| Item 1.01 |
Entry Into A Material Definitive Agreement. |
The Merger Agreement
On May 26, 2022, COVA Acquisition Corp.,
a Cayman Islands exempted company (“COVA”), ECARX Holdings Inc., a Cayman Islands exempted company (the “Company”
or “ECARX”), Ecarx Temp Limited, a Cayman Islands exempted company and wholly owned subsidiary of ECARX (“Merger Sub
1”), and Ecarx&Co Limited, a Cayman Islands exempted company and wholly owned subsidiary of ECARX ( “Merger Sub 2”)
entered into the Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, among other things, (a) Merger
Sub 1 will merge with and into COVA (the “First Merger”), with COVA surviving the First Merger as a wholly owned subsidiary
of ECARX (such company, as the surviving entity of the First Merger, “Surviving Entity 1”), and (b) immediately following
the First Merger and as part of the same overall transaction as the First Merger, Surviving Entity 1 will merge with and into Merger Sub
2 (the “Second Merger,” and together with the First Merger, the “Mergers”), with Merger Sub 2 surviving the Second
Merger as a wholly owned subsidiary of ECARX (such company, as the surviving entity of the Second Merger, “Surviving Entity 2”)
(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 First Effective Time on the Closing Date, (i) the Seventh Amended and Restated Memorandum and Articles of Association of ECARX
(the “Amended Company Articles”) shall be adopted and become effective; (ii) each of the preferred shares of ECARX that
is issued and outstanding immediately prior to such time shall be re-designated and re-classified into one ordinary share of ECARX (the
“Preferred Share Conversion”); (iii) immediately after the Preferred Share Conversion, (x) issued and outstanding
ordinary shares of ECARX (other than the Co-Founder Shares (as defined in the Merger Agreement)) and certain authorized but unissued ordinary share of ECARX
shall each be re-designated into one Class A ordinary shares of ECARX, par value of US$0.000005 per share (“ECARX Class A
Ordinary Shares”), where each ECARX Class A Ordinary Share shall entitle its holder to one (1) vote on all matters subject
to vote at general meetings of ECARX, (y) issued and outstanding Co-Founder Shares and certain authorized but unissued ordinary shares
shall each be re-designated as one Class B ordinary shares of ECARX, par value of US$0.000005 per share (“ECARX Class B
Ordinary Shares” and collectively with ECARX Class A Ordinary Shares, “ECARX Ordinary Shares”), where each ECARX
Class B Ordinary Share shall entitle its holder to ten (10) votes on all matters subject to vote at general meetings of ECARX,
and (z) certain authorized but unissued ordinary shares of ECARX shall each be re-designated as shares of par value of US$0.000005
each of such class or classes (however designated) as the board of directors of ECARX may determine in accordance with the Amended Company
Articles (actions set forth in clause (iii) are referred to as the “Re-designation”); and (iv) each authorized issued
and unissued ECARX Ordinary Share immediately prior to the First Effective Time shall be recapitalized by way of a repurchase in exchange
for issuance of such number of ECARX Ordinary Shares equal to the Recapitalization Factor (as defined below) 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 $3,400,000,000 divided by such amount equal to (a) the aggregate number
of ECARX shares (i) that are issued and outstanding immediately prior to the Re-designation and (ii) that are issuable upon
the exercise of all ECARX options and other equity securities of ECARX that are issued and outstanding immediately prior to the Re-designation
(whether or not then vested or exercisable, as applicable), minus (b) the ECARX shares held by ECARX or any of its subsidiaries
(if applicable) as treasury shares.
In addition, pursuant to the Merger Agreement,
at the First Effective Time: (i) each of COVA’s units (“Units”) (each consisting of one COVA Public Share
(as defined below) and one-half of one COVA public warrant (the “COVA Public Warrants”)) issued and outstanding immediately
prior to the First Effective Time shall be automatically separated and the holder thereof shall be deemed to hold one COVA Public Share
and one-half of one COVA Public Warrant; provided, that, no fractional COVA Public Warrants shall be issued in connection with such separation
such that if a holder of such Units would be entitled to receive a fractional COVA Public Warrant upon such separation, the number of
COVA Public Warrants to be issued to such holder upon such separation will be rounded down to the nearest whole number of COVA Public
Warrants and no cash will be paid in lieu of such fractional COVA Public Warrants; (ii) immediately following the separation of each
Unit, each Class A ordinary share, par value $0.0001 per share, of COVA (“COVA Public Shares”) and each Class B
ordinary share, par value $0.0001 per share, of COVA (“Founder Shares” collectively with COVA Public Shares, “COVA Shares”)
(excluding COVA Public Shares that are held by COVA shareholders that validly exercise their redemption rights, COVA Shares that are held
by COVA shareholders that exercise and perfect their relevant dissenters’ rights and COVA treasury shares) 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 ECARX Class A Ordinary Share; and (iii) each whole warrant of COVA outstanding immediately prior to the First
Effective Time shall cease to be a warrant with respect to COVA Public Shares and be assumed by ECARX and converted into a warrant to
purchase one ECARX Class A Ordinary Share (“ECARX Warrants”), subject to substantially the same terms and conditions
prior to the First Effective Time.
Pursuant
to the Merger Agreement, (i) each ordinary share, par value US$0.000005 per share, of Merger Sub 1 that is issued and outstanding
immediately prior to the First Effective Time shall continue existing and constitute the only issued and outstanding share capital of
Surviving Entity 1, (ii) 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 (iii) each ordinary share, par
value US$0.000005 per share, of Merger Sub 2 issued and outstanding immediately prior to the Second Effective Time shall remain 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.
Representations and Warranties
The Merger Agreement contains representations and
warranties of ECARX, its subsidiaries, including Merger Sub 1 and Merger Sub 2, and COVA, relating to, among other things, their ability
to enter into the Merger Agreement and their outstanding capitalization. In the Merger Agreement, ECARX also made certain other customary
representations and warranties to COVA, 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.
The representations and warranties are, in certain
cases, subject to specified exceptions and materiality, Company Material Adverse Effect and SPAC Material Adverse Effect, knowledge and
other qualifications contained in the Merger Agreement and may be further modified and limited by the Disclosure Letters to the Merger
Agreement.
The representations and warranties made in the
Merger Agreement will not survive the consummation of the Mergers.
Covenants
The Merger Agreement includes customary
covenants of the parties with respect to operation of their respective businesses prior to consummation of the Business Combination
and efforts to satisfy conditions to the consummation of the Business Combination. The Merger Agreement also contains additional
covenants of the parties, including, among others, (i) a covenant providing for COVA and ECARX to cooperate in the preparation
of the Registration Statement on Form F-4 required to be prepared and filed with the SEC in connection with the Mergers,
(ii) covenants requiring COVA to establish a record date for, duly call and give notice of, convene and hold an extraordinary
general meeting of the COVA shareholders as promptly as practicable following the date that the Registration Statement is declared
effective by the SEC under the Securities Act of 1933, as amended (the “Securities Act”), (iii) covenants requiring ECARX to establish a record date for, duly call and
give notice of, convene and hold an extraordinary general meeting of the ECARX shareholders as promptly as practicable following the
date that the Registration Statement is declared effective by the SEC under the Securities Act, and (iv) covenants prohibiting
COVA and ECARX from, among other things, soliciting or negotiating with third parties regarding alternative transactions and
agreeing to certain related restrictions and ceasing discussions regarding alternative transactions.
Conditions to the Consummation of the Transaction
Consummation
of the transactions contemplated by the Merger Agreement is subject to customary closing conditions, including approval of the Business
Combination by the shareholders of COVA and ECARX. The Merger Agreement also contains other conditions, including, among others: (i) the
accuracy of representations and warranties to various standards, from no materiality qualifier to a material adverse effect qualifier,
(ii) the bringdown to Closing of a representation that no material adverse effect has occurred (both for COVA and ECARX); (iii) material
compliance with pre-closing covenants, (iv) the delivery of customary closing certificates, (v) the absence of a legal prohibition
on consummating the Transactions, (vi) ECARX’s listing application with Nasdaq being approved,
(vii) COVA having at least US$5,000,001 of net tangible assets remaining after taking into account redemptions by COVA shareholders;
and (viii) (a) all amounts in the trust account established for the purpose of holding the net proceeds of COVA’s
initial public offering as of immediately prior to the Closing, plus (b) cash
proceeds that will be funded prior to, concurrently with, or immediately after, the Closing to the Company in connection with the purchase
of equity securities of the Company by investors on or prior to the Closing Date pursuant to a subscription or similar agreement executed
by such investors and the Company after the date hereof, plus (c) proceeds in the form of cash or securities that have been
funded or issued or will be funded or issued prior to, concurrently with, or immediately after, the Closing to the Company in connection
with the Permitted Financing, minus (d) the aggregate amount payable to
COVA shareholders exercising their redemption rights, in the aggregate equaling no
less than $100,000,000.
Termination
The
Merger Agreement may be terminated under customary and limited circumstances prior to the closing of the Business Combination,
including, but not limited to: (i) by mutual written consent of COVA and ECARX, (ii) by
either COVA or ECARX if the Business Combination is not consummated on or prior to the 300th
day after the date of the Merger Agreement, (iii) by either COVA or ECARX if there is a final and nonappealable order issued
by a Governmental Authority prohibiting the Business Combination, (iv) by ECARX if the board
of directors of COVA (“COVA Board”) shall have failed to include a statement to the effect that COVA Board has unanimously
recommended that COVA’s shareholders vote in favor of the Transaction Proposals at the duly
convened meeting of COVA’s shareholders (such statement, the “COVA Board Recommendation”) in the proxy statement
distributed to COVA’s shareholders or shall have withheld, withdrawn, qualified,
amended or modified, or publicly proposed or resolved to withhold, withdraw, qualify, amend or modify, the COVA Board Recommendation,
(v) by COVA if there is any breach of any representation, warranty, covenant or agreement on the part of ECARX set forth in
the Merger Agreement, such that the conditions to COVA’s obligations to consummate the Transactions would not be satisfied at the
Closing, and such breach cannot be or has not been cured within 60 days following receipt by ECARX of notice from COVA of such breach;
provided that COVA shall not have the right to terminate the Merger Agreement pursuant to this paragraph if it is then in material breach
of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, (vi) by ECARX if there is any
breach of any representation, warranty, covenant or agreement on the part of COVA set forth in the Merger Agreement, such that the conditions
to ECARX’s obligation to consummate the Transactions would not be satisfied at the closing, and such breach cannot be or has not
been cured within 60 days following receipt by COVA of notice from ECARX of such breach; provided that ECARX shall not have the right
to terminate the Merger Agreement pursuant to this paragraph if it is then in material breach of any of its representations, warranties,
covenants or agreements set forth in the Merger Agreement, (vii) by COVA if the Business
Combination and other related proposals are not approved by ECARX’s shareholders at the duly convened meeting of ECARX shareholders,
and (viii) by ECARX if the Business Combination and other related proposals are not approved
by COVA’s shareholders at the duly convened meeting of COVA’s shareholders.
The foregoing description
of the Merger Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and
conditions of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The
Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such
agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of
the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection
with negotiating the Merger Agreement. The Merger Agreement has been included to provide investors with information regarding its terms.
It is not intended to provide any other factual information about the parties to the Merger Agreement. In particular, the representations,
warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of the Merger Agreement and
as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by
the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between
the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to investors and reports and documents filed with the U.S. Securities and
Exchange Commission (the “SEC”). Investors should not rely on the representations, warranties, covenants and agreements, or
any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. In addition,
the representations, warranties, covenants and agreements and other terms of the Merger Agreement may be subject to subsequent waiver
or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may change
after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in COVA’s public disclosures.
Other Agreements
Strategic Investment Agreements
Concurrently with the execution of the Merger Agreement, ECARX
entered into a strategic investment agreement with Luminar Technologies, Inc. (“Luminar”), pursuant to which
Luminar agreed to subscribe for and purchase ECARX Class A Ordinary Shares at $10.00 per share for an aggregate investment
amount of $15,000,000, payable in a certain number of shares of Class A common stock, par value $0.0001 per share, of Luminar
or, at Luminar's election, in cash. Concurrently with the execution of the Merger Agreement, ECARX entered into a strategic
investment agreement with Geely Investment Holding Ltd. (“Geely”), pursuant to which Geely agreed to subscribe for and purchase
ECARX Class A Ordinary Shares at $10.00 per share for an aggregate purchase price of $20,000,000 (together with the strategic
investment by Luminar, the “Strategic Investments”). Pursuant the Strategic Investment Agreements, the obligations of
the parties to consummate the Strategic Investments are subject to the satisfaction or waiver of certain customary closing
conditions of the respective parties, including, among others, (i) all conditions precedent under the Merger Agreement having
been satisfied or waived (other than those to be satisfied at the closing of the Business Combination) and the Business Combination
having been consummated, (ii) the accuracy of representations and warranties in all material respects and (iii) material
compliance with covenants.
The Strategic Investment Agreements are filed as Exhibit 10.4 and
Exhibit 10.5 to this Current Report on Form 8-K and the foregoing description of the Strategic Investment Agreements is
qualified in its entirety by reference thereto.
Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement,
COVA, COVA Acquisition Sponsor LLC (the “Sponsor”) and ECARX entered into the Sponsor Support Agreement and Deed, pursuant
to which Sponsor has agreed, among other things and subject to the terms and conditions set forth therein: (a) in connection with
the Closing, to surrender to COVA such number of Founder Shares equal to the quotient obtained by dividing the aggregate amount payable
with respect to all redeeming COVA Shares by $10.00, without consideration therefor, in the event that the amounts in the Trust Account
immediately prior to the Closing (after deducting the SPAC Shareholder Redemption Amount) is less than $210 million, provided that the
number of Founder Shares so surrendered shall not exceed 30% of the aggregate number of Founder Shares held by Sponsor as of immediately
prior to the consummation of the Mergers (b) to vote in favor of the transactions contemplated in the Merger Agreement and
the other Transaction Proposals, (c) to waive the anti-dilution rights it held in respect of the Founder Shares under the Amended
and Restated Memorandum and Articles of Association of COVA, (d) to appear at the extraordinary general meeting for purposes of constituting
a quorum, (e) to vote against any proposals that would materially impede the transactions contemplated in the Merger Agreement and
the other Transaction Proposals, (f) not to redeem any COVA Shares held by Sponsor, (g) not to amend that certain letter agreement
between COVA, Sponsor and certain other parties thereto, dated as of February 4, 2021, (h) not to transfer any COVA Shares held
by Sponsor, subject to certain exceptions, (i) to unconditionally and irrevocably waive the dissenters’ rights pursuant to
the Cayman Act in respect to all COVA Shares held by Sponsor with respect to the First Merger, to the extent applicable, and (j) for
a period after the Closing specified therein, not to transfer ECARX Ordinary Shares, ECARX Warrants, and ECARX Class A Ordinary Shares
received upon the exercise of any ECARX Warrants, if any, subject to certain exceptions.
The foregoing description of the Sponsor Support
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sponsor Support Agreement,
a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1 and the terms of which are incorporated by reference
herein.
ECARX Shareholder Support Agreement
Concurrently with the execution of the Merger Agreement,
COVA, ECARX and certain of the shareholders of ECARX entered into the ECARX Shareholder Support Agreement and Deed, pursuant to which
certain shareholders holding sufficient number, type and classes of the issued and outstanding ECARX Shares to approve the transactions
contemplated by the Merger Agreement have agreed, among other things: (a) to vote in favor of the transactions contemplated by the
Merger Agreement, (b) to appear at the ECARX shareholders’ meeting in person or by proxy for purposes of counting towards a
quorum, (c) to vote against any proposals that would or would be reasonably likely to in any material respect impede the transactions
contemplated by the Merger Agreement, (d) not to transfer any ECARX shares held by such shareholder, subject to certain exceptions,
and (e) for a period after the Closing specified therein, not to transfer certain ECARX shares held by such shareholder, if any,
subject to certain exceptions.
The foregoing description of the ECARX Shareholder
Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the ECARX Shareholder
Support Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.2 and the terms of which are
incorporated by reference herein.
Registration Rights Agreement
The Merger Agreement contemplates that, at
the Closing, ECARX, COVA, Sponsor and certain shareholders of ECARX will enter into a registration rights agreement, to be effective
as of the Closing, pursuant to which, among other things, ECARX will agree to undertake certain resale shelf registration
obligations in accordance with the Securities Act and Sponsor and certain shareholders of ECARX will be granted customary demand and
piggyback registration rights.
The foregoing description of the Registration Rights
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Registration Rights Agreement,
a form of which is included as Exhibit C to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K,
and incorporated herein by reference.
Assignment, Assumption and Amendment Agreement
At the Closing, COVA, ECARX and Continental Stock
Transfer & Trust Company (“Continental”) will enter into the Assignment, Assumption and Amendment Agreement pursuant
to which, among other things, COVA will assign all of its rights, interests and obligations in its existing warrant agreement with Continental
(the “Warrant Agreement”) to ECARX, and the Warrant Agreement will be amended to change all references to COVA to ECARX and
so that each warrant will represent the right to receive one whole ECARX Class A Ordinary Share.
The foregoing description of the Assignment, Assumption
and Amendment Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Assignment,
Assumption and Amendment Agreement, a form of which is included as Exhibit H to the Merger Agreement, filed as Exhibit 2.1 to
this Current Report on Form 8-K, and incorporated herein by reference.