Item 1.01. Entry into a Material Definitive Agreement.
Forward Purchase Agreements
As previously disclosed, CIIG Capital Partners II, Inc. (“CIIG II”), a Delaware corporation, Zapp Electric Vehicles Group Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Pubco”), Zapp Electric Vehicles Limited, a private company limited by shares registered in England and Wales (“Zapp”), and Zapp Electric Vehicles, Inc., a Delaware corporation (“Merger Sub”) entered into a Merger Agreement dated November 22, 2022 (the “Merger Agreement”) in connection with its proposed business combination (the “Business Combination”) pursuant to which CIIG II will, along with Zapp, become wholly owned subsidiaries of Pubco.
On April 26, 2023, CIIG II and Pubco entered into separate agreements (each a “Forward Purchase Agreement”, and together, the “Forward Purchase Agreements”) with each of ACM ARRT I LLC and CFPA Holdings LLC–Zapp RS (each of ACM ARRT I LLC and CFPA Holdings LLC –Zapp RS, individually, a “Seller”, and together, the “Sellers”) for OTC Equity Prepaid Forward Transactions. The primary purpose of entering into the Forward Purchase Agreements is to help ensure the Business Combination will be consummated. For purposes of the Forward Purchase Agreements, CIIG II and Pubco are referred to as the “Counterparty” prior to and after the Business Combination, respectively. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed in the Forward Purchase Agreements.
Pursuant to the terms of the Forward Purchase Agreements, the Sellers may, but are not obligated to, purchase up to 10,000,000 shares of Class A common stock, par value $0.0001 per share, of CIIG II (“CIIG II Common Stock”) in the aggregate before the closing of the Business Combination (the “Closing”). The aggregate total number of shares subject to the Forward Purchase Agreements will be in no event more than 10,000,000 Shares (as defined in the Forward Purchase Agreements). The Number of Shares is subject to reduction following termination of the Forward Purchase Agreements with respect to such shares as described under “Optional Early Termination” in the Forward Purchase Agreements.
The Forward Purchase Agreements provide that the Sellers will be paid directly an aggregate cash amount (the “Prepayment Amount”) equal to (x) the product of (i) the Number of Shares as set forth in each Pricing Date Notice (as defined in the Forward Purchase Agreements) and (ii) the redemption price per share as defined in Section 9.2(a) of CIIG II’s Amended and Restated Certificate of Incorporation (the “Initial Price”) less (y) $2,000,000.
Counterparty will pay the Prepayment Amount directly from the Counterparty’s Trust Account maintained by Continental Stock Transfer and Trust Company holding the net proceeds of the sale of the units in Counterparty’s initial public offering and the sale of private placement warrants (the “Trust Account”) no later than the earlier of (a) one business day after the Closing Date and (b) the date any assets from the Trust Account are disbursed in connection with the Business Combination. For the avoidance of doubt, any Additional Shares purchased by the Sellers will not be included in the Number of Shares for purposes of determining the Prepayment Amount.
After the Closing Date, Counterparty may request in writing that the Sellers provide it with additional funding in an amount of $2,000,000 in the aggregate, in which case, Sellers shall provide such funds to an account designated by Counterparty on the third Business Day after such request; provided, that
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