)the particular rights and restrictions attached to any Undesignated Shares shall be recorded in a resolution of the Board. The Board may at any time before the allotment of any Undesignated Share by further resolution in any way amend such rights and restrictions or vary or revoke its designation. A copy of any such resolution or amending resolution for the time being in force shall be annexed as an appendix to (but shall not form part of) these Bye-Laws; and

 

(d)the Board shall not attach to any Undesignated Share any rights or restrictions which would alter or abrogate any of the special rights attached to any other class of series of shares for the time being in issue without such sanction as is required for any alteration or abrogation of such rights, unless expressly authorised to do so by the rights attaching to or by the terms of issue of such shares.

 

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6.Without limiting the foregoing and subject to the Companies Acts, the Company may issue preference shares (including any preference shares created pursuant to Bye-Law 5) which:

 

(a)are liable to be redeemed on the happening of a specified event or events or on a given date or dates and/or;

 

(b)are liable to be redeemed at the option of the Company and/or, if authorised by the Memorandum of Association of the Company, at the option of the holder.

 

7.The terms and manner of the redemption of any redeemable shares created pursuant to Bye-Law 5 shall be as the Board may by resolution determine before the allotment of such shares and the terms and manner of redemption of any other redeemable preference shares shall be either:

 

(a)as the Shareholders may by Resolution determine; or

 

(b)insofar as the Shareholders do not by any Resolution determine, as the Board may by resolution determine, in either case, before the allotment of such shares. A copy of any such Resolution or resolution of the Board for the time being in force shall be attached as an appendix to (but shall not form part of) these Bye-Laws.

 

8.The terms of any redeemable preference shares (including any redeemable preference shares created pursuant to Bye-Law 5) may provide for the whole or any part of the amount due on redemption to be paid or satisfied otherwise than in cash, to the extent permitted by the Companies Acts.

 

9.Subject to the foregoing and to any special rights conferred on the holders of any share or class of shares, any share in the Company may be issued with or have attached thereto such preferred, deferred, qualified or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may by Resolution determine or, if there has not been any such determination or so far as the same shall not make specific provision, as the Board may determine.

 

10.The Board may, at its discretion and without the sanction of a Resolution, authorise the purchase by the Company of its own shares, of any class, at any price (whether at par or above or below par), and any shares to be so purchased may be selected in any manner whatsoever, upon such terms as the Board may in its discretion determine, provided always that such purchase is effected in accordance with the provisions of the Companies Acts. The whole or any part of the amount payable on any such purchase may be paid or satisfied otherwise than in cash, to the extent permitted by the Companies Acts.

 

11.The Board may, at its discretion and without the sanction of a Resolution, authorise the acquisition by the Company of its own shares, of any class, at any price (whether at par or above or below par), and any shares to be so purchased may be selected in any manner whatsoever, to be held as treasury shares, upon such terms as the Board may in its discretion determine, provided always that such acquisition is effected in accordance with the provisions of the Companies Acts. The whole or any part of the amount payable on any such acquisition may be paid or satisfied otherwise than in cash, to the extent permitted by the Companies Acts. The Company shall be entered in the Register as a Shareholder in respect of the shares held by the Company as treasury shares and shall be a Shareholder of the Company but subject always to the provisions of the Companies Acts and for the avoidance of doubt the Company shall not exercise any rights and shall not enjoy or participate in any of the rights attaching to those shares save as expressly provided for in the Companies Acts.

 

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MODIFICATION OF RIGHTS

 

12.Subject to the Companies Acts, all or any of the special rights for the time being attached to any class of shares for the time being issued may from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the holders of not less than seventy-five per cent (75%) of the issued shares of that class or with the sanction of a resolution passed at a separate general meeting of the holders of such shares voting in person or by proxy. To any such separate general meeting, all the provisions of these Bye-Laws as to general meetings of the Company shall mutatis mutandis apply, but so that the necessary quorum shall be two (2) or more persons holding or representing by proxy the majority of the shares of the relevant class, that every holder of shares of the relevant class shall be entitled on a poll to one vote for every such share held by him and that any holder of shares of the relevant class present in person or by proxy may demand a poll; provided, however, that if the Company or a class of Shareholders shall have only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum.

 

13.For the purposes of this Bye-Law, unless otherwise expressly provided by the rights attached to any shares or class of shares, those rights attaching to any class of shares for the time being shall not be deemed to be altered by:

 

(a)the creation or issue of further shares ranking pari passu with them;

 

(b)the creation or issue for full value (as determined by the Board) of further shares ranking as regards participation in the profits or assets of the Company or otherwise in priority to them; or

 

(c)the purchase or redemption by the Company of any of its own shares.

 

SHARES

 

14.Subject to the provisions of these Bye-Laws, the unissued shares of the Company (whether forming part of the original capital or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Board may determine.

 

15.Subject to the provisions of these Bye-Laws, any shares of the Company held by the Company as treasury shares shall be at the disposal of the Board, which may hold all or any of the shares, dispose of or transfer all or any of the shares for cash or other consideration, or cancel all or any of the shares.

 

16.The Board may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by law. Subject to the provisions of the Companies Acts, any such commission or brokerage may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one way and partly in the other.

 

17.Shares may be issued in fractional denominations and in such event the Company shall deal with such fractions to the same extent as its whole shares, so that a share in a fractional denomination shall have, in proportion to the fraction of a whole share that it represents, all the rights of a whole share, including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding-up.

 

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18.Except as ordered by a court of competent jurisdiction or as required by law, no person shall be recognised by the Company as holding any share upon trust and the Company shall not be bound by or required in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or in any fractional part of a share or (except only as otherwise provided in these Bye-Laws or by law) any other right in respect of any share except an absolute right to the entirety thereof in the registered holder.

 

CERTIFICATES

 

19.Shares shall be issued in registered form. No share certificates shall be issued by the Company unless, in respect of a class of shares, the Board has either for all or for some holders of such shares (who may be determined in such manner as the Board thinks fit) determined that the holder of such shares may be entitled to share certificates. In the case of a share held jointly by several persons, delivery of a certificate to one of several joint holders shall be sufficient delivery to all.

 

20.If a share certificate is defaced, lost or destroyed, it may be replaced without fee but on such terms (if any) as to evidence and indemnity and to payment of the costs and out of pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of defacement, on delivery of the old certificate to the Company.

 

21.All certificates for share or loan capital or other securities of the Company (other than letters of allotment, scrip certificates and other like documents) shall, except to the extent that the terms and conditions for the time being relating thereto otherwise provide, be in such form as the Board may determine and issued under the Seal or signed by a Director, the Secretary or any person authorised by the Board for that purpose. The Board may by resolution determine, either generally or in any particular case, that any signatures on any such certificates need not be autographic but may be affixed to such certificates by some mechanical means or may be printed thereon or that such certificates need not be signed by any persons, or may determine that a representation of the Seal may be printed on any such certificates. If any person holding an office in the Company who has signed, or whose facsimile signature has been used on, any certificate ceases for any reason to hold his office, such certificate may nevertheless be issued as though that person had not ceased to hold such office.

 

22.Nothing in these Bye-Laws shall prevent title to any securities of the Company from being evidenced and/or transferred without a written instrument in accordance with regulations made from time to time in this regard under the Companies Acts or the Companies Acts, as the case may be, and the Board shall have power to implement any arrangements which it may think fit for such evidencing and/or transfer which accord with those regulations or the Companies Acts.

 

LIEN

 

23.The Company shall have a first and paramount lien on every share (not being a fully paid share) for all monies, whether presently payable or not, called or payable, at a date fixed by or in accordance with the terms of issue of such share in respect of such share, and the Company shall also have a first and paramount lien on every share (other than a fully paid share) standing registered in the name of a Shareholder, whether singly or jointly with any other person, for all the debts and liabilities of such Shareholder or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such Shareholder, and whether the time for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such Shareholder or his estate and any other person, whether a Shareholder or not. The Company’s lien on a share shall extend to all dividends payable thereon. The Board may at any time, either generally or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Bye-Law.

 

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24.The Company may sell, in such manner as the Board may think fit, any share on which the Company has a lien but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen (14) days after a notice in writing, stating and demanding payment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share.

 

25.The net proceeds of sale by the Company of any shares on which it has a lien shall be applied in or towards payment or discharge of the debt or liability in respect of which the lien exists so far as the same is presently payable, and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the person who was the holder of the share immediately before such sale. For giving effect to any such sale, the Board may authorise some person to transfer the share sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale.

 

26.Whenever any law for the time being of any country, state or place imposes or purports to impose any immediate or future or possible liability upon the Company to make any payment or empowers any government or taxing authority or government official to require the Company to make any payment in respect of any shares registered in any of the Company’s registers as held either jointly or solely by any Shareholder or in respect of any dividends, bonuses or other monies due or payable or accruing due or which may become due or payable to such Shareholder by the Company on or in respect of any shares registered as aforesaid or for or on account or in respect of any Shareholder and whether in consequence of:

 

(a)the death of such Shareholder;

 

(b)the non-payment of any income tax or other tax by such Shareholder;

 

(c)the non-payment of any estate, probate, succession, death, stamp, or other duty by the executor or administrator of such Shareholder or by or out of his estate; or

 

(d)any other act or thing;

 

(e)in every such case (except to the extent that the rights conferred upon holders of any class of shares render the Company liable to make additional payments in respect of sums withheld on account of the foregoing):

 

(f)the Company shall be fully indemnified by such Shareholder or his executor or administrator from all liability;

 

(g)the Company shall have a lien upon all dividends and other monies payable in respect of the shares registered in any of the Company’s registers as held either jointly or solely by such Shareholder for all monies paid or payable by the Company in respect of such shares or in respect of any dividends or other monies as aforesaid thereon or for or on account or in respect of such Shareholder under or in consequence of any such law together with interest at the rate of fifteen percent (15%) per annum thereon from the date of payment to date of repayment and may deduct or set off against such dividends or other monies payable as aforesaid any monies paid or payable by the Company as aforesaid together with interest as aforesaid;

 

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(h)the Company may recover as a debt due from such Shareholder or his executor or administrator wherever constituted any monies paid by the Company under or in consequence of any such law and interest thereon at the rate and for the period aforesaid in excess of any dividends or other monies as aforesaid then due or payable by the Company; and

 

(i)the Company may, if any such money is paid or payable by it under any such law as aforesaid, refuse to register a transfer of any shares by any such Shareholder or his executor or administrator until such money and interest as aforesaid is set off or deducted as aforesaid, or in case the same exceeds the amount of any such dividends or other monies as aforesaid then due or payable by the Company, until such excess is paid to the Company.

 

27.Subject to the rights conferred upon the holders of any class of shares, nothing herein contained shall prejudice or affect any right or remedy which any law may confer or purport to confer on the Company and as between the Company and every such Shareholder as aforesaid, his estate representative, executor, administrator and estate wheresoever constituted or situate, any right or remedy which such law shall confer or purport to confer on the Company shall be enforceable by the Company.

 

CALLS ON SHARES

 

28.The Board may from time to time make calls upon the Shareholders (for the avoidance of doubt excluding the Company in respect of any nil or partly paid shares held by the Company as treasury shares) in respect of any monies unpaid on their shares (whether on account of the par value of the shares or by way of premium) and not by the terms of issue thereof made payable at a date fixed by or in accordance with such terms of issue, and each Shareholder shall (subject to the Company serving upon him at least fourteen (14) days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Board may determine.

 

29.A call may be made payable by instalments and shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed.

 

30.The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

 

31.If a sum called in respect of the share shall not be paid before or on the day appointed for payment thereof the person from whom the sum is due shall pay interest on the sum from the day appointed for the payment thereof to the time of actual payment at such rate as the Board may determine, but the Board shall be at liberty to waive payment of such interest wholly or in part.

 

32.Any sum which, by the terms of issue of a share, becomes payable on allotment or at any date fixed by or in accordance with such terms of issue, whether on account of the nominal amount of the share or by way of premium, shall for all the purposes of these Bye-Laws be deemed to be a call duly made, notified and payable on the date on which, by the terms of issue, the same becomes payable and, in case of non-payment, all the relevant provisions of these Bye-Laws as to payment of interest, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

 

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33.The Board may on the issue of shares differentiate between the allottees or holders as to the amount of calls to be paid and the times of payment.

 

FORFEITURE OF SHARES

 

34.If a Shareholder fails to pay any call or instalment of a call on the day appointed for payment thereof, the Board may at any time thereafter during such time as any part of such call or instalment remains unpaid serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.

 

35.The notice shall name a further day (not being less than fourteen (14) days from the date of the notice) on or before which, and the place where, the payment required by the notice is to be made and shall state that, in the event of non-payment on or before the day and at the place appointed, the shares in respect of which such call is made or instalment is payable will be liable to be forfeited. The Board may accept the surrender of any share liable to be forfeited hereunder and, in such case, references in these Bye-Laws to forfeiture shall include surrender.

 

36.If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls or instalments and interest due in respect thereof has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

 

37.When any share has been forfeited, notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice as aforesaid.

 

38.A forfeited share shall be deemed to be the property of the Company and may be sold, re-offered or otherwise disposed of either to the person who was, before forfeiture, the holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Board shall think fit, and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Board may think fit.

 

39.A person whose shares have been forfeited shall thereupon cease to be a Shareholder in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to the Company all monies which at the date of forfeiture were presently payable by him to the Company in respect of the shares with interest thereon at such rate as the Board may determine from the date of forfeiture until payment, and the Company may enforce payment without being under any obligation to make any allowance for the value of the shares forfeited.

 

40.An affidavit in writing that the deponent is a Director of the Company or the Secretary and that a share has been duly forfeited on the date stated in the affidavit shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration (if any) given for the share on the sale, re-allotment or disposition thereof and the Board may authorise some person to transfer the share to the person to whom the same is sold, re-allotted or disposed of, and he shall thereupon be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, sale, re-allotment or disposal of the share.

 

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REGISTER OF SHAREHOLDERS

 

41.The Register shall be kept at the Registered Office or at such other place in Bermuda as the Board may from time to time direct, in the manner prescribed by the Companies Acts. Subject to the provisions of the Companies Acts, the Company may keep one or more overseas or branch registers in any place, and the Board may make, amend and revoke any such regulations as it may think fit respecting the keeping of such registers. The Board may authorise any share on the Register to be included in a branch register or any share registered on a branch register to be registered on another branch register, provided that at all times the Register is maintained in accordance with the Companies Acts.

 

42.The Register or any branch register may be closed at such times and for such period as the Board may from time to time decide, subject to the Companies Acts. Except during such time as it is closed, the Register and each branch register shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon (or between such other times as the Board from time to time determines) on every working day. Unless the Board so determines, no Shareholder or intending Shareholder shall be entitled to have entered in the Register or any branch register any indication of any trust or any equitable, contingent, future or partial interest in any share or any fractional part of a share and if any such entry exists or is permitted by the Board it shall not be deemed to abrogate any of the provisions of Bye-Law 18.

 

REGISTER OF DIRECTORS AND OFFICERS

 

43.The Secretary shall establish and maintain a register of the Directors and Officers of the Company as required by the Companies Acts. The register of Directors and Officers shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon in Bermuda on every working day.

 

TRANSFER OF SHARES

 

44.Subject to the Companies Acts and to such of the exceptions and restrictions contained in these Bye-Laws as may be applicable, any Shareholder may transfer all or any of his shares by an instrument of transfer in the usual common form or in any other form which the Board may approve.

 

45.The instrument of transfer of a share shall be signed by or on behalf of the transferor and where any share is not fully-paid, the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect thereof. All instruments of transfer when registered may be retained by the Company. The Board may, in its absolute discretion and without assigning any reason therefor, decline to register any transfer of any share which is not a fully-paid share. The Board may also decline to register any transfer unless:

 

(a)the instrument of transfer is duly stamped (if required by law) and lodged with the Company, at such place as the Board shall appoint for the purpose, accompanied by the certificate for the shares (if any has been issued) to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer,

 

(b)the instrument of transfer is in respect of only one class of share,

 

(c)the instrument of transfer is in favour of less than five (5) persons jointly; and

 

(d)it is satisfied that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Bermuda or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained.

 

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46.Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under this Bye-Law.

 

47.If the Board declines to register a transfer it shall, within three (3) months after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal.

 

48.No fee shall be charged by the Company for registering any transfer, probate, letters of administration, certificate of death or marriage, power of attorney, order of court or other instrument relating to or affecting the title to any share, or otherwise making an entry in the Register relating to any share, (except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed on it in connection with such transfer or entry).

 

49.Notwithstanding anything to the contrary in these Bye-Laws, shares that are listed or admitted to trading on an appointed stock exchange may be transferred in accordance with the rules and requirements of such exchange.

 

TRANSMISSION OF SHARES

 

50.In the case of the death of a Shareholder, the survivor or survivors, where the deceased was a joint holder, and the estate representative, where he was sole holder, shall be the only person recognised by the Company as having any title to his shares; but nothing herein contained shall release the estate of a deceased holder (whether the sole or joint) from any liability in respect of any share held by him solely or jointly with other persons. For the purpose of this Bye-Law, estate representative means the person to whom probate or letters of administration has or have been granted in Bermuda or, failing any such person, such other person as the Board may in its absolute discretion determine to be the person recognised by the Company for the purpose of this Bye-Law.

 

51.Any person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law may, subject as hereafter provided and upon such evidence being produced as may from time to time be required by the Board as to his entitlement, either be registered himself as the holder of the share or elect to have some person nominated by him registered as the transferee thereof. If the person so becoming entitled elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to have his nominee registered, he shall signify his election by signing an instrument of transfer of such share in favour of his nominee. All the limitations, restrictions and provisions of these Bye-Laws relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice or instrument of transfer as aforesaid as if the death of the Shareholder or other event giving rise to the transmission had not occurred and the notice or instrument of transfer was an instrument of transfer signed by such Shareholder.

 

52.A person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law shall (upon such evidence being produced as may from time to time be required by the Board as to his entitlement) be entitled to receive and may give a discharge for any dividends or other monies payable in respect of the share, but he shall not be entitled in respect of the share to receive notices of or to attend or vote at general meetings of the Company or, save as aforesaid, to exercise in respect of the share any of the rights or privileges of a Shareholder until he shall have become registered as the holder thereof. The Board may at any time give notice requiring such person to elect either to be registered himself or to transfer the share and, if the notice is not complied with within sixty (60) days, the Board may thereafter withhold payment of all dividends and other monies payable in respect of the shares until the requirements of the notice have been complied with.

 

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53.Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under this Bye-Law.

 

INCREASE OF CAPITAL

 

54.The Company may from time to time increase its capital by such sum to be divided into shares of such par value as the Company by Resolution shall prescribe.

 

55.The Company may, by the Resolution increasing the capital, direct that the new shares or any of them shall be offered in the first instance either at par or at a premium or (subject to the provisions of the Companies Acts) at a discount to all the holders for the time being of shares of any class or classes in proportion to the number of such shares held by them respectively or make any other provision as to the issue of the new shares.

 

56.The new shares shall be subject to all the provisions of these Bye-Laws with reference to lien, the payment of calls, forfeiture, transfer, transmission and otherwise.

 

ALTERATION OF CAPITAL

 

57.The Board may from time to time:

 

(a)divide the Company’s shares into several classes and attach thereto respectively any preferential, deferred, qualified or special rights, privileges or conditions;

 

(b)consolidate and divide all or any of the Company’s share capital into shares of larger par value than its existing shares;

 

(c)sub-divide the Company’s shares or any of them into shares of smaller par value than is fixed by the Company’s memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; and

 

(d)make provision for the issue and allotment of shares which do not carry any voting rights.

 

58.The Company may from time to time by Resolution:

 

(a)cancel shares which, at the date of the passing of the Resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled; and

 

(b)change the currency denomination of its share capital.

 

59.Where any difficulty arises in regard to any division, consolidation, or sub-division under this Bye-Law, the Board may settle the same as it thinks expedient and, in particular, may arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale in due proportion amongst the Shareholders who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to the purchaser thereof, who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

 

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60.Subject to the Companies Acts and to any confirmation or consent required by law or these Bye-Laws, the Company may by Resolution from time to time convert any preference shares into redeemable preference shares.

 

REDUCTION OF CAPITAL

 

61.Subject to the Companies Acts, its memorandum and any confirmation or consent required by law or these Bye-Laws, the Company may from time to time by Resolution authorise the reduction of its issued share capital or any share premium account in any manner.

 

62.In relation to any such reduction, the Company may by Resolution determine the terms upon which such reduction is to be effected including, in the case of a reduction of part only of a class of shares, those shares to be affected.

 

GENERAL MEETINGS AND RESOLUTIONS IN WRITING

 

63.Save and to the extent that the Company elects to dispense with the holding of one or more of its annual general meetings in the manner permitted by the Companies Acts, the Board shall convene and the Company shall hold general meetings as annual general meetings in accordance with the requirements of the Companies Acts at such times and places as the Board shall appoint. The Board may, whenever it thinks fit, and shall, when requisitioned by shareholders pursuant to the provisions of the Companies Acts, convene general meetings other than annual general meetings, which shall be called special general meetings, at such time and place as the Board may appoint.

 

64.Any action required or permitted to be taken by the shareholders of the Company must be effected at a duly called general meeting or special general meeting of such shareholders and may not be effected by any consent in writing by such holders.

 

NOTICE OF GENERAL MEETINGS

 

65.An annual general meeting shall be called by not less than five (5) clear days’ notice in writing and a special general meeting shall be called by not less than five (5) clear days’ notice in writing. The notice shall specify the place, day and time of the meeting, (including any satellite meeting place arranged for the purposes of Bye-Laws 69 to 73) and, the nature of the business to be considered. Notice of every general meeting shall be given in any manner permitted by these Bye-Laws to all Shareholders other than such as, under the provisions of these Bye-Laws or the terms of issue of the shares they hold, are not entitled to receive such notice from the Company and to each Director, and to any Resident Representative who or which has delivered a written notice upon the Registered Office requiring that such notice be sent to him or it.

 

66.The accidental omission to give notice of a meeting or (in cases where instruments of proxy are sent out with the notice) the accidental omission to send such instrument of proxy to, or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive such notice shall not invalidate the proceedings at that meeting.

 

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67.A Shareholder present, either in person or by proxy, at any meeting of the Company or of the holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.

 

68.The Board may cancel or postpone a meeting of the Shareholders after it has been convened and notice of such cancellation or postponement shall be served in accordance with these Bye-Laws upon all Shareholders entitled to notice of the meeting so cancelled or postponed setting out, where the meeting is postponed to a specific date, notice of the new meeting in accordance with this Bye-Law.

 

GENERAL MEETINGS AT MORE THAN ONE PLACE

 

69.The provisions of this Bye-Law shall apply if any general meeting is convened at or adjourned to more than one place.

 

70.The notice of any meeting or adjourned meeting may specify the Specified Place and the Board shall make arrangements for simultaneous attendance and participation in a satellite meeting at other places (whether adjoining the Specified Place or in a different and separate place or places altogether or otherwise) by Shareholders. The Shareholders present at any such satellite meeting place in person or by proxy and entitled to vote shall be counted in the quorum for, and shall be entitled to vote at, the general meeting in question if the chairman of the general meeting is satisfied that adequate facilities are available throughout the general meeting to ensure that Shareholders attending at all the meeting places are able to:

 

(a)communicate simultaneously and instantaneously with the persons present at the other meeting place or places, whether by use of microphones, loud-speakers, audio-visual or other communications equipment or facilities; and

 

(b)have access to all documents which are required by the Companies Acts and these Bye-Laws to be made available at the meeting.

 

71.The chairman of the general meeting shall be present at, and the meeting shall be deemed to take place at, the Specified Place. If it appears to the chairman of the general meeting that the facilities at the Specified Place or any satellite meeting place are or become inadequate for the purposes referred to above, then the chairman may, without the consent of the meeting, interrupt or adjourn the general meeting. All business conducted at that general meeting up to the time of such adjournment shall be valid.

 

72.The Board may from time to time make such arrangements for the purpose of controlling the level of attendance at any such satellite meeting (whether involving the issue of tickets or the imposition of some means of selection or otherwise) as they shall in their absolute discretion consider appropriate, and may from time to time vary any such arrangements or make new arrangements in place of them, provided that a Shareholder who is not entitled to attend, in person or by proxy, at any particular place shall be entitled so to attend at one of the other places and the entitlement of any Shareholder so to attend the meeting or adjourned meeting at such place shall be subject to any such arrangements as may be for the time being in force and by the notice of meeting or adjourned meeting stated to apply to the meeting.

 

73.If a meeting is adjourned to more than one place, notice of the adjourned meeting shall be given in the manner required by Bye-Laws 65 to 68.

 

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PROCEEDINGS AT GENERAL MEETINGS

 

74.In accordance with the Companies Acts, a general meeting may be held with only one individual present provided that the requirement for a quorum is satisfied. No business shall be transacted at any general meeting unless a quorum is present at the time that the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment, choice or election of a chairman, which shall not be treated as part of the business of the meeting. Save as herein otherwise provided, at least two (2) Shareholders present in person or by proxy and entitled to vote representing the holders of more than 50% of the issued shares entitled to vote at such meeting shall be a quorum; provided, however, that if the Company or a class of Shareholders shall have only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum.

 

75.If within five (5) minutes (or such longer time as the chairman of the meeting may determine to wait) after the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of Shareholders, shall be dissolved. In any other case, it shall stand adjourned to such other day and such other time and place as the chairman of the meeting may determine and at such adjourned meeting two (2) Shareholders present in person or by proxy and entitled to vote and representing the holders of more than 50% of the issued shares entitled to vote at such meeting shall be a quorum, provided that if the Company or a class of Shareholders shall have only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum. The Company shall give not less than five (5) clear days’ notice of any meeting adjourned through want of a quorum and such notice shall state that the sole Shareholder or, if more than one, two (2) Shareholders present in person or by proxy and entitled to vote and representing the holders of more than 50% of the issued shares entitled to vote at such meeting shall be a quorum. If at the adjourned meeting a quorum is not present within fifteen (15) minutes after the time appointed for holding the meeting, the meeting shall be dissolved.

 

76.A meeting of the Shareholders or any class thereof may be held by means of such telephone, electronic or other communication facilities (including, without limiting the generality of the foregoing, by telephone, or by video conferencing) as to permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting. If it appears to the chairman of a general meeting that the Specified Place is inadequate to accommodate all persons entitled and wishing to attend, the meeting is duly constituted and its proceedings are valid if the chairman is satisfied that adequate facilities are available, whether at the Specified Place or elsewhere, to ensure that each such person who is unable to be accommodated at the Specified Place is able to communicate simultaneously and instantaneously with the persons present at the Specified Place, whether by the use of microphones, loud-speakers, audio-visual or other communications equipment or facilities.

 

77.Subject to the Companies Acts, a resolution may only be put to a vote at a general meeting of the Company or of any class of Shareholders if:

 

(a)it is proposed by or at the direction of the Board; or

 

(b)it is proposed at the direction of the Court; or

 

(c)it is proposed on the requisition in writing of such number of Shareholders as is prescribed by, and is made in accordance with, the relevant provisions of the Companies Acts; or

 

(d)the chairman of the meeting in his absolute discretion decides that the resolution may properly be regarded as within the scope of the meeting.

 

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78.No amendment may be made to a resolution, at or before the time when it is put to a vote, unless the chairman of the meeting in his absolute discretion decides that the amendment or the amended resolution may properly be put to a vote at that meeting.

 

79.If the chairman of the meeting rules a resolution or an amendment to a resolution admissible or out of order (as the case may be), the proceedings of the meeting or on the resolution in question shall not be invalidated by any error in his ruling. Any ruling by the chairman of the meeting in relation to a resolution or an amendment to a resolution shall be final and conclusive.

 

80.The Resident Representative, if any, upon giving the notice referred to in Bye-Law 65 above, shall be entitled to attend any general meeting of the Company and each Director shall be entitled to attend and speak at any general meeting of the Company.

 

81.The chairman (if any) of the Board shall preside as chairman at every general meeting of the Company. If there is no such chairman, or if at any meeting the chairman is not present within five (5) minutes after the time appointed for holding the meeting, or is unwilling to act as chairman, the Directors present shall choose one of their number to act or if only one Director is present he shall preside as chairman if willing to act. If no Director is present, or if each of the Directors present declines to take the chair, the persons present and entitled to vote shall elect one of their number to be chairman.

 

82.The chairman may, with the consent by resolution of a meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time (or sine die) and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. In addition to any other power of adjournment conferred by law, the chairman of the meeting may at any time without consent of the meeting adjourn the meeting (whether or not it has commenced or a quorum is present) to another time and/or place (or sine die) if, in his opinion, it would facilitate the conduct of the business of the meeting to do so or if he is so directed (prior to or at the meeting) by the Board. When a meeting is adjourned sine die, the time and place for the adjourned meeting shall be fixed by the Board. When a meeting is adjourned for three (3) months or more or for an indefinite period, at least ten (10) clear days’ notice shall be given of the adjourned meeting. Save as expressly provided by these Bye-Laws, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

 

VOTING

 

83.Save where is otherwise required by the Companies Acts or these Bye-Laws, any question proposed for consideration at any general meeting shall be decided on by a simple majority of votes cast. The election of Directors at a general meeting shall be determined by a plurality of the votes cast in respect of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. For these purposes, “plurality” of voting shall be determined in accordance with the General Corporation Law of the State of Delaware, and, by way of illustration only, if there are 12 candidates seeking election but only 11 Board seats available, the 11 Directors with the greatest number of votes shall be appointed to the Board seats available for election at the general meeting.

 

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84.Subject to Bye-Law 169 and to any rights or restrictions attached to any class of shares, at any meeting of the Company, each Shareholder present in person shall be entitled to vote on any question to be decided on a show of hands and each Shareholder present in person or by proxy shall be entitled on a poll to vote for each share held by him.

 

85.At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands or by a count of votes received in the form of Electronic Records, unless (before or on the declaration of the result of the show of hands or count of votes received as Electronic Records or on the withdrawal of any other demand for a poll) a poll is demanded by:

 

(a)the chairman of the meeting; or

 

(b)at least three (3) Shareholders present in person or represented by proxy; or

 

(c)any Shareholder or Shareholders present in person or represented by proxy and holding between them not less than one tenth (1/10) of the total voting rights of all the Shareholders having the right to vote at such meeting; or

 

(d)a Shareholder or Shareholders present in person or represented by proxy holding shares conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth (1/10) of the total sum paid up on all such shares conferring such right.

 

The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands or count of votes received as Electronic Records declared before the demand was made. If the demand for a poll is withdrawn, the chairman or any other Shareholder entitled may demand a poll.

 

86.Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has, on a show of hands or count of votes received as Electronic Records, been carried or carried unanimously or by a particular majority or not carried by a particular majority or lost shall be final and conclusive, and an entry to that effect in the minute book of the Company shall be conclusive evidence of the fact without proof of the number or proportion of votes recorded for or against such resolution.

 

87If a poll is duly demanded, the result of the poll shall be deemed to be the resolution of the meeting at which the poll is demanded.

 

88.A poll demanded on the election of a chairman, or on a question of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken in such manner and either forthwith or at such time (being not later than three (3) months after the date of the demand) and place as the chairman shall direct and he may appoint scrutineers (who need not be Shareholders) and fix a time and place for declaring the result of the poll. It shall not be necessary (unless the chairman otherwise directs) for notice to be given of a poll.

 

89.The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded and it may be withdrawn at any time before the close of the meeting or the taking of the poll, whichever is the earlier.

 

90.On a poll, votes may be cast either personally or by proxy.

 

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91.A person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

 

92.In the case of an equality of votes at a general meeting, whether on a show of hands or count of votes received as Electronic Records or on a poll, the chairman of such meeting shall not be entitled to a second or casting vote and the resolution shall fail.

 

93.In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding.

 

94.A Shareholder who is a patient for any purpose of any statute or applicable law relating to mental health or in respect of whom an order has been made by any Court having jurisdiction for the protection or management of the affairs of persons incapable of managing their own affairs may vote, whether on a show of hands or on a poll, by his receiver, committee, curator bonis or other person in the nature of a receiver, committee or curator bonis appointed by such Court and such receiver, committee, curator bonis or other person may vote on a poll by proxy, and may otherwise act and be treated as such Shareholder for the purpose of general meetings.

 

95.No Shareholder shall, unless the Board otherwise determines, be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

 

96.If:

 

(a)any objection shall be raised to the qualification of any voter; or,

 

(b)any votes have been counted which ought not to have been counted or which might have been rejected; or,

 

(c)any votes are not counted which ought to have been counted,

 

the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any resolution unless the same is raised or pointed out at the meeting or, as the case may be, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that the same may have affected the decision of the meeting. The decision of the chairman on such matters shall be final and conclusive.

 

PROXIES AND CORPORATE REPRESENTATIVES

 

97.A Shareholder may appoint one or more persons as his proxy, with or without the power of substitution, to represent him and vote on his behalf in respect of all or some only of his shares at any general meeting (including an adjourned meeting). A proxy need not be a Shareholder. The instrument appointing a proxy shall be in writing executed by the appointor or his attorney authorised by him in writing or, if the appointor is a corporation, either under its Seal or executed by an officer, attorney or other person authorised to sign the same.

 

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98.A Shareholder which is a corporation may, by written authorisation, appoint any person (or two (2) or more persons in the alternative) as its representative to represent it and vote on its behalf at any general meeting (including an adjourned meeting) and such a corporate representative may exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder and the Shareholder shall for the purposes of these Bye-Laws be deemed to be present in person at any such meeting if a person so authorised is present at it.

 

99.Any Shareholder may appoint a proxy or (if a corporation) representative for a specific general meeting, and adjournments thereof, or may appoint a standing proxy or (if a corporation) representative, by serving on the Company at the Registered Office, or at such place or places as the Board may otherwise specify for the purpose, a proxy or (if a corporation) an authorisation. Any standing proxy or authorisation shall be valid for all general meetings and adjournments thereof or resolutions in writing, as the case may be, until notice of revocation is received at the Registered Office or at such place or places as the Board may otherwise specify for the purpose. Where a standing proxy or authorisation exists, its operation shall be deemed to have been suspended at any general meeting or adjournment thereof at which the Shareholder is present or in respect to which the Shareholder has specially appointed a proxy or representative. The Board may from time to time require such evidence as it shall deem necessary as to the due execution and continuing validity of any standing proxy or authorisation and the operation of any such standing proxy or authorisation shall be deemed to be suspended until such time as the Board determines that it has received the requested evidence or other evidence satisfactory to it.

 

100.Notwithstanding Bye-Law 84, a Shareholder may appoint a proxy which may be irrevocable in accordance with its terms and the holder thereof shall be the only person entitled to vote the relevant shares at any meeting of the shareholders at which such holder is present. Notice of the appointment of any such proxy shall be given to the Company at its Registered Office, and shall include the name, address, telephone number and electronic mail address of the proxy holder. The Company shall give to the proxy holder notice of all meetings of Shareholders of the Company and shall be obliged to recognise the holder of such proxy until such time as the holder notifies the Company in writing that the proxy is no longer in force.

 

101.Subject to Bye-Laws 99 and 100, the instrument appointing a proxy or corporate representative together with such other evidence as to its due execution as the Board may from time to time require, shall be delivered at the Registered Office (or at such place or places as may be specified in the notice convening the meeting or in any notice of any adjournment or, in either case or the case of a resolution in writing, in any document sent therewith) not less than twenty four (24) hours or such other period as the Board may determine, prior to the holding of the relevant meeting or adjourned meeting at which the person named in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of a meeting or adjourned meeting, before the time appointed for the taking of the poll, or, in the case of a resolution in writing, prior to the effective date of the resolution in writing and in default the instrument of proxy or authorisation shall not be treated as valid.

 

102.Subject to Bye-Laws 84 and 85, the 87 decision of the chairman of any general meeting as to the validity of any appointments of a proxy shall be final.

 

103.Instruments of proxy or authorisation shall be in any common form or in such other form as the Board may approve and the Board may, if it thinks fit, send out with the notice of any meeting or any resolution in writing forms of instruments of proxy or authorisation for use at that meeting or in connection with that resolution in writing. The instrument of proxy shall be deemed to confer authority to demand or join in demanding a poll, to speak at the meeting and to vote on any amendment of a resolution in writing or amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy or authorisation shall, unless the contrary is stated therein, be valid as well for any adjournment of the meeting as for the meeting to which it relates. If the terms of the appointment of a proxy include a power of substitution, any proxy appointed by substitution under such power shall be deemed to be the proxy of the Shareholder who conferred such power. All the provisions of these Bye-Laws relating to the execution and delivery of an instrument or other form of communication appointing or evidencing the appointment of a proxy shall apply, mutates mutandis, to the instrument or other form of communication effecting or evidencing such an appointment by substitution.

 

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104.A vote given in accordance with the terms of an instrument of proxy or authorisation shall be valid notwithstanding the previous death or unsoundness of mind of the principal, or revocation of the instrument of proxy or of the corporate authority, provided that no intimation in writing of such death, unsoundness of mind or revocation shall have been received by the Company at the Registered Office (or such other place as may be specified for the delivery of instruments of proxy or authorisation in the notice convening the meeting or other documents sent therewith) at least one hour before the commencement of the meeting or adjourned meeting, or the taking of the poll, or the day before the effective date of any resolution in writing at which the instrument of proxy or authorisation is used.

 

105.Subject to the Companies Acts, the Board may at its discretion waive any of the provisions of these Bye-Laws related to proxies or authorisations and, in particular, may accept such verbal or other assurances as it thinks fit as to the right of any person to attend, speak and vote on behalf of any Shareholder at general meetings or to sign resolutions in writing.

 

APPOINTMENT AND REMOVAL OF DIRECTORS

 

106.At the point of adoption of these Bye-Laws on November 17, 2021, the Board consists of the following persons:

 

Richard Barlow

Lawrence Burns

Samuel Hendel

Timothy Lee

Alan Masarek

John Maxwell

Diarmid Ogilvy

Ann M. Schwister

 

107.Dr. Burns, Mr. Lee and Ms. Schwister are designated as class I Directors, Mr. Masarek, Mr. Maxwell and Mr. Ogilvy are designated as class II Directors, and Mr. Barlow and Mr. Hendel are designated as class III Directors for the purposes of these Bye-Laws. There is no distinction in the voting or other powers and authorities of Directors of different classes; the classifications are solely for the purposes of the retirement by rotation provisions set out in Bye-Laws 109, 110 and 111. All Directors will be designated as either class I, class II or class III Directors. The Board shall from time to time by resolution determine the respective numbers of class I Directors, class II Directors and class III Directors.

 

108.Upon resignation or termination of office of any Director, if a new Director shall be appointed to the Board he will be designated to fill the vacancy arising and shall, for the purposes of these Bye-Laws, constitute a member of the class of Directors represented by the person that he replaces.

 

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109.Each class I Director shall (unless his office is vacated in accordance with these Bye-Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2022 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class I Directors together were last appointed or re-appointed.

 

110.Each class II Director shall (unless his office is vacated in accordance with these Bye-Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2023 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class II Directors together were last appointed or re-appointed.

 

111.Each class III Director shall (unless his office is vacated in accordance with these Bye-Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2024 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class III Directors together were last appointed or re-appointed.

 

112.Any Director retiring at an annual general meeting will be eligible for re-appointment and will retain office until the close of the meeting at which he retires or (if earlier) until a Resolution is passed at that meeting not to fill the vacancy or the resolution to re-appoint him is put to a vote at the meeting and is lost.

 

113.If the Company, at the meeting at which a Director (of any class) retires by rotation or otherwise, does not fill the vacancy, the retiring Director shall, if willing to act, be deemed to have been re-appointed unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the re-appointment of the Director is put to the meeting and lost.

 

114.No person other than a Director retiring by rotation shall be appointed a Director at any general meeting unless:

 

(a)he is recommended by the Board; or

 

(b)in the case of an annual general meeting, not less than one hundred twenty (120) nor more than one hundred fifty (150) days before the date of the Company’s proxy statement released to Shareholders in connection with the prior year’s annual general meeting, a notice executed by a Shareholder (not being the person to be proposed) has been received by the Secretary of the Company of the intention to propose such person for appointment, setting forth as to each person whom the Shareholder proposes to nominate for election or re-election as a Director:

 

(i)the name, age, business address and residence address of such person;

 

(ii)the principal occupation or employment of such person;

 

(iii)the class, series and number of shares of the Company which are beneficially owned by such person;

 

(iv)particulars which would, if he were so appointed, be required to be included in the Company’s register of Directors and Officers; and

 

(v)all other information relating to such person that is required to be disclosed in solicitations for proxies for the election of Directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934 of the United States of America (as amended), together with notice executed by such person of his willingness to serve as a Director if so elected; provided, however, that no Shareholder shall be entitled to propose any person to be appointed, elected or re-elected Director at any special general meeting.

 

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115.Except as otherwise authorised by the Companies Acts, the appointment of any person proposed as a Director shall be effected by a separate Resolution. Subject to Bye-Law 108, the Resolution appointing any Director must designate the Director as a class I, class II or class III Director.

 

116.All Directors, upon election or appointment, except upon re-election or re-appointment at an annual general meeting, must provide written acceptance of their appointment, in such form as the Board may think fit, by notice in writing to the Registered Office within thirty (30) days of their appointment.

 

117.The number of Directors shall be not less than three (3) and not more than eleven (11) or such number in excess thereof as the Board by resolution may from time to time determine. Any one or more vacancies in the Board not filled at any general meeting shall be deemed casual vacancies for the purposes of these Bye-Laws. Without prejudice to the power of the Company by Resolution in pursuance of any of the provisions of these Bye-Laws to appoint any person to be a Director, the Board, so long as a quorum of Directors remains in office, shall have power at any time and from time to time, subject to Bye-Laws 106, 107 and 108, to appoint any person to be a Director so as to fill a casual vacancy. A Director so appointed shall hold office only until the next following annual general meeting and shall not be taken into account in determining the Directors who are to retire by rotation at the meeting. If not reappointed at such annual general meeting, he shall vacate office at the conclusion thereof.

 

RESIGNATION AND DISQUALIFICATION OF DIRECTORS

 

118.The office of a Director shall ipso facto be vacated if the Director:

 

(a)resigns his office by notice in writing delivered to the Registered Office or tendered at a meeting of the Board; or

 

(b)becomes bankrupt under the laws of any country or makes any arrangement or composition with his creditors generally; or

 

(c)is prohibited by law from being a Director or, in the case of a corporate Director, is otherwise unable to carry on or transact business; or

 

(d)ceases to be a Director by virtue of the Companies Acts or these Bye-Laws or is removed from office pursuant to these Bye-Laws;

 

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119.The Company may in a general meeting called for that purpose remove a Director, PROVIDED ALWAYS THAT:

 

(a)notice of any such meeting shall be served upon the Director concerned not less than 14 days before the meeting;

 

(b)the affected Director shall be entitled to be heard at that meeting; and

 

(c)Directors may only be removed for “cause” (as determined by the Board, in their sole discretion from time to time) and only upon the affirmative vote of the holders of at least sixty six and two thirds (66 2/3) of the then issued and outstanding shares carrying the right to vote at general meetings at the relevant time, voting in person or by proxy at such special general meeting.

 

120.The provisions of section 93 of the Companies Act 1981 of Bermuda shall not apply to the Company.

 

121.No Director may appoint an alternate Director and the provisions of sections 91(2)(A) and 91A of the Companies Acts shall not apply to the Company.

 

DISCLOSURE OF DIRECTORS’ INTERESTS

 

122.Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or company shall be entitled to remuneration as if such Director were not a Director. Nothing herein contained shall authorize a Director or Director’s firm, partner or company to act as Auditor to the Company.

 

123.A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company or any of its subsidiaries shall declare the nature of such interest to the Board or any duly appointed committee thereof, whether or not such declaration is required by law.

 

124.Following a declaration being made pursuant to this Bye-Law 122, and unless disqualified by the chairperson of the relevant Board meeting or recused, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum for such meeting.”

 

POWERS AND DUTIES OF THE BOARD

 

125.Subject to the provisions of the Companies Acts and these Bye-Laws, the Board shall manage the business of the Company and may pay all expenses incurred in promoting and incorporating the Company and may exercise all the powers of the Company. No alteration of these Bye-Laws and no such direction shall invalidate any prior act of the Board which would have been valid if that alteration had not been made or that direction had not been given. The powers given by this Bye-Law shall not be limited by any special power given to the Board by these Bye-Laws and a meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board.

 

126.The Board may exercise all the powers of the Company except those powers that are required by the Companies Acts or these Bye-Laws to be exercised by the Shareholders.

 

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FEES, GRATUITIES AND PENSIONS

 

127.The ordinary remuneration of the Directors office for their services (excluding amounts payable under any other provision of these Bye-Laws) shall be determined by Board and each such Director shall be paid a fee (which shall be deemed to accrue from day-to-day) at such rate as may from time to time be determined by the Board. Each Director may be paid his reasonable travel, hotel and incidental expenses for attending and returning from meetings of the Board or committees constituted pursuant to these Bye-Laws or general meetings and shall be paid all expenses properly and reasonably incurred by him in the conduct of the Company’s business or in the discharge of his duties as a Director. Any Director who, by request, goes or resides abroad for any purposes of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and such extra remuneration shall be in addition to any remuneration provided for by or pursuant to any other Bye-Law.

 

128.In addition to its powers under Bye-Law 127 the Board may (by establishment of or maintenance of schemes or otherwise) provide additional benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any past or present Director or employee of the Company or any of its subsidiaries or any body corporate associated with, or any business acquired by, any of them, and for any member of his family (including a spouse and a former spouse) or any person who is or was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.

 

129.No Director or former Director shall be accountable to the Company or the Shareholders for any benefit provided pursuant to this Bye-Law and the receipt of any such benefit shall not disqualify any person from being or becoming a Director of the Company.

 

DELEGATION OF THE BOARD’S POWERS

 

130.The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Bye-Laws) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney and of such attorney as the Board may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him. Such attorney may, if so authorised by the power of attorney, execute any deed, instrument or other document on behalf of the Company.

 

131.The Board may entrust to and confer upon any Director, Officer or, without prejudice to the provisions of Bye-Law 132, other person any of the powers, authorities and discretions exercisable by it upon such terms and conditions with such restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, authorities and discretions, and may from time to time revoke or vary all or any of such powers, authorities and discretions but no person dealing in good faith and without notice of such revocation or variation shall be affected thereby.

 

132.When required under the requirements from time to time of any stock exchange on which the shares of the Company are listed, the Board shall appoint an Audit Committee and a Compensation Committee in accordance with the requirements of such stock exchange. The Board also may delegate any of its powers, authorities and discretions to any other committees, consisting of such person or persons (whether a member or members of its body or not) as it thinks fit. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, and in conducting its proceedings conform to any regulations which may be imposed upon it by the Board. If no regulations are imposed by the Board the proceedings of a committee with two (2) or more members shall be, as far as is practicable, governed by the Bye-Laws regulating the proceedings of the Board.

 

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PROCEEDINGS OF THE BOARD

 

133.The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the motion shall be deemed to have been lost. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Board.

 

134.Notice of a meeting of the Board may be given to a Director by word of mouth or in any manner permitted by these Bye-Laws. A Director may retrospectively waive the requirement for notice of any meeting by consenting in writing to the business conducted at the meeting.

 

135.The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two (2) persons. Any Director who ceases to be a Director at a meeting of the Board may continue to be present and to act as a Director and, subject to Bye-Law 145, be counted in the quorum until the termination of the meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

 

136.A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or proposed contract, transaction or arrangement with the Company and has complied with the provisions of the Companies Acts and these Bye-Laws with regard to disclosure of his interest shall be entitled to vote in respect of any contract, transaction or arrangement in which he is so interested and if he shall do so his vote shall be counted, and he shall be taken into account in ascertaining whether a quorum is present.

 

137.The Resident Representative shall, upon delivering written notice of an address for the purposes of receipt of notice to the Registered Office, be entitled to receive notice of, attend and be heard at and to receive minutes of all meetings of the Board.

 

138.So long as a quorum of Directors remains in office, the continuing Directors may act notwithstanding any vacancy in the Board but, if no such quorum remains, the continuing Directors or a sole continuing Director may act only for the purpose of calling a general meeting.

 

139.The Board may choose one of their number to preside as chairman at every meeting of the Board. If there is no such chairman, or if at any meeting the chairman is not present within five (5) minutes after the time appointed for holding the meeting, or is not willing to act as chairman, the Directors present may choose one of their number to be chairman of the meeting.

 

140.The meetings and proceedings of any committee consisting of two (2) or more members shall be governed by the provisions contained in these Bye-Laws for regulating the meetings and proceedings of the Board so far as the same are applicable and are not superseded by any regulations imposed by the Board.

 

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141.A resolution in writing signed by all the Directors for the time being entitled to receive notice of a meeting of the Board or by all the members of a committee for the time being shall be as valid and effectual as a resolution passed at a meeting of the Board or, as the case may be, of such committee duly called and constituted. Such resolution may be contained in one document or in several documents in the like form each signed by one or more of the Directors or members of the committee concerned.

 

142.A meeting of the Board or a committee appointed by the Board may be held by means of such telephone, electronic or other communication facilities (including, without limiting the generality of the foregoing, by telephone or by video conferencing) as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously and participation in such a meeting shall constitute presence in person at such meeting. Such a meeting shall be deemed to take place where the largest group of those Directors participating in the meeting are physically assembled, or, if there is no such group, where the chairman of the meeting then is.

 

143.All acts done by the Board or by any committee or by any person acting as a Director or member of a committee or any person duly authorised by the Board or any committee shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated their office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director, member of such committee or person so authorised.

 

144.The Company may by resolution suspend or relax to any extent, either generally or in respect of any particular matter, any provision of these Bye-Laws prohibiting a Director from voting at a meeting of the Board or of a committee of the Board, or ratify any transaction not duly authorised by reason of a contravention of any such provisions.

 

145.Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two (2) or more Directors to offices or employments with the Company or any body corporate in which the Company is interested, the proposals may be divided and considered in relation to each Director separately and in such cases each of the Directors concerned (if not debarred from voting under the provisions of Bye-Law 136) shall be entitled to vote and be counted in the quorum in respect of each resolution except that concerning his own appointment.

 

146.If a question arises at a meeting of the Board or a committee of the Board as to the entitlement of a Director to vote or be counted in a quorum, the question may, before the conclusion of the meeting, be referred to the chairman of the meeting and his ruling in relation to any Director other than himself shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed. If any such question arises in respect of the chairman of the meeting, it shall be decided by resolution of the Board (on which the chairman shall not vote) and such resolution will be final and conclusive except in a case where the interests of the chairman have not been fairly disclosed.

 

OFFICERS

 

147.The Officers of the Company, who may or may not be Directors, may be appointed by the Board at any time, subject to Bye-Law 145. Any person appointed pursuant to this Bye-Law shall hold office for such period and upon such terms as the Board may determine and the Board may revoke or terminate any such appointment. Any such revocation or termination shall be without prejudice to any claim for damages that such Officer may have against the Company or the Company may have against such Officer for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Save as provided in the Companies Acts or these Bye-Laws, the powers and duties of the Officers of the Company shall be such (if any) as are determined from time to time by the Board.

 

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148.Any appointment of a Director to an executive office shall terminate if he ceases to be a Director but without prejudice to any rights or claims which he may have against the Company by reason of such cesser. A Director appointed to an executive office shall not ipso facto cease to be a Director if his appointment to such executive office terminates.

 

149.The emoluments of any Director holding executive office for his services as such shall be determined by the Board, and may be of any description, and (without limiting the generality of the foregoing) may include admission to or continuance of membership of any scheme (including any share acquisition scheme) or fund instituted or established or financed or contributed to by the Company for the provision of pensions, life assurance or other benefits for employees or their dependants, or the payment of a pension or other benefits to him or his dependants on or after retirement or death, apart from membership or any such scheme or fund.

 

150.Save as otherwise provided, the provisions of these Bye-Laws as to resignation and disqualification of Directors shall mutatis mutandis apply to the resignation and disqualification of Officers.

 

MINUTES

 

151.The Board shall cause minutes to be made and books kept for the purpose of recording:

 

(a)all appointments of Officers made by the Board;

 

(b)the names of the Directors and other persons (if any) present at each meeting of the Board and of any committee; and

 

(c)all proceedings at meetings of the Company, of the holders of any class of shares in the Company, of the Board and of committees appointed by the Board or the Shareholders.

 

152.Shareholders shall only be entitled to see the register of Directors and Officers, the Register, the financial information provided for in Bye-Law 173 and the minutes of meetings of the Shareholders of the Company.

 

SECRETARY AND RESIDENT REPRESENTATIVE

 

153.The Secretary (including one or more deputy or assistant secretaries) and, if required, the Resident Representative, shall be appointed by the Board at such remuneration (if any) and upon such terms as it may think fit and any Secretary and Resident Representative so appointed may be removed by the Board. The duties of the Secretary and the duties of the Resident Representative shall be those prescribed by the Companies Acts together with such other duties as shall from time to time be prescribed by the Board.

 

154.A provision of the Companies Acts or these Bye-Laws requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary.

 

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THE SEAL

 

155.The Board may authorise the production of a common seal of the Company and one or more duplicate common seals of the Company, which shall consist of a circular device with the name of the Company around the outer margin thereof and the country and year of registration in Bermuda across the centre thereof.

 

156.Any document required to be under seal or executed as a deed on behalf of the Company may be

 

(a)executed under the Seal in accordance with these Bye-Laws; or

 

(b)signed or executed by any person authorised by the Board for that purpose, without the use of the Seal.

 

157.The Board shall provide for the custody of every Seal. A Seal shall only be used by authority of the Board or of a committee constituted by the Board. Subject to these Bye-Laws, any instrument to which a Seal is affixed shall be attested by the signature of:

 

(a)a Director; or

 

(b)the Secretary; or

 

(c)any one person authorised by the Board for that purpose.

 

DIVIDENDS AND OTHER PAYMENTS

 

158.The Board may from time to time declare dividends or distributions out of contributed surplus to be paid to the Shareholders according to their rights and interests, including such interim dividends as appear to the Board to be justified by the position of the Company. The Board, in its discretion, may determine that any dividend shall be paid in cash or shall be satisfied, subject to Bye-Laws 166 and 167, in paying up in full shares in the Company to be issued to the Shareholders credited as fully paid or partly paid or partly in one way and partly the other. The Board may also pay any fixed cash dividend which is payable on any shares of the Company half yearly or on such other dates, whenever the position of the Company, in the opinion of the Board, justifies such payment.

 

159.Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide:

 

(a)all dividends or distributions out of contributed surplus may be declared and paid according to the amounts paid up on the shares in respect of which the dividend or distribution is paid, and an amount paid up on a share in advance of calls may be treated for the purpose of this Bye-Law as paid-up on the share;

 

(b)dividends or distributions out of contributed surplus may be apportioned and paid pro rata according to the amounts paid-up on the shares during any portion or portions of the period in respect of which the dividend or distribution is paid.

 

160.The Board may deduct from any dividend, distribution or other monies payable to a Shareholder by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in respect of shares of the Company.

 

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161.No dividend, distribution or other monies payable by the Company on or in respect of any share shall bear interest against the Company.

 

162.Any dividend, distribution or interest, or part thereof payable in cash, or any other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post or by courier addressed to the holder at his address in the Register or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the shares at his registered address as appearing in the Register or addressed to such person at such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first in the Register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two (2) or more joint holders may give effectual receipts for any dividends, distributions or other monies payable or property distributable in respect of the shares held by such joint holders.

 

163.Any dividend or distribution out of contributed surplus unclaimed for a period of six (6) years from the date of declaration of such dividend or distribution shall be forfeited and shall revert to the Company and the payment by the Board of any unclaimed dividend, distribution, interest or other sum payable on or in respect of the share into a separate account shall not constitute the Company a trustee in respect thereof.

 

164.The Board may also, in addition to its other powers, direct payment or satisfaction of any dividend or distribution out of contributed surplus wholly or in part by the distribution of specific assets, and in particular of paid-up shares or debentures of any other company, and where any difficulty arises in regard to such distribution or dividend, the Board may settle it as it thinks expedient, and in particular, may authorise any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution or dividend purposes of any such specific assets and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order to secure equality of distribution and may vest any such specific assets in trustees as may seem expedient to the Board, provided that such dividend or distribution may not be satisfied by the distribution of any partly paid shares or debentures of any company without the sanction of a Resolution.

 

RESERVES

 

165.The Board may, before declaring any dividend or distribution out of contributed surplus, set aside such sums as it thinks proper as reserves which shall, at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit. The Board may also without placing the same to reserve carry forward any sums which it may think it prudent not to distribute.

 

CAPITALISATION OF PROFITS

 

166.The Board may from time to time resolve to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund which is available for distribution or to the credit of any share premium account and accordingly that such amount be set free for distribution amongst the Shareholders or any class of Shareholders who would be entitled thereto if distributed by way of dividend and in the same proportions, on the footing that the same be not paid in cash but be applied either in or towards paying up amounts for the time being unpaid on any shares in the Company held by such Shareholders respectively or in payment up in full of unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid amongst such Shareholders, or partly in one way and partly in the other, provided that for the purpose of this Bye-Law, a share premium account may be applied only in paying up of unissued shares to be issued to such Shareholders credited as fully paid.

 

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167.Where any difficulty arises in regard to any distribution under this Bye-Law, the Board may settle the same as it thinks expedient and, in particular, may authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments should be made to any Shareholders in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Shareholders.

 

RECORD DATES

 

168.Notwithstanding any other provisions of these Bye-Laws, the Company may fix by Resolution, or the Board may fix, any date as the record date for any dividend, distribution, allotment or issue and for the purpose of identifying the persons entitled to receive notices of any general meeting.

 

169.In relation to any general meeting of the Company or of any class of Shareholder or to any adjourned meeting or any poll taken at a meeting or adjourned meeting of which notice is given, the Board may specify in the notice of meeting or adjourned meeting or in any document sent to Shareholders by or on behalf of the Board in relation to the meeting, a time and date (record date) which is not more than sixty (60) days before the date fixed for the meeting (meeting date) and, notwithstanding any provision in these Bye-Laws to the contrary, in such case:

 

(a)each person entered in the Register at the record date as a Shareholder, or a Shareholder of the relevant class, (record date holder) shall be entitled to attend and to vote at the relevant meeting and to exercise all of the rights or privileges of a Shareholder, or a Shareholder of the relevant class, in relation to that meeting in respect of the shares, or the shares of the relevant class, registered in his name at the record date;

 

(b)as regards any shares, or shares of the relevant class, which are registered in the name of a record date holder at the record date but are not so registered at the meeting date (relevant shares), each holder of any relevant shares at the meeting date shall be deemed to have irrevocably appointed that record date holder as his proxy for the purpose of attending and voting in respect of those relevant shares at the relevant meeting (with power to appoint, or to authorise the appointment of, some other person as proxy), in such manner as the record date holder in his absolute discretion may determine; and

 

(c)accordingly, except through his proxy pursuant to Bye-Law 169(b) above, a holder of relevant shares at the meeting date shall not be entitled to attend or to vote at the relevant meeting, or to exercise any of the rights or privileges of a Shareholder, or a Shareholder of the relevant class, in respect of the relevant shares at that meeting.

 

170.The entry of the name of a person in the Register as a record date holder shall be sufficient evidence of his appointment as proxy in respect of any relevant shares for the purposes of this paragraph, but all the provisions of these Bye-Laws relating to the execution and deposit of an instrument appointing a proxy or any ancillary matter (including the Board’s powers and discretions relevant to such matter) shall apply to any instrument appointing any person other than the record date holder as proxy in respect of any relevant shares.

 

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ACCOUNTING RECORDS

 

171.The Board shall cause to be kept accounting records sufficient to give a true and fair view of the state of the Company’s affairs and to show and explain its transactions, in accordance with the Companies Acts.

 

172.The records of account shall be kept at the Registered Office or at such other place or places as the Board thinks fit, and shall at all times be open to inspection by the Directors, PROVIDED that if the records of account are kept at some place outside Bermuda, there shall be kept at an office of the Company in Bermuda such records as will enable the Directors to ascertain with reasonable accuracy the financial position of the Company at the end of each three (3) month period. No Shareholder (other than an Officer of the Company) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the Board or by Resolution.

 

173.A copy of every balance sheet and statement of income and expenditure, including every document required by law to be annexed thereto, which is to be laid before the Company in general meeting, together with a copy of the Auditors’ report, shall be sent to each person entitled thereto in accordance with the requirements of the Companies Acts.

 

AUDIT

 

174.Save and to the extent that an audit is waived in the manner permitted by the Companies Acts, Auditors shall be appointed and their duties regulated in accordance with the Companies Acts, any other applicable law and such requirements not inconsistent with the Companies Acts as the Board may from time to time determine.

 

SERVICE OF NOTICES AND OTHER DOCUMENTS

 

175.Any notice or other document (including but not limited to a share certificate, any notice of a general meeting of the Company, any instrument of proxy and any document to be sent in accordance with Bye-Law 173) may be sent to, served on or delivered to any Shareholder by the Company

 

(a)personally;

 

(b)sending it through the post (by airmail where applicable) in a pre-paid letter addressed to such Shareholder at his address as appearing in the Register;

 

(c)by sending it by courier to or leaving it at the Shareholder’s address appearing in the Register;

 

(d)where applicable, by sending it by email or facsimile or other mode of representing or reproducing words in a legible and non-transitory form or by sending an Electronic Record of it by electronic means, in each case to an address or number supplied by such Shareholder for the purposes of communication in such manner; or

 

(e)by publication of an Electronic Record of it on a website and notification of such publication (which shall include the address of the website, the place on the website where the document may be found, and how the document may be accessed on the website) by any of the methods set out in paragraphs 175(a), 175(b), 175(c) or 175(d) of this Bye-Law, in accordance with the Companies Acts.

 

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In the case of joint holders of a share, service or delivery of any notice or other document on or to one of the joint holders shall for all purposes be deemed as sufficient service on or delivery to all the joint holders.

 

176.Any notice or other document shall be deemed to have been served on or delivered to any Shareholder by the Company

 

(a)if sent by personal delivery, at the time of delivery;

 

(b)if sent by post, forty-eight (48) hours after it was put in the post;

 

(c)if sent by courier or facsimile, twenty-four (24) hours after sending;

 

(d)if sent by email or other mode of representing or reproducing words in a legible and non-transitory form or as an Electronic Record by electronic means, twelve (12) hours after sending; or

 

(e)if published as an Electronic Record on a website, at the time that the notification of such publication shall be deemed to have been delivered to such Shareholder,

 

and in proving such service or delivery, it shall be sufficient to prove that the notice or document was properly addressed and stamped and put in the post, published on a website in accordance with the Companies Acts and the provisions of these Bye-Laws, or sent by courier, facsimile, email or as an Electronic Record by electronic means, as the case may be, in accordance with these Bye-Laws.

 

177.Each Shareholder and each person becoming a Shareholder subsequent to the adoption of these Bye-Laws, by virtue of its holding or its acquisition and continued holding of a share, as applicable, shall be deemed to have acknowledged and agreed that any notice or other document (excluding a share certificate) may be provided by the Company by way of accessing them on a website instead of being provided by other means.

 

178.If any time, by reason of the suspension or curtailment of postal services within Bermuda or any other territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a notice advertised in at least one national newspaper published in the territory concerned and such notice shall be deemed to have been duly served on each person entitled to receive it in that territory on the day, or on the first day, on which the advertisement appears. In any such case the Company shall send confirmatory copies of the notice by post if at least five (5) clear days before the meeting the posting of notices to addresses throughout that territory again becomes practicable.

 

179.Save as otherwise provided, the provisions of these Bye-Laws as to service of notices and other documents on Shareholders shall mutatis mutandis apply to service or delivery of notices and other documents to the Company or any Director, or Resident Representative pursuant to these Bye-Laws.

 

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DESTRUCTION OF DOCUMENTS

 

180.The Company shall be entitled to destroy all instruments of transfer of shares which have been registered and all other documents on the basis of which any entry is made in the register at any time after the expiration of six (6) years from the date of registration thereof and all dividends mandates or variations or cancellations thereof and notifications of change of address at any time after the expiration of two (2) years from the date of recording thereof and all share certificates which have been cancelled at any time after the expiration of one (1) year from the date of cancellation thereof and all paid dividend warrants and cheques at any time after the expiration of one (1) year from the date of actual payment thereof and all instruments of proxy which have been used for the purpose of a poll at any time after the expiration of one (1) year from the date of such use and all instruments of proxy which have not been used for the purpose of a poll at any time after one (1) month from the end of the meeting to which the instrument of proxy relates and at which no poll was demanded. It shall conclusively be presumed in favour of the Company that every entry in the register purporting to have been made on the basis of an instrument of transfer or other document so destroyed was duly and properly made, that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered, that every share certificate so destroyed was a valid and effective certificate duly and properly cancelled and that every other document hereinbefore mentioned so destroyed was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company, provided always that:

 

(a)the provisions aforesaid shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties thereto) to which the document might be relevant;

 

(b)nothing herein contained shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any other circumstances which would not attach to the Company in the absence of this Bye-Law; and

 

(c)references herein to the destruction of any document include references to the disposal thereof in any manner.

 

UNTRACED SHAREHOLDERS

 

181.The Company shall be entitled to sell, at the best price reasonably obtainable, the shares of a Shareholder or the shares to which a person is entitled by virtue of transmission on death, bankruptcy, or otherwise by operation of law if and provided that:

 

(a)during a period of six (6) years, no dividend in respect of those shares has been claimed and at least three (3) cash dividends have become payable on the share in question;

 

(b)on or after expiry of that period of six (6) years, the Company has inserted an advertisement in a newspaper circulating in the area of the last registered address at which service of notices upon the Shareholder or person entitled by transmission may be effected in accordance with these Bye-Laws and in a national newspaper published in the relevant country, giving notice of its intention to sell such shares:

 

(c)during that period of six (6) years and the period of three (3) months following the publication of such advertisement, the Company has not received any communication from such Shareholder or person entitled by transmission; and

 

(d)if so required by the rules of any securities exchange upon which the shares in question are listed for the time being, notice has been given to that exchange of the Company’s intention to make such sale.

 

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182.If during any six (6) year period referred to in Bye-Law 181 above, further shares have been issued in right of those held at the beginning of such period or of any previously issued during such period and all the other requirements of this Bye-Law (other than the requirement that they be in issue for six (6) years) have been satisfied in regard to the further shares, the Company may also sell the further shares.

 

183.To give effect to any such sale, the Board may authorise some person to execute an instrument of transfer of the shares sold to, or in accordance with the directions of, the purchaser and an instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of, or person entitled by transmission to, the shares. The transferee shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity in, or invalidity of, the proceedings in reference to the sale.

 

184.The net proceeds of sale shall belong to the Company which shall be obliged to account to the former Shareholder or other person previously entitled as aforesaid for an amount equal to such proceeds and shall enter the name of such former Shareholder or other person in the books of the Company as a creditor for such amount. No trust shall be created in respect of the debt, no interest shall be payable in respect of the same and the Company shall not be required to account for any money earned on the net proceeds, which may be employed in the business of the Company or invested in such investments as the Board from time to time thinks fit.

 

WINDING UP

 

185.If the Company shall be wound up, the liquidator may, with the sanction of a Resolution of the Company and any other sanction required by the Companies Acts, divide amongst the Shareholders in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purposes set such values as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trust for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no Shareholder shall be compelled to accept any shares or other assets upon which there is any liability.

 

INDEMNITY AND INSURANCE

 

186.Subject to the proviso below, every Indemnified Person shall be indemnified and held harmless out of the assets of the Company against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs including defence costs incurred in defending any legal proceedings whether civil or criminal and expenses properly payable) incurred or suffered by him by or by reason of any act done, conceived in or omitted in the conduct of the Company’s business or in the discharge of his duties and the indemnity contained in this Bye-Law shall extend to any Indemnified Person acting in any office or trust in the reasonable belief that he has been appointed or elected to such office or trust notwithstanding any defect in such appointment or election PROVIDED ALWAYS that the indemnity contained in this Bye-Law shall not extend to any matter which would render it void pursuant to the Companies Acts.

 

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187.No Indemnified Person shall be liable to the Company for the acts, defaults or omissions of any other Indemnified Person.

 

188.To the extent that any Indemnified Person is entitled to claim an indemnity pursuant to these Bye-Laws in respect of amounts paid or discharged by him, the relevant indemnity shall take effect as an obligation of the Company to reimburse the person making such payment or effecting such discharge.

 

189.Each Shareholder and the Company agree to waive any claim or right of action he or it may at any time have, whether individually or by or in the right of the Company, against any Indemnified Person on account of any action taken by such Indemnified Person or the failure of such Indemnified Person to take any action in the performance of his duties with or for the Company PROVIDED HOWEVER that such waiver shall not apply to any claims or rights of action arising out of the fraud of such Indemnified Person or to recover any gain, personal profit or advantage to which such Indemnified Person is not legally entitled.

 

190.The Company shall advance moneys to any Indemnified Person for the costs, charges, and expenses incurred by the Indemnified Person in defending any civil or criminal proceedings against them, on condition and receipt of an undertaking in a form satisfactory to the Company that of the Indemnified Person shall repay such portion of the advance attributable to any claim of fraud or dishonesty if such a claim is proved against the Indemnified Person PROVIDED THAT no monies shall be paid hereunder unless payment of the same shall be authorised in the specific case upon a determination that indemnification of the Director or Officer would be proper in the circumstances because he has met the standard of conduct which would entitle him to the indemnification thereby provided and such determination shall be made:

 

(a)by the Board, by a majority vote at a meeting duly constituted by a quorum of Directors not party to the proceedings or matter with regard to which the indemnification is, or would be, claimed; or

 

(b)in the case such a meeting cannot be constituted by lack of a disinterested quorum, by independent legal counsel in a written opinion; or

 

(c)by a majority vote of the Shareholders.

 

191.Without prejudice to the provisions of this Bye-Law, the Board shall have the power to purchase and maintain insurance for or for the benefit of any Indemnified Person or any persons who are or were at any time Directors, Officers, employees of the Company, or of any other company which is its holding company or in which the Company or such holding company has any interest whether direct or indirect or which is in any way allied to or associated with the Company, or of any subsidiary undertaking of the Company or any such other company, or who are or were at any time trustees of any pension fund in which employees of the Company or any such other company or subsidiary undertaking are interested, including (without prejudice to the generality of the foregoing) insurance against any liability incurred by such persons in respect of any act or omission in the actual or purported execution or discharge of their duties or in the exercise or purported exercise of their powers or otherwise in relation to their duties, powers or offices in relation to the Company or any such other company, subsidiary undertaking or pension fund.

 

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AMALGAMATION AND MERGER

 

192.Any resolution proposed for consideration at any general meeting to approve the amalgamation or merger of the Company with any other company, wherever incorporated, shall require the approval of:

 

(a)the Board, by resolution adopted by a majority of Directors then in office, and

 

(b)the Shareholders, by resolution passed by a majority of votes cast at such meeting and the quorum for such meeting shall be that required in Bye-Law 74.

 

CONTINUATION

 

193.Subject to the Companies Acts, the Company may with the approval of:

 

(a)the Board, by resolution adopted by a majority of Directors then in office, and

 

(b)the Shareholders by resolution passed by a majority of votes cast at the general meeting, approve the discontinuation of the Company in Bermuda and the continuation of the Company in a jurisdiction outside Bermuda.

 

BUSINESS COMBINATIONS

 

194.The following definitions shall apply with respect to the provisions of this Bye-Law 194:

 

194.1the Act means the Securities Exchange Act of 1934 of the United States of America, as amended, and the rules and regulations thereunder (or any subsequent provisions replacing the Act, rules or regulations).

 

194.2Associate used to indicate a relationship with any person, means (i) any corporation or organization (other than the Company or a majority owned subsidiary of the Company) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities, (ii) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves a trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the Company or any of its parents or subsidiaries.

 

194.3A person shall be a beneficial owner of any shares: (i) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; (ii) which such person or any of its Affiliates or Associates has, directly or indirectly, (A) the right to acquire (whether such rights is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant of any agreement, arrangement or understanding; or (C) beneficially owned, directly or indirectly, by any other person with which such person or any of its affiliates or associates has any agreement, arrangement or understanding of the purpose of acquiring, holding, voting or disposing of any shares of capital stock.

 

For the purposes of determining whether a person is an Interested Shareholder pursuant to this Bye-Law 135, the number of Capital Shares deemed to be outstanding shall include shares deemed beneficially owned by such person through application of this paragraph, but shall not include any other Capital Shares that may be issuable pursuant to an agreement arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 

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194.4Business Combination means: any merger, consolidation or amalgamation of the Company or any Subsidiary (as hereinafter defined) with (i) any Interested Shareholder; (ii) any other company (whether or not itself an Interested Shareholder) which is or after such merger, consolidation or amalgamation would be an affiliate or Associates of an Interested Shareholder; (iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition or security arrangement, investment, loan, advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other arrangement (in one transaction or a series of transactions) with or for the benefit of any Interested Shareholder or any affiliate or associate of any Interested Shareholder of assets of the Company, or of any Subsidiary, which assets have an aggregate market value equal to ten per cent. (10%) or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis, or the aggregate market value of all the issued and outstanding shares of the Company; (iv) the adoption of any plan or proposal for the liquidation or dissolution of the Company or for the discontinuation into another jurisdiction or for any amendment to these Bye-Laws; (v) any reclassification of shares or other securities (including any reverse stock split), or recapitalization of the Company, or any merger, consolidation or amalgamation of the Company with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Shareholder) that has the effect, directly or indirectly, of increasing the proportionate share of any class or series of shares, or any securities convertible into Capital Shares or into equity securities of any Subsidiary, that is beneficially owned by an Interested Shareholder or any Affiliate or Associate of any Interested Shareholder; or (vi) any agreement, contract or other arrangement providing for any one or more of the actions specified in the foregoing paragraphs of this Bye-law 134, inclusive.

 

194.5Capital Shares means all the authorised shares in the capital of the Company.

 

194.6Common Shares means all the authorised common shares in the capital of the Company.

 

194.7Control (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

 

194.8Interested Shareholder means any person (other than the Company or any Subsidiary and other than any profit sharing, employee share ownership or other employee benefit plan of the Company or any Subsidiary or any trustee of a fiduciary with respect to any such plan when acting in such capacity) who (i) is or has announced or publicly disclosed a plan or intention to become the beneficial owner of Voting Shares representing ten per cent. (10%) or more of the vote entitled to be case by the holders of all then outstanding shares of Voting Shares, or (ii) is an Affiliate or Associate of the Company and at any time within the three (3) year period immediately prior to the date in question was the beneficial owner of Voting Shares representing ten per cent. (10%) or more of the votes entitled to be case by the holders of all then outstanding shares of Voting Shares.

 

194.9person means any individual, firm, company or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Capital Shares.

 

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194.10Subsidiary means any company, wherever organised, of which a majority of any class of equity security is beneficially owned by the Company; provided, however, that for the purposes of the definition of Interested Shareholder set forth in this Bye-Law, the term “Subsidiary” shall mean only a company of which a majority of each class of equity security is beneficially owned by the Company.

 

194.11Voting Shares shall mean all Capital Shares which by their terms may be voted on all matters submitted to Shareholders of the Company generally.

 

194.12In addition to any affirmative vote required by law or these Bye-Laws, and except as otherwise expressly provided in this Bye-Law 198, the Company may not enter into a Business Combination with, or proposed by or on behalf of, any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder or any person who thereafter would be an Affiliate or Associate of such Interested Shareholder during the three year period following the point at which such Shareholder became an Interested Shareholder, unless:

 

(a)prior to such time, the Board approved either the business combination or the transaction that resulted in the Shareholder becoming an Interested Shareholder; and

 

(b)on consummation or the transaction that resulted in the Shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least eighty five per cent. (85%) of the issued and outstanding shares eligible to vote at a general meeting at the time the transaction commenced (excluding certain shares); or

 

(c)the business combination has been approved by the Board and by the affirmative vote of not less than sixty-six and two-thirds per cent. (66 2/3%) of the votes entitled to be cast by the holders of all the then outstanding shares eligible to vote at a general meeting, voting together as a single class, excluding shares beneficially owned by any Interested Shareholder or any Affiliate or Associate of such Interested Shareholders. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage or separate class vote may be specified, by law or in any agreement with any national securities exchange or otherwise.

 

(d)Notwithstanding any other provisions of these Bye-Laws (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law or these Bye-Laws), any proposal to amend, repeal or adopt any provision of these Bye-Laws inconsistent with this Bye-Law 198 which is proposed by or on behalf of an Interested Shareholder or an Affiliate or Associate of an Interested Shareholder shall require the affirmative vote of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) of the votes entitled to be cast by the holders of all the then outstanding Voting Shares, voting together as a single class, excluding Voting Shares beneficially owned by such Interested Shareholder.

 

ALTERATION OF BYE-LAWS

 

195.Subject to Bye-Law 196, these Bye-Laws may be revoked or amended only by the Board, which may from time to time revoke or amend them in any way by a resolution of the Board passed by a majority of the Directors then in office and eligible to vote on that resolution, but no such revocation or amendment shall be operative unless and until it is approved at a subsequent general meeting of the Company by the Shareholders by Resolution passed by a majority of votes cast.

 

196.Where the Board has, by a resolution passed by a majority of the Directors then in office and eligible to vote on that resolution, approved a revocation or amendment of Bye-Laws 106 to 117, 121, 192, 193, 194, 195 and 196 inclusive, the revocation or amendment will not be effective unless approved by a Resolution of Shareholders holding not less than sixty six and two thirds (66 2/3) per cent of the issued shares of the Company carrying the right to vote at general meetings at the relevant time.

 

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Exhibit 10.1

 

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of November 18, 2021 among Wejo Group Limited, an exempted company limited by shares incorporated under the laws of Bermuda (the “Company”), Wejo Limited, a private limited company incorporated under the laws of England and Wales with company number 08813730 (“Wejo”), Virtuoso Sponsor LLC (“Sponsor”), the undersigned parties listed under Existing Holders on the signature page hereto (each such party, together with the Sponsor and any person or entity deemed an “Existing Holder”, and collectively the “Existing Holders”), the undersigned parties listed as Majority Sellers on the signature pages hereto (collectively, the “Majority Sellers”) and the undersigned parties listed as Wejo Affiliate Holders on the signature pages hereto (collectively the “Wejo Affiliate Holders”). The Majority Sellers and the Wejo Affiliate Holders are collectively referred to as the “New Holders”, and the New Holders and the Existing Holders are collectively referred to as the “Holders”.

 

WHEREAS, the Company has entered into that certain Agreement and Plan of Merger (the “Business Combination Agreement”), dated as of May 28, 2021, by and among the Company, Yellowstone Merger Sub, Inc., Wejo Bermuda Limited, Wejo and Virtuoso Acquisition Corp. (“Virtuoso”);

 

WHEREAS, in connection with the closing of the transactions contemplated by the Business Combination Agreement and subject to the terms and conditions set forth therein, the Existing Holders and New Holders were issued common shares, par value $0.001, of the Company (“Company Common Shares”; for the avoidance of doubt, such term excludes any shares of common stock of the Company issued pursuant to any Subscription Agreement, dated as of May 28, 2021, by and among the Company, Virtuoso and General Motors), in each case, subject to such terms and conditions as set forth in the Business Combination Agreement; and

 

WHEREAS, the Company, Sponsor and the other parties hereto desire to provide the Existing Holders and the New Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties hereto agree as follows:

 

1.              Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

   

Agreement” has the meaning set forth in the preamble.

 

Board” means the board of directors (or any successor governing body) of the Company.

 

Closing Date” means the date of this Agreement.

 

Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time.

 

 

 

 

Company” has the meaning set forth in the preamble and includes the Company’s successors by merger, amalgamation, acquisition, reorganization or otherwise.

 

Company Common Shares” has the meaning set forth in the preamble.

 

Controlling Person” has the meaning set forth in Section 5(g).

 

Demand Registration” has the meaning set forth in Section 2(c).

 

DTCDRS” has the meaning set forth in Section 5(r).

 

Effectiveness Deadline” has the meaning set forth in Section 2(b).

 

Equity Securities” means all of the issued equity securities of the Company from time to time (including any warrants or any shares issuable upon exercise of such warrants and any other shares issued or issuable with respect thereto (whether by way of a share dividend or share split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other corporate reorganization or other similar event with respect to the Equity Securities)).

 

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

 

Existing Holder” has the meaning set forth in the preamble, and refers to the Holders of equity securities of Virtuoso, party to that certain Registration Rights Agreement with Virtuoso dated as of January 21, 2021.

 

Existing Holder Lock-up Period” means, with respect to the Founder Shares, the period ending on the earlier of (A) one year after the date hereof, (B) the first date the closing price of the Company Common Shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the date hereof or (C) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Company Common Shares for cash, securities or other property.

 

Founder Shares” means, as of the date hereof, the 5,750,000 shares of Virtuoso’s common stock that were purchased in a private placement prior to Virtuoso’s initial public offering.

 

General Motors” means General Motors Holdings LLC, a Delaware limited liability company.

 

Holders” has the meaning set forth in the preamble.

 

Initial Registrable Securities” has the meaning set forth in Section 5(a)(ii).

 

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Initial Registration Statement” has the meaning set forth in Section 5(a)(ii).

 

Inspectors” has the meaning set forth in Section 5(h).

 

Lock-Up Period” means the Existing Holder Lock-up Period and the New Holder Lock-up Period, as applicable.

 

Long-Form Registration” has the meaning set forth in Section 2(a).

 

Majority Sellers” has the meaning set forth in the preamble, and includes General Motors, Richard Barlow, Diarmid Ogilvy and Timothy Lee.

 

New Holders” has the meaning set forth in the preamble.

 

New Holder Lock-up Period” means, with respect to the Company Common Shares issued to the New Holders in connection with the transactions contemplated by the Business Combination Agreement, and held by the New Holders or their Permitted Transferees, the period ending on the earlier of (A) six months after the date hereof, (B) the first date the closing price of the Company Common Shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the date hereof, or (C) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Company Common Shares for cash, securities or other property.

 

New Registration Statement” has the meaning set forth in Section 5(a)(ii).

 

Permitted Transferee” means any Person to whom a Holder is permitted to transfer such Registrable Securities prior to the expiration of any Lock-Up Period hereunder and any other applicable agreement between such Holder and the Company, and to any transferee thereafter, which for the avoidance of doubt includes affiliates.

 

Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.

 

Piggyback Registration” has the meaning set forth in Section 3(a).

 

Piggyback Registration Statement” has the meaning set forth in Section 3(a).

 

Piggyback Shelf Registration Statement” has the meaning set forth in Section 3(a).

 

Piggyback Shelf Takedown” has the meaning set forth in Section 3(a).

 

Prospectus” means the prospectus or prospectuses included in any Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 430A under the Securities Act or any successor rule thereto), as amended or supplemented by any prospectus supplement, including any Shelf Supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

 

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Records” has the meaning set forth in Section 5(h).

 

Registrable Securities” mean (a) the Founder Shares, (b) any issued and outstanding Company Common Shares or any other equity security (including the Company Common Shares issued or issuable upon the exercise of any other equity security) of the Company held by a Holder (x) as of the date of this Agreement (including the Company Common Shares issued or issuable upon the exercise of any such other equity security) or (y) that are otherwise issued in connection with the transactions contemplated by the Business Combination Agreement, and (c) any Equity Securities issued or issuable with respect to any shares described in subsections (a) and (b) above by way of a share dividend or share split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other reorganization or other similar event with respect to the Equity Securities (it being understood that, for purposes of this Agreement, a Person shall be deemed to be a holder of Registrable Securities whenever such Person has the right to then acquire or obtain from the Company any Registrable Securities, whether or not such acquisition has actually been effected). As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) the Commission has declared a Registration Statement covering such securities effective and such securities have been disposed of pursuant to such effective Registration Statement, or (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met.

 

Registration” shall mean a registration effected by preparing and filing a Registration Statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such Registration Statement becoming effective.

 

Registration Date” means the date on which the Company becomes subject to Section 13(a) or Section 15(d) of the Exchange Act.

 

Registration Statement” means any registration statement of the Company, including the Prospectus, amendments and supplements (including Shelf Supplements) to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in such registration statement.

 

Restricted Securities” has the meaning set forth in Section 4(a).

 

Rule 144” means Rule 144 under the Securities Act or any successor rule thereto.

 

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

 

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Selling Expenses” means all underwriting discounts, selling commissions and share transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any holder of Registrable Securities, except for the fees and disbursements of counsel for the holders of Registrable Securities required to be paid by the Company pursuant to Section 6.

 

Shelf Registration” has the meaning set forth in Section 2(c).

 

Shelf Registration Statement” has the meaning set forth in Section 2(c).

 

Shelf Supplement” has the meaning set forth in Section 2(d).

 

Shelf Takedown” has the meaning set forth in Section 2(d).

 

Shelf Takedown Notice” has the meaning set forth in Section 2(d).

 

Short-Form Registration” has the meaning set forth in Section 2(c).

 

Target Filing Date” has the meaning set forth in Section 2(c).

 

Wejo” has the meaning set forth in the preamble and includes Yellowstone’s successors by merger, amalgamation, acquisition, reorganization or otherwise.

 

Wejo Affiliate Holders” has the meaning set forth in the preamble, and includes General Motors, Richard Barlow, Diarmid Ogilvy and Timothy Lee.

 

2.Demand Registration.

 

(a)            To the extent that a Registration Statement filed pursuant to Section 2(b) or a Shelf Registration Statement is not available to effect the proposed transaction, following the applicable Lock-up Period, either (a) General Motors, (b) the Majority Sellers (other than General Motors) of at least a majority in interest of the then issued and outstanding number of Registrable Securities held by such Majority Sellers (other than General Motors) or (c) the Existing Holders of at least a majority in interest of the then issued and outstanding number of Registrable Securities held by the Existing Holders (the “Demanding Holders”), in each case, may request that the Company register under the Securities Act all or any portion of its Registrable Securities pursuant to a Registration Statement on Form S-1 or any successor form thereto with respect to a underwritten public offering of Registrable Securities (each, a “Long-Form Registration”). Each request for a Long-Form Registration shall specify the number of Registrable Securities requested to be included in the Long-Form Registration. Upon receipt of any such request, the Company shall promptly (but in no event later than 10 days following receipt thereof) deliver notice of such request to all other holders of Registrable Securities who shall then have 10 days from the date such notice is given to notify the Company in writing of their desire to be included in such registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”). The Company shall prepare and file with the Commission a Registration Statement on Form S-1 or any successor form thereto covering all of the Registrable Securities that the holders thereof have requested to be included in such Long-Form Registration within 60 days after the date on which the initial request is given and shall use its best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter. Under no circumstances shall the Company be obligated to effect (x) more than an aggregate of three (3) Registrations pursuant to a Demand Registration by the Majority Sellers under this subsection 2(a) with respect to any or all Registrable Securities held by such Majority Sellers and (y) more than three (3) Registration pursuant to a Demand Registration by the Existing Holders under this subsection 2(a) with respect to any or all Registrable Securities held by such Existing Holders; provided, however, that a Registration pursuant to a Demand Registration shall not be counted for such purposes unless a Registration Statement that may be available at such time has become effective and all of the Registrable Securities requested by the Requesting Holders and the Demanding Holders to be registered on behalf of the Requesting Holders and the Demanding Holders in such Registration Statement have been sold, in accordance with Section 5 of this Agreement.

 

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(b)            The Company shall, as soon as practicable, but in any event within fifteen (15) business days after the Closing Date, file a Registration Statement to permit the public resale of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this Section 2(b) and shall use its reasonable best efforts to cause the Registration Statement to be declared effective as soon as practicable after the filing thereof, but in no event later than the earlier of (i) the 60th day following the Closing Date and (ii) the 10th business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Registration Statement filed with the Commission pursuant to this Section 2(b) shall be on Form S-1 or such other form of registration statement as is then available to effect a registration for the sale or resale of such Registrable Securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule or provision similar thereto adopted by the Commission, covering such Registrable Securities, and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor rule or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. A Registration Statement filed pursuant to this Section 2(b) shall provide for the sale or resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to Section 2(b) to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another Registration Statement or Shelf Registration Statement is continuously available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. As soon as practicable following the effective date of a Registration Statement filed pursuant to this Section 2(b), but in any event within one (1) business day of such date, the Company shall notify the Holders of the effectiveness of such Registration Statement. If, after the filing such Registration Statement, a holder of Registrable Securities requests registration under the Securities Act of additional Registrable Securities pursuant to such Registration Statement, the Company shall amend such Registration Statement to cover such additional Registrable Securities.

 

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(c)            The Company shall use its reasonable best efforts to qualify and remain qualified to register the offer and sale of securities under the Securities Act pursuant to a Registration Statement on Form S-3 or any successor form thereto. As soon as practicable after the date hereof, but not later than the Target Filing Date, the Company shall (i) prepare and file with (or confidentially submit to) the Commission a Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Shelf Registration Statement”) that covers all Registrable Securities then outstanding for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Shelf Registration”) and (ii) use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission as soon as practicable thereafter. In addition, the Company shall use its reasonable best efforts to cause a Shelf Registration Statement filed pursuant to Section 2(c) to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Shelf Registration Statement is available or, if not available, that another Shelf Registration Statement (if the Company is eligible to file a Shelf Registration Statement) or other Registration Statement (if the Company is not so eligible) is continuously available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. For purposes hereof, “Target Filing Date” shall mean the date which is 30 days after the Company becomes qualified to register the offer and sale of securities under the Securities Act pursuant to a Shelf Registration Statement. If, after the filing of a Shelf Registration Statement, a holder of Registrable Securities requests registration under the Securities Act of additional Registrable Securities pursuant to such Shelf Registration, the Company shall amend such Shelf Registration Statement to cover such additional Registrable Securities. At such time as the Company shall have qualified for the use of a Registration Statement on Form S-3 or any successor form thereto, the holders of Registrable Securities shall have the right to request an unlimited number of registrations under the Securities Act of all or any portion of their Registrable Securities pursuant to a Registration Statement on Form S-3 or any similar short-form Registration Statement (each, a “Short-Form Registration” and, collectively with each Long-Form Registration and Shelf Registration (as defined below), a “Demand Registration”). Each request for a Short-Form Registration shall specify the number of Registrable Securities requested to be included in the Short-Form Registration. Upon receipt of any such request, the Company shall promptly (but in no event later than 10 days following receipt thereof) deliver notice of such request to all other holders of Registrable Securities who shall then have 10 days from the date such notice is given to notify the Company in writing of their desire to be included in such registration. The Company shall prepare and file with (or confidentially submit to) the Commission a Registration Statement on Form S-3 or any successor form thereto covering all of the Registrable Securities that the holders thereof have requested to be included in such Short-Form Registration within 30 days after the date on which the initial request is given and shall use its best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter.

 

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(d)            At any time that a Shelf Registration Statement is effective, if a holder of Registrable Securities covered by such Shelf Registration Statement delivers a notice to the Company (a “Shelf Takedown Notice”) stating that the holder intends to effect an offering of all or part of its Registrable Securities included in such Shelf Registration Statement (a “Shelf Takedown”) and the Company is eligible to use such Shelf Registration Statement for such Shelf Takedown, then the Company shall take all actions reasonably required, including amending or supplementing (a “Shelf Supplement”) such Shelf Registration Statement, to enable such Registrable Securities to be offered and sold as contemplated by such Shelf Takedown Notice. Each Shelf Takedown Notice shall specify the number of Registrable Securities to be offered and sold under the Shelf Takedown. Upon receipt of a Shelf Takedown Notice, the Company shall promptly (but in no event later than five (5) business days, or, in the case of an underwritten overnight “block trade”, two (2) business days, following receipt thereof) deliver notice of such Shelf Takedown Notice to all other holders of Registrable Securities who shall then have five (5) business days, or, in the case an underwritten overnight “block trade,” one (1) business day, from the date such notice is given to notify the Company in writing of their desire to be included in such Shelf Takedown. The Company shall prepare and file with the Commission a Shelf Supplement as soon as practicable after the date on which it received the Shelf Takedown Notice and, if such Shelf Supplement is an amendment to such Shelf Registration Statement, shall use its best efforts to cause such Shelf Supplement to be declared effective by the Commission as soon as practicable thereafter.

 

(e)            The Company shall not be obligated to effect any Long-Form Registration within 90 days after the effective date of a previous Long-Form Registration or Shelf Takedown or a previous Piggyback Registration in which holders of Registrable Securities were permitted to register the offer and sale under the Securities Act, and actually sold, all of the shares of Registrable Securities requested to be included therein. The Company may postpone for up to 90 days the filing or effectiveness of a Registration Statement for a Demand Registration or the filing of a Shelf Supplement for a Shelf Takedown if the Board determines in its reasonable good faith judgment that such Demand Registration or Shelf Takedown would (i) materially interfere with a significant acquisition, corporate reorganization, financing, securities offering or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act. The Company may delay a Demand Registration or Shelf Takedown pursuant to the immediately preceding sentence only once in any period of 12 consecutive months.

 

(f)            If the holders of the Registrable Securities initially requesting a Demand Registration or Shelf Takedown elect to distribute the Registrable Securities covered by their request in an underwritten offering, they shall so advise the Company as a part of their request made pursuant to Section 2(a), Section 2(b), Section 2(c) or Section 2(d), and the Company shall include such information in its notice to the other holders of Registrable Securities. The holders of the Registrable Securities initially requesting a Demand Registration or Shelf Takedown shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering; provided, that such selection shall be subject to the consent of the Company, which consent shall not be unreasonably withheld.

 

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(g)            The Company shall not include in any Demand Registration or Shelf Takedown any securities which are not Registrable Securities without the prior written consent of the holders of a majority of the Registrable Securities included in such Demand Registration or Shelf Takedown, which consent shall not be unreasonably withheld or delayed. If a Demand Registration or Shelf Takedown involves an underwritten offering and the managing underwriter of the requested Demand Registration or Shelf Takedown advises the Company and the holders of Registrable Securities in writing that in its reasonable and good faith opinion the number of shares of Equity Securities proposed to be included in the Demand Registration or Shelf Takedown, including all Registrable Securities and all other shares of Equity Securities proposed to be included in such underwritten offering, exceeds the number of shares of Equity Securities which can be sold in such underwritten offering and/or the number of shares of Equity Securities proposed to be included in such Demand Registration or Shelf Takedown would adversely affect the price per share of the Equity Securities proposed to be sold in such underwritten offering, the Company shall include in such Demand Registration or Shelf Takedown (i) first, the shares of Equity Securities that the holders of Registrable Securities propose to sell, and (ii) second, the shares of Equity Securities proposed to be included therein by any other Persons (including shares of Equity Securities to be sold for the account of the Company and/or other holders of Equity Securities) allocated among such Persons in such manner as they may agree. If the managing underwriter determines that less than all of the Registrable Securities proposed to be sold can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated pro rata among the respective holders thereof on the basis of the number of Registrable Securities owned by each such holder.

 

3.Piggyback Registration.

 

(a)            Whenever the Company proposes to offer or sell any shares of its Equity Securities pursuant to a registered offering under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee share plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one or more shareholders of the Company and the form of Registration Statement (a “Piggyback Registration Statement”) to be used may be used for any registration of Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than ten (10) business days prior to either the filing of such Registration Statement or, with respect to a Piggyback Shelf Takedown, the filing of a prospectus supplement to the applicable Piggyback Shelf Registration Statement) to the holders of Registrable Securities of its intention to effect such a registration and, subject to Section 3(b) and Section 3(c), shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities within five (5) business days after the Company’s notice has been given to each such holder. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2. If any Piggyback Registration Statement pursuant to which holders of Registrable Securities have registered the offer and sale of Registrable Securities is a Registration Statement on Form S-3 or the then appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “Piggyback Shelf Registration Statement”), such holder(s) shall have the right, but not the obligation, to be notified of and to participate in any offering under such Piggyback Shelf Registration Statement (a “Piggyback Shelf Takedown”).

 

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(b)            If a Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company and the managing underwriter advises the Company and the holders of Registrable Securities (if any holders of Registrable Securities have elected to include Registrable Securities in such Piggyback Registration or Piggyback Shelf Takedown) in writing that in its reasonable and good faith opinion the number of shares of Equity Securities proposed to be included in such registration or takedown, including all Registrable Securities and all other shares of Equity Securities proposed to be included in such underwritten offering, exceeds the number of shares of Equity Securities which can be sold in such offering and/or that the number of shares of Equity Securities proposed to be included in any such registration or takedown would adversely affect the price per share of the Equity Securities to be sold in such offering, the Company shall include in such registration or takedown (i) first, the shares of Equity Securities that the Company proposes to sell; (ii) second, the shares of Equity Securities requested to be included therein by holders of Registrable Securities, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the shares of Equity Securities requested to be included therein by holders of Equity Securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree.

 

(c)            If a Piggyback Registration or Piggyback Shelf Takedown is initiated as an underwritten offering on behalf of a holder of Equity Securities other than Registrable Securities, and the managing underwriter advises the Company in writing that in its reasonable and good faith opinion the number of shares of Equity Securities proposed to be included in such registration or takedown, including all Registrable Securities and all other shares of Equity Securities proposed to be included in such underwritten offering, exceeds the number of shares of Equity Securities which can be sold in such offering and/or that the number of shares of Equity Securities proposed to be included in any such registration or takedown would adversely affect the price per share of the Equity Securities to be sold in such offering, the Company shall include in such registration or takedown (i) first, the shares of Equity Securities requested to be included therein by the holder(s) requesting such registration or takedown and by the holders of Registrable Securities, allocated pro rata among all such holders on the basis of the number of shares of Equity Securities other than the Registrable Securities (on a fully diluted, as converted basis) and the number of Registrable Securities, as applicable, owned by all such holders or in such manner as they may otherwise agree; and (ii) second, the shares of Equity Securities requested to be included therein by other holders of Equity Securities, allocated among such holders in such manner as they may agree.

 

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(d)            If any Piggyback Registration or Piggyback Shelf Takedown is initiated as a primary underwritten offering on behalf of the Company, the Company shall, subject to the prior written consent of the holders of a majority of the Registrable Securities included in such Piggyback Registration or Piggyback Shelf Takedown, which consent shall not be unreasonably withheld or delayed, select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering.

 

4.Transfer Restrictions.

 

(a)            During the applicable Lock-Up Periods, no New Holder or Existing Holder shall offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of or distribute any Company Common Shares that are subject to an applicable Lock-Up Period or any securities convertible into, exercisable for, exchangeable for or that represent the right to receive Company Common Shares that are subject to an applicable Lock-Up Period, whether now owned or hereinafter acquired, that is owned directly by the Existing Holders or the New Holders (including securities held as a custodian) or with respect to which such Existing Holder or New Holder has beneficial ownership within the rules and regulations of the Commission (such securities that are subject to an applicable Lock-Up Period, the “Restricted Securities”), other than any transfer to a Permitted Transferee, as applicable. The foregoing restriction is expressly agreed to preclude each Existing Holder or New Holder, as applicable, from engaging in any hedging or other transaction with respect to Restricted Securities which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Restricted Securities even if such Restricted Securities would be disposed of by someone other than such Existing Holder or New Holder. Such prohibited hedging or other transactions include any short sale or any purchase, sale or grant of any right (including any put or call option) with respect to any of the Restricted Securities of the applicable Existing Holder or New Holder, or with respect to any security that includes, relates to, or derives any significant part of its value from such Restricted Securities.

 

(b)            Each Existing Holder and New Holder hereby represents and warrants that it now has and, except as contemplated by this subsection 4(b) for the duration of the applicable Lock-Up Period, will have good and marketable title to its Restricted Securities, free and clear of all liens, encumbrances, and claims that could impact the ability of such Existing Holder or New Holder to comply with the foregoing restrictions. Each Existing Holder, and New Holder agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of any Restricted Securities during the applicable Lock-Up Period.

 

5.             Registration Procedures. If and whenever the holders of Registrable Securities request that the offer and sale of any Registrable Securities be registered under the Securities Act or any Registrable Securities be distributed in a Shelf Takedown pursuant to the provisions of this Agreement, the Company shall use its best efforts to effect the registration of the offer and sale of such Registrable Securities under the Securities Act in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as soon as practicable and as applicable:

 

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(a)            subject to Section 2(a), Section 2(b), Section 2(c) and Section 2(d), (i) prepare and file with the Commission a Registration Statement covering such Registrable Securities and use its best efforts to cause such Registration Statement to be declared effective; and (ii) if (A) the Company has filed a Registration Statement (the “Initial Registration Statement”) with the Commission that covers Registrable Securities (the “Initial Registrable Securities”), (B) pursuant to Rule 415(a)(5) under the Securities Act or any successor rule thereto, the Initial Registration Statement may no longer be used for offers and sales of any of the Initial Registrable Securities, and (C) any of the Initial Registrable Securities are Registrable Securities at the time that (B) above occurs, the Company shall prepare and file with the Commission within the time limits required by Rule 415 under the Securities Act or any successor rule thereto a new Registration Statement covering any Initial Registrable Securities that have not ceased to be Registrable Securities for an offering to be made on a delayed on continuous basis pursuant to Rule 415 under the Securities Act or any successor rule thereto (a “New Registration Statement”) and shall use its best efforts to cause such New Registration Statement to be declared effective by the Commission as soon as practicable thereafter;

 

(b)            (i) in the case of a Long-Form Registration or a Short-Form Registration, prepare and file with the Commission such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than 180 days, or if earlier, until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such Registration Statement; and (ii) in the case of a Shelf Registration, prepare and file with the Commission such amendments, post-effective amendments and supplements, including Shelf Supplements, to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities subject thereto for a period ending on the earlier of (i) 36 months after the effective date of such Registration Statement and (ii) the date on which all the Registrable Securities subject thereto have been sold pursuant to such Registration Statement;

 

(c)            within a reasonable time before filing such Registration Statement, Prospectus or amendments or supplements thereto with the Commission, furnish to one counsel selected by holders of a majority of such Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the review, comment and approval of such counsel;

 

(d)            notify each selling holder of Registrable Securities, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective or a supplement, including a Shelf Supplement, to any Prospectus forming a part of such Registration Statement has been filed with the Commission;

 

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(e)            furnish to each selling holder of Registrable Securities such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement thereto, including a Shelf Supplement (in each case including all exhibits and documents incorporated by reference therein), and such other documents as such seller may request in order to facilitate the disposition of the Registrable Securities owned by such seller;

 

(f)            use its best efforts to register or qualify such Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as any selling holder requests and do any and all other acts and things which may be necessary or advisable to enable such holders to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holders; provided, that the Company shall not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this Section 5(f);

 

(g)            notify each selling holder of such Registrable Securities, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the Prospectus included in such Registration Statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(h)            make available for inspection by any selling holder of Registrable Securities, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such holder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all information requested by any such Inspector in connection with such Registration Statement;

 

(i)             provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;

 

(j)             use its best efforts to cause such Registrable Securities to be listed on each securities exchange on which the Equity Securities is then listed or, if the Equity Securities is not then listed, on a national securities exchange selected by the holders of a majority of such Registrable Securities;

 

(k)            in connection with an underwritten offering, enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all such other customary actions as the holders of such Registrable Securities or the managing underwriter of such offering request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making appropriate officers of the Company available to participate in “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities));

 

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(l)            otherwise use its best efforts to comply with all applicable rules and regulations of the Commission and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than 30 days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K, as applicable, under the Exchange Act and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and

 

(m)           furnish to each selling holder of Registrable Securities and each underwriter, if any, with (i) a written legal opinion of the Company’s outside counsel, dated the closing date of the offering, in form and substance as is customarily given in opinions of the Company’s counsel to underwriters in underwritten registered offerings; and (ii) on the date of the applicable Prospectus, on the effective date of any post-effective amendment to the applicable Registration Statement and at the closing of the offering, dated the respective dates of delivery thereof, a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as is customarily given in accountants’ letters to underwriters in underwritten registered offerings;

 

(n)            without limiting Section 5(f), use its best efforts to cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;

 

(o)            notify the holders of Registrable Securities promptly of any request by the Commission for the amending or supplementing of such Registration Statement or Prospectus or for additional information;

 

(p)            advise the holders of Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued;

 

(q)            permit any holder of Registrable Securities which holder, in its sole and exclusive judgment, might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company, to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included;

 

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(r)            cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends and representing such number of shares of Equity Securities and registered in such names as the holders of the Registrable Securities may reasonably request a reasonable period of time prior to sales of Registrable Securities pursuant to such Registration Statement or Rule 144; provided, that the Company may satisfy its obligations hereunder without issuing physical share certificates through the use of The Depository Trust Company’s Direct Registration System (the “DTCDRS”);

 

(s)            not later than the effective date of such Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company; provided, that the Company may satisfy its obligations hereunder without issuing physical share certificates through the use of the DTCDRS;

 

(t)            take no direct or indirect action prohibited by Regulation M under the Exchange Act; provided, that, to the extent that any prohibition is applicable to the Company, the Company will take all reasonable action to make any such prohibition inapplicable; and

 

(u)           otherwise use its best efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby.

 

6.            Expenses. All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities shall be paid by the Company, including, without limitation, all (i) registration and filing fees (including, without limitation, any fees relating to filings required to be made with, or the listing of any Registrable Securities on, any securities exchange or over-the-counter trading market on which the Registrable Securities are listed or quoted); (ii) underwriting expenses (other than fees, commissions or discounts); (iii) expenses of any audits incident to or required by any such registration; (iv) fees and expenses of complying with securities and “blue sky” laws (including, without limitation, fees and disbursements of counsel for the Company in connection with “blue sky” qualifications or exemptions of the Registrable Securities); (v) printing expenses; (vi) messenger, telephone and delivery expenses; (vii) fees and expenses of the Company’s counsel and accountants, including with respect to any “comfort letters”; (viii) Financial Industry Regulatory Authority, Inc. filing fees (if any); and (ix) fees and expenses of one counsel for the holders of Registrable Securities participating in such registration as a group (selected by the holders of a majority of the Registrable Securities included in the registration). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties) and the expense of any annual audits. All Selling Expenses relating to the offer and sale of Registrable Securities registered under the Securities Act pursuant to this Agreement shall be borne and paid by the holders of such Registrable Securities, in proportion to the number of Registrable Securities included in such registration for each such holder.

 

15 

 

 

7.Indemnification.

 

(a)            The Company shall indemnify and hold harmless, to the fullest extent permitted by law, each holder of Registrable Securities, such holder’s officers, directors, managers, members, partners, shareholders and affiliates, each underwriter, broker or any other Person acting on behalf of such holder of Registrable Securities and each other Controlling Person, if any, who controls any of the foregoing Persons, against all losses, claims, actions, damages, liabilities and expenses, joint or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading; and shall reimburse such Persons for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder expressly for use therein or by such holder’s failure to deliver a copy of the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished such holder with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Securities. This indemnity shall be in addition to any liability the Company may otherwise have.

 

(b)            In connection with any registration in which a holder of Registrable Securities is participating, each such holder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify and hold harmless, the Company, each director of the Company, each officer of the Company who shall sign such Registration Statement, each underwriter, broker or other Person acting on behalf of the holders of Registrable Securities and each Controlling Person who controls any of the foregoing Persons against any losses, claims, actions, damages, liabilities or expenses resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 under the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing by such holder expressly for inclusion therein; provided, that the obligation to indemnify shall be several, not joint and several, among such holders of Registrable Securities, and the liability of each such holder shall be in proportion to and shall not exceed an amount equal to the net proceeds (after underwriting fees, commissions or accounts) actually received by such holder from the sale of Registrable Securities pursuant to such Registration Statement.

 

16 

 

 

(c)            Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section 7, such indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. The failure of any indemnified party to notify an indemnifying party of any such action shall not (unless such failure shall have a material adverse effect on the indemnifying party) relieve the indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and to assume the defense of the claims in any such action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after written notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, that, if (i) any indemnified party shall have reasonably concluded that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity provided hereunder, or (ii) such action seeks an injunction or equitable relief against any indemnified party or involves actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party without such indemnified party’s prior written consent (but, without such consent, shall have the right to participate therein with counsel of its choice) and such indemnifying party shall reimburse such indemnified party and any Controlling Person of such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicting indemnified parties shall have a right to retain one separate counsel, chosen by the holders of a majority of the Registrable Securities included in the registration, at the expense of the indemnifying party.

 

17 

 

 

(d)            If the indemnification provided for hereunder is unavailable or insufficient to hold harmless an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, whether the violation of the Securities Act or any other similar federal or state securities laws or rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any applicable registration, qualification or compliance was perpetrated by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

8.              Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided, that no holder of Registrable Securities included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such holder, such holder’s ownership of its shares of Equity Securities to be sold in the offering and such holder’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 7.

 

9.Rule 144 Compliance.

 

(a)            With a view to making available to the holders of Registrable Securities the benefits of Rule 144 and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public without registration, the Company shall:

 

(i)            make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Registration Date;

 

18 

 

 

(ii)             use best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act, at any time after the Registration Date; and

 

(iii)            furnish to any holder so long as the holder owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company as such holder may request in connection with the sale of Registrable Securities without registration.

 

10.            Preservation of Rights. The Company shall not (a) grant any registration rights to third parties which are more favorable than or inconsistent with the rights granted hereunder, or (b) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly granted to the holders of Registrable Securities in this Agreement.

 

11.            Termination. This Agreement shall terminate and be of no further force or effect when there shall no longer be any Registrable Securities outstanding; provided, that the provisions of Section 6 and Section 7 shall survive any such termination.

 

12.            Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).

 

If to the Company:

 

Name:Wejo Group Limited

For the attention of:Mina Bhama

Address:ABC Building 21-23 Quay St
Manchester, United Kingdom M3 4AE

E-mail address:Mina.Bhama@wejo.com

 

with a copy to:

 

Name:Weil, Gotshal & Manges LLP

For the attention of:Jackie Cohen and James Harvey

Address:767 Fifth Ave, New York, NY 10153;
110 Fetter Lane, London, United Kingdom EC4A 1AY

E-mail address:Jackie.Cohen@weil.com; James.Harvey@weil.com

 

19 

 

 

If to any Holder, to such Holder’s address as set forth on Schedule A hereto.

 

13.            Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

 

14.            Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Prior to the expiration of the applicable Lock-up Period, as the case may be, no Holder who is subject to such Lock-up Period and, prior to the expiration of such Lock-up Period, no Holder who is subject to such Lock-up Period, may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, in violation of the applicable restrictions in effect during such Lock-up Period. Following the applicable Lock-up Period, each Holder may assign its rights hereunder to any purchaser or transferee of Registrable Securities; provided, that such purchaser or transferee shall, as a condition to the effectiveness of such assignment, be required to execute a counterpart to this Agreement agreeing to be treated as an Holder whereupon such purchaser or transferee shall have the benefits of, and shall be subject to the restrictions contained in, this Agreement as if such purchaser or transferee was originally included in the definition of an Holder herein and had originally been a party hereto.

 

15.            No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement; provided, however, the parties hereto hereby acknowledge that the Persons set forth in Section 7 are express third-party beneficiaries of the obligations of the parties hereto set forth in Section 7.

 

16.            Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

17.            Amendment, Modification and Waiver. The provisions of this Agreement may only be amended, modified, supplemented or waived with the prior written consent of the Company and the holders of a majority of the Registrable Securities; provided, that any amendment or waiver that would materially adversely impact the rights of any Holder under this agreement in a manner different from the other Holders shall require the written consent of such Holder. No waiver by any party or parties shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

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18.            Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

19.            Remedies. Each holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company acknowledges that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the Company hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

20.            Governing Law; Submission to Jurisdiction. This Agreement and any non-contractual rights or obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of the State of Delaware.

 

The parties irrevocably agree that the state and federal courts located in the State of New York shall have exclusive jurisdiction to settle any Disputes, and waive any objection to proceedings before such courts on the grounds of venue or on the grounds that such proceedings have been brought in an inappropriate forum.

 

For the purposes of this Section 20, “Dispute” means any dispute, controversy, claim or difference of whatever nature arising out of, relating to, or having any connection with this Agreement, including a dispute regarding the existence, formation, validity, interpretation, performance or termination of this Agreement or the consequences of its nullity and also including any dispute relating to any non-contractual rights or obligations arising out of, relating to, or having any connection with this Agreement.

 

21.            No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted under or otherwise conflicts with the provisions of this Agreement.

 

22.            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

23.            Further Assurances. Each of the parties to this Agreement shall, and shall cause their affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and to give effect to the transactions contemplated hereby.

 

[Signature page follows]

 

21 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

 

  COMPANY:
   
  WEJO GROUP LIMITED
   
   
   
  By: /s/ John Maxwell
   
  Name: John Maxwell
   
  Title:   Director

 

[Signature page to Registration Rights Agreement]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

 

  COMPANY:
   
  WEJO LIMITED
   
   
   
  By: /s/ John Maxwell
   
  Name:  John Maxwell
   
  Title:    Chief Financial Officer

 

[Signature page to Registration Rights Agreement]

 

 

 

 

  GENERAL MOTORS:
   
  GENERAL MOTORS HOLDINGS, LLC
   
   
   
  By: /s/ Gustavo Q. Vello
   
  Name: Gustavo Q. Vello
   
  Title:   Assistant Treasurer

 

[Signature page to Registration Rights Agreement]

 

 

 

 

  SPONSOR:
   
  VIRTUOSO SPONSOR LLC
   
   
   
  By: /s/ Jeffrey Warshaw
   
  Name: Jeffrey Warshaw
   
  Title:   Managing Member

 

[Signature page to Registration Rights Agreement]

 

 

 

 

 

RICHARD BARLOW:

  
  
  
By:/s/ Richard Barlow

 

[Signature page to Registration Rights Agreement]

 

 

 

 

 TIMOTHY LEE:
  
  
  
By:/s/ Timothy Lee

 

[Signature page to Registration Rights Agreement]

 

 

 

 

 DIARMID OGILVY:
  
  
  
By:/s/ Diarmid Ogilvy

 

[Signature page to Registration Rights Agreement]

 

 

 

 

SCHEDULE A
Holders

 

Name Address for service of notices
General Motors

For the attention of: General Motors

Address: 300 Renaissance Center, Detroit, MI 48265, U.S.A.

For the attention of: Craig Glidden and Elena Centeio

Email address: craig.glidden@gm.com; elena.centeio@gm.com

with a copy to (which shall not constitute notice):

Name: Morgan Lewis & Bockius LLP

For the attention of: Robert Dickey and Iain Wright

Email address: robert.dickey@morganlewis.com; iain.wright@morganlewis.com

Richard Barlow

For the attention of: Mina Bhama

Address: ABC Building 21-23 Quay St, Manchester, United Kingdom M3 4AE

E-mail address: Mina.Bhama@wejo.com

with a copy to:

Weil, Gotshal & Manges LLP

For the attention of: Jackie Cohen and James Harvey

Address: 767 Fifth Ave, New York, NY 10153;
110 Fetter Lane, London, United Kingdom EC4A 1AY

E-mail address: Jackie.Cohen@weil.com; James.Harvey@weil.com

Timothy Lee

For the attention of: Mina Bhama

Address: ABC Building 21-23 Quay St, Manchester, United Kingdom M3 4AE

E-mail address: Mina.Bhama@wejo.com

with a copy to:

Weil, Gotshal & Manges LLP

For the attention of: Jackie Cohen and James Harvey

Address: 767 Fifth Ave, New York, NY 10153;
110 Fetter Lane, London, United Kingdom EC4A 1AY

E-mail address: Jackie.Cohen@weil.com; James.Harvey@weil.com

 

 

 

 

Name Address for service of notices
Diarmid Ogilvy

For the attention of: Mina Bhama

Address: ABC Building 21-23 Quay St, Manchester, United Kingdom M3 4AE

E-mail address: Mina.Bhama@wejo.com

with a copy to:

Weil, Gotshal & Manges LLP

For the attention of: Jackie Cohen and James Harvey

Address: 767 Fifth Ave, New York, NY 10153;
110 Fetter Lane, London, United Kingdom EC4A 1AY

E-mail address: Jackie.Cohen@weil.com; James.Harvey@weil.com

Sponsor

For the attention of: Virtuoso Acquisition Corp.

Address: 180 Post Road East, Suite 201, Westport, CT 06880

Attn: Jeffrey D. Warshaw

E-mail address: jeff@virtuosoacquisition.com

with a copy to:

Arnold & Porter Kaye Scholer LLP

250 West 55th Street, New York, NY 10019

For the attention of: Jonathan Levine

Lowell Dashefsky

Christopher Peterson

E-mail address: jonathan.levine@arnoldporter.com

lowell.dashefsky@arnoldporter.com

christopher.peterson@arnoldporter.com

 

[Schedule A to Registration Rights Agreement]

 

 

 

Exhibit 10.2

 

EXECUTION VERSION

                    

WARRANT ASSUMPTION AGREEMENT

 

This Warrant Assumption Agreement (this “Warrant Assumption Agreement”) is entered into as of November 18, 2021, by and among Virtuoso Acquisition Corp., a Delaware corporation (“VOSO”), Wejo Group Limited, an exempted company limited by shares incorporated under the laws of Bermuda (the “Company”), and Continental Stock Transfer & Trust Company, a New York Limited Purpose Trust Company (the “Warrant Agent”).

 

WHEREAS, VOSO and the Warrant Agent are parties to that certain Warrant Agreement dated as of January 21, 2021 (the “Warrant Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Business Combination Agreement (as defined below));

 

WHEREAS, pursuant to (a) the Agreement and Plan of Merger, dated as of May 28, 2021 (the “Business Combination Agreement”), by and among VOSO, the Company, Yellowstone Merger Sub, Inc., a Delaware corporation and direct, wholly-owned subsidiary of the Company (“Merger Sub”), Wejo Bermuda Limited, an exempted company limited by shares incorporated under the laws of Bermuda (“Limited”), and Wejo Limited, a private limited company incorporated under the laws of England and Wales with company number 08813730 (“Wejo”), and (b) the transactions contemplated by the Business Combination Agreement (collectively, the “Business Combination”), pursuant to which, subject to the terms and conditions set forth therein, at the Closing, among other things, (i) Merger Sub will merge with and into VOSO, with VOSO being the surviving corporation in the merger and a direct, wholly-owned subsidiary of the Company (the “Merger”, and together with the transactions contemplated by the Business Combination Agreement and the other related agreements entered into in connection therewith, the “Transactions”); (ii) all Wejo shares will be purchased by the Company in exchange for Common Shares of the Company, par value $0.001 (the “Company Common Shares”); and (iii) the Company contributes all of its VOSO and Wejo shares to Limited in exchange for Limited equity interests.

 

WHEREAS, pursuant to the terms and conditions of each of the Warrant Agreement and the Business Combination Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of any holder of Public Warrants, each Public Warrant that is outstanding immediately prior to the Effective Time shall be assumed by the Company and will automatically and irrevocably be modified to provide that such Public Warrant shall no longer entitle the holder thereof to purchase the amount of share(s)&nb