UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 15, 2024
Keyarch Acquisition Corporation
(Exact name of registrant as specified in its charter)
| Cayman Islands | 001-41243 | 98-1600074 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
275 Madison Avenue, 39th Floor
New York, NY 10016
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: 914-434-2030
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one Class A Ordinary Share, $0.0001 par value, one-half of one redeemable warrant and one right | KYCHU | The Nasdaq Stock Market LLC | ||
| Class A Ordinary Shares included as part of the units | KYCH | The Nasdaq Stock Market LLC | ||
| Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 | KYCHW | The Nasdaq Stock Market LLC | ||
| Rights to receive one-tenth of one Class A Ordinary Share included as part of the units | KYCHWR | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Third Amendment to Business Combination Agreement
On March 15, 2024, Keyarch Acquisition Corporation, a Cayman Islands exempted company (“Keyarch”), Zooz Power Ltd., an Israeli company listed for trading on the Tel-Aviv Stock Exchange (“Zooz”), and Keyarch Global Sponsor Limited, a Cayman Islands exempted company (the “Sponsor”), in the capacity as the SPAC Representative, entered into that certain Amendment No. 3 to Business Combination Agreement (the “Third BCA Amendment”). The Third BCA Amendment amends certain provisions of that certain Business Combination Agreement, dated as of July 30, 2023 (as amended by Amendment No. 1 to the Business Combination Agreement dated February 9, 2024, Amendment No. 2 to the Business Combination Agreement dated March 8, 2024, the Third BCA Amendment and as may be further amended, restated and/or supplemented in accordance with its terms, the “Business Combination Agreement”), by and among Keyarch, Zooz, the Sponsor, in the capacity as the SPAC Representative, and Zooz Power Cayman, a Cayman Islands exempted company and a wholly owned subsidiary of Zooz. The transactions contemplated by the Business Combination are collectively referred to herein as the “Business Combination”.
The Business Combination Agreement provides that, following the closing of the Business Combination (the “Closing”), up to an additional 4,000,000 ordinary shares of Zooz, par value NIS 0.00025 per share (“Zooz Ordinary Shares”), will be issuable to the Zooz shareholders who were Zooz shareholders as of immediately prior to the Closing at a record date to be determined by Zooz (“Pre-Closing Zooz Shareholders”) as earnout consideration. The Third BCA Amendment amends the events for achievement of the earnout consideration to specify that such occur only upon achievement of certain share price targets for ZOOZ Ordinary Shares following the Closing. The Third BCA Amendment removes earnout milestones, for achievement of the earnout consideration, relating to any revenue events.
The foregoing description of the Third BCA Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Third BCA Amendment, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and which is incorporated herein by reference.
Second Amendment to Sponsor Letter Agreement
On March 15, 2024, in connection with the execution of the Third BCA Amendment, Keyarch, the Sponsor and Zooz entered into an amendment (the “Second Sponsor Letter Amendment”) to that certain letter agreement, dated as of July 30, 2023 (as amended on February 9, 2024, the “Sponsor Letter Agreement”), previously entered into by those parties. The Second Sponsor Letter Amendment conforms certain provisions governing the release of certain of the Sponsor’s Zooz Ordinary Shares that will be placed in escrow as of the Closing to the revised earnout provisions in Third BCA Amendment, as described above.
The foregoing description of the Second Sponsor Letter Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Second Sponsor Letter Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated herein by reference.
1
Important Information and Where to Find It
Zooz has filed with the SEC a Registration Statement on Form F-4, which includes a proxy statement of Keyarch that constitutes a prospectus for Zooz securities and a proxy statement for Keyarch’s shareholders (the “Registration Statement”). The Registration Statement has not been declared effective by the SEC. Promptly after the Registration Statement is declared effective by the SEC, Keyarch will distribute the definitive proxy statement and a proxy card contained therein to its shareholders. Investors and securityholders of Keyarch and other interested persons are advised to read, when available, the Registration Statement, including preliminary proxy statement to be filed with the SEC, and amendments thereto, and the definitive proxy statement in connection with Keyarch’s solicitation of proxies for the extraordinary general meeting to be held to approve the Business Combination Agreement and the Business Combination (collectively, the “Transactions”) and other documents filed in connection with the proposed Transactions because these documents will contain important information about Zooz, Keyarch, the Business Combination Agreement and the Transactions. The definitive proxy statement will be distributed to shareholders of Keyarch as of a record date to be established in the future for voting on the Business Combination Agreement and the Transactions. The Registration Statement, including the definitive proxy statement, the preliminary proxy statement and other relevant materials in connection with the Transactions (when they become available), and any other documents filed by Keyarch with the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov) or by writing to Keyarch at: 275 Madison Avenue, 39th Floor, New York, New York 10016. This Current Report on Form 8-K does not contain all the information that should be considered concerning the proposed Transactions and is not intended to form the basis of any investment decision or any other decision in respect of the proposed Transactions. This Current Report on Form 8-K is not a substitute for any registration statement or for any other document that Zooz or Keyarch may file with the SEC in connection with the proposed Transactions.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING, AMONG OTHER THINGS, THE BUSINESS COMBINATION AGREEMENT, THE PARTIES THERETO AND THE TRANSACTIONS.
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, THE ISRAELI SECURITIES AUTHORITY (“ISA”), OR ANY OTHER REGULATORY AUTHORITY, NOR HAS ANY SECURITIES AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE PROPOSED TRANSACTIONS PURSUANT TO WHICH ANY SECURITIES ARE TO BE OFFERED OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Participants in the Solicitation
Zooz, Keyarch, and their respective directors and executive officers, under SEC rules, may be deemed to be participants in the solicitation of proxies from the holders of Keyarch securities in respect of the proposed Transactions. Information regarding Keyarch’s directors and executive officers and their ownership of Keyarch’s securities is set forth in Keyarch’s filings with the SEC. Additional information regarding the interests of the participants in the proxy solicitation will be included in the Registration Statement when it becomes available. These documents can be obtained free of charge from the sources indicated above.
No Solicitation or Offer
This communication and this Current Report on Form 8-K shall not constitute an offer to sell or exchange or the solicitation of an offer to buy or exchange any securities pursuant to the proposed Transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
2
Forward-Looking Statements
This Current Report on Form 8-K contains, and certain oral statements made by representatives of Keyarch and Zooz and their respective affiliates, from time to time may contain, “forward-looking statements” within the meaning of federal securities laws. Keyarch’s and Zooz’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Keyarch’s and Zooz’s expectations with respect to future performance and anticipated financial impacts of the Transactions, the satisfaction of the closing conditions to the Transactions and the timing of the completion of the Transactions. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside of the control of Keyarch or Zooz and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) the inability of the parties to successfully or timely consummate the Transactions, including the risk that any required regulatory or other approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company following the Transactions (the “Company”) or the expected benefits of the Transactions, if not obtained; (ii) the failure to realize the anticipated benefits of the Transactions; (iii) the ability of Keyarch prior to the Transactions, and the Company following the Transactions, to maintain or list, as applicable, the Company’s shares on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”), including the ability to meet stock exchange listing standards following the consummation of the proposed Transactions; (iv) costs related to the Transactions; (v) the failure to satisfy the conditions to the consummation of the Transactions, including the approval of the Business Combination Agreement by the shareholders of Keyarch and Zooz, and the satisfaction of the minimum cash requirement of the Business Combination Agreement following any redemptions by Keyarch’s public shareholders; (vi) the risk that the Transactions may not be completed by the stated deadline and the potential failure to obtain an extension of the stated deadline; (vii) the outcome of any legal proceedings that may be instituted against Keyarch or Zooz related to the Transactions; (viii) the attraction and retention of qualified directors, officers, employees and key personnel of Keyarch and Zooz prior to the Transactions, and the Company following the Transactions; (ix) the ability of Zooz prior to the Transactions, and the Company following the Transactions, to maintain relationships with its suppliers and customers and the effect of the Transactions on its operating results and businesses in general; (x) the ability of the Company to compete effectively in a highly competitive market; (xi) the ability to protect and enhance Zooz’s corporate reputation and brand; (xii) the impact from future regulatory, judicial, and legislative changes to Zooz’s or the Company’s industry; (xiii) competition from larger technology companies that have greater resources, technology, relationships and/or expertise; (xiv) future financial performance of the Company following the Transactions, including the ability of future revenues to meet projected annual revenues; (xv) the ability of the Company to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses; (xvi) the ability of the Company to generate sufficient revenue from each of its revenue streams; (xvii) the ability of the Company’s patents and patent applications to protect the Company’s core technologies from competitors; (xviii) the Company’s ability to manage its marketing relationships and realize projected revenues from customers; (xix) the Company’s ability to meet its product and/or service sales targets; (xx) the Company’s ability to execute its business plans and strategy; (xxi) the occurrence of a material adverse change with respect to the financial position, performance, operations or prospects of Keyarch or Zooz; (xxii) the disruption of Zooz’s management’s time from ongoing business operations due to the announcement and consummation of the proposed Transactions; (xxiii) announcements relating to the Transactions having an adverse effect on the market price of Keyarch’s securities and/or Zooz’s securities; (xxiv) risks associated with Zooz being an Israeli company located in Israel and the effect of any judicial reforms, security and terrorist activity in or affecting Israel; (xxv) the lack of a third party valuation in determining whether or not to pursue the proposed Transactions; (xxvi) limited liquidity and trading of Keyarch’s and/or Zooz’s securities; (xxvii) inaccuracies for any reason in the estimates of expenses and profitability and projected financial information for Zooz and/or Keyarch; and (xxviii) other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the SEC, the TASE or the ISA by Keyarch or Zooz. Keyarch and Zooz caution that the foregoing list of factors is not exclusive. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Forward-looking statements relate only to the date they are made, and readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date they are made. Keyarch and Zooz undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made whether as a result of new information, future events or otherwise, subject to applicable law.
3
Readers are referred to the most recent reports filed with the SEC by Keyarch and, as applicable, Zooz. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and neither Keyarch nor Zooz undertakes any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
Nothing in this Current Report on Form 8-K should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved.
Item 9.01 Exhibits.
(d) Exhibits.
The following exhibits are being filed herewith:
| Exhibit No. | Description | |
| 2.1 | Amendment No. 3 to Business Combination Agreement, dated as of March 15, 2024, by and among Keyarch Acquisition Corporation, Zooz Power Cayman, Keyarch Global Sponsor Limited, and Zooz Power Ltd. | |
| 10.1 | Amendment No. 2 to Sponsor Letter Agreement, dated as of March 15, 2024, by and among Keyarch Global Sponsor Limited, Keyarch Acquisition Corporation, and Zooz Power Ltd. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KEYARCH ACQUISITION CORPORATION | |||
| By: | /s/ Kai Xiong | ||
| Name: | Kai Xiong | ||
| Title: | Chief Executive Officer | ||
| Dated: March 15, 2024 | |||
5
Exhibit 2.1
AMENDMENT NO. 3 TO BUSINESS COMBINATION AGREEMENT
This AMENDMENT NO. 3 TO BUSINESS COMBINATION AGREEMENT (this “Amendment”) is made and entered into as of March 15, 2024, by and among (i) Keyarch Acquisition Corporation, a Cayman Islands exempted company (“SPAC”), (ii) Zooz Power Ltd., an Israeli company (the “Company”), and (iii) Keyarch Global Sponsor Limited, a Cayman Islands exempted company, in the capacity as the SPAC Representative under the BCA (as defined herein). Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the BCA.
WHEREAS, the parties hereto entered into that certain Business Combination Agreement, dated as of July 30, 2023, which was amended by Amendment No. 1 on February 9, 2024 and by Amendment No. 2 on March 8, 2024 (as so amended, the “Original Agreement”);
WHEREAS, in connection with the transactions contemplated by the Original Agreement, the parties hereto desire to further amend the Original Agreement upon the terms and subject to the conditions set forth herein (the Original Agreement, as amended pursuant to this Amendment and as may be further amended, supplemented, modified and/or restated from time to time, the “BCA”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
1. Amendments to the BCA.
1.1 Amendments to Earnout. Section 1.2 of the BCA is hereby deleted in its entirety and replaced with the following:”
“1.2 Earnout.
(a) Earnout Generally. At the Closing or as soon as reasonably practicable thereafter, and, in any case, by no later than seven (7) Business Days after the Closing and after receipt of all required approvals from any applicable Governmental Authority for the Israeli Prospectus (as defined in Section 5.15(a)), subject to the terms and conditions set forth herein, the Company shall issue to the Company Shareholders who were Company Shareholders as of immediately prior to the Closing at a record date to be determined by the Company in coordination with the TASE (the “Pre-Closing Company Shareholders”) an aggregate of Four Million (4,000,000) non-tradeable, non-assignable rights (the “Earnout Rights”), to be allocated among the Pre-Closing Company Shareholders according to their respective Pro Rata Shares. The Earnout Rights shall be automatically converted (subject to Section 1.2(i) below) into Company Ordinary Shares (by the Company issuing one Company Ordinary Share in lieu of each converted Earnout Right which shall be automatically cancelled and extinguished upon such conversion), in an amount not to exceed Four Million (4,000,000) Company Ordinary Shares in the aggregate (subject to adjustment after the Closing for share splits, combinations or exchange or readjustment of shares, reorganizations, recapitalizations, share sub-divisions (including share consolidations), split-up and the like, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), upon and subject to the occurrence of Earnout Milestone(s) (as defined below) during a five-year period (which shall commence as of the first day of the full fiscal quarter immediately following the Closing) (the “Earnout Period”), subject to the other terms set forth below, in accordance with the terms set forth in Section 1.2(h) below, and without the payment of any consideration by the Pre-Closing Company Shareholders (other than, to the extent applicable, the transfer of the applicable Withholding Amount (as defined below) by each respective Pre-Closing Company Shareholder in accordance with the terms set forth in Section 1.2(h) below). The Earnout Rights shall be issued through the “Nesher system” of the TASE. The Earnout Rights shall convert automatically (subject to Section 1.2(i) below) into Earnout Shares in accordance with the terms set forth in Section 1.2 below. All conversions of Earnout Rights by Pre-Closing Company Shareholders shall be in accordance with the rules and regulations of the TASE and the “Nesher System” (to the extent that the Company is listed for trading on the TASE at such time) and otherwise in accordance with the rules of any stock exchange on which the Company’s shares are then traded (to the extent applicable).
(i) In the event that the VWAP of the Company Ordinary Shares equals or exceeds $12.00 (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) (the “First Earnout Milestone”) for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period during the Earnout Period, then, subject to the terms and conditions of this Agreement, twenty-five percent (25%) of the Earnout Rights shall automatically convert (subject to Section 1.2(i) below) into twenty-five percent (25%) of the Earnout Shares (i.e., 1,000,000 Company Ordinary Shares in the aggregate, subject to adjustment in accordance with this Section 1.2) (“First Level Contingent Share Consideration”) as soon as practicable following the settlement of the First Earnout Milestone as detailed in Section 1.2(b) and/or 1.2(c) below, as applicable. The allocation of the First Level Contingent Share Consideration among the Pre-Closing Company Shareholders shall be made in accordance with each Pre-Closing Company Shareholder’s Pro Rata Share of the First Level Contingent Share Consideration;
(ii) In the event that the VWAP of the Company Ordinary Shares equals or exceeds $16.00 (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) (the “Second Earnout Milestone”) for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period during the Earnout Period, then, subject to the terms and conditions of this Agreement, thirty-five percent (35%) of the Earnout Rights shall automatically convert (subject to Section 1.2(i) below) into thirty-five percent (35%) of the Earnout Shares (i.e., 1,400,000 Company Ordinary Shares in the aggregate, subject to adjustment in accordance with this Section 1.2) (“Second Level Contingent Share Consideration”) as soon as practicable following the settlement of the Second Earnout Milestone as detailed in Section 1.2(b) and/or 1.2(c) below, as applicable. The allocation of the Second Level Contingent Share Consideration among the Pre-Closing Company Shareholders shall be made in accordance with each Pre-Closing Company Shareholder’s Pro Rata Share of the Second Level Contingent Share Consideration; and
(iii) In the event that the VWAP of the Company Ordinary Shares equals or exceeds $23.00 (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) (“Third Earnout Milestone”, and each of the First Earnout Milestone, Second Earnout Milestone and the Third Earnout Milestone, an “Earnout Milestone”) for any twenty (20) Trading Days within any thirty (30) consecutive Trading Day period during the Earnout Period, then, subject to the terms and conditions of this Agreement, forty percent (40%) of the Earnout Rights shall automatically convert (subject to Section 1.2(i) below) into forty percent (40%) of the Earnout Shares (i.e., 1,600,000 Company Ordinary Shares in the aggregate, subject to adjustment in accordance with this Section 1.2) (“Third Level Contingent Share Consideration”) as soon as practicable following the settlement of the Third Earnout Milestone as detailed in Section 1.2(b) and/or 1.2(c) below, as applicable. The allocation of the Third Level Contingent Share Consideration among the Pre-Closing Company Shareholders shall be made in accordance with each Pre-Closing Company Shareholder’s Pro Rata Share of the Third Level Contingent Share Consideration.
Subject to the preceding paragraphs, in the event that the applicable Earnout Milestones are not met by the end of the Earnout Period, the respective Earnout Rights applicable to such Earnout Milestones shall expire and the Pre-Closing Company Shareholders shall not be entitled to receive the applicable portion of the Earnout Shares. For the avoidance of doubt, in the event that the Company meets at the same measurement period the Earnout Milestones for the Second Level Contingent Share Consideration and the First Level Contingent Share Consideration, then the conversion of the Earnout Rights will also include the First Level Contingent Share Consideration. In the event that the Company meets at the same measurement period the Earnout Milestones for the Third Level Contingent Share Consideration and the Second Level Contingent Share Consideration, then the conversion of the Earnout Rights will also include the entitlement for the Second Level Contingent Share Consideration. In the event that the Company meets at the same measurement period the Earnout Milestones for the Third Level Contingent Share Consideration, the Second Level Contingent Share Consideration and the First Level Contingent Share Consideration, then the conversion of the Earnout Rights will also include the entitlement for the First Level Contingent Share Consideration and the Second Level Contingent Share Consideration. Additionally, if during the Earnout Period any Earnout Milestone is achieved once and then thereafter the same Earnout Milestone is achieved again, then, for the avoidance of doubt, the portion of the Earnout Rights corresponding to the applicable Earnout Milestone shall only be converted once.
2
The issuance of the Earnout Rights will be subject to the prior receipt of the TASE’s approval for the listing of the Earnout Shares for trading. The Earnout Shares will be listed for trading on the stock exchange or exchanges where the Company Ordinary Shares will be listed for trading on the date of the conversion of the applicable Earnout Rights.
(b) Determination of Earnout.
(i) With respect to the achievement of the Earnout Milestones, during the Earnout Period the Company’s Chief Financial Officer (the “CFO”) shall monitor on an ongoing basis the VWAP of the Company Ordinary Shares on the principal securities exchange or securities market on which the Company Ordinary Shares are then traded on each Trading Day during the Earnout Period, and as soon as practicable (and in any event within five (5) Business Days) after the applicable Earnout Milestone has been achieved, the CFO shall prepare and deliver to each of the Representative Parties a written statement of that fact accompanied by the relevant VWAP calculation (each, an “Earnout Statement”). Each Representative Party shall have five (5) Business Days after its receipt of an Earnout Statement to review it, and each Representative Party and its Representatives on its behalf may make inquiries to the CFO and related Company personnel and advisors regarding questions concerning or disagreements with such Earnout Statement arising in the course of their review thereof, and the Company shall cooperate in good faith in connection therewith. If either Representative Party has any objections to an Earnout Statement, such Representative Party shall deliver to the Company (to the attention of the CFO) and the other Representative Party a statement setting forth its objections thereto (in reasonable detail). If such written statement is not delivered by a Representative Party within five (5) Business Days following the date of delivery of each Earnout Statement, then such Representative Party shall have waived its right to contest such Earnout Statement and the calculation of the VWAP of the Company Ordinary Shares during the applicable portion of the Earnout Period (and whether an Earnout Milestone has been achieved) as set forth therein. If such written statement is delivered by a Representative Party within such five (5) Business Day period, then the Representative Parties shall negotiate in good faith to resolve any such objections for a period of five (5) Business Day thereafter. If the Representative Parties do not reach a final resolution within such five (5) Business Day period, then upon the written request of either Representative Party the Representative Parties will refer the dispute to the Independent Expert for final resolution of the dispute in accordance with Section 1.2(c). The Company shall issue a press release once the Earnout Milestone has been settled in accordance with the mechanism above, or earlier immediately following the reaching of a written agreement (or no objections) between the Company and the Representative Parties. The actual conversion of the Earnout Rights into Earnout Shares shall be made as soon as practicable in accordance with the then applicable rules of the TASE (to the extent that the Company is listed for trading on the TASE at such time) and in accordance with the terms set forth in Section 1.2 (h) below.
(ii) [Reserved]
(iii) To the extent that at any time during the Earnout Period the Company Ordinary Shares shall only be listed for trading on TASE, then, for the purpose of making the above determinations with respect to the occurrence of any Earnout Milestone, the VWAP USD prices referenced in Section 1.2(a) shall be deemed replaced with NIS equivalents based on the average USD to NIS exchange rate published by the Bank of Israel over the last fiscal quarter during which the Company Ordinary Shares had been trading on NASDAQ.
(iv) For the avoidance of doubt, and notwithstanding anything to the contrary herein, in the event that there is a dispute with respect to an Earnout Statement on the date on which the Earnout Period ends, then the end of the Earnout Period shall not affect the right of the Pre-Closing Company Shareholders to receive such Earnout Shares relating to the Earnout Statement in dispute, and if it is resolved in such dispute resolution in accordance with the terms of this Section 1.2 that the applicable Earnout Milestone has been achieved as set forth in the applicable Earnout Statement, the Pre-Closing Company Shareholders shall be entitled to receive the applicable Earnout Shares irrespective of the lapse of the Earnout Period.
3
(c) Dispute Resolution. If a dispute with respect to an Earnout Statement is submitted in accordance with this Section 1.2 to the Independent Expert for final resolution, the Parties will follow the procedures set forth in this Section 1.2(c). Each of the Holder Representative and the SPAC Representative agrees to execute, if requested by the Independent Expert, a reasonable engagement letter with respect to the determination to be made by the Independent Expert. All fees and expenses of the Independent Expert, and all other out-of-pocket costs and expenses incurred by a Representative Party in connection with resolving any dispute hereunder before the Independent Expert, shall be borne by the Company. The Independent Expert shall determine only those issues still in dispute as of the Independent Expert Notice Date and the Independent Expert’s determination shall be based solely upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Expert shall be based solely on presentations with respect to such disputed items by the SPAC Representative and the Holder Representative to the Independent Expert and not on the Independent Expert’s independent review; provided, that such presentations will be deemed to include any work papers, records, accounts or similar materials delivered to the Independent Expert by a Representative Party in connection with such presentations and any materials delivered to the Independent Expert in response to requests by the Independent Expert. Each of the Holder Representative and the SPAC Representative shall use their reasonable efforts to make their respective presentations as promptly as practicable following submission to the Independent Expert of the disputed items, and each such Representative Party shall be entitled, as part of its presentation, to respond to the presentation of the other Representative Party and any questions and requests of the Independent Expert. In deciding any matter, the Independent Expert shall be bound by the provisions of this Agreement, including this Section 1.2. It is the intent of the parties hereto that the activities of the Independent Expert in connection herewith are not (and should not be considered to be or treated as) an arbitration proceeding or similar arbitral process and that no formal arbitration rules should be followed (including rules with respect to procedures and discovery). The Representative Parties shall request that the Independent Expert’s determination be made within fifteen (15) days after its engagement, or as soon thereafter as possible, will be set forth in a written statement delivered to the Representative Parties and shall be final, conclusive, non-appealable and binding for all purposes hereunder (other than for fraud or manifest error).
(d) [Reserved]
(e) Changes in Business. Subject to the requirements of this Section 1.2, each of the Company and its Subsidiaries, including the Surviving Company, shall be permitted, following the Closing, to make changes at its sole discretion to its operations, organization, personnel, accounting practices and other aspects of its business, including actions that may have an impact on the share price of the Company Ordinary Shares and/or Company Continuing Warrants or otherwise the ability of the Company Shareholders to earn the Earnout Shares in accordance with this Section 1.2, and the Company Shareholders shall not have any right to claim the loss of all or any portion of any Earnout Shares or other damages as a result of such decisions. Notwithstanding the foregoing, Company shall not, and shall cause its Subsidiaries not to, take or omit to take any action that is in bad faith and has the primary purpose of avoiding, reducing or preventing the achievement or attainment of the Earnout Milestones.
(f) Reservation of Shares. At all times prior to the issuance of all of the Earnout Shares, Company shall keep available for issuance a sufficient number of unissued Company Ordinary Shares to permit Company to satisfy its issuance obligations set forth in this Section, shall take all actions required to increase the authorized number of Company Ordinary Shares if at any time there shall be insufficient unissued shares of Company Ordinary Shares to permit such reservation and shall not enter into any contract or agreement that is in conflict with or would cause Company to violate its obligations under this sentence.
4
(g) Adjustments to Earnout Rights. Notwithstanding anything to the contrary herein, to the extent required following the Closing by the TASE and/or ISA and/or NASDAQ and/or SEC and/or ITA, the Company shall be authorized to make any adjustments or amendments regarding the terms of the then-outstanding Earnout Rights for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations, recapitalizations, reclassifications, share sub-divisions (including share consolidations), split-up and the like.
(h) Withholding Taxes. The conversion of the Earnout Rights into Earnout Shares and the issuance of the Earnout Shares will be subject to withholding tax according to the relevant provisions of applicable Law. Such withholding tax from the Earnout Shares will be conducted by any TASE member.
(i) Excise Amendment. Notwithstanding anything to the contrary herein, in the event that the Company, after reasonably consulting with its tax and legal advisors and with the SPAC Representative, believes that it is advisable and in the best interests of the Company for tax withholding purposes to amend the method by which the Earnout Rights are converted into Earnout Shares from an automatic conversion mechanism to instead having such Earnout Rights exercisable solely at the election of the Pre-Closing Company Shareholders (the “Exercise Amendment”), then the Company shall have the right to make such Exercise Amendment. In the event that the Company makes an Exercise Amendment, the applicable Earnout Rights shall be exercisable by Pre-Closing Company Shareholder(s) by providing the Company with an exercise notice, in such form and substance to be published by the Company in advance (the “Exercise Notice”), with respect to the exercise of their respective portion of the Earnout Rights by no later than twenty (20) days following the issuance by the Company of the press release with respect to the settlement of the applicable Earnout Milestone, subject to the terms detailed in the Exercise Notice.”
2. Miscellaneous.
2.1 No Further Amendment. The parties hereto agree that all other provisions of the BCA shall, subject to the amendments set forth in Section 1 of this Amendment, continue unmodified, in full force and effect and constitute legal and binding obligations of the Parties in accordance with their terms. This Amendment is limited precisely as written and shall not be deemed to be an amendment to any other term or condition of the BCA or any of the documents referred to therein. This Amendment shall form an integral and inseparable part of the BCA. From and after the date of this Amendment, each reference in the BCA to “this Agreement,” “hereof,” “hereunder” or words of like import, and all references to the BCA in any and all agreements, instruments, documents, notes, certificates and other writings of every kind of nature (other than in this Amendment or as otherwise expressly provided) will be deemed to mean the BCA, as amended by this Amendment, whether or not this Amendment is expressly referenced.
2.2 Other Terms. This Amendment shall be interpreted, construed, governed and enforced in a manner consistent with the Agreement. Without limiting the foregoing, the provisions of Article X of the BCA are incorporated herein by reference and shall apply to the terms and provisions of this Amendment and the Parties, mutatis mutandis.
{Remainder of page intentionally left blank. Signature page follows.}
5
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 to Business Combination Agreement as of the date first written above.
| SPAC: | |||
| KEYARCH ACQUISITION CORPORATION | |||
| By: | /s/ Kai Xiong | ||
| Name: | Dr. Kai Xiong | ||
| Title: | Authorized Signatory | ||
| The SPAC Representative: | |||
| KEYARCH GLOBAL SPONSOR LIMITED, solely in the capacity as the SPAC Representative hereunder | |||
| By: | /s/ Kai Xiong | ||
| Name: | Dr. Kai Xiong | ||
| Title: | Authorized Signatory | ||
| The Company: | |||
| ZOOZ POWER LTD. | |||
| By: | /s/ Avi Cohen | ||
| Name: | Avi Cohen | ||
| Title: | Executive Chairman | ||
{Signature Page to Amendment No. 3 to Business Combination Agreement}
Exhibit 10.1
AMENDMENT NO. 2 TO LETTER AGREEMENT
This Amendment No. 2 (this “Amendment”), dated as of March 15, 2024, to the Letter Agreement (as defined below) is entered into by and among (i) Keyarch Acquisition Corporation, a Cayman Islands exempted company (“SPAC”), (ii) Zooz Power Ltd., an Israeli company (the “Company”), and (iii) Keyarch Global Sponsor Limited, a Cayman Islands exempted company (the “Sponsor”). Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Letter Agreement.
WHEREAS, reference is made to that certain Business Combination Agreement, dated as of July 30, 2023 (as amended on February 9, 2024, March 8, 2024 and March 15, 2024, and as it may be further amended, supplemented or modified from time to time, the “BCA”), by and among SPAC, the Company, Zooz Power Cayman, a Cayman Islands exempted company and a wholly-owned subsidiary of the Company, and the Sponsor, in the capacity as the SPAC Representative thereunder;
WHEREAS, SPAC, the Company and the Sponsor are parties to that certain Sponsor Letter Agreement, dated as of July 30, 2023, as amended on February 9, 2024 (the “Letter Agreement”);
WHEREAS, the parties hereto desire to amend the Letter Agreement as set forth herein; and
WHEREAS, Section 8 of the Letter Agreement provides that the Letter Agreement may be amended by a written instrument executed by all parties thereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Amendments.
(a) Section 4 of the Letter Agreement is hereby amended to delete the phrase “Revenue Earnout Milestones or Price Earnout Milestones” and replace it with the phrase “Earnout Milestones”.
(b) The second full paragraph of Section 6 of the Letter Agreement is hereby deleted and replaced with the following:
“For the avoidance of doubt, in the event that the Company meets at the same measurement period the Earnout Milestones for the Second Level Contingent Sponsor Share Consideration and the First Level Contingent Sponsor Share Consideration, then the release from the Sponsor Escrow Account will also include the First Level Contingent Sponsor Share Consideration. In the event that the Company meets at the same measurement period the Earnout Milestones for the Third Level Contingent Sponsor Share Consideration and the Second Level Contingent Sponsor Share Consideration, then the release from the Sponsor Escrow Account will also include the Second Level Contingent Sponsor Share Consideration. In the event that the Company meets at the same measurement period the Earnout Milestones for the Third Level Contingent Sponsor Share Consideration, the Second Level Contingent Sponsor Share Consideration and the First Level Contingent Sponsor Share Consideration, then the release from the Sponsor Escrow Account will also include the First Level Contingent Sponsor Share Consideration and the Second Level Contingent Sponsor Share Consideration.”
2. Miscellaneous. Except as expressly provided in this Amendment, all of the terms and provisions in the Letter Agreement are and shall remain unchanged and in full force and effect, on the terms and subject to the conditions set forth therein. This Amendment does not constitute, directly or by implication, an amendment or waiver of any provision of the Letter Agreement, or any other right, remedy, power or privilege of any party, except as expressly set forth herein. Any reference to the Letter Agreement in the Letter Agreement or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the Letter Agreement, as amended by this Amendment (or as the Letter Agreement may be further amended or modified after the date hereof in accordance with the terms thereof). The Letter Agreement, as amended by this Amendment, and the BCA and the documents or instruments attached hereto or thereto or referenced herein or therein, constitutes the entire agreement between the parties with respect to the subject matter of the Letter Agreement, and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to its subject matter. This Amendment shall be construed, interpreted, governed and enforced in a manner consistent with the provisions of the BCA. In the event of any conflict between the terms of the Letter Agreement, as amended by this Amendment, and the BCA, the terms of the BCA shall govern. The Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. The Letter Agreement may not be changed, amended or modified, except by a written instrument executed by all parties hereto, and no provision thereof may be waived, except in writing signed by the party against whom enforcement of such provision is sought. No party hereto may assign either the Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties, and any purported assignment in violation of this provision shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. Nothing in this Amendment, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. The provisions set forth in Sections 10.2 through 10.8 and 10.10 through 10.13 of the BCA, as in effect as of the date hereof, are hereby incorporated by reference into, and shall be deemed to apply to, this Amendment as if all references to the “Agreement” in such sections were instead references to this Amendment, and the references therein to the “Parties” were instead to the parties to this Amendment, mutatis mutandis. Notwithstanding anything to the contrary contained herein, in the event that the BCA is terminated in accordance with its terms prior to the Closing, this Amendment shall automatically terminate and become null and void, and the parties shall not have any rights or obligations hereunder.
[Remainder of page intentionally left blank. Signature page follows.]
2
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the Effective Date.
| SPAC: | |||
| KEYARCH ACQUISITION CORPORATION | |||
| By: | /s/ Kai Xiong | ||
| Name: | Dr. Kai Xiong | ||
| Title: | Authorized Signatory | ||
| The Company: | |||
| ZOOZ POWER LTD. | |||
| By: | /s/ Avi Cohen | ||
| Name: | Avi Cohen | ||
| Title: | Chairman of Directors | ||
| The Sponsor: | |||
| KEYARCH GLOBAL SPONSOR LIMITED | |||
| By: | /s/ Kai Xiong | ||
| Name: | Dr. Kai Xiong | ||
| Title: | Authorized Signatory | ||
{Signature Page to Amendment No. 2 to Sponsor Letter Agreement}