Item
1.01 Entry Into A Material Definitive Agreement.
On
August 3 2020, FinTech Acquisition Corp. III (the “Company”) entered into an Agreement and Plan of Merger (the
“Merger Agreement”) by and among GTCR-Ultra Holdings, LLC (“Seller”), GTCR Ultra-Holdings
II, LLC (“Holdings”), FinTech Acquisition Corp. III Parent Corp. (“Parent”), the Company,
FinTech III Merger Sub Corp. (“Merger Sub”), GTCR/Ultra Blocker, Inc. (“Blocker”), and GTCR
Fund XI/C LP (“Blocker Seller”), which provides for, among other things, (a) Merger Sub to be merged with and
into the Company with the Company being the surviving corporation in the merger and a wholly owned subsidiary of Parent (the “Merger”)
and (b) through a series of transactions, Seller and Blocker Seller to contribute to Parent all of the equity interests in Holdings
and Blocker in exchange for cash and shares of common stock of Parent (the “Contribution and Exchange” and
together with the Merger and the other transactions contemplated by the Merger Agreement, the “Transactions”).
The
Merger Agreement
Transactions
As
a result of the Transactions, the Company and the various operating subsidiaries of Holdings will become subsidiaries of Parent,
with Seller and former stockholders of the Company becoming stockholders of Parent.
Consideration
The
aggregate consideration to be paid in the Transactions will consist of (i) based on Holdings’ current capitalization, assuming
no redemptions, an estimated $565 million in cash and 48 million shares of Parent’s common stock, and (ii) up to an additional
14,000,000 shares of Parent’s common stock (the “Earnout Shares”), in the event that the closing sale
price of Parent’s common stock exceeds certain price thresholds for 20 out of any 30 consecutive trading days during the
first five years following the closing of the Transactions. The number of shares of the equity consideration will be based on
a $10.00 per share value for Parent’s common stock The cash consideration will be funded from the cash held in the Company’s
trust account (after permitted redemptions) and the proceeds of the PIPE Investment (described below).
Redemption
Offer
Pursuant
to the Company’s amended and restated certificate of incorporation and in accordance with the terms of the Merger Agreement,
the Company will be providing its public stockholders with the opportunity to redeem, upon the closing of the Transactions, their
shares of Company Class A common stock for cash equal to their pro rata share of the aggregate amount on deposit as of two (2)
business days prior to the consummation of the Transactions in the Company’s trust account (which holds the proceeds of
the Company’s initial public offering (the “IPO”), less taxes payable(the “Redemption Offer”).
Representations,
Warranties and Covenants
Each
of Seller, Holdings, Parent, the Company, Merger Sub, Blocker and Blocker Seller have made representations, warranties and covenants
in the Merger Agreement that are customary for transactions of this nature. The representations and warranties of Seller, Holdings,
Parent, the Company, Merger Sub, Blocker and Blocker Seller will not survive the closing of the Transactions.
Conditions
to Consummation of the Transactions
Consummation
of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including,
among others, that (i) the Transactions be approved by the Company’s stockholders; (ii) there has been no material adverse
effect (as defined in the Merger Agreement) with respect to Holdings or the Company since the date of the Merger Agreement; (iii)
the registration statement on Form S-4 of Parent containing the proxy statement/prospectus for the Company’s special meeting
of stockholders will have become effective; (iv) the Company will have at least $5,000,001
of net tangible assets immediately following the Closing (after giving effect to the redemption of public shares by the Company’s
public stockholders); (v) all applicable waiting periods and any extensions thereof under applicable antitrust, competition or
similar laws will have expired or been terminated; (vi) the Company will have at least $200 million in its trust account as of
the closing, after giving effect to the redemption of public shares by the Company’s public stockholders, the payment of
the Company’s transaction expenses, the payment of reimbursable transaction expenses (as defined in the Merger Agreement)
and the payment of deferred underwriting fees (the “Remaining Trust Funds”); and (vii) the total of the sum
of the Remaining Trust Funds and the proceeds of the PIPE Investment will be at least $400 million.
Termination
The
Merger Agreement may be terminated at any time prior to the consummation of the Transactions (whether before or after the required
Company stockholder vote has been obtained) by mutual written consent of the Company and Seller and in certain other limited circumstances,
including if the Transactions have not been consummated by November 20, 2020 (the “outside date”), with the
outside date being automatically extended to April 4, 2021 if the Company’s stockholders approve an extension of
the deadline for the Company to complete a business combination to that date.
If
the Merger Agreement is validly terminated, no party thereto will have any liability or any further obligation to any other party
under the Merger Agreement.
Additional
Agreements to be Executed at Closing
The
Merger Agreement provides that, upon consummation of the Transactions, Parent will enter into a registration rights agreement,
a director nomination agreement and a tax receivables agreement.
Registration
Rights Agreement
At
the closing, Parent will enter into a Registration Rights Agreement with certain stockholders of the Company and certain former
stockholders of Holdings with respect to the shares of Parent common stock that will be issued as partial consideration under
the Merger Agreement. The Registration Rights Agreement will require Parent to, among other things, file a resale shelf registration
statement on behalf of the stockholders promptly after the closing of the Transactions. The Registration Rights Agreement will
also provide certain demand rights and piggyback rights to the stockholders, subject to underwriter cutbacks and issuer blackout
periods. Parent will agree to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.
The Registration Rights Agreement will also prohibit the transfer (subject to limited exceptions) of the shares of Parent common
stock received as equity consideration by Seller and Blocker Seller and the shares of Parent common stock held by the Company’s
Sponsors (FinTech Investor Holdings III, LLC, FinTech Masala Advisors, LLC and 3FIII, LLC), in each case for a period of 180 days
following the closing, subject to early termination in the event that the closing sale price of Parent’s common stock exceeds
$12.00 for 20 out of 30 consecutive trading days.
Director
Nomination Agreement
At
the closing, Parent will enter into a Director Nomination Agreement with Seller, Blocker Seller and certain affiliates of Blocker
Seller (collectively, “GTCR”). Pursuant to the Director Nomination Agreement, GTCR will be granted certain rights
to nominate members of the board of Parent following the closing of the Transactions, subject to certain conditions set forth
in the Director Nomination Agreement, until GTCR no longer beneficially owns at least 5% of the total voting power of the then
outstanding shares of Parent common stock. In addition, GTCR will have the right to designate the replacement for any of its designees
whose board service has terminated prior to the end of the director’s term, regardless of GTCR’s beneficial ownership
at such time. GTCR will also have the right to have its designees participate on committees of the board of directors, subject
to compliance with applicable law and stock exchange listing rules.
Tax
Receivables Agreement
In
connection with the closing, Parent will enter into the Tax Receivable Agreement with Seller, Blocker Seller, Holdings and Blocker.
The Tax Receivable Agreement will generally provide for the payment by Parent to Seller and Blocker Seller, as applicable, of
85% of the net cash savings, if any, in U.S. federal, state and local income taxes that Parent actually realizes (or is deemed
to realize in certain circumstances) in periods after the Closing as a result of: (i) certain tax attributes of Blocker, Holdings
and subsidiaries of Holdings that existed prior to the Transactions; (ii) certain increases in the tax basis of Holdings’
assets resulting from the Transactions; (iii) imputed interest deemed to be paid by Parent as a result of payments Parent makes
under the Tax Receivable Agreement; and (iv) certain increases in tax basis resulting from payments Parent makes under the Tax
Receivable Agreement.
The
Merger Agreement has been approved by the Company’s board of directors, and the board has recommended that the Company’s
stockholders adopt the Merger Agreement and approve the Transactions.
The
Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date
of such 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 Merger 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. The Company does not believe that these schedules
contain information that is material to an investment decision. Investors are not third-party beneficiaries under the Merger Agreement
and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual
state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates.
This
description of the Merger Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions
of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Sponsor
Agreement
Concurrently
with the execution and delivery of the Merger Agreement, the Company’s Sponsors entered into a Sponsor Support Agreement
with the Company, Holdings, Parent, Seller and the other parties thereto (the “Sponsor Agreement”), pursuant
to which they have agreed to comply with the provisions of the Merger Agreement applicable to the Sponsors as well as the covenants
set forth in the Sponsor Agreement, including voting all shares of Company common stock or Parent common stock, as applicable,
beneficially owned by the Sponsors in favor of (i) the transactions contemplated by the Merger Agreement and (ii) following the
Closing, the election as members of Parent’s board of directors of the Nominees (as defined in the Director Nomination Agreement),
which obligation shall terminate upon the earlier of (a) Seller's written notice to the Sponsors as to any such termination and
(b) 30 days after the Closing. The Sponsor Agreement also provides that, at the Closing, the Sponsors will forfeit a portion of
their founder shares for no consideration and restructure a majority of their remaining founder shares to be subject to the same
price thresholds for Parent’s common stock described above with respect to the Earnout Shares.
This
description of the Sponsor Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions
of the Sponsor Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
PIPE
Subscription Agreements
Concurrently
with the execution and delivery of the Merger Agreement, certain institutional accredited investors (the “PIPE Investors”),
including affiliates of the Company’s Sponsors (FinTech Investor Holdings III, LLC, FinTech Masala Advisors, LLC and 3FIII,
LLC), entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE
Investors have committed to subscribe for and purchase up to 25,000,000 shares of Company Class A common stock (the “PIPE
Shares”) at a purchase price per share of $10.00 (the “PIPE Investment”). An affiliate of the Sponsors
has committed to purchase 1,500,000 PIPE Shares as part of the PIPE Investment. The purchase of the PIPE Shares will be consummated
concurrently with the Closing.
This
description of the PIPE Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms
and conditions of the form of PIPE Subscription Agreement, a form of which is attached hereto as Exhibit 10.2 and is incorporated
herein by reference.
Underwriting
Agreement Amendment
Concurrently
with the execution and delivery of the Merger Agreement, the Company entered into an agreement (the “UA Agreement”)
with Cantor Fitzgerald & Co., as representative of the several underwriters named in that certain underwriting agreement dated
as of November 15, 2018 (the “Underwriting Agreement”). Pursuant to the UA Agreement, subject to certain conditions,
the parties agreed that the Deferred Underwriting Commission (as defined in the Underwriting Agreement) payable upon the consummation
of the Transactions would be reduced to $6 million. This description of the UA Agreement does not purport to be complete and is
qualified in its entirety by the terms and conditions of the UA Agreement, a copy of which is attached hereto as Exhibit 10.3
and is incorporated herein by reference.