Item 1.01
Entry into a Material Definitive Agreement.
Merger
Agreement and Plan of Reorganization
On
May 7, 2021, Hennessy Capital Investment Corp. V (“HCIC”) entered into a Merger Agreement and Plan of Reorganization
(the “Merger Agreement”) to effect an initial business combination, by and among HCIC, PlusAI Corp, an exempted company
incorporated with limited liability in the Cayman Islands (“Plus” or the “Company”), Plus Inc.,
an exempted company incorporated with limited liability in the Cayman Islands (“PubCo”), Prime Merger Sub I, Inc.,
an exempted company incorporated with limited liability in the Cayman Islands and a direct, wholly-owned subsidiary of PubCo (“First
Merger Sub”), Prime Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of PubCo (“Second Merger
Sub”), and Plus Holdings Ltd., an exempted company incorporated with limited liability in the Cayman Islands and wholly-owned
subsidiary of the Company (“Plus Holdings”).
Pursuant
to the Merger Agreement, a business combination between HCIC and Plus (the “Business Combination”) will be effected
through (a) the merger of Prime Merger Sub, Ltd., an exempted company incorporated with limited liability in the Cayman Islands and wholly-owned
subsidiary of Plus Holdings, with and into the Company, with the Company surviving as a wholly-owned subsidiary of Plus Holdings (the
“F-Reorg Merger”); (b) following the F-Reorg Merger, the merger of First Merger Sub with and into Plus Holdings, with
Plus Holdings surviving as a wholly-owned subsidiary of PubCo (the “Plus Merger”); and (c) simultaneously with, and
as part of the same overall transaction as the Plus Merger, the merger of Second Merger Sub with and into HCIC, with HCIC surviving as
a wholly-owned subsidiary of PubCo (the “HCIC Merger” and, together with the Plus Merger, the “Mergers”).
As a result of the Mergers, Plus Holdings and HCIC each will become a direct wholly-owned subsidiary of PubCo, the Company will become
a direct wholly-owned subsidiary of Plus Holdings and PubCo will become a publicly traded company.
Consideration;
Conversion of Securities
Under
the terms of the Merger Agreement, the aggregate consideration to be paid to existing Plus shareholders in the Mergers is $2,720,000,000,
subject to certain adjustments contained in the Merger Agreement, including reductions for (i) indebtedness, (ii) certain amounts required
to be paid pursuant to existing subscription agreements of the Company, to the extent such amounts are not paid in full by July 5, 2021,
and (iii) the amount of a share reserve attributable to a Company Share Purchase Warrant (as defined in the Merger Agreement), in each
case as more specifically set forth in the Merger Agreement. The consideration will be paid entirely in stock, comprised of newly issued
ordinary shares of PubCo at a price of $10.00 per share.
As
a result of the Plus Merger, (a) each outstanding share of preferred stock of Plus Holdings (other than the Plus Holdings Series A-3
Preferred Shares (as defined in the Merger Agreement)) and each outstanding ordinary share of Plus as of immediately prior to the Effective
Time will be cancelled in exchange for the right to receive the number of ordinary shares of PubCo, par value of $0.000002, designated
as Class A Ordinary Shares, which are expected to have one (1) vote per share (“PubCo Class A Ordinary Shares”) equal
to the Exchange Ratio (as defined below); (b) each outstanding Plus Holdings Series A-3 Preferred Share as of immediately prior to the
Effective Time will be cancelled in exchange for the right to receive the number of ordinary shares of PubCo, par value of $0.000002,
designated as Class B Ordinary Shares, which are expected to have eight (8) votes per share (“PubCo Class B Ordinary Shares”
and together with the PubCo Class A Ordinary Shares, “PubCo Shares”) equal to the Exchange Ratio; and (c) each Plus
Holdings Assumed Convertible Security (as defined in the Merger Agreement) will be assumed by PubCo in accordance with its terms and
converted into the right to receive convertible securities in PubCo as determined by the Exchange Ratio. If an ordinary share of Plus
Holdings is subject to forfeiture restrictions or other restrictions immediately prior to the Effective Time, then the PubCo Class A
Ordinary Shares received in exchange would be subject to an equivalent forfeiture restriction or other restrictions.
“Exchange
Ratio” means the following ratio: the quotient obtained by dividing (a) the number of PubCo Shares equal to the quotient
determined by dividing (i) the Aggregate Merger Consideration Amount by (ii) $10.00 by (b) the Plus Holdings Deemed Outstanding
Shares (as defined in the Merger Agreement) less the number of Plus Holdings Deemed Outstanding Shares attributable to the Company Share
Purchase Warrant (as defined in the Merger Agreement).
“Aggregate
Merger Consideration Amount” means (x) (i) $2,720,000,000; minus (ii) the estimated indebtedness of the Company as of
the Effective Time; and minus (iii) certain amounts required to be paid pursuant to existing subscription agreements of the Company,
to the extent not fully paid by certain payment deadlines; multiplied by (y) (i) one hundred percent (100%) minus (ii)
(A) the quotient equal to the number of Plus Holdings Deemed Outstanding Shares attributable to the Company Share Purchase Warrant divided
by the Plus Holdings Deemed Outstanding Shares (if the Company Share Purchase Warrant is executed prior to the Closing of the Business
Combination (the “Closing”)) or (B) twenty percent (20%) (if the Company Share Purchase Warrant is not executed prior
to the Closing).
As
a result of the HCIC Merger, (a) each outstanding share of HCIC common stock will be cancelled in exchange for the right to receive for
one PubCo Class A Ordinary Share, and (b) each outstanding HCIC warrant will become exercisable for one PubCo Class A Ordinary Share
on the same terms and conditions.
Registration
Statement and Proxy Statement
As
promptly as practicable after the date of the Merger Agreement, HCIC and PubCo will prepare and file a registration statement on Form
F-4 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which
will include a prospectus with respect to PubCo’s securities to be issued in connection with the Merger Agreement and a proxy statement
to be distributed to holders of HCIC’s common stock in connection with HCIC’s solicitation of proxies for the vote by HCIC’s
stockholders with respect to the proposed Business Combination with Plus and other matters to be described in the Registration Statement
(the “Proxy Statement”).
Stock
Exchange Listing
The
parties to the Merger Agreement will cooperate to use commercially reasonable efforts to cause the shares and warrants of PubCo to be
issued in connection with the Business Combination to be approved for listing as of the Closing date on either the Nasdaq Capital Market
or the New York Stock Exchange (the “NYSE”) (as mutually agreed by HCIC and the Company).
Representations,
Warranties and Covenants
The
Merger Agreement contains customary representations, warranties and covenants of (a) the Company, (b) PubCo, First Merger Sub and Second
Merger Sub and (c) HCIC, in each case relating to, among other things, their ability to enter into the Merger Agreement and their outstanding
capitalization.
Conditions
to Closing
The
obligations of the Company, Plus Holdings, HCIC, PubCo, First Merger Sub and Second Merger Sub to consummate the Business Combination
are subject to customary and other conditions of the respective parties, including approval by HCIC’s and the Company’s shareholders.
Other closing conditions of the Merger Agreement include (i) HCIC having at least $5,000,001 of net tangible assets remaining following
the exercise of any redemption rights by HCIC stockholders, (ii) the absence of any law or order enjoining or prohibiting the consummation
of the Business Combination, (iii) the receipt of approval for the PubCo Class A Ordinary Shares to be listed on either the Nasdaq Capital
Market or the New York Stock Exchange (as mutually agreed by HCIC and the Company), (iv) the consummation of the PIPE (as defined below),
(v) the absence of any material adverse effect on either the Company or HCIC and (vi) PubCo having delivered to HCIC lock-up agreements
executed by persons holding in the aggregate eighty-five percent (85%) of Plus Holdings Deemed Outstanding Shares.
Termination
The
Merger Agreement may be terminated at any time prior to the consummation of the Mergers (whether before or after the required HCIC stockholder
vote has been obtained) by written consent of HCIC and Plus and in certain other circumstances, including, but not limited to if: (a)
the Closing has not occurred by November 8, 2021, (b) a governmental entity shall have issued an order or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Business Combination, and such order or other action has become final and non-appealable
(c) the HCIC Merger and other related proposals are not approved by HCIC’s stockholders at the duly convened meeting of HCIC’s
stockholders, (d) if the Company has failed to obtain certain required transaction consents prior to or on the date that is the later
of (i) July 5, 2021, and (ii) the date that is twenty (20) business days after the Registration Statement becomes effective, and (e)
upon a material breach by HCIC or the Company such that a condition to closing would not be satisfied, subject to a 30-day cure period
if curable. If the Merger Agreement is terminated, the Merger Agreement will become void, and there will be no liability under the Merger
Agreement on the part of any party thereto, except as set forth in the Merger Agreement or in the case of termination subsequent to a
willful material breach of the Merger Agreement by a party thereto.
A
copy of the Merger 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 Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement
filed with this Current Report on Form 8-K. The Merger Agreement is included to provide security holders with information regarding its
terms. It is not intended to provide any other factual information about HCIC, the Company or the other parties thereto. In particular,
the assertions embodied in representations and warranties by HCIC, the Company, Plus Holdings, PubCo, First Merger Sub or Second Merger
Sub contained in the Merger Agreement are qualified by information in the disclosure schedules provided by the parties in connection
with the signing of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions
to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger
Agreement were used for the purpose of allocating risk between the parties, rather than establishing matters as facts. Accordingly, security
holders should not rely on the representations and warranties in the Merger Agreement as characterizations of the actual state of facts
about HCIC, the Company, Plus Holdings, PubCo, First Merger Sub or Second Merger Sub.
PIPE Subscription
Agreements
In
connection with the execution of the Merger Agreement, on May 7, 2021, HCIC and PubCo entered into separate subscription agreements (the
“PIPE Subscription Agreements”) with a number of investors (the “PIPE Investors”), pursuant to
which the PIPE Investors have agreed to subscribe for and purchase, and PubCo has agreed to issue and sell to the PIPE Investors, an
aggregate of 15,000,000 PubCo Class A Ordinary Shares (the “PIPE Shares”), for a purchase price of $10.00 per share
and at an aggregate purchase price of $150,000,000, in a private placement (the “PIPE”).
The
PIPE Subscription Agreement contains customary representations and warranties of each of HCIC, PubCo and each PIPE Investor, and customary
conditions to closing, including the consummation of the Business Combination. The purpose of the PIPE is to raise additional capital
for use by the combined company following the Closing.
Pursuant
to the PIPE Subscription Agreements, PubCo agreed that, within 15 business days after the Closing Date (the “Filing Deadline”),
PubCo will file with the SEC (at PubCo’s sole cost and expense) a registration statement registering the resale of the PIPE Shares
(the “Resale Registration Statement”), and HCIC will use its commercially reasonable efforts to have the Resale Registration
Statement declared effective as soon as practicable after the filing thereof, and PubCo will uses its commercially reasonable efforts
to have the Resale Registration Statement declared effective by the SEC by the earlier of (i) 60 days (or 90 days if the SEC notifies
PubCo that it will review the Resale Registration Statement) following the Filing Deadline and (ii) 10 business days after the date PubCo
is notified by the SEC that the Resale Registration Statement will not be “reviewed” or will not be subject to further review.
PubCo must maintain the effectiveness of the Resale Registration Statement for up to two years.
The
foregoing description of the PIPE Subscription Agreements is qualified in its entirety by reference to the full text of the form of the
PIPE Subscription Agreement, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein
by reference.
Company
Shareholder Support Agreement
HCIC,
the Company, Plus Holdings, and certain shareholders of the Company and/or Plus Holdings entered into a Shareholder Support Agreement
(the “Company Shareholder Support Agreement”), pursuant to which, among other things, the shareholders of the Company
and Plus Holdings have agreed (a) to support the adoption of the Merger Agreement and the approval of the Business Combination, subject
to certain customary conditions, and (b) not to transfer any of their subject shares (or enter into any arrangement with respect thereto),
subject to certain customary conditions.
The
foregoing description of the Company Shareholder Support Agreements is qualified in its entirety by reference to the full text of the
form of the Company Shareholder Support Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.2 and
incorporated herein by reference.
Sponsor
Support Agreement
Concurrently
with the execution of the Merger Agreement, the Sponsor and certain stockholders of HCIC, in each case, that hold shares of HCIC Class
B common stock, have executed a Sponsor Support Agreement with the Company and Plus Holdings (the “Sponsor Support Agreement”),
pursuant to which, among other things, such persons have agreed (a) to support the adoption of the Merger Agreement and the approval
of the Business Combination, subject to certain customary conditions, and (b) not to transfer any of their subject shares (or enter into
any arrangement with respect thereto), subject to certain customary conditions.
The
foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference to the full text of the Voting and Support
Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.3 and incorporated herein by reference.
Lock-Up
Agreements
Concurrently
with the execution of the Merger Agreement, certain existing Company shareholders, including all holders of 2% or more of the pre-Closing
Company equity securities, will each agree, subject to certain customary exceptions, not to (i) sell, offer to sell, contract or agree
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC
promulgated thereunder, any PubCo Shares held by it immediately after the Closing, or any PubCo Shares issuable upon the exercise of
any options or warrants to purchase PubCo Shares held by them immediately after the Closing, or any securities convertible into or exercisable
or exchangeable for PubCo Shares held by it immediately after the Closing, (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership of any of such PubCo Shares or securities convertible
into or exercisable or exchangeable for PubCo Shares, whether any such transaction is to be settled by delivery of such securities, in
cash or otherwise or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) until 180 days after
the Closing.
The
foregoing description of the Lock-Up Agreements is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement,
a copy of which is included as Exhibit A to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated
herein by reference.
Registration
Rights Agreement
In
connection with the Closing, HCIC’s existing Registration Rights Agreement, dated as of January 14, 2021, will be amended and restated
and PubCo, HCIC, Hennessy Capital Partners V LLC (the “Sponsor”), certain persons and entities holding securities
of HCIC prior to the Closing (collectively, together with the Sponsor, the “Existing Holders”) and certain persons
and entities receiving PubCo Shares pursuant to the Mergers (the “New Holders” and together with the Existing Holders,
the “Reg Rights Holders”) will enter into an Amended and Restated Registration Rights Agreement, in the form attached
as an exhibit to the Merger Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement,
PubCo will agree that, within 15 business days after the Closing, PubCo will file with the SEC (at PubCo’s sole cost and expense)
a registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders (the “Resale
Registration Statement”), and PubCo will use its reasonable best efforts to have the Resale Registration Statement declared
effective as soon as reasonably practicable after the filing thereof, but in no event later than 60 days (or 120 days if the SEC notifies
PubCo that it will review the Resale Registration Statement). In certain circumstances, the Reg Rights Holders can demand up to three
underwritten offerings and will be entitled to piggyback registration rights, in each case subject to certain limitations set forth in
the Registration Rights Agreement.
The
Registration Rights Agreement further provides for the securities of PubCo received in exchange for outstanding shares of HCIC Class
B common stock to be locked-up for a period of time following the Closing, as described below, subject to certain customary exceptions.
The lock-up restriction period is one year following the Closing, subject to earlier release if (i) the reported last sale price of PubCo’s
common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing or (ii) if PubCo consummates
a liquidation, merger, stock exchange or other similar transaction after the Closing which results in all of PubCo’s stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
The
foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of
Registration Rights Agreement, a copy of which is included as Exhibit B to the Merger Agreement, filed as Exhibit 2.1 to this Current
Report on Form 8-K, and incorporated herein by reference.
Shareholders
Agreement
Concurrently
with the execution of the Merger Agreement, PubCo and certain existing shareholders of Plus, including Full Truck Alliance Co. Ltd.,
an exempted company incorporated with limited liability in the Cayman Islands (“FTA”) and the significant existing
shareholder of Plus, entered into a Shareholders Agreement (the “Shareholders Agreement”), which will become effective
at (and is contingent upon the occurrence of) the Closing. The Shareholder Agreement provides for, among other things, (i) certain director
nomination rights with respect to the post-Closing board of directors of the combined company on a go-forward basis, including that FTA
will be entitled to nominate a number of directors as is proportional to its voting ownership percentage and the founders of the Company,
David Liu and Hao Zheng, will be entitled to nominate two (2) directors for so long as Messrs. Liu and Zheng remain the Chief Executive
Officer (CEO) and Chief Technology Officer (CTO), respectively, of PubCo and their aggregate shareholding in PubCo is maintained at a
certain percentage, and (ii) PubCo agreeing not to take any action, without the prior written approval or consent of all PubCo directors,
to remove Mr. Liu as PubCo CEO or Mr. Zheng as PubCo CTO without cause within the 18-month period following the Closing. To the extent
PubCo terminates Mr. Liu’s or Mr. Zheng’s employment without cause or Mr. Liu or Mr. Zheng resigns for “good reason”
at any time during such 18-month period post-Closing, the executive will have the right to require PubCo to repurchase a portion of the
PubCo shares held by such executive for cash, for a period of 12 months post-termination or resignation. PubCo will also agree not to
remove directors nominated by the aforementioned parties. Pursuant to the Merger Agreement, HCIC will be entitled to nominate two (2)
directors to the PubCo board of directors, and such HCIC nominees may not be removed without cause prior to the first annual meeting
of PubCo shareholders. The foregoing description of the Shareholders Agreement is qualified in its entirety by reference to the full
text of the form of Shareholders Agreement.