Document:

Exhibit 4.2

 

Description
of SHARES

 

As of December 31, 2021, ION Acquisition Corp
3 Ltd. (“we,” “our,” “us” or the “company”) had 26,056,000 Class A ordinary shares, par
value $0.0001 per share, registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
In addition, this Description of Securities also references the company’s Class B ordinary shares initially purchased by our sponsor
in a private placement prior to our initial public offering (the “founder shares”), which are not registered pursuant to Section
12 of the Exchange Act but are convertible into Class A ordinary shares. The description of the Class B ordinary shares is necessary to
understand the material terms of the Class A ordinary shares. Unless the context otherwise requires, references to our “sponsor”
are to ION Holdings 3, LP and references to our “initial shareholders” are to our sponsor and directors.

 

We are a Cayman Islands exempted company (company
number 371167) and our affairs are governed by our amended and restated memorandum and articles of association, the Companies Act and
the common law of the Cayman Islands. We are authorized to issue 500,000,000 Class A ordinary shares, $0.0001 par value each, 50,000,000
Class B ordinary shares, $0.0001 par value each, and 5,000,000 preference shares, $0.0001 par value each. The following description
summarizes certain terms of our shares as set out more particularly in our amended and restated memorandum and articles of association.
Because it is only a summary, it may not contain all the information that is important to you.

 

Ordinary Shares

 

Ordinary shareholders of record are entitled to
one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary
shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders
except as required by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable
provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are
voted is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution
under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the ordinary shares that are voted, and
pursuant to our amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum
and articles of association and approving a statutory merger or consolidation with another company. Our board of directors is 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. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of
the shares voted for the appointment of directors can elect all of the directors. However, only holders of Class B ordinary shares
be entitled to vote on the appointment of directors in any election held prior to or in connection with the completion of our initial
business combination. The holders of Class A ordinary shares will not be entitled to vote on the appointment of any directors until
after the completion of our initial business combination. Our shareholders are entitled to receive ratable dividends when, as and if declared
by the board of directors out of funds legally available therefor.

 

Because our amended and restated memorandum and
articles of association authorize the issuance of up to 500,000,000 Class A ordinary shares, if we were to enter into a business
combination, we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary
shares which we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder
approval in connection with our initial business combination. 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 directors appointed prior to our first annual general meeting)
serving a three-year term.

 

     

     

    

 

In accordance with NYSE corporate governance requirements,
we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on the NYSE.
There is no requirement under the Companies Act for us to hold annual or general meetings or appoint directors. We may not hold an annual
general meeting to appoint new directors prior to the consummation of our initial business combination.

 

We will provide our public shareholders with the
opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation
of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us
to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations and on the conditions described
herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute
to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to their founder shares and private placement shares and public shares in connection with the completion of our initial
business combination.

 

Unlike many special purpose acquisition companies
that hold shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related
redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if
a shareholder vote is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will,
pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules
of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated
memorandum and articles of association require these tender offer documents to contain substantially the same financial and other information
about our initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a shareholder
approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other reasons, we will, like
many special purpose acquisition companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules
and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if
it is approved by an ordinary resolution under Cayman Islands law, which requires the affirmative vote of the holders of a majority of
the shares present in person or by proxy at a general meeting of the company. However, if our initial business combination is structured
as a statutory merger or consolidation with another company under Cayman Islands law, the approval of our initial business combination
will require a special resolution passed by the affirmative vote of the holders of at least two-thirds of our ordinary shares which are
represented in person or by proxy and are voted at a general meeting of the company. However, the participation of our sponsor, officers,
directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in
the approval of our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote,
against such initial business combination. For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on
the approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association
require that at least five days’ notice will be given of any general meeting.

 

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If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business 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 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 Excess Shares without our prior consent.
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. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability
to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such
Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess
Shares if we complete our initial business combination. And, as a result, such shareholders will continue to hold that number of shares
exceeding 20% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at
a loss.

 

If we seek shareholder approval in
connection with our initial business combination, our sponsor, officers and directors have agreed to vote their founder shares,
private placement shares and any public shares purchased during or after our initial public offering (including in open market and
privately-negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial
shareholders’ founder shares and private placement shares, we would need 9,109,501, or 36.0%, of the 25,300,000 public shares
sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business
combination approved (assuming all outstanding shares are voted). However, if our initial business combination is structured as a
statutory merger or consolidation with another company under Cayman Islands law, the approval of our initial business combination
will require a special resolution passed by the affirmative vote of the holders of at least two-thirds of our ordinary shares that
are represented in person or by proxy at a general meeting of the company. Additionally, each public shareholder may elect to redeem
their public shares irrespective of whether they vote for or against the proposed transaction or whether they were a public
shareholder on the record date for the general meeting held to approve the proposed transaction.

 

Pursuant to our amended and restated memorandum
and articles of association, if we are unable to complete an initial business combination by May 4, 2023, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem
the public shares, 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 (less taxes payable and up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights
as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as
promptly as reasonably possible following such redemption, subject to the approval 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, subject,
in all cases to the other requirements of applicable law. Our sponsor, officers and directors have entered into a letter agreement with
us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their
founder shares and private placement shares if we fail to complete our initial business combination by May 4, 2023. However, if our sponsor
or management team acquire public shares in or after our initial public offering, they will be entitled to liquidating distributions from
the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time
period.

 

In the event of a liquidation, dissolution or
winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available
for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference
over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable
to the ordinary shares, except that we will provide our public shareholders with the opportunity to redeem their public shares for cash
at a per share price 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 to pay our taxes, divided by the number of then outstanding public shares, upon the
completion of our initial business combination, subject to the limitations and on the conditions described herein.

 

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Founder Shares

 

The founder shares are designated as Class B
ordinary shares and, except as described below, are identical to the Class A ordinary shares being sold in our initial public offering,
and holders of founder shares have the same shareholder rights as public shareholders, except that (i) the founder shares are subject
to certain transfer restrictions, as described in more detail below, (ii) the founder shares are entitled to registration rights;
(iii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (A) waive
their redemption rights with respect to their founder shares and private placement shares and public shares in connection with the completion
of our initial business combination, (B) waive their redemption rights with respect to their founder shares and public shares in
connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to
modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of our initial
public offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business
combination activity, (C) waive their rights to liquidating distributions from the trust account with respect to their founder shares
if we fail to complete our initial business combination within 24 months from the closing of our initial public offering, although they
will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete
our initial business combination within such time period and (D) vote any founder shares held by them, private placement shares and
any public shares purchased during or after our initial public offering (including in open market and privately-negotiated transactions)
in favor of our initial business combination, (iv) the founder shares are automatically convertible into Class A ordinary shares
concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment
as described herein and in our amended and restated memorandum and articles of association, and (v) only holders of Class B
ordinary shares will be entitled to vote on the appointment of directors in any election held prior to or in connection with the completion
of our initial business combination.

 

The founder shares will automatically convert
into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on a
one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like,
and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities
are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon
conversion of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding (excluding
the private placement shares) after such conversion (after giving effect to any redemptions of Class A ordinary shares by public
shareholders), including the total number of Class A 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 combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible
into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement
shares issued to our sponsor, officers or directors upon conversion of working capital loans; provided that such conversion of
founder shares will never occur on a less than one-for-one basis.

 

With certain limited exceptions, the founder shares
are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor,
each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial
business combination, and (B) subsequent to our initial business combination, (x) if the closing price of the Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business
combination, and (y) the date following the completion of our initial business combination on which we complete a liquidation, merger,
share exchange or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary
shares for cash, securities or other property.

 

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Preference Shares

 

Our amended and restated memorandum and articles
of association authorize 5,000,000 preference shares and provide that preference shares may be issued from time to time in one or more
series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating,
optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series.
Our board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could
adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability
of our board of directors to issue preference shares without shareholder approval could have the effect of delaying, deferring or preventing
a change of control of us or the removal of existing management. We have no preference shares outstanding at the date hereof. Although
we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future.  

 

Private Placement Shares

 

The private placement shares will not be transferable,
assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions
as described under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares,”
to our officers and directors and other persons or entities affiliated with our sponsor). Except as described in the foregoing and below,
the private placement shares have terms and provisions that are identical to those of the shares sold as part of our initial public offering.
For the avoidance of doubt, there will be no redemption rights granted to the private placement shares or liquidating distributions rights
from the trust account with respect to the Company’s private placement shares if the Company fails to complete the initial business
combination within the combination period.

 

If they remain affiliated with us, their ability
to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from
selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell
our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information.

 

Dividends

 

We have not paid any cash dividends on our ordinary
shares to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends
in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent
to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion
of our board of directors at such time.

 

If we increase or decrease the size of our initial
public offering pursuant to Rule 462(b) under the Securities Act, we will effect a share capitalization, redemption or other appropriate
mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of our initial public
offering in such amount as to maintain the ownership of our initial shareholders at 20.0% of our issued and outstanding ordinary shares
upon the consummation of our initial public offering (excluding the private placement shares). Any conversion of Class B ordinary
shares described herein will take effect as a redemption of Class B ordinary shares and an issuance of Class A ordinary shares
as a matter of Cayman Islands law.

 

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Further, if we incur any indebtedness, including
in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree
to in connection therewith.

 

Certain Anti-Takeover Provisions of our Amended
and Restated Memorandum and Articles of Association

 

Our amended and restated memorandum and articles
of association provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances,
a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual general meetings.

 

Our authorized but unissued Class A ordinary
shares and preference shares are available for future issuances without shareholder approval and could be utilized for a variety of corporate
purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved Class A ordinary shares and preference shares could render more difficult or discourage an attempt to
obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

 

6ex_350206.htm

 

Exhibit 4.1

 

DESCRIPTION OF REGISTRANT’S SECURITIES 

REGISTERED PURSUANT TO SECTION 12 OF THE 

SECURITIES EXCHANGE ACT OF 1934

 

 

The Reserve Petroleum Company (the “Company”) has one class of security registered under Section 12 of the Securities Exchange Act of 1934: the Company’s common stock.

 

DESCRIPTION OF COMMON STOCK

 

The following summary of the terms of the Company’s common stock is based upon its Restated Certificate of Incorporation (the "Certificate of Incorporation") and Amended Bylaws (the “Bylaws”). This summary is not complete and is qualified by reference to the Company’s Certificate of Incorporation and Bylaws, each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.

 

General

 

Pursuant to the Certificate of Incorporation, the Company is authorized to issue 200,000 shares of common stock, par value $0.50 per share.

 

Dividends

 

Our board of directors may declare, at its discretion, dividends payable in cash or shares of the Company to the extent permitted by applicable law.

 

Voting Rights

 

Each holder of shares of our common stock is entitled to one vote for each share held on all questions submitted to a vote at a meeting of shareholders. There are no cumulative voting rights in the election of directors.

 

A majority of the votes cast is required for all actions to be taken by shareholders, except with respect to director elections, which requires a plurality of the votes cast.

 

Upon any liquidation, dissolution or winding up of the Company, holders of its common stock are entitled to share equally and ratably in any assets remaining after the payment of all debt and other liabilities.

 

Trading

 

The Company’s common stock is traded in the Pink Sheet Quotation Service and the OTC Bulletin Board under the symbol “RSRV.”

 

Board of Directors

 

Our board of directors shall consist of not less than three (3) or more than fifteen (15) directors. We currently have nine (9) directors.

 

Anti-Takeover Effects of Certain Provisions

 

Certain provisions of the Company's Certificate of Incorporation and its Bylaws summarized in the paragraphs above and in the following paragraphs may have an anti-takeover effect. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that shareholders may otherwise consider to be in their best interest or in the best interests of the Company, including transactions that might result in a premium over the market price for shares of the Company's common stock.

 

Special Shareholder Meetings

 

Unless otherwise permitted by applicable law, the Company's Bylaws provides that special meetings of shareholders may be called only by (i) the Board, (ii) the Chairman of the Board, (iii) the President or (iv) the Board upon the written request of shareholders holding a majority of all the votes entitled to be cast on each issue to be considered at the special meeting as of the date of submission of the request.

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