Item 1.01 Entry Into A Material Definitive Agreement.
The Merger Agreement
On January 31, 2023, L Catterton Asia Acquisition Corp, an exempted company
limited by shares incorporated under the laws of the Cayman Islands ("SPAC" or
"LCAA"), Lotus Technology Inc., an exempted company limited by shares
incorporated under the laws of the Cayman Islands (the "Company" or "Lotus
Tech"), Lotus Temp Limited, an exempted company limited by shares incorporated
under the laws of the Cayman Islands and a wholly-owned subsidiary of Lotus Tech
("Merger Sub 1"), and Lotus EV Limited, an exempted company limited by shares
incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary
of Lotus Tech ("Merger Sub 2") entered into the Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which, among other things, (i) Merger Sub
1 will merge with and into LCAA (the "First Merger"), with LCAA surviving the
First Merger as a wholly owned subsidiary of Lotus Tech (the surviving entity of
the First Merger, "Surviving Entity 1"), and (ii) immediately following the
consummation of the First Merger, Surviving Entity 1 will merge with and into
Merger Sub 2 (the "Second Merger", and together with the First Merger,
collectively, the "Mergers"), with Merger Sub 2 surviving the Second Merger as a
wholly owned subsidiary of Lotus Tech ( (the transactions contemplated by the
Merger Agreement, including the Mergers, collectively, the "Business
Combination"). Capitalized terms in this summary of the Merger Agreement not
otherwise defined herein shall have the meanings ascribed to them in the Merger
Agreement.
The Business Combination
Pursuant to the Merger Agreement, immediately prior to the effective time of the
First Merger (the "First Effective Time"), (i) each of the preferred shares of
Lotus Tech that is issued and outstanding immediately prior to such time shall
be re-designated and re-classified into one ordinary share par value $0.00001
per share, of Lotus Tech (each, a "Company Ordinary Share" and such conversion,
the "Preferred Share Conversion"); (ii) the Sixth Amended and Restated
Memorandum and Articles of Association of Lotus Tech (the "Amended Company
Articles") shall be adopted and become effective; (iii) immediately following
the Preferred Share Conversion, certain authorized but unissued ordinary share
of Lotus Tech shall each be re-designated into shares of a par value of
US$0.00001 each of such class or classes (however designated) as the board of
directors of Lotus Tech may determine in accordance with the Amended Company
Articles (the "Re-designation"); and (iv) immediately following the
Re-designation, (x) each issued Company Ordinary Share shall be recapitalized by
way of a repurchase in exchange for issuance of such number of Company Ordinary
Shares equal to the Recapitalization Factor (as defined below) (the
"Recapitalization"); and (y) any options of the Company issued and outstanding
shall be adjusted such that each such option shall be exercisable for that
number of Company Ordinary Shares equal to the product of the number of ordinary
shares of the Company subject to such option immediately prior to the
Recapitalization multiplied by the Recapitalization Factor, each of (x) and (y)
as described further in the Merger Agreement. Actions set forth in clauses (i)
through (iv) above are collectively referred to as the "Capital Restructuring."
The "Recapitalization Factor" is a number determined by dividing the Price per
Share by $10.00. "Price per Share" is defined in the Merger Agreement as the
amount equal to $5,500,000,000 divided by such amount equal to (i) the aggregate
number of shares of the Company (a) that are issued and outstanding immediately
prior to the Recapitalization, (b) that are issuable upon the exercise, exchange
or conversion of all options and other equity securities of the Company that are
issued and outstanding immediately prior to the Recapitalization (whether or not
then vested or exercisable, as applicable, and subject to certain exclusions)
minus (ii) shares of the Company held by the Company or any of its subsidiaries
(if applicable) as treasury shares.
Pursuant to the Merger Agreement, immediately prior to the First Effective Time,
each Class B ordinary share, par value $0.0001 per share, of SPAC (each, a "SPAC
Class B Ordinary Share") shall be automatically converted into one Class A
ordinary share, par value $0.0001 per share, of SPAC (each, a "SPAC Class A
Ordinary Share", together with SPAC Class B Ordinary Share, collectively, "SPAC
Shares") (such automatic conversion, the "SPAC Class B Conversion") and shall no
longer be issued and outstanding and shall be cancelled. In addition, at the
First Effective Time: (i) each of SPAC's units ("Units") (each consisting of one
SPAC Class A Ordinary Share and one-third of a SPAC Warrant (as defined below))
issued and outstanding immediately prior to the First Effective Time shall be
automatically detached and the holder thereof shall be deemed to hold one SPAC
Class A Ordinary Share and one-third of a SPAC Warrant in accordance with the
terms of the applicable Unit (the "Unit Separation"); provided that no
fractional SPAC Warrant shall be issued in connection with the Unit Separation
such that if a holder of such Units would be entitled to receive a fractional
SPAC Warrant upon the Unit Separation, the number of SPAC Warrants to be issued
to such holder upon the Unit Separation will be rounded down to the nearest
whole number of SPAC Warrants; (ii) immediately following the Unit Separation,
each SPAC Class A Ordinary Share (including SPAC Class A Ordinary Shares (a)
issued in connection with the SPAC Class B Conversion and (b) held as a result
of the Unit Separation) and each SPAC Class B Ordinary Share (excluding treasury
shares held by SPAC or any of its subsidiaries (if applicable), SPAC Shares that
are held by SPAC shareholders that validly exercise their redemption rights,
SPAC Shares that are held by SPAC shareholders that exercise and perfect their
relevant dissenters' rights) issued and outstanding immediately prior to the
First Effective Time shall be cancelled and cease to exist and each holder
thereof shall be entitled to receive one newly issued Company Ordinary Share;
and (iii) each warrant issued by SPAC to acquire SPAC Class A Ordinary Shares
(each, a "SPAC Warrant") (including the SPAC Warrants held a result of the Unit
Separation) outstanding immediately prior to the First Effective Time shall
cease to be a warrant with respect to SPAC Shares and be assumed by the Company
and converted into a warrant to purchase one Company Ordinary Share, subject to
substantially the same terms and conditions prior to the First Effective Time.
Pursuant to the Merger Agreement, (i) at the First Effective Time, each ordinary
share, par value US$0.00001 per share, of Merger Sub 1 that is issued and
outstanding immediately prior to the First Effective Time shall remain issued
and outstanding and continue existing and constitute the only issued and
outstanding share capital of Surviving Entity 1 and shall not be affected by the
First Merger; (ii) at the Second Effective Time, (a) each ordinary share of
Surviving Entity 1 that is issued and outstanding immediately prior to the
Second Effective Time will be automatically cancelled and cease to exist without
any payment therefor; and (b) each ordinary share, par value US$0.00001 per
share, of Merger Sub 2 that is issued and outstanding immediately prior to the
Second Effective Time shall remain issued and outstanding and continue existing
and constitute the only issued and outstanding share capital of Surviving Entity
2 and shall not be affected by the Second Merger.
Lotus Tech Agreements
Concurrently with the parties' entry into of the Merger Agreement, (i) a
wholly-owned subsidiary of Lotus Tech has entered into a distribution agreement
(the "Distribution Agreement") with Lotus Cars Limited, the entity carrying out
Lotus's sportscar manufacturing operations and a indirect wholly-owned
subsidiary of Lotus Advance Technologies Sdn Bhd, pursuant to which such
wholly-owned subsidiary of Lotus Tech is appointed the global distributor for
Lotus Cars Limited for vehicles, parts and certain tools, and, in connection
with its role as global distributor, will provide after sale services for the
vehicles, parts and tools distributed, and (ii) Lotus Tech has entered into a
put option agreement (each, a "Put Option Agreement") with Geely International
(Hong Kong) Limited ("Geely") and Etika Automotive Sdn Bhd ("Etika"), pursuant
to which each of Geely and Etika will be granted a put option (which can be
exercised independently and is not conditioned upon the exercise of such put
option by the other option holder) to require Lotus Tech to purchase at a
pre-agreed price, at a future date and upon satisfaction of certain pre-agreed
conditions, the equity interests held by Geely and Etika in Lotus Advance
Technologies Sdn Bhd.
Representations and Warranties
The Merger Agreement contains representations and warranties of Lotus Tech, its
subsidiaries, including Merger Sub 1 and Merger Sub 2, and LCAA, relating to,
among other things, their ability to enter into the Merger Agreement and their
outstanding capitalization. In the Merger Agreement, Lotus Tech also made
certain other customary representations and warranties to LCAA, including among
others, representations and warranties related to the following: compliance with
laws; tax matters; financial statements; absence of changes; actions;
liabilities; material contracts and commitments; title, properties; intellectual
property rights; labor and employee matters; environmental matters; insurance;
. . .
Item 7.01 Regulation FD Disclosure.
On January 31, 2023 LCAA issued a press release announcing the execution of the
Merger Agreement. The press release is attached hereto as Exhibit 99.1 and
incorporated by reference herein.
Furnished as Exhibit 99.2 hereto and incorporated into this Item 7.01 by
reference is an investor presentation that LCAA and Lotus Tech have prepared for
use in connection with the announcement of the parties' entry into the Merger
Agreement.
The foregoing (including Exhibits 99.1and 99.2) is being furnished pursuant to
Item 7.01 and shall not be deemed to be filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise be subject to the liabilities of that section, nor shall it be deemed
to be incorporated by reference into any filing of LCAA under the Securities Act
or the Exchange Act, regardless of any general incorporation language in such
filings. This Current Report will not be deemed an admission as to the
materiality of any of the information in this Item 7.01, including Exhibits 99.1
and 99.2.
Forward-Looking Statements
This current report (the "Current Report") contains forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act, that are based on beliefs and assumptions and on information
currently available to Lotus Tech and LCAA. All statements other than statements
of historical fact contained in this Current Report are forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expect", "intend", "will", "estimate",
"anticipate", "believe", "predict", "potential", "forecast", "plan", "seek",
"future", "propose" or "continue", or the negatives of these terms or variations
of them or similar terminology although not all forward-looking statements
contain such terminology. Such forward-looking statements are subject to risks,
uncertainties, and other factors which could cause actual results to differ
materially from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and assumptions that,
while considered reasonable by LCAA and its management, and Lotus Tech and its
management, as the case may be, are inherently uncertain. Factors that may cause
actual results to differ materially from current expectations include, but are
not limited to: (1) the occurrence of any event, change or other circumstances
that could give rise to the termination of definitive agreements with respect to
the proposed Business Combination between LCAA, Lotus Tech and the other parties
thereto; (2) the outcome of any legal proceedings that may be instituted against
LCAA, the combined company or others following the announcement of the Business
Combination and any definitive agreements with respect thereto; (3) the amount
of redemption requests made by LCAA public shareholders and the inability to
complete the Business Combination due to the failure to obtain approval of the
shareholders of LCAA, to obtain financing to complete the Business Combination
or to satisfy other conditions to the Closing; (4) changes to the proposed
structure of the Business Combination that may be required or appropriate as a
result of applicable laws or regulations or as a condition to obtaining
regulatory approval of the Business Combination; (5) the ability to meet stock
exchange listing standards following the consummation of the Business
Combination; (6) the risk that the Business Combination disrupts current plans
and operations of the Company as a result of the announcement and consummation
of the Business Combination; (7) the ability to recognize the anticipated
benefits of the Business Combination, which may be affected by, among other
things, competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with customers and suppliers and
retain its management and key employees; (8) costs related to the Business
Combination; (9) risks associated with changes in applicable laws or regulations
and the Company's international operations; (10) the possibility that the
Company or the combined company may be adversely affected by other economic,
business, and/or competitive factors; (11) the Company's estimates of expenses
and profitability; (12) the Company's ability to maintain agreements or
partnerships with its strategic partner Geely and to develop new agreements or
partnerships; (13) the Company's ability to maintain relationships with its
existing suppliers and strategic partners, and source new suppliers for its
critical components, and to complete building out its supply chain, while
effectively managing the risks due to such relationships; (14) the Company's
reliance on its partnerships with vehicle charging networks to provide charging
solutions for its vehicles and its strategic partners for servicing its vehicles
and their integrated software; (15) the Company's ability to establish its brand
and capture additional market share, and the risks associated with negative
press or reputational harm, including from lithium-ion battery cells catching
fire or venting smoke; (16) delays in the design, manufacture, launch and
financing of the Company's vehicles and the Company's reliance on a limited
number of vehicle models to generate revenues; (17) the Company's ability to
continuously and rapidly innovate, develop and market new products; (18) risks
related to future market adoption of the Company's offerings; (19) increases in
costs, disruption of supply or shortage of materials, in particular
for lithium-ion cells or semiconductors; (20) the Company's reliance on its
partners to manufacture vehicles at a high volume, some of which have limited
experience in producing electric vehicles, and on the allocation of sufficient
production capacity to the Company by its partners in order for the Company to
be able to increase its vehicle production capacities; (21) risks related to the
Company's distribution model; (22) the effects of competition and the high
barriers to entry in the automotive industry, and the pace and depth of electric
vehicle adoption generally on the Company's future business; (23) changes in
regulatory requirements, governmental incentives and fuel and energy prices;
(24) the impact of the global COVID-19 pandemic on LCAA, the Company, the
Company's post business combination's projected results of operations, financial
performance or other financial metrics, or on any of the foregoing risks; and
(25) other risks and uncertainties set forth in the section entitled "Risk
Factors" and "Cautionary Note Regarding Forward-Looking Statements" in LCAA's
final prospectus relating to its initial public offering
(File No. 333-253334) declared effective by the SEC on March 10, 2021, and other
documents filed, or to be filed, with the SEC by LCAA or Lotus Tech, including
the Registration/Proxy Statement. There may be additional risks that neither
LCAA nor Lotus Tech presently know or that LCAA or Lotus Tech currently believe
are immaterial that could also cause actual results to differ from those
contained in the forward-looking statements.
Nothing in this Current Report should be regarded as a representation by any
person that the forward-looking statements set forth herein will be achieved in
any specified timeframe, or at all, or that any of the contemplated results of
such forward-looking statements will be achieved in any specified timeframe, or
at all. The forward-looking statements in this Current Report represent the
views of LCAA and Lotus Tech as of the date they are made. While LCAA and Lotus
Tech may update these forward-looking statements in the future, LCAA and Lotus
Tech specifically disclaim any obligation to do so, except to the extent
required by applicable law. You should not place undue reliance on
forward-looking statements.
Additional Information
In connection with the proposed Business Combination, (i) Lotus Tech is expected
to file with the SEC a registration statement on Form F-4 containing a
preliminary proxy statement of LCAA and a preliminary prospectus (the
"Registration/Proxy Statement"); and (ii) LCAA will file a definitive proxy
statement relating to the proposed Business Combination (the "Definitive Proxy
Statement") and will mail the Definitive Proxy Statement and other relevant
materials to its shareholders after the Registration/Proxy Statement is declared
effective. The Registration/Proxy Statement will contain important information
about the proposed Business Combination and the other matters to be voted upon
at a meeting of LCAA shareholders to be held to approve the proposed Business
Combination. This Current Report does not contain all the information that
should be considered concerning the proposed Business Combination and is not
intended to form the basis of any investment decision or any other decision in
respect of the Business Combination.
Before making any voting or other investment decisions, securityholders of LCAA
and other interested persons are advised to read, when available, the
Registration/Proxy Statement and the amendments thereto and the Definitive Proxy
Statement and other documents filed in connection with the proposed Business
Combination, as these materials will contain important information about LCAA,
Lotus Tech and the Business Combination. When available, the Definitive Proxy
Statement and other relevant materials for the proposed Business Combination
will be mailed to shareholders of LCAA as of a record date to be established for
voting on the proposed Business Combination. Shareholders will also be able to
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
No. Description
2.1* Agreement and Plan of Merger, dated as of January 31, 2023, by and among
by and among Lotus Technology, Inc., L Catterton Asia Acquisition Corp,
Lotus Temp Limited and Lotus EV Limited.
10.1 Sponsor Support Agreement, dated as of January 31, 2023, by and among
Lotus Technology, Inc., L Catterton Asia Acquisition Corp, LCA Acquisition
Sponsor, LP and certain other shareholders of L Catterton Asia Acquisition
Corp.
10.2* Shareholder Support Agreement, dated as of January 31, 2023, by and among
Lotus Technology, Inc., L Catterton Asia Acquisition Corp, and certain
other shareholders of Lotus Technology, Inc.
10.3 Form of Registration Rights Agreement, by and among Lotus Technology,
Inc., L Catterton Asia Acquisition Corp, LCA Acquisition Sponsor, LP and
certain other shareholders of L Catterton Asia Acquisition Corp.
10.4 Form of Assignment, Assumption and Amendment Agreement, by and among
Lotus Technology, Inc., L Catterton Asia Acquisition Corp and Continental
Stock Transfer & Trust Company
10.5 Form of Lock-Up Agreement, by and among Lotus Technology, Inc. and
certain shareholders of Lotus Technology Inc.
10.6 Letter Agreement, dated as of January 31, 2023, by and between L
Catterton Asia Acquisition Corp and Credit Suisse Securities (USA) LLC.
99.1 Press Release issued by Lotus Technology Inc. and L Catterton Asia
Acquisition Corp
99.2 Investor Presentation of Lotus Technology Inc.
* Certain exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). LCAA hereby undertakes to
furnish supplementally a copy of any omitted schedule to the SEC upon its
request; provided, however, that LCAA may request confidential treatment
for any such schedules so furnished.
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