Item 1.01. Entry into a Material Definitive Agreement.
General
On February 16, 2022, immediately
following the termination of the Business Combination Agreement (as defined below), as described in Item 1.02 of this Current Report on
Form 8-K, Concord Acquisition Corp, a Delaware corporation (“Concord”), Circle Internet Financial Limited, a private company
limited by shares incorporated in Ireland (the “Company”), Circle Internet Finance Public Limited Company (formerly Circle
Acquisition Public Limited Company), a public company limited by shares incorporated in Ireland (“Topco”), and Topco (Ireland)
Merger Sub, Inc., a Delaware corporation (“Merger Sub”), entered into a Transaction Agreement (the “Transaction Agreement”),
pursuant to which Topco agreed to combine with Concord in a business combination that will result in each of the Company and Concord becoming
a wholly-owned subsidiary of Topco. Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the
meanings given to them in the Transaction Agreement.
The Transaction Agreement
Structure of the Proposed Transactions
The business combination is
comprised of two separate transactions (collectively, the “Proposed Transactions”):
| (a) | Pursuant to an Irish law court-approved scheme of arrangement (the “Scheme”), the Company’s
shareholders will transfer their holdings of shares in the capital of the Company to Topco in exchange for the issuance of new shares
in Topco, with the result that, at the effective time of the Scheme, the Company will become a wholly-owned subsidiary of Topco; and |
| (b) | On the first business day following the Scheme effective time, subject to the conditions of the Transaction
Agreement and in accordance with the Delaware General Corporation Law (the “DGCL”), Merger Sub will merge with and into Concord
(the “Merger”), with Concord surviving the Merger as a wholly-owned subsidiary of Topco. |
Consideration
Pursuant to the Scheme, at
the Scheme effective time, each holder of shares of any class in the capital of the Company appearing in the register of members of the
Company at the Scheme record time (“Scheme Shares”) will transfer all of his, her or its Scheme Shares to Topco in exchange
for the allotment and issuance by Topco of that number of Topco Ordinary Shares comprising that Scheme shareholder’s pro rata
portion of an amount of Topco Ordinary Shares equal to the Company Equity Value (as defined below) divided by $10.00 and rounded down
to the nearest whole number of Topco Ordinary Shares (collectively, the “Scheme Consideration”). The “Company Equity
Value” means $9,000,000,000 plus (i) the aggregate amount of the net proceeds of any equity or convertible debt issued by the Company
after March 6, 2021, plus (ii) the proceeds from any Private Placement completed by Topco or the Company after the date of the Transaction
Agreement, plus (iii) the Net Equity Value of any Acquisition Transaction in which Equity Interests of the Company or Topco are issued
or sold completed after the date of the Transaction Agreement minus (iv) any indebtedness of the Company that will not convert into equity
in connection with the Proposed Transactions.
At the effective time of the
Merger:
| (a) | each share of Concord Class A common stock and each share of Concord Class B common stock (other than
shares held by Concord as treasury stock or owned by Concord immediately prior to the Merger effective time) issued and outstanding immediately
prior to the Merger effective time will be cancelled and automatically converted into and become the right to receive one Topco Ordinary
Share (the “Merger Consideration”); and |
| (b) | each Concord Warrant that is outstanding immediately prior to the Merger effective time will be converted
in accordance with the terms of the Concord Warrant Agreement into a Topco Warrant on substantially the same terms as were in effect immediately
prior to the Merger effective time under the terms of the Concord Warrant Agreement. |
Earnout
Following the closing of the
Proposed Transactions (the “Closing”), Topco will issue up to an aggregate number of Topco Ordinary Shares equal to 20% of
the Topco Ordinary Shares in issue (on a fully diluted basis) immediately following the Closing (the “Earnout Shares”) to
certain of the Company’s existing equity holders, as follows:
| ● | 25% of the Earnout Shares, in the aggregate, if the volume weighted average trading price of the Topco
Ordinary Shares is $12.00 or greater for any 20 trading days within a period of 30 consecutive trading days prior to the first anniversary
of the Closing; |
| ● | 25% of the Earnout Shares, in the aggregate, if the volume weighted average trading price of the Topco
Ordinary Shares is $14.00 or greater for any 20 trading days within a period of 30 consecutive trading days prior to the third anniversary
of the Closing; |
| ● | 25% of the Earnout Shares, in the aggregate, if the volume weighted average trading price of the Topco
Ordinary Shares is $16.00 or greater for any 20 trading days within a period of 30 consecutive trading days prior to the fifth anniversary
of the Closing; and |
| ● | 25% of the Earnout Shares, in the aggregate, if the volume weighted average trading price of the Topco
Ordinary Shares is $100.00 or greater for any 20 trading days within a period of 30 consecutive trading days prior to the tenth anniversary
of the Closing. |
Such Earnout Shares will also
become issuable under certain circumstances if a “change of control” of Topco occurs prior to the applicable earnout expiration
date and the price per share in the change of control equals or exceeds the applicable price target.
Escrow
Following the Closing, Topco
and certain Topco shareholders will enter into an escrow agreement, pursuant to which an aggregate of 37,500,000 of Topco Ordinary Shares
included in the Scheme Consideration will be deposited with an escrow agent to serve as security for certain specified potential post-Closing
liabilities of the Company.
Proxy Statement/Prospectus and Stockholder
Meeting
As promptly as reasonably
practicable after the date of the availability of certain required financial statements of the Company, Topco, Concord and the Company
will prepare and file with the Securities and Exchange Commission (the “SEC”) an amendment to the registration statement on
Form S-4, initially filed by Topco on August 6, 2021 (as amended or supplemented, the “Registration Statement”), which will
include a proxy statement / prospectus that will be included therein as a prospectus with respect to Topco and that will be used as a
proxy statement with respect to a meeting of the stockholders of Concord to seek adoption and approval of (i) the Transaction Agreement,
(ii) any other proposals reasonably agreed by Topco, Concord and the Company to be necessary or appropriate in connection with the Proposed
Transactions or that either the SEC or New York Stock Exchange (or their respective staff members) deems necessary in its comments to
the Registration Statement or in correspondence related thereto, and (iii) a proposal for the adjournment of Concord stockholders’
meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the
foregoing (such proposals in clauses (i) through (iii), the “Concord Proposals”) and other matters reasonably related to the
Concord Proposals.
Closing
The Closing will occur on
a date to be agreed by the parties, but in no event later than three business days, following the satisfaction or waiver of all of the
closing conditions, with the exception of those conditions that can only be satisfied at the Closing.
Representations, Warranties and Covenants
The Transaction Agreement
contains customary representations and warranties of (a) the Company, (b) Topco and Merger Sub and (c) Concord relating to, among other
things, their ability to enter into the Transaction Agreement and their outstanding capitalization. The
Transaction Agreement also contains covenants by the Company, Topco Merger Sub and Concord to conduct their businesses in the ordinary
course and consistent with past practice during the period between the execution of the Transaction Agreement and consummation of the
Proposed Transactions and to refrain from taking certain actions specified in the Transaction Agreement, subject to certain exceptions,
including the right to raise capital pursuant to one or more private placements in an aggregate amount of no greater than $750 million
and based on a valuation of the Company of no less than $7,650,000,000, and the right to complete one or more Acquisition Transactions,
subject to Concord’s consent in the event of any acquisition if financial statements of the acquired business would be required
to be included in the Registration Statement. The Company has agreed to customary “no shop” obligations.
Pursuant to the Transaction
Agreement, prior to the Closing the shareholders of Topco will pass a resolution adopting a revised constitution (the “Amended Topco
Constitution”) containing, in addition to provisions that are customary for the constitution of an Irish-incorporated company that
is listed on the New York Stock Exchange, a six-month lock-up provision applicable to certain of the Topco Ordinary Shares to be issued
to Company shareholders at the Closing, subject to customary exceptions and certain tiered price-based early release provisions.
Conditions to Closing
General Conditions
The obligations of the parties
to consummate the Proposed Transactions are subject to the satisfaction or waiver (where permissible and by the party for whose benefit
such condition exists) at or prior to the Scheme effective time, of the following conditions:
| (a) | The Concord Proposals will have been approved and adopted by the requisite affirmative vote of the stockholders
of Concord in accordance with the Registration Statement, the DGCL, the Concord organizational documents and the rules and regulations
of the New York Stock Exchange; |
| (b) | No governmental authority will have enacted, issued, promulgated, enforced or entered any law, rule, regulation,
judgment, decree, executive order or award which is then in effect and has the effect of making the Proposed Transactions illegal or otherwise
prohibiting consummation of the Proposed Transactions; |
| (c) | All required filings and/or notifications required: (i) under any application for authorization or regulatory
process; (ii) under the applicable antitrust laws will have been completed and any applicable waiting period (and any extension thereof)
applicable to the consummation of the Proposed Transactions under the applicable antitrust laws will have expired or been terminated;
and (iii) any pre-Closing approvals or clearances reasonably required thereunder will have been obtained; |
| (d) | The Topco initial listing application with the New York Stock Exchange in connection with the Proposed
Transactions will have been approved and, immediately following the Merger effective time, Topco will satisfy any applicable initial and
continuing listing requirements of the New York Stock Exchange, and Topco will not have received any notice of non-compliance therewith
that has not been cured or would not be cured at or immediately following the Merger effective time, and the Topco Ordinary Shares will
have been approved for listing on the New York Stock Exchange, or another national securities exchange mutually agreed to by the parties,
as of the Closing Date (subject to the satisfaction of certain other requirements set forth in the Transaction Agreement); |
| (e) | The Registration Statement will have been declared effective under the Securities Act. No stop order suspending
the effectiveness of the Registration Statement will be in effect, and no proceedings for purposes of suspending the effectiveness of
the Registration Statement will have been initiated or be threatened in writing by the SEC; and |
| (f) | All required parties to the Registration Rights Agreement will have delivered, or cause to be delivered,
copies of the Registration Rights Agreement duly executed by all such parties. |
Concord Conditions to Closing
The obligations of Concord
to consummate the Proposed Transactions are subject to the satisfaction or waiver (where permissible and by the party for whose benefit
such condition exists) at or prior to the Scheme effective time, of the following additional conditions:
| (a) | The representations and warranties of the Company, Topco and Merger Sub contained in the Transaction Agreement
will each be true and correct in all material respects as of the date of the Transaction Agreement and the Scheme effective time (except
to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and
warranty must be true and correct as of such specified date), subject to certain exceptions where the failures of any such representations
and warranties, individually or in the aggregate, to be true and correct would not reasonably be expected to have a material adverse effect
on the Company or Topco; |
| (b) | The Company, Topco and Merger Sub will have performed or complied in all material respects with all agreements
and covenants required by the Transaction Agreement; provided, that Topco will have performed or complied in all respects with certain
specified agreements and covenants set forth in the Transaction Agreement; |
| (c) | The Company will have delivered to Concord a certificate, dated the date of the Closing, signed by an
officer of the Company, certifying as to the satisfaction of certain conditions contained in the Transaction Agreement; |
| (d) | No Company material adverse effect will have occurred; |
| (e) | All required parties to the Shareholders Agreement will have delivered, or caused to be delivered, to
Concord copies of the Shareholders Agreement duly executed by all such parties; |
| (f) | The Company will have delivered to Concord all Company permits and any additional notice, consent, approval,
orders or authorization of, or registration, declaration or filing with, any governmental authority or other person; |
| (g) | Topco will have adopted the Amended Topco Constitution; and |
| (h) | Topco will have entered into a composition agreement with the Irish Revenue Commissioners and a special
eligibility agreement for securities with a depository trust company in respect of the Topco Ordinary Shares and Topco Warrants, both
of which are in full force and effect. |
The Company Conditions to Closing
The obligations of the Company to consummate the
Proposed Transactions are subject to the satisfaction or waiver (where permissible and by the party for whose benefit such condition exists)
at or prior to the Scheme effective time, of the following additional conditions:
| (a) | The representations and warranties of Concord contained in the Transaction Agreement will each be true
and correct in all material respects as of the date of the Transaction Agreement and the Scheme effective time (except to the extent that
any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty must be true
and correct as of such specified date), subject to certain exceptions where the failures of any such representations and warranties to
be so true and correct, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Concord; |
| (b) | Concord will have performed or complied in all material respects with all other agreements and covenants
required by the Transaction Agreement to be performed or complied with by it on or prior to the Merger effective time; and |
| (c) | Concord will have delivered to the Company a certificate, dated the date of the Closing, signed by an
executive officer of Concord, certifying as to the satisfaction of certain conditions contained in the Transaction Agreement. |
The Transaction Agreement does not include
a minimum cash closing condition.
Scheme Conditions
The obligations of the Company,
Concord, Topco and Merger Sub to consummate the Proposed Transactions are subject to the satisfaction of each of the following conditions:
| (a) | The Scheme having been approved by a majority in number of members of each class of Company Holders and
the Company Convertible Note Holders, including as may be directed by the Irish High Court pursuant to Section 450(5) of the companies
Act 2014 of Ireland, as amended, present and voting either in person or by proxy at each of the court meetings (or at any adjournment
or postponement of any such meetings) representing, at the Scheme voting record time, at least 75% in value of the Company Shares of that
class or the Company Convertible Note Holders (as the case may be) held by such Company Holders or Company Convertible Note Holders (as
the case may be) present and voting at that court meeting; |
| (b) | Each of the resolutions to be proposed at the extraordinary general meeting of the Company Holders for
the purposes of approving and implementing the Scheme, having been duly passed by the requisite majority of Company Holders at the extraordinary
general meeting; |
| (c) | The Irish High Court having sanctioned (without material modification) the Scheme pursuant to Sections
449 to 455 of the Companies Act 2014 of Ireland, as amended; and |
| (d) | A copy of the court order sanctioning the Scheme pursuant to Irish law having been delivered to the Irish
Registrar of Companies. |
Termination
The Transaction Agreement
may be terminated and the Merger and the other Proposed Transactions may be abandoned at any time prior to the Scheme effective time,
as follows:
| (a) | By mutual written consent of Concord and the Company; |
| (b) | By either Concord or the Company, if the Scheme effective time has occurred prior to December 8, 2022
(the “Outside Date”); provided that (i) if a Concord Extension Proposal shall be approved at a relevant Concord Stockholders’
Meeting, the Outside Date will be the last day of the extended time period for Concord to consummate a business combination (but no later
than January 31, 2023; provided, further, that (ii) the Transaction Agreement may not be terminated by or on behalf of any party that
either directly or indirectly through its affiliates is in breach or violation of any representation, warranty, covenant, agreement or
obligation contained in the Transaction Agreement and such breach or violation will have proximately caused the failure to consummate
the Proposed Transactions on or prior to the Outside Date; |
| (c) | By either Concord or the Company if any governmental authority in the United States has enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) that has become
final and non-appealable and has the effect of making consummation of the Proposed Transactions illegal or otherwise preventing or prohibiting
consummation of the Proposed Transactions; |
| (d) | By either Concord or the Company if any of the Concord Proposals fail to receive the required Concord
stockholder approval at the Concord stockholders’ meeting; |
| (e) | By either Concord or the Company if: (i) the court meetings or the extraordinary general meeting of the
Company Holders have been completed and the court meeting Resolution or the extraordinary general meeting of the Company Holders resolutions,
as applicable, have not been approved by the requisite majorities in each case; or (ii) if the Irish High Court declines or refuses to
sanction the Scheme, unless the Company and Concord agree that the decision of the Irish High Court will be appealed; |
| (f) | By either Concord or the Company if any law or injunction enacted, issued, promulgated, enforced or entered
by a relevant governmental authority has been entered permanently restraining, enjoining or otherwise prohibiting the consummation of
the Acquisition or the Merger and such law or injunction has become final and non-appealable, provided that the right to terminate the
Transaction Agreement will not be available to a party whose breach of any provision of the Transaction Agreement has caused such injunction; |
| (g) | By Concord if any of the Company’s representations or warranties contained in the Transaction Agreement
are not be true and correct or if the Company, Topco or Merger Sub has failed to perform any covenant or agreement such that the conditions
of the Transaction Agreement would not be satisfied (“Terminating Company Breach”); provided Concord is not then in breach
of its representations, warranties, covenants or agreements in the Transaction Agreement so as to prevent the condition to closing from
being satisfied; provided further that, if such Terminating Company Breach is curable by the Company, Topco or Merger Sub, Concord may
not terminate the Transaction Agreement for so long as the Company, Topco and Merger Sub continue to exercise its reasonable efforts to
cure such breach, unless such breach is not cured by the earlier of (x) 30 days after written notice of such breach is provided by Concord
to the Company and (y) the Outside Date; and |
| (h) | By the Company if any of Concord’s representations or warranties contained in the Transaction Agreement
are not be true and correct or if Concord has failed to perform any covenant or agreement such that the conditions of the Transaction
Agreement would not be satisfied (“Terminating Concord Breach”); provided that none of the Company, Topco or Merger Sub is
then in breach of its respective representations, warranties, covenants or agreements in the Transaction Agreement so as to prevent the
condition to closing of the Transaction Agreement from being satisfied; provided, however, that, if such Terminating Concord Breach is
curable by Concord, the Company may not terminate the Transaction Agreement for so long as Concord continues to exercise their reasonable
efforts to cure such breach, unless such breach is not cured by the earlier of (x) 30 days after written notice of such breach is provided
by the Company to Concord and (y) the Outside Date. |
Effect of Termination; Termination Fee; Break-up
Fee
If the Transaction Agreement
is terminated, it will become void, and there will be no liability or obligation under the Transaction Agreement on the part of any party
thereto, except as set forth in the Transaction Agreement or in the case of termination subsequent to a willful material breach of the
Transaction Agreement or fraud by a party thereto.
The Company will be required
to pay to Concord an amount equal to $112,500,000, in the event that (i) the Transaction Agreement is validly terminated as a result of
the failure of the Scheme to receive the requisite approval of the Company’s equity holders or as a result of a breach by the Company,
Topco or Merger Sub of certain of their covenants under the Transaction Agreement where such breach occurs as a result of the vote of
the Company’s equity holders regarding the Scheme not occurring by the Outside Date in circumstances where (X) the Registration
Statement has been declared effective under the Securities Act (the date of such declaration the “SEC Effective Date”) and
(Y) the period of time from the SEC Effective Date to the Outside Date would have been sufficient for the Company to convene the court
meetings and the extraordinary general meeting; and (ii) at the time of such termination, Concord has not committed a breach of the Transaction
Agreement giving the Company the right to terminate the Transaction Agreement.
If the Transaction Agreement
is validly terminated (i) by the mutual consent of the parties or by either the Company or Concord because the Outside Date shall have
occurred and as of the date of such termination the Registration Statement has not been declared effective under the Securities Act; and
(ii) at the time of such termination, Concord has not committed a Terminating Concord Breach (as defined in the Transaction Agreement),
then the Company shall issue to Concord a number of Company Ordinary Shares equal in value to $20,000,000.
In no event will the Company
be required to pay either such termination fee on more than one occasion.
A copy of the Transaction
Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description
of the Transaction Agreement is qualified in its entirety by reference to the full text of the Transaction Agreement filed with this Current
Report on Form 8-K. The Transaction Agreement is included to provide investors and security holders with information regarding its terms.
It is not intended to provide any other factual information about Concord, the Company or the other parties thereto. In particular, the
assertions embodied in representations and warranties by Concord, the Company, Topco and Merger Sub contained in the Transaction Agreement
are qualified by information in the disclosure schedules provided by the parties in connection with the signing of the Transaction Agreement.
These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set
forth in the Transaction Agreement. Moreover, certain representations and warranties in the Transaction Agreement were used for the purpose
of allocating risk between the parties, rather than establishing matters as facts. Accordingly, investors and security holders should
not rely on the representations and warranties in the Transaction Agreement as characterizations of the actual state of facts about Concord,
the Company, Topco and Merger Sub.
The foregoing descriptions
of the Transaction Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Transaction
Agreement, a copy of which is included as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference herein.
Transaction Support Agreement
On February 16, 2022, concurrently
with the execution of the Transaction Agreement, certain securityholders of the Company entered into a Transaction Support Agreement with
Concord, pursuant to which, among other things, such securityholders agreed to vote their Company shares in favor of the Transaction Agreement,
the Scheme and the Transaction Documents to which the Company is or will be a party. In addition, Jeremy Allaire, the Company’s
Chief Executive Officer (the “Founder”), entered into a Transaction Support Agreement with Concord pursuant to which the Founder
further agreed not to vote in favor of any Alternative Transaction (excluding for such purpose an initial public offering of the Company)
for a period of six months following the termination of the Transaction Agreement under certain circumstances.
The foregoing description
of the Transaction Support Agreements is qualified in its entirety by reference to the full text of the Transaction Support Agreements,
copies of which are included as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Shareholders Agreement
In connection with the Proposed
Transactions, Topco, Concord, the Sponsor, the Founder and certain other shareholders of Topco as of the Closing will enter into a Shareholders
Agreement, pursuant to which, among other things, at the Closing Topco’s board of directors will consist of seven directors, one
of whom will be designated by the Founder, one of whom will be designated by the Sponsor, and five of whom will be mutually agreed upon
by the Founder and the Sponsor.
The foregoing description
of the Shareholders Agreement is qualified in its entirety by reference to the full text of the form of the Shareholders Agreement, a
copy of which is included as Exhibit A to the Transaction Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Registration Rights Agreement
In connection with the Proposed
Transactions, Topco, certain equity holders of the Company and certain Concord stockholders will enter into a Registration Rights Agreement,
pursuant to which, among other things, Topco will be required to file, promptly after the Closing, a registration statement to register
the resale of certain securities of Topco held by such Company and Concord stockholders, who will also have customary demand and “piggyback”
registration rights, subject to certain requirements and customary conditions.
The foregoing description
of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Registration Rights Agreement,
a copy of which is included as Exhibit B to the Transaction Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Warrant Amendment
At the Merger effective time,
each Concord Warrant that is outstanding immediately prior to the Merger effective time shall, by virtue of the Merger and without any
action on the part of the parties or any of their respective shareholders, cease to represent a right to acquire one (1) share of Concord
Class A Common Stock and shall automatically be converted in accordance with the terms of the existing Warrant Agreement, at the Merger
effective time, into a Topco Warrant on substantially the same terms as were in effect immediately prior to the Merger effective time
under the terms of the existing Warrant Agreement. In connection with the Proposed Transactions, Concord, Topco and Continental, as warrant
agent, will enter into the Warrant Amendment in connection with the Closing, pursuant to which, Topco will assume, and agree to pay, perform,
satisfy and discharge in full, all of Concord’s liabilities and obligations under the existing Warrant Agreement arising from and
after the Merger effective time.
The foregoing description
of the Warrant Amendment is qualified in its entirety by reference to the full text of the form of Warrant Amendment, a copy of which
is included as Exhibit F to the Transaction Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein
by reference.