Item
1.01 Entry Into A Material Definitive Agreement.
Business
Combination Agreement
On
March 4, 2021, Sustainable Opportunities Acquisition Corp., a Cayman Islands exempted company (“SOAC”), entered
into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business
Combination Agreement”), by and among SOAC, 1291924 B.C. Unlimited Liability Company, an unlimited liability company
existing under the laws of British Columbia, Canada (“NewCo Sub”), and DeepGreen Metals Inc., a company existing
under the laws of British Columbia, Canada (the “Company” or “DeepGreen”).
The
Business Combination Agreement and the transactions contemplated thereby were unanimously approved by the board of directors of
each of SOAC and the Company.
The
Business Combination
Pursuant
to the Business Combination Agreement, SOAC will migrate to and be continued as a company in British Columbia, Canada (the “SOAC
Continuance”). Following the SOAC Continuance, pursuant to a plan of arrangement (the “Plan of Arrangement”)
under the Business Corporations Act (British Columbia), (i) SOAC will acquire all of the issued and outstanding shares
in the capital of the Company (the “Company Shares”) from the Company shareholders in exchange for SOAC Common
Shares (as defined below) and Company Earnout Shares (as defined below) (the “Share Exchange”), (ii) the
Company will become a wholly-owned subsidiary of SOAC, and (iii) the Company and NewCo Sub will amalgamate to continue as one
unlimited liability company, in each case, on the terms and subject to the conditions set forth in the Business Combination Agreement
and the Plan of Arrangement and in accordance with the provisions of applicable law (collectively, with the Share Exchange, the
“Share Exchange and Amalgamation” and, together with the other transactions contemplated by the Business Combination
Agreement, the Plan of Arrangement and the ancillary documents entered into in connection with the Business Combination Agreement,
collectively, the “Business Combination”).
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, pursuant to the Plan of Arrangement,
each option to purchase common shares in the capital of the Company (the “DeepGreen Options”) will become an
option to purchase SOAC Common Shares and Company Earnout Shares on the same terms and conditions (including applicable vesting,
expiration and forfeiture provisions) that applied to the corresponding DeepGreen Options immediately prior to closing of the
Business Combination.
The
Business Combination is expected to close in the second quarter of 2021, following the receipt of the required approval by SOAC’s
stockholders and the fulfillment of other conditions.
Business
Combination Consideration
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, pursuant to the Plan of Arrangement,
the shareholders and the optionholders of the Company will be entitled to receive, in exchange for their Company Shares or DeepGreen
Options, as applicable, an aggregate of (i) will receive shares in the capital of SOAC or comparable equity awards that are settled
or are exercisable for shares in the capital of SOAC, as applicable, based on an implied Company equity value of $2.25 billion
after giving effect to the SOAC Continuance (the “SOAC Common Shares”), (ii) 5,000,000 Class A Special Shares,
(iii) 10,000,000 Class B Special Shares, (iv) 10,000,000 Class C Special Shares, (v) 20,000,000 Class D Special Shares, (vi) 20,000,000
Class E Special Shares, (vii) 20,000,000 Class F Special Shares, (viii) 25,000,000 Class G Special Shares and (ix) 25,000,000
Class H Special Shares, in each case, in the capital of SOAC (collectively, the “Company Earnout Shares”),
or, as applicable, options to purchase such SOAC Common Shares and Company Earnout Shares.
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, immediately prior to closing of
the Business Combination, Sustainable Opportunities Holdings LLC, a Delaware limited liability company (the “Sponsor”),
will exchange 10% of the SOAC Common Shares it will own following the SOAC Continuance for (i) 500,000 Class I Special Shares
(the “Sponsor Earnout Shares”) in the capital of SOAC, and (ii) 741,000 Class J Special Shares in the capital
of SOAC (the “Class J Special Shares”).
Representations
and Warranties; Covenants
The
Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary
for transactions of this type. Each of SOAC and the Company has also agreed to take all action within its power as may be necessary
or appropriate such that, effective immediately after the closing of the Business Combination, the SOAC board of directors shall
consist of nine directors, which shall be comprised of eight individuals determined by the Company prior to the effectiveness
of the Registration Statement on Form S-4 (the “Registration Statement”)
and one director determined by the Sponsor, prior to the effectiveness of the Registration Statement. In addition, SOAC
has agreed to adopt an equity incentive plan, as described in the Business Combination Agreement.
Conditions
to Each Party’s Obligations
The
obligation of SOAC and the Company to consummate the Business Combination is subject to certain closing conditions, including,
but not limited to, (i) the absence of any order, law or other legal restraint or prohibition issued by any court of competent
jurisdiction or other governmental entity of competent jurisdiction preventing the consummation of the Business Combination, (ii)
the effectiveness of the Registration Statement,
(iii) the approval of SOAC’s shareholders, (iv) the approval of the Company’s shareholders and optionholders,
(v) receipt of a final Canadian court order with respect to the Plan of Arrangement (the “Final Order”), (vi)
receipt of approval or deemed approval by the applicable minister under Part IV of the Investment Canada Act (Canada) (if required),
(vii) the approval by NYSE of SOAC’s initial listing application in connection with the Business Combination and (viii) SOAC
having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange
Act of 1934, as amended) remaining after the closing of the Business Combination.
In
addition, the obligation of the Company to consummate the Business Combination is subject to the fulfillment of other closing
conditions, including, but not limited to, (i) the aggregate cash proceeds from SOAC’s trust account, together with the
proceeds from the PIPE Financing (as defined below), equaling no less than $250,000,000 (after deducting any amounts paid to SOAC
shareholders that exercise their redemption rights in connection with the Business Combination and net of SOAC’s unpaid
transaction expenses and SOAC’s unpaid liabilities), (ii) no SOAC Material Adverse Effect (as defined in the Business Combination
Agreement) having occurred that is continuing, (iii) SOAC having delivered, or caused to be delivered, to the Company, the Registration
Rights Agreement (as defined in the Business Combination Agreement), duly executed by an authorized officer of SOAC and (iv) SOAC
having taken all actions necessary or appropriate such that the board of directors of SOAC consists of the number of directors,
and is comprised of the individuals, determined pursuant to the Business Combination Agreement.
Termination
The
Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the closing of the
Business Combination, including, but not limited to, by (i) mutual written consent of SOAC and the Company, (ii) SOAC if the representations
and warranties of the Company are not true and correct or if the Company fails to perform any covenant or agreement set forth
in the Business Combination Agreement such that certain conditions to closing cannot be satisfied and the breach or breaches of
such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot
be cured within certain specified time periods, (iii) the Company if the representations and warranties of any SOAC Party (as
defined in the Business Combination Agreement) are not true and correct or if any SOAC Party fails to perform any covenant or
agreement set forth in the Business Combination Agreement such that certain conditions to closing cannot be satisfied and the
breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable,
are not cured or cannot be cured within certain specified time periods, (iv) either SOAC or the Company if the Business Combination
is not consummated by October 4, 2021, subject to certain limited exceptions, (v) either SOAC or the Company, if any governmental
entity of competent jurisdiction shall have issued an order permanently enjoining or prohibiting the Business Combination and
such order shall have become final and nonappealable, (vi) either SOAC or the Company if certain required approvals are not obtained
by SOAC shareholders after the conclusion of a meeting of SOAC’s stockholders held for such purpose at which such shareholders
voted on such approvals and (vi) SOAC if the Company Required Approval (as defined in the Business Combination Agreement) is not
obtained at the Company Shareholder Meeting (as defined in the Business Combination Agreement).
If
the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have
any liability or any further obligation under the Business Combination Agreement, except in the case of Willful Breach or Fraud
(each, as defined in the Business Combination Agreement) and for customary obligations that survive the termination thereof (such
as confidentiality obligations).
Alternative
Transaction
In
the event that the Final Order is not obtained (for any reason other than as a result of a material breach of SOAC’s covenants
or obligations under the Business Combination Agreement), the parties to the Business Combination Agreement agreed to take all
actions reasonably required to execute and deliver all related documentation in order to complete the Business Combination by
way of an amalgamation under Part 9, Division 3 of the BCBCA (an “Alternative Transaction”). In such event,
the parties may consider effecting a share exchange for certain shareholders prior to consummating the Alternative Transaction.
A
copy of the Business Combination Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein
by reference, and the foregoing description of the Business Combination Agreement is qualified in its entirety by reference thereto.
The Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each
other as of the date of the Business Combination Agreement or other specific dates. The assertions embodied in those representations,
warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications
and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants
in the Business Combination Agreement are also modified in important part by the underlying disclosure schedules which are not
filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders
and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. SOAC does not believe
that these schedules contain information that is material to an investment decision.
Sponsor
Letter Agreement
Concurrently
with the execution of the Business Combination Agreement, (i) Sponsor, (ii) the Company and (iii) each of Rick Gaenzle, Isaac
Barchas and Justin Kelly, each of whom is a holder of Class B ordinary shares of SOAC (collectively, the “Insiders”)
entered into the Sponsor Letter Agreement (the “Sponsor Letter Agreement”), pursuant to which the Sponsor and
the Insiders agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions contemplated
thereby (including the SOAC Continuance), (ii) waive any adjustment to the conversion ratio set forth in the governing documents
of SOAC or any other anti-dilution or similar protection with respect to their Class B ordinary shares (whether resulting from
the transactions contemplated by the Subscription Agreements (as defined below) or otherwise), (iii) solely with respect to the
Sponsor, subject to and conditioned upon the closing of the Business Combination Agreement and effective as of immediately following
the SOAC Continuance, to exchange 741,000 SOAC Class B ordinary shares held by the Sponsor for 741,000 Class J Special Shares
in the capital of SOAC and 500,000 Class I Special Shares (the “Sponsor Earnout Shares”) in the capital
of SOAC after giving effect to the SOAC Continuance, convertible into SOAC Common Shares and redeemable with their terms, (iv)
be bound by certain other covenants and agreements related to the Business Combination and (v) be bound by certain transfer restrictions
with respect to his, her or its shares in SOAC prior to the closing of the Business Combination, in each case, on the terms and
subject to the conditions set forth in the Sponsor Letter Agreement.
A
copy of the Sponsor Letter Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein
by reference, and the foregoing description of the Sponsor Letter Agreement is qualified in its entirety by reference thereto.
PIPE
Subscription Agreements
Concurrently
with the execution of the Business Combination Agreement, SOAC entered into subscription agreements (the “Subscription
Agreements”) with certain institutional and accredited investors, pursuant to which such investors agreed to subscribe
for and purchase, and SOAC agreed to issue and sell to such investors, substantially concurrently with the Closing (as defined
in the Business Combination Agreement), an aggregate of 33,030,000 shares of SOAC Common Shares for $10.00 per share, for aggregate
gross proceeds of $330,300,000 (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon,
among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide
that SOAC will grant the investors in the PIPE Financing certain customary registration rights. The PIPE Financing is contingent
upon, among other things, the substantially concurrent closing of the Business Combination.
The
foregoing description of the Subscription Agreements and the PIPE Financing is subject to and qualified in its entirety by reference
to the full text of the forms of Subscription Agreements, copies of which are attached as Exhibit 10.2 and Exhibit 10.3 hereto
and the terms of which are incorporated herein by reference.
Transaction
Support Agreements
Concurrently
with the execution of the Business Combination Agreement, certain shareholders and optionholders of the Company (collectively,
the “DeepGreen Shareholders”) entered into a Transaction Support Agreement (collectively, the “Transaction
Support Agreements”) with SOAC, pursuant to which the DeepGreen Shareholders have agreed to, among other things, (i)
support and vote in favor of the Company Arrangement Resolution (as defined in the Business Combination Agreement) and any Alternative
Transaction (as defined above), (ii) irrevocably appoint SOAC or any individual designated by SOAC as such DeepGreen Shareholder’s
attorney-in-fact, with full power of substitution in favour of SOAC, to take all such actions and execute and deliver such documents,
instruments or agreements as are necessary to consummate the transaction contemplated by the Business Combination Agreement, including
acting as a proxy, to attend on behalf of such DeepGreen Shareholder, at any meeting of the DeepGreen Shareholders with respect
to the Business Combination and (iii) be bound by certain other covenants and agreements related to the Business Combination.
The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination.
The
foregoing description of the Transaction Support Agreements is subject to and qualified in its entirety by reference to the full
text of the form of Transaction Support Agreement, a copy of which are attached is Exhibit 10.4 hereto, and the terms of which
are incorporated herein by reference.