Item 1.01 Entry Into A Material Definitive
Agreement.
As disclosed in the
Previous Current Report, on February 3, 2021, 10X Capital Venture Acquisition Corp, a Delaware corporation (the “Company”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) among REE Automotive Ltd, a corporation
organized under the laws of Israel (“REE”), Spark Merger Sub Inc., a Delaware corporation and a direct, wholly-owned
subsidiary of the Company (“Merger Sub”), and the Company, which provides for, among other things, the merger
of Merger Sub with and into the Company, with the Company surviving as a wholly owned subsidiary of REE (the “Business
Combination”). In connection with the Business Combination, REE will list as a publicly-traded company on Nasdaq and
will continue to conduct the automotive technology business conducted by REE prior to the Business Combination.
The Merger Agreement
The Business Combination
is based upon an enterprise valuation of REE of $3.0 billion on a cash-free and debt-free basis, and an assumed level of net working
capital, all at the time of the signing of the Merger Agreement. No purchase price adjustments will be made in connection with
the closing of the transactions contemplated by the Merger Agreement. Assuming none of the Class A common stock, par value $0.0001
per share, of the Company (the “Company Common Stock”) is redeemed by the Company’s public stockholders
as described below under “Redemption Offer,” immediately following the Effective Time, the Company’s public stockholders
will own 5.6% of REE’s ordinary shares, par value NIS 0.01 each (the “REE Class A Ordinary Shares”); the
Company’s sponsor—10X Capital SPAC Sponsor I LLC (the “Sponsor”)—will own 2.2% of the REE
Class A Ordinary Shares; the shareholders of REE as of immediately prior to the Business Combination (the “Legacy REE
Shareholders”) will own 83.8% of the REE Class A Ordinary Shares, including Class B Ordinary Shares, par value NIS 0.01
each, of REE (“REE Class B Ordinary Shares”) owned by the founders of REE (the “Founders”)
and REE Class A Ordinary Shares issued pursuant to the conversion of REE Preferred Shares, as described below; and the PIPE Investors
(as defined below) will own 8.4% of the REE Class A Ordinary Shares.
Immediately prior to
the Effective Time, (i) each preferred share, par value NIS 0.01 each, of REE (each, a “REE Preferred Share”)
will be converted into REE Class A Ordinary Shares in accordance with REE’s organizational documents and (ii) immediately
following such conversion but prior to the Effective Time, REE will effect a stock split of each REE Class A Ordinary Share into
such number of REE Class A Ordinary Shares calculated in accordance with the terms of the Merger Agreement such that each REE Class
A Ordinary Share will have a value of $10.00 per share after giving effect to such stock split (the “Stock Split”
and, together with the conversion of REE Preferred Shares, the “Capital Restructuring”).
As a result of the
Business Combination, immediately prior to the Effective Time, each outstanding share of Class B common stock, par value $0.0001
per share, of the Company (“Company Class B Common Stock”) shall convert into 1.5763975 (the “Class
B Share Conversion Ratio”) shares of Company Common Stock and, immediately thereafter, each outstanding share of Company
Common Stock will be converted into the right to receive one newly issued REE Class A Ordinary Share. The Company’s amended
and restated certificate of incorporation provides that, upon conversion of the Company Class B Common Stock into Company Common
Stock, the holders of Company Class B Common Stock shall be entitled to receive a number of additional shares (the “Anti-Dilution
Shares”) of Company Common Stock equal to 25% of the number of shares of Company Common Stock issued to the PIPE Investors.
Pursuant to the Letter Agreement (as defined under “Letter Agreement” below), the holders of the shares of the Company
Class B Common Stock have agreed to waive their right to receive any Anti-Dilution Shares in excess of 2,900,000 (the “Conversion
Ratio Adjustment”), with such waiver resulting in the Class B Share Conversion Ratio. In addition, up to 1,500,000 of
the 2,900,000 Anti-Dilution Shares to be received upon the conversion of the Company Class B Common Stock will be subject to subsequent
forfeiture without consideration if trading prices of REE Class A Ordinary Shares specified below are not achieved following the
Business Combination. The Company’s outstanding warrants to purchase one share of Company Common Stock shall be converted
into the right to receive an equal number of warrants to purchase one REE Class A Ordinary Share (the “REE Warrants”).
REE’s ordinary
shares will be divided into two classes. The REE Class A Ordinary Shares will each have one vote per share. The REE Class B Ordinary
Shares will each have 10 votes per share. As a result of the conversion of the REE Preferred Shares, coupled with their ownership
of the REE Class B Ordinary Shares, each Founder will have approximately 39% of the total voting power of the REE Class A Ordinary
Shares. The REE Class B Ordinary Shares will be cancelled and have no further voting rights with respect to any Founder who (i)
holds less than 33% of the Class A shares (including those underlying vested and unvested options); (ii) whose employment as an
executive officer is terminated other than for cause or resigns and also ceases to serve as a director, or (iii) whose employment
as an executive officer is terminated for cause. A termination for cause requires a unanimous decision of the Board other than
the affected Founder. In addition, all of the REE Class B Ordinary Shares shall automatically convert into REE Class A Ordinary
Shares upon the tenth anniversary of the Closing.
Redemption Offer
Pursuant to the Company’s
amended and restated certificate of incorporation and in accordance with the terms of the Merger Agreement, the Company will be
providing its public stockholders with the opportunity to redeem, upon the Effective Time, their respective shares of Company Common
Stock for cash equal to the applicable pro rata share of the aggregate amount on deposit as of two business days prior to the consummation
of the Business Combination in the Company’s trust account (which holds the proceeds of the Company’s initial public
offering, less taxes payable).
Representations, Warranties and
Covenants
Each of REE, the Company
and Merger Sub have made representations, warranties and covenants in the Merger Agreement that are customary for transactions
of this nature. The representations and warranties of the Company, Merger Sub and REE will not survive the closing of the Business
Combination (the “Closing”).
Conditions to Consummation of the
Business Combination
Consummation of the
transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including, among
others, that (i) the Business Combination be approved by the Company’s stockholders and REE’s shareholders; (ii) there
has been no material adverse effect (as defined in the Merger Agreement) that is continuing with respect to REE or the Company
since the date of the Merger Agreement; (iii) the representations and warranties of the Company and REE shall be true and correct
in all material respects on and as of the date of the Merger Agreement and as of the date of the Closing (the “Closing
Date”); (iv) the Company and REE shall have performed all agreements and covenants required by the Merger Agreement at
or prior to the Closing Date in all material respects; (v) the Company will have at least $5,000,001 of net tangible assets immediately
following the Closing (after giving effect to the redemption of public shares by the Company’s public stockholders pursuant
to the redemption offer described above and the PIPE Investment (as defined below)); (vi) the Capital Restructuring shall have
been completed; (vii) the REE Class A Ordinary Shares and REE Warrants shall be approved for listing on Nasdaq upon Closing; (viii)
the PIPE Investment and the funding of the PIPE Investment amount shall have been consummated or will be consummated substantially
concurrently with the Closing; and (ix) the Company shall have at least $225,000,000 in cash and cash equivalents at the time of
the Closing (after giving effect to, among other things, the redemption of public shares by the Company’s public stockholders
pursuant to the redemption offer described above).
Termination
The Merger Agreement
may be terminated at any time prior to the consummation of the Business Combination (i) by mutual written consent of the Company
and REE; (ii) by either the Company or REE if the closing of the transactions contemplated in the Merger Agreement has not occurred
by August 15, 2021 (the “Outside Date”), except that the right to so terminate the Merger Agreement will not
be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transactions
(as defined in the Merger Agreement) to occur on or before such date and such action or failure to act constitutes a material breach
of the Merger Agreement; (iii) by either the Company or REE if a governmental entity has issued an order or decree or has taken
any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions,
including the Business Combination, which order, decree or other action is final and nonappealable; (iv) by REE if the Company
has breached any of its covenants or representations and warranties in any material respect and has not cured such breach within
the time periods provided for in the Merger Agreement (subject to a 30-day cure period); (v) by the Company if REE has breached
any of its covenants or representations and warranties in any material respect and has not cured such breach within the time periods
provided for in the Merger Agreement (subject to a 30-day cure period); (vi) by either the Company or REE, if, at the meeting of
the Company’s stockholders held to approve the Business Combination (including any adjournments thereof), the Merger Agreement,
the Business Combination, and the other transaction proposals contemplated by the Merger Agreement are not duly adopted by the
Company’s stockholders by the requisite vote under applicable legal requirements and the Company’s organizational documents;
(vii) by either the Company or REE, if, at the meeting of REE’s shareholders held to approve the Business Combination (including
any adjournments thereof), the Merger Agreement, the Business Combination, and the other transaction proposals contemplated by
the Merger Agreement are not duly adopted by REE’s shareholders by the requisite vote under applicable legal requirements
and REE’s organizational documents; (viii) by REE, if, prior to receipt of approval of the stockholders of the Company, the
board of directors of the Company changes its recommendation with respect to the Business Combination, as permitted by the Merger
Agreement; (ix) by the Company, if the REE shareholders necessary to approve the Business Combination, the Merger Agreement, and
the transactions contemplated thereby do not deliver voting agreements in support of the transaction within 45 days following the
signing of the Merger Agreement; or (xi) by either the Company or REE, if, at the Closing, the condition regarding the aggregate
amount of available funds described above is incapable of being satisfied at the Closing.
If the Merger Agreement
is validly terminated, no party thereto will have any liability or any further obligation to any other party under the Merger Agreement,
with certain limited exceptions, including liability for any intentional fraud or willful breach of the Merger Agreement.
The Merger Agreement
has been approved by the Company’s board of directors, and the board has recommended that the Company’s stockholders
adopt the Merger Agreement and approve the Business Combination.
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 such agreement. The representations, warranties and covenants in the Merger Agreement are also modified in part
by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality
different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather
than establishing matters as facts. The Company does not believe that these schedules contain information that is material to an
investment decision. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties
thereto or any of their respective subsidiaries or affiliates.
The foregoing description
of the Merger Agreement 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.
Support Agreement
As disclosed in the
Previous Current Report, concurrently with the execution and delivery of the Merger Agreement, the Company, its executive officers
and directors (the “Insiders”), the Sponsor, REE and the REE shareholders party thereto (together with the Insiders
and the Sponsor, the “Voting Parties”) entered into a Support Agreement (the “Support Agreement”),
pursuant to which each of the Voting Parties agreed to, among other things, in their respective capacities as a Company stockholder
or REE shareholders, as applicable, vote their shares of Class A Common Stock in favor of the Business Combination at every meeting
of the Company stockholders’ to be held to approve the Business Combination, and vote their REE Class A Ordinary Shares in
favor of the Business Combination at every meeting of REE shareholders to be held to approve the Business Combination, as applicable.
In addition, each of the Voting Parties agreed not to transfer, directly or indirectly, any of their voting securities of the Company
or REE until the earliest of the Effective Time or the date on which the Merger Agreement is terminated in accordance with its
terms, subject to certain exceptions described in the Support Agreement. Under the terms of the Support Agreement, the Sponsor
and the Insiders each agreed to waive and not to assert or perfect any rights of appraisal or rights to dissent from the transactions
contemplated in the Merger Agreement, and not to exercise any right to redeem any Class A Common Stock.
The foregoing description
of the Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the form
of Support Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Letter Agreement
As disclosed in the
Previous Current Report, concurrently with the execution and delivery of the Merger Agreement, the Company, its executive officers
and directors (the “Insiders”), the Sponsor and REE entered into a SPAC Letter Agreement (the “Letter
Agreement”).
Under the terms of
the Letter Agreement, the Sponsor, as the holder of all outstanding shares of Class B Common Stock, has agreed to waive its right
to receive any Anti-Dilution Shares in excess of the number of shares of Company Common Stock issuable pursuant to the Class B
Share Ratio. In addition, the Sponsor has agreed in the Letter Agreement to forfeit and surrender, after the closing of the Business
Combination, (i) a number of Class A Ordinary Shares of REE equal to (i) 1,500,000 if the volume weighted average trading price
of the Class A Common Stock of the Company on the date of the closing of the Business Combination (the “First Day Trading
Price”) is less than $13.00, (ii) 1,000,000 if the First Trading Day Price equals or exceeds $13.00 but is less than
$16.00, (iii) 500,000 if the First Trading Day Price equals or exceeds $16.00 but is less than $20.00, and (iv) 0 if the First
Trading Day Price equals or exceeds $20.00.
The foregoing description
of the Letter Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the form
of Letter Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Investors’ Rights Agreement
As disclosed in the
Previous Current Report, concurrently with the execution and delivery of the Merger Agreement, REE, the Company, the Sponsor, the
Insiders, and certain Legacy REE Shareholders entered into an Investors’ Rights Agreement (the “Investors’
Rights Agreement”), to be effective as of the Effective Time, pursuant to which REE agreed to file a registration statement
as soon as practicable following the exercise of a demand registration right by certain significant shareholders of REE to register
the resale of certain registrable securities under the Securities Act, subject to required notice provisions to other shareholders
party thereto. Certain Legacy REE Shareholders party to the Investors’ Rights Agreement will be entitled to an aggregate
of three demands and the Sponsor will be entitled to two demands. REE also agreed to provide customary “piggyback”
registration rights with respect to such registrable securities and, subject to certain circumstances, REE is required to file
a resale shelf registration statement to register the resale under the Securities Act of such registrable securities. REE also
agreed to file a resale shelf registration statement within 30 days of the Closing to register the resale of the REE Class A Ordinary
Shares and REE Warrants held by the Sponsor. In addition, in connection with the execution of the Investors’ Rights Agreement,
the Company is obligated to terminate the existing registration rights agreement, dated November 24, 2020. The Investors’
Rights Agreement also provides that REE will pay certain expenses relating to such registrations and indemnify the securityholders
party thereto against certain liabilities.
Under the terms of
the Investors’ Rights Agreement, the Sponsor has agreed that it shall not transfer any of its REE Class A Ordinary Shares
issued in connection with the Business Combination until (i) with respect to 25% of such shares, the date that is 90 days following
the Closing Date, and (ii) with respect to 75% of such shares, the first to occur of (x) the date that is 12 months following the
Closing Date and (y) such time as the closing price of the REE Class A Ordinary Shares equals or exceeds $13.00 per share for any
20 trading days out of 30 consecutive trading days following the Closing Date; provided that if the condition set forth in this
subclause (y) is met prior to the date that is 180 days following the Closing Date, the restriction on such shares shall expire
on the date that is 180 days following the Closing Date (the “Sponsor Lock-Up Period”). Further, each Insider
has agreed that it shall not transfer any of its REE Class A Ordinary Shares issued in connection with the Business Combination
until the date that is 180 days following the Closing Date. The foregoing restrictions on transfer of the Sponsor’s and the
Insiders’ REE Class A Ordinary Shares shall terminate and no longer be applicable upon the date following the Closing Date
on which the REE completes a liquidation, merger, capital stock exchange, or other similar transaction that results in all of REE’s
shareholders having the right to exchange their REE Class A Ordinary Shares for cash, securities or other property. The Sponsor
also has agreed not to transfer any of its REE Warrants until 30 days after the Closing Date.
The foregoing description
of the Investors’ Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions
of the form of Investors’ Rights Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein
by reference.
PIPE Subscription Agreements
As disclosed in the
Previous Current Report, concurrently with the execution and delivery of the Merger Agreement, certain institutional accredited
investors (the “PIPE Investors”), including affiliates of the Sponsor, entered into subscription agreements
(the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors have committed to subscribe for and
purchase up to 30,000,000 shares of Company Common Stock (the “PIPE Shares”) at a purchase price per share of
$10.00. The purchase of the PIPE Shares will be consummated immediately prior to the Closing.
The foregoing description
of the PIPE Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions
of the form of Subscription Agreement, a copy of which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.
Additional Information About the Transactions
and Where to Find It
REE intends to file
with the SEC a Registration Statement on Form F-4, which will include a preliminary proxy statement/prospectus in connection with
the Business Combination. The Company will mail a definitive proxy statement/prospectus and other relevant documents to its stockholders.
The Company’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus,
and amendments thereto, and the definitive proxy statement/prospectus in connection with the Company’s solicitation of proxies
for its stockholders’ meeting to be held to approve the Business Combination because the proxy statement/prospectus will
contain important information about the Company, REE and the Business Combination. The definitive proxy statement/prospectus will
be mailed to stockholders of the Company as of a record date to be established for voting on the Business Combination. Stockholders
will also be able to obtain copies of the Registration Statement on Form F-4 and the proxy statement/prospectus, without charge,
once available, at the SEC’s website at www.sec.gov or by directing a request to: 10X Capital Ventures Acquisition
Corp, 1 World Trade Center, 85th Floor, New York, NY 10007, Attn: Hans Thomas.
Participants in Solicitation
The Company, REE and
certain of their respective directors and officers may be deemed participants in the solicitation of proxies of the Company’s
stockholders with respect to the approval of the Business Combination. Information regarding the Company’s directors and
officers and a description of their interests in the Company is contained in the Company’s final prospectus dated November
24, 2020 filed with the SEC. Additional information regarding the participants in the proxy solicitation, including REE’s
directors and officers, and a description of their direct and indirect interests, by security holdings or otherwise, will be included
in the Registration Statement on Form F-4 and the definitive proxy statement/prospectus for the Business Combination when available.
Each of these documents is, or will be, available at the SEC’s website or by directing a request to the Company as described
above under “Additional Information About the Transaction and Where to Find It.”
In connection with
the Business Combination, at any time prior to the special meeting to approve the Business Combination, certain existing Company
stockholders, which may include certain of the Company’s officers, directors and other affiliates, may enter into transactions
with stockholders and other persons with respect to the Company’s securities to provide such investors or other persons with
incentives in connection with the approval and consummation of the Business Combination. While the exact nature of such incentives
has not yet been determined, they might include, without limitation, arrangements to purchase shares from or sell shares to such
investors and persons at nominal prices or prices other than fair market value. These stockholders will only effect such transactions
when they are not then aware of any material nonpublic information regarding the Company, REE or their respective securities.
Forward Looking Statements
This Current Report
on Form 8-K contains “forward-looking statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as
“anticipate”, “believe”, “could”, “continue”, “expect”, “estimate”,
“may”, “plan”, “outlook”, “future” and “project” and other similar
expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements,
which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and
estimates of amounts not yet determinable and may also relate to the Company’s and REE’s future prospects, developments
and business strategies. In particular, such forward-looking statements include statements concerning the timing of the Business
Combination; the business plans, objectives, expectations and intentions of the public company once the transaction is complete,
and REE’s estimated and future results of operations, business strategies, competitive position, industry environment and
potential growth opportunities. These statements are based on the Company’s or REE’s management’s current expectations
and beliefs, as well as a number of assumptions concerning future events.
Such forward-looking
statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside
the Company’s or REE’s control that could cause actual results to differ materially from the results discussed in the
forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to,
(1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;
(2) the inability to complete the transactions contemplated by the Merger Agreement due to the failure to obtain approval of the
stockholders of the Company or other conditions to closing in the Merger Agreement; (3) the ability of the public entity to meet
Nasdaq’s listing standards following the Business Combination; (4) the inability to complete the private placement; (5) the
risk that the proposed transaction disrupts current plans and operations of REE as a result of the announcement and consummation
of the transactions described herein; (6) the ability to recognize the anticipated benefits of the proposed transaction, which
may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably,
maintain relationships with suppliers and agents and retain its management and key employees; (7) costs related to the proposed
transaction; (8) changes in applicable laws or regulations and delays in obtaining, adverse conditions contained in, or the inability
to obtain necessary regulatory approvals required to complete the potential transaction; (9) the possibility that REE may be adversely
affected by other economic, business, regulatory and/or competitive factors; (10) the outcome of any legal proceedings that may
be instituted against the Company, REE or any of their respective directors or officers, following the announcement of the potential
transaction; and (11) the failure to realize anticipated pro forma results and underlying assumptions, including with respect to
estimated stockholder redemptions and purchase price and other adjustments.
Additional factors
that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found
in the Company’s most recent annual report on Form 10-K, subsequently filed quarterly reports on Form 10-Q and current reports
on Form 8-K, which are available, free of charge, at the SEC’s website at www.sec.gov, and will also be provided in
the Registration Statement on Form F-4 and the Company’s proxy statement/prospectus when available. New risks and uncertainties
arise from time to time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to
place undue reliance upon any forward-looking statements, which speak only as of the date made, and the Company and REE undertake
no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
This communication
is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment
in the Company and is not intended to form the basis of an investment decision in the Company. All subsequent written and oral
forward-looking statements concerning the Company and REE, the proposed transaction or other matters and attributable to the Company
and REE or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.
Disclaimer
This communication
shall neither constitute an offer to sell or the solicitation of an offer to buy any securities, 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.