Risk Factors.
−Removed: An investment in our securities involves a high degree of risk.
−Removed: You should consider carefully all of the risks described below, together
−Removed: with the other information contained in this Annual Report, before making a decision to invest in our securities.
−Removed: If any of the following events occur, our business, financial condition and operating results may be materially adversely affected.
−Removed: that event, the trading price of our securities could decline, and you could lose all or part of your investment.
−Removed: SUMMARY RISK FACTORS
−Removed: Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not
−Removed: limited to, the following:
−Removed: General Risk Factors
−Removed: We are a recently incorporated company with no operating history and no revenues, and you have no basis on which
−Removed: to evaluate our ability to achieve our business objective.
−Removed: Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your
−Removed: interests, and your ability to protect your rights through the U.S.
−Removed: federal courts may be limited.
−Removed: Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring
−Removed: a shareholder vote, potentially in a manner that you do not support.
−Removed: General Risks Related to Initial Business Combinations
−Removed: Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which
−Removed: means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares
−Removed: could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
−Removed: The requirement that we consummate an initial business combination within 24 months after the closing of the
−Removed: Initial Public Offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we
−Removed: approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
−Removed: Our search for a business combination, and any target business with which we ultimately consummate a business
−Removed: combination, may be materially adversely affected by the coronavirus (COVID-19) outbreak and the status of debt and equity markets.
−Removed: We may not be able to consummate an initial business combination within 24 months after the closing of the
−Removed: Initial Public Offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
−Removed: You will not have any rights or interests in funds from the Trust Account, except under certain limited
−Removed: circumstances.
−Removed: Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: We are not required to obtain an opinion from an independent accounting or investment banking firm, and
−Removed: consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
−Removed: Risks Related to the Proposed Blue Owl Business Combination
−Removed: Our Sponsor has agreed to vote in favor of the proposed Blue Owl Business Combination, regardless of how our
−Removed: public shareholders vote.
−Removed: If the conditions to the Business Combination Agreement are not met, the proposed Blue Owl Business Combination
−Removed: may not occur.
−Removed: Pre-existing relationships between participants in the proposed Blue Owl
−Removed: Business Combination and the related transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the proposed Blue Owl Business Combination.
−Removed: If the sale of some or all of the PIPE Securities fails to close and sufficient shareholders exercise their
−Removed: redemption rights in connection with the proposed Blue Owl Business Combination, Altimar may lack sufficient funds to consummate the proposed Blue Owl Business Combination.
−Removed: If the proposed Blue Owl Business Combination is consummated, Altimars shareholders will experience
−Removed: The Domestication may result in adverse tax consequences for holders of Altimar ordinary shares and warrants,
−Removed: including public shareholders exercising redemption rights.
−Removed: The grant of registration rights to our shareholders, holders of our Private Placement Warrants and PIPE
−Removed: Investors and the future exercise of such rights may adversely affect the market price of our Class A common stock.
−Removed: General Risk Factors
−Removed: We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our
−Removed: business objective.
−Removed: We are a recently exempted company, incorporated under the laws of the Cayman Islands with no operating
−Removed: results, and we did not commence operations until obtaining funding through the Initial Public Offering.
−Removed: Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our
−Removed: initial business combination with one or more target businesses.
−Removed: If we fail to complete our initial business combination, we will never generate any operating revenues.
−Removed: Past performance by HPS, our management team or either of their respective affiliates may not be indicative of future performance of an investment in
−Removed: Information regarding performance is presented for informational purposes only.
−Removed: Any past experience or performance of HPS
−Removed: Investment Partners, LLC (HPS), an affiliate of our Sponsor, our management team or either of their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or
−Removed: (ii) success with respect to any business combination that we may consummate.
−Removed: You should not rely on the historical record of HPS, our management team or either of their respective affiliates as indicative of the future performance of an
−Removed: investment in us or the returns we will, or are likely to, generate going forward.
−Removed: Our management team has no experience in operating special purpose acquisition companies.
−Removed: In addition, HPS advises funds and accounts which have investment mandates
−Removed: that overlap with ours and therefore may compete for investment opportunities with us, and HPS will not be obligated to present any investment opportunities to us over the funds and accounts it manages.
−Removed: Senior management of HPS will spend a vast
−Removed: majority, if not substantially all, of their business time on their other duties, including to the investment management clients of HPS.
−Removed: emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller
−Removed: reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: We are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
−Removed: of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation
−Removed: requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on
−Removed: executive compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: As a result, our shareholders may not have access to certain information they may deem important.
−Removed: We could be an emerging growth company for up
−Removed: to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any
−Removed: June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
−Removed: some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the
−Removed: trading prices of our securities may be more volatile.
−Removed: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being
−Removed: required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the
−Removed: Exchange Act) are required to comply with the new or revised financial accounting standards.
−Removed: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has
−Removed: different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our financial
−Removed: statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
−Removed: standards used.
−Removed: Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K.
−Removed: Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
−Removed: We will remain a smaller
−Removed: reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30 or (2) our
−Removed: annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.
−Removed: To the extent
−Removed: we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
−Removed: Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial
−Removed: financial and management resources, and increase the time and costs of completing an acquisition.
−Removed: Section 404 of the
−Removed: Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021.
−Removed: Only in the event we are
−Removed: deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control
−Removed: over financial reporting.
−Removed: The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to
−Removed: complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
−Removed: The development of the internal control of any such entity to achieve compliance with the
−Removed: Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
−Removed: Because we are incorporated under the laws of the
−Removed: Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
−Removed: federal courts may be limited.
−Removed: We are an exempted company incorporated under the laws of the Cayman Islands.
−Removed: As a result, it may be difficult for investors to effect service
−Removed: of process within the U.S.
−Removed: upon our directors or executive officers, or enforce judgments obtained in the U.S.
−Removed: courts against our directors or officers.
−Removed: Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same may be
−Removed: supplemented or amended from time to time) and the common law of the Cayman Islands.
−Removed: We are also subject to the federal securities laws of the U.S.
−Removed: The rights of shareholders to take action against the directors, actions by minority shareholders and
−Removed: the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
−Removed: The common law of the Cayman Islands is derived in part from comparatively limited judicial
−Removed: precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
−Removed: The rights of our shareholders and the fiduciary responsibilities of
−Removed: our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the U.S.
−Removed: In particular, the Cayman Islands has a different body of securities laws as compared to that of the
−Removed: U.S., and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.
−Removed: In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court
−Removed: We have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts
−Removed: of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the U.S.
−Removed: predicated upon the civil liability provisions of the federal securities laws of the U.S.
−Removed: or any state and (ii) in original actions
−Removed: brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the U.S.
−Removed: or any state, so far as the liabilities imposed by those provisions are penal in nature.
−Removed: those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the U.S., the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent
−Removed: jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.
−Removed: foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be, in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same
−Removed: matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be
−Removed: contrary to public policy).
−Removed: A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
−Removed: As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by
−Removed: management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S.
−Removed: Provisions in
−Removed: our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
−Removed: Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover
−Removed: proposals that shareholders may consider to be in their best interests.
−Removed: These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preference shares, and the
−Removed: fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our Sponsor, are entitled to vote on the appointment of directors, which may make more difficult the
−Removed: removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
−Removed: Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
−Removed: We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of HPS
−Removed: and third parties with which we may deal.
−Removed: Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation
−Removed: of our assets, proprietary information and sensitive or confidential data.
−Removed: As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
−Removed: We may not have
−Removed: sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
−Removed: It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and
−Removed: lead to financial loss.
−Removed: Since only holders of our founder shares will have the right to vote on the appointment of directors,
−Removed: the NYSE may consider us to be a controlled company within the meaning of the NYSE rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
−Removed: Only holders of our founder shares will have the right to vote on the appointment of directors.
−Removed: As a result, the NYSE may consider us to be a
−Removed: controlled company within the meaning of the NYSE corporate governance standards.
−Removed: Under the NYSE corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a
−Removed: controlled company and may elect not to comply with certain corporate governance requirements, including the requirements that:
−Removed: we have a board that includes a majority of independent directors, as defined under the rules of the
−Removed: we have a compensation committee of our board that is comprised entirely of independent directors with a written
−Removed: charter addressing the committees purpose and responsibilities;
−Removed: we have a nominating and corporate governance committee of our board that is comprised entirely of independent
−Removed: directors with a written charter addressing the committees purpose and responsibilities.
−Removed: We do not intend to
−Removed: utilize these exemptions and intend to comply with the corporate governance requirements of the NYSE, subject to applicable phase-in rules.
−Removed: However, if we determine in the future to utilize some or all of
−Removed: these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements.
−Removed: The NYSE may delist our securities from trading on its exchange, which could limit investors ability to make transactions in our securities and
−Removed: subject us to additional trading restrictions.
−Removed: Our Units, Class A ordinary shares and warrants are currently listed on the
−Removed: Although after giving effect to the Initial Offering Public we meet, on a pro forma basis, the minimum initial listing standards set forth in the NYSE listing standards, our securities may not be listed on the NYSE in the future or
−Removed: prior to our initial business combination.
−Removed: In order to continue listing our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and share price levels, such as a minimum market
−Removed: capitalization (generally $50,000,000) and a minimum number of holders of our securities (generally 300 public holders).
−Removed: Additionally, our Units will not be traded after completion of our initial business combination and, in connection with our
−Removed: initial business combination, we will be required to demonstrate compliance with the NYSE initial listing requirements, which are more rigorous than the NYSE continued listing requirements, in order to continue to maintain the listing of our
−Removed: securities on the NYSE.
−Removed: For instance, our share price would generally be required to be at least $4.00 per share, our total market capitalization would be required to be at least $200.0 million, the aggregate market value of publicly held
−Removed: shares would be required to be at least $100.0 million and we would be required to have at least 400 round lot shareholders.
−Removed: We may not be able to meet those listing requirements at that time, especially if there are a significant number of
−Removed: redemptions in connection with our initial business combination.
−Removed: If the NYSE delists our securities from trading on its exchange and we
−Removed: are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
−Removed: If this were to
−Removed: occur, we could face significant material adverse consequences, including:
−Removed: a limited availability of market quotations for our securities;
−Removed: reduced liquidity for our securities;
−Removed: a determination that our Class A ordinary shares are a penny stock which will require brokers
−Removed: trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
−Removed: a limited amount of news and analyst coverage;
−Removed: a decreased ability to issue additional securities or obtain additional financing in the future.
−Removed: The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states
−Removed: from regulating the sale of certain securities, which are referred to as covered securities. Because our Units, Class A ordinary shares and warrants are listed on the NYSE, our Units, Class A ordinary shares and warrants
−Removed: qualify as covered securities under the statute.
−Removed: Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is
−Removed: a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
−Removed: While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank
−Removed: check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in
−Removed: their states.
−Removed: Further, if we were no longer listed on the NYSE, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
−Removed: Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to
−Removed: negotiate and complete our initial business combination, and results of operations.
−Removed: We are subject to laws and regulations enacted
−Removed: by national, regional and local governments.
−Removed: In particular, we will be required to comply with certain SEC and other legal requirements.
−Removed: Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
−Removed: Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations.
−Removed: In addition, a failure to comply
−Removed: with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
−Removed: Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their
−Removed: If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an
−Removed: unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business.
−Removed: As a result, a liquidator could seek to recover some or
−Removed: all amounts received by our shareholders.
−Removed: Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying
−Removed: public shareholders from the Trust Account prior to addressing the claims of creditors.
−Removed: We cannot assure you that claims will not be brought against us for these reasons.
−Removed: We and our directors and officers who knowingly and willfully authorized or
−Removed: permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offense and may be liable for a fine of $18,292.68 and
−Removed: imprisonment for five years in the Cayman Islands.
−Removed: We may be a passive foreign investment company, or PFIC, which could result in
−Removed: federal income tax consequences to U.S.
−Removed: If we are a PFIC for any taxable year (or portion thereof) that is
−Removed: included in the holding period of a U.S.
−Removed: Holder (as defined in the section of our IPO prospectus captioned TaxationU.S.
−Removed: Federal Income Tax Considerations-General ) of our Class A ordinary shares or warrants, the U.S.
−Removed: Holder may be subject to adverse U.S.
−Removed: federal income tax consequences and may be subject to additional reporting requirements.
−Removed: Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception.
−Removed: Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that
−Removed: we will qualify for the start-up exception.
−Removed: Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any
−Removed: subsequent taxable year.
−Removed: Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year.
−Removed: Moreover, if we determine we are a PFIC for any
−Removed: taxable year, upon written request, we will endeavor to provide to a U.S.
−Removed: Holder such information as the Internal Revenue Service (IRS) may require, including a PFIC Annual Information Statement, in order to enable the U.S.
−Removed: make and maintain a qualified electing fund election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases.
−Removed: investors to consult their tax advisors regarding the possible application of the PFIC rules.
−Removed: We are dependent upon our executive officers and
−Removed: directors, and their loss could adversely affect our ability to operate.
−Removed: Our operations are dependent upon a relatively small
−Removed: group of individuals and, in particular, our executive officers and directors.
−Removed: We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination.
−Removed: addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying
−Removed: potential business combinations and monitoring the related due diligence.
−Removed: We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers.
−Removed: The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
−Removed: Our Sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a
−Removed: manner that you do not support.
−Removed: As of December 31, 2020, our Sponsor owned 20% of our issued and outstanding ordinary shares.
−Removed: Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association.
−Removed: If our Sponsor
−Removed: purchases additional securities, this would increase its control.
−Removed: Other than as previously disclosed by us, neither our Sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities.
−Removed: Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares.
−Removed: In addition, our board of directors, whose members were appointed by our Sponsor, is
−Removed: and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year.
−Removed: We may not hold an annual general meeting to appoint new directors prior to the
−Removed: completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination.
−Removed: If there is an annual general meeting, as a consequence of our
−Removed: staggered board of directors, only a minority of the board of directors will be considered for appointment and our Sponsor, because of its ownership position, will control the outcome, as only holders of our Class B ordinary shares
−Removed: will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination.
−Removed: Accordingly, our Sponsor will continue to exert control at least until the completion of our initial business combination.
−Removed: In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our Sponsor.
−Removed: We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of
−Removed: the then-outstanding public warrants.
−Removed: As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of Class A ordinary shares purchasable upon exercise of a warrant could be
−Removed: decreased, all without approval of each warrant affected.
−Removed: Our warrants were issued in registered form under a warrant agreement
−Removed: between Continental Stock Transfer & Trust Company, as warrant agent, and us.
−Removed: The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
−Removed: provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
−Removed: Accordingly, we may amend the terms of
−Removed: the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.
−Removed: Although our ability to amend the terms of the public warrants with the
−Removed: consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants,
−Removed: convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares or Class A common stock, as applicable, purchasable upon exercise of a warrant.
−Removed: We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to holders of warrants, thereby making such warrants
−Removed: We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their
−Removed: expiration, at a price of $0.01 per warrant, provided that the last sale price of our Class A ordinary shares or Class A common stock, as applicable, equals or exceeds $18.00 per share (as adjusted for share splits, share
−Removed: capitalizations, reorganizations, recapitalizations and the like) on each of 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which notice of such redemption
−Removed: We will not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A ordinary shares or Class A common stock, as applicable, issuable upon exercise of the warrants is effective
−Removed: and a current prospectus relating to those Class A ordinary shares or Class A common stock, as applicable, is available throughout the 30-day redemption period, except if the warrants may be
−Removed: exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act.
−Removed: If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
−Removed: underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding warrants could force holders thereof to (i) exercise warrants and pay the exercise price therefor at a time when it may be disadvantageous
−Removed: for such holder to do so, (ii) sell warrants at the then-current market price when such holder might otherwise wish to hold warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for
−Removed: redemption, is likely to be substantially less than the market value of such warrants.
−Removed: None of the Private Placement Warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees.
−Removed: In addition, we may redeem warrants after they become exercisable for Class A ordinary shares or common stock, as applicable, determined
−Removed: based on the redemption date and the fair market value of our Class A ordinary shares or common stock, as applicable.
−Removed: Any such redemption may have similar consequences to a cash redemption described above.
−Removed: In addition, such redemption may occur
−Removed: at a time when the warrants are out-of-the-money, in which case holders thereof would lose any potential embedded
−Removed: value from a subsequent increase in the value of the Class A ordinary shares or common stock, as applicable, had such warrants remained outstanding.
−Removed: General Risks Related to Initial Business Combinations
−Removed: Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial
−Removed: business combination even though a majority of our shareholders do not support such a combination.
−Removed: We may choose not to hold a
−Removed: shareholder vote before we complete our initial business combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirements.
−Removed: For instance, if we were seeking to acquire a target
−Removed: business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction.
−Removed: Except for as required by applicable law or stock exchange listing
−Removed: requirements, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on
−Removed: a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.
−Removed: Accordingly, we may complete our initial business combination even if holders of a majority
−Removed: of our issued and outstanding ordinary shares do not approve of the business combination we complete.
−Removed: Your only opportunity to affect the
−Removed: investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
−Removed: At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target
−Removed: Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business
−Removed: combination, unless we seek such shareholder approval.
−Removed: Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising
−Removed: your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
−Removed: The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination
−Removed: targets, which may make it difficult for us to enter into a business combination with a target.
−Removed: We may seek to enter into a
−Removed: business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
−Removed: If too many public shareholders exercise their redemption rights, we would not be
−Removed: able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
−Removed: Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
−Removed: $5,000,001 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SECs penny stock rules).
−Removed: Consequently, if accepting all properly submitted redemption requests would
−Removed: cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial business combination or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such
−Removed: redemption and the related business combination and may instead search for an alternative business combination.
−Removed: Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the
−Removed: most desirable business combination or optimize our capital structure.
−Removed: At the time we enter into an agreement for our initial
−Removed: business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
−Removed: large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for additional third-party financing.
−Removed: Raising additional third-party financing
−Removed: may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.
−Removed: The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
−Removed: The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination.
−Removed: The per share amount we will distribute to
−Removed: shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and, after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred
−Removed: underwriting commissions.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could
−Removed: increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
−Removed: If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
−Removed: requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased.
−Removed: If our initial business combination is unsuccessful, you would not receive your pro rata portion of
−Removed: the funds in the Trust Account until we liquidate the Trust Account.
−Removed: If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
−Removed: however, at such time our shares may trade at a discount to the pro rata amount
−Removed: per share in the Trust Account.
−Removed: In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
−Removed: The requirement that we consummate an initial business combination within 24 months after the closing
−Removed: of the Initial Public Offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as
−Removed: we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
−Removed: Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an
−Removed: initial business combination within 24 months from the closing of the Initial Public Offering.
−Removed: Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial
−Removed: business combination with that particular target business, we may be unable to complete our initial business combination with any target business.
−Removed: This risk will increase as we get closer to the time frame described above.
−Removed: In addition, we may have
−Removed: limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
−Removed: Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely
−Removed: affected by the coronavirus (COVID-19) outbreak and the status of debt and equity markets.
−Removed: The pandemic, together with resulting voluntary and U.S.
−Removed: federal and state and non-U.S.
−Removed: actions, including, without limitation, mandatory business closures, public gathering limitations, restrictions on travel and quarantines, has meaningfully disrupted the global economy and markets.
−Removed: Although the long-term economic fallout of the COVID-19 pandemic is difficult to predict, it has and is expected to continue to have ongoing material adverse effects across many, if not all, aspects of the regional, national and global economy.
−Removed: The COVID-19 pandemic has resulted, and a significant outbreak of other infectious diseases could result, in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the
−Removed: business of any potential target business with which we consummate a business combination could be materially and adversely affected.
−Removed: The extent to which the COVID-19 pandemic impacts our search for a business
−Removed: combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
−Removed: If the disruptions posed by the COVID-19 pandemic or other matters of global concern continue for an extensive period of time, our
−Removed: ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
−Removed: In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
−Removed: by the COVID-19 pandemic and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
−Removed: We may not be able to consummate an initial business combination within 24 months after the closing of the Initial Public Offering, in which case we
−Removed: would cease all operations, except for the purpose of winding up, and we would redeem our public shares and liquidate.
−Removed: be able to find a suitable target business and consummate an initial business combination within 24 months after the closing of the Initial Public Offering.
−Removed: Our ability to complete our initial business combination may be negatively impacted by
−Removed: general market conditions, volatility in the capital and debt markets, and the other risks described herein.
−Removed: For example, the outbreak of COVID-19 continues to grow both in the U.S.
−Removed: and globally and, while the
−Removed: extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party
−Removed: financing being unavailable on terms acceptable to us or at all.
−Removed: Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire.
−Removed: If we have not consummated an initial business
−Removed: combination within such applicable time period, we will:
−Removed: (i) cease all operations except for the purpose of winding up;
−Removed: (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a
−Removed: per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
−Removed: released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will
−Removed: completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any);
−Removed: and (iii) as promptly as reasonably possible following such redemption, subject to the approval
−Removed: of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
−Removed: Our amended and
−Removed: restated memorandum and articles of association provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the Trust
−Removed: Account as promptly as reasonably possible but not more than 10 business days thereafter, subject to applicable Cayman Islands law.
−Removed: In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public
−Removed: share, on the redemption of their shares, and our warrants will expire worthless.
−Removed: If we seek shareholder approval of our initial business
−Removed: combination, our Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public float of our
−Removed: Class A ordinary shares or public warrants.
−Removed: If we seek shareholder approval of our initial business combination and we do not
−Removed: conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated
−Removed: transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so.
−Removed: However, they have no current commitments, plans or intentions to engage in such
−Removed: transactions and have not formulated any terms or conditions for any such transactions.
−Removed: None of the funds in the Trust Account will be used to purchase public shares or warrants in such transactions.
−Removed: In the event that our Sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated
−Removed: transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.
−Removed: The purpose of any such transaction could be to
−Removed: (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters
−Removed: submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the
−Removed: closing of our initial business combination, where it appears that such requirement would otherwise not be met.
−Removed: Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been
−Removed: In addition, if such purchases are made, the public float of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
−Removed: to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
−Removed: Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are
−Removed: subject to such reporting requirements.
−Removed: If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our
−Removed: initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
−Removed: will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination.
−Removed: Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation
−Removed: or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares.
−Removed: In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public
−Removed: shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares.
−Removed: In the event that a shareholder fails to comply with these procedures, its
−Removed: shares may not be redeemed.
−Removed: You will not have any rights or interests in funds from the Trust Account, except under certain
−Removed: limited circumstances.
−Removed: Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: Our public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of:
−Removed: (i) our completion of
−Removed: an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein;
−Removed: (ii) the redemption of any public shares
−Removed: properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the
−Removed: right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or
−Removed: (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares;
−Removed: and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing
−Removed: of the Initial Public Offering, subject to applicable law and as further described herein.
−Removed: Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding
−Removed: sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of the
−Removed: Initial Public Offering, with respect to such Class A ordinary shares so redeemed.
−Removed: In no other circumstances will a public shareholder have any right or interest of any kind in the Trust Account.
−Removed: Holders of warrants will not have any right to
−Removed: the proceeds held in the Trust Account with respect to the warrants.
−Removed: Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or
−Removed: a group of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
−Removed: If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
−Removed: combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is
−Removed: acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which
−Removed: we refer to as the Excess Shares, without our prior consent.
−Removed: However, we would not be restricting our shareholders ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
−Removed: inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
−Removed: Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
−Removed: And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of
−Removed: such shares, would be required to sell your shares in open market transactions, potentially at a loss.
−Removed: Because of our limited resources and the
−Removed: significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
−Removed: If we have not consummated our initial business combination within the required time period, our public
−Removed: shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which
−Removed: may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
−Removed: Many of these individuals and entities are well established and
−Removed: have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
−Removed: Many of these competitors possess greater technical, human and other resources or
−Removed: more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
−Removed: with those of many of these competitors.
−Removed: While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of
−Removed: the Private Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
−Removed: This inherent competitive limitation gives others an advantage
−Removed: in pursuing the acquisition of certain target businesses.
−Removed: Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder
−Removed: vote or via a tender offer.
−Removed: Target companies will be aware that this may reduce the resources available to us for our initial business combination.
−Removed: Any of these obligations may place us at a competitive disadvantage in successfully negotiating a
−Removed: business combination.
−Removed: If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
−Removed: of our Trust Account and our warrants will expire worthless.
−Removed: If the net proceeds of the Initial Public Offering and the sale of the Private
−Removed: Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for the 24 months following the closing of the Initial Public Offering, it could limit the amount available to fund our search for a target business or
−Removed: businesses and our ability to complete our initial business combination, and we will depend on loans from our Sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination.
−Removed: Of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, only approximately $1,000,000 is available
−Removed: to us initially outside the Trust Account to fund our working capital requirements.
−Removed: We believe that the funds available to us outside of the Trust Account, together with funds available from loans from our Sponsor, its affiliates or members of our
−Removed: management team will be sufficient to allow us to operate for at least the 24 months following the closing of the Initial Public Offering;
−Removed: however, we cannot assure you that our estimate is accurate, and our Sponsor, its affiliates or members of our
−Removed: management team are under no obligation to advance funds to us in such circumstances.
−Removed: Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target
−Removed: We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent designed to keep target businesses from shopping
−Removed: around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so.
−Removed: If we entered into a
−Removed: letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue
−Removed: searching for, or conduct due diligence with respect to, a target business.
−Removed: If we are required to seek additional capital, we would need
−Removed: to borrow funds from our Sponsor, its affiliates, members of our management team or other third parties to operate or we may be forced to liquidate.
−Removed: Neither our Sponsor, members of our management team nor their affiliates are under any obligation to
−Removed: us in such circumstances.
−Removed: Any such advances may be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial business combination.
−Removed: Up to $2,000,000 of such loans may be convertible into
−Removed: warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender.
−Removed: The warrants would be identical to the Private Placement Warrants.
−Removed: Prior to the completion of our initial business combination, we do not
−Removed: expect to seek loans from parties other than our Sponsor, its affiliates or members of our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds
−Removed: in our Trust Account.
−Removed: If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.
−Removed: Consequently, our public shareholders may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
−Removed: See If third parties bring claims against us,
−Removed: the proceeds held in the Trust Account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per public share and other risk factors herein.
−Removed: Subsequent to our completion of our initial business combination, we may be required to take
−Removed: write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of
−Removed: your investment.
−Removed: Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that
−Removed: this diligence will identify all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside of the target business and outside of
−Removed: our control will not later arise.
−Removed: As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in
−Removed: our reporting losses.
−Removed: Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
−Removed: Even though these charges may
−Removed: be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
−Removed: charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining
−Removed: post-combination debt financing.
−Removed: Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities.
−Removed: Such holders are unlikely to have a remedy for such
−Removed: reduction in value.
−Removed: If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption
−Removed: amount received by shareholders may be less than $10.00 per public share.
−Removed: Our placing of funds in the Trust Account may not
−Removed: protect those funds from third-party claims against us.
−Removed: Although we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title,
−Removed: interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing
−Removed: claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain
−Removed: advantage with respect to a claim against our assets, including the funds held in the Trust Account.
−Removed: If any third-party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an
−Removed: analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third-partys engagement would be significantly more beneficial to us than any
−Removed: Examples of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of
−Removed: a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service
−Removed: provider willing to execute a waiver.
−Removed: In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not
−Removed: seek recourse against the Trust Account for any reason.
−Removed: Upon redemption of our public shares, if we have not consummated an initial business combination within 24 months from the closing of the Initial Public Offering, or upon the exercise of a
−Removed: redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
−Removed: the per share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors.
−Removed: Pursuant to the letter agreement (which is an exhibit to this Annual
−Removed: Report), our Sponsor has agreed that it will be liable to us if and to the extent any claims by (A) a third-party (other than our independent auditors) for services rendered or products sold to us or (B) a prospective target business with
−Removed: which we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date
−Removed: of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability
−Removed: will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account.
−Removed: Moreover, in the event that an executed waiver is deemed to be unenforceable against a
−Removed: third -party, our Sponsor will not be responsible to the extent of any liability for such third-party claims.
−Removed: However, we have not asked our Sponsor to reserve for such indemnification obligations, nor
−Removed: have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations, and we believe that our Sponsors only assets are securities of our Company.
−Removed: Therefore, we cannot assure you that our Sponsor would be
−Removed: able to satisfy those obligations.
−Removed: As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share.
−Removed: such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares.
−Removed: None of our officers or directors will indemnify us for claims
−Removed: by third parties including, without limitation, claims by vendors and prospective target businesses.
−Removed: The securities in which we invest the proceeds
−Removed: held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by
−Removed: shareholders may be less than $10.00 per share.
−Removed: The gross proceeds of the Initial Public Offering and certain proceeds from the
−Removed: sale of the Private Placement Warrants, in the amount of $275,000,000, are held in an interest-bearing Trust Account.
−Removed: The proceeds held in the Trust Account may only be invested in direct U.S.
−Removed: Treasury obligations having a maturity of 185 days or
−Removed: less, or in certain money market funds which invest only in direct U.S.
−Removed: Treasury obligations.
−Removed: While short-term U.S.
−Removed: Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years.
−Removed: Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the U.S.
−Removed: In the event of
−Removed: very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced.
−Removed: In the event that we are unable to complete our initial business combination, our public shareholders are entitled to
−Removed: receive their pro rata share of the proceeds held in the Trust Account, plus any interest income.
−Removed: If the balance of the Trust Account is reduced below $250,000,000 as a result of negative interest rates, the amount of funds in the Trust
−Removed: Account available for distribution to our public shareholders may be reduced below $10.00 per share.
−Removed: Our directors may decide not to enforce the
−Removed: indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.
−Removed: In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount
−Removed: per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay
−Removed: our tax obligations, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our
−Removed: Sponsor to enforce its indemnification obligations.
−Removed: While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our
−Removed: independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of
−Removed: funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00 per public share.
−Removed: We may not have
−Removed: sufficient funds to satisfy indemnification claims of our directors and executive officers.
−Removed: We have agreed to indemnify our
−Removed: officers and directors to the fullest extent permitted by law.
−Removed: However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the
−Removed: Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares).
−Removed: Accordingly, any indemnification provided will be able to be satisfied by us only if
−Removed: (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination.
−Removed: Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our
−Removed: or directors for breach of their fiduciary duty.
−Removed: These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such
−Removed: an action, if successful, might otherwise benefit us and our shareholders.
−Removed: Furthermore, a shareholders investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors
−Removed: pursuant to these indemnification provisions.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a
−Removed: bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may
−Removed: seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed
−Removed: under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a preferential transfer or a fraudulent conveyance. As a result, a bankruptcy or insolvency court could seek to recover some or all amounts
−Removed: received by our shareholders.
−Removed: In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
−Removed: shareholders from the Trust Account prior to addressing the claims of creditors.
−Removed: If, before distributing the proceeds in the Trust Account to our
−Removed: public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the
−Removed: claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
−Removed: If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or
−Removed: winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be
−Removed: subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders.
−Removed: To the extent any bankruptcy or insolvency
−Removed: claims deplete the Trust Account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
−Removed: If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and
−Removed: our activities may be restricted, which may make it difficult for us to complete our initial business combination.
−Removed: deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
−Removed: restrictions on the nature of our investments;
−Removed: restrictions on the issuance of securities;
−Removed: each of which may make it difficult for us to complete our initial business combination.
−Removed: In addition, we may have imposed upon us burdensome requirements, including:
−Removed: registration as an investment company with the SEC;
−Removed: adoption of a specific form of corporate structure;
−Removed: reporting, recordkeeping, voting, proxy and disclosure requirements and other rules and regulations that we are
−Removed: currently not subject to.
−Removed: In order not to be regulated as an investment company under the Investment Company Act,
−Removed: unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading
−Removed: investment securities constituting more than 40% of our assets (exclusive of U.S.
−Removed: government securities and cash items) on an unconsolidated basis.
−Removed: Our business will be to identify and complete a business combination and thereafter to
−Removed: operate the post-transaction business or assets for the long term.
−Removed: We do not plan to buy businesses or assets with a view to resale or profit from their resale.
−Removed: We do not plan to buy unrelated businesses or assets or to be a passive investor.
−Removed: We do not believe that our anticipated principal activities will subject us to the Investment Company Act.
−Removed: To this end, the proceeds held in
−Removed: the Trust Account may only be invested in U.S.
−Removed: government securities within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions
−Removed: under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.
−Removed: Treasury obligations.
−Removed: Pursuant to the trust agreement, the trustee is not permitted to invest in other securities
−Removed: By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant
−Removed: bank or private equity fund), we intend to avoid being deemed an investment company within the meaning of the Investment Company Act.
−Removed: The Trust Account is intended as a holding place for funds pending the earliest to occur of either:
−Removed: (i) the completion of our initial business combination;
−Removed: (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to
−Removed: modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not
−Removed: complete our initial business combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares;
−Removed: or (iii) absent
−Removed: our completing an initial business combination within 24 months from the closing of the Initial Public Offering, our return of the funds held in the Trust Account to our public shareholders as part of our redemption of the public shares.
−Removed: not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.
−Removed: If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional
−Removed: expenses for which we have not allotted funds and may hinder our ability to complete a business combination.
−Removed: If we have not consummated our initial business combination within the required time period, our public shareholders may receive only
−Removed: approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: If we have not consummated an initial business combination within 24 months from the closing of the Initial Public Offering, our public shareholders may
−Removed: be forced to wait beyond such 24 months before redemption from our Trust Account.
−Removed: If we have not consummated an initial business
−Removed: combination within 24 months from the closing of the Initial Public Offering, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income
−Removed: taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein.
−Removed: Any redemption of public shareholders from the Trust Account will be effected
−Removed: automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up.
−Removed: If we are required to wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public
−Removed: shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law.
−Removed: In that case, investors may be forced to wait beyond 24 months from the closing of the
−Removed: Initial Public Offering before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account.
−Removed: We have no obligation to return funds to investors
−Removed: prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where
−Removed: investors have sought to redeem their Class A ordinary shares.
−Removed: Only upon our redemption or any
−Removed: liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum
−Removed: and articles of association.
−Removed: Our amended and restated memorandum and articles of association provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with
−Removed: respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than 10 business days thereafter, subject to applicable Cayman Islands law.
−Removed: We may not hold an annual general meeting until after the consummation of our initial business combination.
−Removed: In accordance with the NYSE corporate governance requirements, we are not required to hold an annual general meeting until one year after our
−Removed: first fiscal year end following our listing on the NYSE.
−Removed: There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings to appoint directors.
−Removed: Until we hold an annual general meeting, public shareholders may
−Removed: not be afforded the opportunity to appoint directors and to discuss Company affairs with management.
−Removed: Our board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those
−Removed: directors appointed prior to our first annual general meeting) serving a three-year term.
−Removed: Holders of Class A ordinary shares will not be
−Removed: entitled to vote on any appointment of directors we hold prior to our initial business combination.
−Removed: Prior to our initial business
−Removed: combination, only holders of our founder shares will have the right to vote on the appointment of directors.
−Removed: Holders of our public shares will not be entitled to vote on the appointment of directors during such time.
−Removed: In addition, prior to our
−Removed: initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
−Removed: Accordingly, you may not have any say in the management of our Company prior to the consummation of an initial
−Removed: business combination.
−Removed: We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or
−Removed: any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially
−Removed: causing such warrants to expire worthless.
−Removed: We are not registering the Class A ordinary shares issuable upon exercise of the
−Removed: warrants under the Securities Act or any state securities laws at this time.
−Removed: However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing of our initial
−Removed: business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective
−Removed: within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are
−Removed: We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
−Removed: or incorporated by reference therein are not current, complete or correct, or the SEC issues a stop order.
−Removed: If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we
−Removed: will be required to permit holders to exercise their warrants on a cashless basis, in which case the number of Class A ordinary shares that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares
−Removed: equal to 0.361 Class A ordinary shares per warrant (subject to adjustment).
−Removed: However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants,
−Removed: unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
−Removed: Notwithstanding the above, if our Class A ordinary
−Removed: shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option,
−Removed: require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in
−Removed: effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
−Removed: Exercising the warrants on a
−Removed: cashless basis could have the effect of reducing the potential upside of the holders investment in our Company because the warrant holder will hold a smaller number of
−Removed: Class A ordinary shares upon a cashless exercise of the warrants it holds.
−Removed: In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to
−Removed: register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available.
−Removed: If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or
−Removed: qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
−Removed: In such event, holders who acquired their warrants as part of a purchase of units will have paid the
−Removed: full unit purchase price solely for the Class A ordinary shares included in the units.
−Removed: There may be a circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants while a
−Removed: corresponding exemption does not exist for holders of the public warrants included as part of units sold in the Initial Public Offering.
−Removed: In such an instance, our Sponsor and its permitted transferees (which may include our directors and executive
−Removed: officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares.
−Removed: If and when the
−Removed: warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities laws.
−Removed: As a result, we may redeem the
−Removed: warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
−Removed: The warrants may become exercisable and redeemable
−Removed: for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
−Removed: In certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable
−Removed: for a security other than the Class A ordinary shares.
−Removed: As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at
−Removed: Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business days of the closing of an initial
−Removed: business combination.
−Removed: The grant of registration rights to our Sponsor may make it more difficult to complete our initial business combination, and
−Removed: the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
−Removed: Pursuant to an
−Removed: agreement entered into at the closing of the Initial Public Offering, our Sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the Private
−Removed: Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion
−Removed: of such warrants.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares.
−Removed: In addition, the existence of the
−Removed: registration rights may make our initial business combination more costly or difficult to conclude.
−Removed: This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash
−Removed: consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by our Sponsor or its permitted transferees are registered for resale.
−Removed: Involvement of members of our management and companies with which they are affiliated in civil disputes and litigation, governmental investigations or
−Removed: negative publicity unrelated to our business affairs could materially impact our ability to consummate an initial business combination.
−Removed: Members of our management team and companies with which they are affiliated have been, and in the future will continue to be, involved in a
−Removed: wide variety of business affairs, including transactions, such as sales and purchases of businesses, and ongoing operations.
−Removed: As a result of such involvement, members of our management and companies with which they are affiliated in have been, and
−Removed: may in the future be, involved in civil disputes, litigation, governmental investigations and negative publicity relating to their business affairs.
−Removed: Any such claims, investigations, lawsuits or negative publicity may be detrimental to our reputation
−Removed: and could negatively affect our ability to identify and complete an initial business combination in a material manner and may have an adverse effect on the price of our securities.
−Removed: We are not required to obtain an opinion from an independent accounting or investment banking firm
−Removed: and, consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
−Removed: Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent
−Removed: investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a financial point of view.
−Removed: If no opinion is obtained, our shareholders will be relying on
−Removed: the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
−Removed: Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable,
−Removed: related to our initial business combination.
−Removed: We may issue additional Class A ordinary shares or preference shares to complete our initial
−Removed: business combination or under an employee incentive plan after completion of our initial business combination.
−Removed: We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of
−Removed: Any such issuances would dilute the interest of our shareholders and likely present other risks.
−Removed: Our amended and
−Removed: restated memorandum and articles of association authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference
−Removed: shares, par value $0.0001 per share.
−Removed: The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled
−Removed: to liquidating distributions from the Trust Account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof as described herein and in our amended and
−Removed: restated memorandum and articles of association.
−Removed: We may issue a substantial number of additional Class A ordinary shares or
−Removed: preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
−Removed: We may also issue Class A ordinary shares in connection with our redeeming the warrants or
−Removed: upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
−Removed: provisions as set forth herein.
−Removed: However, our amended and restated memorandum and articles of association provide, among other things, that prior to or in connection with our initial business combination, we may not issue additional shares that would
−Removed: entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial
−Removed: business combination.
−Removed: These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
−Removed: of additional ordinary or preference shares:
−Removed: may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights
−Removed: senior to those afforded our Class A ordinary shares;
−Removed: could cause a change in control if a substantial number of Class A ordinary shares are issued, which may
−Removed: affect, among other things, our ability to use our net operating loss carryforwards, if any, and could result in the resignation or removal of our present officers and directors;
−Removed: may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting
−Removed: rights of a person seeking to obtain control of us;
−Removed: may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants;
−Removed: may not result in adjustment to the exercise price of our warrants.
−Removed: Unlike some other similarly structured blank check companies, our Sponsor will receive additional Class A ordinary shares if we issue shares to
−Removed: consummate an initial business combination.
−Removed: The founder shares will automatically convert into Class A ordinary shares (which
−Removed: such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial business combination) at the time of our initial
−Removed: business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an
−Removed: as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of Class A
−Removed: ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business
−Removed: combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any
−Removed: Private Placement Warrants issued to our Sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans.
−Removed: In no event will the Class B ordinary shares convert into Class A ordinary shares at a
−Removed: rate of less than one-to-one.
−Removed: This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an
−Removed: aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
−Removed: We may reincorporate in another
−Removed: jurisdiction, such as Delaware, in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
−Removed: We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law,
−Removed: reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction.
−Removed: The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or
−Removed: warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity.
−Removed: We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes.
−Removed: Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the
−Removed: reincorporation.
−Removed: After our initial business combination, it is possible that a majority of our directors and officers will live outside the U.S.
−Removed: and all of our assets will be located outside the U.S.;
−Removed: therefore investors may not be able to enforce federal securities laws or their other legal rights.
−Removed: It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the U.S.
−Removed: our assets will be located outside of the U.S.
−Removed: As a result, it may be difficult, or in some cases not possible, for investors in the U.S.
−Removed: to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce
−Removed: judgments of U.S.
−Removed: courts predicated upon civil liabilities and criminal penalties on our directors and officers under U.S.
−Removed: Our ability to successfully effect our initial business combination and to be successful thereafter
−Removed: will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination.
−Removed: The loss of key personnel could negatively impact the operations and profitability of our post-combination
−Removed: Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel.
−Removed: We believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial business combination.
−Removed: None of our officers are required to commit any specified amount of time to our affairs and,
−Removed: accordingly, they will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
−Removed: If our officers and
−Removed: directors other business affairs require them to devote more substantial amounts of time to their other business activities, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to
−Removed: consummate our initial business combination.
−Removed: In addition, we do not have employment agreements with, or key-man insurance on the life of, any of our officers.
−Removed: The unexpected loss of the services of our key
−Removed: personnel could have a detrimental effect on us.
−Removed: The role of our key personnel after our initial business combination, however, remains
−Removed: to be determined.
−Removed: Although some of our key personnel may serve in senior management or advisory positions following our initial business combination, it is likely that most, if not all, of the management of the target business will remain in place.
−Removed: These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements.
−Removed: This could be expensive and time-consuming and
−Removed: could lead to various regulatory issues which may adversely affect our operations.
−Removed: Our key personnel may negotiate employment or consulting
−Removed: agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel.
−Removed: These agreements may provide for them to receive
−Removed: compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
−Removed: Our key personnel may be able to remain with our Company after the completion of our initial business combination only if they are able to
−Removed: negotiate employment or consulting agreements in connection with the business combination.
−Removed: Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive
−Removed: compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
−Removed: Such negotiations also could make such key personnels retention or resignation a condition
−Removed: to any such agreement.
−Removed: The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.
−Removed: In addition, pursuant to an agreement entered into prior to the closing of the Initial
−Removed: Public Offering, our Sponsor, upon and following consummation of an initial business combination, is entitled to nominate three individuals for appointment to our board of directors, as long as the Sponsor holds any securities covered by the
−Removed: registration and shareholder rights agreement.
−Removed: The officers and directors of an acquisition candidate may resign upon completion of our initial
−Removed: business combination.
−Removed: The loss of a business combination targets key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an acquisition candidates key personnel upon the completion of our initial business combination cannot be ascertained at this
−Removed: Although we contemplate that certain members of an acquisition candidates management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of
−Removed: an acquisition candidate will not wish to remain in place.
−Removed: Our executive officers and directors will allocate their time to other businesses thereby causing
−Removed: conflicts of interest in their determination as to how much time to devote to our affairs.
−Removed: This conflict of interest could have a negative impact on our ability to complete our initial business combination.
−Removed: Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict
−Removed: of interest in allocating their time between our operations and our search for a business combination and their other businesses.
−Removed: We do not intend to have any full-time employees prior to the completion of our initial business combination.
−Removed: our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
−Removed: independent directors also serve as officers and board members for other entities.
−Removed: If our executive officers and directors other business affairs require them to devote substantial amounts of time to such affairs in excess of their
−Removed: current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
−Removed: Our officers and directors presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities,
−Removed: including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: Until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more
−Removed: businesses or entities.
−Removed: Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to
−Removed: present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law.
−Removed: Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be
−Removed: These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
−Removed: In addition, HPS, an affiliate of our Sponsor, our Sponsor, officers and directors are and may in the future become affiliated with other
−Removed: blank check companies that may have acquisition objectives that are similar to ours.
−Removed: They may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: These conflicts may not be resolved in our
−Removed: favor and a potential target business may be presented to such other blank check companies prior to its presentation to us, subject to our officers and directors fiduciary duties under Cayman Islands law.
−Removed: Our amended and restated
−Removed: memorandum and articles of association provide that, to the fullest extent permitted by applicable law:
−Removed: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain
−Removed: from engaging directly or indirectly in the same or similar business activities or lines of business as us;
−Removed: and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or
−Removed: matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
−Removed: Our executive officers, directors,
−Removed: security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
−Removed: have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any
−Removed: transaction to which we are a party or have an interest.
−Removed: In fact, we may enter into a business combination with a target business that is affiliated with our Sponsor, our directors or executive officers, although we do not intend to do so, or we may
−Removed: acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of HPS and/or one or more investors in funds managed by HPS.
−Removed: Nor do we have a policy that expressly prohibits any such persons from engaging for their own
−Removed: account in business activities of the types conducted by us.
−Removed: Accordingly, such persons or entities may have a conflict between their interests and ours.
−Removed: The personal and financial interests of our directors and officers may influence their
−Removed: motivation in timely identifying and selecting a target business and completing a business combination.
−Removed: Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result in a conflict
−Removed: of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders best interest.
−Removed: If this were the case, it would be a breach of their fiduciary duties to us as a
−Removed: matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders rights.
−Removed: We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our
−Removed: Sponsor, executive officers, directors or initial shareholders which may raise potential conflicts of interest.
−Removed: In light of the
−Removed: involvement of our Sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor, executive officers, directors or initial shareholders.
−Removed: Our directors also serve as
−Removed: officers and board members for other entities.
−Removed: HPS and our Sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination.
−Removed: Such entities may compete with us for business combination opportunities.
−Removed: HPS and our Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with
−Removed: which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities.
−Removed: Although we will not be specifically focusing on, or targeting, any transaction with any affiliated
−Removed: entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination, and such transaction was approved by a majority of our independent and disinterested directors.
−Removed: Despite our agreement to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our Company from a financial point of view of a business
−Removed: combination with one or more domestic or international businesses affiliated with our Sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of the business
−Removed: combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
−Removed: Moreover, we may, at
−Removed: our option, pursue an Affiliated Joint Acquisition opportunity with an entity affiliated with HPS and/or one or more investors in funds managed by HPS.
−Removed: Any such parties may co-invest with us in the target
−Removed: business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a specified future issuance to any such parties.
−Removed: Since our Sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed, a
−Removed: conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
−Removed: On September 1, 2020, our Sponsor paid $25,000, or approximately $0.001 per share, to cover certain offering and formation costs in
−Removed: consideration of 8,625,000 Class B ordinary shares, par value $0.0001.
−Removed: Prior to the initial investment in the Company of $25,000 by the Sponsor, the Company had no assets, tangible or intangible.
−Removed: On October 21, 2020, our Sponsor effected a
−Removed: surrender of 1,437,500 founder shares to the Company for no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 8,625,000 to 7,187,500 such that the total number of founder shares represented
−Removed: 20% of the total number of ordinary shares outstanding upon completion of the Initial Public Offering.
−Removed: On October 19, 2020, our Sponsor transferred 25,000 Class B ordinary shares to each of our independent directors.
−Removed: These shares were not
−Removed: subject to forfeiture.
−Removed: The per share price of the founder shares was determined by dividing the amount contributed to the Company by the number of founder shares issued.
−Removed: The founder shares will be worthless if we do not complete an initial business
−Removed: Simultaneously with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 4,666,667 Private Placement Warrants, to the Sponsor at a price of $1.50 per Private Placement Warrant,
−Removed: generating total proceeds of $7,000,000.
−Removed: In connection with the Underwriters exercise of their Over-allotment Option, the Sponsor purchased an additional 333,333 Private Placement Warrants.
−Removed: If we do not consummate an initial business within 24
−Removed: months from the closing of the Initial Public Offering, the Private Placement Warrants will expire worthless.
−Removed: The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a
−Removed: target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
−Removed: This risk may become more acute as the 24-month
−Removed: anniversary of the closing of the Initial Public Offering nears, which is the deadline for our consummation of an initial business combination.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a
−Removed: business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders investment in us.
−Removed: Although we have no commitments as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur
−Removed: outstanding debt, we may choose to incur substantial debt to complete our initial business combination.
−Removed: We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title,
−Removed: interest or claim of any kind in or to the monies held in the Trust Account.
−Removed: As such, no issuance of debt will affect the per share amount available for redemption from the Trust Account.
−Removed: Nevertheless, the incurrence of debt could have a variety of
−Removed: negative effects, including:
−Removed: default and foreclosure on our assets if our operating revenues after an initial business combination are
−Removed: insufficient to repay our debt obligations;
−Removed: acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments
−Removed: when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
−Removed: our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
−Removed: our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to
−Removed: obtain such financing while the debt is outstanding;
−Removed: our inability to pay dividends on our Class A ordinary shares;
−Removed: using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the
−Removed: funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
−Removed: limitations on our flexibility in planning for and reacting to changes in our business and in the industry in
−Removed: which we operate;
−Removed: increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse
−Removed: changes in government regulation;
−Removed: limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt
−Removed: service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
−Removed: Our management may not be able to maintain control of a target business after our initial business combination.
−Removed: Upon the loss of control of a target
−Removed: business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
−Removed: may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such
−Removed: business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to
−Removed: register as an investment company under the Investment Company Act.
−Removed: We will not consider any transaction that does not meet such criteria.
−Removed: Even if the post-business combination company owns 50% or more of the voting securities of the
−Removed: target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the
−Removed: target and us in the business combination.
−Removed: For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests
−Removed: In this case, we would acquire a 100% interest in the target.
−Removed: However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a
−Removed: majority of our outstanding Class A ordinary shares subsequent to such transaction.
−Removed: In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the
−Removed: Companys shares than we initially acquired.
−Removed: Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
−Removed: We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or
−Removed: prevent us from achieving our desired results.
−Removed: We may seek business combination opportunities with large, highly complex companies
−Removed: that we believe would benefit from operational improvements.
−Removed: While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as
−Removed: successful as we anticipate.
−Removed: To the extent we complete our initial business combination with a large complex business or entity with a
−Removed: complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy.
−Removed: Although our management team will endeavor to
−Removed: evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination.
−Removed: If we are not able to achieve our
−Removed: desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate.
−Removed: Furthermore, some of these risks and complexities may be outside of our control and leave us with no
−Removed: ability to control or reduce the chances that those risks and complexities will adversely impact a target business.
−Removed: Such combination may not be as successful as a combination with a smaller, less complex organization.
−Removed: We do not have a specified maximum redemption threshold.
−Removed: The absence of such a redemption threshold may make it possible for us to complete our initial
−Removed: business combination with which a substantial majority of our shareholders do not agree.
−Removed: Our amended and restated memorandum and
−Removed: articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon
−Removed: consummation of an initial business combination (so that we do not then become subject to the SECs penny stock rules).
−Removed: As a result, we may be able to complete our initial business combination even though a substantial majority of
−Removed: our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination
−Removed: pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or their affiliates.
−Removed: In the event the aggregate cash consideration we would be required to pay
−Removed: for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we
−Removed: will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
−Removed: In order to effectuate an initial business combination, blank check companies have, in the recent
−Removed: past, amended various provisions of their charters and other governing instruments, including their warrant agreements.
−Removed: We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing
−Removed: instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
−Removed: In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and
−Removed: governing instruments, including their warrant agreements.
−Removed: For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and,
−Removed: with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
−Removed: Amending our amended and restated memorandum and articles of association requires at least a special
−Removed: resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the Company, and
−Removed: amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to
−Removed: the Private Placement Warrants, 50% of the number of the then outstanding Private Placement Warrants.
−Removed: In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to
−Removed: redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary
−Removed: shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public
−Removed: Offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
−Removed: To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered
−Removed: through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
−Removed: The provisions of our
−Removed: amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended
−Removed: with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the Company, which is a lower
−Removed: amendment threshold than that of some other blank check companies.
−Removed: It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some
−Removed: of our shareholders may not support.
−Removed: Some other blank check companies have a provision in their charter which prohibits the
−Removed: amendment of certain of its provisions, including those which relate to the rights of a companys shareholders, without approval by a certain percentage of the companys shareholders.
−Removed: In those companies, amendment of these provisions
−Removed: typically requires approval by between 90% and 100% of the companys shareholders.
−Removed: Our amended and restated memorandum and articles of association provide that any of its provisions related to the rights of holders of our Class A ordinary
−Removed: shares (including the requirement to deposit proceeds of the Initial Public Offering and the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to
−Removed: public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the Company,
−Removed: and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 65% of our ordinary shares;
−Removed: provided that the provisions of our amended and restated
−Removed: memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than two-thirds
−Removed: of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares.
−Removed: Our Sponsor and its permitted transferees, if any, who will collectively
−Removed: beneficially own, on an as-converted basis, 20% of our Class A ordinary shares will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement
−Removed: and will have the discretion to vote in any manner they choose.
−Removed: As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our
−Removed: pre-business combination behavior more
−Removed: easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree.
−Removed: Our shareholders may pursue remedies against us for
−Removed: any breach of our amended and restated memorandum and articles of association.
−Removed: Our Sponsor, executive officers and directors have agreed,
−Removed: pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A
−Removed: ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the
−Removed: Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary
−Removed: shares upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us
−Removed: to pay our income taxes, if any, divided by the number of the then-outstanding public shares.
−Removed: Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies
−Removed: against our Sponsor, executive officers or directors for any breach of these agreements.
−Removed: As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
−Removed: We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business,
−Removed: which could compel us to restructure or abandon a particular business combination.
−Removed: If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public
−Removed: share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: we believe that the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants will be sufficient to allow us to complete our initial business combination, because we have not yet selected any prospective target
−Removed: business we cannot ascertain the capital requirements for any particular transaction.
−Removed: If the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants prove to be insufficient, either because of the size of our
−Removed: initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business
−Removed: combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination.
−Removed: We cannot assure you that
−Removed: such financing will be available on acceptable terms, if at all.
−Removed: The current economic environment may make it difficult for companies to obtain acquisition financing.
−Removed: To the extent that additional financing proves to be unavailable when needed to
−Removed: complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
−Removed: If we have not consummated our initial business
−Removed: combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
−Removed: The failure to secure additional financing could have a
−Removed: material adverse effect on the continued development or growth of the target business.
−Removed: None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
−Removed: We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of
−Removed: the then-outstanding public warrants.
−Removed: As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be
−Removed: decreased, all without your approval.
−Removed: Our warrants were issued in registered form under a warrant agreement between Continental
−Removed: Stock Transfer & Trust Company, as warrant agent, and us.
−Removed: The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correcting any
−Removed: mistake, including to conform the provisions of the warrant agreement to the description of the
−Removed: terms of the warrants and the warrant agreement set forth in our Initial Public Offering prospectus, or defective provision (ii) amending the provisions relating to cash dividends on
−Removed: ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem
−Removed: necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to
−Removed: make any change that adversely affects the interests of the registered holders of public warrants.
−Removed: Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public
−Removed: warrants approve of such amendment and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants, 50% of the number of the then
−Removed: outstanding Private Placement Warrants.
−Removed: Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among
−Removed: other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
−Removed: We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
−Removed: We have the ability to redeem the outstanding public warrants at any time prior to their expiration, at a price of $0.01 per
−Removed: warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading
−Removed: days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met.
−Removed: If and when the warrants become
−Removed: redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: As a result, we may redeem the warrants as set forth above even if the
−Removed: holders are otherwise unable to exercise the warrants.
−Removed: Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so,
−Removed: (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect
−Removed: would be substantially less than the market value of your warrants.
−Removed: None of the Private Placement Warrants will be redeemable by us so long as they are held by our Sponsor or its permitted transferees.
−Removed: In addition, we have the ability to redeem the outstanding public warrants at any time prior to their expiration, at a price of $0.10 per
−Removed: warrant upon a minimum of 30 days prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable
−Removed: upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that
−Removed: certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A
−Removed: ordinary shares.
−Removed: The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may
−Removed: not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the
−Removed: None of the Private Placement Warrants will be redeemable by us as so long as they are held by our Sponsor or its permitted transferees.
−Removed: Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
−Removed: initial business combination with some prospective target businesses.
−Removed: The federal proxy rules require that a proxy statement with
−Removed: respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports.
−Removed: We will include the same financial statement disclosure in
−Removed: connection with our tender offer documents, whether or not they are required under the tender offer rules.
−Removed: These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in
−Removed: of America, or GAAP, or international
−Removed: financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be
−Removed: audited in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), or PCAOB.
−Removed: These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to
−Removed: provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
−Removed: Risks Related to the Proposed Blue Owl Business Combination
−Removed: Our Sponsor has agreed to vote in favor of the proposed Blue Owl Business Combination, regardless of how our public shareholders vote.
−Removed: Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the
−Removed: votes cast by the public shareholders in connection with an initial business combination, the Sponsor has agreed to vote all its Class A ordinary shares and Class B ordinary shares in favor of all of the Shareholder Approvals, including
−Removed: the Business Combination Proposal.
−Removed: In addition, pursuant to the Forfeiture and Support Agreement, dated December 23, 2020, the Sponsor has agreed to vote all of its Class A ordinary shares and Class B ordinary shares (i) in favor
−Removed: of the Shareholder Proposals 1-7 (including the Advisory Charter Proposals) (ii) against any action, proposal, transaction or agreement that could reasonably be expected to result in a breach of any
−Removed: covenant, representation or warranty or any other obligation or agreement of the Company under the Business Combination Agreement;
−Removed: and (iii) against (A) any proposal or offer from any Person concerning (1) a merger, consolidation,
−Removed: liquidation, recapitalization, share exchange or other business combination transaction involving the Company, or (2) the issuance or acquisition of shares of capital stock or other equity securities of the Company (other than as contemplated
−Removed: or permitted by the Business Combination Agreement);
−Removed: and (B) any action, proposal, transaction or agreement that would reasonably be expected to impede the fulfillment of the Companys conditions under the Business Combination Agreement or
−Removed: change in any manner the voting rights of any class of shares of the Company (including any amendments to the Companys governing documents, other than in connection with the Domestication or as otherwise contemplated by the Business
−Removed: Combination Agreement).
−Removed: As of December 31, 2020, our initial shareholders own approximately 20.0% of our total outstanding ordinary shares.
−Removed: As of December 31, 2020, the Sponsor owns approximately 19.36% of the issued and outstanding
−Removed: ordinary shares.
−Removed: If the conditions to the Business Combination Agreement are not met, we may not be able to consummate the proposed Blue Owl
−Removed: Business Combination.
−Removed: Even if the Business Combination Agreement is approved by the shareholders of Altimar, specified conditions
−Removed: must be satisfied or waived before the parties to the Business Combination Agreement are obligated to complete the proposed Blue Owl Business Combination, including, among other things, certain required approvals and consents.
−Removed: Altimar and Blue Owl
−Removed: may not satisfy all of the closing conditions in the Business Combination Agreement.
−Removed: If the closing conditions are not satisfied or waived, the proposed Blue Owl Business Combination will not occur, or will be delayed pending later satisfaction or
−Removed: waiver, and such delay may cause Altimar and Blue Owl to each lose some or all of the intended benefits of the proposed Blue Owl Business Combination.
−Removed: If we do not obtain the required consents related to our funds and such condition is waived, this
−Removed: may result in a loss of future revenue for Blue Owl.
−Removed: For more information related to the foregoing, including a discussion of the risks associated with the target entities in the proposed Blue Owl Business Combination, please refer to the Proxy
−Removed: Some of Altimars officers and directors may have conflicts of interest that may influence or have influenced them to support or
−Removed: approve the proposed Blue Owl Business Combination without regard to your interests or in determining whether Blue Owl is appropriate for Altimars initial business combination.
−Removed: The personal and financial interests of Altimars Sponsor, officers and directors may influence or have influenced their motivation in
−Removed: identifying and selecting a target for the proposed Blue Owl Business Combination, their support for completing the proposed Blue Owl Business Combination and the operation of Blue Owl following the consummation of the proposed Blue Business
−Removed: Altimars Sponsor and independent directors own 6,675,000 and 200,000 Class B
−Removed: ordinary shares, respectively, which were initially acquired prior to Altimars IPO for an aggregate purchase price of $0.001 per share and Altimars directors and officers have pecuniary interests in such ordinary shares through their
−Removed: ownership interest in the Sponsor.
−Removed: In addition, the Sponsor purchased an aggregate of 5,000,000 Private Placement Warrants, each exercisable for one ordinary share of Altimar at $11.50 per share, for a purchase price of $7,500,000, or $1.50 per
−Removed: Altimars Amended and Restated Memorandum and Articles of Association require Altimar to complete an initial business combination (which will be the Business Combination should it occur) within 24 months from the closing of the IPO, or
−Removed: October 27, 2022 (unless Altimar submits and its shareholders approve an extension of such date).
−Removed: If the proposed Blue Owl Business Combination is not completed and Altimar is forced to wind up, dissolve and liquidate in accordance with the
−Removed: Amended and Restated Memorandum and Articles of Association, the 6,675,000 and 200,000 Class B ordinary shares currently held by Altimars Sponsor and independent directors, respectively, and the Private Placement Warrants held by the
−Removed: Sponsor and/or the independent directors will be worthless (as the holders have waived liquidation rights with respect to such ordinary shares).
−Removed: Altimars Sponsor, directors and officers, and their respective affiliates have incurred significant out-of-pocket expenses in connection with performing due diligence on suitable targets for business combinations and the negotiation of the proposed Blue Owl Business Combination.
−Removed: At the Closing of the
−Removed: proposed Blue Owl Business Combination, Altimars Sponsor, directors and officers, and their respective affiliates, will be reimbursed for any out-of-pocket
−Removed: expenses incurred in connection with activities on Altimars behalf such as identifying potential target businesses and performing due diligence on suitable targets for business combinations.
−Removed: If an initial business combination is not completed
−Removed: prior to October 27, 2022, Altimars Sponsor, directors and officers, or any of their respective affiliates will not be eligible for any such reimbursement.
−Removed: Pre-existing relationships between participants in the proposed Blue Owl Business Combination and the related
−Removed: transactions or their affiliates could give rise to actual or perceived conflicts of interest in connection with the proposed Blue Owl Business Combination.
−Removed: Certain of the participants in the proposed Blue Owl Business Combination and the PIPE Financing or their affiliates have pre-existing relationships that could give rise to conflicts of interest in connection with the proposed Blue Owl Business Combination and related transactions.
−Removed: Dyal Fund IV has a passive minority equity interest in an affiliate of HPS, which is an affiliate of the Sponsor.
−Removed: Although Dyal Fund IV does not have a direct interest in Altimar, the interest in an affiliate of HPS could give rise to conflicts of interest in connection with the Sponsors approval of the proposed Blue Owl Business Combination, for example,
−Removed: by influencing the Sponsor to accept less attractive terms than in a transaction with an unrelated third-party.
−Removed: Certain of the PIPE Investors (including one of the lead PIPE Investors), have interests in or are affiliated
−Removed: with investors in Owl Rock, the Owl Rock funds and/or the Dyal funds, as well as certain other contractual relationships with Owl Rock, Dyal and/or their respective funds.
−Removed: In addition, each of Dyal Fund IV and Dyal Fund V has a passive minority
−Removed: equity interest in an affiliate of one of the PIPE Investors.
−Removed: Such PIPE Investors have different considerations when choosing to make their investment, as a successful transaction may facilitate liquidity on their existing positions.
−Removed: such arrangements exist, such investors may also hope that such investments will provide opportunities for influence or more favorable economic terms on their fund investments, which could impact the overall Owl Rock portion of the Blue Owl
−Removed: There is no guarantee such investors will continue to maintain their fund investments.
−Removed: Certain of Dyals partner managers, directly or through their investment funds, own securities in Owl Rock
−Removed: or its subsidiaries.
−Removed: Additionally, Dyal Fund IV has a passive minority equity interest in Owl Rock Feeder and will therefore become an indirect equityholder in Blue Owl upon consummation of the proposed Blue Owl Business Combination.
−Removed: Even if such relationships do not create actual conflicts, the perception of conflicts in the press or the financial
−Removed: community generally could create negative publicity with respect to the proposed Blue Owl Business Combination, which could adversely affect the business generated and the relationships of Owl Rock and Dyal with their fund clients.
−Removed: The exercise of Altimars directors and executive officers discretion in agreeing to
−Removed: changes or waivers in the terms of the proposed Blue Owl Business Combination may result in a conflict of interest when determining whether changes to the terms of the proposed Blue Owl Business Combination or waivers of conditions are appropriate
−Removed: and in Altimars shareholders best interest.
−Removed: In the period leading up to the closing of the proposed Blue Owl Business
−Removed: Combination, events may occur that, pursuant to the Business Combination Agreement, may require Altimar to agree to amend the Business Combination Agreement, to consent to certain actions taken by Owl Rock, Neuberger or Dyal or to waive rights that
−Removed: Altimar is entitled to under the Business Combination Agreement.
−Removed: Such events could arise because of changes in the course of Owl Rocks or Dyals respective businesses, a request by Owl Rock or Dyal to undertake actions that would
−Removed: otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Owl Rocks or Dyals respective businesses and would entitle Altimar to terminate the
−Removed: Business Combination Agreement.
−Removed: In any of such circumstances, it would be at Altimars discretion, acting through its board of directors, to grant its consent or waive those rights.
−Removed: The existence of financial and personal interests of one or
−Removed: more of the directors described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he or they may believe is best for Altimar and its shareholders and what he or they may believe is best
−Removed: for himself or themselves in determining whether or not to take the requested action.
−Removed: As of the date of this Annual Report, Altimar does not believe there will be any changes or waivers that Altimars directors and executive officers would be
−Removed: likely to make after shareholder approval of the Business Combination Proposal has been obtained.
−Removed: While certain changes could be made without further shareholder approval, Altimar will circulate a new or amended Proxy Statement and resolicit
−Removed: Altimars shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.
−Removed: A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future.
−Removed: could cause the market price of our Class A common stock to drop significantly, even if Blue Owls business is doing well.
−Removed: Sales of a substantial number of shares of the Class A common stock in the public market could occur at any time.
−Removed: These sales, or the
−Removed: perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of the Class A common stock.
−Removed: Upon completion of the proposed Blue Owl Business Combination, based on the pro forma
−Removed: assumptions set forth in the Proxy Statement, the PIPE Investors will own approximately 64.1% of the outstanding shares of the Class A common stock of Blue Owl assuming no Altimar public shareholders redeem their Class A ordinary shares in
−Removed: connection with the Business Combination or approximately 72.6% of the outstanding Class A ordinary shares assuming that 27.5 million Class A ordinary shares (being our estimate of the maximum number of Class A ordinary shares
−Removed: that could be redeemed in connection with the Business Combination in order to satisfy the closing conditions contained in the Business Combination Agreement) are redeemed in connection with the proposed Blue Owl Business Combination.
−Removed: While the PIPE
−Removed: Investors will agree, and will continue to be subject, to certain restrictions regarding the transfer of the Class A common stock, these shares may be sold after the expiration of the applicable lock-up
−Removed: restrictions.
−Removed: We may file one or more registration statements prior to or shortly after the closing of the proposed Blue Owl Business Combination to provide for the resale of such shares from time to time.
−Removed: As restrictions on resale end and the
−Removed: registration statements are available for use, the market price of the Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
−Removed: If the sale of some or all of the PIPE Securities fails to close and sufficient shareholders exercise their redemption rights in connection with the
−Removed: proposed Blue Owl Business Combination, Altimar may lack sufficient funds to consummate the proposed Blue Owl Business Combination.
−Removed: In connection with the signing of the Business Combination Agreement, Altimar entered into Subscription Agreements with the PIPE Investors
−Removed: which provide for the purchase of an aggregate of 150,000,000 shares of Class A common stock (the PIPE Securities) in a private placement to close concurrently with, and contingent upon, the closing of the Business Combination, for
−Removed: a purchase price of $10.00 per share, or an aggregate of $1,500,000,000.
−Removed: These purchases will be made regardless of whether any Class A ordinary shares are redeemed by Altimars public shareholders.
−Removed: The proceeds from the sale of PIPE Securities will be part
−Removed: of the proposed Blue Owl Business Combination consideration.
−Removed: In addition, prior to giving effect to the exercise of any redemption rights, the Trust Account has $275,000,000, plus accrued interest since the completion of the Altimar IPO.
−Removed: the sale of the PIPE Securities does not close by reason of the failure by some or all of the PIPE Investors to fund the purchase price for their PIPE Securities, for example, and a sufficient number of holders of Class A ordinary shares
−Removed: exercise their redemption rights in connection with the proposed Blue Owl Business Combination, we may lack sufficient funds to consummate the proposed Blue Owl Business Combination.
−Removed: Additionally, the PIPE Investors obligations to purchase the
−Removed: PIPE Securities are subject to termination prior to the closing of the sale of the PIPE Securities by mutual written consent of Altimar, Owl Rock Group, Neuberger and each of the PIPE Investors, or if the proposed Blue Owl Business Combination is
−Removed: not consummated on or before October 23, 2021.
−Removed: The PIPE Investors obligations to purchase the PIPE Securities are subject to fulfillment of customary closing conditions, including that the proposed Blue Owl Business Combination must be
−Removed: consummated substantially concurrently with, and immediately following, the purchase of PIPE Securities.
−Removed: In the event of any such failure to fund, any obligation is so terminated or any such condition is not satisfied and not waived, we may not be
−Removed: able to obtain additional funds to account for such shortfall on terms favorable to us or at all.
−Removed: Any such shortfall would also reduce the amount of funds that we have available for working capital of Blue Owl.
−Removed: While the PIPE Investors represented
−Removed: to us that they have sufficient funds to satisfy their obligations under the respective Subscription Agreements, we have not obligated them to reserve funds for such obligations.
−Removed: The Business Combination Agreement includes a minimum condition to Owl
−Removed: Rocks and Neubergers respective obligations to consummate the proposed Blue Owl Business Combination that at least $1,300,000,000 in available cash is available to Altimar from the PIPE Investment including any cash remaining in the
−Removed: Trust Account after giving effect to any exercise of redemption rights by Altimars shareholders.
−Removed: In addition, the Business Combination Agreement includes a condition to Altimars obligation to consummate the proposed Blue Owl Business
−Removed: Combination, that Altimar consummates the sale of at least $750,000,000 in PIPE Securities.
−Removed: Subsequent to the completion of the proposed Blue Owl
−Removed: Business Combination, Blue Owl may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition and its share price, which could cause you to
−Removed: lose some or all of your investment.
−Removed: Altimar cannot assure you that the due diligence Altimar has conducted on Blue Owl will
−Removed: reveal all material issues that may be present with regard to Blue Owl, or that factors outside of Altimars or Blue Owls control will not later arise, and the Business Combination Agreement does not generally provide for indemnification
−Removed: of Blue Owl in respect of historical liability or with respect to Owl Rocks or Dyals respective businesses.
−Removed: As a result of unidentified issues or factors outside of Altimars or Blue Owls control, Blue Owl may be forced to
−Removed: later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in reporting losses.
−Removed: Even if Altimars due diligence successfully identifies certain
−Removed: risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with the preliminary risk analysis conducted by Altimar.
−Removed: Even though these charges may be non-cash items
−Removed: that would not have an immediate impact on Blue Owls liquidity, the fact that Blue Owl reports charges of this nature could contribute to negative market perceptions about Blue Owl or its securities.
−Removed: In addition, charges of this nature may
−Removed: cause Blue Owl to violate leverage or other covenants to which it may be subject.
−Removed: Accordingly, any shareholders who choose to remain shareholders following the proposed Blue Owl Business Combination could suffer a reduction in the value of their
−Removed: shares from any such write-down or write-offs.
−Removed: If the proposed Blue Owl Business Combinated is consummated.
−Removed: Altimars shareholders will
−Removed: experience dilution.
−Removed: Following the consummation of the proposed Blue Owl Business Combination, Altimars public shareholders
−Removed: will own approximately 2.0% of the fully diluted common equity of Blue Owl (assuming that no shares of Altimars Class A ordinary shares are elected to be redeemed by Altimars public shareholders).
−Removed: If any shares of Class A
−Removed: ordinary shares are redeemed in connection with the proposed Blue Owl Business Combination, the percentage of Blue Owls fully diluted common equity held by the current public shareholders of Altimar will decrease relative to the percentage
−Removed: held if none of the Class A ordinary shares are redeemed.
−Removed: To the extent that any of the outstanding warrants are exercised for shares of Class A common stock, Altimars public shareholders may experience substantial dilution.
−Removed: Altimar has not obtained an opinion from an independent investment banking firm or another independent
−Removed: firm and consequently, you may have no assurance from an independent source that the terms of the proposed Blue Owl Business Combination are fair to Altimar from a financial point of view.
−Removed: The Altimar Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the proposed Blue
−Removed: Owl Business Combination.
−Removed: Altimar is not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from another independent firm that the price it is paying is fair to Altimar from a financial point of
−Removed: In analyzing the proposed Blue Owl Business Combination, the Altimar board of directors and Altimars management conducted due diligence on Blue Owl and researched the industry in which Blue Owl operates and concluded that the proposed
−Removed: Blue Owl Business Combination was in the best interest of its shareholders.
−Removed: Accordingly, Altimars shareholders will be relying solely on the judgment of the Altimar board of directors in determining the value of the proposed Blue Owl Business
−Removed: Combination, and the Altimar board of directors may not have properly valued such business.
−Removed: The lack of a third-party valuation or fairness opinion may also lead an increased number of shareholders to vote against the proposed Blue Owl Business
−Removed: Combination or demand redemption of their shares, which could potentially impact our ability to consummate the proposed Blue Owl Business Combination.
−Removed: During the pendency of the proposed Blue Owl Business Combination, Altimar will not be able to solicit, initiate or take any action to facilitate or
−Removed: encourage any inquiries or the making, submission or announcement of, or enter into a business combination with another party because of restrictions in the Business Combination Agreement.
−Removed: Furthermore, certain provisions of the Business Combination
−Removed: Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.
−Removed: During the pendency of the proposed Blue Owl Business Combination, Altimar will not be able to enter into a business combination with another
−Removed: party because of restrictions in the Business Combination Agreement.
−Removed: Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be
−Removed: superior to the arrangements contemplated by the Business Combination Agreement, in part because of the inability of the Altimar Board to change its recommendation in connection with the proposed Blue Owl Business Combination.
−Removed: Combination Agreement does not permit our Board of Directors to change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify its recommendation in favor of adoption of the Shareholder Proposals.
−Removed: Certain covenants in the Business Combination Agreement impede the ability of Altimar to make acquisitions or complete certain other
−Removed: transactions pending completion of the proposed Blue Owl Business Combination.
−Removed: As a result, Altimar may be at a disadvantage to its competitors during that period.
−Removed: In addition, if the proposed Blue Owl Business Combination is not completed, these
−Removed: provisions will make it more difficult to complete an alternative business combination following the termination of the Business Combination Agreement due to the passage of time during which these provisions have remained in effect.
−Removed: Because Altimar is incorporated under the laws of the Cayman Islands, in the event the proposed Blue Owl Business Combination is not completed, you may
−Removed: face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
−Removed: federal courts may be limited.
−Removed: Because Altimar is currently incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests and your
−Removed: ability to protect your rights through the U.S.
−Removed: federal courts may be limited prior to the Domestication.
−Removed: Altimar is currently an exempted company under the laws of the Cayman Islands.
−Removed: As a result, it may be difficult for investors to effect service
−Removed: of process within the U.S.
−Removed: upon Altimars directors or officers, or enforce judgments obtained in the U.S.
−Removed: courts against Altimars directors or officers.
−Removed: Until the Domestication is effected, Altimars corporate affairs are governed by the Amended and Restated Memorandum and Articles of
−Removed: Association, the Cayman Islands Companies Act and the common law of the Cayman Islands.
−Removed: The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of Altimars directors
−Removed: under the laws of the Cayman Islands are to a large extent governed
−Removed: by the common law of the Cayman Islands.
−Removed: The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common
−Removed: law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
−Removed: The rights of Altimars shareholders and the fiduciary responsibilities of its directors under Cayman Islands law are
−Removed: different from what they would be under statutes or judicial precedent in some jurisdictions in the U.S.
−Removed: In particular, the Cayman Islands has a different body of securities laws as compared to that of the U.S., and certain states, such as Delaware,
−Removed: may have more fully developed and judicially interpreted bodies of corporate law.
−Removed: In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the U.S.
−Removed: The courts of the Cayman Islands are unlikely (i) to recognize or enforce against Altimar judgments of courts of the U.S.
−Removed: predicated upon
−Removed: the civil liability provisions of the federal securities laws of the U.S.
−Removed: or any state and (ii) in original actions brought in the Cayman Islands, to impose liabilities against Altimar predicated upon the civil liability provisions of the
−Removed: federal securities laws of the U.S.
−Removed: or any state, so far as the liabilities imposed by those provisions are penal in nature.
−Removed: In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the U.S.,
−Removed: the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the
−Removed: judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.
−Removed: For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and
−Removed: must not be, in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to
−Removed: natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
−Removed: A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought
−Removed: The public shareholders of Altimar may have more difficulty in protecting their interests in the face of actions taken by
−Removed: management, members of the Altimar Board or controlling shareholders than they would as public shareholders of a U.S.
−Removed: The Domestication
−Removed: may result in adverse tax consequences for holders of Altimar ordinary shares and warrants, including public shareholders exercising redemption rights.
−Removed: holders (as defined in U.S.
−Removed: Federal Income Tax ConsiderationsU.S.
−Removed: Holders in the Proxy Statement) may be subject
−Removed: federal income tax as a result of the Domestication.
−Removed: It is intended that the Domestication qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code for U.S.
+Added: Risks Related to Our Business and Operations
+Added: The COVID-19 pandemic has caused severe disruptions in the U.S.
+Added: and global economy, has disrupted, and may continue to disrupt, industries in which we, our products and our products’ investments operate and could potentially negatively impact us, our products or our products’ investments.
+Added: The COVID-19 pandemic has adversely impacted global commercial and economic activity and contributed to significant volatility in certain equity and debt markets.
+Added: The impact of the outbreak continues to develop and many countries, including the United States, and states and municipalities in which we and our products’ investments operate, have instituted quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues.
+Added: Individual businesses and industries are also implementing similar precautionary measures.
+Added: Those measures, as well as the general uncertainty surrounding the dangers and effects of COVID-19, have created significant disruption in supply chains and economic activity and are having a particularly adverse impact on transportation, hospitality, tourism, commercial real estate, entertainment and other industries, including industries in which certain of our products, borrowers, Partner Managers and their respective investments operate and invest.
+Added: The effects of COVID-19 have led to significant volatility and it is uncertain how long this volatility will continue.
+Added: As COVID-19 continues to spread, particularly as new variants, including the Delta and Omicron variants, continue to emerge, the potential effects, including a global, regional or other economic recession, are increasingly uncertain and difficult to assess.
+Added: This uncertainty has been exacerbated by issues with the availability and acceptance of vaccines both in the United States and globally.
+Added: The continued spread of the virus globally could lead to a protracted world-wide economic downturn, the effects of which could last for some period after the pandemic is controlled and/or abated.
+Added: The extent of the impact of the COVID-19 pandemic on us and our products’ operational and financial performance will depend on many factors, including the duration and scope of the public health emergency, the actions taken by governmental authorities to contain its financial and economic impact, the continued or renewed implementation of travel advisories and restrictions, the widespread availability and acceptance of vaccines, the impact of the public health emergency on overall supply and demand, staffing and attrition levels, consumer confidence and levels of economic activity and the extent of its disruption to global, regional and local supply chains and economic markets, all of which are uncertain and difficult to assess.
+Added: Significant volatility and declines in valuations in the global markets as well as liquidity concerns may impair our ability to raise funds or deter fund investors from investing in new or successor funds that we are marketing.
+Added: Actions taken in response to the COVID-19 pandemic (whether imposed by governments or adopted by businesses or individuals) may give rise to difficulty marketing and raising new or successor funds due to shelter-in-place orders, travel restrictions and social distancing requirements implemented or undertaken in response to the COVID-19 pandemic, which may lower or delay anticipated fee revenues.
+Added: For existing funds, those actions may slow the pace of investment activity, by, for example, hindering the diligence process.
+Added: This, in turn, could adversely affect the timing of raising capital for new or successor funds, the terms that might be offered and the management fees we earn on our products that generate fees based on invested (and not committed) capital.
+Added: In addition, cash flows from management fees may be impacted by, among other things, a failure of our clients to meet capital calls.
+Added: Borrowers of loans and other credit instruments made by our products may be unable to make their loan payments on a timely basis and meet their loan covenants, resulting in a decrease in value of our products’ credit investments and lower than expected returns.
+Added: We are continuing to monitor the impact of COVID-19 and related risks, including risks related to the ongoing spread of COVID-19 (including the Delta and Omicron variants) and efforts to mitigate the spread and deployment of vaccines.
+Added: However, the rapid development and fluidity of the situation precludes any prediction as to its ultimate impact on us.
+Added: If the spread and related mitigation efforts continue, our business, financial condition, results of operations and cash flows could be materially adversely affected.
+Added: The impact of COVID-19 could have the effect of heightening many of the other risk factors described herein.
+Added: Difficult market and political conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.
+Added: Our businesses are affected by conditions and trends in the global financial markets and the global economic and political climate relating to, among other things, interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to our taxation, taxation of our clients and the possibility of changes to regulations applicable to alternative asset managers), trade policies, commodity prices, tariffs, currency exchange rates and controls, political elections and administration transitions, and national and international political events (including wars and the most recent and rapidly evolving tensions between Russia and Ukraine as well as other forms of conflict, terrorist acts, and security operations) and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and pandemics.
+Added: Those factors are outside of our control and may affect the level and volatility of credit and securities prices and the liquidity and value of fund investments, and we and our products may not be able to or may choose not to manage our exposure to these conditions.
+Added: The extent and impact of any sanctions imposed in connection with the escalation of hostilities between Russia and Ukraine may cause additional financial market volatility and impact the global economy as the situation continues to evolve.
+Added: During periods of difficult market conditions or slowdowns, which may be across one or more industries, sectors or geographies, companies in which our funds invest may experience decreased revenues, financial losses, credit rating downgrades, difficulty in obtaining access to financing and increased funding costs.
+Added: During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including to the extent that they are Partner Managers, raising additional capital) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our funds.
+Added: Negative financial results in our funds’ portfolio companies may reduce the net asset value of our funds, result in the impairment of assets and reduce the investment returns for our products, which could have a material adverse effect on our operating results and cash flow or ability to raise additional capital through new or successor funds.
+Added: In addition, those conditions would increase the risk of default with respect to credit-oriented or debt investments by our products.
+Added: We recently ceased to be an emerging growth company, and now are being required to comply with certain heightened reporting requirements.
+Added: Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, are expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on our future results of operations and our stock price.
+Added: As a public company, we are subject to the reporting, accounting and corporate governance requirements of the NYSE, the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that apply to issuers of listed equity, which impose certain significant compliance requirements, costs and obligations upon us.
+Added: On October 7, 2021, we ceased to be an “emerging growth company” as defined in the JOBS Act.
+Added: The changes necessitated by being a publicly listed company and ongoing compliance with these rules and regulations require a significant commitment of additional resources and management oversight, which increases our operating costs and could divert the attention of our management and personnel from other business concerns.
+Added: Further, to continue to comply with the requirements of being a public company, we have undertaken various actions, such as implementing new internal controls and procedures and hiring additional accounting and internal audit staff.
+Added: The Sarbanes-Oxley Act requires us, among other things, to maintain effective disclosure controls and procedures and internal control over financial reporting.
+Added: In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
+Added: In addition, our internal resources and personnel may in the future be insufficient to avoid accounting errors, and our auditors may identify deficiencies, significant deficiencies or material weaknesses in our internal control environment in the future.
+Added: Any failure to develop or maintain effective controls or any difficulties encountered implementing required new or improved controls could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
+Added: Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
+Added: Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors in our common stock or investors in our products to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock and/or investors’ confidence in our products.
+Added: In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.
+Added: The expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees.
+Added: As a public company, we are required, among other things institute comprehensive compliance and investor relations functions.
+Added: These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, cash flows and results of operation.
+Added: Failure to comply with the requirements of being a public company could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities.
+Added: In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.
+Added: We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses.
+Added: If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and there could be a material adverse effect on our business, financial condition, cash flows and results of operations.
+Added: The management fees of our BDCs and management fees and performance income of our private funds comprise a substantial majority of our revenues and a reduction in fees could have an adverse effect on our results of operations and the level of cash available for distributions to our shareholders.
+Added: The investment advisory agreements we have with each of our BDCs categorize the fees we receive as:
+Added: (a) base management fees, which are paid quarterly and generally increase or decrease based on the average fair value of our BDC’s gross assets (excluding cash and cash equivalents) or average fair value of gross assets (excluding cash) plus undrawn commitments, (b) Part I Fees and (c) Part II Fees.
+Added: We classify the Part I Fees as management fees because they are predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter.
+Added: If any of our BDCs’ gross assets or net investment income (before Part I Fees and Part II Fees) were to decline significantly for any reason, including, without limitation, due to fair value accounting requirements, the poor performance of its investments or the inability or increased cost to obtain or maintain borrowings for each of our BDCs, the amount of the fees we receive from our BDCs, including the base management fee and the Part I Fees, would also decline significantly, which could have an adverse effect on our revenues and results of operations.
+Added: In addition, because the Part II Fees are not paid unless each of our BDCs achieves cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), each of our BDCs’ Part II Fees payable to us are variable and not predictable.
+Added: Our advisory agreements typically provide that the rates at which we earn advisory fees from our BDCs increase after our BDCs are publicly listed (where before the listing the advisory fees typically are a reduced management fee with a reduced or no Part I or II fees).
+Added: If our BDCs do not become publicly listed on anticipated timeframes or at all for any reason, including the poor share performance of our BDCs, Blue Owl will not benefit from this increase, and those BDCs may need to return their capital to investors, further reducing our management fees.
+Added: We may also, from time to time, (a) waive or voluntarily defer any fees payable to us by our BDCs or any BDCs that we may manage after the date hereof and (b) restructure any existing fee waivers granted by us to our BDCs so that such of our BDCs will be obligated to pay fee amounts that are less than the full fee amounts owed to us pursuant to the terms of the applicable advisory agreement between us and such BDC, and the duration and extent of such waivers and deferrals in each of (a) and (b) may need to be significant to support continued fundraising.
+Added: In addition to those arrangements, we have entered into and in the future may enter into expense supporting arrangements with certain of our BDCs where we pay or reimburse certain expenses of our BDCs in order to support their target dividend payments.
+Added: Our investment advisory and management agreements with our BDCs renew for successive annual periods subject to the approval of the applicable BDC’s board of directors or by the affirmative vote of the holders of a majority of such BDC’s outstanding voting securities.
+Added: In addition, as required by the Investment Company Act, the investment advisory agreements with our BDCs generally may be terminated without penalty upon 60 days’ written notice to the other party.
+Added: Termination or non-renewal of any of these agreements would reduce our revenues significantly and could have a material adverse effect on our financial condition.
+Added: Private Funds:
+Added: Management Fees
+Added: For our other non-BDC Direct Lending products, as well as GP Capital Solutions and certain Real Estate products, which we refer to as our private funds, we enter into investment advisory agreements whereby we generally receive base management fees from the inception of such fund through the liquidation of such fund or for most of our GP Capital Solutions products for a set period.
+Added: Non-BDC Direct Lending products have a base management fee that is typically based on a percentage of gross asset value (which includes the portion of such investments purchased with leverage), whereas our GP Capital Solutions products have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event for a Dyal Capital fund (generally either the end of the investment period or, for certain funds, when the fund’s commitments become substantially invested or drawn), is adjusted to a lower percentage of the fund’s cost of unrealized investments, subject to impairment losses for certain funds.
+Added: Following the management fee step down event, the management fee we receive will be reduced when a fund realizes investments or in certain cases when there are permanent changes to the cost basis of unrealized investments.
+Added: While those funds are not required to realize assets as of any date, there is an obligation to explore liquidity strategies with respect to a fund, and should a liquidity strategy event occur prior to the management fee end date, it could cause a reduction in the amount of management fees we are otherwise entitled to receive.
+Added: Further, any realization of assets will be within the control of certain of our employees who own an interest in a portion of the carried interest that does not belong to us and who may have an incentive to effect a realization earlier than one otherwise would expect had carried interest not been applicable.
+Added: As our private funds generally have end dates for paying management fees, our revenues will decline in respect of such funds if we are unable to successfully raise successor funds that replace the management fee payments that terminate on the older funds or such successor funds do not generate fees at the same rate.
+Added: Additionally, given that such management fees are often based on gross asset value, acquisition costs or invested capital, either throughout the fund term or, in some cases following their investment period, the management fee received in respect of such fund will be reduced when a fund realizes investments or if the value of an investment is impaired.
+Added: During the investment period of many funds, the fund expects to actively recycle capital into new investments, which would have the impact of replacing investments that have been realized during the investment period, but there are many factors that may limit our ability to effectively recycle capital and realize the full fee potential of any particular fund.
+Added: For many Direct Lending funds, the gross asset value used as the base for the management fee includes investments purchased with leverage.
+Added: If we are unable to obtain leverage at the expected level, or at all, this will have a negative impact on our ability to realize the full fee potential of any particular fund.
+Added: Further, our right to receive management fees can be impaired by certain actions of investors in a private fund.
+Added: Our private funds generally provide investors with:
+Added: (1) the right to terminate such fund on both a cause basis and a no fault basis;
+Added: (2) the right to remove us as manager of a fund for cause;
+Added: and (3) the right to create an early step down event with respect to a fund on a cause basis.
+Added: If the investors exercised their right to vote for an early termination, we would typically continue to receive management fee through the liquidation of such fund, but we could face pressure to liquidate investments earlier than we otherwise believe is appropriate to maximize the value of such investment.
+Added: Certain funds also provide investors with the right to remove the general partner of such fund on a cause basis.
+Added: Upon the removal of the general partner of a fund becoming effective, the investment advisory contract in respect of such fund will cease to exist and our rights to payment of management fee will terminate.
+Added: In some cases, investors may also have the right to redeem after certain periods of time or following regulatory or key person concerns, which would also reduce the base on which fees are charged.
+Added: In other cases, after an initial lock up period, investors may issue redemption notices with respect to their interests;
+Added: as such interests are redeemed, the fees will decrease unless we are able to find new investors to replace those redeeming.
+Added: Notwithstanding the formulas for calculating management fees provided in the governing documents for our products, Blue Owl has provided (and expects to provide in the future) discounts to investors on such fees based on the size of their commitments to the fund (or Blue Owl funds generally), the timing of their commitments to the fund or other factors that Blue Owl deems relevant.
+Added: Certain investors are effectively given management fee discounts through specified interests and discounts with respect to carried interest or performance income through the grant of participation rights, fee rebates or revenue shares.
+Added: Although such discounts will typically be awarded in circumstances where Blue Owl management believes there will ultimately be long-term benefits to Blue Owl, there can be no assurance that the ultimate benefit attained will be commensurate with the discount awarded, or as to how long it may take to recoup such value.
+Added: Private Funds:
+Added: Carried Interest
+Added: The general partner or an affiliate of certain of our private funds that are not BDCs may be entitled to receive carried interest from a fund based on cumulative fund performance to date.
+Added: Carried interest entitles the general partner (or an affiliate) to a special allocation of income and gains from a fund, and is typically structured as a net profits interest in the applicable fund.
+Added: Carried interest is generally calculated on a “realized” basis, and the recipient is generally entitled to a carried interest based upon the net realized income and gains often taking into account certain unrealized losses generated by such fund.
+Added: Net realized income/gains or loss is not netted between or among funds.
+Added: If the investments we make on behalf of our funds or separate accounts perform poorly, we may suffer a decline in our realized performance income, which may limit our ability to pay dividends.
+Added: For most funds, the carried interest is subject to a preferred return of 8%, subject in most cases to a catch-up allocation to the general partner.
+Added: Generally, if at the termination of fund, the fund has not achieved investment returns that exceed the preferred return threshold, the general partner may not be entitled to a share of the carried interest.
+Added: Additionally, similar to management fees as described above, if the fund is terminated early by the investors or the general partner is removed by the investors of a fund, this may have a negative impact on the value of investments, which will then reduce the carried interest allocations to the general partner, and, in the instance where the general partner is removed for cause, a penalty reduction may be assessed against any remaining carried interest.
+Added: Amounts that could otherwise go to satisfy dividend payments may be deferred or reserved to satisfy potential repayment obligations.
+Added: Although Blue Owl is only entitled to 15% of this realized performance income, the remainder of this revenue stream is owned by entities not controlled by us, including to investors in such entities that otherwise might serve as professionals of Blue Owl.
+Added: Blue Owl may be misaligned from these investors, as a portion of this income would qualify for long-term capital gains in the hands of such individuals, whereas Blue Owl, as a U.S.
+Added: corporation, will not receive preferential treatment for long-term capital gains and may be limited in deducting capital losses.
+Added: Furthermore, to the extent such investors currently benefit from such long-term capital gains treatment, they may not be entitled to this treatment in perpetuity.
+Added: For example, U.S.
+Added: federal income tax law now generally imposes a three-year holding period requirement for carried interest to be treated as long-term capital gain.
+Added: The holding period requirement may result in some of the carried interest received by such persons being treated as ordinary income, which would materially increase the amount of taxes paid by such persons.
+Added: The tax treatment of carried interest may continue to be area of attention for the federal and state governments.
+Added: Other Fee Income
+Added: We also receive fee income for providing services to certain portfolio companies of our products.
+Added: Such services include arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services.
+Added: Certain types of transaction-related fees are required to be distributed to the Blue Owl funds and other products under the terms of our Co-investment Exemptive Order, as discussed in “Conflicts of interest may arise in connection with co-investments between our private funds and our BDCs” below, or are required to be distributed to investors in our products or offset against management fees that would otherwise be payable pursuant to the terms of the governing agreements of the relevant vehicles, while other types of related fees may be retained by us with no offset against management fees and contribute to our revenues and, ultimately, to our net income.
+Added: We may decide not to seek those fees for any reason, including market conditions and expectations.
+Added: Our ability to receive and retain those fees, and to continue to receive and retain those fees in the future, is dependent on the terms we negotiate with investors in our products, our ability to successfully negotiate for those fees with underlying portfolio companies, the permissibility of receiving and retaining those fees under the relevant legal and regulatory frameworks, and our business determination to negotiate for those fees.
+Added: As a result, any change to the willingness of portfolio companies to bear those fees, the terms of our products that permit us to receive and retain those fees, the legal and regulatory framework in which we operate or our willingness to negotiate for those fees with portfolio companies of our products, could result in a decrease to our revenues and net income, and ultimately decrease the value of our common stock and our dividends to our shareholders.
+Added: In addition, the fees generated are typically dependent on transaction frequency and volume, and a slowdown in the pace or size of investments by our products could adversely affect the amount of fees generated.
+Added: Our growth depends in large part on our ability to raise new and successor funds.
+Added: If we were unable to raise such funds, the growth of our FPAUM and management fees, and ability to deploy capital into investments, earning the potential for performance income, would slow or decrease, all of which would materially reduce our revenues and cash flows and adversely affect our financial condition.
+Added: A significant portion of our revenue from our products in any given period is dependent on the size of our FPAUM in such period and fee rates charged on the FPAUM.
+Added: We may not be successful in procuring investment returns and prioritizing services that will allow us to maintain our current fee structure, to maintain or grow our FPAUM, or to generate performance income.
+Added: A decline in the size or pace of growth of FPAUM or applicable fee rates will reduce our revenues.
+Added: A decline in the size or pace of growth of FPAUM or applicable fee rates may result from a range of factors, including:
+Added: • Volatile economic and market conditions, which could cause fund investors to delay making new commitments to alternative investment funds or limit the ability of our existing funds to deploy capital;
+Added: • Intense competition among alternative asset managers may make fundraising and the deployment of capital more difficult, thereby limiting our ability to grow or maintain our FPAUM.
+Added: Competition may be amplified by changes in fund investors allocating increased amounts of capital away from alternative asset managers;
+Added: • Continuation or amplification of general trends within the investment management industry towards lower fees including through direct reductions, deferrals, rebates or other means, which may also result in our competitors operating based on fee structures with which we are unable to successfully compete.
+Added: In response to those trends, we may, in certain cases, lower the fees we charge or grant fee reductions or specified interests or periodic holidays in order to remain competitive;
+Added: • Poor performance of one or more of our products, either relative to market benchmarks or in absolute terms (e.g., based on market value or net asset value of our BDCs’ shares), or compared to our competitors may cause fund investors to regard our funds less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor funds;
+Added: • Our funds may engage in strategic transactions or other dispositions that reduce the cost basis upon which we charge management fees with respect to one or more of our funds.
+Added: For example, a fund may sell all or a portion of its interests in portfolio companies that causes such fund’s management fee base to be reduced;
+Added: • Certain of our funds contain “key person” provisions or other provisions allowing investors to take actions following certain specified events.
+Added: The occurrence of one or more of those events prior to the end of a fund’s investment period could result in the termination of a fund’s investment period and a material decrease in the management fees paid by such fund or, in certain cases, cessation of the funds.
+Added: Our products may suffer losses if our Partner Managers are unable to raise new funds or grow their AUM.
+Added: As our GP Capital Solutions products’ investments in Partner Managers are intended to be held for an indefinite duration, we are dependent upon the ability of our Partner Managers to execute successfully their investment program and grow their assets under management.
+Added: In the event that a Partner Manager is unable to grow their assets under management or such Partner Manager’s investment returns fail to meet expectations, the returns attributable to such investment may be reduced or our products may suffer a loss on such investment.
+Added: A Partner Manager’s failure to grow assets under management may result from a range of factors common to asset managers, including factors to which we are subject ourselves, or specific factors attributable to its business including the departure of key persons, the inability of such Partner Manager to diversify into new investment strategies, investment performance and regulatory enforcement actions.
+Added: The investment management business is intensely competitive.
+Added: The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, business relationships, quality of service provided to clients, fund investor liquidity, fund terms (including fees and economic sharing arrangements), brand recognition and business reputation.
+Added: Maintaining our reputation is critical to attracting and retaining fund investors and for maintaining our relationships with our regulators, sponsors, Partner Managers, potential co-investors and joint venture partners, as applicable.
+Added: Negative publicity regarding our company, our personnel or our Partner Managers could give rise to reputational risk that could significantly harm our existing business and business prospects.
+Added: We are also currently subject to and may be subject in the future to litigation between ourselves and our Partner Managers, which may harm our reputation.
+Added: Similarly, events could occur that damage the reputation of our industry generally, such as the insolvency or bankruptcy of large funds or a significant number of funds or highly publicized incidents of fraud or other scandals, any one of which could have a material adverse effect on our business, regardless of whether any of those events directly relate to our products or the investments made by our products.
+Added: Our products compete with a number of specialized funds, corporate buyers, traditional asset managers, real estate companies, commercial banks, investment banks, other investment managers and other financial institutions, including certain of our shareholders, as well as domestic and international pension funds and sovereign wealth funds, and we expect that competition will continue to increase.
+Added: In addition, our BDCs and other Direct Lending products compete with a number of other BDCs, private funds, commercial banks, and other financial institutions.
+Added: Numerous factors increase our competitive risks, including, but not limited to:
+Added: • A number of our competitors may have or are perceived to have more expertise or financial, technical, marketing and other resources and more personnel than we do;
+Added: • Some of our products may not perform as well as competitors’ funds or other available investment products;
+Added: • Several of our competitors have raised significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities;
+Added: • Some of our competitors may have lower fees or alternative fee arrangements that potential clients of ours may find more appealing;
+Added: • Some of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our products, including our products that directly use leverage or rely on debt financing of their portfolio investments to generate superior investment returns;
+Added: • Some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds than us, which could allow them to consider a wider variety of investments and to bid more aggressively than us or to agree to less restrictive legal terms and protections for investments that we want to make;
+Added: • Some of our competitors may be subject to less regulation or conflicts of interest and, accordingly, may have more flexibility to undertake and execute certain businesses or investments than we do, bear less compliance expense than we do or be viewed differently in the marketplace;
+Added: • Some of our competitors may have more flexibility than us in raising and deploying certain types of funds under the investment management contracts they have negotiated with their fund investors;
+Added: • Some of our competitors may offer a broader investment platform and more partnership opportunities to portfolio companies than we are able to offer.
+Added: Certain of our strategic relationship investors (including early-stage investors in new products) may be granted the right to participate in the net profits of our advisory business attributable to certain strategies or products.
+Added: Certain investors in our products have been granted, and may in the future receive various forms of, participation rights.
+Added: with respect to certain strategies, product lines or products, including, but not limited to, the right to:
+Added: (1) the net profits or gross revenues of certain businesses;
+Added: (2) the gross management fee revenue derived from certain strategies;
+Added: (3) shares in net operating income that would otherwise be earned by us with respect to management fees, and (4) shares in a percentage of management fees.
+Added: To the extent gross revenue participations or similar arrangements are offered, they will reduce the revenue earned by us, but we will continue to bear all applicable expenses, even if the product is not generating positive cash flow.
+Added: We may also offer our employees the opportunity to participate in certain types of these arrangements in certain circumstances as a way of compensating or incentivizing employees.
+Added: There is generally no limitation on the size or the duration of future economic sharing arrangements.
+Added: In addition, in the ordinary course we may offer fee discounts to investors in existing and future funds and we expect to continue to waive fees for many or all of our co-investments.
+Added: We currently expect, at least in certain instances, to continue to offer these economic sharing arrangements to our strategic relationship investors (which may include certain of our shareholders) in the future, which may reduce the revenues ultimately earned by us in respect of these products, although it is hoped in many instances this will be balanced by the broader strategic benefits.
+Added: Conflicts of interest may arise in our allocation of capital and co-investment opportunities.
+Added: As an asset manager with multiple clients, including our various product lines, we confront conflicts of interests relating to our investment activities and operations.
+Added: In particular, our allocation of capital and co-investment opportunities across our products are subject to numerous actual or potential conflicts of interest.
+Added: Although we have implemented policies and procedures to address those conflicts, our failure to effectively identify and address them could cause reputational harm and a loss of investor confidence in our business.
+Added: It could also result in regulatory lapses that could lead to applicable penalties, as well as increased regulatory oversight of our business.
+Added: Potential conflicts of interest in allocation among funds
+Added: Certain of our products may have overlapping investment objectives, including funds that have different fee structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among those funds.
+Added: We may allocate an investment opportunity that is appropriate for two or more investment funds in a manner that excludes one or more funds or results in a disproportionate allocation based on factors or criteria that we determine, including but not limited to differences with respect to available capital, the current or anticipated size of a fund, minimum investment amounts, the remaining life of a fund, differences in investment objectives, guidelines or strategies, diversification, portfolio construction considerations and other considerations deemed relevant to us and in accordance with our policy.
+Added: Although we have adopted investment allocation policies and procedures that are designed to ensure fair and equitable treatment over time, and expect these policies and procedures to continue to evolve, those policies and procedures will not eliminate all potential conflicts.
+Added: Certain investment opportunities may be allocated to certain funds that have lower fees or to our co-investment funds that pay no fees.
+Added: To the extent that those investments could otherwise have been allocated to funds generating FPAUM, our revenues will be less than what would otherwise have been generated were those investments made through fee paying structures.
+Added: Potential conflicts of interest in connection with co-investments between our private funds and our BDCs
+Added: Our BDCs are permitted to co-invest in portfolio companies with each other and with affiliated investment funds in negotiated transactions pursuant to an SEC order (the “Co-investment Exemptive Order”).
+Added: Pursuant to that exemptive relief, our BDCs and other affiliated investment funds generally are permitted to make such co-investments if a “required majority” (as defined in Section 57(o) of the Investment Company Act) of such BDC’s directors (including the independent directors) makes certain conclusions in connection with the co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to such BDC and its shareholders and do not involve overreaching in respect of such BDC or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of such BDC’s shareholders and with its investment objective and strategies, and (3) the investment by one of our BDCs and other affiliated investment funds would not disadvantage any other of our BDCs, and such BDC’s participation would not be on a basis different from or less advantageous than that on which the other BDCs or other affiliated investment funds are investing.
+Added: The different investment objectives or terms of the BDCs and affiliated investment funds may result in a potential conflict of interest, including in connection with the allocation of investments among our BDCs and/or our affiliated investment funds pursuant to the Co-investment Exemptive Order or otherwise.
+Added: As a result of our structure, our GP Capital Solutions products are affiliated investment funds of our BDCs and are prohibited from co-investing with our BDCs, except as permitted by the Investment Company Act and the Co-investment Exemptive Order.
+Added: Those restrictions may limit the ability of the GP Capital Solutions products to make certain investments they otherwise may have made, and subject our products to additional compliance and regulatory risk.
+Added: While it is not currently anticipated that there will be substantial overlap in the investment opportunities pursued by our BDCs, on the one hand, and the GP Capital Solutions products, on the other hand, the Co-investment Exemptive Order will require that any opportunities that are appropriate for both our BDCs and our GP Capital Solutions products will need to be offered to our BDCs and any such investments, if made, will need to be conducted in compliance with the conditions of the Co-Investment Exemptive Order and other requirements under the Investment Company Act.
+Added: These restrictions also apply to our other Direct Lending and Real Estate products and may apply to additional product lines in the future.
+Added: Conflicts related to investments by several of our products at different levels of the capital structure of a single portfolio company or Partner Manager.
+Added: Different funds that we advise and/or our BDCs may invest in a single portfolio company, including at different levels of the capital structure of the portfolio company.
+Added: For example, in the normal course of business, one of our products may acquire debt positions in, or lend to, companies in which another of our products owns common equity securities or a subordinated debt position.
+Added: This could occur at the time of, or subsequent to, the initial investment in the portfolio company.
+Added: A direct conflict of interest could arise among the various debt holders and equity holders if the company were to experience financial distress.
+Added: In addition, if one of our BDCs is an investor in a portfolio company alongside other of our BDCs or affiliated investment funds we advise that have invested in a different part of the portfolio company’s capital structure, the Investment Company Act may prohibit us from negotiating on behalf of any such fund in connection with a reorganization or restructuring of the portfolio company.
+Added: While we have developed general guidelines regarding when two or more funds can invest in different parts of the same company’s capital structure and created a process that we employ to handle those conflicts when they arise, our decision to permit the investments to occur in the first instance or our judgment on how to minimize the conflict could be challenged.
+Added: If we fail to appropriately address those conflicts, it could negatively impact our reputation and ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
+Added: Conflicts of interest may arise in our allocation of costs and expenses, and we are subject to increased regulatory scrutiny and uncertainty with regard to those allocations.
+Added: As an asset manager with multiple funds, we regularly make determinations to allocate costs and expenses both among our funds and between our funds and their investment advisors.
+Added: Certain of those allocation determinations are inherently subjective and virtually all of them are subject to regulatory oversight.
+Added: Any allocation or allegation of, or investigation into, a potential violation could cause reputational harm and a loss of investor confidence in our business.
+Added: It could also result in regulatory lapses and any applicable penalties, as well as increased regulatory oversight of our business.
+Added: In addition, any determination to allocate fees to the applicable investment adviser or Blue Owl could negatively affect our net income, and ultimately decrease the value of our common stock and our dividends to our shareholders.
+Added: Similar considerations arise when allocating expenses to, or away from vehicles to which specified interests apply.
+Added: Allocation of costs and expenses among our funds and between our funds and applicable management companies
+Added: We have a conflict of interest in determining whether certain costs and expenses are incurred in the course of operating our funds, including the extent to which services provided by certain employees and associated costs are allocable to certain funds.
+Added: Our funds generally pay or otherwise bear all legal, accounting, filing, and other expenses incurred in connection with organizing and establishing the funds and the offering of interests in the funds.
+Added: Such determinations often require subjective judgment and may result in the management company, rather than our funds, being allocated certain fees and expenses.
+Added: In addition, our funds generally pay all expenses related to the operation of the funds and their investment activities, in certain cases subject to caps.
+Added: We also determine, in our sole discretion, the appropriate allocation of investment-related expenses, including broken deal expenses, incurred in respect of unconsummated investments and expenses more generally relating to a particular investment strategy, among our products, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.
+Added: That often requires judgment and could result in one or more of our funds bearing more or less of these expenses than other investors or potential investors in the relevant investments or a fund paying a disproportionate share, including some or all, of the broken deal expenses or other expenses incurred by potential investors.
+Added: Any dispute regarding such allocations could lead to our funds having to bear some portion of these costs as well as reputational risk.
+Added: In addition, for funds that do not pay or otherwise bear the costs and expenses described above because of the application of caps or otherwise, such amounts may be borne by the applicable management company, which will reduce the amount of net fee income we receive for providing advisory services to the funds.
+Added: For example, Dyal Capital has developed a Business Services Platform that provides strategic services to Partner Managers, certain areas.
+Added: Certain expenses associated with the Business Services Platform (“BSP Expenses”) are allocated among, and payable by, each of the GP Minority Equity Investment funds (“Dyal Equity Funds”).
+Added: Those Dyal Equity Funds are generally allocated an amount equal to their pro rata allocation of BSP Expenses based on the relative number of Partner Managers in which investments are held from time to time by each of those funds;
+Added: provided that the amount of BSP Expenses borne by a particular Dyal Equity Fund is subject to certain caps specified in its respective governing documents.
+Added: In addition, Dyal Fund V provides for a minimum payment for BSP Expenses, which to the extent such minimum exceeds Dyal Fund V’s otherwise allocable share of such expenses, reduces the amounts of BSP Expenses borne by the other Dyal Equity Funds.
+Added: It is expected that any successor fund to Dyal Fund V would similarly share in BSP Expenses.
+Added: We are required to bear any BSP Expenses allocated to a Dyal Equity Fund that exceeds the fund’s cap on those expenses.
+Added: In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to the Dyal Equity Funds, or to a particular fund, in response to regulatory, fund investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.
+Added: Any such determination could have the effect of materially reducing the reimbursement payments received by us with respect to the Business Services Platform or result in losses attributable to certain activities thereof.
+Added: The allocation methodology for allocating BSP Expenses and other similar expenses is complex and subject to interpretation.
+Added: Accordingly, there can be no assurance that any conflict arising from these allocations of expenses will be resolved in a manner responsive to the interests of all of our clients, which could damage our reputation.
+Added: The activities of the Business Services Platform and the allocation of BSP expenses have in the past been subject to an SEC order.
+Added: These and other expense allocation practices could in the future be subject to regulatory scrutiny.
+Added: Existing and future relationships between or among our Partner Managers, our products and their limited partners could give rise to actual or perceived conflicts of interest.
+Added: Certain of our GP Capital Solutions products’ Partner Managers directly or through their investment funds, own securities in Blue Owl or its subsidiaries.
+Added: Additionally, Dyal Fund IV has a passive minority equity interest in Owl Rock Feeder and became an indirect equityholder in Blue Owl upon consummation of the Business Combination.
+Added: As a result, Dyal Fund IV will, to the extent it holds shares of Blue Owl, be entitled to vote on matters submitted to shareholders of Blue Owl generally, including with respect to the election of directors.
+Added: In addition, a controlled affiliate of Blue Owl will serve as investment manager to Dyal Fund IV.
+Added: Dyal Fund IV may have different interests, including different investment horizons, than Blue Owl generally or the Dyal Principals specifically.
+Added: However, any decision made with respect to holding or disposing of Dyal Fund IV’s interest in Blue Owl will be determined by such Blue Owl affiliate, as investment manager to Dyal Fund IV, in a manner consistent with its statutory and contractual duties to Dyal Fund IV.
+Added: Because those decisions will be made independent from consideration of Blue Owl’s interests, they may, due to a range of factors, conflict with Blue Owl’s own interests at such time.
+Added: GP Capital Solutions products hold minority, noncontrolling interests in a broad range of Partner Managers.
+Added: Those Partner Managers may, from time to time, directly or through their funds, enter into transactions or other contractual arrangements with us or our products outside of the GP Minority Equity Investments strategy, including our private funds, BDCs and Real Estate products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
+Added: None of those transactions or other contractual arrangements are believed to be currently material to our operations or performance but there may be material transactions entered into in the future.
+Added: Even if those relationships do not create actual conflicts, the perception of conflicts in the press or the financial community generally could create negative publicity with respect to Blue Owl, which could adversely affect the relationships of with our product investors.
+Added: Debt investments in Partner Manager investments by the funds.
+Added: Portfolio companies of funds managed by our Partner Managers may also be borrowers under debt facilities or instruments owned, arranged or managed by our BDCs or funds.
+Added: In its capacity as agent or lender under such facilities or instruments, a BDC or fund is required to act in the best interests of its shareholders or investors.
+Added: In certain circumstances, a BDC or fund may be required to take actions that may be adverse to the investments owned by funds managed by Partner Managers, which could adversely affect our relationships with the Partner Managers, or potentially impact the value of a GP Capital Solutions product’s investment in such Partner Manager.
+Added: As a result, although we believe that the Business Combination has enhanced our ability to source investment opportunities for our BDCs and funds through, among other things, our enhanced relationships with Partner Managers, it also may result in additional conflicts of interest.
+Added: Our Real Estate products may enter into sale lease-back transactions with portfolio companies of funds managed by our Partner Managers or borrowers under debt facilities or instruments owned, arranged or managed by our BDCs or funds.
+Added: From time to time, companies in which our BDCs or funds, or funds managed by our Partner Managers, have invested or may invest, may enter into sale-leaseback transactions with our Real Estate products.
+Added: These arrangements could result in our BDCs or funds, or funds managed by our Partner Managers, being creditors to, or equity owners of, such companies at the same time as those companies are tenants of our Real Estate products.
+Added: If such a company were to encounter financial difficulty or default on its obligations as a borrower, our BDC or fund, or a fund managed by a Partner Manager, could be required to take actions that may be adverse to those of our Real Estate products in enforcing its rights under the relevant facilities or agreements, or vice versa.
+Added: Additional and unpredictable conflicts of interests may rise in the future.
+Added: In addition to the conflicts outlined above, we may experience conflicts of interest in connection with the management of our business affairs relating to and arising from a number of matters, including the amounts paid to us by our investment funds;
+Added: services that may be provided by us and our affiliates to investments in which our investment funds invest (including the determination of whether or not to charge fees to our investments for our provision of such services);
+Added: investments by our investment funds and our other clients, subject to the limitations of the Investment Company Act;
+Added: our formation of additional investment funds;
+Added: differing recommendations given by us to different clients;
+Added: and our use of information gained from an investment funds’ investments used to inform investments by other clients, subject to applicable law.
+Added: Our products hold and make investments in Partner Managers and there may be provisions within our arrangements with Partner Managers that could affect our right to receive or share information or cause us to sell our interests in the Partner Manager.
+Added: The terms of our GP Capital Solutions products’ investments in Partner Managers generally include provisions relating to competitors of the Partner Managers, access to information about the Partner Managers and their business, and affirmative and negative confidentiality obligations regarding the Partner Managers.
+Added: While we have an information control policy with restrictions regarding the sharing of a Partner Manager’s confidential information, such policy and related procedures may not reduce a Partner Manager’s concern over the sharing of confidential and competitively sensitive information.
+Added: Certain Partner Managers that are engaged in managing funds focused on similar businesses as our other product lines may consider Blue Owl to be a competitor with respect to their business and may seek to invoke remedies available to them under the investment agreements or pursue other remedies.
+Added: Potential remedies available to them under the investment agreements, as applicable, include limiting the rights of our products to receive confidential information from the Partner Manager regarding its business, requiring us to sequester confidential information received from the Partner Manager, or requiring us to sell our interests in the Partner Manager for fair value as determined under the relevant investment agreement.
+Added: A forced sale of a Partner Manager interest may reduce the amount of fees we receive with respect to the applicable GP Capital Solutions product, and any reduction in information may impede our ability to supervise our funds’ investments.
+Added: Further, the affiliation may hinder the GP Capital Solutions products’ ability to make future investments in Partner Managers who are in the same space and who may consider Blue Owl a competitor, including follow-on investments in existing Partner Managers and investments with new Partner Managers.
+Added: The operations of our business and related transactions may affect our reputation and relationship with our Partner Managers.
+Added: We are reliant upon our strong relationships with our Partner Managers for the continued growth and development of business.
+Added: Due to the number of Partner Managers with which we have relationships, we may compete with existing or prospective Partner Managers, which could negatively impact our ability to attract new Partner Managers to our products who may seek relationships with non-competitors over concerns of sharing information with competitors or other potential conflicts, including the ability to exercise our fiduciary duties.
+Added: Additionally, our investments in Partner Managers may affect our relationships with other sponsors that are key relationships for our lending businesses, because of similar concerns around information sharing or other reasons.
+Added: While we intend to implement robust procedures to address any such conflict, such procedures may not reduce the perception that such conflicts exist and may make us a less attractive partner/investor.
+Added: Our entitlement and that of certain of our shareholders, Principals and employees to receive performance income from certain of our products may create an incentive for us to make more speculative investments and determinations on behalf of our products than would be the case in the absence of such performance income.
+Added: Some of our products receive performance-based fees.
+Added: With respect to Dyal Funds I - V and their related co-investment vehicles, none of the carried interest will be allocated to us.
+Added: Further, we will be allocated a portion of the carried interest attributable to future GP Capital Solutions and Direct Lending products as well as 15% of the carried interest in existing Real Estate products.
+Added: If a new GP Capital Solutions product is formed to facilitate a secondary transaction with respect to any of Dyal Funds I - V (which would include, without limitation, any continuation fund or other new fund whose primary purpose is to acquire directly or indirectly all or a portion of the assets of or interests in the existing Dyal Fund), any carried interest generated by such fund will not be allocated to us, notwithstanding that such secondary vehicle is formed in the future.
+Added: Realized performance income not allocated to us is allocated to certain of our shareholders, Principals and employees in vehicles not controlled by us.
+Added: Carried interest and performance based fees or allocations may create an incentive for us or our investment professionals to make more speculative or riskier investments and determinations, directly or indirectly on behalf of our products, or otherwise take or refrain from taking certain actions than it would otherwise make in the absence of such carried interest or performance-based fees or allocations.
+Added: It may also create incentives to influence how we establish economic terms for future funds.
+Added: In addition, we may have an incentive to make exit determinations based on factors that maximize economics in favor of certain of our shareholders, Principals and employees relative to us and our non-participating shareholders.
+Added: Our failure to appropriately address any actual, potential or perceived conflicts of interest resulting from our entitlement to receive performance income from many of our products could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including limiting our ability to raise additional funds, attract new clients or retain existing clients.
+Added: Our business is currently focused on multiple investment strategies.
+Added: We currently pursue, through our products, multiple investment strategies.
+Added: While we believe that there may be certain synergies amongst the various strategies, there can be no assurance that the benefits will manifest or that there will not be unanticipated consequences resulting therefrom.
+Added: Although we are seeking additional investment strategies, relative to more diversified asset managers, our products’ limited and specialized focus also leaves us more exposed to risks affecting the dual sectors in which our products invest.
+Added: As our investment management program is not broadly diversified, we may be uniquely exposed to market, tax, regulatory and other risks affecting the sectors in which we invest.
+Added: There can be no assurance that we will be able to take actions necessary to mitigate the effect of such risks or otherwise diversify our investment program to minimize such exposure.
+Added: Rising interest rates could have a substantial adverse effect on our business.
+Added: Rising interest rates could have a dampening effect on overall economic activity, the financial condition of our customers and the financial condition of the end customers who ultimately create demand for the capital we supply, all of which could negatively affect demand for our capital.
+Added: Additionally, an increase in interest rates could make it difficult for us to obtain financing at attractive rates, impacting our ability to execute on our growth strategies or future acquisitions.
+Added: The anticipated benefits of the Business Combination, the Oak Street Acquisition and other acquisitions that we may pursue under our growth strategy, may not be realized or may take longer than expected to realize.
+Added: The optimization of our combined operations following the Business Combination will be a complex, costly and time-consuming process and if we experience difficulties in this process, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period.
+Added: There can be no assurances that we will realize the potential operating efficiencies, synergies and other benefits currently anticipated from the Business Combination.
+Added: The integration of Dyal Capital, Owl Rock and Oak Street may present material challenges, including, without limitation:
+Added: • combining the leadership teams and corporate cultures of Dyal Capital, Owl Rock and Oak Street;
+Added: • the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the businesses as a result of the devotion of management’s attention to the continuing integration of the businesses;
+Added: • managing a larger combined business;
+Added: • maintaining employee morale and retaining key management and other employees at the combined company, including by offering sufficiently attractive terms of employment;
+Added: • retaining existing business and operational relationships, and attracting new business and operational relationships;
+Added: • the possibility of faulty assumptions underlying expectations regarding the integration process;
+Added: • consolidating corporate and administrative infrastructures and eliminating duplicative operations;
+Added: • managing expense loads and maintaining currently anticipated operating margins given that our two businesses are different in nature and therefore may require additional personnel and compensation expenses, which expenses may be borne by us, rather than our products;
+Added: • difficulty replicating or replacing functions, systems and infrastructure provided by Neuberger or certain of its affiliates or the loss of benefits from Neuberger’s global contracts;
+Added: • unanticipated issues in integrating information technology, communications and other systems.
+Added: In addition, our growth strategy contemplates that we will pursue acquisitions of assets or business that are complementary to our business, such as the recently completed Oak Street Acquisition.
+Added: Some or all of the foregoing risks may arise in connection with integrating these acquisitions.
+Added: Some of those factors are outside of our control, and any one of them could result in delays, increased costs, decreases in the amount of potential revenues or synergies, potential cost savings, and diversion of management’s time and energy, which could materially affect our financial position, results of operations, and cash flows.
+Added: We may continue to enter into new lines of business and expand into new investment strategies, geographic markets and businesses, each of which may result in upfront costs and additional risks and uncertainties in our businesses.
+Added: We intend, if market conditions warrant, to grow our businesses by increasing FPAUM in existing businesses and expanding into new investment strategies, geographic markets (including in both U.S.
+Added: markets) and businesses.
+Added: For example, we recently completed the Oak Street Acquisition, which focuses on structuring sale-leasebacks, including triple net leases, and we also recently entered into a definitive purchase agreement to acquire Wellfleet Credit Partners LLC, the performing credit arm of Littlejohn & Co., LLC which focuses on the management of CLO portfolios of broadly syndicated leveraged loans.
+Added: Subject to the consent rights of Neuberger as set forth in the Investor Rights Agreement (as described below), we may pursue growth through acquisitions of other investment management companies, expansion into new markets, acquisitions of critical business partners or other strategic initiatives, in each case, which may include entering into new lines of business.
+Added: Attempts to expand our businesses involve a number of special risks, including some or all of the following:
+Added: • the required investment of capital and other resources;
+Added: • the diversion of management’s attention from our core businesses;
+Added: • the assumption of liabilities in any acquired business;
+Added: • the disruption of our ongoing businesses;
+Added: • entry into markets or lines of business in which we may have limited or no experience, and which may subject us to new laws and regulations which we are not familiar or from which we are currently exempt;
+Added: • increasing demands on our operational and management systems and controls;
+Added: • compliance with or applicability to our businesses or our funds’ portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection related laws) and the impact that noncompliance or even perceived noncompliance could have on us and our funds’ portfolio companies;
+Added: • conflicts between business lines in deal flow or objectives;
+Added: • we may be dependent upon, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control;
+Added: • potential increase in fund investor concentration;
+Added: • the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions where we currently have little or no presence, such as different legal, tax and regulatory regimes and currency fluctuations, which require additional resources to address.
+Added: Because we have not yet identified these potential new investment strategies, geographic markets or lines of business, we cannot identify all of the specific risks we may face and the potential adverse consequences on us and their investment that may result from any attempted expansion.
+Added: Rapid growth of our businesses may be difficult to sustain and may place significant demands on our administrative, operational and financial resources.
+Added: Our AUM has grown significantly in the past, and we intend to pursue further growth in the near future, including through acquisitions.
+Added: Our rapid growth has placed, and future growth, if successful, will continue to place, significant demands on our legal, compliance, accounting and operational infrastructure and will result in increased expenses.
+Added: In addition, we are, and will continue to be, required to continuously develop our systems and infrastructure in response to the increasing sophistication of the investment management market;
+Added: legal, accounting, regulatory and tax developments and continually evolving cybersecurity risks.
+Added: Our future growth will depend in part on our ability to maintain an operating platform and management system sufficient to address our growth and may require us to incur significant additional expenses and to commit additional senior management and operational resources.
+Added: As a result, we may face significant challenges in:
+Added: • maintaining adequate financial, regulatory (legal, tax and compliance) and business controls;
+Added: • providing current and future fund investors and shareholders with accurate and consistent reporting;
+Added: • implementing new or updated information and financial systems and procedures;
+Added: • training, managing and appropriately sizing our work force and other components of our businesses on a timely and cost-effective basis.
+Added: We may not be able to manage our expanding operations effectively and may not be ready to continue to grow because of operational needs, and any failure to do so could adversely affect our ability to generate revenue and control our expenses.
+Added: In addition, if we are unable to consummate or successfully integrate development opportunities, acquisitions or joint ventures, we may not be able to implement our growth strategy successfully.
+Added: Our Professional Sports Minority Investments strategy is new, subject to significant risk and uncertainty.
+Added: We have established and are continuing to build a new relationship with the NBA in furtherance of our Professional Sports Minority Investments strategy.
+Added: Our Dyal HomeCourt Fund makes minority investments in NBA franchises.
+Added: The NBA provides certain services with respect to the Dyal HomeCourt Fund and receives a share of management fees and incentive allocations attributable to the fund.
+Added: There is no assurance that we will be able to raise sufficient funds to continue to execute this strategy in the future.
+Added: As advisor to the Dyal HomeCourt Fund, we may be exposed to liability to the NBA in a range of circumstances including as a result of a violation of rules applicable to NBA franchise owners by us or investors in our Dyal HomeCourt Fund or, in certain circumstances, by our co-owners of a team (regardless of whether such persons were acting under our direction or control), the departure of certain Dyal Capital key persons or the occurrence of certain events constituting cause.
+Added: Any failure of the Professional Sports Minority Investments strategy could result in a decrease in our FPAUM growth potential and have an adverse effect on our reputation.
+Added: In addition, we associate from time to time with different businesses and managers in different ways.
+Added: This may include Partner Managers, Dyal Home Court, and our seeding business through Oak Street.
+Added: To differing degrees, these present the potential for a reputational risk that may have consequences that exceed the current materiality of the revenue from these businesses.
+Added: We depend on our senior management team, senior investment professionals and other key personnel, and the loss of their services would have a material adverse effect on us and our products.
+Added: Our success depends on the efforts, judgment and personal reputations of our senior management team, senior investment professionals and other key personnel.
+Added: Their reputations, expertise in investing, relationships with fund investors and with other members of the business communities on whom we and our products depend on for investment opportunities and financing are each critical elements in operating and expanding our business.
+Added: The loss of the services of our senior management team, senior investment professionals or other key personnel could have a material adverse effect on us and our products, and on the performance of our products, including on our ability to retain and attract fund investors and raise capital.
+Added: The departure of some or all of those individuals could also trigger certain provisions tied to the departure of, or cessation of committed time, by those persons (known as “key person” provisions) in the documentation governing certain of our products, which could permit the investors in those funds to suspend or terminate those funds’ investment periods.
+Added: We do not carry any “key person” insurance that would provide us with proceeds in the event of the death or disability of any of our senior professionals, and we do not have a policy that prohibits our senior professionals from traveling together.
+Added: In addition, each of our Key Individuals is entitled to significant compensation payments and under certain circumstances (including the Key Individual’s death or disability), the Key Individual (or his estate) is entitled to retain those payments for up to five years following such person’s ceasing to be employed by us.
+Added: While we continue to make such payments, we may need to find or promote new employees to replace the former Key Individual, which may require additional significant compensation to be paid by us, which could adversely affect our earnings.
+Added: Employee misconduct could harm us by impairing our ability to attract and retain fund investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.
+Added: Our ability to attract and retain fund investors and to pursue investment opportunities for our clients depends heavily upon the reputation of our professionals, especially our senior professionals as well as third-party service providers.
+Added: We are subject to a number of obligations and standards arising from our investment management business and our authority and statutory fiduciary status over the assets managed by our investment management business.
+Added: Further, our employees are subject to various internal policies including a Code of Ethics and policies covering conflicts of interest, information systems, business continuity and information security.
+Added: The violation of those obligations, standards and policies by any of our employees or misconduct by one of our third-party service providers could adversely affect investors in our products and us.
+Added: Our businesses often require that we deal with confidential matters of great significance to companies in which our products may invest.
+Added: If our employees, former employees or third-party service providers were to use or disclose confidential information improperly, we could suffer serious harm to our reputation, financial position and current and future business relationships.
+Added: Employee or third-party service provider misconduct could also include, among other things, binding us to transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), or otherwise charging (or seeking to charge) inappropriate expenses or inappropriate or unlawful behavior or actions directed towards other employees.
+Added: It is not always possible to detect or deter misconduct by employees or third-party service providers, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases.
+Added: If one or more of our employees, former employees or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our businesses and our reputation could be adversely affected and a loss of fund investor confidence could result, which would adversely impact our ability to raise future funds.
+Added: Our current and former employees and those of our products’ investments as well as our third-party service providers may also become subject to allegations of sexual harassment, racial and gender discrimination or other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could harm our and such portfolio company’s brand and reputation.
+Added: Our future growth depends on our ability to attract, retain and develop human capital in a highly competitive talent market.
+Added: The success of our business will continue to depend upon us attracting, developing and retaining human capital.
+Added: Competition for qualified, motivated, and highly-skilled executives, professionals and other key personnel in asset management firms is significant.
+Added: Turnover and associated costs of rehiring, the loss of human capital through attrition, death, or disability and the reduced ability to attract talent could impair our ability to implement our growth strategy and maintain our standards of excellence.
+Added: Our future success will depend upon our ability to find, attract, retain and motivate highly-skilled and highly-qualified individuals.
+Added: We seek to provide our personnel with competitive benefits and compensation packages.
+Added: However, our efforts may not be sufficient to enable us to attract, retain and motivate qualified individuals to support our growth.
+Added: Moreover, if our personnel join competitors or form businesses that compete with ours, that could adversely affect our ability to raise new or successor funds.
+Added: We are subject to risks related to corporate social responsibility.
+Added: We and our products face increasing public scrutiny related to environmental, social and governance (“ESG”) activities, including diversity and inclusion, environmental stewardship, support for local communities, corporate governance and transparency.
+Added: Before making an investment on behalf of our products, we analyze a wide array of considerations, risks, and potential rewards related to the prospective investment.
+Added: Among the pecuniary considerations we analyze are the present and future material ESG implications of investments.
+Added: It is expected that investor demands and the prevailing legal environment will require us to spend additional resources and place increasing importance on ESG matters in our review of prospective investments and management of existing ones.
+Added: Devoting additional resources to ESG matters could increase the amount of expenses we or our investments are required to bear.
+Added: Further, emphasis on ESG criteria in evaluating an investment by us or our products could lead to reduced profits.
+Added: ESG matters have been the subject of increased focus by certain regulators, including in the United States and the European Union.
+Added: A lack of harmonization globally in relation to ESG legal and regulatory reform leads to a risk of fragmentation in group level priorities as a result of the different pace of sustainability transition across global jurisdictions.
+Added: This may create conflicts across our global business and funds in which we invest which could risk inhibiting our future implementation of, and compliance with, rapidly developing ESG standards and requirements.
+Added: The European Commission has adopted legislative reforms, which include, without limitation:
+Added: (a) Regulation 2019/2088 regarding the introduction of transparency and disclosure obligations for fund investors, funds and asset managers in relation to ESG factors, for which most rules took effect beginning on March 10, 2021;
+Added: (b) a regulation regarding the introduction of an EU-wide taxonomy of environmentally sustainable activities, which takes effect in part in January 2022 and in part in January 2023;
+Added: and (c) amendments to existing regulations including MiFID II and the European Union (“EU”) Alternative Investment Fund Managers Directive (the “AIFMD”) to embed ESG requirements.
+Added: As a result of these legislative and regulatory initiatives, we may be required to provide additional disclosure to investors in our products with respect to ESG matters.
+Added: This exposes us to increased disclosure risks, for example due to a lack of available or credible data, and the potential for conflicting disclosures may also expose us to an increased risk of misstatement litigation or miss-selling allegations.
+Added: Failure to manage these risks could result in a material adverse effect on our business in a number of ways.
+Added: The effect of global climate change may impact the operations of our products’ investments.
+Added: There is evidence of global climate change.
+Added: Climate change creates physical and financial risk and some of our products and their investments may be adversely affected by climate change.
+Added: For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity.
+Added: To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes.
+Added: Increases in the cost of energy could adversely affect the cost of operations of our investments if the use of energy products or services is material to their business.
+Added: A decrease in energy use due to weather changes may affect some of our investments’ financial condition through, for example, decreased revenues.
+Added: Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.
+Added: We are subject to risks in using custodians, counterparties, administrators and other agents.
+Added: Many of our products depend on the services of custodians, counterparties, administrators and other agents to carry out certain transactions and other administrative services, including compliance with regulatory requirements in U.S.
+Added: jurisdictions.
+Added: We are subject to risks of errors and mistakes made by these third parties, which may be attributed to us and subject us or our products’ investors to reputational damage, penalties or losses.
+Added: We depend on third parties to provide primary and back up communications and information systems.
+Added: Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities.
+Added: Our financial, accounting, data processing, portfolio monitoring, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control.
+Added: The terms of the contracts with third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight.
+Added: Accordingly, we may be unsuccessful in seeking reimbursement or indemnification from these third-party service providers.
+Added: In addition, we rely on a select number of third-party services providers and replacement of any one of our service providers could be difficult and result in disruption and expense.
+Added: Cybersecurity risks and cyber incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships, any of which could negatively impact our business, financial condition and operating results.
+Added: There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an alternative asset management firm, we hold confidential and other price sensitive information about existing and potential investments.
+Added: Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties.
+Added: As a result, we may face a heightened risk of a security breach or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments or cyber terrorists.
+Added: The efficient operation of our business is dependent on computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, which are vulnerable to security breaches and cyber incidents.
+Added: A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources.
+Added: These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.
+Added: In addition, we and our employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to proprietary or sensitive information.
+Added: The result of these incidents may include disrupted operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships, causing our business and results of operations to suffer.
+Added: As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by third-party service providers.
+Added: We have implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber intrusions and rely on industry accepted securities measures and technology to securely maintain confidential and proprietary information maintained on our information systems;
+Added: however, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-incident techniques change frequently or are not recognized until launched and because cyber-incidents can originate from a wide variety of sources.
+Added: Those risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, and personally identifiable information of our employees, our clients and others, that we collect and store in our data centers and on our networks.
+Added: Our products may also invest in strategic assets having a national or regional profile or in infrastructure assets, the nature of which could expose them to a greater risk of being subject to a terrorist attack or security breach than other assets or businesses.
+Added: The secure processing, maintenance and transmission of this information are critical to our operations.
+Added: A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of fund investor, employee or other personally identifiable or proprietary business data, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm.
+Added: Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business and our products.
+Added: We operate in businesses that are highly dependent on information systems and technology.
+Added: The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.
+Added: Cybersecurity has become a priority for regulators in the U.S.
+Added: and around the world.
+Added: Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the California Consumer Privacy Act that went into effect on January 1, 2020, and the New York SHIELD Act, which went into effect on March 1, 2020.
+Added: In addition, the SEC announced that one of the 2019 examination priorities for the Office of Compliance Inspections and Examinations was to continue to examine cybersecurity procedures and controls, including testing the implementation of these procedures and controls.
+Added: Further, the European General Data Protection Regulation (the “GDPR”) came into effect in May 2018.
+Added: Data protection requirements under the GDPR are more stringent than those imposed under prior European legislation.
+Added: There are substantial financial penalties for breach of the GDPR, including up to the higher of 20 million Euros or 4% of group annual worldwide turnover.
+Added: Non-compliance with any of the aforementioned laws or other similar laws, therefore, represents a serious risk to our business.
+Added: Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data.
+Added: Breaches in security could potentially jeopardize our, our employees’ or our product investors’ or counterparties’ confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our employees’, our product investors’, our counterparties’ or third parties’ operations, which could result in significant losses, increased costs, disruption of our business, liability to our product investors and other counterparties, regulatory intervention or reputational damage.
+Added: Furthermore, if we fail to comply with the relevant laws and regulations, it could result in regulatory investigations and penalties, which could lead to negative publicity and may cause our product investors and clients to lose confidence in the effectiveness of our security measures.
+Added: We are subject to litigation risks, and consequently, we may face liabilities and damage to our professional reputation as a result.
+Added: Legal liability could have a material adverse effect on our businesses, financial condition or results of operations or cause reputational harm to us, which could harm our businesses.
+Added: We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain fund investors and to pursue investment opportunities for our products.
+Added: As a result, allegations of improper conduct asserted by private litigants or regulators, regardless of whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, our investment activities or the investment industry in general, whether or not valid, may harm our reputation, which may be damaging to our businesses.
+Added: In addition, the laws and regulations governing the limited liability of such issuers and investments vary from jurisdiction to jurisdiction, and in certain contexts the laws of certain jurisdictions may provide not only for carve-outs from limited liability protection for the issuer or portfolio company that has incurred the liabilities, but also for recourse to assets of other entities under common control with, or that are part of the same economic group as, such issuer.
+Added: For example, if any of our products’ investments is subject to bankruptcy or insolvency proceedings in a jurisdiction and is found to have liabilities under the local consumer protection, labor, tax or bankruptcy laws, the laws of that jurisdiction may permit authorities or creditors to file a lien on, or to otherwise have recourse to, assets held by other investments (including assets held by our products) in that jurisdiction.
+Added: There can be no assurance that we will not be adversely affected as a result of the foregoing risks.
+Added: We may not be able to maintain sufficient insurance to cover us for potential litigation or other risks.
+Added: We may not be able to maintain sufficient insurance on commercially reasonable terms or with adequate coverage levels against potential liabilities we may face in connection with potential claims, which could have a material adverse effect on our business.
+Added: We may face a risk of loss from a variety of claims, including related to securities, antitrust, contracts, cybersecurity, fraud and various other potential claims, whether or not such claims are valid.
+Added: Insurance and other safeguards might only partially reimburse us for our losses, if at all, and if a claim is successful and exceeds or is not covered by our insurance policies, we may be required to pay a substantial amount in respect of such successful claim.
+Added: Certain losses of a catastrophic nature, such as losses arising as a result of wars, earthquakes, typhoons, terrorist attacks or other similar events, may be uninsurable or may only be insurable at rates that are so high that maintaining coverage would cause an adverse impact on our business, our investment funds and their investments.
+Added: In general, losses related to terrorism are becoming harder and more expensive to insure against.
+Added: Some insurers are excluding terrorism coverage from their all-risk policies.
+Added: In some cases, insurers are offering significantly limited coverage against terrorist acts for additional premiums, which can greatly increase the total cost of casualty insurance for a property.
+Added: As a result, we, our products and their investments may not be insured against terrorism or certain other catastrophic losses.
+Added: Our use of leverage to finance our businesses exposes us to substantial risks.
+Added: Any security interests or negative covenants required by a credit facility we enter into may limit our ability to create liens on assets to secure additional debt.
+Added: We may choose to finance our businesses operations through the issuance of senior notes, borrowings under our Revolving Credit Facility or by issuing additional debt in the future.
+Added: Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage.
+Added: The occurrence or continuation of any of these events or trends could cause us to suffer a decline in the credit ratings assigned to our debt by rating agencies, which could cause the interest rate applicable to borrowings under the Revolving Credit Facility to increase and could result in other material adverse effects on our businesses.
+Added: We depend on financial institutions extending credit to us on terms that are reasonable to us.
+Added: There is no guarantee that such institutions will continue to extend credit to us or renew any existing credit agreements we may have with them, or that we will be able to refinance outstanding facilities when they mature.
+Added: In addition, the incurrence of additional debt in the future could result in potential downgrades of our existing corporate credit ratings, which could limit the availability of future financing and increase our cost of borrowing.
+Added: Furthermore, our Revolving Credit Facility contains certain covenants with which we need to comply.
+Added: Non-compliance with any of the covenants without cure or waiver would constitute an event of default, and an event of default resulting from a breach of certain covenants could result, at the option of the lenders, in an acceleration of the principal and interest outstanding.
+Added: In addition, if we incur additional debt, our credit rating could be adversely impacted.
+Added: Blue Owl may provide financial guarantees of performance in connection with certain investments, particularly in the Real Estate product-line, to certain lenders to its products and investments.
+Added: Lenders in commercial real estate financing customarily will require such guarantees, which typically provides that the lender can recover losses from the guarantors for certain bad acts, such as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds, voluntary incurrence of prohibited debt and environmental losses sustained by lender.
+Added: It is expected that commercial real estate financing arrangements will generally require such guarantees and in the event that such a guarantee is called, Blue Owl’s assets could be materially and adversely affected.
+Added: As borrowings under our senior notes, Revolving Credit Facility and any future indebtedness mature, we may be required to either refinance them by entering into new facilities or issuing additional debt, which could result in higher borrowing costs, or issuing equity, which would dilute existing shareholders.
+Added: We could also repay these borrowings by using cash on hand, cash provided by our continuing operations or cash from the sale of our assets.
+Added: We may be unable to enter into new facilities or issue debt or equity in the future on attractive terms, or at all.
+Added: Borrowings under the Revolving Credit Facility are SOFR-based obligations.
+Added: As a result, an increase in short-term interest rates will increase our interest costs if such borrowings are not been hedged into fixed rates in the future.
+Added: Risks Related to Legal and Regulatory Environment
+Added: Our businesses are subject to extensive domestic and foreign regulations that may subject us to significant costs and compliance requirements, and our failure to comply with such regulations could have a material adverse effect on our business.
+Added: Our businesses, as well as the financial services industry, generally are subject to extensive regulation, including periodic examinations, by governmental agencies and self-regulatory organizations or exchanges in the U.S.
+Added: and foreign jurisdictions in which we operate relating to, among other things, securities, antitrust, anti-money laundering, anti-bribery, tax and privacy.
+Added: Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many aspects of financial services, including the authority to grant, and in specific circumstances to cancel, permissions to carry on particular activities.
+Added: The financial services industry may face an increasingly difficult political and regulatory environment, especially as a result of the recent change in presidential administration.
+Added: The new administration has expressed support for proposals that call for greater regulatory oversight of the financial services industry.
+Added: If these proposals were to become policy, such developments, including investors’ perceptions of and responses to such proposals, could potentially have a material adverse effect on our business, our products and the businesses of the companies in which our products invest.
+Added: We recently expanded our business to Canada, the U.K., Hong Kong and Singapore.
+Added: Differences between the laws and rules governing our businesses in these jurisdictions compared to the United States result in inconsistent regulatory requirements that it may not be possible to fully reconcile in a cost-efficient manner across our businesses.
+Added: The SEC oversees the activities of certain of our subsidiaries that are registered investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act”) and the activities of our BDCs that are regulated under the Investment Company Act.
+Added: Investment Advisers Act of 1940:
+Added: The Advisers Act imposes specific restrictions on an investment adviser’s ability to engage in principal and agency cross transactions.
+Added: Our registered investment advisers are subject to additional requirements that cover, among other things, disclosure of information about our business to clients;
+Added: maintenance of written policies and procedures;
+Added: maintenance of extensive books and records;
+Added: restrictions on the types of fees we may charge, including performance fees and carried interest;
+Added: solicitation arrangements;
+Added: maintaining effective compliance programs;
+Added: custody of client assets;
+Added: client privacy;
+Added: and proxy voting.
+Added: Failure to comply with the obligations imposed by the Advisers Act could result in investigations, sanctions, fines, restrictions on the activities of us or our personnel and reputational damage.
+Added: Under the Advisers Act, an investment adviser (whether or not registered under the Advisers Act) has fiduciary duties to its clients.
+Added: The SEC has interpreted those duties to impose standards, requirements and limitations on, among other things, trading for proprietary, personal and client accounts;
+Added: allocations of investment opportunities among clients;
+Added: execution of transactions;
+Added: and recommendations to clients.
+Added: Investment Company Act:
+Added: Our subsidiaries are the advisers to our BDCs, which are subject to the rules and regulations under the Investment Company Act.
+Added: Our BDCs are required to file periodic and annual reports with the SEC and may also be required to comply with the applicable provisions of the Sarbanes-Oxley Act.
+Added: Furthermore, advisers to our BDCs have a fiduciary duty under the Investment Company Act not to charge excessive compensation, and the Investment Company Act grants shareholders of mutual funds and BDCs a direct private right of action against investment advisers to seek redress for alleged violations of this fiduciary duty.
+Added: While we exercise broad discretion over the day-to-day management of our BDCs, each of our BDCs is also subject to oversight and management by a board of directors, a majority of whom are not “interested persons” as defined under the Investment Company Act.
+Added: The responsibilities of each of our BDC’s boards include, among other things, approving our advisory contract with the applicable BDC that we manage;
+Added: approving certain service providers;
+Added: determining the valuation and the method for valuing assets;
+Added: and monitoring transactions involving affiliates;
+Added: and approving certain co-investment transactions.
+Added: The advisory contracts with each of our BDCs may be terminated by the shareholders or directors of such BDC on not more than 60 days’ notice, and are subject to annual renewal by each respective BDC’s board of directors after an initial two-year term.
+Added: Our BDCs are also prohibited from knowingly participating in certain transactions with their affiliates, except as permitted by the Investment Company Act and the Co-investment Exemptive Order.
+Added: For additional details, see “Conflicts of interest may arise in connection with co-investments between our private funds and our BDCs” .
+Added: In addition, the Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk-taking by covered financial institutions.
+Added: In 2016, federal bank regulatory authorities and the SEC revised and re-proposed a rule that generally (1) prohibits incentive-based payment arrangements that are determined to encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss and (2) requires those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.
+Added: The Dodd-Frank Act also directs the SEC to adopt a rule that requires public companies to adopt and disclose policies requiring, in the event the company is required to issue an accounting restatement, the contingent repayment of obligations of related incentive compensation from current and former executive officers.
+Added: The SEC has proposed but not yet adopted such rule.
+Added: To the extent the aforementioned rules are adopted, our ability to recruit and retain investment professionals and senior management executives could be limited.
+Added: Other Securities Laws:
+Added: In addition, we regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, and the Commodity Exchange Act.
+Added: Those exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third parties whom we do not control.
+Added: The revocation, challenge or unavailability of these exemptions could increase our cost of doing business or subject us to regulatory action or third-party claims, which could have a material adverse effect on our businesses.
+Added: For example, Rule 506 of Regulation D under the Securities Act includes “bad actor” disqualification provisions that ban an issuer from offering or selling securities pursuant to the safe harbor in Rule 506 if the issuer, or any other “covered person,” is the subject of a criminal, regulatory or court order or other “disqualifying event” under the rule which has not been waived by the SEC.
+Added: The definition of a “covered person” under the rule includes an issuer’s directors, general partners, managing members and executive officers and promoters and persons compensated for soliciting investors in the offering.
+Added: Accordingly, our ability to rely on Rule 506 to offer or sell our products and therefore a significant portion of our business would be impaired if we or any “covered person” is the subject of a disqualifying event under the rule and we are unable to obtain a waiver or, in certain circumstances, terminate our involvement with such “covered person”.
+Added: Compliance with existing and new regulations subjects us to significant costs.
+Added: Any changes or other developments in the regulatory framework applicable to our businesses and changes to formerly accepted industry practices, may impose additional costs on us, require the attention of our senior management or limit the manner in which we conduct our businesses.
+Added: We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.
+Added: Additional legislation, increasing global regulatory oversight of fundraising activities, changes in rules promulgated by self-regulatory organizations or exchanges or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability.
+Added: Moreover, our failure to comply with applicable laws or regulations, including labor and employment laws, could result in fines, censure, suspensions of personnel or other sanctions, including revocation of the registration of our relevant subsidiaries as investment advisers or our broker-dealer affiliate as a registered broker-dealer.
+Added: Even if a sanction is imposed against us, one of our subsidiaries or our affiliates or our personnel by a regulator for a small monetary amount, the costs incurred in responding to such matters could be material.
+Added: The adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our businesses, making it harder for us to raise new and successor funds and discouraging others from doing business with us or accepting investments from our products.
+Added: Heightened scrutiny of the financial services industry by regulators may materially and adversely affect our business.
+Added: The financial services industry has been the subject of heightened scrutiny by regulators around the globe.
+Added: In particular, the SEC and its staff have focused more narrowly on issues relevant to alternative asset management firms, including by forming specialized units devoted to examining such firms and, in certain cases, bringing enforcement actions against the firms, their Principals and employees.
+Added: In recent periods there have been a number of enforcement actions within the industry, and it is expected that the SEC will continue to pursue enforcement actions against asset managers.
+Added: This increased enforcement activity has caused, and could further cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.
+Added: While the SEC’s recent lists of examination priorities include such items as cybersecurity compliance and controls and conducting risk-based examinations of investment advisory firms, it is generally expected that the SEC’s oversight of alternative asset managers will continue to focus substantially on concerns related to fiduciary duty transparency and investor disclosure practices (See “— Conflicts of interest may arise in our allocation of capital and co-investment opportunities ”).
+Added: Although the SEC has cited improvements in disclosures and industry practices in this area, it has also indicated that there is room for improvement in particular areas, including fees and expenses (and the allocation of such fees and expenses) and co-investment practices.
+Added: To this end, many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding various transparency-related topics, including the acceleration of monitoring fees, the allocation of broken-deal expenses, outside business activities of firm Principals and employees, group purchasing arrangements and general conflicts of interest disclosures.
+Added: While we believe we have made appropriate and timely disclosures regarding the foregoing, the SEC staff may disagree.
+Added: Further, the SEC has highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.
+Added: If the SEC were to investigate and find errors in our methodologies or procedures, we and/or members of our board and management could be subject to penalties and fines, which could harm our reputation and our business, financial condition and results of operations could be materially and adversely affected.
+Added: Regulations governing the operations of our BDCs as business development companies affect their ability to raise, and the way in which they raise, additional capital.
+Added: Our BDCs have elected to be regulated as business development companies under the Investment Company Act.
+Added: Many of the regulations governing business development companies restrict, among other things, leverage incurrence, co-investments and other transactions with other entities within Blue Owl.
+Added: Certain of our products may be restricted from engaging in transactions with our BDCs and their subsidiaries.
+Added: As business development companies regulated under the Investment Company Act, our BDCs may issue debt securities or preferred stock and borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act.
+Added: BDCs are not generally able to issue and sell their common stock at a price below net asset value per share.
+Added: BDCs may, however, issue and sell their common stock, or warrants, options or rights to acquire such common stock, at a price below the then-current net asset value of such common stock if (1) the applicable BDC’s board of directors determines that such sale is in the BDC’s best interests and the best interests of the BDC’s shareholders, and (2) the applicable BDC’s shareholders have approved a policy and practice of making such sales within the preceding 12-months.
+Added: In any such case, the price at which the securities of BDCs are to be issued and sold may not be less than a price which, in the determination of the applicable board of directors, closely approximates the market value of such securities.
+Added: In addition, as business development companies that are subject to regulations under the Investment Company Act, our BDCs are currently permitted to incur indebtedness or issue senior securities only in amounts such that their asset coverage ratio equals at least 150% after each such issuance, except in the instance of ORCC II, which is required to maintain an asset coverage ratio of at least 200%.
+Added: Our BDCs’ ability to pay dividends will be restricted if such BDC’s asset coverage ratio falls below the required asset coverage ratio and any amounts that it uses to service its indebtedness are not available for dividends to its common shareholders.
+Added: Any of the foregoing circumstances could have a material adverse effect on our BDCs, and as a result, on our financial condition, results of operations and cash flow.
+Added: federal income tax purposes, our BDCs have elected to be treated as regulated investment companies (“RICs”) under Subchapter M of the Code.
+Added: To maintain their status as RICs, our BDCs must meet, among other things, certain source of income, asset diversification and annual distribution requirements.
+Added: Each of our BDCs is required to generally distribute to its shareholders at least 90% of such BDC’s investment company taxable income to maintain its RIC status.
+Added: Changes to the method of determining the London Interbank Offered Rate (“LIBOR”) or the selection of a replacement for LIBOR may affect the value of investments held by our products and could affect our results of operations and financial results.
+Added: LIBOR, the London Interbank Offered Rate, is the basic rate of interest used in lending transactions between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally.
+Added: Our products, and in particular our BDCs, typically use LIBOR as a reference rate in term loans they extend to investments such that the interest due to us pursuant to a term loan extended to a portfolio company is calculated using LIBOR.
+Added: The terms of our debt investments generally include minimum interest rate floors which are calculated based on LIBOR.
+Added: The United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it will not compel panel banks to contribute to LIBOR after 2021.
+Added: In addition, in March 2021, the FCA announced that LIBOR will no longer be provided for the one-week and two-month U.S.
+Added: dollar settings after December 21, 2021 and that publication of the U.S.
+Added: dollar settings for the overnight, one-month, three-month, six-month and 12-month LIBOR rates will cease after June 30, 2023.
+Added: It is unclear if at that time LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2023.
+Added: The discontinuance of LIBOR, as well as uncertainty related to the establishment of any alternative reference rate, may adversely affect our cost of capital and the market for LIBOR-based securities, which could have an adverse impact on the earnings from or value of our investment portfolio.
+Added: Central banks and regulators in a number of major jurisdictions (for example, United States, United Kingdom, European Union, Switzerland and Japan) have convened working groups to find, and implement the transition to, suitable replacements for interbank offered rates (“IBORs”).
+Added: To identify a successor rate for U.S.
+Added: dollar LIBOR, the Alternative Reference Rates Committee (“ARRC”), a U.S.-based group convened by the Federal Reserve Board and the Federal Reserve Bank of New York, was formed.
+Added: The ARRC has recommended the Secured Overnight Financing Rate (“SOFR”) plus a recommended spread adjustment as its preferred alternative rate for LIBOR.
+Added: SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S.
+Added: Treasury securities, and is based on directly observable U.S.
+Added: Treasury-backed repurchase transactions.
+Added: However, given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR).
+Added: SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions.
+Added: Although SOFR plus the recommended spread adjustment appears to be the preferred replacement rate for U.S.
+Added: dollar LIBOR, and its use continues to steadily grow, at this time it is not possible to predict the effect of any such changes, any establishment of alternative reference rates or other reforms to LIBOR that may be enacted in the United States, United Kingdom or elsewhere.
+Added: As such, if LIBOR in its current form does not survive and a replacement rate is not widely agreed upon or if a replacement rate is significantly different from LIBOR, it could cause a disruption in the credit markets generally.
+Added: The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to our investments or on our overall financial condition or results of operations.
+Added: In addition, if LIBOR ceases to exist, our products, borrowers of our products and our Partner Managers and their respective portfolio companies may need to renegotiate the credit agreements extending beyond 2023 that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard that is established, which may have an adverse effect on our overall financial condition or results of operations.
+Added: Following the replacement of LIBOR, some or all of these credit agreements may bear interest at a lower interest rate, which, to the extent our products are lenders, could have an adverse impact on their performance, could have an adverse impact on our products’ and their portfolio companies’ results of operations.
+Added: Moreover, if LIBOR ceases to exist, our products and their portfolio companies may need to renegotiate certain terms of their credit facilities.
+Added: If our products and their portfolio companies are unable to do so, amounts drawn under their credit facilities may bear interest at a higher rate, which would increase the cost of their borrowings and, in turn, affect their results of operations.
+Added: Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our businesses.
+Added: Since 2010, states and other regulatory authorities have begun to require investment managers to register as lobbyists.
+Added: We are registered as a lobbyist in California.
+Added: These registration requirements impose significant compliance obligations on registered lobbyists and their employers, which may include annual registration fees, periodic disclosure reports and internal record keeping, and may also prohibit the payment of contingent fees.
+Added: Under applicable SEC rules, investment advisers are required to implement compliance policies designed, among other matters, to track contributions by certain of the adviser’s employees and engagements of third parties that solicit government entities and to keep certain records to enable the SEC to determine compliance with the rule.
+Added: In addition, there have been similar rules on a state level regarding “pay to play” practices by investment advisers.
+Added: FINRA has its own set of “pay to play” regulations that are similar to the SEC’s regulations.
+Added: As we have public pension plans that are investors in our products, these rules could impose significant economic sanctions on our businesses if we or one of the other persons covered by the rules make any prohibited contribution or payment, whether or not material or with an intent to secure an investment from a public pension plan.
+Added: We may also acquire other investment managers or hire additional personnel who are not subject to the same restrictions as us, but whose activity, and the activity of their Principals, prior to our ownership or employment of such person, could affect our product raising.
+Added: Any failure on our part to comply with these rules could cause us to lose compensation for our advisory services or expose us to significant penalties and reputational damage.
+Added: Failure to comply with regulations regarding the prevention of money laundering or terrorism or national security could adversely affect our business.
+Added: As part of our responsibility for the prevention of money laundering under applicable laws, we may require detailed verification of a prospective investor’s identity and the source of such prospective investor’s funds.
+Added: In the event of delay or failure by a prospective investor to produce any such information required for verification purposes, we may refuse to admit the investor to our products.
+Added: We may from time-to-time request (outside of the subscription process), and our products’ limited partners will be obligated to provide to us as appropriate upon such request, additional information as from time to time may be required for us to satisfy our obligations under these and other laws that may be adopted in the future.
+Added: Additionally, we may from time to time be obligated to file reports with regulatory authorities in various jurisdictions with regard to, among other things, the identity of our products’ limited partners and suspicious activities involving the interests of our products.
+Added: In the event it is determined that any investor, or any direct or indirect owner of any investor, is a person identified in any of these laws as a prohibited person, or is otherwise engaged in activities of the type prohibited under these laws, we may be obligated, among other actions to be taken, to withhold distributions of any funds otherwise owing to such investor or to cause such investor’s interests to be cancelled or otherwise redeemed (without the payment of any consideration in respect of those interests).
+Added: The Bank Secrecy Act of 1970 and the USA PATRIOT Act require that financial institutions (a term that includes banks, broker-dealers and investment companies) establish and maintain compliance programs to guard against money laundering activities.
+Added: Laws or regulations may presently or in the future require us, our products or any of our affiliates or other service providers to establish additional anti-money laundering procedures, to collect information with respect to our products’ limited partners, to share information with governmental authorities with respect to our products’ limited partners or to implement additional restrictions on the transfer of the interests.
+Added: These requirements can lead to increased expenses and exposure to enforcement actions
+Added: Economic sanction laws in the U.S.
+Added: and other jurisdictions may prohibit us and our affiliates from transacting with certain countries, individuals and companies, which could negatively impact our business, financial condition and operating results.
+Added: Economic sanction laws in the U.S.
+Added: and other jurisdictions may restrict or prohibit us or our affiliates from transacting with certain countries, territories, individuals and entities.
+Added: In the U.S., the U.S.
+Added: Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S.
+Added: economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain non-U.S.
+Added: countries, territories, individuals and entities.
+Added: These types of sanctions may significantly restrict or completely prohibit lending activities in certain jurisdictions, and violation of any such laws or regulations, may result in significant legal and monetary penalties, as well as reputational damage.
+Added: OFAC sanctions programs change frequently, which may make it more difficult for us or our affiliates to ensure compliance.
+Added: Moreover, OFAC enforcement is increasing, which may increase the risk that we become subject of such actual or threatened enforcement.
+Added: In addition, any sanctions imposed in connection with the escalation of hostilities between Russia and Ukraine may impact portfolio companies of our funds, which may in turn impact us.
+Added: Additionally, Section 2019 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”) amended the Exchange Act to require companies subject to SEC reporting obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by OFAC during the period covered by the relevant periodic report.
+Added: In some cases, the ITRA requires companies to disclose these types of transactions even if they were permissible under U.S.
+Added: Companies that currently may be or may have been at the time considered our affiliates, may have from time to time publicly filed and/or provided to us such disclosures.
+Added: We do not independently verify or participate in the preparation of these disclosures.
+Added: We and our publicly traded funds are required, either periodically or annually to separately file with the SEC a notice when such activities have been disclosed, and the SEC is required to post such notice of disclosure on its website and send the report to the President and certain U.S.
+Added: Congressional committees.
+Added: Disclosure of such activity, even if such activity is not subject to sanctions under applicable law, and any sanctions actually imposed on us or our affiliates as a result of these activities, could harm our reputation and have a negative impact on our business, financial condition and results of operations, and any failure to disclose any such activities as required could additionally result in fines or penalties.
+Added: We are subject to laws and regulations in the EEA, including the Alternative Investment Fund Managers Directive, which may increase our regulatory costs and burdens.
+Added: The AIFMD regulates the activities of certain private fund managers undertaking fund management activities or marketing fund interests to investors within the EEA.
+Added: To the extent any one of our products is actively marketed to investors domiciled or having their registered office in the EEA:
+Added: (i) we and such fund will be subject to certain reporting, disclosure and other compliance obligations under the AIFMD, which will result in such funds incurring additional costs and expenses;
+Added: (ii) we and such fund may become subject to additional regulatory or compliance obligations arising under national law in certain EEA jurisdictions, which would result in such fund incurring additional costs and expenses or may otherwise affect the management and operation of such fund;
+Added: (iii) we will be required to make detailed information relating to such fund and its investments available to regulators and third parties;
+Added: and (iv) the AIFMD will also restrict certain activities of such fund in relation to EEA investments, including, in some circumstances, such fund’s ability to recapitalize, refinance or potentially restructure an EEA portfolio company within the first two years of ownership, which may in turn affect operations of such fund generally.
+Added: In addition, it is possible that some EEA jurisdictions will elect to restrict or prohibit the marketing of non-EEA funds to investors based in those jurisdictions, which may make it more difficult for our products to raise their targeted amount of commitments.
+Added: We rely on a third party provider to ensure our compliance with these regulations, including required registrations, which may increase our compliance costs and risk of non-compliance.
+Added: In the future, it may be possible for non-EEA alternative investment fund managers (“AIFMs”) to market an alternative investment fund (“AIF”) within the EEA pursuant to a pan-European marketing “passport”, instead of under national private placement regimes.
+Added: Access to this passport may be subject to the non-EEA AIFM complying with various additional requirements under the AIFMD, which may include one or more of the following:
+Added: additional conduct of business and organizational requirements;
+Added: rules relating to the remuneration of certain personnel;
+Added: minimum regulatory capital requirements;
+Added: restrictions on the use of leverage;
+Added: additional disclosure and reporting requirements to both investors and EEA home state regulators;
+Added: independent valuation of an AIF’s assets;
+Added: and the appointment of an independent depositary.
+Added: Certain EEA Member States have indicated that they will cease to operate national private placement regimes when, or shortly after, the passport becomes available, which would mean that non-EEA AIFMs to whom the passport is available would be required to comply with all relevant provisions of the AIFMD in order to market to professional investors in those jurisdictions.
+Added: As a result, if in the future non-EEA AIFMs may only market in certain EEA jurisdictions pursuant to a passport, we may not seek to market interests in our products in those jurisdictions, which may lead to a reduction in the overall amount of capital invested in our products.
+Added: Alternatively, if we sought to comply with the requirements to use the passport, this could have adverse effects including, amongst other things, increasing the regulatory burden and costs of operating and managing certain of our products and their investments, and potentially requiring changes to compensation structures for key personnel, thereby affecting our ability to recruit and retain these personnel.
+Added: Certain of the funds or accounts we advise or manage are subject to the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code, and our businesses could be adversely affected if certain of our other funds or accounts fail to satisfy an exception under the “plan assets” regulation under ERISA.
+Added: A number of investors in our products are subject to the fiduciary and prohibited transaction provisions of Title I of ERISA and the parallel provisions of the Internal Revenue Code;
+Added: however, the substantial majority of our products rely on the “insignificant participation” exception under the “plan assets” regulation under ERISA.
+Added: We are not, therefore subject to the requirements of ERISA (or the parallel provision of the Internal Revenue Code) with respect to the management of those funds.
+Added: However, if those funds fail to satisfy that exception for any reason and if no other exception is available, that failure could materially interfere with our activities in relation to those funds or expose us to risks related to our failure to comply with the applicable requirements.
+Added: For example, the governing documents of a fund generally impose certain obligations on the general partner or manager of the fund to cause the assets of the fund to not be treated as “plan assets” and a breach of that obligation could create liability for us.
+Added: Further, if the assets of a fund become plan assets (whether because of our breach, a change in law or otherwise), the application of ERISA-related requirements on our product may prevent us from operating the fund as intended and may cause the fund to breach its obligations with Partner Managers or other investments, which would create significant liabilities for our products and could significantly impact the fund’s ability to make any further investments.
+Added: Further, we have formed a small number of holding vehicles to facilitate co-investments alongside our products by ERISA investors, the assets of which holding vehicles constitute “plan assets” and with respect to which we serve as a fiduciary.
+Added: While we may be required to satisfy applicable fiduciary standards and avoid the prohibited transaction provisions of ERISA with respect to such holding vehicles and their assets, in each case, our authority with respect to the management and control of those vehicles is limited by contract with the relevant fund investor.
+Added: Accordingly, we do not anticipate any liabilities with respect to our serving as a fiduciary with respect to such vehicles.
+Added: Risks Related to Our Products
+Added: The historical returns attributable to our products should not be considered as indicative of the future results of our products or of our future results or of any returns expected on an investment in our Class A Shares.
+Added: The historical performance of our products is relevant to us primarily insofar as it is indicative of performance income we have earned in the past and may earn in the future and our reputation and ability to raise new funds.
+Added: The historical and potential returns of the funds we advise are not, however, directly linked to returns on shares of our Class A Shares.
+Added: Therefore, holders of our Class A Shares should not conclude that positive performance of the funds we advise will necessarily result in positive returns on a return on investment in our Class A Shares.
+Added: However, poor performance of our products we advise would likely cause a decline in our revenues and would therefore likely have a negative effect on our operating results, returns on our Class A Shares and a negative impact on our ability to raise new funds.
+Added: Also, there is no assurance that projections in respect of our products or unrealized valuations will be realized.
+Added: Moreover, the historical returns of our products should not be considered indicative of the future returns of these or from any future funds we may raise, in part because:
+Added: • market conditions during previous periods may have been significantly more favorable for generating positive performance than the market conditions we may experience in the future;
+Added: • our products’ rates of returns, which are calculated on the basis of net asset value of the funds’ investments, reflect unrealized gains, which may never be realized;
+Added: • our products’ returns have previously benefited from investment opportunities and general market conditions that may not recur, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly;
+Added: • the historical returns that we present in this report derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed, which may have little or no realized investment track record;
+Added: • our products’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past;
+Added: • the attractive returns of certain of our products have been driven by the rapid return on invested capital, which has not occurred with respect to all of our products and we believe is less likely to occur in the future;
+Added: • in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative funds and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future;
+Added: • our newly established funds may generate lower returns during the period that they take to deploy their capital.
+Added: The future internal rate of return for any current or future fund may vary considerably from the historical internal rate of return generated by any particular fund, or for our products as a whole.
+Added: Future returns will also be affected by the risks described elsewhere in this proxy statement, including risks of the industries and businesses in which a particular fund invests.
+Added: Valuation methodologies for certain assets of our products can be subject to significant subjectivity.
+Added: Many of the investments in our products are illiquid and thus have no readily ascertainable market prices.
+Added: We value these investments based on our estimate, or an independent third party’s estimate, of their value as of the date of determination.
+Added: The determination of fair value, and thus the amount of unrealized appreciation or depreciation our products may recognize in any reporting period, is to a degree subjective.
+Added: Our products generally value their investments quarterly at fair value, as determined in good faith by our products’ respective boards or a valuation committee, as applicable, based on, among other things, the input of third party valuation firms and taking into account the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company operates, comparison to publicly traded companies, discounted cash flow, current market interest rates and other relevant factors.
+Added: Because such valuations, and particularly valuations of private securities, private companies and privately owned real estate, are inherently uncertain, the valuations may fluctuate significantly over short periods of time due to changes in current market conditions.
+Added: A fund’s net asset value could be adversely affected if the determinations regarding the fair value of the investments were materially higher than the values that are ultimately realized upon the disposal of such investments.
+Added: These valuations could, in turn, affect the management fees or performance income that our business receives.
+Added: The use of leverage by our products may materially increase the returns of such funds but may also result in significant losses or a total loss of capital.
+Added: Our products, particularly our Direct Lending and Real Estate products, use leverage as part of their respective investment programs and in certain products regularly borrow a substantial amount of their capital.
+Added: The use of leverage poses a significant degree of risk and enhances the possibility of a significant loss in the value of the investment portfolio.
+Added: A fund may borrow money from time to time to purchase or carry securities or may enter into derivative transactions with counterparties that have embedded leverage.
+Added: The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital.
+Added: If the value of a fund’s assets were to decrease, leverage would cause net asset value to decline more sharply than it otherwise would if the fund had not employed leverage.
+Added: Similarly, any decrease in the fund’s income would cause net income to decline more sharply than it would have if it had not borrowed and employed leverage.
+Added: Such a decline could negatively affect the fund’s ability to service its debt, which could have a material adverse effect on our products, and as a result, on our financial condition, results of operations and cash flow.
+Added: Our private funds often rely on obtaining credit facilities secured principally by the undrawn capital commitments of their investors.
+Added: These credit lines are an important part of managing the cash flow of the funds, including facilitating a fund’s acquisition or funding of investments, enhancing the regularity of cash distributions to investors and facilitating the payment of management fees to us.
+Added: The inability to secure or maintain these lines of credit would have an adverse impact on our products and their returns and on us, including increasing administrative costs associated with managing a fund.
+Added: Our real estate funds are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.
+Added: Investments in our real estate funds will be subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets.
+Added: These risks include the following:
+Added: • general and local economic conditions;
+Added: • changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding);
+Added: • the financial resources of tenants;
+Added: • changes in building, environmental and other laws;
+Added: • energy and supply shortages;
+Added: • various uninsured or uninsurable risks;
+Added: • natural disasters;
+Added: • changes in government regulations (such as rent control and tax laws);
+Added: • changes in interest rates;
+Added: • the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable;
+Added: • negative developments in the economy that depress travel activity;
+Added: • environmental liabilities;
+Added: • contingent liabilities on disposition of assets;
+Added: • unexpected cost overruns in connection with development projects;
+Added: • terrorist attacks, war (including tensions between Russia and Ukraine) and other factors that are beyond our control.
+Added: Additionally, our funds’ properties are generally self-managed by the tenant or managed by a third party, which makes us dependent upon such third parties and subjects us to risks associated with the actions of such third parties.
+Added: Any of these factors may cause the value of the investments in our real estate funds to decline, which may have a material impact on our results of operations.
+Added: Risks Related to our Structure and Governance
+Added: Blue Owl has elected to be treated as, a “controlled company” within the meaning of the NYSE listing standards and, as a result, our shareholders may not have certain corporate governance protections that are available to shareholders of companies that are not controlled companies.
+Added: So long as more than 50% of the voting power for the election of directors of Blue Owl is held by an individual, a group or another company, Blue Owl will qualify as a “controlled company” under the NYSE listing requirements.
+Added: The Principals control a majority of the voting power of our outstanding capital stock.
+Added: As a result, Blue Owl qualifies as, and has elected to be treated as, a “controlled company” under the NYSE listing standards and will not be subject to the requirements that would otherwise require us to have:
+Added: (i) a majority of “independent directors,” as defined under the listing standards of the NYSE;
+Added: (ii) a nominating committee comprised solely of independent directors;
+Added: (iii) compensation of our executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors;
+Added: and (iv) director nominees selected, or recommended for the Board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors.
+Added: The Principals may have their interest in Blue Owl diluted due to future equity issuances or their own actions in selling Class A Shares, in each case, which could result in a loss of the “controlled company” exemption under the NYSE listing rules.
+Added: Blue Owl would then be required to comply with those provisions of the NYSE listing requirements.
+Added: The multi-class structure of Blue Owl common stock has the effect of concentrating voting power with the Principals, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.
+Added: Entities controlled by the Principals hold all of the issued and outstanding Class B and Class D Shares.
+Added: Accordingly, until such time as the Principals own less than 25% of their aggregate ownership as of immediately after the closing of the Business Combination (the “Sunset Date”), the Principals will hold 90% of the voting power of Blue Owl’s capital stock on a fully-diluted basis and will be able to control matters submitted to our shareholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.
+Added: The Principals may have interests that differ from our shareholders and may vote in a way with which you disagree and which may be adverse to your interests.
+Added: This concentrated control may have the effect of delaying, preventing or deterring a change in control of Blue Owl, could deprive our shareholders of an opportunity to receive a premium for their capital stock as part of a sale of Blue Owl, and might ultimately affect the market price of Class A Shares.
+Added: Potential conflicts of interest may arise among the holders of Class B and Class D Shares and the holders of our Class A and Class C Shares.
+Added: The Principals (and certain former employees of Dyal Capital) hold all of the Class B and Class D Shares.
+Added: As a result, conflicts of interest may arise among the Principals, on the one hand, and us and our holders of our Class A and Class C Shares, on the other hand.
+Added: The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our board of directors, and provisions under the Investor Rights Agreement and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our board of directors).
+Added: If the holders of our Class A and Class C Shares are dissatisfied with the performance of our board of directors, they have no ability to remove any of our directors, with or without cause.
+Added: Further, through their ability to elect our board of directors, the Principals have the ability to indirectly influence the determination of the amount and timing of our investments and dispositions, cash expenditures, allocation of expenses, indebtedness, issuances of additional partnership interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of Common Units and our Class A Shares.
+Added: In addition, conflicts may arise relating to the selection, structuring and disposition of investments and other transactions, declaring dividends and other distributions and other matters due to the fact that the Principals hold their Blue Owl Operating Group Units directly or through pass-through entities that are not subject to corporate income taxation.
+Added: Delaware law, our certificate of incorporation and our bylaws contain certain provisions, including anti-takeover provisions, that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.
+Added: Our certificate of incorporation and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Board and therefore depress the trading price of Blue Owl’s Class A Shares.
+Added: These provisions could also make it difficult for shareholders to take certain actions, including electing directors who are not nominated by the current members of the Board or taking other corporate actions, including effecting changes in management.
+Added: Among other things, our certificate of incorporation and bylaws include provisions regarding:
+Added: • a classified board of directors with three-year staggered terms, which could delay the ability of shareholders to change the membership of a majority of the Board;
+Added: • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
+Added: • the limitation of the liability of, and the indemnification of, our directors and officers;
+Added: • the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents shareholders from being able to fill vacancies on the Board;
+Added: • the requirement that directors may only be removed from the Board for cause;
+Added: • the inability of shareholders to act by written consent following the Sunset Date;
+Added: • the requirement that a special meeting of shareholders may be called only by the Board, the chairman of the Board of directors or Blue Owl’s chief executive officer, which could delay the ability of shareholders to force consideration of a proposal or to take action, including the removal of directors;
+Added: • controlling the procedures for the conduct and scheduling of the Board and shareholder meetings;
+Added: • the ability of the Board of directors to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;
+Added: • advance notice procedures with which shareholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a shareholders’ meeting, which could preclude shareholders from bringing matters before annual or special meetings of shareholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
+Added: These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management.
+Added: In addition, as a Delaware corporation, the Registrant is generally subject to provisions of Delaware law, including the DGCL, although we have elected not to be governed by Section 203 of the DGCL.
+Added: Any provision of our certificate of incorporation, our bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for shareholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock.
+Added: In addition, the provisions of the Investor Rights Agreement, as described below, provide the shareholders party thereto with certain board representation and other consent rights that could also have the effect of delaying or preventing a change in control.
+Added: Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
+Added: Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of us, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or shareholder of Blue Owl to Blue Owl or our shareholders, or any claim for aiding and abetting such alleged breach, (c) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or shareholders (i) arising pursuant to any provision of the DGCL, our certificate of incorporation (as it may be amended or restated) or our bylaws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (d) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or shareholders governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (a) through (b), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery;
+Added: provided, however, that the foregoing shall not apply to any claim (1) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (2) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or (3) arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum.
+Added: Notwithstanding the foregoing, the provisions of Article XIII of our certificate of incorporation does not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum.
+Added: This choice-of-forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our or its directors, officers, shareholders, agents or other employees, which may discourage such lawsuits.
+Added: Alternatively, if a court were to find this provision of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of management and our board of directors.
+Added: The Registrant is a holding company and its only material source of cash is its indirect interest (held through Blue Owl GP) in the Blue Owl Operating Partnerships, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes, cause Blue Owl GP to make payments under the Tax Receivable Agreement, and pay dividends.
+Added: The Registrant is a holding company with no material assets other than its indirect ownership of the GP Units through Blue Owl GP and certain deferred tax assets that arose in connection with the purchase of Blue Owl Operating Group Units with proceeds from the Business Combination.
+Added: As a result, the Registrant has no independent means of generating revenue or cash flow.
+Added: The Registrant’s ability to pay taxes, cause Blue Owl GP to make payments under the Tax Receivable Agreement, and pay dividends will depend on the financial results and cash flows of the Blue Owl Operating Partnerships and the distributions it receives (directly or indirectly) from the Blue Owl Operating Partnerships.
+Added: Deterioration in the financial condition, earnings or cash flow of the Blue Owl Operating Partnerships for any reason could limit or impair the Blue Owl Operating Partnerships’ ability to pay such distributions.
+Added: Additionally, to the extent that the Registrant or Blue Owl GP needs funds and the Blue Owl Operating Partnerships are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or the Blue Owl Operating Partnerships are otherwise unable to provide such funds, it could materially adversely affect Blue Owl’s liquidity and financial condition.
+Added: Subject to the discussion herein, the Blue Owl Operating Partnerships will continue to be treated as partnerships for U.S.
+Added: federal income tax purposes and, as such, generally will not be subject to any entity-level U.S.
+Added: federal income tax.
+Added: Instead, taxable income will be allocated to holders of Common Units and GP Units.
+Added: Accordingly, Blue Owl GP will be required to pay income taxes on its allocable share of any net taxable income of the Blue Owl Operating Partnerships.
+Added: Under the terms of the Blue Owl Limited Partnership Agreements, the Blue Owl Operating Partnerships are obligated to make tax distributions to holders of the Common Units and GP Units calculated at certain assumed tax rates.
+Added: In addition to tax expenses, Blue Owl will also incur expenses related to its operations, including Blue Owl GP’s payment obligations under the Tax Receivable Agreement, which could be significant, and some of which will be reimbursed by the Blue Owl Operating Partnerships (excluding payment obligations under the Tax Receivable Agreement).
+Added: Blue Owl intends to cause Blue Owl GP to cause the Blue Owl Operating Partnerships to make ordinary distributions and tax distributions to holders of the Common Units and GP units on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments by Blue Owl GP under the Tax Receivable Agreement and dividends, if any, declared by Blue Owl.
+Added: However, as discussed above, the Blue Owl Operating Partnerships’ ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the obligations of the Blue Owl Operating Partnerships and restrictions on distributions that would violate any applicable restrictions contained in the Blue Owl Operating Partnerships’ debt agreements, or any applicable law, or that would have the effect of rendering the Blue Owl Operating Partnerships insolvent.
+Added: To the extent that Blue Owl GP is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid;
+Added: provided, however, that nonpayment for a specified period may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments under the Tax Receivable Agreement, which could be substantial.
+Added: Additionally, although the Blue Owl Operating Partnerships generally will not be subject to any entity-level U.S.
+Added: federal income tax, they may be liable under recent U.S.
+Added: federal tax legislation for adjustments to prior year tax returns, absent an election to the contrary.
+Added: In the event the Blue Owl Operating Partnerships’ calculations of taxable income are incorrect, the Blue Owl Operating Partnerships and/or their partners, including the Registrant or Blue Owl GP, in later years may be subject to material liabilities pursuant to this legislation and its related guidance.
+Added: If either of the Blue Owl Operating Partnerships were treated as a corporation for U.S.
+Added: federal income tax or state tax purposes, then the amount available for distribution by such Blue Owl Operating Partnerships could be substantially reduced and the value of the Registrant’s shares could be adversely affected.
+Added: An entity that would otherwise be classified as a partnership for U.S.
+Added: federal income tax purposes (such as either of the Blue Owl Operating Partnerships) may nonetheless be treated as, and taxable as, a corporation if it is a “publicly traded partnership” unless an exception to such treatment applies.
+Added: An entity that would otherwise be classified as a partnership for U.S.
+Added: federal income tax purposes will be treated as a “publicly traded partnership” if interests in such entity are traded on an established securities market or interests in such entity are readily tradable on a secondary market or the substantial equivalent thereof.
+Added: If either of the Blue Owl Operating Partnerships were determined to be treated as a “publicly traded partnership” (and taxable as a corporation) for U.S.
+Added: federal income tax purposes, such Blue Owl Operating Partnership would be taxable on its income at the U.S.
+Added: federal income tax rates applicable to corporations and distributions by such Blue Owl Operating Partnership to its partners (including Blue Owl GP) could be taxable as dividends to such partners to the extent of the earnings and profits of such Blue Owl Operating Partnership.
+Added: In addition, we would no longer have the benefit of increases in the tax basis of the Blue Owl Operating Partnership’s assets as a result of exchanges of Common Units.
+Added: Pursuant to the Exchange Agreement, certain Blue Owl equity holders may, from time to time, subject to the terms of the Exchange Agreement, exchange their interests in the Blue Owl Operating Partnerships and have such interests redeemed by Blue Owl Operating Partnerships for cash or the Registrant’s stock.
+Added: While such exchanges could be treated as trading in the interests of the Blue Owl Operating Partnerships for purposes of testing “publicly traded partnership” status, the Exchange Agreement contains restrictions on redemptions and exchanges of interests in the Blue Owl Operating Partnerships that are intended to prevent either of the Blue Owl Operating Partnerships from being treated as a “publicly traded partnership” for U.S.
federal income tax purposes.
−Removed: However, due to the
−Removed: absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as Altimar, this result is not entirely clear.
−Removed: Assuming the Domestication qualifies as a reorganization under Section 368(a)(1)(F) of the Code, U.S.
−Removed: holders of Altimar ordinary shares
−Removed: will be subject to Section 367(b) of the Code, and as a result:
−Removed: holder of Altimar ordinary shares whose Altimar ordinary shares have a fair market value of less than
−Removed: $50,000 on the date of the Domestication should not recognize any gain or loss and generally should not be required to include any part of Altimars earnings in income pursuant to the Domestication;
−Removed: holder of Altimar ordinary shares whose Altimar ordinary shares have a fair market value of $50,000 or
−Removed: more on the date of the Domestication, but who on the date of the Domestication owns (actually and constructively) less than 10% of the total combined voting power of all classes of Altimar ordinary shares entitled to vote and less than 10% of the
−Removed: total value of all classes of Altimar ordinary shares will generally recognize gain (but not loss) with respect to the Domestication, as if such U.S.
−Removed: holder exchanged its Altimar ordinary shares for Blue Owl common stock in a taxable transaction.
−Removed: an alternative to recognizing gain, such U.S.
−Removed: holders may file an election to include in income as a dividend the all earnings and profits amount (as defined in Treasury Regulations Section 1.367(b)- 2(d)) attributable to their
−Removed: Altimar ordinary shares, provided certain other requirements are satisfied.
−Removed: Altimar does not expect that Altimars cumulative earnings and profits will be material at the time of Domestication;
−Removed: holder of Altimar ordinary shares who on the date of the Domestication owns (actually and constructively)
−Removed: 10% or more of the total combined voting power of all classes of Altimar ordinary shares entitled to vote or 10% or more of the total value of all classes of Altimar ordinary shares will generally be required to include in income as a dividend the
−Removed: all earnings and profits amount (as defined in Treasury Regulations Section 1.367(b)-2(d)) attributable to its Altimar ordinary shares.
−Removed: Any such U.S.
−Removed: holder that is a corporation may, under
−Removed: certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code.
−Removed: Altimar does not expect that Altimars cumulative earnings and profits will be material at the time
−Removed: of the Domestication.
−Removed: Furthermore, if the Domestication qualifies as a reorganization under Section 368(a)(1)(F)
−Removed: of the Code, a U.S.
−Removed: holder of Altimar ordinary shares or warrants may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its Altimar ordinary shares or warrants for Blue Owl common stock or warrants under the PFIC
−Removed: rules of the Code.
−Removed: Proposed Treasury Regulations with a retroactive effective date have been promulgated under Section 1291(f) of the Code which generally require that a U.S.
−Removed: person who disposes of stock of a PFIC (including for this purpose
−Removed: exchanging Altimar warrants for Blue Owl warrants) must recognize gain equal to the excess, if any, of the fair market value of the Blue Owl common stock or warrants received in the Domestication and the U.S.
−Removed: holders adjusted tax basis in the
−Removed: corresponding Altimar ordinary shares or warrants surrendered in exchange therefor, notwithstanding any other provision of the Code.
−Removed: Because Altimar is a blank check company with no current active business, we believe that it is likely that Altimar
−Removed: is classified as a PFIC for U.S.
+Added: Such restrictions are designed to comply with certain safe harbors provided for under applicable U.S.
+Added: federal income tax law.
+Added: Blue Owl GP may also impose additional restrictions on exchanges that the Registrant or Blue Owl GP determines to be necessary or advisable so that neither of the Blue Owl Operating Partnerships is treated as a “publicly traded partnership” for U.S.
federal income tax purposes.
−Removed: As a result, these proposed Treasury Regulations, if finalized in their current form, would generally require a U.S.
−Removed: holder of Altimar ordinary shares or warrants to recognize gain on the
−Removed: exchange of such shares or warrants for Blue Owl common stock or warrants, unless such U.S.
−Removed: holder has made certain tax elections with respect to such U.S.
−Removed: holders Altimar ordinary shares.
−Removed: holder cannot currently make the aforementioned
−Removed: elections with respect to such U.S.
−Removed: holders Altimar warrants.
−Removed: Any such gain would be taxed as ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S.
−Removed: holder on the
−Removed: undistributed earnings, if any, of Altimar.
−Removed: It is not possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code will be adopted.
−Removed: Additionally, the Domestication may cause non-U.S.
−Removed: holders (as defined in Material U.S.
−Removed: Federal Income Tax ConsiderationsNon-U.S.
−Removed: Holders in the Proxy Statement) to become subject to U.S.
−Removed: federal withholding taxes on any dividends paid in respect of such non-U.S.
−Removed: holders Blue Owl common stock after the Domestication.
−Removed: Furthermore, because the
−Removed: Domestication will occur immediately prior to the redemption of U.S.
−Removed: holders that exercise redemption rights, U.S.
−Removed: holders exercising redemption rights will be subject to the potential tax consequences of the Domestication.
−Removed: The tax consequences of the Domestication are complex and will depend on a holders particular circumstances.
−Removed: All holders are strongly
−Removed: urged to consult their tax advisors for a full description and understanding of the tax consequences of the Domestication, including the applicability and effect of U.S.
−Removed: federal, state, local and foreign income and other tax laws.
−Removed: In connection with the proposed Blue Owl Business Combination, the Sponsor, initial shareholders, directors, executive officers, advisors and their
−Removed: affiliates may elect to purchase shares or public warrants from public shareholders of Altimar, which may influence a vote on the proposed Blue Owl Business Combination and reduce the public float of our Class A ordinary shares.
−Removed: In connection with the proposed Blue Owl Business Combination, the Sponsor, initial shareholders, directors, executive officers,
−Removed: advisors or heir affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of the proposed Blue Owl Business Combination, although they are under no
−Removed: obligation to do so.
−Removed: However, other than as expressly stated
−Removed: herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
−Removed: None of the funds in the
−Removed: Trust Account will be used to purchase shares or public warrants in such transactions.
−Removed: In the event that the Sponsor, initial
−Removed: shareholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be
−Removed: required to revoke their prior elections to redeem their shares.
−Removed: The purpose of any such purchases of shares would be to vote such shares in favor of the proposed Blue Owl Business Combination and thereby increase the likelihood of obtaining
−Removed: shareholder approval of the proposed Blue Owl Business Combination or to satisfy the Minimum Proceeds Condition, where it appears that such requirement would otherwise not be met.
−Removed: The purpose of any such purchases of public warrants would be to
−Removed: reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the proposed Blue Owl Business Combination.
−Removed: Any such purchases of our securities may result in
−Removed: the completion of the proposed Blue Owl Business Combination that may not otherwise have been possible.
−Removed: Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject
−Removed: to such reporting requirements.
−Removed: In addition, if such purchases are made, the public float of our Class A ordinary shares
−Removed: or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
−Removed: There is no guarantee that a shareholders decision whether to redeem its shares for a pro rata portion of the Trust Account will put the
−Removed: shareholder in a better future economic position.
−Removed: We can give no assurance as to the price at which a shareholder may be able to
−Removed: sell its Class A common stock in the future following the completion of the proposed Blue Owl Business Combination or any alternative business combination.
−Removed: Certain events following the consummation of any initial business combination, including
−Removed: the proposed Blue Owl Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a shareholder of Blue Owl might realize in the future had the shareholder not redeemed its shares.
−Removed: Similarly, if
−Removed: a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the Class A common stock after the consummation of the proposed Blue Owl Business Combination, and there can be no assurance that a shareholder can
−Removed: sell its shares in the future for a greater amount than the redemption price set forth in the Proxy Statement.
−Removed: A shareholder should consult the shareholders own financial advisor for assistance on how this may affect its individual situation.
−Removed: If a shareholder fails to receive notice of our offer to redeem our Class A ordinary shares in connection with the proposed Blue Owl Business
−Removed: Combination, such shares may not be redeemed.
−Removed: We will comply with the proxy rules when conducting redemptions in connection with
−Removed: the Business Combination.
−Removed: Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation, such shareholder may not become aware of the opportunity to redeem its shares.
−Removed: In addition, the proxy solicitation that we
−Removed: furnish to holders of our Class A ordinary shares in connection with the Business Combination describes the various procedures that must be complied with in order to validly redeem or tender Class A ordinary shares.
−Removed: In the event that a
−Removed: shareholder fails to comply with these procedures, its shares may not be redeemed.
−Removed: If you or a group of shareholders are deemed to hold
−Removed: in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
−Removed: The Amended and Restated Memorandum and Articles of Association provide that a public shareholder, together with any affiliate of such
−Removed: shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an
−Removed: aggregate of 15% of the shares sold in the Initial Public Offering without our prior consent, which we refer to as the Excess Shares. However, we would not be restricting our shareholders ability to vote all of their shares
−Removed: (including Excess Shares) for or against the proposed Blue Owl Business Combination.
−Removed: Your inability to redeem the Excess Shares will reduce your influence over our ability to complete the proposed Blue Owl Business Combination and you could suffer a
−Removed: material loss on your investment in us if you
−Removed: sell Excess Shares in open market transactions.
−Removed: Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete the proposed Blue Owl Business
−Removed: As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
−Removed: If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by
−Removed: shareholders may be less than $10.00 per share.
−Removed: Our placing of funds in the Trust Account may not protect those funds from
−Removed: third-party claims against us.
−Removed: Since the consummation of the Initial Public Offering, we have sought and will continue to seek to have vendors, service providers, prospective target businesses, including the Owl Rock and Dyal Equityholders in the
−Removed: proposed Blue Owl Business Combination, and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public
−Removed: shareholders.
−Removed: However, in certain instances we have not been able to obtain such a waiver in agreements that we have executed.
−Removed: Further, under certain circumstances, parties that have executed such a waiver may not be prevented from bringing claims
−Removed: against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with
−Removed: respect to a claim against our assets, including the funds held in the Trust Account.
−Removed: In determining whether to enter into an agreement with a third-party that refuses to execute a waiver of such claims to the monies held in the Trust Account, our
−Removed: management has considered and will consider whether competitive alternatives are reasonably available to us, and has historically only entered into agreements with third parties without such a waiver in situations where management believes that such
−Removed: third-partys engagement is in the best interests of Blue Owl under the circumstances.
−Removed: Upon redemption of our Class A ordinary
−Removed: shares, if we are unable to complete the initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with the initial business combination, we may be required to provide for payment of
−Removed: claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
−Removed: Although no such claims have been brought against us or threatened to date, the per share redemption amount received by public
−Removed: shareholders could be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors to the extent they are brought in the future.
−Removed: Pursuant to a letter agreement, the Sponsor agreed that it will be liable
−Removed: to us if and to the extent any claims by a third-party for services rendered or products sold to us, or a prospective target business with which we entered into a written letter of intent, confidentiality or other similar agreement or business
−Removed: combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account, if
−Removed: less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third-party or prospective target business who executed a waiver of any and all
−Removed: rights to the monies held in the Trust Account (whether or not such waiver is enforceable).
−Removed: However, we have not asked the Sponsor to reserve for such indemnification obligations, nor have we independently verified whether the Sponsor has sufficient
−Removed: funds to satisfy its indemnity obligations, and we believe that the Sponsors only assets are securities of our Company.
−Removed: Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations.
−Removed: None of our officers or
−Removed: directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
−Removed: directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.
−Removed: In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per
−Removed: share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and the Sponsor asserts that it is unable to
−Removed: satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations.
−Removed: currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and
−Removed: subject to their fiduciary duties may choose not to do so in any particular instance.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our
−Removed: public shareholders may be reduced below $10.00 per share.
−Removed: You may only be able to exercise your public warrants on a cashless basis under certain
−Removed: circumstances and, if you do so, you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
−Removed: The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be
−Removed: permitted to do so for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act:
−Removed: (i) if the Class A common stock issuable upon exercise of the warrants is not registered
−Removed: under the Securities Act in accordance with the terms of the warrant agreement;
−Removed: (ii) if we have so elected and the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that it
−Removed: satisfies the definition of covered securities under Section 18(b)(1) of the Securities Act;
−Removed: and (iii) if we have so elected and we call the public warrants for redemption.
−Removed: If you exercise your public warrants on a cashless
−Removed: basis, you would pay the warrant exercise price by surrendering all of the warrants for that number of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of Class A common stock underlying
−Removed: the warrants, multiplied by the excess of the fair market value of our Class A common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value.
−Removed: The fair market
−Removed: value is the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of
−Removed: redemption is sent to the holders of warrants, as applicable.
−Removed: As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
−Removed: The grant of registration rights to our shareholders, holders of our Private Placement Warrants and PIPE Investors and the future exercise of such
−Removed: rights may adversely affect the market price of our Class A common stock.
−Removed: Upon the completion of the proposed Blue Owl
−Removed: Business Combination, the Investor Rights Agreement will be entered into between Blue Owl, the Sponsor, certain equityholders of Altimar named therein and certain other parties, replacing Altimars existing registration rights agreement.
−Removed: Pursuant to the Investor Rights Agreement, the Owl Rock Equityholders, the Dyal Equityholders and the Sponsor and, in each case, their permitted transferees will have customary registration rights (including demand (only in the case of the Owl Rock
−Removed: Equityholders and the Dyal Equityholders (each as defined in the Proxy Statement)) and piggy-back rights, subject to cooperation and cut-back provisions) with respect to (i) the Class A common stock
−Removed: (including the Class A common stock issued pursuant to the Blue Owl Operating Group Agreements upon exchange of the Common Company Units (as defined in the Proxy Statement) along with a corresponding number of shares of the Class C common
−Removed: stock or Class D common stock for the Class A common stock or Class B common stock, respectively, (ii) Private Placement Warrants and the Class A common stock issuable upon exercise of the Private Placement Warrants and
−Removed: (iii) any common stock of Blue Owl or any subsidiary of Blue Owl issued or issuable with respect to the securities referred to in clauses (i) and (ii) above by way of dividend, distribution, split or combination of securities, or any
−Removed: recapitalization, merger, consolidation or other reorganization.
−Removed: Further, pursuant to the Subscription Agreements, we agreed that we will use our reasonable best efforts (i) to file within 30 days after the closing of the Business Combination a
−Removed: registration statement with the SEC for a secondary offering of the PIPE Securities, (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration
−Removed: statement until the earlier of (a) the date on which the Sponsor and all of the independent directors cease to hold the securities covered thereby and (b) the date all of the securities covered thereby can be sold publicly without
−Removed: restriction or limitation under Rule 144 under the Securities Act.
−Removed: In addition, the Subscription Agreements provide these holders will have certain piggy-back registration rights to include their securities in other registration
−Removed: statements filed by us.
−Removed: We will bear the cost of registering these securities.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of the
−Removed: Class A common stock of Blue Owl.
−Removed: Our warrants may have an adverse effect on the market price of our Class A common stock.
−Removed: We issued warrants to purchase 8,333,333 of our Class A ordinary shares as part of the units offered in the IPO and,
−Removed: simultaneously with the closing of the IPO, we issued in a private placement an aggregate of 4,666,667 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share.
−Removed: Subsequently, we issued and sold an additional 2,500,000 units pursuant to the underwriters over-allotment option at a price of $10.00
−Removed: per unit and sold an additional 333,333 private warrants.
−Removed: Upon the Domestication, the warrants will entitle the holders to purchase shares of Class A common stock of Blue Owl.
−Removed: Such warrants, when exercised, will increase the number of issued
−Removed: and outstanding Class A common stock and reduce the value of the Class A common stock.
−Removed: Compliance obligations under the Sarbanes-Oxley
−Removed: Act may make it more difficult for us to effectuate the proposed Blue Owl Business Combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
−Removed: Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual
−Removed: Report on Form 10-K for the year ending December 31, 2021.
−Removed: Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company will
−Removed: we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
−Removed: Further, for as long as we remain an emerging growth company, we will not be required to comply
−Removed: with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
−Removed: Following the proposed Blue Owl Business Combination, we will be required to assure that we are in compliance with the
−Removed: provisions of the Sarbanes-Oxley Act regarding adequacy of our internal controls.
−Removed: The development of the internal control system to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete the proposed
−Removed: Blue Owl Business Combination as well as impose obligations on Blue Owl following the proposed Blue Owl Business Combination.
+Added: Accordingly, while such position is not free from doubt, each of the Blue Owl Operating Partnerships is expected to be operated such that it is not treated as a “publicly traded partnership” taxable as a corporation for U.S.
+Added: federal income tax purposes and we intend to take the position that neither of the Blue Owl Operating Partnerships is so treated as a result of exchanges of its interests pursuant to the Exchange Agreement.
+Added: Pursuant to the Tax Receivable Agreement, Blue Owl GP will be required to make payments to certain equity holders for certain tax benefits the Registrant and Blue Owl GP may claim and those payments may be substantial.
+Added: Certain equity holders may in the future exchange their Common Units, together with the cancellation of an equal number of Class C Shares or Class D Shares, for Class A Shares or Class B Shares, respectively, or cash pursuant to the Blue Owl Operating Partnership Agreements and the Exchange Agreement, subject to certain conditions and transfer restrictions as set forth therein and in the Investor Rights Agreement.
+Added: Additionally, Blue Owl GP may acquire from certain former Owl Rock equity holders corporations formed by such former Owl Rock equity holders to hold partnership interests in Owl Rock.
+Added: Such transactions are expected to result in increases in the Registrant’s (and Blue Owl GP’s) allocable share of the tax basis of the tangible and intangible assets of the Blue Owl Operating Partnerships.
+Added: These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that the Registrant or Blue Owl GP would otherwise be required to pay in the future had such sales and exchanges never occurred.
+Added: In connection with the Business Combination, Blue Owl GP entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain tax benefits, if any, that Blue Owl GP realizes (or in certain cases is deemed to realize) as a result of these increases in tax basis and certain other tax attributes of Blue Owl GP, the corporations acquired from certain former Owl Rock equity holders in the transaction, and tax benefits related to entering into the Tax Receivable Agreement.
+Added: Those payments are the obligation of Blue Owl (including Blue Owl GP) and not of Blue Owl Operating Partnerships.
+Added: The actual increase in Blue Owl GP’s allocable share of the Blue Owl Operating Partnerships’ tax basis in their assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of the Class A Shares at the time of the exchange, the extent to which such exchanges are taxable and the amount and timing of the recognition of the Registrant’s (and Blue Owl GP’s) income.
+Added: While many of the factors that will determine the amount of payments that Blue Owl GP will make under the Tax Receivable Agreement are outside of its control, Blue Owl GP expects that the payments it will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on Blue Owl’s financial condition.
+Added: Any payments made by Blue Owl GP under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to the Registrant and Blue Owl GP.
+Added: To the extent that Blue Owl GP is unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid;
+Added: however, nonpayment for a specified period may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, as further described below.
+Added: Furthermore, Blue Owl GP’s future obligation to make payments under the Tax Receivable Agreement could make Blue Owl a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be realized or deemed realized under the Tax Receivable Agreement.
+Added: See the section entitled “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”
+Added: In certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits t he Registrant or Blue Owl GP realizes or be accelerated.
+Added: Payments under the Tax Receivable Agreement will be based on the tax reporting positions that the Registrant or Blue Owl GP determines, and the IRS or another taxing authority may challenge all or any part of the tax basis increases, as well as other tax positions that the Registrant or Blue Owl GP takes, and a court may sustain such a challenge.
+Added: In the event that any tax benefits initially claimed by the Registrant or Blue Owl GP are disallowed, the former Owl Rock and Dyal Capital equityholders will not be required to reimburse the Registrant or Blue Owl GP for any excess payments that may previously have been made under the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities.
+Added: Rather, excess payments made to such holders will be netted against any future cash payments otherwise required to be made by Blue Owl GP under the Tax Receivable Agreement, if any, after the determination of such excess.
+Added: However, a challenge to any tax benefits initially claimed by the Registrant or Blue Owl GP may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that Blue Owl GP might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments against which to net.
+Added: As a result, in certain circumstances Blue Owl GP could make payments under the Tax Receivable Agreement in excess of Blue Owl’s or Blue Owl GP’s actual income or franchise tax savings, which could materially impair Blue Owl’s financial condition.
+Added: Moreover, the Tax Receivable Agreement provides that, in certain events, including a change of control, breach of a material obligation under the Tax Receivable Agreement, or Blue Owl GP’s exercise of early termination rights, Blue Owl GP’s obligations under the Tax Receivable Agreement will accelerate and Blue Owl GP will be required to make a lump-sum cash payment to the former Owl Rock and Dyal Capital equityholders and other applicable parties to the Tax Receivable Agreement equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to Blue Owl GP’s future taxable income.
+Added: The lump-sum payment could be substantial and could exceed the actual tax benefits that the Registrant or Blue Owl GP realizes subsequent to such payment because such payment would be calculated assuming, among other things, that the Registrant and Blue Owl GP would have certain tax benefits available to it and that the Registrant and Blue Owl GP would be able to use the potential tax benefits in future years.
+Added: There may be a material negative effect on the Registrant’s liquidity if the payments required to be made by Blue Owl GP under the Tax Receivable Agreement exceed the actual income or franchise tax savings that the Registrant (or Blue Owl GP) realizes.
+Added: Furthermore, Blue Owl GP’s obligations to make payments under the Tax Receivable Agreement could also have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.
+Added: Adverse developments in U.S.
+Added: tax laws could have a material and adverse effect on our business, financial condition and results of operations.
+Added: Our effective tax rate and the amount of “tax distributions” that the Blue Owl Operating Partnerships are required to make to equity holders could also change materially as a result of various evolving factors, including changes in income tax law resulting from the most recent U.S.
+Added: presidential and congressional elections or changes in the scope of our operations.
+Added: The Registrant is subject to U.S.
+Added: federal income taxation, and the Registrant and the Blue Owl Operating Partnerships and their subsidiaries are subject to income taxation by certain states and municipalities and certain foreign jurisdictions in which they operate.
+Added: In addition, the Blue Owl Operating Partnerships are required to make tax distributions to their partners pursuant to the Blue Owl Limited Partnership Agreements.
+Added: In determining our tax liability and obligation to make tax distributions, we must monitor changes to the applicable tax laws and related regulations.
+Added: While our existing operations have been implemented in a manner we believe is in compliance with current prevailing laws, one or more taxing U.S.
+Added: jurisdictions could seek to impose incremental, retroactive, or new taxes on us.
+Added: In addition, the current U.S.
+Added: presidential administration has called for changes to fiscal and tax policies, which may include comprehensive tax reform.
+Added: These and other tax laws and related regulation changes, to the extent adopted, may increase tax uncertainty and/or our effective tax rate, result in higher compliance cost and result in a corresponding increase in the amount of payments under the Tax Receivable Agreement and/or a corresponding increase in the tax distributions that the Blue Owl Operating Partnerships will be required to make.
+Added: In addition, there may be changes in law related to the Base Erosion and Profit Shifting Project of the Organization for Economic Co-Operation and Development (“OECD”), the European Commission’s state aid investigations and other initiatives.
+Added: Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid, or the taxation of partnerships and other pass-through entities.
+Added: Any adverse developments in these and other U.S.
+Added: or foreign laws or regulations, including legislative changes, judicial holdings or administrative interpretations, could have a material and adverse effect on our business, financial condition and results of operations.
+Added: Finally, changes in the scope of our operations, including expansion to new geographies, could increase the amount of taxes to which we are subject, and could increase our effective tax rate, which could similarly adversely affect our financial condition and results of operations.
+Added: Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A Shares.
+Added: Securities research analysts may establish and publish their own periodic projections for Blue Owl from time to time.
+Added: Those projections may vary widely and may not accurately predict the results we actually achieve.
+Added: Our share price may decline if our actual results do not match the projections of these securities research analysts.
+Added: Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.
+Added: In addition, securities research analysts may compare Blue Owl to companies that are not appropriately comparable, which could lead to lower than expected valuations.
+Added: If one or more analysts cease coverage of us or fail to publish reports on us regularly, our share price or trading volume could decline.
+Added: The Blue Owl Operating Partnerships may directly or indirectly make distributions of cash to us substantially in excess of the amounts we use to make distributions to our shareholders and pay our expenses (including our taxes and payments by Blue Owl GP under the Tax Receivable Agreement).
+Added: To the extent we do not distribute such excess cash as dividends to our shareholders, the direct or indirect holders of Common Units would benefit from any value attributable to such cash as a result of their ownership of our stock upon an exchange of their Common Units.
+Added: Blue Owl GP receives a pro rata portion of any distributions made by the Blue Owl Operating Partnerships.
+Added: Any cash received from such distributions is first be used to satisfy any tax liability and then used to make any payments required to be made by Blue Owl GP under the Tax Receivable Agreement.
+Added: Subject to having available cash and subject to limitations imposed by applicable law and contractual restrictions, the Blue Owl Operating Group Agreements require the Blue Owl Operating Partnerships to make certain distributions to holders of Common Units and to Blue Owl GP pro rata to facilitate the payment of taxes with respect to the income of the Blue Owl Operating Partnerships that is allocated to them.
+Added: To the extent that the tax distributions we directly or indirectly receive exceed the amounts we actually require to pay taxes, Tax Receivable Agreement payments and other expenses (which is likely to be the case given that the assumed tax rate for such distributions will generally exceed our effective tax rate), we will not be required to distribute such excess cash.
+Added: Our board of directors may, in its sole discretion, choose to use such excess cash for certain purposes, including to make distributions to the holders of our stock.
+Added: Unless and until our board of directors chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our shareholders.
+Added: No adjustments to the exchange ratio of Common Units for shares of our common stock will be made as a result of either (i) any cash distribution by us or (ii) any cash that we retain and do not distribute to our shareholders.
+Added: To the extent we do not distribute such cash as dividends and instead, for example, hold such cash balances or use such cash for certain other purposes, this may result in shares of our stock increasing in value relative to the Common Units.
+Added: The holders of Common Units may benefit from any value attributable to such cash balances if they acquire shares of our stock in an exchange of Common Units.
+Added: Risks Related to Our Class A Shares
+Added: An active trading market for our Class A Shares may not be sustained, which may make it difficult to sell the Class A Shares you purchase.
+Added: Our Class A Shares are currently listed on the NYSE under the symbol “OWL.” However, we cannot assure you that an active trading market for our Class A Shares will be sustained.
+Added: Accordingly, we cannot assure you of the likelihood that an active trading market for our Class A Shares will be maintained, the liquidity of any trading market, your ability to sell your Class A Shares when desired or the prices that you may obtain for your shares.
+Added: The market price and trading volume of our Class A Shares may be volatile, which could result in rapid and substantial losses for holders of our Class A Shares.
+Added: The market price of our Class A Shares is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors.
+Added: In addition, the volume of trading in our Class A Shares may fluctuate and cause significant price variations to occur.
+Added: If the market price of our Class A Shares declines significantly, holders of our Class A Shares may be unable to resell their shares at or above their purchase price, if at all.
+Added: Some of the factors that could negatively affect the price of our Class A Shares or result in fluctuations in the price or trading volume of shares of our Class A Shares include:
+Added: • the impact of COVID-19 pandemic on Blue Owl’s business;
+Added: • the inability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, Blue Owl’s inability to grow and manage growth profitably, and retain its key employees;
+Added: • adverse market reaction to any indebtedness we may incur or securities we may issue in the future;
+Added: • changes in market valuations of similar companies;
+Added: • speculation in the press or investment community;
+Added: • a lack of liquidity in the trading of our Class A Shares;
+Added: • changes in applicable laws or regulations;
+Added: • risks relating to the uncertainty of Blue Owl’s projected financial information;
+Added: • risks related to the organic and inorganic growth of Blue Owl’s business and the timing of expected business milestones.
+Added: In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
+Added: These fluctuations have often been unrelated or disproportionate to the operating performance of those companies.
+Added: Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our Class A Shares, regardless of Blue Owl’s actual operating performance.
+Added: Volatility in our share price could subject us to securities class action litigation.
+Added: In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
+Added: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm its business.
+Added: If securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading volume could decline.
+Added: The trading market for our Class A Shares will depend, in part, on the research and reports that securities or industry analysts publish about us.
+Added: We do not have any control over these analysts.
+Added: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover our performance downgrade our common stock or change their opinion, our stock price would likely decline.
+Added: If one or more of these analysts cease coverage of us or fail to regularly publish reports on our performance, it could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
+Added: Future offerings of debt or offerings or issuances of equity securities by us may adversely affect the market price of our Class A Shares or otherwise dilute all other shareholders.
+Added: In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional Class A Shares or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.
+Added: We also expect to grant equity awards to employees, directors, and consultants under stock incentive plans.
+Added: Future acquisitions could require substantial additional capital in excess of cash from operations.
+Added: We would expect to obtain the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness and/or cash from operations.
+Added: Issuing additional Class A Shares or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing shareholders or reduce the market price of our Class A Shares or both.
+Added: Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our Class A Shares.
+Added: Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion.
+Added: Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Class A Shares.
+Added: Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings.
Unresolved Staff Comments.
−Removed: We currently maintain our executive offices at 40 West 57th Street, 33rd Floor, New York, NY 10019.
−Removed: The cost for our use of this space is
−Removed: included in the $10,000 per month fee we will pay to an affiliate of our Sponsor for office space, administrative and support services.
−Removed: We consider our current office space adequate for our current operations.
−Removed: Legal Proceedings.
−Removed: We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us
−Removed: or any of our officers or directors in their corporate capacity.
−Removed: Mine Safety Disclosures.
+Added: Our principal executive offices are located in leased office space at 399 Park Avenue, New York, New York.
+Added: We also lease office space in other cities around the world.
+Added: We consider these facilities to be suitable and adequate for the management and operation of our business.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.