Item 1.01 Entry Into A Material Definitive Agreement.
BUSINESS COMBINATION AGREEMENT
This section describes the material provisions of the Business Combination
Agreement but does not purport to describe all of the terms thereof. The
Company's stockholders, warrant holders, rights holders and other interested
parties are urged to read such agreement in its entirety. The following summary
is qualified in its entirety by reference to the complete text of the Business
Combination Agreement, a copy of which is attached hereto as Exhibit 2.1. Unless
otherwise defined herein, the capitalized terms used below are defined in the
Business Combination Agreement.
General Description of the Business Combination Agreement
On October 25, 2022, Jupiter Wellness Acquisition Corp., a Delaware corporation
(the "Company"), entered into a definitive Business Combination Agreement (the
"Business Combination Agreement") with Chijet Inc., a Cayman Islands exempted
company ("Chijet"), each of the referenced holders of Chijet's outstanding
shares (collectively, the "Sellers"), Chijet Motor Company, Inc., a Cayman
Islands exempted company and wholly-owned subsidiary of Chijet ("Pubco"), and
Chijet Motor (USA) Company, Inc., a Delaware corporation and a wholly-owned
subsidiary of Pubco ("Merger Sub"). Chijet indirectly holds controlling
interests in Shandong Baoya New Energy Vehicle Co., Ltd., a Chinese company
("Baoya"), which is a producer and manufacturer of electric vehicles, and FAW
Jilin Automobile Co., Ltd., a Chinese company ("FAW Jilin"), which manufactures
and sells traditional fuel vehicles. The transactions contemplated by the
Business Combination Agreement are referred to herein as the "Business
Combination".
Subject to the terms and conditions of the Business Combination Agreement, the
Company and Chijet will become wholly-owned subsidiaries of Pubco, a newly
formed holding company. Pursuant to the Business Combination Agreement, subject
to the terms and conditions set forth therein, at the closing of the Business
Combination (the "Closing"), (a) Merger Sub will merge with and into the
Company, with the Company continuing as the surviving entity and a wholly-owned
subsidiary of Pubco (the "Merger"), and with holders of Company securities
receiving substantially equivalent securities of Pubco (and with respect to the
holders of the Company's publicly traded shares of Class A common stock, par
value $0.0001 per share ("Class A Common Stock"), that do not redeem their
shares also receiving one (1) contingent value right ("CVR") for each share of
publicly traded Class A Common Stock held, and (b) immediately prior to the
Merger, Pubco will acquire all of the issued and outstanding ordinary shares of
Chijet (the "Purchased Shares") from the Sellers in exchange for ordinary shares
of Pubco and Chijet shall surrender for no consideration its shares in Pubco, as
described below, with Chijet likewise becoming a wholly-owned subsidiary of
Pubco (the "Share Exchange").
Effect of Merger on Company Securities
At the effective time of the of the Merger (the "Effective Time"): (i) every
issued and outstanding share of Class A Common Stock immediately prior to that
Effective Time (other than treasury stock), will be exchanged for one ordinary
share, par value $0.0001 per share, of Pubco ("Ordinary Share") and one CVR
(with the holders of private shares waiving their right to receive CVRs pursuant
to the Support Agreement, as described below); (ii) each issued and outstanding
right of the Company, entitling the registered holder thereof to receive
one-eighth (1/8th) of a share of the Company's Class A Common Stock upon the
consummation by the Company of its initial business combination shall be issued
equivalent shares of Class A Common Stock of the Company, which shall be
aggregated per registered holder to the amount of full shares of Class A Common
Stock for which such holder is eligible, and which shall be automatically
converted into the number of Pubco Ordinary Shares that would have been received
by the holder thereof if such right had been automatically exercised immediately
prior to the Effective Time in accordance with clause (i) of this paragraph;
(iii) each share of Class B Common Stock, par value $0.0001 per share ("Class B
Common Stock") of the Company will be exchanged for one Pubco Ordinary Share;
and (iv) each privately placed warrant of the Company to acquire Common Stock
shall be exchanged for a substantially equivalent warrant to acquire Pubco
Ordinary Shares, in each case pursuant to the Company's certificate of
incorporation and the terms of these securities. Following which all shares of
the Company's Class A Common Stock and Class B Common Stock will be canceled and
will cease to exist.
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Exchange Consideration
Pubco shall issue and deliver to the Sellers an aggregate number of Pubco
ordinary shares (the "Exchange Shares") with an aggregate value equal to One
Billion Six Hundred Million U.S. Dollars ($1,600,000,000), with each Pubco
ordinary share valued at the redemption price payable to the Company's public
stockholders who redeem their shares in connection with the Closing (the
"Redemption Price"), and with each Seller receiving its pro rata share of the
applicable Exchange Shares based on the number of Purchased Shares owned by such
Seller, divided by the total number of purchased shares owned by all Sellers.
The issuance of an amount of Exchange Shares to certain Sellers who are earnout
participants ("Earnout Participants") equal in value to Six Hundred and Seventy
Four Million U.S. Dollars ($674,000,000), with each of such shares being valued
at the redemption price (such Pubco ordinary shares, subject to equitable
adjustment for share splits, share dividends, combinations, recapitalizations
and the like after the closing, including to account for any equity securities
into which such shares are exchanged or converted, and together with the
earnings thereof, the "Earnout Shares"), shall be issued and registered by Pubco
in the name of the Earnout Participants, but shall be unvested and subject to
potential surrender and cancellation as provided in the Business Combination
Agreement. Additionally, until the Earnout Shares have become vested, (i) all
earnings, such as dividends or distributions, related to such Earnout Shares
shall be held in a segregated escrow account, and (ii) the Earnout Participants
will not be permitted to sell, assign, convey, pledge, hypothecate, transfer or
otherwise dispose of the Earnout Shares (or any rights to the earnings thereon)
(the "Earnout Transfer Restrictions"). Otherwise, the Earnout Shares shall have
the same rights as the Pubco Ordinary Shares. The Earnout Shares shall vest and
no longer be subject to potential cancellation and become free of the Earnout
Transfer Restrictions, and that each of the Earnout Participants shall have the
contingent right to receive a pro rata portion of the earnings on the Earnout
Shares (such pro rata allocation based on the number of Purchased Shares owned
by such Earnout Participant, divided by the total number of Purchased Shares
owned by all Earnout Participants), based on either meeting the criteria
relating to (i) consolidated gross revenue (based on a fixed U.S. dollar to
Chinese yuan renminbi exchange rate of 6.5) or (ii) closing price of Pubco
Ordinary Shares. The Earnout Shares and earnings thereon will vest in three
tranches consisting of 30% for 2023, 30% for 2024 and any unvested amount for
2025 (in each case without giving effect to any prior surrenders of Earnout
Shares and together with any earnings thereon), as follows: (a) The first
tranche shall (i) vest based on gross revenues of Pubco and the Company and its
subsidiaries (together, the "Target Companies") (including the period prior to
Closing) as set forth in Pubco's audited annual financial statements included in
Form 20-F or 10-K filed with the SEC for the calendar year ended December 31,
2023 in excess of the gross revenue milestones specified in the Business
Combination Agreement, or alternatively (ii) vest if the Pubco Ordinary Shares
on the applicable Trading Market is at least $13.00 per share (as equitably
adjusted for share splits, share capitalizations, share consolidations,
subdivisions, share dividends, reorganizations, recapitalizations and the like)
for at least twenty (20) out of thirty (30) Trading Days, through and including
the thirtieth (30th) Trading Day after the date on which Pubco files its annual
report with the SEC on Form 20-F or 10-K (such trading criteria being
collectively the "Trading Criteria"), for the fiscal year ended December 31,
2023. (b) The second tranche will likewise either (i) vest based on gross
revenues set forth in Pubco's audited annual financial statements included in
Form 20-F or 10-K filed with the SEC for the calendar year ended December 31,
2024 in excess of the gross revenue milestones specified in the Business
Combination Agreement; or (ii) based on meeting the Trading Criteria during the
applicable period for the year ended December 31, 2024. (c) Any remaining
Earnout Shares not vested in the first or second tranches are eligible either to
(i) vest based on gross revenues set forth in Pubco's audited annual financial
statements included in Form 20-F or 10-K filed with the SEC for the calendar
year ended December 31, 2025 in excess of the gross revenue milestones specified
in the Business Combination Agreement; or (ii) vest based on meeting the Trading
Criteria during the applicable period for the year ended December 31, 2025.
Representations and Warranties
The Business Combination Agreement contains a number of representations and
warranties made by the Company, Chijet and Pubco as of the date of such
agreement or other specific dates solely for the benefit of certain of the
parties to the Business Combination Agreement, which in certain cases are
subject to specified exceptions and materiality, Material Adverse Effect,
knowledge and other qualifications contained in the Business Combination
Agreement or in information provided pursuant to certain disclosure schedules to
the Business Combination Agreement. "Material Adverse Effect" as used in the
Business Combination Agreement means with respect to any specified person or
entity, any fact, event, occurrence, change or effect that has had, or would
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business, assets, liabilities, results of operations or
condition (financial or otherwise) of such person or entity and its
subsidiaries, taken as a whole, or the ability of such person or entity or any
of its subsidiaries on a timely basis to consummate the Business Combination,
subject to certain customary exceptions.
In the Business Combination Agreement, Chijet made certain customary
representations and warranties to the Company and Pubco, including among others,
related to the following: (1) corporate matters, including due organization,
existence and good standing; (2) authority and binding effect relating to
execution and delivery of the Business Combination Agreement and other ancillary
documents; (3) capitalization; (4) subsidiaries; (5) governmental approvals; (6)
non-contravention; (7) financial statements; (8) absence of certain changes; (9)
compliance with laws; (10) permits; (11) litigation; (12) material contracts;
(13) intellectual property; (14) taxes and tax returns; (15) real property; (16)
personal property; (17) title to and sufficiency of assets; (18) employee
matters; (19) benefit plans; (20) environmental matters; (21) transactions with
affiliates; (22) insurance; (23) customers and suppliers; (24) business
practices; (25) Investment Company Act of 1940 ("Investment Company Act"); (26)
finders and brokers; (27) information supplied and (28) independent
investigation. Additionally, Pubco made certain customary representations and
warranties to the Company, Chijet and Sellers, with respect to Pubco and Merger
Sub, including representations and warranties related to the following: (1)
corporate matters, including due organization, existence and good standing; (2)
authority and binding effect relating to execution and delivery of the Business
Combination Agreement and other ancillary documents; (3) governmental approvals;
(4) non-contravention; (5) capitalization; (6) title and ownership of the Pubco
shares to be issued to the Sellers; (7) Pubco and Merger Sub activities; (8) SEC
filings; (9) absence of certain changes; (10) compliance with laws; (11)
litigation, orders and permits; (12) taxes and tax returns; (13) employees and
employee benefit plans; (14) properties; (15) material contracts; (16)
transactions with affiliates; (17) Investment Company Act and the Jumpstart Our
Business Startups Act of 2012 ("JOBS Act"); (18) business practices; (19)
insurance; (20) finders and brokers; (21) information supplied; and (22)
independent investigation.
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In the Business Combination Agreement, the Company made certain customary
representations and warranties to Chijet, Sellers and Pubco, including among
others, related to the following: (1) corporate matters, including due
organization, existence and good standing; (2) authority and binding effect
relative to execution and delivery of the Business Combination Agreement and
other ancillary documents; (3) governmental approvals; (4) non-contravention;
(5) capitalization; (6) SEC filings, financial statements and internal controls;
(7) absence of certain changes; (8) compliance with laws; (9) litigation, orders
and permits; (10) taxes and tax returns; (11) employees and employee benefit
plans; (12) properties; (13) material contracts; (14) transactions with
affiliates; (15) Investment Company Act and the JOBS Act; (16) finders and
brokers; (17) business practices; (18) insurance; (19) information supplied;
(20) independent investigation; and (21) trust account.
In the Business Combination Agreement, each Seller made customary
representations and warranties to the Company and Pubco, including among others,
related to the following: (1) organization and good standing; (2) authority and
binding effect relating to execution and delivery of the Business Combination
Agreement and other ancillary documents; (3) ownership of the Purchased Shares;
(4) governmental approvals; (5) non-contravention; (6) litigation; (7)
investment representations; (8) finders and brokers; (9) information supplied;
and (10) independent investigation.
Covenants of the Parties
Each party agreed in the Business Combination Agreement to use its commercially
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report.
Exhibit No. Description
2.1* Business Combination Agreement dated as of October 25, 2022, among
Jupiter Wellness Acquisition Corp., Chijet Inc., Chijet Motor
Company, Inc., Chijet Motor (USA) Company, Inc. and the Sellers
named therein
10.1 Support Agreement, dated as of October 25, 2022, among Jupiter
Wellness Acquisition Corp., Jupiter Wellness Sponsor LLC, Chijet
Inc., Chijet Motor Company, Inc., I-Bankers Securities, Inc. and
Join Surplus International Ltd.
10.2 Form of Lock-Up Agreement dated as of October 25, 2022, among
Chijet Motor Company, Inc. and the Holders named therein
10.3 Form of Amended and Restated Registration Rights Agreement
10.4 Amendment to Insider Letter dated as of October 25, 2022, among
Jupiter Wellness Acquisition Corp., Chijet Motor Company, Inc.,
Jupiter Wellness Sponsor LLC, I-Bankers Securities, Inc., Join
Surplus International Ltd., and the Insiders name therein
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the inline XBRL document)
* Certain of the exhibits, appendices, annexes and/or schedules to this Exhibit
have been omitted in accordance with Regulation S-K Item 601(b)(2). The
Registrant agrees to furnish supplementally a copy of all omitted exhibits,
annexes, appendices and schedules to the Securities and Exchange Commission upon
its request.
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