LIV CAPITAL ACQUISITION CORP. II Item 1.01 Entry into a Material Definitive Agreement.
On
The Business Combination Agreement provides for a series of transactions, pursuant to which, among other things, Merger Sub will be merged with and into LIVB, with LIVB being the surviving entity in the Merger (as defined below) and continuing (immediately following the Merger) as a direct wholly-owned subsidiary of Covalto, on the terms and subject to the conditions set forth therein (the "Merger", and together with the other transactions contemplated by the Business Combination Agreement, the "proposed business combination").
The Second BCA Amendment amends the Original Business Combination Agreement to:
(1) Amend the definition of the LIVB Class A Ordinary Shares to include LIVB
Class A Ordinary Shares converted from LIVB Class B Ordinary Shares prior to
the consummation of the Merger;
(2) Provide that LIVB Class A Ordinary Shares converted from LIVB Class B
Ordinary Shares will not be entitled to receive any funds from the Trust
Account;
(3) Amend the exclusivity provision such that, during the Interim Period,
Covalto shall not, nor shall Covalto direct or permit any of its affiliates
or representatives to take, whether directly or indirectly, (i) any action
to solicit, initiate or engage in discussions or negotiations with, or enter
into any agreement with, or encourage, or provide information to, any
special purpose acquisition company or similar "blank check company" (other
than LIVB or any of its affiliates or representatives) concerning any
Acquisition Transaction or (ii) any action to undertake an initial public
offering of any equity securities of Covalto or any of its subsidiaries (or
any affiliate or successor of Covalto or any of its subsidiaries);
(4) Require LIVB to file with the Securities and Exchange Commission (the
"SEC") a definitive proxy statement (the "Extension Proxy Statement") (i)
soliciting proxies from LIVB's shareholders for a meeting of LIVB's
shareholders (the "Extension Meeting") to approve, among other things, the
extension of the date by which LIVB must consummate an initial business
combination from May 10, 2023 to February 10, 2024 (the "Extension"), and
(ii) providing the LIVB's shareholders with the opportunity to redeem their
LIVB Class A Ordinary Shares in connection therewith;
(5) Require Covalto, after the approval of the Extension by the LIVB
shareholders, to deposit or cause to be deposited into the Trust Account the
lesser of (i) $135,000 or (ii) an aggregate of $0.035 per public LIVB Class
A Ordinary Share (other than any LIVB Class A Ordinary Share converted from
a LIVB Class B Ordinary Share) that remains outstanding and is not redeemed
in connection with the Extension, in each case for each month commencing on
May 10, 2023 until the earlier of (i) the termination of the Business
Combination Agreement in accordance with the termination provisions therein,
or (ii) the month commencing on January 10, 2024 (but including a deposit
for such month) (the "Extension Period" and such deposit, the "Extension
Contribution");
(6) Require Covalto to reimburse LIVB for (i) the reasonable and documented,
out-of-pocket administrative expenses actually incurred by LIVB after April
7, 2023 subject to a cap of an amount equal to $25,000 multiplied by the
number of months of the Extension Period (the "Administrative Expenses"),
and (ii) accrued fees, costs and expenses incurred in connection with the
Extension Proxy Statement, the Extension Meeting and the Extension
Contribution up to $100,000 (the "Extension Expenses" and together with the
Administrative Expenses, the "Expenses");
(7) Provide for Covalto's right to terminate the Business Combination Agreement,
at any time and at its sole discretion, by written notice to LIVB, subject
to Covalto's accrued payment obligations for the Extension Contribution and
the Expenses;
(8) Revise the definition of the Termination Fee to provide LIVB the option, in
the event that Covalto chooses to pay the Termination Fee in the form of the
Fee Shares, to elect to receive, as the Termination Fee, the option of (i)
the Fee Shares or (ii) both (a) 820,000 Covalto shares and (b) reimbursement
for up to fifty percent (50%) of the reasonable and documented LIVB Expenses
actually paid by or on behalf of LIVB as of the termination date, subject to
a cap of $1,500,000 in the aggregate and other restrictions on the timing of
such reimbursement;
(9) Require Covalto to pay to LIVB the Termination Fee in the event that the
Business Combination Agreement is terminated by (i) LIVB as a result of
Covalto's failure to perform its obligations and covenants under the
Business Combination Agreement, including Covalto's failure to timely pay to
LIVB the Extension Contribution or the Administrative Expenses, (ii) Covalto
pursuant to its right to terminate the Business Combination, at any time at
its sole discretion, by written notice to LIVB, subject to its payment
obligations for the Extension Contribution and the Expenses, or (iii) LIVB
or Covalto if the closing of the proposed business combination fails to
occur by the Termination Date, provided that the right to terminate will not
be available to any party whose breach of any provision in the Business
Combination Agreement primarily causes or results in the failure of the
Merger to be consummated by such time;
(10) Provide that the regulatory approval of a certain Mexican regulatory
authority shall be deemed to have been obtained for purposes of the closing
conditions to the extent the Mandatorily Convertible Note issued by the
Anchor Investor has been converted; and
(11) Extend the Termination Date from May 10, 2023 to February 10, 2024 , and
eliminate the right of LIVB and Covalto to extend the Termination Date by
mutual written consent for an additional 3-month period.
The foregoing description of the Second BCA Amendment is subject to and qualified in its entirety by reference to the full text of the Second BCA Amendment, a copy of which is attached as Exhibit 2.2 hereto. The Business Combination Agreement provides investors with information regarding its terms and is not intended to provide any other factual information about the parties. In particular, the assertions embodied in the representations and warranties contained in the Business Combination Agreement were made as of the execution date of the Business Combination Agreement only and are qualified by information in confidential disclosure schedules provided by the parties in connection with the signing of the Business Combination Agreement. These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Business Combination Agreement, which, while they may be material to the parties to the Business Combination Agreement, LIVB believes are not material to investors' understanding of such representations and warranties. Moreover, certain representations and
warranties in the Business Combination Agreement may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations and warranties in the Business Combination Agreement as characterizations of the actual statements of fact about the parties.
Additional Information About the Proposed Business Combination and Where to Find It
This Current Report on Form 8-K 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 proposed business combination. Covalto filed an Amendment No. 1 to
Registration Statement on Form F-4 (Commission file number 333-269106) with the
Investors and securities holders will be able to obtain free copies of the
Registration Statement and all other relevant documents filed or that will be
filed with the
Participants in Solicitation
LIVB, Covalto and certain of their respective directors and officers may be
deemed to be participants in the solicitation of proxies from LIVB's
shareholders in connection with the proposed business combination. Information
about LIVB's directors and executive officers and their ownership of LIVB's
securities is set forth in LIVB's filings with the
Forward-Looking Statements
Certain statements in this Current Report on Form 8-K may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside LIVB's and Covalto's control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the approvals, timing, and ability to complete the proposed business combination; (2) the benefits of the proposed business combination, including future financial and operating results of the combined company; (3) the impact of COVID-19 or other adverse public health developments; (4) costs related to the proposed business combination; (5) changes in applicable laws or regulations; (6) the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; (7) the risk that the proposed transaction disrupts current plans and operations of Covalto as a result of the announcement and consummation of the transactions described herein; (8) the ability to meet Nasdaq's listing standards following the consummation of the transactions contemplated by the business combination agreement; and (9) those factors discussed in LIVB's IPO . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.2 Second Amendment to Business Combination Agreement, dated as of
April 7, 2023 , by and among LIVB Capital Acquisition Corp. II,
Merger Sub and Covalto Ltd.
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