Document:

crhm-ex42_301.htm

Exhibit 4.2

Description of Common Shares

 

General

 

The following description of the common shares, no par value (the “common shares”) of CRH Medical Corporation (the “Company,” “we,” “us,” and “our”) summarizes material rights of our common shares, as contained in our notice of articles and articles and any amendments thereto. This summary is not a complete description of the share rights associated with our common shares. For more detailed information, please see the forms of our Business Corporations Act (British Columbia) notice of articles and articles, which are filed as exhibits to this Annual Report on Form 10-K.

 

Share Capital

 

The Company’s authorized share capital consists of 100,000,000 common shares. Our common shares are listed on the NYSE American under the symbol “CRHM” and on the TSX under the symbol “CRH”. 

 

Common Shares

 

The common shares are not subject to any future call or assessment and all have equal voting rights.  There are no special rights or restrictions of any nature attached to any of the common shares and they all rank pari passu, each with the other as to all benefits which might accrue to the holders of such common shares.  The holders of common shares have the right to receive, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the Company, any dividends declared by the Company.  There are no limitations on the right of nonresident or foreign owners of the common shares to hold or vote the common shares. All registered shareholders are entitled to receive a notice of any general meetings to be convened by the Company. At any general meeting, subject to the restrictions on joint registered owners of common shares, on a show of hands, every member who is present in person and entitled to vote thereat and every proxy holder duly appointed by a holder of a common share who would have been entitled to vote shall have one vote and on a poll every member shall have one vote for each common share of which he is the registered holder and may exercise such vote either in person or by proxy.  The common shares do not have any pre-emptive rights, conversion rights or redemption rights. Provisions as to the creation, modification, amendment or variation of such rights or such provisions are contained in the Business Corporations Act (British Columbia) and the articles of the Company.

 

Dividend Policy

 

We have neither declared nor paid any dividends on our outstanding common shares since our inception and we do not anticipate that we will do so in the foreseeable future. The declaration of dividends on our common shares is within the discretion of the Board of Directors and will depend on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. At the present time, anticipated capital requirements are such that we intend to follow a policy of retaining earnings in order to finance the further development of the business.

 

Advance Notice Policy

 

Our articles include an advance notice policy (the “Advance Notice Policy”). The Advance Notice Policy provides that any shareholder seeking to nominate a candidate for election as a director (a “Nominating Shareholder”) at any annual meeting of the shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors, must give timely notice thereof in proper written form to our Corporate Secretary.

 

To be timely, a Nominating Shareholder’s notice must be made: (i) in the case of an annual meeting of shareholders (including an annual and special meeting), not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders, provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date on which the first public announcement of the meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the 10th day following the date of such first public announcement; and (ii) in the case of a special meeting of shareholders (which is not 

 

 

also an annual meeting) called for the purpose of electing directors (whether or not called for other purposes as well), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting of shareholders was made. The articles also prescribe the proper written form for a Nominating Shareholder’s notice.

 

The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the notice procedures set forth in the articles and, if any proposed nomination is not in compliance with such provisions, the discretion to declare that such defective nomination will be disregarded.

 

Notwithstanding the foregoing, the Board of Directors may, in their sole discretion, waive any requirement in the Advance Notice Policy.Exhibit 4.5

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

As of March 11, 2020,
Forum Merger II Corporation has three classes of securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”): (1) our units; (2) our Class A common stock; and (3) our warrants.

 

The following description
of our units, Class A common stock, and warrants is a summary and does not purport to be complete. It is subject to and qualified
in its entirety by reference to our amended and restated certificate of incorporation and our Bylaws (the “Bylaws”),
each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is
a part. We encourage you to read our amended and restated certificate of incorporation, our Bylaws and the applicable provisions
of Delaware General Corporations Law (Title 8, Chapter 1 of the Delaware Code).

 

Terms not otherwise
defined herein shall have the meaning assigned to them in the Annual Report on Form 10-K of which this Exhibit 4.5 is a
part.

 

Description of Units

 

		1.	Public Units

 

Each unit consists
of one share of Class A common stock and one redeemable warrant. Each warrant entitles the holder thereof to purchase one share
of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in our prospectus (the “Prospectus”).
Pursuant to the warrant agreement, a warrantholder may exercise its warrants only for a whole number of shares of Class A common
stock.

 

		2.	Private Placement Units

 

The private placement
units (including the private placement warrants or private placement shares issuable upon exercise of such warrants) are 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 Stockholders — Restrictions on Transfers of Founder Shares and Private
Placement Units,” to our officers and directors and other persons or entities affiliated with our sponsor) and they are not
redeemable by us so long as they are held by members of our sponsor or its permitted transferees. Otherwise, the private placement
units are identical to the units sold in our initial public offering (the “Public Offering”) except that
the private placement warrants, so long as they are held by our sponsor, the underwriters or their permitted transferees, (i) are
not redeemable by us, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain
limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business
combination, (iii) may be exercised by the holders on a cashless basis, (iv) are entitled to registration rights and (v) for so
long as they are held by the underwriters, are not exercisable more than five years from the effective date of the registration
statement in accordance with FINRA Rule 5110(f)(2)(G)(i).

 

Description of Class
A Common Stock

 

Pursuant to our amended
and restated certificate of incorporation, our authorized capital stock consists of 400,000,000 shares of common stock, $0.0001
par value and 1,000,000 shares of undesignated preferred stock, $0.0001 par value.

 

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Common stockholders
of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A common
stock and holders of the Class B common stock vote together as a single class on all matters submitted to a vote of our stockholders,
except as required by law. Unless specified in our amended and restated certificate of incorporation or Bylaws, or as required
by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common
stock that are voted is required to approve any such matter voted on by our stockholders. Our board of directors is divided into
two classes, each of which generally serves for a term of two years with only one class of directors being elected in each year.
There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the
shares voted for the election of directors can elect all of the directors. Our stockholders 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 certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, if we were
to enter into an initial business combination, we may (depending on the terms of such an initial business combination) be required
to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders
vote on the initial business combination to the extent we seek stockholder approval in connection with our initial business combination.

 

In accordance with
Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our
first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual
meeting of stockholders for the purposes of electing directors in accordance with our Bylaws, unless such election is made by written
consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation
of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual
meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination,
they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section
211(c) of the DGCL.

 

We will provide our
stockholders 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 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 franchise and income taxes, divided by the number of then outstanding
public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately
$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 any founder shares
and private placement shares and any public shares held by them in connection with the completion of our initial business combination.
Unlike many blank check companies that hold stockholder 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 stockholder vote is not required by law and we do not decide to hold a stockholder
vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, 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 certificate of incorporation requires these tender offer documents to contain
substantially the same financial and other information about the initial business combination and the redemption rights as is required
under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain
stockholder approval for business or other legal reasons, we will, like many blank check 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 stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted
in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy
of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of
capital stock of the company entitled to vote at such meeting.

 

However, the participation
of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in our Prospectus),
if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or
indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding
shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is
obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any
such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting
thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial
business combination.

 

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If we seek stockholder
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 certificate of incorporation provides that a public stockholder, together
with any affiliate of such stockholder or any other person with whom such stockholder 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 more than an aggregate
of 15% of the shares of common stock sold in the Public Offering, which we refer to as the Excess Shares. However, we would not
be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability
to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell
such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to
the Excess Shares if we complete the initial business combination. And, as a result, such stockholders will continue to hold that
number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions,
potentially at a loss.

 

If we seek stockholder
approval in connection with our initial business combination, pursuant to the letter agreement our sponsor, officers and directors
have agreed to vote their founder shares and private placement shares and any public shares purchased during or after the 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 stockholders’ founder shares, we would need only 7,172,501, or 35.9%, of the 20,000,000 public
shares sold in the Public Offering to be voted in favor of an initial business combination (assuming all outstanding shares are
voted and the private placement shares to be issued to our sponsor and the underwriters are voted in favor of the transaction)
in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally,
each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction
(subject to the limitation described in the preceding paragraph).

 

Pursuant to our amended
and restated certificate of incorporation, if we are unable to complete our initial business combination within 24 months from
the closing of the Public Offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, 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 and not previously released to us to pay our franchise and income taxes (less 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 stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other 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 any founder shares or private placement shares held by them if we fail to complete our initial
business combination within 24 months from the closing of the Public Offering. However, if our initial stockholders acquire public
shares in or after the 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 an initial business combination, our stockholders 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 stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights.

 

There are no sinking
fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their
public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion
of our initial business combination, subject to the limitations described herein.

 

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Description of Warrants

 

		1.	Public Stockholders’ Warrants

 

Each warrant entitles
the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as
discussed below, at any time commencing on the later of 12 months from the closing of the Public Offering or 30 days after the
completion of our initial business combination. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only
for a whole number of shares of Class A common stock. The warrants will expire five years after the completion of our initial business
combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

We are not obligated
to deliver any shares of Class A common stock pursuant to the exercise of a warrant and have no obligation to settle such warrant
exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying
the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described
below with respect to registration. No warrant is exercisable and we are not obligated to issue shares of Class A common stock
upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed
to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the
conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required
to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser
of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock
underlying such unit.

 

We are not registering
the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as
practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our
best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of
the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares
of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement
covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business
day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration
statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on
a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the
above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our
option, 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 effect
a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available.

 

Once the warrants become
exercisable, we may call the warrants for redemption:

 

		(a)	in whole and not in part;

 

		(b)	at a price of $0.01 per warrant;

 

		(c)	upon not less than 30 days’ prior written notice of redemption (the “30-day redemption
period”) to each warrantholder; and

 

		(d)	if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00
per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders.

 

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If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the
warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such
registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky
laws of the state of residence in those states in which the warrants were offered by us in the Public Offering.

 

We have established
the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant
premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants,
each warrantholder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Class
A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued.

 

If we call the warrants
for redemption as described above, our management will have the option to require any holder that wishes to exercise its warrant
to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless
basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding
and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise
of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering
their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of
the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of
the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value”
shall mean 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 redemption is sent to the holders of warrants. If our management takes advantage of
this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A common
stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless
exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption.
We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial
business combination. If we call our warrants for redemption and our management does not take advantage of this option, our sponsor
and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis
using the same formula described above that other warrantholders would have been required to use had all warrantholders been required
to exercise their warrants on a cashless basis, as described in more detail below.

 

A holder of a warrant
may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise
such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates),
to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder
may specify) of the shares of Class A common stock outstanding immediately after giving effect to such exercise.

 

If the number of outstanding
shares of Class A common stock is increased by a stock dividend payable in shares of Class A common stock, or by a split-up of
shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split- up or similar
event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such
increase in the outstanding shares of Class A common stock. A rights offering to holders of Class A common stock entitling holders
to purchase shares of Class A common stock at a price less than the fair market value will be deemed a stock dividend of a number
of shares of Class A common stock equal to the product of (i) the number of shares of Class A common stock actually sold in such
rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable
for Class A common stock) and (ii) one (1) minus the quotient of (x) the price per share of Class A common stock paid in such rights
offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into
or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken into account
any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair
market value means the volume weighted average price of Class A common stock as reported during the ten (10) trading day period
ending on the trading day prior to the first date on which the shares of Class A common stock trade on the applicable exchange
or in the applicable market, regular way, without the right to receive such rights.

 

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In addition, if we,
at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other
assets to the holders of Class A common stock on account of such shares of Class A common stock (or other shares of our capital
stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to
satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination,
(d) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our
amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our
Class A common stock if we do not complete our initial business combination within 24 months from the closing of the Public Offering
or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity,
or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then
the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash
and/or the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event.

 

If the number of outstanding
shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares
of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased
in proportion to such decrease in outstanding shares of Class A common stock.

 

Whenever the number
of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise
price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator
of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to
such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately
thereafter.

 

In case of any reclassification
or reorganization of the outstanding shares of Class A common stock (other than those described above or that solely affects the
par value of such shares of Class A common stock), or in the case of any merger or consolidation of us with or into another corporation
(other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification
or reorganization of our outstanding shares of Class A common stock), or in the case of any sale or conveyance to another corporation
or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are
dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms
and conditions specified in the warrants and in lieu of the shares of our Class A common stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities
or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants
immediately prior to such event. If less than 70% of the consideration receivable by the holders of Class A common stock in such
a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national securities
exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following
such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure
of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes
value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional
value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to
which the holders of the warrants otherwise do not receive the full potential value of the warrants in order to determine and realize
the option value component of the warrant. This formula is to compensate the warrant holder for the loss of the option value portion
of the warrant due to the requirement that the warrant holder exercise the warrant within 30 days of the event. The Black-Scholes
model is an accepted pricing model for estimating fair market value where no quoted market price for an instrument is available.

 

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The warrants are issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.
You should review a copy of the warrant agreement, which was filed as an exhibit to the registration statement, for a complete
description of the terms and conditions applicable to the warrants. 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 provision, but requires the approval
by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests
of the registered holders of public warrants.

 

The warrants may be
exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with
the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment
of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number
of warrants being exercised. The warrantholders do not have the rights or privileges of holders of Class A common stock and any
voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance of shares of Class
A common stock upon exercise of the warrants, each holder will be entitled to one (1) vote for each share held of record on all
matters to be voted on by stockholders.

 

No fractional shares
will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional
interest in a share, we will, upon exercise, round down to the nearest whole number of shares of Class A common stock to be issued
to the warrantholder.

 

		2.	Private Placement Warrants

 

The private placement
warrants (including the Class A common stock issuable upon exercise of the private placement warrants) are not transferable, assignable
or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described
under the section of the Prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares
and Private Placement Units,” to our officers and directors and other persons or entities affiliated with our sponsor or
the underwriters) and they will not be redeemable by us so long as they are held by our sponsor, the underwriters or their permitted
transferees. Our sponsor, the underwriters and their permitted transferees, have the option to exercise the private placement warrants
on a cashless basis. Except as described below, the private placement warrants have terms and provisions that are identical to
those of the warrants being sold as part of the units in the Public Offering, including as to exercise price, exercisability and
exercise period. If the private placement warrants are held by holders other than our sponsor, the underwriters or their permitted
transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants
included in the units being sold in the Public Offering.

 

In addition, for as
long as the private placement warrants are held by the underwriters or their designees or affiliates, they may not be exercised
after five years from the effective date of the registration statement.

 

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If holders of the private
placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants
for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares
of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean 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 warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will
be exercisable on a cashless basis so long as they are held by our sponsor, the underwriters or their permitted transferees is
because it is not known at this time whether they will be affiliated with us following an initial business combination. If they
remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We 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. Accordingly, unlike public stockholders who could sell the shares of Class A common stock issuable
upon exercise of the warrants freely in the open market, the insiders could be significantly restricted from doing so. As a result,
we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

 

In order to finance
transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain
of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,200,000 of such working
capital loans may be convertible into private placement-equivalent units at a price of $10.00 per unit at the option of the lender.
Such units would be identical to the private placement units, including as to exercise price, exercisability and exercise period
of the underlying warrants. The terms of such working capital loans by our sponsor or its affiliates, or our officers and directors,
if any, have not been determined and no written agreements exist with respect to such loans.

 

In addition, holders
of our private placement warrants are entitled to certain registration rights and any private placement warrants held by the underwriters
will not be exercisable more than five years from the effective date of the registration statement.

 

Our sponsor and the
underwriters have agreed not to transfer, assign or sell any of the private placement units (including the underlying securities
and the Class A common stock issuable upon exercise of any of the private placement warrants) until the date that is 30 days after
the date we complete our initial business combination, except that, among other limited exceptions as described under the section
of the Prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private placement
units” made to our officers and directors and other persons or entities affiliated with our sponsor.

 

 

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