Advantages of SPACs Over Traditional IPOs

PIPE Transaction (continued) • The PIPE investors will have registration rights to sell their shares after the closing of the business combination. • The PIPE investors will negotiate for the ability to obtain liquidity in advance of other stakeholders. In order to provide a clear market for the PIPE investors, the sellers and Sponsor will agree to transfer restrictions (lock-ups) on their shares for a period following the closing. The lock-up period is typically 180 days (as with an IPO) but is occasionally tiered based upon trading-price milestones. • Like the de-SPAC merger, the PIPE is only announced when signed. Morgan Lewis 16

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