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Item 1.01
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Entry into a Material Definitive Agreement.
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Business
Combination Agreement
On
December 10, 2020, Collective Growth Corporation, a Delaware corporation (“Collective Growth”), entered
into a Business Combination Agreement (“Business Combination Agreement”) by and among Collective Growth,
Innoviz Technologies Ltd., a company organized under the laws of the State of Israel (the “Company” or “Innoviz”),
Hatzata Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger
Sub”), Perception Capital Partners LLC, a Delaware limited liability company (“Perception”)
(solely for purposes of Sections 2.2(d), 2.3(a), 2.8, 2.9, 5.2, 5.5, 7.2 and Article VIII) and Antara Capital LP, a Delaware
limited partnership (“Antara”) (solely for purposes of Sections 5.2, 5.5, 7.2 and Article VIII).
Pursuant to
the Business Combination Agreement, Merger Sub will merge with and into Collective Growth, with Collective Growth surviving the
merger (the “Merger”). As a result of the Merger, and upon consummation of the Merger and the other transactions
contemplated by the Business Combination Agreement (“Transactions”) Collective Growth will become a wholly-owned
subsidiary of the Company, with the stockholders of Collective Growth becoming securityholders of the Company.
The pro forma
valuation of the Company upon consummation of the Transactions is $1,375,000,000. We estimate that, upon consummation of the Transactions
(the “Effective Time”), without giving effect to the issuance of Earnout Shares (defined below) and assuming
none of Collective Growth’s public stockholders demand redemption (“SPAC Redemptions”) pursuant to Collective
Growth’s amended and restated certificate of incorporation, the securityholders of the Company and certain members of the
Company’s management receiving shares in the Transactions (“Company Management”) will own more than 75%
of the outstanding ordinary shares of the Company (“Company Ordinary Shares”) and the securityholders of Collective
Growth, Perception, Antara, and the Investors purchasing PIPE Shares will own the remaining Company Ordinary Shares.
The following
securities issuances will be made by the Company to Collective Growth securityholders at the Effective Time and in each case assume
the Stock Split (as defined below) has occurred: (i) each share of Class B common stock of Collective Growth after taking into
account the forfeiture of 1,875,000 shares pursuant to the Forfeiture Agreement, will be exchanged for one Company Ordinary Share,
(ii) each outstanding share of Class A common stock of Collective Growth will be exchanged for one Company Ordinary Share, and
(iii) each outstanding warrant of Collective Growth will be assumed by the Company and will become a warrant of the company (“Company
Warrant”) (with the number of Company Ordinary Shares underlying the Company Warrant and the exercise price of such Company
Warrants subject to adjustment in accordance with the terms of the Merger Agreement).
The following
securities issuances will be made by the Company to Company Management, the Company’s securityholders, and Perception at
the Effective Time and in each case assume the Stock Split (as defined below): (i) each outstanding preferred share of the Company
will be converted into one Company Ordinary Share, (ii) Company Management will be issued an aggregate of 2,847,436 Company Ordinary
Shares and 3,986,410 Company Warrants, and (iii) Perception will be issued an aggregate of 3,448,526 Company Warrants.
Additionally,
the Company will issue securities pursuant to the Subscription Agreement and the Antara Put Option Agreement, each as described
in more detail below.
The Company
Ordinary Shares and Company Warrants to be received by the Sponsors, Company Management, Perception, and Antara in connection
with the Transactions, including the Earnout Shares, will be subject to the transfer restrictions described below under the heading
“Lockup Agreement”.
Earnout
Pursuant to
the Business Combination Agreement, if the last sale price of the Company Ordinary Shares on the Nasdaq Capital Market (“Nasdaq”)
is greater than $10.97 for any ten (10) trading days out of a twenty (20) consecutive trading-day period at any time during the
four years after the consummation of the Transactions, Perception, Antara and certain members of the Company’s management
may be issued additional Company Ordinary Shares as follows:
(1) to Perception
as additional consideration for services provided by Perception to the Company (x) 2,477,269 Company Ordinary Shares if the Initial
Transaction Proceeds is equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference
of (A) 2,477,269 and (B) the product of (i) 0.3866 and (ii) an earnout calculation (“Perception Earnout Calculation”)
set forth in the Business Combination Agreement if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable
to Perception, the “Perception Earnout Shares”); and
(2) to the
Company Management, 1,423,718 Company Ordinary Shares (such shares, the “Management Earnout Shares”)
Pursuant to
the Put Option Agreement, concurrently with the issuance of the Perception Earnout Shares, if any, Antara will be issued (x) 370,167
Company Ordinary Shares if the Initial Transaction Proceeds is equal to or greater than $150,000,000 or (y) a number of Company
Ordinary Shares equal to the difference of (A) 370,167 and (B) the product of (i) 0.577 and (ii) the Perception Earnout Calculation
if the Initial Transaction Proceeds are less than $150,000,000 (such shares issuable to Perception, the “Antara Earnout
Shares”, and together with the Perception Earnout Shares and Management Earnout Shares, the “Earnout Shares”).
Adjustments
to Consideration
Prior to the
Effective Time, the Company intends to effect a reverse stock split to cause the value of the outstanding Company Ordinary Shares
immediately prior to the Effective Time to equal $10.00 per share (the “Stock Split”). Upon consummation of
the Stock Split, the consideration to be issued to securityholders of Collective Growth, Company Management, Antara, and Perception
shall be adjusted appropriately to reflect the effect of the Stock Split.
The Transactions
are targeted to be consummated in the first quarter of 2021, after the required approval by the stockholders of Collective Growth
(“Collective Growth Stockholder Approval”), ordinary shareholders of the Company (“Company Shareholder
Approval”), and preferred shareholders of the Company (“Company Preferred Shareholder Approval”) and
the fulfillment of certain other conditions.
Governance
After the consummation
of the Transactions, the current officers of the Company will remain officers of the Company. The size of the board of directors
of the Company will be increased and one director will be designated by Perception.
The following
summaries of the Business Combination Agreement and the other agreements to be entered into by the parties are qualified in their
entirety by reference to the text of the Business Combination Agreement and agreements entered into in connection therewith. The
Business Combination Agreement is attached as an exhibit hereto and incorporated herein by reference.
Representations and Warranties
The Business
Combination Agreement contains representations and warranties of the Company and its subsidiaries, including Merger Sub, relating,
among other things, to proper organization and qualification; capitalization; the authorization, performance and enforceability
against the Company of the Business Combination Agreement; financial statements; absence of undisclosed liabilities; governmental
actions and filings; permits; material contracts; absence of certain changes; litigation; compliance with laws; benefit plans;
environmental matters; intellectual property; labor matters; insurance; tax matters; brokers’ fees; real and personal property;
transactions with affiliates; compliance with international trade and anti-corruption laws; the Company’s major customers
and suppliers; product warranties and product liability; and the execution of the Subscription Agreements.
The Business
Combination Agreement contains representations and warranties of Collective Growth relating, among other things, to proper organization
and qualification; the authorization, performance and enforceability against Collective Growth of the Business Combination Agreement;
governmental actions and filings; brokers’ fees; capitalization; reports filed with the Securities and Exchange Commission
(“SEC”), financial statements, and compliance with the Sarbanes-Oxley Act; Collective Growth’s trust account;
indebtedness; transactions with affiliates; litigation; compliance with laws; restrictions on business activities; Collective Growth’s
internal controls, financial statements, and Nasdaq listing; absence of undisclosed liabilities; tax matters; absence of changes;
employment matters; the execution of the Sponsor Support Agreement; status under the Investment Company Act; the absence of poison
pill or similar anti-takeover matters; compliance with international trade and anti-corruption laws; the execution of the Sponsor
Forfeiture Agreement; and non-Israeli residence.
Covenants
The Business
Combination Agreement includes customary covenants of the parties with respect to business operations prior to consummation of
the Transactions and efforts to satisfy conditions to the consummation of the Transactions. The Business Combination Agreement
also contains additional covenants of the parties, including, among others, covenants providing for Collective Growth and the Company
to cooperate in the preparation of the Registration Statement on Form F-4 required to be prepared in connection with
the Merger (the “Registration Statement”), for the Company to terminate certain existing investor rights agreements
with its securityholders (collectively, the “Company Investor Agreements”), and to enter into a consulting agreement
with Wilson Kello, an officer of Collective Growth, with respect to transition and public company consulting services.
Additionally,
prior to the Effective Time, Collective Growth will transfer the intellectual property rights relating to its name, trading symbols,
and internet domain name, and certain material relating to its evaluation of alternative business combinations, to a third party.
Conditions to Closing
General Conditions
In addition,
the consummation of the Transactions is conditioned upon, among other things:
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all specified waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended shall have expired;
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no order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental
authority or statute, rule or regulation that is in effect and prohibits or enjoins the consummation of the Transactions;
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the Registration Statement shall have become effective in accordance with the provisions of the Securities Act of 1933, as
amended (“Securities Act”), no stop order shall have been issued by the SEC that remains in effect with respect
to the Registration Statement, and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC which
remains pending;
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the Company Shareholder Approval and Company Preferred Shareholder Approval shall have been obtained;
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the Collective Growth Stockholder Approval shall have been obtained;
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Collective Growth having at least $5,000,001 of net tangible assets remaining prior to the Transactions after taking into account
the SPAC Redemptions;
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no proceeding is pending or threatened that is reasonably likely to prevent consummation of the Transactions or cause the Transactions
to be rescinded following consummation;
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the Company’s application to list the Company Ordinary Shares (including the Company Ordinary Shares to be issued pursuant
to the Merger) shall have been approved by Nasdaq, subject to official notice thereof and public holder requirements; and
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the Sponsor Support Agreement, Sponsor Forfeiture Agreement, Company Transaction Support Agreement, Registration Rights Agreement,
Lockup Agreement and an amendment to the Company’s warrant agreement shall have been executed and delivered by the parties
thereto and shall be in full force and effect.
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Other Conditions to Collective
Growth’s Obligations
The obligations
of Collective Growth to consummate the Transactions are also conditioned upon, among other things:
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the accuracy of the representations and warranties of the Company and Merger Sub (subject to certain bring-down standards);
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performance in all material respects of the covenants of the Company required by the Business Combination Agreement to be performed
on or prior to the closing;
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no material adverse effect with respect to the Company shall have occurred between the date of the Business Combination Agreement
and the closing of the Transactions;
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the Company having delivered certain customary officer’s and secretary’s certificates;
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the Company’s board consisting of certain agreed persons; and
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the Company having terminated the Company Investor Agreements.
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Other Conditions to the Company’s
and Merger Sub’s Obligations
The obligations
of the Company and Merger Sub to consummate the Transactions are also conditioned upon, among other things:
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the accuracy of the representations and warranties of Collective Growth (subject to certain bring-down standards);
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performance in all material respects of the covenants of Collective Growth required by the Business Combination Agreement to
be performed on or prior to the closing;
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the aggregate amount remaining in Collective Growth’s trust account after taking into account the SPAC Redemptions, plus
the aggregate amount raised in the PIPE, plus the aggregate purchase price of additional Company Ordinary Shares (the “Antara
Top Up Shares”) subscribed for by Antara following any SPAC Redemptions (such amount, the “Initial Transaction
Proceeds”), shall be equal to or greater than $200,000,000;
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Collective Growth having delivered certain customary officer’s and secretary’s certificates;
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each officer and director of Collective Growth having resigned as of the closing date;
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the existing liabilities and expenses of Collective Growth shall not exceed $9,700,000; and
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the Forfeiture shall have occurred and each other covenant pursuant to the Sponsor Forfeiture Agreement shall have been performed
in all material respects.
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Waivers
Either Collective
Growth or the Company may waive any inaccuracies in the representations and warranties made to such party contained in the Business
Combination Agreement or in any document delivered pursuant to the Business Combination Agreement and waive compliance with any
agreements or conditions for the benefit of itself or such party contained in the Business Combination Agreement or in any document
delivered pursuant to the Business Combination Agreement. Notwithstanding the foregoing, pursuant to Collective Growth’s
amended and restated certificate of incorporation, Collective Growth cannot consummate the proposed business combination if it
has less than $5,000,001 of net tangible assets remaining upon consummation of the Transactions after taking into account the holders
of public shares that properly demanded that Collective Growth redeem their public shares for their pro rata share of the trust
account.
Termination
The Business
Combination Agreement may be terminated:
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by mutual written consent of Collective Growth and the Company;
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by Collective Growth if the Company or Merger Sub has breached any of its covenants or representations and warranties in any material respect and has not cured by the Termination Date, provided that Collective Growth is itself not in material breach;
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by the Company if Collective Growth has breached any of its covenants or representations and warranties in any material respect and has not cured by the Termination Date, provided that the Company or Merger Sub is itself not in material breach;
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by either Collective Growth or the Company if the Transactions are not consummated on or before May 30, 2021 (“Termination Date”), provided that the right to terminate the Business Combination Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of the Business Combination Agreement;
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by either Collective Growth or the Company if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, judgment, ruling or other action is final and non-appealable, provided that the right to terminate the Business Combination Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of the Business Combination Agreement;
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by ether Collective Growth or the Company if the Collective Growth shareholder meeting has been held, has concluded, Collective Growth’s stockholders have duly voted and the Collective Growth Stockholder Approval was not obtained;
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by ether Collective Growth or the Company if the Company shareholder meeting has been held, has concluded, the Company’s shareholders have duly voted and the Company Shareholder Approval or the Company Preferred Shareholder Approval were not obtained;
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by Collective Growth if, prior to obtaining the Company Shareholder Approval and the Company Preferred Shareholder Approval the Company board of directors changes its recommendation with respect to the Merger as permitted by the Business Combination Agreement; and
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by the Company if, prior to obtaining the Collective Growth Stockholder Approval, the Collective Growth board of directors changes its recommendation with respect to the Merger as permitted by the Business Combination Agreement or fails to include a recommendation to vote in favor of the Merger in the Registration Statement.
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In the event that the Business Combination
Agreement is terminated because the Company board of directors has changed its recommendation with respect to the Merger, the Company
shall pay Collective Growth a termination fee in an amount equal to $14,625,000 as liquidated damages.
Incentive Equity Plan
Prior to the
effectiveness of the Registration Statement, the Company will adopt an incentive equity plan, the form and terms of which shall
be prepared by the Company and be reasonably acceptable to Collective Growth, reserving a number of Company Ordinary Shares for
grant thereunder equal to seven percent (7%) of the fully-diluted issued and outstanding Company Ordinary Shares immediately after
the Effective Time.
Lockup Agreement
Concurrently
with the execution of the Business Combination Agreement, the Sponsors, Company Management, Perception, Antara, and certain securityholders
of the Company entered into a Confidentiality and Lockup Agreement with the Company (“Lockup Agreement”), pursuant
to which such persons agreed (i) to keep confidential certain Company information furnished to them and (ii) not to transfer certain
Company Ordinary Shares and Company Warrants and any equity or derivative securities of the Company, except to certain permitted
transferees, beginning at the Effective Time and continuing a period of one hundred eighty (180) days.
In connection
with the Lockup Agreement, at the Effective Time, the transfer restrictions set forth in certain letter agreements among Collective
Growth and the Sponsors will terminate.
Registration Rights Agreement
Concurrently
with the execution of the Business Combination Agreement, the Company, Sponsors, Perception, Antara, and certain securityholders
of the Company entered into a registration rights agreement (“Registration Rights Agreement”) pursuant to which
the Company agreed to file a registration statement with respect to the registrable securities under the Registration Rights Agreement
within sixty (60) days of the Effective Time to register the resale under the Securities Act of Company Ordinary Shares, including
Company Ordinary Shares issuable upon the exercise of Company Warrants and any earned Earnout Shares, and the Company Warrants
to be held by such securityholders, subject to certain conditions set forth therein. The Company also agreed to provide customary
“piggyback” registration rights. The Registration Rights Agreement also provides that the Company will pay certain
expenses relating to such registrations and indemnify the securityholders against certain liabilities. The rights granted under
the Registration Rights Agreement supersede any prior registration, qualification, or similar rights of the parties with respect
to their Company Securities, and all such prior agreements shall be terminated.
Sponsor Forfeiture Agreement
Concurrently
with the execution of the Business Combination Agreement, the Sponsors entered into a letter agreement (“Sponsor Forfeiture
Agreement”) in favor of the Company and Collective Growth, pursuant to which they have agreed to forfeit an aggregate
of 1,875,000 shares of Collective Growth Class B common stock and 1,875,000 Collective Growth warrants for cancellation in exchange
for no consideration at the Effective Time (the “Forfeiture”).
Sponsor Support Agreement
Concurrently with
the execution of the Business Combination Agreement, the Sponsors entered into a letter agreement (“Sponsor Support Agreement”)
in favor of the Company and Collective Growth, pursuant to which they have agreed to (i) vote all shares of Class B common stock
and Class A common stock of Collective Growth beneficially owned by them in favor of the Merger and each other proposal related
to the Merger on the agenda at the meeting of Collective Growth shareholders called to approve the Merger, (ii) appear at such
shareholder meeting for the purpose of establishing a quorum, (iii) vote all such shares against any action that would reasonably
be expected to materially impede, interfere with, delay, postpone, or adversely affect the Merger or any of the other transactions
contemplated by the Business Combination Agreement, and (iv) not to transfer, assign, or sell such shares, except to certain permitted
transferees, prior to the consummation of the Transactions.
Company Transaction Support
Agreement
Concurrently
with the execution of the Business Combination Agreement, Collective Growth, the Company, holders of Company Ordinary Shares who
hold a majority of the then-outstanding Company Ordinary Shares, holders of at least sixty percent (60%) of the issued and outstanding
Company preferred shares voting together as a single class on an as-converted basis, and holders of a majority of the then-outstanding
series C convertible preferred shares of the Company and the series C-1 convertible preferred shares of the Company, entered into
agreements (“Transaction Support Agreement”) pursuant to which they agreed to (i) appear at a shareholder meeting
called by the Company for the purpose of approving the Business Combination, Merger, and other transactions contemplated by the
Business Combination, for the purpose of establishing a quorum, (ii) execute a written consent in favor of the Merger, the adoption
of the Business Combination, a proposal to increase the size of the Company’s board of directors, the termination of the
Company Investor Agreements, and, with respect to the Company preferred shares, proposals to adopt amended and restated articles
of association and waive certain preemptive rights as set forth in the Company’s charter documents, (iii) vote all such shares
against any action that would reasonably be expected to materially impede, interfere with, delay, postpone, or adversely affect
the Merger or any of the other transactions contemplated by the Business Combination Agreement, (iv) not to solicit, initiate,
encourage, or facilitate certain alternate business combinations, and (v) not to transfer, assign, or sell such covered shares,
except to certain permitted transferees, prior to the consummation of the Transactions.
PIPE Subscription Agreements
In connection
with the Transactions, the Company engaged Goldman Sachs & Co. LLC as placement agent of a private placement of not less than
$200,000,000 of Company Ordinary Shares (the “PIPE”).
Concurrently
with the execution of the Business Combination Agreement, the Company and certain accredited investors (“Investors”)
entered into a series of subscription agreements (“Subscription Agreements”) providing for the purchase by the
Investors at the Effective Time of an aggregate of 20,000,000 Company Ordinary Shares (“PIPE Shares”) at a price
per share of $10.00, for gross proceeds to the Company of $200,000,000. Each Investor agreed to fund the purchase price for its
PIPE Shares within two (2) business days after receiving notice from the Company of the expected closing date of the Transactions.
The price per share to be paid by the Investors pursuant to the Subscription Agreements assumes that the Company has effected the
Stock Split. The closing of the PIPE is conditioned upon the consummation of the Transactions and other transactions contemplated
by the Business Combination Agreement.
The Company
agreed to file a registration statement registering the resale of the PIPE Shares within forty-five (45) days after the consummation
of the Transactions.
The Company
Ordinary Shares were offered and sold to the Investors in reliance on the exemption from registration provided by Section 4(a)(2)
of the Securities Act, based on the fact that the sale will have been made without any general solicitation or advertising and
based on representations from each Investor, among other things, that (a) it was a qualified institutional buyer or an accredited
investor (to the extent applicable), (b) it was purchasing the shares for its own account investment, and not with a view to distribution,
(c) it had been given access to full and complete access to information regarding Collective Growth, the Company, and the Merger,
and (d) it understood that the offer and sale of the shares was not registered and the shares may not be publicly sold or otherwise
disposed of without registration under the Securities Act or an applicable exemption therefrom.
Antara Put Option Agreement
Concurrently
with the execution of the Business Combination Agreement, the Company and Antara, on behalf of the funds it manages and/or its
designees, entered into a put option agreement (“Put Option Agreement”) pursuant to which the Company caused
Antara to subscribe for a number of Company Ordinary Shares in the PIPE with an aggregate equity value equal to $70,000,000. Additionally, Antara will receive at the Effective Time an additional 4,310,736 Company
Warrants and up to 3,559,294 Company Ordinary Shares, as follows: (x) 3,559,294 Company Ordinary Shares if the Initial Transaction
Proceeds is equal to or greater than $150,000,000 or (y) a number of Company Ordinary Shares equal to the difference of (A) 3,559,294
and (B) the product of (i) 0.5556 and (ii) the Perception Earnout Calculation if the Initial Transaction Proceeds are less than
$150,000,000 (such shares issuable to Antara, the “Antara Additional Shares”). Antara may also receive the Antara Earnout Shares, as described above under
the section titled “Earnout”. The number of Company Shares and Company Warrants issuable pursuant to the Put Option
Agreement assumes that the Company has effected the Stock Split.
The foregoing descriptions of the Lockup Agreement,
Registration Rights Agreement, Sponsor Forfeiture Agreement, Sponsor Support Agreement, Company Transaction Support Agreement,
Subscription Agreements, and Put Option Agreement are qualified in their entirety by the text of the Registration Rights Agreement,
Sponsor Forfeiture Agreement, Sponsor Support Agreement, Company Transaction Support Agreement, Subscription Agreements, and Put
Option Agreement, respectively. The forms of such agreements are attached as exhibits hereto and are incorporated herein by reference.
