Exhibit 4.6

 

[Form of Warrant Certificate]

 

[FACE]

 

Number

 

WARRANTS

 

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR IN THE WARRANT AGREEMENT DESCRIBED BELOW

 

Lotus Technology Inc.

 

Incorporated Under the Laws of the Cayman Islands

 

CUSIP [●]

 

Warrant Certificate

 

This Warrant Certificate certifies that [●], or registered assigns, is the registered holder of [ ] warrant(s) (the “Warrants” and each, a “Warrant”) to purchase ordinary shares, $0.00001 par value per share (the “Ordinary Shares”), of Lotus Technology Inc., a Cayman Islands exempted company (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable Ordinary Shares as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement.

 

Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

 

 

Each whole Warrant is initially exercisable for one fully paid and non-assessable Ordinary Share. Fractional shares shall not be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant holder. The number of Ordinary Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.

 

The initial Exercise Price per one Ordinary Share for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.

 

Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions as set forth in the Warrant Agreement.

 

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

 

This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York.

 

	LOTUS TECHNOLOGY INC.
	By:
		Name:
		Title:
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
	AS WARRANT AGENT
	By:
		Name:
		Title:

 

 

[Form of Warrant Certificate]

 

[Reverse]

 

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive [ ] Ordinary Shares of the Company and are issued or to be issued pursuant to (i) the Assignment, Assumption and Amendment Agreement (the “Assignment, Assumption and Amendment Agreement”) dated as of [●] duly executed and delivered by Continental Stock Transfer & Trust Company, a New York limited purpose trust company, as warrant agent (the “Warrant Agent”), the Company, and L Catterton Asia Acquisition Corp and (ii) the Warrant Agreement dated as of March 10, 2021 duly executed and delivered by L Catterton Asia Acquisition Corp to the Warrant Agent and as amended by the Assignment, Assumption and Amendment Agreement (the “Warrant Agreement”). The Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

 

Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.

 

Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance of the Ordinary Shares to be issued upon exercise is effective under the Securities Act, and (ii) a prospectus thereunder relating to the Ordinary Shares is current, except through “cashless exercise” as provided for in the Warrant Agreement.

 

The Warrant Agreement provides that upon the occurrence of certain events the number of Ordinary Shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number of Ordinary Shares to be issued to the holder of the Warrant.

 

 

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

 

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.

 

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.

 

 

Election to Purchase

 

(To Be Executed Upon Exercise of Warrant)

 

Election to Purchase

 

(To Be Executed Upon Exercise of Warrant)

 

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive [ ] Ordinary Shares and herewith tenders payment for such Ordinary Shares to the order of Lotus Technology Inc. (“Company”) in the amount of $[ ] in accordance with the terms hereof. The undersigned requests that the register of members of the Company be updated to reflect the issuance of such Ordinary Shares in the name of the undersigned and a certificate for such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Ordinary Shares be delivered to [ ], whose address is [ ]. If said [ ] number of Ordinary Shares is less than all of the Ordinary Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Warrant Certificate be delivered to [ ], whose address is [ ].

 

In the event that the Warrant has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise its Warrant pursuant to a Make-Whole Exercise, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.

 

In the event that the Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.

 

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.

 

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Ordinary Shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Ordinary Shares. If said number of shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered in the name of [ ], whose address is [ ] and that such Warrant Certificate be delivered to [ ], whose address is [ ].

 

[Signature Page Follows]

 

 

Date: [ ], 20

 

	(Signature)
	(Address)
	(Tax Identification Number)

 

Signature Guaranteed:

 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).

 

 

 

Exhibit 10.9

 

Lotus Technology Inc.

 

2022 STOCK INCENTIVE PLAN

 

1.       Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives to Employees, Directors and Consultants and to promote the success of the Company’s and its Subsidiaries’ business. For the avoidance of doubt, this plan does not intend to provide incentive to and shall not be applicable to any other person.

 

2.       Definitions. The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the definition contained in this Section 2.

 

(a)      “Administrator” means Mr. Qingfeng Feng

 

(b)      “Affiliate” means (a) with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person and (b) in the case of an individual, shall include his/her parents, spouse, children (and their spouses, if any), siblings (and their spouses, if any), and other immediate family members, or any Person Controlled by any of the aforesaid individuals.

(c)      “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable laws, regulations, rules, federal securities laws, state corporate and securities laws, the rules of any applicable stock exchange or national market system, and the laws, regulations, orders or rules of any jurisdiction applicable to the Awards granted to residents therein or the Grantees receiving such Awards.

 

(d)      “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award.

 

(e)      “Award” means the grant of an Option or any other right or benefit under the Plan.

 

(f)       “Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto.

 

(g)      “Board” means the Board of Directors of the Company.

(h)      “Termination Event” means, the Grantee’s: (i) negligence in performing, or refusal to perform, any major duties to the Company or any Related Entity (as stated in the agreement between the Grantee and the Company or any Related Entity, or reasonably assigned by the Company or such Related Entity based on the Grantee’s position), or material violation of any code of conduct, rules, regulations, or policies of the Company or any Related Entity, (ii) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity (economical or reputational), (iii) dishonesty or commitment in an act of theft, embezzlement, fraud, or a breach of trust, (iv) any intentional misconduct or material breach of any labor contract (employment agreement), non-disclosure obligation, non-competition obligation, non-solicitation obligation, code of conducts, employee handbook or other agreement between the Grantee and the Company or any Related Entity, (v) leakage of the Company’s trade secrets (including without limitation operational and technical information), (vi) breach of a fiduciary duty, or commission of a crime (other than minor traffic violations or similar offenses), (vii) material violation of any Applicable Laws or securities laws, (viii) any intentional act in a manner detrimental to the reputation, business operation, assets, or market image of the Company or any Related Entity, (ix) where the Grantee establishes employment relationship with a second employer while Continuous Service is not yet terminated.

 

(i)       “Company” means Lotus Technology Inc., a company incorporated with limited liability under the laws of the Cayman Islands or any successor corporation that adopts the Plan in connection with a Corporate Transaction.

 

(j)       “Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as an Employee or Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

(k)      “Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of a full-time Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated upon an actual termination of Continuous Service, if there has been a change in the entity for which the Grantee provides services, or upon the entity for which the Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Subsidiary, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Subsidiary in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.

 

(l)       “Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. 

(m)     “Corporate Transaction” means (as determined by the Administrator acting reasonably) any of the following transactions:

 

(i)        a merger, amalgamation, consolidation or other business combination of the Company with or into any Person, in which the Company is not the surviving entity, or any other transaction or series of transactions, as a result of which the shareholders of the Company immediately prior to such transaction or series of transactions will cease to own a majority of the voting power of the surviving entity immediately after consummation of such transaction or series of transactions, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

 

(ii)       the sale, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company and its Subsidiaries;

 

(iii)      the complete liquidation or dissolution of the Company;

 

(iv)      any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the Ordinary Shares outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a Person or Persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or

(v)       acquisition in a single or series of related transactions by any Person or related group of Persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.

 

(n)       “Director” means a member of the Board or the board of directors of any Related Entity.

 

(o)       “Employee” means any person, including a Director, who is in the employment of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a Director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company or the Related Entity.

 

(p)       “Exercise Window” means such period of time Administrator shall determine in his sole discretion, with reasonable advance notice to Grantees. Provided that no Exercise Window may be allowed and no exercise may be consummated until the Company’s valuation first reaches RMB 21,670,000,000.

 

“Grantee” means an Employee, Director or Consultant who receives an Award under the Plan.

 

(q)       “IPO” shall mean the Company’s first firm commitment underwritten public offering of any of its securities (or the securities of a successor corporation) to the general public pursuant to (a) a registration statement filed under the Securities Act of 1933, as amended, or (b) the securities laws applicable to an offering of securities in another jurisdiction pursuant to which such securities will be listed on an internationally recognized securities exchange.

(r)       “M&A” means the currently effective memorandum and articles of association of the Company, as amended from time to time.

 

(s)       “Ordinary Share” means the Company’s ordinary shares of a par value of US$0.00001 each.

 

(t)       “Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.

 

(u)      “Parent” means any company (other than the Company) in an unbroken chain of companies ending with the Company, if each of the companies (other than the Company) owns or Controls stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other companies in such chain. A company that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

(v)      “Person” means any individual, corporation, partnership, limited partnership, limited liability company, firm, joint venture, estate, trust, unincorporated organization, association, enterprise, institution, public benefit corporation, entity or governmental or regulatory authority or other entity of any kind or nature.

 

(w)     “Plan” means this 2022 Stock Incentive Plan.

(x)       “Registration Date” means the first to occur of (i) the closing of the IPO; and (ii) in the event of a Corporate Transaction, the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation (or its Parent) issuable in such Corporate Transaction shall have been sold to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or prior to the date of consummation of such Corporate Transaction.

 

(y)      “Related Entity” means any Subsidiary of the Company and Lotus Advanced Technology Limited Partnership, ETIKA AUTOMOTIVE SDN. BHD., Zhejiang Geely Holding Group Limited, and LOTUS GROUP INTERNATIONAL LIMITED, and in whichever event shall exclude any portfolio company of the Company and other non-Subsidiary Affiliates of the Company.

 

(z)       “Replaced” means that pursuant to a Corporate Transaction the Award is replaced with a comparable share or stock award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive.

 

(aa)    “Share” means an Ordinary Share of the Company.

 

(bb)    “Spin-off Transaction” means a distribution by the Company to its shareholders of all or any portion of the securities of any Subsidiary of the Company.

(cc)     “Investor Rights Agreement” means any agreement entered into by and among the Company, and certain investors of the Company (as amended, restated and supplemented from time to time).

 

(dd)    “Subsidiary” means with respect to a specific entity, (i) any entity (x) more than fifty percent (50%) of whose shares or other interests entitled to vote in the election of directors or (y) more than a fifty percent (50%) interests in whose profits or capital, are owned or Controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity; (ii) any entity whose assets, or portions thereof, are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with U.S. GAAP; or (iii) any entity with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly through another Subsidiary.

 

(ee)     “U.S. Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

3.       Shares Subject to the Plan.

 

(a)       The Shares to be issued pursuant to the Awards under this Plan shall be authorized, but unissued, or reacquired Ordinary Shares. Subject to the provisions of Section 10 below, the maximum aggregate number of Shares that may be issued pursuant to all Awards is [232,751,852] Shares (proportionally adjusted to reflect any share dividends, share splits, or similar transactions).

(b)       Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company, such Shares shall become available for future grant under the Plan. To the extent not prohibited by the Applicable Law and the listing requirements of the applicable stock exchange or national market system on which the Ordinary Shares are traded, any Shares covered by an Award which are surrendered (i) in payment of the Award exercise or purchase price or (ii) in satisfaction of tax withholding obligations incident to the exercise of an Award shall be deemed not to have been issued for purposes of determining the maximum number of Shares which may be issued pursuant to all Awards under the Plan, unless otherwise determined by the Administrator.

 

4.       Administration of the Plan.

 

(a)       Plan Administrator.

 

(i)       Administration. The Plan shall be administered by the Administrator. The Administrator may authorize one or more officers or directors to grant such Awards and may limit such authority as the Administrator determines from time to time.

 

(ii)      Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws and approved by the Administration.

(b)       Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), the Administrator shall have the authority, in its discretion:

 

(i)       to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

 

(ii)     to determine whether and to what extent Awards are granted hereunder;

 

(iii)     to determine the type or the number of Awards to be granted, the number of Shares or the amount of consideration to be covered by each Award granted hereunder;

 

(iv)     to approve forms of Award Agreements for use under the Plan, to amend terms of the Award Agreements;

 

(v)      to determine or alter the terms and conditions of any Award granted hereunder (including without limitation the vesting schedule and exercise price set forth in the Notice of Stock Option Award and the Award Agreements);

 

(vi)     to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the Grantee’s rights under an outstanding Award in material aspects shall not be made without the Grantee’s written consent;

 

(vii)    to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement, granted pursuant to the Plan;

(viii)   to require the Grantee to provide representation or evidence that any currency used to pay the exercise price of any Award was legally acquired and taken out of the jurisdiction in which the Grantee resides in accordance with the Applicable Laws;

 

(ix)      to determine whether and at what price to repurchase from the Grantee all or any portion of the Shares obtained by the Grantee upon exercise of any Awards; and

 

(x)       to take such other action, not inconsistent with the terms of the Plan and the Applicable Laws, as the Administrator deems appropriate.

 

(c)       Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or Employees of the Company or a Related Entity, members of the Board and any Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by Applicable Law and in the manner approved by the Administrator, on an after-tax basis, against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such Person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such Person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same.

5.       Eligibility. Awards may be granted to Employees, Directors and Consultants. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards.

 

6.       Terms and Conditions of Awards.

 

(a)       Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) an Option or any other similar right with a fixed or variable price of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions.

 

(b)       Designation of Award. Each Award shall be designated in the Award Agreement.

 

(c)       Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. Each Award shall be subject to the terms of an Award Agreement approved by the Administrator. The performance criteria may be applicable to the Company, Related Entities and/or any individual business units of the Company or any Related Entity.

(d)       Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, share purchase, asset purchase or other form of transaction.

 

(e)       Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time.

 

(f)       Term of Award. The term of each Award shall be the term stated in the Award Agreement.

 

(g)       Non-transferability of Award. The Grantee shall not transfer, sell, hypothecate, encumber or otherwise dispose of any shares, any Award, or any right or interest under this plan without first obtaining the prior written consent of the Company and complying with the provisions of any applicable provisions of the Investor Rights Agreement and the M&A.

 

(h)       Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator.

7.       Award Exercise or Purchase Price, Consideration and Taxes.

 

(a)       Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be determined by the Administrator.

 

Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award.

 

(b)       Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator. In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following:

 

(i)        cash;

 

(ii)       check;

 

(iii)      if the exercise or purchase occurs on or after the Registration Date, or as otherwise permitted by the Administrator, surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which have a value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised;

(iv)       with respect to Options, if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or

 

(v)       any combination of the foregoing methods of payment.

 

The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in Section 4(b)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares or which otherwise restrict one or more forms of consideration.

 

(c)       Taxes. No Shares shall be delivered under the Plan to any Grantee or other Person until such Grantee or other Person has made arrangements acceptable to the Administrator for the satisfaction of any income and employment tax withholding obligations under any Applicable Laws. The Grantee shall be responsible for all taxes associated with the receipt, vest, exercise, transfer and disposal of the Awards and the Shares. Upon exercise of an Award, the Company and/or the Related Entity which is an employer of the Grantee shall have the right to withhold or collect from Grantee an amount sufficient to satisfy such tax obligations.

8.       Exercise of Award.

 

(a)       Procedure for Exercise; Rights as a Shareholder.

 

(i)       Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement. Any Award granted hereunder that has been vested may be exercised only during an Exercise Window.

 

(ii)       An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company, during an Exercise Window, in accordance with the terms of the Award by the Person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(iv).

 

(b)       No Exercise in Violation of Applicable Law.

 

Notwithstanding the foregoing, regardless of whether an Award has otherwise become exercisable, the Award shall not be exercised if the Administrator (in its sole discretion) determines that an exercise would violate any Applicable Laws.

 

(c)       Restrictions on Exercise.

 

Notwithstanding the foregoing, regardless of whether an Award has become vested and exercisable, no Award may be exercised until after the Registration Date (subject to any further blackout/silence period as required by law).

9.       Conditions Upon Issuance of Shares.

 

(a)       Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, the M&A and the relevant Award Agreement, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 

(b)       As a condition to the exercise of an Award, the Company may require the Person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

 

(c)       As a condition to the exercise of an Award, the applicable Award Agreement may require the Grantee to grant a power of attorney to the Board or any Person designated by the Board to exercise the voting rights with respect to the Shares and the Company may require the Person exercising such Award to acknowledge and agree to be bound by the provisions of the currently effective M&A and other documents of the Company in relation to the Shares (if any, including any Investor Rights Agreement), as if the Grantee is a holder of Ordinary Shares thereunder.

10.       Termination. Upon termination of the Grantee’s Continuous Service for any reason, or upon occurrence of any Termination Event (without regard to whether Grantee’s Continuous Service terminates), all Awards, whether vested or unvested, will be terminated immediately without further effect (“Termination”).

 

11.       Adjustments Upon Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Award, the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Grantee in any fiscal year of the Company, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Ordinary Shares including a corporate merger, consolidation, acquisition of property or equity, separation (including a spin-off or other distribution of shares or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award. In the event of a Spin-off Transaction, the Administrator may in its discretion make such adjustments and take such other action as it deems appropriate with respect to outstanding Awards under the Plan, including but not limited to: (i) adjustments to the number and kind of Shares, the exercise or purchase price per Share and the vesting periods of outstanding Awards, (ii) prohibit the exercise of Awards during certain periods of time prior to the consummation of the Spin-off Transaction, or (iii) the substitution, exchange or grant of Awards to purchase securities of the Subsidiary; provided that the Administrator shall not be obligated to make any such adjustments or take any such action hereunder.

12.       Corporate Transactions. In the event of a Corporate Transaction, each Award can be, as determined by the Administrator, Assumed or Replaced (or without taking any action) immediately prior to the specified effective date of such Corporate Transaction. All outstanding Awards under the Plan shall terminate upon the consummation of such Corporate Transaction, provided however that, all such Awards shall not terminate to the extent they are Assumed or Replaced in connection with the Corporate Transaction.

 

13.       Effective Date and Term of Plan. The Plan shall become effective upon its adoption by the Board or the Company’s shareholders or as otherwise specified by the Board or the Company’s shareholders when adopting the Plan. The Plan shall continue in effect for a term of ten (10) years after the date of adoption, unless sooner terminated. Subject to Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

 

14.       Amendment, Suspension or Termination of the Plan.

 

(a)       The Board may at any time amend (including extend the term of the Plan), suspend or terminate the Plan; provided, however, that no such amendment, suspension or termination shall be made without the approval of the Company’s shareholders to the extent such approval is required by Applicable Laws or as otherwise determined by the board at the time of adoption of this plan.

(b)       No Award may be granted during any suspension of the Plan or after termination of the Plan.

 

(c)       Unless otherwise determined by the Administrator in good faith, the suspension, amendment or termination of the Plan (including termination of the Plan under Section 12, above) shall not materially adversely affect any rights under Awards already granted to a Grantee.

 

15.       Reservation of Shares.

 

(a)       The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

(b)       The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 

16.       No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause, and with or without notice.

17.       No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

18.       Vesting Schedule. The Awards to be issued to any Grantee at such time prior to the Registration Date shall be subject to the vesting schedule as specified in the Award Agreement of such Grantee. The Administrator shall have the right to adjust the vesting schedule of the Awards granted to the Grantees.

 

19.       IPO. In the case of an IPO, the Grantees shall enter into any agreements with any underwriter, coordinator, bankers or sponsor elected by the Company for the purpose of the IPO, and each of such Grantees shall grant to the Board or a Person designated by the Board, a power of attorney to enter into any agreements with any underwriter, coordinator, bankers or sponsor elected by the Company and to do and carry out all the acts and to execute all the documents that are necessary or advisable to complete the IPO.

 

20.       Holding Company, Trustee, etc. Notwithstanding anything to the contrary in this Plan, any Award Agreement, any notice of award or the terms on which any Award is granted or vested, any underlying Share of the Awards may, at the Administrator’s own discretion, be held by one or more holding companies or trustees or other nominees (collectively, the “Trustees”) as designated by the Administrator for the Grantees, and the Plan may be implemented and administrated by the Administrator through the Trustees.

21.       Unfunded Obligation. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes. Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

 

22.       Entire Plan. This Plan, the individual Award Agreements and notices of issuance of the Awards, together with all the exhibits hereto and thereto, constitute and contain the entire stock incentive plan and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, memorandum, duties or obligations between the parties respecting the subject matter hereof.

 

23.       Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

24.       Governing Law. This Plan is to be construed in accordance with and governed by the laws of Hong Kong Special Administrative Region, without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the laws of Hong Kong Special Administrative Region to the rights and duties of the parties.

 

Exhibit 10.10

 

INDEMNIFICATION AGREEMENT

 

This INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of                             by and between Lotus Technology Inc., an exempted company incorporated and existing under the laws of the Cayman Islands (the “Company”), and                             , an individual (Passport/ID Card No._________ ) (the “Indemnitee”).

 

WHEREAS, the Indemnitee has agreed to serve as a director or officer of the Company and in such capacity will render valuable services to the Company; and

 

WHEREAS, in order to induce and encourage highly experienced and capable persons such as the Indemnitee to render valuable services to the Company, the board of directors of the Company (the “Board”) has determined that this Agreement is not only reasonable and prudent, but necessary to promote and ensure the best interests of the Company and its shareholders;

 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, and other good and valuable consideration, including, without limitation, the service of the Indemnitee, the receipt of which hereby is acknowledged, and in order to induce the Indemnitee to render valuable services the Company, the Company and the Indemnitee hereby agree as follows:

 

1.             Definitions. As used in this Agreement:

 

(a)               “Change in Control” shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar or successor schedule or form) promulgated under the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred (irrespective of the applicability of the initial clause of this definition) if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act, but excluding any trustee or other fiduciary holding securities pursuant to an employee benefit or welfare plan or employee share plan of the Company or any subsidiary or affiliate of the Company, or any entity organized, appointed, established or holding securities of the Company with voting power for or pursuant to the terms of any such plan) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities without the prior approval of at least two-thirds of the Continuing Directors (as defined below) in office immediately prior to such person’s attaining such interest; (ii) the Company is a party to a merger, consolidation, scheme of arrangement, sale of assets or other reorganization, or a proxy contest, as a consequence of which Continuing Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of the Company (or any successor entity) thereafter; or (iii) during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board of the Company (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) (such directors being referred to herein as “Continuing Directors”) cease for any reason to constitute at least a majority of the Board of the Company.

 

 

(b)               “Disinterested Director” with respect to any request by the Indemnitee for indemnification or advancement of expenses hereunder shall mean a director of the Company who neither is nor was a party to the Proceeding (as defined below) in respect of which indemnification or advancement is being sought by the Indemnitee.

 

(c)               The term “Expenses” shall mean, without limitation, expenses of Proceedings, including attorneys’ fees, disbursements and retainers, accounting and witness fees, expenses related to preparation for service as a witness and to service as a witness, travel and deposition costs, expenses of investigations, judicial or administrative proceedings and appeals, amounts paid in settlement of a Proceeding by or on behalf of the Indemnitee, costs of attachment or similar bonds, any expenses of attempting to establish or establishing a right to indemnification or advancement of expenses, under this Agreement, the Company’s Memorandum of Association and Articles of Association as currently in effect (the “Articles”), applicable law or otherwise, and reasonable compensation for time spent by the Indemnitee in connection with the investigation, defense or appeal of a Proceeding or action for indemnification for which the Indemnitee is not otherwise compensated by the Company or any third party. The term “Expenses” shall not include the amount of judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, which are actually levied against or sustained by the Indemnitee to the extent sustained after final adjudication.

 

(d)               The term “Independent Legal Counsel” shall mean any firm of attorneys reasonably selected by the Board of the Company, so long as such firm has not represented the Company, the Company’s subsidiaries or affiliates, the Indemnitee, any entity controlled by the Indemnitee, or any party adverse to the Company, within the preceding five (5) years. Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification or advancement of expenses under this Agreement, the Company’s Articles, applicable law or otherwise.

 

(e)               The term “Proceeding” shall mean any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, or other proceeding (including, without limitation, an appeal therefrom), formal or informal, whether brought in the name of the Company or otherwise, whether of a civil, criminal, administrative or investigative nature, and whether by, in or involving a court or an administrative, other governmental or private entity or body (including, without limitation, an investigation by the Company or its Board), by reason of (i) the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, whether or not the Indemnitee is serving in such capacity at the time any liability or expense is incurred for which indemnification or reimbursement is to be provided under this Agreement, (ii) any actual or alleged act or omission or neglect or breach of duty, including, without limitation, any actual or alleged error or misstatement or misleading statement, which the Indemnitee commits or suffers while acting in any such capacity, or (iii) the Indemnitee attempting to establish or establishing a right to indemnification or advancement of expenses pursuant to this Agreement, the Company’s Articles, applicable law or otherwise.

 

 

(f)               The phrase “serving at the request of the Company as an agent of another enterprise” or any similar terminology shall mean, unless the context otherwise requires, serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, limited liability company, trust, employee benefit or welfare plan or other enterprise, foreign or domestic. The phrase “serving at the request of the Company” shall include, without limitation, any service as a director/an executive officer of the Company which imposes duties on, or involves services by, such director/executive officer with respect to the Company or any of the Company’s subsidiaries, affiliates, employee benefit or welfare plans, such plan’s participants or beneficiaries or any other enterprise, foreign or domestic. In the event that the Indemnitee shall be a director, officer, employee or agent of another corporation, partnership, joint venture, limited liability company, trust, employee benefit or welfare plan or other enterprise, foreign or domestic, 50% or more of the ordinary shares, combined voting power or total equity interest of which is owned by the Company or any subsidiary or affiliate thereof, then it shall be presumed conclusively that the Indemnitee is so acting at the request of the Company.

 

2.             Services by the Indemnitee. The Indemnitee agrees to serve as a director or officer of the Company under the terms of the Indemnitee’s agreement with the Company for so long as the Indemnitee is duly elected or appointed or until such time as the Indemnitee tenders a resignation in writing or is removed from the Indemnitee’s position; provided, however, that the Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or other obligation imposed by operation of law).

 

3.             Proceedings by or in the Right of the Company. The Company shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise involved in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, against all Expenses, judgments, fines, interest or penalties, and excise taxes assessed with respect to any employee benefit or welfare plan, which are actually and reasonably incurred by the Indemnitee in connection with the defense or settlement of such a Proceeding, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company; except that no indemnification under this section shall be made in respect of any claim, issue or matter as to which such person shall have been adjudicated by final judgment by a court of competent jurisdiction to be liable to the Company for willful misconduct in the performance of his/her duty to the Company, unless and only to the extent that the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such amounts which such other court shall deem proper.

 

4.             Proceeding Other Than a Proceeding by or in the Right of the Company. The Company shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise involved in any Proceeding (other than a Proceeding by or in the right of the Company), by reason of the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, against all Expenses, judgments, fines, interest or penalties, and excise taxes assessed with respect to any employee benefit or welfare plan, which are actually and reasonably incurred by the Indemnitee in connection with such a Proceeding, to the fullest extent permitted by applicable law; provided, however, that any settlement of a Proceeding must be approved in advance in writing by the Company (which approval shall not be unreasonably withheld).

 

 

5.             Indemnification for Costs, Charges and Expenses of Witness or Successful Party. Notwithstanding any other provision of this Agreement (except as set forth in subparagraph 9(a) hereof), and without a requirement for determination as required by Paragraph 8 hereof, to the extent that the Indemnitee (a) has prepared to serve or has served as a witness in any Proceeding in any way relating to (i) the Company or any of the Company’s subsidiaries, affiliates, employee benefit or welfare plans or such plan’s participants or beneficiaries or (ii) anything done or not done by the Indemnitee as a director or officer of the Company or in connection with serving at the request of the Company as an agent of another enterprise, or (b) has been successful in defense of any Proceeding or in defense of any claim, issue or matter therein, on the merits or otherwise, including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without an admission of liability, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee in connection therewith to the fullest extent permitted by applicable law.

 

6.             Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of the Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, which are actually and reasonably incurred by the Indemnitee in the investigation, defense, appeal or settlement of any Proceeding, but not, however, for the total amount of the Indemnitee’s Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, then the Company shall nevertheless indemnify the Indemnitee for the portion of such Expenses, judgments, fines, interest or penalties or excise taxes to which the Indemnitee is entitled.

 

7.             Advancement of Expenses. The Expenses incurred by the Indemnitee in any Proceeding shall be paid promptly by the Company in advance of the final disposition of the Proceeding at the written request of the Indemnitee to the fullest extent permitted by applicable law; provided, however, that the Indemnitee shall set forth in such request reasonable evidence that such Expenses have been incurred by the Indemnitee in connection with such Proceeding, a statement that such Expenses do not relate to any matter described in subparagraph 9(a) of this Agreement, and an undertaking in writing to repay any advances if it is ultimately determined as provided in subparagraph 8(b) of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement.

 

8.             Indemnification Procedure; Determination of Right to Indemnification.

 

(a)               Promptly after receipt by the Indemnitee of notice of the commencement of any Proceeding, the Indemnitee shall, if a claim for indemnification or advancement of Expenses in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof in writing. The failure and delay to so notify the Company will not relieve the Company from any liability which the Company may have to the Indemnitee under this Agreement unless the Company shall have lost significant substantive or procedural rights with respect to the defense of any Proceeding as a result of such omission to so notify.

 

 

(b)              The Indemnitee shall be conclusively presumed to have met the relevant standards of conduct, if any, as defined by applicable law, for indemnification pursuant to this Agreement and shall be absolutely entitled to such indemnification, unless a determination is made that the Indemnitee has not met such standards by (i) the Board by a majority vote of a quorum thereof consisting of Disinterested Directors, (ii) the shareholders of the Company by  majority vote of a quorum thereof consisting of shareholders who are not parties to the Proceeding due to which a claim for indemnification is made under this Agreement, (iii) Independent Legal Counsel as set forth in a written opinion (it being understood that such Independent Legal Counsel shall make such determination only if the quorum of Disinterested Directors referred to in clause (i) of this subparagraph 8(b) is not obtainable or if the Board of the Company by a majority vote of a quorum thereof consisting of Disinterested Directors so directs), or (iv) a court of competent jurisdiction; provided, however, that if a Change in Control shall have occurred and the Indemnitee so requests in writing, such determination shall be made only by a court of competent jurisdiction.

 

(c)               If a claim for indemnification or advancement of Expenses under this Agreement is not paid by the Company within thirty (30) days after receipt by the Company of written notice thereof, the rights provided by this Agreement shall be enforceable by the Indemnitee in any court of competent jurisdiction. Such judicial proceeding shall be made de novo. The burden of proving that indemnification or advances are not appropriate shall be on the Company. Neither the failure of the directors or shareholders of the Company or Independent Legal Counsel to have made a determination prior to the commencement of such action that indemnification or advancement of Expenses is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, if any, nor an actual determination by the directors or shareholders of the Company or Independent Legal Counsel that the Indemnitee has not met the applicable standard of conduct shall be a defense to an action by the Indemnitee or create a presumption for the purpose of such an action that the Indemnitee has not met the applicable standard of conduct. The termination of any Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself (i) create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in the best interests of the Company and/or its shareholders, and, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful or (ii) otherwise adversely affect the rights of the Indemnitee to indemnification or advancement of Expenses under this Agreement, except as may be provided herein.

 

(d)               If a court of competent jurisdiction shall determine that the Indemnitee is entitled to any indemnification or advancement of Expenses hereunder, the Company shall pay all Expenses actually and reasonably incurred by the Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings).

 

 

(e)               With respect to any Proceeding for which indemnification or advancement of Expenses is requested, the Company will be entitled to participate therein at its own expense and, except as otherwise provided below, to the extent that it may wish, the Company may assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of its election to assume the defense of a Proceeding, the Company will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense thereof, other than as provided below. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. The Indemnitee shall have the right to employ his/her own counsel in any Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense of the Proceeding shall be at the expense of the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of a Proceeding, or (iii) the Company shall not in fact have employed counsel to assume the defense of a proceeding, in each of which cases the fees and expenses of the Indemnitee’s counsel shall be advanced by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which the Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee.

 

9.             Limitations on Indemnification. No payments pursuant to this Agreement shall be made by the Company:

 

(a)               To indemnify or advance funds to the Indemnitee for Expenses with respect to (i) Proceedings initiated or brought voluntarily by the Indemnitee and not by way of defense, except with respect to Proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under applicable law or (ii) Expenses incurred by the Indemnitee in connection with preparing to serve or serving, prior to a Change in Control, as a witness in cooperation with any party or entity who or which has threatened or commenced any action or proceeding against the Company, or any director, officer, employee, trustee, agent, representative, subsidiary, parent corporation or affiliate of the Company, but such indemnification or advancement of Expenses in each such case may be provided by the Company if the Board finds it to be appropriate;

 

(b)               To indemnify the Indemnitee for any Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, sustained in any Proceeding for which payment is actually made to the Indemnitee under a valid and collectible insurance policy, except in respect of any excess beyond the amount of payment under such insurance;

 

(c)               To indemnify the Indemnitee for any Expenses, judgments, fines, interest or penalties sustained in any Proceeding for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Act or similar provisions of any foreign or United States federal, state or local statute or regulation;

 

(d)               To indemnify the Indemnitee for any Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, for which the Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement;

 

(e)               To indemnify the Indemnitee for any Expenses (including without limitation any Expenses relating to a Proceeding attempting to enforce this Agreement), judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, on account of the Indemnitee’s conduct if such conduct shall be finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct, including, without limitation, breach of the duty of loyalty; or

 

 

(f)                If a court of competent jurisdiction finally determines that any indemnification hereunder is unlawful. In this respect, the Company and the Indemnitee have been advised that the U.S. Securities and Exchange Commission takes the position that indemnification for liabilities arising under securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication;

 

(g)               To indemnify the Indemnitee in connection with Indemnitee’s personal tax matter; or

 

(h)               To indemnify the Indemnitee with respect to any claim related to any dispute or breach arising under any contract or similar obligation between the Company or any of its subsidiaries or affiliates and such Indemnitee.

 

10.           Continuation of Indemnification. All agreements and obligations of the Company contained herein shall continue during the period that the Indemnitee is a director or officer of the Company (or is or was serving at the request of the Company as an agent of another enterprise, foreign or domestic) and shall continue thereafter so long as the Indemnitee shall be subject to any possible Proceeding by reason of the fact that the Indemnitee was a director or officer of the Company or serving in any other capacity referred to in this Paragraph 10.

 

11.           Indemnification Hereunder Not Exclusive. The indemnification provided by this Agreement shall not be deemed to be exclusive of any other rights to which the Indemnitee may be entitled under the Company’s Articles, any agreement, vote of shareholders or vote of Disinterested Directors, provisions of applicable law, or otherwise, both as to action or omission in the Indemnitee’s official capacity and as to action or omission in another capacity on behalf of the Company while holding such office.

 

12.           Successors and Assigns.

 

(a)               This Agreement shall be binding upon the Indemnitee, and shall inure to the benefit of, the Indemnitee and the Indemnitee’s heirs, executors, administrators and assigns, whether or not the Indemnitee has ceased to be a director or officer, and the Company and its successors and assigns. Upon the sale of all or substantially all of the business, assets or share capital of the Company to, or upon the merger of the Company into or with, any corporation, partnership, joint venture, trust or other person, this Agreement shall inure to the benefit of and be binding upon both the Indemnitee and such purchaser or successor person. Subject to the foregoing, this Agreement may not be assigned by either party without the prior written consent of the other party hereto.

 

(b)               If the Indemnitee is deceased and is entitled to indemnification under any provision of this Agreement, the Company shall indemnify the Indemnitee’s estate and the Indemnitee’s spouse, heirs, executors, administrators and assigns against, and the Company shall, and does hereby agree to assume, any and all Expenses actually and reasonably incurred by or for the Indemnitee or the Indemnitee’s estate, in connection with the investigation, defense, appeal or settlement of any Proceeding. Further, when requested in writing by the spouse of the Indemnitee, and/or the Indemnitee’s heirs, executors, administrators and assigns, the Company shall provide appropriate evidence of the Company’s agreement set out herein to indemnify the Indemnitee against and to itself assume such Expenses.

 

 

13.           D&O Liability Insurance. To the extent that the Company maintains a policy or policies of insurance (the “D&O Liability Insurance”) providing liability insurance for directors and officers of the Company in their capacities as such (and for any capacity in which any director or officer of the Company serves any other enterprise at the request of the Company), in respect of acts or omissions occurring while serving in such capacity, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any other director or officer under such policy or policies.

 

14.           Insurance and Subrogation.

 

(a)               If, at the time the Company receives notice of a claim hereunder, the Company has D&O Liability Insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. The failure or refusal of any such insurer to pay any such amount shall not affect or impair the obligations of the Company under this Agreement.

 

(b)               In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

 

(c)               The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided) hereunder if and to the extent that Indemnitee has actually received such payment under any insurance policy (including without limitation to policies of the D&O Liability Insurance) or other indemnity provision.

 

15.          Severability. Each and every paragraph, sentence, term and provision of this Agreement is separate and distinct so that if any paragraph, sentence, term or provision thereof shall be held to be invalid, unlawful or unenforceable for any reason, such invalidity, unlawfulness or unenforceability shall not affect the validity, unlawfulness or enforceability of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision of this Agreement may be modified by a court of competent jurisdiction to preserve its validity and to provide the Indemnitee with the broadest possible indemnification permitted under applicable law. The Company’s inability, pursuant to a court order or decision, to perform its obligations under this Agreement shall not constitute a breach of this Agreement.

 

16.          Savings Clause. If this Agreement or any paragraph, sentence, term or provision hereof is invalidated on any ground by any court of competent jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any Expenses, judgments, fines, interest or penalties, or excise taxes assessed with respect to any employee benefit or welfare plan, which are incurred with respect to any Proceeding to the fullest extent permitted by any (a) applicable paragraph, sentence, term or provision of this Agreement that has not been invalidated or (b) applicable law.

 

17.          Interpretation; Governing Law. This Agreement shall be construed as a whole and in accordance with its fair meaning and any ambiguities shall not be construed for or against either party. Headings are for convenience only and shall not be used in construing meaning. This Agreement shall be governed and interpreted in all respects in accordance with the laws of the Cayman Islands without regard to the conflict of laws principles thereof.

 

 

18.          Amendments. No amendment, waiver, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by the party against whom enforcement is sought. The indemnification rights afforded to the Indemnitee hereby are contract rights and may not be diminished, eliminated or otherwise affected by amendments to the Company’s Articles, or by other agreements, including directors’ and officers’ liability insurance policies, of the Company.

 

19.           Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to the other.

 

20.           Notices. Any notice required to be given under this Agreement shall be directed to the Company at No. 800 Century Avenue, Pudong District, Shanghai, People’s Republic of China, and to the Indemnitee at __________________________________________or to such other address as either party shall designate to the other in writing.

 

[The remainder of this page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, the parties have executed this Indemnification Agreement as of the date first written above.

 

	LOTUS TECHNOLOGY INC.
	By:
	Name:
	Title:
	INDEMNITEE
	By:
	Name:

 

[Signature Page to Indemnification Agreement]

 

 

 

Exhibit 10.11

 

Labor Contract

 

Company：

	Department:

	Name:

 

 

Labor Contract

 

Party A (Employer):

 

Legal representative:

 

Address:

 

Party B (Laborer)

 

Name:

Gender:

 

ID Card No.:

 

Contact address:

 

Family address:

 

Personal frequently used e-mail:

Emergency contact:

Emergency contact information:

 

Pursuant to the Labor Law of the People’s Republic of China, Labor Contract Law of the People’s Republic of China and relevant laws, regulations and rules, Party A and Party B, on the basis of equality and free will, agree to enter into, and abide by, this Contract.

 

Article 1      Term of the Labor Contract

 

1. Party A and Party B opt for the form as specified in Subparagraph 1.1 below to determine the term of this Labor Contract.

 

1.1 A fixed-term labor contract, under which the contract term commences from                                (MM/DD/YYYY) and ends on                       (MM/DD/YYYY).

 

1.2 An open-ended labor contract, under which the contract term commences from                           (MM/DD/YYYY) and ends at the time when the conditions for statutory termination of the contract arise.

 

1.3 A labor contract with a term subject to the completion of certain tasks, under which the contract term commences from                          (MM/DD/YYYY) and ends on the date when Party B completes the tasks assigned by Party A.

 

2. This Contract stipulates a probationary period which is             months from                                  (MM/DD/YYYY) to                            (MM/DD/YYYY).

 

 

Article 2      Work Content and Work Location

 

1. The work content of Party B includes:

 

Job position and work content can be found in the offer letter/job description/job qualifications and content;

 

                                                                                                                                                                                                                                                                      ;

 

Other work arranged by Party A.                                                                                                                                                                                                              

 

Party B undertakes to complete the work on time, with quality and quantity as per the work content and requirements given by Party A.

 

2. Party B’s work location ..

 

3. Party A shall have the right to reasonably adjust Party B’s job position, work content and work location in accordance with national laws and regulations, and in line with production and operation needs, laborers’ physical condition, work ability and work performance, and make corresponding adjustments to salaries and benefits in accordance with relevant rules and regulations of Party A. Party B agrees to and obeys Party A’s work arrangements. Where Party B refuses to accept such work arrangements, it will be deemed as a serious breach and violation of the content of this Contract agreed by both parties and the rules and regulations of Party A. In this case, Party A may terminate this Labor Contract.

 

Article 3      Labor Protection, Working Conditions and Occupational Hazard Protection

 

1. Both Party A and Party B must strictly abide by the relevant national regulations on production safety, labor protection, and occupational hazard protection.

 

2. Party A shall provide Party B with labor safety and sanitation conditions and necessary labor protection articles in compliance with national regulations, and provide Party B with production safety and hygiene knowledge education, safe operation training and other business technical trainings in accordance with relevant national regulations. Party B shall participate in such trainings, and strictly abide by various safety operating procedures, production safety and sanitation management systems, and various rules and regulations formulated by Party A under laws.

 

3. Party A shall be obliged to inform Party B of the positions that may cause occupational disease hazards, and do a good job in the prevention of occupational disease hazards in the labor process, and Party B shall actively cooperate therewith.

 

Article 4      Working Hours and Days Off, Leaves and Vacations

 

1. The dominant working hour system implemented by Party A for the time being is the standard working hour system.

 

2. Party A may implement the variable working hour system or the comprehensive working hour system after reporting to, and approved by, the competent labor authority.

 

 

For employees who are subject to the variable working hour system and the comprehensive working hour system, the work, days off, leaves and vacations shall be scientifically arranged under the premise of ensuring that Party B may complete the work tasks on time with quality and quantity.

 

3. Party B shall be entitled to statutory holidays regulated by the State and to the leaves and vacations determined by the Company in accordance with its internal systems and relevant national regulations.

 

4. Party B agrees to accept the overtime arrangement made by Party A in line with the needs of production and operation. Unless arranged by Party A, if Party B considers that it is necessary to work overtime for the purpose of completing work tasks, he or she shall go through the overtime application and approval procedures in accordance with Party A’s relevant regulations. Otherwise, Party B’s work will not be regarded as overtime work, and Party B shall has no right to demand corresponding compensatory leave or overtime wages. For employees subject to standard working hour system and comprehensive working hour system, who are approved by Party A to work overtime under laws, Party A shall arrange the same time compensatory leave for such employees or pay overtime wages to such employees in accordance with Chinese laws.

 

Where Party B believes that Party A is illegally forcing overtime, he or she shall have the right to raise written objections thereto in advance.

 

Where Party B has accepted, and actually implemented, Party A’s overtime arrangement, it shall be deemed that Party B has accepted the overtime arrangement of his or her own accord.

 

The accounting base of Party B’s overtime wages shall be determined based on the basic wage in Party B’s wage structure (and not lower than the local minimum wage standard).

 

Article 5      Labor Remuneration and Calculation Standards

 

1. The salary of Party B shall be listed in the Offer Letter signed by Party B on the premise that it is not lower than the local minimum wage standard.

 

2. Party B’s salary and benefits may be adjusted in line with Party B’s work performance or changes in positions and duties during his or her work for Party A, which are subject to the Salary Adjustment Notice or other documents.

 

3. Party A shall have the right to determine the distribution scope, standard, amount and time of the bonuses to Party A’s employees in line with the production and operation conditions, and implement accordingly. Party B agrees that Party A shall have the right to determine the distribution scope, standard and time of employee performance wages and year-end benefit bonuses in accordance with Party A’s salary management and performance management system, and in line with the production and operation conditions, and implement accordingly.

 

 

4. Under the premise of not violating relevant laws and regulations, Party A shall have the right to adjust the bonus and benefits standards of all employees including Party B in line with the production and operation conditions.

 

5. The monthly income of Party B under the piecework wage system is not lower than the minimum wage standard in the actual place of work, and fluctuates with the output, and the floating wages already include overtime wages.

 

6. Party B agrees that Party A or the third party designated by Party A shall pay the wages of the current month before the 25th day of the next month, and Party A or the third party designated by Party A shall not delay in the payment thereof without cause.

 

7. The salary structure of all employees, including Party B, shall be implemented in accordance with the salary system formulated by Party A. All such salaries are pre-tax ones. Party B’s personal income tax shall be paid in full and in a timely manner in accordance with relevant national laws and regulations. Party B agrees that Party A or the third party designated by Party A may withhold and remit the personal income tax on his or her labor remuneration when paid. If for Party B’s reasons, Party A fails to withhold and remit the personal income tax in time or Party B fails to pay the personal income tax in full in a timely manner, resulting in losses to Party A, Party B shall be liable to compensate therefor, and such liability of Party B for compensation does not exclude his or her responsibility to pay the personal income tax.

 

8. Unless required by laws and regulations, Party A shall have no obligation to pay Party B any additional wages, benefits or subsidies other than those specified in this Contract (including any appendices hereto).

 

9. Others：

 

                                                                                        /                                                                                                                                                                        

 

Article 6      Social Insurance and Benefits

 

1. Party A and Party B shall participate in social insurances under laws and pay social insurance premiums on schedule; and Party B’s personal contribution to the social insurance premiums shall be withheld and remitted by Party A from Party B’s salary.

 

2. Party B’s entitlement to statutory holidays, annual leave, wedding and funeral leaves, treatment of female employees during pregnancy, childbirth, and breastfeeding, and the payment of economic compensation to Party B when the Labor Contract is rescinded (terminated) are all subject to relevant laws, regulations, rules and policies, as well as the regulations formulated by Party A under laws.

 

3. Party B’s medical treatment period and work-related injury treatment shall be subject to relevant laws, regulations, rules and policies.

 

 

Article 7      Labor Disciplines

 

1. Party A shall have the right to formulate or revise its internal rules and regulations in accordance with Chinese laws from time to time in line with the needs of its operation and management

 

2. Party B must abide by the rules and regulations formulated by Party A and the group to which it is affiliated (or Wuhan Lotus Technology Co., Ltd. in the absence of such group), strictly abide by the work system and work norms, care for Party A’s property, abide by professional ethics, and actively participate in the trainings organized by Party A to improve his or her ideological level and professional skills.

 

3. If Party B violates the labor disciplines of Party A and the group to which it is affiliated (if there is no such group, Wuhan Lotus Technology Co., Ltd. shall apply), Party A may impose necessary disciplinary sanctions in accordance with the rules and regulations, including the termination of this Contract.

 

Article 8      Intellectual Property Rights

 

I. Definitions

 

Unless otherwise specified in this Contract, the following terms shall have the following meanings:

 

1. “Disclosing party” means Wuhan Lotus Technology Co., Ltd. and its subsidiaries or affiliates. “Receiving party” means Party B, which is the party that obtains or has access to the disclosing party’s business secrets, confidential information and any information related to intellectual property rights based on this Contract or working or serving for the disclosing party, or otherwise authorization or appointment by the disclosing party.

 

2. “Intellectual property rights” means patents, trademarks, copyrights, industrial designs, know-how, trade secrets, integrated circuit layout designs and/or other rights that are considered intellectual property rights under applicable laws, as well as the corresponding subject matter , power, application right and right to request protection, etc.

 

3. “Service-related intellectual achievements” means any and all ideas, reverse knowledge, concepts, inventions, discoveries, improvements, prototypes, software, programming codes, catalogs, texts, or works of art, know-how, structures, designs, formulas, algorithms, methods, equipment, products, processes, systems and technologies at any stage of development, as well as any and all patents, pending patents, utility models, designs, copyrights, moral rights, trademarks, trade secrets and any other intellectual property rights therein, including any and all improvements, modifications and derivative works, conceived, created, developed and put into practice by Party B individually or jointly with others,

 

(1) during the period when Party B is performing his or her own work, or performing tasks assigned by Party A outside of his or her own work, and within one year after Party B retires, is transferred from Party A, or terminates the labor or personnel relationship (or employment relationship) with Party A, related to his or her own work in Party A or the tasks assigned by Party A, and/or

 

 

(2) for which Party B utilizes the material and technical conditions of Party A or the disclosing party during the period of service for Party A, no matter whether it is during working hours or in the workplace of Party A or the disclosing party,

 

as well as the rights and related claims to the foregoing in accordance with the laws of any region.

 

II. Attribution of Rights

 

1. In order to clarify the attribution of intellectual property rights, Party B shall consciously avoid disputes between his or her former employer and Party A or the disclosing party on intellectual property rights because of Party B, and shall truthfully disclose to Party A the intellectual property rights between him or her and his or her former employer when joining Party A, and such information should be truthfully recorded in the Dossier Form filled out by Party B when he or she joins Party A.

 

2. The intellectual property rights and/or confidential information created by Party B during his or her work for Party A are exclusively owned by Party A or its designee. Party B understands and agrees that the service-related intellectual achievements are all service inventions and are owned by Party A. Party B shall transfer, and assist in the transfer of, the service-related intellectual achievements to Party A or its designee in accordance with this article.

 

3. Party A agrees that the intellectual property rights and/or confidential information created by Party B on non-service and non-service-related matters are owned by Party B. Where some intellectual property rights or confidential information use Party A’s equipment, instruments, materials, information, working hours, intellectual property rights or other tangible and intangible resources, such intellectual property rights and/or confidential information are still owned by Party A or its designee, and Party B shall cooperate in the transfer of such intellectual property rights and/or confidential information to Party A or its designee in accordance with the provisions of the Subparagraph 4 below.

 

4. Regardless of whether Party B is employed by Party A or leaves from Party A, he or she shall unconditionally assist Party A or its designee to apply for, obtain and register the intellectual property rights in various countries and regions, including but not limited to signing (or sealing) applications, affidavits, and instruments of transfer and other legal documents, providing information related to the application, protection and litigation in connection with such intellectual property rights, and discussing the intellectual property applications with Party A’s staff responsible for intellectual property rights. Where Party B fails to sign (or seal) any of such legal documents, Party B agrees to authorize Party A or its designee to sign various relevant legal documents on behalf of Party B in accordance with this Contract.

 

 

III. Obligations of, and Incentives and Remuneration to Party B

 

1. Disclosure, transfer and licensing of service-related intellectual achievements

 

(1) Party B shall promptly disclose in writing to Party A (not to others) all intellectual achievements related to the service, regardless of whether they are patentable or obtain protection of trade secrets, trademarks, and copyrights. Party B must further disclose to Party A (not to others) the identity of the co-creators (if any) of all service-related intellectual achievements. Party B must honestly and accurately state the identity the creators in accordance with company policies and guidelines. In addition, Party B shall, within ten (10) days after the creation of the relevant content, disclose to Party A in writing any ideas, reverse knowledge, concepts, inventions, discoveries, improvements, prototypes, software, catalogs, texts or works of art, know-how, structures, designs, formulas, algorithms, methods, products, processes, systems and techniques at any stage of development outside the scope of the aforesaid “service-related intellectual achievements” involved during his or her work for Party A.

 

(2) Party B shall make and keep written records for a sufficient period of time on all service-related intellectual achievements. Records shall be in notes, sketches, drawings and any other form on any medium specified by Party A. Records shall be readily available to Party A and remain the exclusive property of Party A at all times. Records shall be made in good and legible form, dated and signed as requested by Party A.

 

(3) Party B agrees not to do anything that may endanger or impair Party A or the disclosing party to obtain the registration of trademarks, patents and copyrights for the service-related intellectual achievements that are attributable, transferred or licensed to Party A or its designee under this Contract, including but not limited to disclosing information about the service-related intellectual achievements in any way and form without the prior written permission of Party A, so as to damage the patentability, or the secrecy of the corresponding technology, required to obtain intellectual property registration.

 

(4) Party B agrees and confirms that all inventions and creations shall be regarded as “service inventions and creations”. If any invention-creation is not regarded as a “service invention-creation” created by Party B for Party A in accordance with the applicable law, Party B agrees to transfer, and make automatically transferred upon completion of creation, to Party A or its designee without further compensation all rights, qualifications and interests (in all countries and jurisdictions) to such invention-creation (including all intellectual property rights contained in the invention and their extension and renewal), including the right of prosecution and claim of any previous infringement and encumbrances. Such transfer and assignment shall be applicable to any and all inventions and creations completed by Party B during the entire employment period at the beginning of the development of the relevant inventions and creations. The service-related intellectual achievements shall be solely owned by Party A, regardless of whether they are patentable, copyrightable or trademarkable, or are in the stage of commercial development.

 

(5) If, in accordance with the relevant laws, Party B is unable to transfer the rights, qualifications and interests of any of the aforesaid service-related intellectual achievements, or the transfer thereof has not been approved by or registered with the relevant government authority, Party B shall grant an exclusive (even excluding Party B itself), irrevocable, perpetual, transferable, sublicensable and royalty-free license under relevant service-related intellectual achievements to Party A and its successors and assigns.

 

 

(6) To the extent permitted by law, the transfer of service-related intellectual achievements includes, but is not limited to, the transfer of authorship right, integrity right, publication right, cancellation right, and other rights that may be considered “moral rights”, “personal rights” or similar rights (collectively, “moral rights”). If Party B reserves any moral rights in accordance with applicable laws, Party B hereby authorizes and agrees that Party A may perform, or permit others to perform, any actions related to any moral rights, and Party B confirms that he or she will not claim moral rights for such actions. At the request of Party A, Party B will confirm such authorizations, consents and approvals from time to time. Notwithstanding the foregoing provisions, Party B agrees that Party A, its successors and its licensees do not need to indicate that Party B is the creator of the service-related intellectual achievements.

 

(7) Party B confirms and agrees:

 

a. Party B has no objection to the disclosure, use and commercial exploitation of relevant intellectual achievements by Party A or its successors, assigns or licensees;

 

b. Party A or its successors, assigns or licensees may re-innovate the invention-creation in the way it thinks fit, and disclose and dispose of the invention-creation (technical re-innovation) without consent of anyone or without payment to anyone. In addition to the foregoing provisions, Party A shall have the exclusive right to commercialize, prepare and sell products or services based on the invention-creation itself, its sub-licensing, its re-innovated technology and otherwise exploitation and use thereof.

 

(8) Party B agrees to unconditionally assist Party A in protecting such service-related intellectual achievements in various ways that Party A deems requisite or necessary, whether on-the-job or off-job, including but not limited to, taking necessary measures to obtain, maintain and exercise patent rights or other applicable registered rights, and transfer all rights to Party A or any of its affiliates. If due to Party B’s incapacity or for any other reasons, Party A is unable to make Party B sign documents, and these documents are required to apply for, legally perform, obtain or exercise any patent rights, copyrights or other rights and claimed methods related to the service-related intellectual achievements, Party B hereby irrevocably agrees that Party A may authorize persons it considers appropriate, including but not limited to its officers or agents, to sign corresponding documents and implement all acts permitted by law on behalf of Party B, to promote the application, issuance and exercise of such patent rights, copyrights, trademark rights or other rights and claimed methods under laws, and the legal effect of such signing on behalf of Party B is equivalent to that of signing by Party B.

 

 

2. Rewards and remunerations to inventors and creators

 

(1) Party B confirms that the wages, salaries and other remunerations received from Party A constitute reasonable and sufficient rewards and remunerations for any inventions and creations attributed, transferred or licensed to Party A by Party B, a participant in the creation or development of such inventions and creations, in accordance with this Contract or the applicable laws.

 

(2) Notwithstanding the provisions of Subparagraph (1) above, in order to encourage inventions and creations and reward Party B’s contribution to the creation or development of inventions and creations, Party A may give Party B appropriate rewards and remuneration for inventions and creations at its discretion. Discretionary rewards and remuneration shall be paid in accordance with applicable and effective company policies.

 

(3) Party B hereby waives any and all claims of any nature against Party A and its affiliates, assigns and licensees in respect of any of the following items now or in the future:

 

a. infringement upon any patent, utility model, design, trademark or copyright;

 

b. additional rewards or remunerations related to the inventions and creations; or

 

c. any other claims arising from any application for registration of patents, utility models, designs, trademarks or copyrights attributable, assigned or licensed to Party A in accordance with this Contract.

 

IV. Others

 

1. When performing duties for Party A, Party B shall not arbitrarily implement any acts that may infringe upon the intellectual property rights of others.

 

2. During the performance of this Labor Contract, where Party B infringes upon the intellectual property rights of a third party in violation of this Contract, Party B shall assume the corresponding liability for compensation. If such infringement upon the intellectual property rights of the third party results in damage to Party A, including but not limited to prosecution against Party A, Party B shall be liable to compensate for the expenses arising therefrom, including but not limited to court costs and attorney fees.

 

3. The intellectual property rights created by Party B within one year from the date of resignation from Party A and related to the same or similar work in Party A are owned by Party A, and Party B shall submitted the same to Party A in writing at any time. If there is any doubt about the ownership of any intellectual property rights, Party B shall first negotiate with Party A in good faith to confirm the ownership of such rights. Before the ownership of such rights is confirmed, Party B shall not apply for, register or register, or allow others to apply for, register or register, such intellectual property rights in the name of itself or others, nor shall Party B have any act that may impair the acquisition, application or registration of such the intellectual property rights.

 

Article 9      Confidentiality

 

In view of the fact that Party B may get access to the confidential information of Party A and related parties based on work or business needs during his or her work for Party A or Party A’s affiliates (collectively, “Party A”), Party B fully understands that such confidential information is trade secrets in connection with the operation and technology of Party A, and that Party A may have strict confidentiality obligations to other related parties with regard thereto, and that the disclosure and illegal use of such confidential information will cause heavy losses to and material impacts on Party A. To this end, Party B agrees to treat such confidential information in strict confidence and abide by the following provisions:

 

 

1. Scope of confidential information

 

Confidential information includes but is not limited to: research and development information, technical indicators/plans/documents/reports, process flow, design sketches, drawings, pictures, databases, research and development records, test reports, test data, test results, samples; customer information, supplier information, contracts (including contracts to be executed or business negotiations related thereto), marketing plans, implementation plans, procurement information, costs, price data, pricing policies, distribution channels, operating/marketing data, merchandising and sales techniques, product information; financial and audit information, human resource information, legal affairs information; strategic policies, financial plans, long-term plans, financing plans, business plans; scientific research, training methods, new products, new uses of old products, licenses, software programs, computer programming, technical secrets, etc. The specific categories are as follows:

 

(1) All non-public, confidential, proprietary information, data and documents, including but not limited to:

 

a. the Company’s important meeting resolutions, such as board meeting resolutions and meeting minutes, shareholders’ meeting minutes and other materials;

 

b. the Company’s major decision-making materials, such as product development, substantial equipment investment, material personnel adjustments and other materials and information;

 

c. the Company’s development strategy deployment and development planning;

 

d. capital operation planning and planning scheme, and status quo thereof;

 

e. the Company’s important personnel information, wages, salaries and benefits policies;

 

f. contract materials, business negotiation minutes; and

 

g. other materials and information that may put the Company in a disadvantageous position in competition if disclosed to the outside world.

 

(2) Technical data and information, including but not limited to:

 

a. non-patent technical achievements, technical data, manuals, and design drawings;

 

b. product production process and flow, equipment and technical information;

 

c. test and experimental data of new products and new materials;

 

d. product formulas and research reports;

 

e. computer programs, data, configuration files, user accounts, passwords;

 

 

f. product pictures and other materials that have not been released to the public;

 

g. intellectual property rights such as computer software copyrights, patent rights, trademark rights, and copyrights that are being applied for or already obtained, and products formed by such intellectual property rights; and

 

h. technical ideas, technical solutions, research results and other intellectual property rights that have been proposed, put into research and implementation.

 

(3) Business materials, information, opportunities or advantages, including but not limited to:

 

a. marketing strategies and methods, sales information and customer list, product price list;

 

b. supply, sales, service channels and information and lists of each channel;

 

c. investment and financing plans and programs;

 

d. advertising strategies and planning plans;

 

e. unique or proprietary management experience and management advantages;

 

f. financial accounting information and statements on turnover, profit, taxation, cost, etc.;

 

g. production costs and implementation of production and business plans; and

 

h. business terms and cooperation models in major transaction agreements.

 

(4) Marketing data and information, including but not limited to:

 

a. sales volume, ranking, market share and other data of each vehicle model in each year and each province;

 

b. monthly and annual shipments, orders and other data of all vehicle models;

 

c. overall sales performance, sales data, user data, and report database;

 

d. the sales volume, ranking, market share and other data of competing vehicles of each model in each province and each year;

 

e. various analysis, special reports and other information based on marketing data; and

 

f. all customer data and information.

 

(5) Information on new products (products not released to the public), including but not limited to:

 

a. product or product model pictures and other related materials not released by Party A;

 

b. experiments and experimental data of new products and materials;

 

c. all research and development and production-related information, such as the processes, formulas and research reports of the new products;

 

d. Party A’s new product launch plans, publicity plans and materials;

 

e. all information and materials about new products from Party A before the release or launch of new products, including but not limited to training information and materials, research information and materials, etc.; and

 

f. new product benchmarking vehicle information.

 

2. Confidentiality period

 

 

Party B agrees to treat in confidence the confidential information of Party A and related parties that have not lifted the confidentiality measures during his or her work for Party A and after the labor relationship is rescinded or terminated (regardless of the reasons and methods for the dissolution or termination of Party B’s labor relationship with Party A), subject to the confidentiality obligations below.

 

3. Confidentiality obligations

 

(1) Acquisition of confidential information

 

a. Party B has fully understood that the direct disclosure of confidential information by Party A or related parties to Party B is the only legal way for Party B to obtain confidential information. Without authorization or consent, Party B shall not take the initiative to inquire or obtain any confidential information that Party A or related parties have not directly disclosed to Party B from other employees who have obtained information disclosure, including but not limited to consulting in whatever form the relevant documents, computers and other information carriers of the persons who have obtained information disclosure, or taking the initiative to request such persons to disclose confidential information to Party B.

 

b. Without the authorization or consent of Party A, Party B shall not duplicate or record the confidential information by audio recording, video recording, photographing or any other means, nor shall he or she duplicate or transfer such confidential information to a private or third-party devices and carriers that are out of the supervision of Party A and the protection of security measures.

 

(2) Use of confidential information

 

a. The confidential information obtained by Party B shall be only used within the scope of Party B’s responsibilities and requisite and necessary for Party A’s business development, and Party B shall not use such confidential information to provide services for Party B itself or any other third party or for any purpose that is not for the benefit of Party A.

 

b. Party B shall only use the obtained confidential information on the office premises and storage tools approved by Party A, and shall take cautious and necessary security measures to protect thereof.

 

Party B shall take necessary security measures for confidential information and storage tools in accordance with Party A’s information security management system, including but not limited to the following requirements:

 

a. Do not use mobile media to copy the confidential information without the approval of Party A;

 

b. Do not privately create a shared folder for other unapproved personnel to share, use and download confidential information;

 

c. Do not use unauthorized applications to transmit confidential information, such as FTP/QQ/WeChat and other applications;

 

d. Passwords should be set for confidential information storage tools, and it is forbidden to use public cloud storage to store confidential information, such as Baidu Cloud/Youdao Cloud/360 Cloud, etc.;

 

 

e. Do not send the confidential information to a private mailbox or upload it to the public network;

 

f. It is strictly forbidden to print confidential information without permission;

 

g. Without permission, it is not allowed to use devices to take pictures, videos, or audio recordings of confidential information; and

 

h. It is an obligation to carefully keep the hardware assets that store confidential information to prevent loss or theft for personal reasons; in case of loss or theft, Party B shall promptly report to Party A after discovering the loss or theft, and actively assist Party A in recovering the lost or stolen articles.

 

(3) Disclosure of confidential information

 

During his or her work for Party A, without authorization or consent, Party B shall not directly or indirectly discuss, communicate, disseminate, output or disclose confidential information with or to any other person or unauthorized colleagues or employees.

 

(4) If Party A and Party B decide to rescind/terminate the labor relationship for any reason or if the confidential project has been terminated/completed, when the labor relationship is rescinded/terminated or the confidential project is terminated/completed, Party B shall return or destroy all confidential information and materials as required by Party A, including but not limited to facilities, documents, data, notes, reports, checklists, drawings, programs, materials, software, models, mobile storage tools, devices and reproductions or abstracts in any form that record confidential information. Meanwhile, Party B shall issue a written undertaking to Party A that he or she has performed the provisions of this article, and that he or she has not duplicated or retained confidential information in any form. After the dissolution/termination of the labor relationship between both parties or the termination/completion of the confidential project, Party B shall not use or disclose the known confidential information in any way or for any reason.

 

(5) In order to prevent Party B from using or disclosing confidential information without permission, and to protect Party A’s rights to confidential information, Party B agrees that Party A shall take all other security measures that are legally compliant and deemed necessary or justified by Party A.

 

4. Liabilities for default

 

(1) If Party B fails to perform the confidentiality obligations specified herein or uses the known confidential information to directly or indirectly seek benefits, regardless of whether it causes losses to Party A, Party B shall be liable for default. If Party B is in default, he or she shall pay Party A liquidated damages on a lump-sum basis, which is equivalent to [100%] of the total wage income obtained by Party B from Party A in the 12 months immediately prior to the rescission or termination of this Labor Contract; and Party A shall have the right to require Party B to delete or return the confidential information that has been acquired, duplicated, recorded, or transferred. Meanwhile, Party B shall return all the proceeds obtained due to his or her default and compensate Party A for all losses arising therefrom (including but not limited to Party A’s direct losses, compensation and liquidated damages paid to related parties, and court costs, reasonable attorney fees, necessary evidence collection expenses, etc. incurred for claiming compensation for damages).

 

 

(2) Party B further reiterates that he or she has deeply realized that the confidentiality obligation contained herein is one of the important confidentiality systems of Party A. If Party B obtains, uses, or discloses confidential information in default of this Contract, or fails to return/destroy confidential information as requested by Party A, it shall be deemed as a serious violation of Party A’s rules and regulations. Party A shall have the right to impose first to fourth degrees of punishments on Party B in accordance with Party A’s information security reward and punishment system, based on the severity of Party B’s circumstances. If the circumstances are serious, Party A shall have the right to terminate the labor relationship with Party B in accordance with Article 39 of the Labor Contract Law of the People’s Republic of China.

 

(3) When the labor relationship between both parties rescinded/terminated or the confidential project is terminated/completed, if Party B fails to return or destroy all confidential information as required by Party A or refuses to issue a written undertaking to Party A, Party A shall have the right to refuse to pay any economic compensation (if any), and take necessary legal channels to require Party B to perform these provisions.

 

(4) Party B is aware that illegally disclosing, using, or allowing others to use, Party A’s confidential information in violation of this Contract will result in civil liabilities, administrative punishments, and even criminal liabilities in accordance with relevant provisions of the Criminal Law of the People’s Republic of China, Civil Code of the People’s Republic of China, Law of the People’s Republic of China for Countering Unfair Competition, Data Security Law of the People’s Republic of China, and Personal Information Protection Law of the People’s Republic of China. In the event of actual or potential default by Party B, Party A shall have the right to file a lawsuit with any competent court or request the public security organ to initiate criminal procedures to prevent any actual or potential breach of this Contract.

 

5. Others

 

(1) Any waiver of any rights under this article shall not be effective until it is contained in a written document signed by both parties.

 

(2) This article shall survive the dissolution or termination of the labor relationship between Party B and Party A.

 

Article 10      Non-competition

 

In view of the fact that Party B has gotten (or may get) access to, acquire and know the business secrets and other information of Party A and Wuhan Lotus Technology Co., Ltd. and their subsidiaries or affiliates (including but not limited to shareholders, subsidiaries, branches, joint ventures, collectively, “affiliates” below) and is obliged to treat the same in confidence, in order to protect the legitimate rights and interests of both parties hereto, pursuant to the Law of the People’s Republic of China for Countering Unfair Competition, Labor Contract Law of the People’s Republic of China and relevant national and local laws and regulations, Party A and Party B, based on the principles of equality, free will and integrity, have reached an agreement on the following provisions after negotiation:

 

 

1. Scope, territory and period of non-competition

 

(1) Scope of non-competition: See relevant content specified in Paragraph 4 of this article.

 

(2) Territory of non-competition:

 

a. The countries and regions covered by the business of Party A and Wuhan Lotus Technology Co., Ltd. and its subsidiaries or affiliates (collectively, “Lotus”) (including overseas operations); and

 

b. Countries and regions covered by the companies competing with Party A and Lotus (including overseas).

 

(3) Period of non-competition: the term of the Labor Contract executed by both parties and two years after Party B resigns from Party A.

 

2. Non-competition compensation

 

(1) Calculation of non-competition compensation

 

In view of the fact that Party B must abide by the non-competition obligations as specified herein, as compensation, Party A agrees to pay monthly non-competition compensation at the following agreed standards: 30% of the average monthly salary that Party B received from Party A in the 12 months immediately prior to the rescission or termination of the Labor Contract, and not lower than the local minimum wage standard.

 

(2) Terms of payment of non-compete compensation

 

a. Party B completes the resignation procedures as required by Party A, and informs Party A in writing of where he or she will go after resignation. Regarding the non-competition obligations as specified herein, Party A shall pay Party B the corresponding non-competition compensation in accordance with the law from the next day after the dissolution/termination of the labor relationship between both parties.

 

b. During the non-competition period after resignation, Party B shall provide relevant materials to Party A in accordance with the provisions of Subparagraph (8) of Paragraph 4 of this article and the requirements of Party A, and Party A shall confirm after receiving relevant materials from Party B, and pay the non-competition compensation to Party B upon confirmation.

 

c. Such payments shall be transferred to Party B’s latest bank account used to collect wages prior to Party B’s resignation.

 

d. Where Party B refuses to accept, waives, or refuses to receive the non-competition compensation, or where Party A cannot normally issue the non-competition compensation for Party B’s reasons (including but not limited to maliciously canceling the bank account for receiving the non-competition compensation, changing the account without notifying Party A in time, etc.), the losses caused thereby shall be borne by Party B, and Party B shall not be exempted from the non-competition obligations.

 

 

3. Obligations of Party A

 

(1) If Party B performs the non-competition obligations in accordance with the requirements of Party A within the non-competition period after resignation, Party A shall pay non-competition compensation to Party B in accordance with the provisions of Paragraph 2 above.

 

(2) Although Party A has required Party B to perform the non-competition obligations, Party A may still decide, at its own discretion, whether to require Party B to stop performing the non-competition obligations within the non-competition period.

 

4. Obligations of Party B

 

(1) During the non-competition period as specified herein, Party B shall not engage in the following activities, whether long-term or temporary, paid or unpaid, full-time or part-time, direct or indirect:

 

a. Being employed by the entities or individuals that compete with Party A and Lotus for business (as defined in the relevant provisions below in this paragraph);

 

b. Acting as a director, supervisor, partner, manager, consultant, representative, agent of an entity or individual that competes with Party A and Lotus, or providing labor, consulting or services in any other capacity to an entity or individual that competes with Party A and Lotus; and

 

c. Self-investment (“investment” referred to in this article does not include financial investment (financial investment means that the investor does not participate in the actual operation and management of the investee nor appoint directors, the same below) in or operating competing business, whether or not in the form of a company or other organization.

 

(2) “Competing business” used in this Contract means:

 

a. the same or similar business as Party A’s principal business; and

 

b. the same or similar business as Lotus’s vehicle manufacturing and power system, three-electric system, Internet of Vehicles, smart travel, and autonomous driving (including but not limited to research and development, procurement, manufacturing and sale).

 

(3) Party B agrees that during the non-competition period, he or she shall truthfully disclose to Party A the company where he or she works or serves, or the business or investment or business activities that he or she is engaged in. If Party A notifies Party B that the company that Party B will work or serve for or the business or investment or business activities that Party B will be engaged in competes with Party A and Lotus, Party B agrees not to work or serve for such company, or not to be engaged in such business or investment or business activities.

 

(4) Party B shall not, directly or indirectly, persuade, induce, solicit, encourage, or otherwise help others to procure, any customers, suppliers, licensees or licensors of Party A and its affiliates or any other individuals or entities (including any potential customers, suppliers or licensees) that have actual or potential business relationship with Party A or its affiliates to terminate or otherwise change the business relationship with Party A or its affiliates; nor shall he or she introduce the customers of Party A and its affiliates to other entities and individuals, harming the interests of Party A and its affiliates.

 

 

(5) During his or her work for Party A or after resignation, Party B shall not, directly or indirectly, persuade, induce, solicit, encourage, or otherwise help others to induce, any employees of Party A and its affiliates to resign or to work for other entities, which will harm the legitimate interests of Party A and its affiliates, whether it is for the benefit of himself or herself or any other individuals or entities.

 

(6) Party B agrees that the non-competition compensation referred to in this article is a fair and reasonable compensation for the restrictions he or she suffers during the non-competition period. Party B will not seek or require any other compensation for performance of his or her obligations under this clause.

 

(7) Party B shall ensure that the information on the bank account used to collect non-competition compensation as specified in Paragraph 2 above is true and accurate, such bank account shall remain valid during the non-competition period, and Party B shall not report the loss of it or cancel it at will, If such bank account is canceled, becomes invalid or is in other circumstances that may prevent Party B from receiving the non-competition compensation paid by Party A within the non-competition period, Party B shall notify Party A in writing within 2 working days of the occurrence of such circumstances.

 

(8) Party B shall strictly abide by and ensure the effective performance of the obligations as specified herein. Party B shall disclose in writing his or her whereabouts. During the non-competition period, Party B shall disclose to Party A his or her new employment information (including but not limited to complete information on the new employer or the business, investment and business activities engaged in, his or her duties, position, work content in the new employer, the business scope of the new employer or the services it provides, his or her effective contact information, direct or indirect investment (including but not limited to investment in the name of Party B’s relatives/friends, equity holding, partnership with others, etc.)) within [7] days after starting any new employment, labor relationship, investment or service engagement with any other third party; meanwhile, Party B shall provide Party A with the tax payment certificate of the People’s Republic of China, the monthly social security payment certificate and other relevant materials that may prove that Party B has not violated the non-competition. Party A reserves the right to conduct necessary and reasonable investigation and verification of relevant information after receiving the information provided by Party B, including but not limited to further learning relevant information from Party B, requesting Party B to provide relevant supporting documents or certificates, and conducting verification and verification with relevant entities or organizations, and confirming with relevant entities and their personnel together with Party B. In this case, Party B shall be obliged to do its utmost to cooperate therein under the principle of good faith.

 

 

Party A shall have the right not to pay the non-competition compensation after verifying that the relevant information provided by Party B is false. In such circumstances, Party B is not exempted from the non-competition obligations, nor will it be understood in any form as Party B’s right to terminate the non-competition agreement early. In addition, where Party A still continues to pay the non-competition compensation to Party B for any reason, it cannot be understood as Party A’s confirmation or recognition that Party B has fully performed the non-competition obligations, or Party A’s acquiescence in Party B’s violation of the non-competition obligations.

 

(9) Before Party B starts any new employment, labor relationship or service engagement, Party B shall also notify the new employer in writing of Party B’s non-competition obligations to Party A, and shall provide Party A with a copy of the notice to the new employers of his or her non-competition obligations to Party A and a record of giving such notice.

 

(10) Unless otherwise specified by law, Party B shall not unilaterally terminate its non-competition obligations without the mutual agreement of both parties.

 

(11) In addition to the foregoing non-competition obligations, the intellectual property rights and confidentiality clauses specified in this Contract are still valid and binding after Party B resigns from Party A, and will not be released or waived due to Party B’s resignation or for other reasons.

 

5. Liabilities for default

 

(1) If Party B fails to perform the obligations specified in this article, he or she shall. within 30 days from the date Party A gives the notice, refund the non-competition compensation paid by Party A in full on a lump-sum basis, and pay Party A liquidated damages on a lump-sum basis, which is equivalent to 200% of the total wage income that Party B received from Party A in the 12 months immediately prior to the termination of this Labor Contract. Meanwhile, the proceeds from Party B’s default shall belong to Party A, and Party B shall be liable for compensation if Party A suffers losses therefrom (including but not limited to the loss of paying taxes and other losses, etc.).

 

(2) Reasonable expenses (including but not limited to attorney fees, investigation expenses, appraisal fees and other legal fees) paid by Party A for investigating Party B’s default are not included in the liquidated damages, which shall be otherwise assumed by Party B.

 

(3) If Party A or its affiliates reach a separate agreement with Party B on Party B’s performance of non-competition obligations based on other arrangements (including but not limited to equity incentive plans, etc.), Party A’s investigation into Party B’s liability for default based on this article does not affect Party A’s and its affiliates’ further investigation into Party B’s relevant liabilities for default based on other contractual agreements.

 

6. Others

 

If the agreement on dissolution/termination of the labor relationship or the resignation certificate clearly states that Party B does not need to perform non-competition obligations, this article will automatically become invalid and have no binding force on both parties. In this case, Party A does not need to pay any non-competition compensation to Party B, and Party B shall also have no right to claim any form of non-competition compensation from Party A.

 

 

Article 11      Change, Rescission, Termination and Renewal of this Contract

 

1. If there is a major change in the objective conditions on which this Contract is based, which makes it impossible to perform this Contract, the relevant content of this Contract may be changed after mutual agreement between Party A and Party B.

 

2. If Party B is in one of the following circumstances, Party A may terminate this Contract at any time without paying any economic compensation:

 

(1) During the probationary period, it is proved that Party B does not meet the recruitment conditions; and if in the following circumstances, an employee is deemed failure to meet the recruitment conditions:

 

a. failing to pass the entry physical examination or failing to truthfully fill in the health status when on board, such as having a history of epilepsy or family history, or having infectious diseases;

 

b. being unqualified to work in China (in respect of a foreigner);

 

c. failing to participate in new employee training or failing to pass the training test;

 

d. rejecting the performance appraisal or failing to pass the performance appraisal during the probationary period;

 

e. being in violations of labor disciplines up to the second or higher degree during the probationary period;

 

f. having dishonest acts such as fraud and concealment when entering into the labor contract, the fraudulent acts include but are not limited to the employee’s providing false personal information; concealing any material information that is sufficient to affect whether the Company concludes a contract with him or her; failing to pass the Company’s credit investigation, such as providing false academic qualifications, age, work experience, identity certificates, and resignation certificates, having a non-competition agreement with the former employer and, within the scope of restrictions, concealing any legal punishments (including but not limited to criminal punishment, public security administration punishment) or being imposed with disciplinary action by the former employer, concealing the outstanding public funds owed to other enterprises or companies;

 

g. during the probationary period, having any acts in violation of national laws and regulations, or of being detained by judicial organs (including administrative detention, criminal detention, judicial detention, et.), or being sheltered for investigation, arrested and treated with other coercive measures, or being punished by public security, or being investigated for criminal liabilities; and

 

h. other circumstances that do not meet the recruitment requirements:                    /                        

 

 

_______________________________________________________________________________

 

_______________________________________________________________________________

 

(2) Using fraud, coercion or taking advantage of Party A’s hardship to make Party A enter into or change the Labor Contract against its true intention;

 

(3) Serious violation of the rules and regulations of Party A;

 

(4) Serious dereliction of duty, malpractice for personal gain, causing heavy damage to the interests of Party A;

 

(5) Establishing a labor relationship with another employer concurrently, which seriously affects the completion of Party A’s work tasks, and refusing to make corrections upon Party A’s request; and

 

(6) Being investigated for criminal liabilities under law.

 

3. If Party B is in one of the following circumstances, Party A may terminate the Labor Contract by giving a 30-day notice to Party B in writing or after paying Party B an additional month’s salary in lieu of notice:

 

(1) Party B suffers from illness or non-work-related injury, and cannot engage in the original job after the prescribed medical treatment expires, nor may he or she engage in another job arranged by Party A;

 

(2) Party B is incompetent for the work specified herein, and is still incompetent for the work after training or job adjustment; and

 

(3) There is a major change in the objective conditions on which this Labor Contract is based, which makes it impossible to perform this Contract, and after negotiation between Party A and Party B, no agreement has been reached on the modification of the Labor Contract.

 

4. If Party B is in any of the following circumstances, Party A shall not terminate the Labor Contract in accordance with the provisions of Paragraph 3 of this article and Article 41 of the Labor Contract Law:

 

(1) Failing to undergone off-post occupational health examinations after being engaged in operations exposed to occupational disease hazards, or being in the period of diagnosis or medical observation as a suspected occupational disease patient;

 

(2) Suffering from an occupational disease or work-related injury at Party A’s premises and is confirmed to have lost or partially lost the ability to work;

 

(3) Having sickness or non-work-related injury and being still in the prescribed medical treatment period;

 

(4) (In the case of a female employee) being in pregnancy period, maternal period, or lactation period;

 

(5) Having worked continuously for Party A for fifteen years and less than five years away from the statutory retirement age; and

 

 

(6) Other circumstances specified by laws and administrative regulations.

 

5. If Party A is in any of the following circumstances, Party B may terminate the Labor Contract:

 

(1) Failing to provide labor protection or working conditions in accordance with the Labor Contract;

 

(2) Failing to pay labor remuneration in full and in time;

 

(3) Failing to pay social insurance premiums for Party B under law;

 

(4) Party A’s rules and regulations violate the provisions of laws and regulations and damage the rights and interests of Party B;

 

(5) Using fraud, coercion or taking advantage of Party B’s hardship to make Party B enter into or change the Labor Contract against his or her true intention; and

 

(6) Other circumstances in which Party B may terminate the Labor Contract in accordance with laws and administrative regulations.

 

6. If Party B intends to terminate the Labor Contract, he or she shall notifying Party A in writing 30 days in advance in accordance with laws and regulations; and if in the probationary period, Party B may terminate the Labor Contract by notifying Party A three days in advance.

 

7. If both parties terminate the Labor Contract, Party B shall complete the work handover and departure audit (if necessary) in a timely manner in accordance with laws and regulations and Party A’s relevant rules and regulations. If Party B fails to follow Party A’s requirements for work handover and departure audit (if necessary), thereby causing losses to Party A, or if, after Party B’s resignation, Party A is discovered to have suffered losses for Party B’s personal reason, Party B shall be liable to compensate therefor.

 

8. Party A and Party B may terminate the Labor Contract upon consensus through negotiation.

 

9. This Labor Contract will terminate if：

 

(1) The term of the Labor Contract expires;

 

(2) Party B begins to be entitled to the basic pension insurance benefits in accordance with law or attains the statutory retirement age;

 

(3) Party B dies, or is declared dead or missing by the people’s court;

 

(4) Party A is declared bankrupt in accordance with law;

 

(5) Party A is revoked of business license, ordered to close down, canceled or Party A decides to dissolve in advance; or

 

(6) Other circumstances specified by laws and administrative regulations.

 

10. When the labor contract expires, the Labor Contract may be renewed upon consensus through negotiation by both parties.

 

 

Article 12      Other Matters Agreed (or Need to Be Explained) by Both Parties

 

1. Both parties confirm that: when Party A recruits Party B, Party A has truthfully introduced to Party B the work content, work location, working conditions, occupational hazards, safety production, labor remuneration, and other information that Party B requires to know, and Party B has known the same.

 

2. Party B undertakes to read and study Party A’s rules and regulations carefully (including but not limited to those on attendance, transfer, performance, salaries, compliance, information security and labor disciplines, etc.) through the publicity methods and channels of Party A and Wuhan Lotus Technology Co., Ltd. and their subsidiaries or affiliates (including but not limited to on-board training, employee handbook distribution, rules and regulations training, rules and regulations examination, OA website release, notification by e-mail, bulletin board posting, Geely University Learning Platform learning, Flashing Running publishing, Feishu publishing and Feishu Platform learning, etc.), and Party B abide by them of his or her own accord.

 

3. The contact information/address, bank account number/bank of Party B set out above are Party B’s address for service of relevant materials and the channel for payment of non-competition compensation to Party B. If there is any change, Party B shall notify Party A in writing within 2 working days from the date of change. Otherwise, Party B’s loss of personal interests and responsibilities arising therefrom shall be irrelevant to Party A and shall wholly rest with Party B, and Party B shall not be exempted from its corresponding non-competition obligations under this Contract.

 

4                                                                                                                                                                                                                                                                     .

 

Article 13      Liability for Compensation

 

1. If either Party A or Party B is in default of this Contract and causes economic losses to the other party, the defaulting party shall assume the corresponding liability for compensation.

 

2. If Party B is in violation of Party A’s work system or rules and regulations, serious dereliction of duty, or engages in malpractice for personal gain, etc. and causes losses to Party A’s production, operation and work, Party B shall assume the corresponding liability for compensation.

 

Article 14      Supplementary Provisions

 

1. Affiliates used in this Contract mean legal persons that control Party A, are controlled by Party A, or are under common control of the same third party with Party A; the “control” above means a party’s possession, direct or indirect, of the power to direct or cause the direction of the management, operation and policies of another party, or of the power or influence to appoint a majority of another party’s board of directors (or equivalent authority) or manage the business of another party, whether through the ownership of voting securities, by contract, or otherwise.

 

2. If any provisions of this Contract conflict with national laws and regulations, the national laws and regulations shall prevail.

 

 

3. If a dispute arises during the performance of this Contract, both parties may negotiate to settle it. If the negotiation fails or both parties are unwilling to negotiate, both parties should submit the dispute to the competent labor dispute arbitration committee in the place where Party A is located for arbitration.

 

4. This Contract shall take effect on the date of execution by both parties. The change of the nature of Party A’s enterprise or the change of legal representative of Party A shall not affect the legal effect of this Contract. If the oral or written agreement between Party A and Party B conflicts with this Contract, this Contract shall prevail. Changes to the content of this Contract shall be subject to the effective documents signed by both parties (including the “Supplementary Agreement”, the standard for effectiveness is that Party A affixes the official seal/special seal for contracts and Party B signs). Any written/oral undertakings made by Party A’s staff to Party B without the written authorization of Party A shall not be binding on Party A.

 

5. This Contract is executed in duplicate, with either party holding one respectively.

 

6. The Special Training Service Period Agreement and relevant rules and regulations legally formulated by Party A constitute an important part of this Contract and shall have the same legal effect as this Contract. If the service period specified in the agreement exceeds the period specified in this Contract, the service period specified in the agreement shall be the service period performed by both parties. If multiple executed agreements specify different service periods, the last service period shall prevail.

 

7. If there are multiple labor contracts concluded between both parties, the last labor contract executed by both parties shall prevail.

 

Party A (seal):

Party B (signature):

 

Date:

(MM/DD/YYYY)

Date:

(MM/DD/YYYY)

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

Exhibit 10.12

 

EPA/LAMBDA/ALPHA Development Agreement

 

between

 

Wuhan Geely Automobile Research and Development Co., Ltd.

 

and

 

Ningbo Geely Automobile Research and Development Co., Ltd.

 

 

I.     Parties

 

One party is

 

Wuhan Geely Automobile Research and Development Co., Ltd., a company duly established and existing under the laws of the People’s Republic of China (“China”), with its address at Building 2, No. 100 Weihu Road, Shamao Street, Hannan District, Wuhan, Hubei (the “Company”).

 

The other party is

 

Ningbo Geely Automobile Research and Development Co., Ltd., a company duly established and existing under the laws of the People’s Republic of China, with its registered address at No. 818 Binhai 2nd Road, Hangzhou Bay New Area, Ningbo, Zhejiang, China (the “Developer”).

 

The Company and the Developer are hereinafter referred to as the “Parties” collectively and a “Party” individually.

 

The Parties mutually undertake and agree to enter into this Research and Development Agreement (the “R&D Agreement”) and agree as follows:

 

II.     Clauses

 

1.     Appointment

 

The Company hereby appoints the Developer to carry out product-related research and development activities for the Company (the “R&D Activities”), and the Developer hereby accepts such appointment.

 

2.     R&D Activities

 

R&D Activities refer to all activities dedicated to the research and development of products and any other supporting products, which are provided to the Company by the Developer in the form of services, and should be beneficial to the further technical improvement of products. See Appendix A for details.

 

3.     Delivery of Work Results to the Company

 

When a certain work result (defined below) is finally completed, the Developer shall inform the Company of the completion of the corresponding work result, and deliver the work result to the Company in written, electronic and/or oral form (the specific form of delivery shall be decided by the Parties through negotiation). See Appendix A for details.

 

4.     Relationship between the Parties

 

The Developer will act as an independent contractor in accordance with the terms of the R&D Agreement and not as the Company’s legal representative for any purpose. Nothing in the R&D Agreement shall be construed to: (i) give either Party the power to direct or control the day-to-day activities of the other, or (ii) create a relationship between the Parties of principal and agent, employer and employee, franchisor and franchisee, partnership, joint venture, co-owner or other form of joint arrangement participant relationship.

 

5.     Licensing of Intellectual Property Rights of the Company

 

The Company grants the Developer a non-exclusive, royalty-free license in, to and under the Company’s its intellectual property rights to use only to the extent necessary and only for the purpose of providing R&D Activities in accordance with the R&D Agreement and/or performing the obligations under the R&D Agreement.

 

 

Such license will automatically terminate when all R&D Activities are completed or the R&D Agreement is terminated, whichever earlier.

 

The Developer will neither own nor obtain any ownership or title of the Company’s intellectual property rights or any goodwill related to the Company’s intellectual property rights or products through the R&D Agreement, the development of R&D Activities or the performance of obligations under the R&D Agreement.

 

6.     Assignment of Rights to Work Results and Intellectual Property Rights

 

6.1

Any and all work results (including but not limited to presentations, 3D data, CAE models, 2D and other drawings, simulation reports, test reports, computational and analysis reports, prototypes, programs, software, meeting minutes, technical documentation, quality documentation, graphics, designs, diagrams, pictures, text, configurations, ideas and concepts, flowcharts, layout diagrams, databases, source code, object code, algorithms , inventions, developments, manuals, formulas, research, marketing materials and documentation, collectively, the “Work Results”) are vested in and owned by the Company alone.

 

6.2.

The Developer hereby assigns to the Company any and all intellectual property rights related to the Work Results, including but not limited to copyright and dependent rights, designs, patents, utility models, trade secrets, know-how and similar exclusive rights (collectively, the “Intellectual Property Rights”). The Company hereby accepts this assignment. The assignment of each right is effective upon creation of each right.

 

6.3.

Without prejudice to the foregoing provisions, the Developer agrees that the Company owns the Intellectual Property Rights, and hereby waives the right to exercise rights therein, thereto or thereunder against the Company, its affiliates, successors, assigns and their respective customers to the extent permitted by laws.

 

6.4.

The Company may (but is not obliged to) apply for any Work Result as intellectual property anywhere in the world.

 

6.5.

The Developer has the right to subcontract all or part of the R&D Activities to third parties. When the Developer enters into a subcontracting agreement with a third party, the Developer shall obtain or claim the ownership of the Work Results and Intellectual Property Rights produced by the subcontracted third party, and such Work Results and Intellectual Property Rights shall be transferred/assigned to the Company in accordance with the R&D Agreement immediately after they are produced.

 

7.     Cooperation and Further Obligations of the Developer

 

7.1.

The Developer shall sign any and all statements, take any and all actions, and provide any and all cooperation, that are requisite, necessary, desirable and useful, to put into effect the assignment of Intellectual Property Rights in any and all countries requested by the Company.

 

7.2.

The Developer shall sign any and all statements, take any and all actions, and provide any and all cooperation, that are requisite, necessary, desirable and useful, for the Company to apply for and/or maintain any further rights in any Intellectual Property Rights and/or Work Results in any and all countries requested by the Company, including but not limited to giving statements to any intellectual property office or other administrative agency which any such Intellectual Property Rights may be registered with or applied for to.

 

7.3.

The Developer shall sign any and all statements, take any and all actions, and provide any and all cooperation, that are requisite, necessary, desirable and useful, for the Company to protect and/or enforce any further rights in any Intellectual Property Rights and/or Work Results in any and all countries requested by the Company, including but not limited to cooperating with third party actions, preparing and providing information explaining how certain Work Results were created, and signing documents.

 

 

7.4.

When providing services or creating any Work Result, the Developer shall always abide by all laws and regulations and respect the rights of third parties, and shall not use or contain any intellectual property rights of any third party or of the Developer itself in the Work Results.

 

7.5.

To the extent that the Developer can legally make such consent, the Developer shall not at any time directly or indirectly raise any objection or dispute about the validity, ownership or enforceability of the Intellectual Property Rights related to the Work Results or the Company’s intellectual property rights, Nor shall the Developer attempt, directly or indirectly, to dilute the value or goodwill attached to any such Intellectual Property Rights or the Company’s intellectual property rights.

 

7.6.

To the utmost extent permitted by applicable laws, and subject to the sufficiency of performance of the Developer’s obligations under the R&D Agreement (in particular under Clause 7) in any case, the Developer shall ensure to obtain all rights and titles in, to and under any Work Results or Intellectual Property Rights developed or created by its employees, freelancers, contractors, or any other third parties engaged by the Developer for the purpose of developing or creating any Work Results and Intellectual Property Rights.

 

8.     Subcontracting

 

The Developer has the right to subcontract any rights and obligations contained in the R&D Agreement to any third party.

 

9.     Effectiveness – Effective Date

 

The R&D Agreement shall take effect on January 1, 2018 and continue to be effective until December 31, 2021 (the “Term”), with the exception where the R&D Agreement is terminated in accordance with the provisions of Article 15.

 

10.   Rights and Obligations of the Company

 

10.1.     Assistance to the Developer

 

The Company shall provide the Developer with all reasonable assistance to enable the Developer to perform its obligations under the R&D Agreement.

 

10.2.     Sufficiency

 

The Company shall provide the Developer with guidance and the Company’s intellectual property rights (if any), and such guidance and the Company’s intellectual property rights (if any) shall be objectively sufficient to enable the Developer to perform its obligations under the R&D Agreement.

 

10.3.     Obligations of the Developer

 

The Developer shall deliver the Work Results to the Company as per the schedule agreed upon by the Parties.

 

11.   Amount

 

The Company shall pay the Developer remuneration for the R&D Activities carried out under the R&D Agreement (the “R&D Expenses”).

 

The R&D Activities will start on January 1, 2018 and are expected to end on April 30, 2021. The amount of the R&D Expenses is estimated to be RMB******.

 

 

11.1.     Billing and payment of R&D Expenses

 

When the R&D Activities are completed, the Company shall pay all R&D Expenses to the Developer on a lump-sum basis, and the amount of R&D Expenses shall be based on the actual amount incurred. The R&D Expenses are calculated as follows:

 

R&D Expenses = [labor cost] x [1+ markup rate ******%] + [all other costs except labor cost]

 

The Company shall pay the Developer the invoiced amount within 45 days after the invoice is issued.

 

11.2.     Transferability

 

Upon consensus through negotiation, the Developer has the right to transfer the R&D Agreement and all rights and obligations arising from the R&D Agreement to a third party.

 

12.   Trade Secrets and Confidentiality

 

12.1.     The Parties shall take all necessary measures to comply with each other’s security and confidentiality procedures.

 

12.2.     All confidential information shall only be used for the purposes stipulated in the R&D Agreement - unless otherwise specifically agreed based on the subsequent provisions of this Article, and when the other Party approves in writing, its own managers, employees, consultants or subcontractors need to know such information for the purpose of performing the duties under the R&D Agreement, the Parties shall treat in confidence any confidential information obtained in connection with the R&D Agreement and shall not disclose it to any third party. Such provision does not apply when the receiving party can prove:

 

The confidential information becomes available to the public through no breach of this or other confidentiality undertakings;

 

The confidential information is already in the possession of the receiving party prior to disclosure by the disclosing party;

 

The confidential information obtained by the receiving party from a third party is not bound by an obligation of confidentiality;

 

The confidential information is required to be disclosed pursuant to mandatory laws, court orders, lawful government actions, or applicable securities exchange laws;

 

The confidential information is reasonably required by either Party to enforce its rights and use its intellectual property rights or any results; or

 

The confidential information is independently developed or created by a Party, any content of which is developed or created without the assistance or information of the other Party.

 

The receiving party shall protect the confidential information disclosed by the other Party with the same care as it would take for its own confidential information of a similar nature (but not less than a reasonable degree of care) to prevent dissemination or publication of the confidential information to third parties. In addition, either Party shall ensure that its employees and consultants are bound by the same confidentiality obligations, and any subcontractors involved in the performance of the Party’s obligations shall also sign a confidentiality undertaking, which shall contain provisions similar in nature to this Article.

 

 

This confidential information clause shall survive the termination of the R&D Agreement without time limitation.

 

13    Representations and Warranties

 

13.1.     Representations and warranties of the Company

 

The Company hereby represents and warrants to the Developer that it has the legal right to enter into the R&D Agreement in accordance with the laws of the People’s Republic of China.

 

13.2.     Representations and warranties of the Developer

 

The Developer hereby represents and warrants to the Company that:

 

(i)

It has the legal right and capacity to enter into the R&D Agreements in accordance with the laws of the People’s Republic of China;

 

(ii)

To the best of its knowledge, carrying out R&D Activities in accordance with the provisions of the R&D Agreement and relevant guidelines does not violate Chinese laws and any other laws applicable to the Developer.

 

14.   Indemnities

 

The Developer shall not be obliged or liable for any personal injury or death or any property damage resulting from the Company’s acts, omissions, gross negligence or willful misconduct.

 

The Company hereby, directly or indirectly, indemnify, defend and hold harmless the Developer and its directors, officers, employees and agents from and against any and all fines, suits, legal proceedings, losses, claims, judgments, decrees, awards, applications, demands, or actions of any nature or kind, and any and all damages, costs, defrayals and expenses (including but not limited to reasonable legal expenses) incurred by or on behalf of such parties during the investigation to defend any and all such charges and accusations.

 

This indemnity clause shall not apply if any damages and any consequential damages suffered by the Developer are caused by its unlawful intent or gross negligence.

 

The Developer shall indemnify, defend and hold the Company harmless from and against losses, claims, actions, damages, expenses or liabilities (including but not limited to reasonable attorney fees and amounts paid in settlement of any claim or suit) arising from or in connection with the Developer’s (i) possession, commercialization or any other exploitation of any Work Results or related Intellectual Property Rights or (ii) breach of any of the Developer’s obligations or liabilities under the R&D Agreement.

 

15.   Termination

 

15.1.     Ordinary termination

 

Either Party may terminate the R&D Agreement at any time at its sole discretion, but it must give a written notice of termination to the other Party 6 (six) months in advance (i.e. 6 months away from the end of the month of termination).

 

15.2.     Extraordinary termination

 

If either Party is in breach of its obligations under the R&D Agreement, the other Party shall give a written notice of breach to the breaching Party. If the breaching Party fails to rectify the breach to the satisfaction of the other Party and notify the other Party of the rectification in writing within 10 (ten) business days after receipt of the notice of breach, either Party giving the notice of breach may terminate the R&D Agreement. Such termination will be effective immediately upon written notice of termination.

 

 

Notwithstanding the preceding paragraph, if any application or order made, proceeding initiated, resolution passed, petition filed to a court or any step taken, by any person, is likely to result in the winding up, dissolution, bankruptcy or insolvency of either Party, or the appointment of an administrator, controller, custodian or similar person with respect to all or any of the assets of either Party (including any commitment made, or any preliminary steps taken, by the affected Party to such appointment), or the transfer of assets of either Party for the benefit of creditors, or the appointment of a receiver or trustee of assets of either Party, such Party shall be deemed to be in breach of the R&D Agreement and the other Party shall have the right to terminate the R&D Agreement with immediate effect without prior notice or opportunity to rectify the breach.

 

16.   Obligations of the Developer after the Termination of the R&D Agreement

 

After the R&D Agreement is duly terminated for any cause, the Developer will no longer be the developer of the Company, and shall immediately stop carrying out any R&D Activities under the R&D Agreement. The Company shall indemnify and hold the Developer harmless for all costs and expenses incurred prior to termination.

 

Article 12 above stipulates the Developer’s confidentiality obligations after the termination of the R&D Agreement.

 

17.   Breach of Obligations

 

Any and all damages, losses, costs or expenses incurred by the Company due to the Developer’s breach of its obligations under the R&D Agreement shall be deducted from the R&D Expenses; on the other hand, the Company shall indemnify the Developer for any and all damages, losses, costs or expenses incurred by the Developer due to the Company’s breach of its obligations under the R&D Agreement.

 

18.   Entire Agreement

 

The R&D Agreement and its appendices constitute the entire agreement between the Parties with respect to the subject matter of the R&D Agreement and supersede, as applicable, all prior agreements, understandings, negotiations and discussions, whether written or oral, with respect to the subject matter of the R&D Agreement. Except as stipulated in the R&D Agreement and its appendices, the Company does not provide any direct or indirect, incidental, express or implied conditions, representations, warranties, undertakings, promises, solicitations or agreements to the Developer.

 

Any supplement or modification to, or waiver of, the R&D Agreement shall not be binding, unless it is signed by the authorized representatives of the Company and the Developer and affixed with the official seals thereof.

 

19.   Severability

 

If any term or provision of the R&D Agreement is found to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of such term or provision in any other jurisdiction, nor shall it affect the validity or enforceability of any other provisions of the R&D Agreement, and any invalid term or provision shall be deemed severable. The Parties shall negotiate in good faith to replace the provisions found to be invalid or unenforceable with new valid and enforceable provisions that retain the original intent of the Parties.

 

 

20.   Other Contractual Relationships between the Parties

 

The Parties to the R&D Agreement recognize that there are now, or there will be in the future, other contractual relationships between them. It is in their interest and intention that the various contractual relationships that exist between the Parties are independent of each other and that the matters specified in the R&D Agreement are in no way governed any terms or conditions other than those set out in by the R&D Agreement.

 

21.   Successors and Assigns

 

The R&D Agreement shall be binding on, and inure to the benefit of, the Company and the Developer and their respective legal representatives, successors and permitted assigns. For the avoidance of doubt, if a Party changes the subject information, such change shall not affect the binding effect of the R&D Agreement.

 

22.   Costs and Taxes

 

22.1.     Costs

 

All costs incurred in connection with the implementation of the R&D Agreement and any subsequent actions shall be borne by the Party directly incurring such costs.

 

22.2.     Taxes

 

The Company shall be responsible for all and any direct taxes imposed by the tax authorities on the transactions contemplated under the R&D Agreement, including value added tax and surtaxes.

 

For the avoidance of doubt, either Party may withhold from payments any taxes required by applicable laws to be withheld.

 

Each Party shall provide to the other Party certificates and evidence that the withholding tax has been remitted to the competent tax authority. If the withholding Party fails to file the tax return and remit the tax to the competent tax authority within the specified time, the withholding Party shall be responsible for any surcharges and penalties arising therefrom.

 

Each Party shall indemnify the other Party for actual costs incurred in providing assistance under this Article.

 

23.   Force Majeure

 

If a Party delays in performing any of its obligation under the R&D Agreement or is in default in the performance of such obligations due to any cause beyond the Party’s reasonable control, and the Party is not at fault or negligent (the “Force Majeure”), the Party shall not be held liable therefor, nor shall the other Party terminate the R&D Agreement on this ground.

 

24.   Non-Waiver and Cumulative Rights

 

The failure of either Party to exercise any right, power or option specified in the R&D Agreement or to insist that the other Party shall abide by the terms and conditions of the R&D Agreement, does not constitute that the Party waives the relevant terms and conditions or any other or subsequent breach by the other Party, nor shall it constitute a waiver by the Party who has not exercised its right, power or option to require the other Party to strictly abide by all the terms and conditions of the R&D Agreement at any time thereafter (including the relevant terms or conditions that the non-breaching Party fails to exercise such right, power or option). The rights of the Parties under the R&D Agreement are cumulative.

 

 

25.   Notices

 

All notices, consents and approvals permitted or required to be given under the R&D Agreement shall be in writing, and shall be deemed to have been fully and duly delivered and served if delivered personally, or by courier, or sent by fax or other recorded form of communication that has been tested prior to dispatch, to the address specified at the beginning of the R&D Agreement.

 

Any notice so served shall be deemed to have been received on the date of delivery if sent by courier, fax or other recorded form of communication, as appropriate. Neither Party may change, by such notice, the address it uses for the purpose of the R&D Agreement.

 

26.   Governing Laws

 

The R&D Agreement shall be governed by, and construed in accordance with, the laws of the People’s Republic of China.

 

27.   Arbitration

 

All disputes arising from or in connection with the R&D agreement shall be submitted to the China International Economic and Trade Arbitration Commission Shanghai Branch for arbitration in accordance with its arbitration rules in effect at that time. The arbitral award shall be final and binding on the Parties.

 

The seat of arbitration shall be Shanghai. The language of arbitration shall be Chinese. Any competent court may enter a judgment on the award rendered by the arbitrator.

 

28.   Counterparts of the R&D Agreement

 

The R&D Agreement shall be written in Chinese. The R&D Agreement has been executed in six (6) counterparts, of which the Developer should receive three (3) counterparts and the Company should receive three (3) counterparts, each of which shall be deemed an original.

 

29.   Further Assurance

 

The Parties to the R&D Agreement agree to do or cause to be done all actions or things necessary to fully implement and enforce the R&D Agreement, including any type of public or formal filing or registration as required by applicable laws.

 

30.   Appendixes

 

The following appendixes constitute an integral part of the R&D Agreement:

 

●    Appendix A - Work Content and Technical List

 

[The execution page is followed]

 

 

IN WITNESS WHEREOF, the Parties have executed the R&D Agreement on the date specified in the R&D Agreement.

 

The Company:

 

Wuhan Geely Automobile Research and Development Co., Ltd. (seal)

 

/s/ Wuhan Geely Automobile Research and Development Co., Ltd.

 

Date: March 22, 2021

 

 

The Developer

 

Ningbo Geely Automobile Research and Development Co., Ltd. (seal)

 

/s/ Ningbo Geely Automobile Research and Development Co., Ltd.

 

Date: March 24, 2021

 

 

Schedule A

Working Contends and Technology List

[***] 

 

 

Exhibit 10.13

 

Technology License Agreement

 

between

 

Wuhan Lotus Cars Co., Ltd.

 

and

 

Zhejiang Liankong Technology Co., Ltd.

 

 

This Technology License Agreement (the “Agreement”) is entered into on December [  ], 2021 by and between:

 

(1) Wuhan Lotus Cars Co., Ltd., a company organized and existing under the laws of the People’s Republic of China, with its address at A404, No. 3 Building, No. 28 Chuanjiangchi 2nd Road, Wuhan Economic and Technological Development Zone, Wuhan, China, (“Lotus”);

 

(2) Zhejiang Liankong Technology Co., Ltd., a company organized and existing under the Law of the People’s Republic of China, with its address at No. 818 Binhai 2nd Road, Hangzhou Bay New Area, Ningbo, Zhejiang, China, (“Geely”).

 

Lotus and Geely are hereinafter referred to as a “Party” individually and the “Parties” collectively.

 

Cooperation Background

 

The PMAI architecture and other technologies are owned by Geely and its affiliates, and Geely intends to license the PMA1 architecture and other technologies to Lotus.

 

Clauses

 

1.

Definitions and Interpretations

 

Unless otherwise required in the context, the following terms and expressions shall have the following meanings.

 

Affiliate	means, with respect to any entity, any other entity directly or, through one or more intermediary organs (intermediaries), indirectly controlling, controlled by or under common control with such entity. Any “control”, with respect to an entity, shall mean the power to manage the entity or have decision-making power in the management of the entity through: (1) direct or indirect ownership of more than 50% of the shares, registered capital or equity of the entity with voting rights; ( ii) the power to appoint a majority of the directors of the entity or a similar management team; or (iii) agreement or otherwise. “Controlling” and “controlled” shall have corresponding meanings;
Agreement	means this License Agreement and the Exhibits hereto;
Appendix	means an appendix to this License Agreement;
Confidential information	means all non-public information belonging to the disclosing party, including but not limited to, the intellectual property rights, non-patent intellectual property rights, and the rights, products, parts, technical data, properties, designs, drawings, algorithms, formulas, know-how, specifications and procedures, expertise, suppliers, financial information, agreements or contracts, product plans, business plans , business methods, business data, customers, market, market or competitor analyses in the confidential information of the other Party, learned by or known to a Party before or after the effective date, and protected by laws;

 

 

Effective Date	means December [  ], 2021;
Documentation	means those documents stored electronically by Geely or its authorized third parties and accessible by Lotus. Such documents are stored in virtual database created for the purpose of execution of this License Agreement. Under the premise of complying with the terms of the database, Lotus has the right to independently access the database to obtain/download and use relevant information;
Intellectual property rights	mean intellectual property rights, including but not limited to patents, inventions (whether patentable or not) and design rights (registered and unregistered), utility models, copyrights and equivalent rights, know-how including trade secrets (whether patentable or not) and any similar rights, whether registered or not, and all rights under an license and other rights to enforce the foregoing. For the avoidance of doubt, trademarks are excluded from this definition;
Trademarks	mean trademarks (including numerical parts of trademarks), service marks, logos, trade names, aliases, trade dress, domain names, whether registered or unregistered in each case, including all registration applications, registrations, renewals thereto, etc.;
PMA1 architecture and other technologies	mean PMA1 mechanical architecture technology (including subsequent technology changes and upgrades), GEEA2.0 technology (including subsequent technology changes and upgrades) and intelligent driving technology, see Appendix A for details.
PA node	means an project approval node.
Lotus related products	mean the three vehicle models internally codenamed LAMBDA, ALPHA and SIGMA developed or to be developed by Lotus and its affiliates, as well as other vehicle models to be added thereafter upon mutual written agreement of the Parties.
EPA architecture technologies	mean new architecture technologies (including related technologies such as mechanical architecture and electrical and electronic architecture) developed by Lotus and its affiliates by themselves or upon commissioning a third party for development, based on Geely’s PMA1 architecture and related technologies (including PMA1 mechanical architecture GEEA2.0 electrical and electronic architecture and other related technologies).

 

 

2.

Geely’s Technologies License to Lotus - PMA1 Architecture and Other Technologies

 

2.1

Geely, on behalf of itself and its affiliates, hereby grants to Lotus a perpetual (the “License Term”), fully paid-up (Payments and Fees for Lotus are determined by Appendix B), non-exclusive, non-transferable, non-sublicensable (other than to Lotus’s affiliates), irrevocable, worldwide license:

 

(a)

for Lotus to use the PMA1 architecture and other technologies (as described in Appendix A) in whole or in part, and upgrade and develop Lotus’s EPA architecture technologies, based on this license;

 

(b)

to use PMA1 architecture and other technologies and its components in whole or in part on Lotus related products;

 

(c)

to design, process, manufacture, market and sell Lotus related products and components in whole or in part according to or using the technologies licensed in this Paragraph 2.1;

 

(d)

as an exception to the aforementioned “non-sublicensable”, after mutual agreement, Lotus may independently license the relevant technologies within the scope of license under the Agreement as part of the EPA architecture technologies (including mechanical architecture and electrical architecture) to third parties and obtain proceeds therefrom (such independent license does not include projects jointed participated in by Liankong and its affiliates and Lotus), and the Parties will agree on the distribution of the proceeds in a separate agreement drafted otherwise; and

 

(e)

for other purposes agreed upon by the Parties.

 

2.2

Lotus shall pay royalty in the amount and manner required in Appendix B.

 

2.3

The Parties agree that Lotus has the right to sub-license the license in Paragraph 2.1 to its affiliates. Except for the circumstances in Subparagraph 2.1(d) of the Agreement, Geely’s prior written consent is required for Lotus to sub-license the PMA1 architecture and other technologies to any third party other than to its affiliates. Lotus shall ensure that the use of the PMA1 architecture and other technologies by its affiliates or other third parties which are granted a sub-license in accordance with this Paragraph 2.3 does not exceed the scope of the license agreed in the Agreement.

 

2.4

Lotus understands that the PMA1 architecture and other technologies related information provided by Geely to Lotus in Paragraph 2.1 may involve third-party intellectual property rights, including intellectual property rights owned by suppliers of Geely and its affiliates; Geely shall ensure that Lotus obtains the license to use the corresponding technologies or similar alternative technical solutions without additional costs.

 

2.5

The Parties understand that Appendix A is the subject matter of delivery formed by the Parties based on their best understanding of the PMA1 architecture and other technologies at the time of execution of the Agreement. If the Parties agree that there is a missing item in the PMA1 architecture and other technologies agreed in Appendix A and such item is the key to the licensed technologies, the Parties shall update the list in Appendix A.

 

 

3.

Financial Terms and Conditions

 

3.1

See Appendix B for all financial terms and conditions related to the Agreement.

 

4.

Infringement upon Intellectual Property Rights

 

4.1

A Party (after becoming aware thereof) shall immediately notify the other Party in writing:

 

a)

The act of any third party causes the Party to reasonably believe that there has been or may be an infringement upon, misuse or other violation of, the intellectual property rights licensed to the Party under the Agreement.

 

b)

Any third party asserts against the Party that any intellectual property right license under the Agreement is invalid, cancelable, unenforceable, or misuses the third party’s intellectual property rights.

 

4.2

When a Party makes a request on intellectual property issues, the other Party shall provide reasonable assistance to the Party, and the related expenses should be negotiated each other. However, a Party, as the owner of the intellectual property rights related to the Agreement, shall have the right to decide to protect its intellectual property rights in any form, including taking actions such as suing and responding to lawsuits.

 

5.

Confidential Information

 

5.1.

The Parties shall take all necessary measures to comply with each other’s security and confidentiality procedures.

 

5.2.

All confidential information shall only be used for the purposes stipulated in the Agreement, unless otherwise specifically agreed in Paragraph 5.3, and when the other Party approves in writing, its own managers, employees, consultants or subcontractors need to know such information for the purpose of performing the duties under the Agreement, the Parties shall treat in confidence any confidential information obtained in connection with the Agreement and shall not disclose it to any third party.

 

5.3

The provisions of Paragraph 5.2 above do not apply to when the receiving Party can prove:

 

a)

The confidential information becomes available to the public through no breach of this or other confidentiality undertakings;

 

b)

The confidential information is already in the possession of the receiving party prior to disclosure by the disclosing party;

 

c)

The confidential information is obtained by the receiving party from a third party not bound by an obligation of confidentiality;

 

d)

The confidential information is required to be disclosed pursuant to mandatory laws, court orders, lawful government actions, or applicable securities exchange laws;

 

 

e)

The confidential information is reasonably required by either Party to enforce its rights and use its intellectual property rights or any results; or

 

f)

The confidential information is independently developed or created by a Party, any content of which is developed or created without the assistance or information of the other Party.

 

5.4

The receiving party shall protect the confidential information disclosed by the other Party with the same care as it would take for its own confidential information of a similar nature (but not less than a reasonable degree of care) to prevent dissemination or publication of the confidential information to third parties. In addition, either Party shall ensure that its employees and consultants are bound by the same confidentiality obligations, and any subcontractors involved in the performance of the Party’s obligations shall also sign a confidentiality undertaking, which shall contain provisions similar in nature to the provisions of Article 5 hereof.

 

5.5

Article 5 hereof shall survive the termination of the Agreement without time limitation.

 

6.

Representations and Warranties

 

6.1

Each Party represents and warrants to the other Party:

 

a)

It is duly established and exists in accordance with the laws of the places of establishment or incorporation, and has good credit standing;

 

b)

It has full corporate power and authority to execute and deliver the Agreement and perform its obligations hereunder;

 

c)

The execution, delivery and performance of the Agreement have been duly authorized and approved, and the authorization and approval have been fully established or effective, and there is not, and will not be, any violation of (i) any applicable laws or (ii) its constitutional documents or any agreement to which it is a party; and

 

d)

The Agreement is a legally binding obligation and may be enforceable in accordance with its provisions.

 

6.2

Exclusion of implied warranties

 

Unless otherwise expressly provided in this Appendix: (1) All representations and warranties related to the Agreement, whether implied, according to statutes, or embodied in any other form, especially warranties and representations regarding applicability, merchantability, description, intention and fitness for a particular purpose, non-infringement, integrity, system integration, and accuracy, are limited to the utmost extent permitted by laws; and (2) All intellectual property rights licensed under this Appendix are provided “as is” and the licensor has no obligation to maintain or update the same unless otherwise expressly agreed in writing between the Parties.

 

 

6.3

The absence of warranties and representations in this Article 6 or in the Agreement shall not (or shall be deemed to) exclude or limit either Party’s liability for actual fraud or willful misconduct.

 

6.4

Geely warrants that, to its best knowledge, the PMA1 architecture and other technologies do not infringe the intellectual property rights of any third party.

 

7.

Limitation of Liabilities

 

7.1

The Parties agree that the risks and costs arising from the use of the licensed technologies under the Agreement shall be borne by the Parties respectively.

 

7.2

Neither Party shall be liable for any indirect, incidental or consequential damages or losses on production or profits arising out of the Agreement.

 

7.3

Any individual or related total direct losses incurred by the Parties under the Agreement shall not exceed the royalty paid or expected to be paid.

 

7.4

The limitation of liabilities specified in the preceding paragraphs does not include losses caused by:

 

(a)

willful misconduct or gross negligence;

 

(b)

a Party’s breach of the confidentiality undertaking set out in Article 6; or

 

(c)

infringement on the intellectual property rights of the other Party or any third party.

 

8.

Assignments, Additions and Amendments

 

8.1

Assignments

 

Neither Party shall assign the Agreement or any of its rights and obligations hereunder without the prior written consent of the other Party.

 

8.2

Additions and amendments

 

Additions and amendments to the Agreement are only effective if agreed in writing by the Parties.

 

9.

Term and Termination

 

9.1

This License Agreement shall take effect from the Effective Date. Unless terminated early in accordance with the following terms, it shall be in effect for the term of the license granted.

 

9.2

A Party has the right to terminate the Agreement by giving the other Party at least one (1) year prior written notice.

 

 

9.3

Without prejudice to the reliefs that a Party may have when the other Party is in breach or fails to perform its obligations hereunder, either Party shall have the right to terminate the Agreement in the following circumstances:

 

a)

If a Party substantially breaches the Agreement and fails to rectify it (if it can be rectified) within thirty (30) days after receiving a written notice of rectification from the other Party, the other Party shall have the right to terminate the Agreement.

 

b)

If a Party delays in making the one-time payment as set out in Appendix B for more than ninety (90) days, the other Party shall have the right to terminate the Agreement.

 

c)

If a Party goes bankrupt or enters into restructuring negotiations with its creditors or files for bankruptcy, or is assigned for the benefit of its creditors, the other Party shall have the right to terminate the Agreement.

 

9.4

After a circumstance constituting breach is known or should be known to the aggrieved Party, the notice of termination shall be given immediately without delay.

 

9.5

All provisions of the Agreement (whether express or implied) shall survive the expiration or termination of the Agreement. The expiration or termination of the Agreement does not mean the termination of the obligations previously agreed by the Parties. The rights and obligations in the Agreement that should survive the termination of the Agreement according to their own nature shall still be valid before their performance is completed, and applicable to and binding on the Parties’ respective successors and permitted assigns. For the avoidance of doubt, if a Party changes the subject information, such change shall not affect the binding force of the Agreement.

 

9.6

For the avoidance of ambiguity, the Parties believe that without any restrictions, the following provisions of the Agreement shall survive the expiration or termination of the Agreement:

 

a)

The defaulting Party is obligated to pay all fees and expenses incurred under the Agreement from the Effective Date until the expiration or termination of the Agreement, including any interest on overdue fees and expenses (if any); and

 

b)

The Parties are obliged to treat in confidence the provisions of the Agreement and information regarding the performance of the Parties.

 

10.

Force Majeure

 

10.1

In case of failure or delay caused by force majeure events, neither Party shall be liable therefor hereunder. “Force majeure event” means an event beyond a Party’s reasonable control, in which it has no fault, which is foreseeable in nature or foreseeable but unavoidable, including strikes, blockades or other industrial disputes (whether involving its laborers or of a third party’s laborers), breakdown of energy or transportation networks, wars, terrorism, riots, collapse of building structures, fires, floods, storms, lightning, earthquakes, shipwrecks, epidemics or similar events, acts of God or extreme weather, or default or delay by suppliers or subcontractors, etc.

 

 

10.2

If the non-performing Party claims that there is a force majeure event and therefore it cannot perform its obligations under the Agreement, it shall notify the other Party with a delay and use commercially reasonable efforts to continue to perform or reduce the impact of non-performance, and immediately resume performing its obligations after the force majeure event is eliminated.

 

11.

Governing Laws and Settlement of Disputes

 

11.1       The Agreement shall be governed by, and construed in accordance with, the laws of the People’s Republic of China, without regard to principles of conflict of laws.

 

11.2       Any dispute or claim arising from or in connection with the Agreement shall be settled as follows:

 

In the event of a controversy, dispute or claim arising from or in connection with the Agreement, or breach, early termination or invalidation of the Agreement, it shall be finally submitted to the China International Economic and Trade Arbitration Commission for arbitration in accordance with its arbitration rules. The seat of arbitration shall be Shanghai, and the language used in the proceedings shall be Chinese. The Parties understand that the arbitration proceedings and any award or decision of the arbitration committee shall be kept strictly confidential.

 

12.

Miscellaneous

 

12.1       Compliance with laws

 

Each Party shall comply with all laws applicable to the Agreement, including any applicable data protection or privacy laws, laws regarding the use of personal data in connection with electronic communications, and shall use commercially reasonable efforts to make all participating subcontractors and third-party suppliers be alos subject to the relevant laws.

 

12.2       Severability

 

If any provision of the Agreement conflicts with applicable laws, or is found invalid by an arbitrator or a competent court, that provision shall be rewritten in an attempt to comply with applicable laws and to express as much as possible the original intent of the Parties. The remainder of the Agreement remains in effect.

 

12.3       Survival

 

If the Agreement is terminated or expires pursuant to Article 9 above, Articles 5 (Confidential Information), 7 (Limitation of Liabilities) and 11 (Governing Laws and Settlement of Disputes) and this Paragraph 12.3 shall survive any termination or expiration of the Agreement, and remain binding on the Parties after termination or expiration hereof.

 

12.4       The Agreement is executed in six counterparts, with Lotus and Geely holding three counterparts respectively, all of which shall have the same legal effect.

 

 

Wuhan Lotus Cars Co., Ltd.

 

/s/ Wuhan Lotus Cars Co., Ltd.

 

Date: December 20, 2021

 

 

Zhejiang Liankong Technology Co., Ltd.

 

/s/ Zhejiang Liankong Technology Co., Ltd.

 

Date: December 20, 2021

  

 

Schedule A

[***]

 

 

Schedule B

[***] 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.14

 

 

Trademarks License Agreement

 

 

Dated: date of last signature of the Parties

 

between

 

Group Lotus Limited

 

and

 

LOTUS ADVANCED TECHNOLOGY LIMITED

This Trademark LICENSING AGREEMENT (“Agreement”) is made on the date of last signature of the Parties by and between:

 

(1)

Group Lotus Limited, a company incorporated in England and Wales with company number 00606189, with its registered address at Potash Lane, Hethel, Norwich, NR14 8EZ (“Licensor”); and

 

(2)

LOTUS ADVANCED TECHNOLOGY LIMITED, a company organized and existing under the laws of Hong Kong with company number 73169419-000-07-21-3, with its registered address at Unit 3A-8,12/F, Kaiser Centre, No. 18 Centre Street, Sai Ying Pun, Hong Kong (“Licensee”)

 

(Licensor and Licensee shall be individually referred to as a “Party” or collectively as the “Parties”).

 

WHEREAS

 

(A)

One or more Affiliates of the Licensee design, manufacture, develop and sell automobile vehicles, related parts and components, provide services in relation to and conduct any other business that it deems fit around the world.

 

(B)

The Licensee wishes to obtain a licence to certain trademarks of the Licensor for use by its Affiliates.

 

(C)

In consideration for the grant of the licence in this Agreement, the Licensor or a Lotus Group Company nominated by the Licensor will be issued with 150,101 ordinary shares of Lotus Cayman (as defined below), the public listing vehicle of the Licensee representing a 0.07% shareholding in Lotus Cayman.

 

(D)

The Licensor (or its nominee), Lotus Cayman, and other shareholders of Lotus Cayman intend to enter into a shareholders’ agreement.

 

(E)

The Parties agree that Licensor will grant the Licensee the licence in Hong Kong only according to the terms and conditions of this Agreement.

IT IS AGREED AS FOLLOWS:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

 

In this Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings:

 

“Affiliate(s)”

means in relation to the Licensee:

 

(a)

any wholly owned subsidiary of the Licensee (either directly or indirectly via one or more wholly owned subsidiaries);

(b)

any wholly owned subsidiaries of Lotus Cayman (either directly or indirectly via one or more wholly owned subsidiaries);

(c)

any entity listed in Schedule 4

(d)

any entity that the Parties agree should be an affiliate (which shall be determined upon a written request by the Licensee to the email address of the Licensor specified in clause 11.12, providing full details of the proposed company and the reason for including them as an affiliate; the Licensor shall respond as to whether or not it approves such request within fourteen (14) days of receipt of the request, which approval shall not be unreasonably withheld;)

 

but the definition of Affiliates shall exclude Lotus Cayman or Lotus Technology International Limited.

 

“Applicable Laws”

means, with respect to any person, any and all applicable provisions of any constitution, statute, law, regulation, ordinance, judgment, rule of common law, or order or injunction pursuant to any legal process issued by any court or tribunal with competent jurisdiction whether in China or elsewhere, whether in effect as of the date hereof or thereafter and in each case as amended, applicable to such person or its assets;

 

“Business Day”

means a day (excluding Saturday and Sunday and gazetted public holidays) when banks are open for general banking business with the public in London and Hong Kong;

“Confidential Information”

means any information which any Party or its Affiliates (or any Lotus Group Company in the case of the Licensor) may have or acquired (whether before or after the date of this Agreement) including any information in relation to the Licensed Trademarks, any financial information, know-how, trade secrets and other information of a confidential nature (including, without limitation, all proprietary technical, industrial and commercial information and techniques in whatever form held, such as paper, electronically stored data, magnetic media film and microfilm or conveyed orally), wherever in the world protectable;

 

“Cross-over”

means a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV;

 

“Effective Date”

means the date of this Agreement;

 

“Hatch-back”

means a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded;

 

“Licensed Trademarks”

means those trademarks set out in Schedule 1 in the Territory or any replacement trademark agreed by the Parties from time to time in the Territory and class unless not renewed by the Licensor prior to the Effective Date;

 

“Licensor’s Majority Shareholders”

means Etika Automotive Sdn Bhd and Zhejiang Geely Holding Group Limited;

 

“Lotus Group Company”

means in relation to the Licensor, that company, any subsidiary or holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company.

 

“Licence Fee”

has the meaning given to it in clause 4.1.

 

“Lifestyle Vehicle”

a passenger vehicle (which for the avoidance of doubt, shall exclude “Sports Car” (as defined below)) produced by Licensee (or its Affiliates), which is an SUV, Sedan, Cross-over or Hatch-back.

 

“Lotus Cayman”

Lotus Technology Inc., a company incorporated in the Cayman Islands under number 379482.the parent and sole shareholder of the Licensee.

“Sedan”

means a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats.

 

“Sports Car”

means a vehicle low to the ground with dynamic capability as the focus; Typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

“SUV” or “Sports Utility Vehicle”

means a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

“Renminbi” or “RMB”

means Renminbi Yuan, the lawful currency of People’s Republic of China.

 

“Territory”

means Hong Kong only.

 

1.2

Interpretation

 

Save where specifically required or indicated otherwise:

 

(a)

all references to statutes, statutory provisions, enactments, shall include references to any consolidation, re-enactment, modification or replacement of the same, any statute, statutory provision, enactment, of which it is a consolidation, re-enactment, modification or replacement and any subordinate legislation in force under any of the same from time to time except to the extent that any consolidation, re-enactment, modification or replacement enacted after the date of this Agreement would extend or increase the liability of any Party under this Agreement;

 

(b)

clause and paragraph headings and the table of contents are inserted for ease of reference only and shall not affect construction.

 

(c)

a reference in this Agreement to “including”, “include” and other similar expressions shall not be construed restrictively but shall mean “including without prejudice to the generality of the foregoing” and “including, but without limitation”.

 

(d)

any reference to “writing” or “written” includes any method of reproducing words or text in a legible and non-transitory form (including electronic mail);

 

(e)

there shall be no presumption that any ambiguity should be construed in favour of or against any party solely as a result of such party’s actual or alleged role in drafting this Agreement or any part of it;

 

(f)

where an act is required to be done within a specified number of days after, from, or prior to a specified date, the time period shall be calculated exclusive of the date so specified and if the last day of the period of time falls on a day which is not a Business Day, then the period shall be deemed to expire on the immediately succeeding Business Day.

2.

LICENCE OF LICENSED TRADEMARKS

 

2.1

Subject to the terms of this Agreement (including clauses 2.2, 2.3 and 6.9A below), the Licensor hereby agrees to grant to Licensee and to the Affiliates of Licensee and the Licensee agrees to accept a sub-licensable licence to use those Licensed Trademarks set out in Part A to schedule 1 showing “Hong Kong” in the “country” column (“Part A Licensed Trademarks”) in the Territory in those classes (and individual specification of goods and services registered for each class) covered by those Licensed Trade Marks for so long as the Licensee (or its Affiliates) conduct the business in relation to Lifestyle Vehicles (the “Term”):

 

(a)

exclusively on the Lifestyle Vehicles and parts and components in relation thereto the Licensee (or its Affiliates) designs, develops, manufactures, assembles, distributes and sells or has designed, developed, manufactured or assembled by any third party.

 

(b)

non-exclusively for Licensee’s or its Affiliates’ business of providing related after-sale services for the Lifestyle Vehicles;

 

(c)

non-exclusively on the related products (excluding anything relating to Sports Cars) such as accessories Licensee (or its Affiliates) designs, produces, distributes, and sells or has designed or produced by any third party on its behalf;

 

(d)

any other occasions in relation to the business conducted by the Licensee (or its Affiliates) as duly approved by its Board (excluding anything relating to Sports Cars);

 

(collectively, “Part A Trademark Licence”).

 

Except to the extent provided under clause 2.3, the licence granted to any Affiliates of the Licensee under this clause 2.1 shall, automatically terminate when such entity ceases to be an Affiliate of the Licensee, and all sub-licences granted by such entity shall also automatically terminate.

 

Nothing herein shall limit or impair the Licensor’s rights to prosecute or maintain any claim against any Affiliate with respect to activities, events or transactions occurring prior to the time when such entity became an Affiliate of the Licensee.

 

The Licensee remains liable for the acts and/or omissions of any of its Affiliates, or any third party who is granted a sublicence under this Agreement.

2.2

In relation to clause 2.1(a), Licensor and any Lotus Group Company (including the Licensor) shall not use by itself or allow other third parties to use the Part A Trademarks in relation to Lifestyle Vehicles in the Territory in respect of the good and services covered by the Part A Trademarks except as permitted under any distribution agreement (if any) or other agreement(s) to which the Licensee (or its Affiliates) affords a Group Lotus company such rights.

 

2.3

Subject to clause 4.4, on expiry of the Term (unless terminated earlier under clause 9), the licences granted at clause 2.1 above shall expire but the Licensee (or its Affiliates) shall be granted a non-exclusive and sub-licensable licence for a period of ten (10) years (or such longer term as required by Applicable Laws in the Territory to maintain after-sale service) from the date of the last vehicle manufactured (or has manufactured by third party) by Licensee (or its Affiliates) pursuant to this Agreement is sold to the extent necessary for providing after-sale service for the Lifestyle Vehicles manufactured or sold under this Licence.

 

2.4

Schedule 1 will be updated on the annual basis.

 

2.5

The exclusive licence granted at clause 2(a) of the Part A Trademark Licence is subject to any existing licences already granted to third parties as at the date of this Agreement.

 

2.6

Subject to the terms of this Agreement, the Licensor hereby agrees to grant to Licensee and to all Affiliates of Licensee and the Licensee agrees to accept, a non-exclusive sub- licensable licence to use those Licensed Trademarks set out in Part B to schedule 1 showing “Hong Kong” in the “country” column (“Part B Licensed Trademarks”) for promotional activities in the Territory in those classes (and individual specification of goods and services registered for each class) covered by those Licensed Trade Marks (the “Part B Trade Mark Licence”) but the Licensee (or its Affiliates) is prohibited from using the Part B Licensed Trademarks for any other purpose (including for the avoidance of doubt not for use on Lifestyle Vehicles, goods or services (including after-sales parts and merchandise) or motorsport. The Licensee agrees and acknowledges that such use would conflict with activities carried out by a Lotus Group Company. For the purposes of this clause 2.6, “promotional activities” shall mean “marketing or public relations activities intended to engage with potential customers and/or increase brand awareness”.

 

2.7

In the event the Licensee or its Affiliate intends to or has agreed to sub-license any of the Licensed Trademarks to a third party that is not the Licensee’s Affiliate, if such sub-license is not within the ordinary course of business of the Licensee or its Affiliate and the Licensee or its Affiliate is entitled to a licensee fee for such third party’s use of the Licensed Trademarks (“Sub-Licence”), the Parties shall, in the Lotus Global Committee, agree a reasonable split of revenue for such Sub-licence, based upon the type of opportunity and the contribution of each Party and shall enter into a separate agreement regarding Licensee’s or its Affiliate’s additional payment to Licensor for such Sub-Licence (if any). The terms of any sub-licence to be granted by the Licensee shall not conflict with the material terms of this Agreement and (where appropriate) shall require the sub-licensee to comply with any brand guidelines agreed in the Lotus Global Committee.

2.8

Each Party agrees not to do, and the Licensee shall ensure that its Affiliates or sublicensees will not do anything or cause anything to be done that weakens or damages the Licensed Trademarks. The Licensee further agrees not to (and will ensure that its Affiliates or sublicensees will not, register a trade mark that is identical or similar to a trade mark already registered by the Licensor, without the Licensor’s prior written consent. For the purposes of this Agreement “similar” shall mean either:

 

(a)

a trade mark that contains the LOTUS wordmark, any LOTUS roundel or the ACBC mark;

(b)

the name of any vehicle (or proposed name for a vehicle) that has been applied for or registered by the Licensor; or

(c)

any other trade mark which is or has previously been registered by the Licensor or is used as a slogan/strapline by the Licensor and is explicitly listed in Schedule 5, except for those discussed and agreed by the Lotus Global Committee.

 

in an identical or different class, where the Lotus Global Committee determines that the marks are visually, orally or conceptually similar (based upon an overall impression given by the marks and bearing in mind their distinctive and dominant components) and would lead to a likelihood of confusion or would likely take unfair advantage of or be detrimental to the Licensor or the Licensed Trademarks.

 

2.9

Where a material breach of clause 2.8 occurs, the Lotus Global Committee will determine the steps that should be taken to remedy the breach, and, if not capable of being rectified, determine whether the licence granted to an Affiliate or third party should be terminated.

 

3.

LOTUS GLOBAL COMMITTEE

 

3.1

The Parties agree that, upon the execution of this Agreement, they shall establish a committee (the “Lotus Global Committee”) as set out in schedule 3, whose structure, function, governance, mechanism, powers and authorities shall be approved by LGIL’s board of directors. Upon its establishment, both parties will discuss the matters to be discussed and approved in this Lotus Global Committee.

 

4.

LICENCE FEE

 

4.1

The Licence Fee for the licences to be granted under this Agreement is £724,700.

 

4.2

Payment of the Licence Fee shall be achieved by the Licensor or a Lotus Group Company nominated by the Licensor being issued with 150,101 ordinary shares (the “Consideration Shares”) of the Licensee’s parent, Lotus Cayman, representing a 0.07% shareholding. The issue of shares should take place after the initial subscription but before the ‘Pre-A round’ of investment when the Consideration Shares are valued at £724,700, and in any event before 31 December 2021 (“Long Stop Date”).

4.3

The Licensor (or its nominee), Lotus Cayman, and other shareholders of Lotus Cayman intend to enter into a shareholders’ agreement in relation to the Licensor’s (or its nominee’s) shareholding in Lotus Cayman (“Shareholders’ Agreement”) on terms acceptable to the Licensor (or its nominee) acting reasonably and in good faith. The Licensee shall procure that Lotus Cayman enters into the Shareholders’ Agreement.

 

4.4

In the event that the Licensor (or its nominee) does not receive the Consideration Shares in accordance with Clause 4.2, this Agreement and all licenses granted under it (including any licences or sublicences granted to Affiliates or third parties) will terminate with immediate effect unless the Licensee pays the Licence Fee to the Licensor within thirty (30) days of the Long Stop Date.

 

4.5

With the exception of any tax payable by the Licensor to the UK tax authorities, the Licensee shall be solely responsible for all taxes and duties which may be levied by any governmental authority in any jurisdiction as a result of the licences and sublicences granted under this Agreement, including, but not limited to, for the avoidance of doubt, any withholding or other tax levied by the Hong Kong or Chinese tax authorities.

 

5.

LICENCE TERM

 

5.1

Subject to clauses 2.3 and 9, the Agreement shall be effective from the Effective Date, and shall continue to be effective during the Term (as defined in clause 2.1). For the avoidance of doubt, after expiry of the Term, this Agreement shall continue to the minimum extent and period necessary to provide the limited non-exclusive licence for after sales service required by any Applicable Laws referred to in clause 2.3.

 

6.

MAINTENANCE OF THE LICENSED TRADEMARKS

 

6.1

The Licensor shall pay the agreed renewal fees in due time. As part of the budgeting process each year, the Licensor shall provide the full list of the Licensed Trademarks that are to be renewed together with any known forecasted fees and costs to be incurred in that relevant year and by December of every year for the following year, the Licensor shall provide a full list of Licensed Trademarks with insertion of updated information.

 

6.2

Subject to clauses 6.4 and 6.5, the Licensor shall be responsible for the registration and renewing of the Licensed Trademarks in accordance with clause 6.1 provided that the Licensee shall pay its share of the cost of registration and/or renewal of a Licensed Trademark to the Licensor within 60 days of an invoice provided to the Licensee. The Licensor shall provide the details of fees for the Licensee’s confirmation before it issues the invoice. The Licensee will bear the cost as follows:

 

(a)

100% of costs if only Lifestyle Vehicles and not Sports Cars are present in the Territory.

(b)

50% of costs if both Lifestyle Vehicles and Sports Cars are present in the Territory.

The Licensor shall be responsible for 100% of the costs of renewal and registration if neither Party’s products are present or only Sports Cars and not Lifestyle Cars are present in the Territory.

 

6.3

For protecting the Licensed Trademarks to the benefit of both Parties, if the Licensor is aware of any actions taken by any third party trying to cancel the registration of any Licensed Trademarks in whole or in part in the Territory, the Licensor shall use commercially reasonable endeavours to protect the validity and registration of the relevant Licensed Trademarks and the Licensee shall be responsible for providing evidence of use of the Licensed Trademarks and providing such evidence to the Licensor on an annual basis. Where the Licensee fails to provide evidence of use, the Licensor shall not be responsible for any invalidation or cancellation of a Licensed Trademark or reduction of the goods and services in a class for the Licensed Trademark.

 

6.4

If the Licensee wishes to register any marks that are not the Part A Licensed Trademarks or Part B Licensed Trademarks but are deemed similar (as defined in clause 2.8 above) and therefore would conflict with the Licensor’s trademarks, the Lotus Global Committee shall decide whether the Licensor should make such registration in the Licensor’s name. In such event, the Licensee shall reimburse the Licensor for all costs involved in making a new application in the proportions specified in clauses 6.2 above payable within 60 days of an invoice being provided by the Licensor. The Licensor shall have no liability in the event that a new trade mark is not granted. Where the Licensee wishes to register a trade mark that the Lotus Global Committee agrees is not identical or similar to a Licensor trade mark, it shall register in the Licensee’s name and at the sole cost of the Licensee.

 

6.5

Should the Licensee wish to use the Licensed Trademarks on goods and services in different categories where Licensed Trademarks have not been registered in the Territory, the applications shall be discussed and agreed in the Lotus Global Committee. Subject to direction of the Lotus Global Committee and agreement by the Parties, the Licensor shall make the new applications and own the trade mark and the trademark licence granted to the Licensee as agreed in this Agreement will extend to the use of such relevant marks, but the Licensee shall reimburse the Licensor for all costs involved in making a new application in the proportions specified in clauses 6.2 and 6.3 above payable within 60 days of an invoice provided to the Licensee by the Licensor. The Licensor shall have no liability in the event that a new trade mark is not granted.

 

6.6

If either Party becomes aware of any actual, threatened or suspected infringement (such as misuse or misappropriation) of Licensed Trademarks in the Territory by any third party or against any third party’s rights, it shall promptly inform the other Party of such infringement. Parties will discuss and work together to take commercially reasonable actions to protect and defend the legal ownership and beneficial interest of the Licensed Trademarks, including but not limited to:

 

a.

procure the right for Licensee (or its Affiliates) to continue using the relevant part of the Licensed Trademarks in the Territory;

b.

make or procure such alterations, modifications, adjustments or substitutions to all or any part or parts of the Licensed Trademarks so that they become non-infringing in the Territory.

c.

Where possible substitute with a non-infringing version of the infringing item of equivalent; or

d.

Take such other reasonable action as the Parties deem necessary and appropriate.

 

6.7

The Parties agree that from the date of this Agreement the costs of any litigation or settling any litigation in in the Territory, including but not limited to any actions brought against the Licensor in respect of the Licensed Trademarks, or the defence of any Licensed Trademarks or any settlement with a third party or success fee payable to legal counsel will paid by the Parties in accordance with the criteria agreed in clauses 6.2 and 6.3.

 

6.8

For the purposes of this clause 6, the email address for notifying the Licensor is Legal@lotuscars.com and the email address for notifying the Licensee is peng.fu@lotuscars.com.cn. Where the Licensor receives a “watch notification” from its trade mark attorneys concerning a Part A Licensed Trademarks or a Part B Licensed Trademarks in the Territory, it shall either forward a copy of that watch notification to the email address above, or request that the watch notification is sent directly to the Licensee’s email. Unless the Licensee provides instructions that a new application from a third party should be opposed (in the Territory) within five (5) days of receiving the watch notification (or within 24 hours where the deadline to oppose is shorter than five (5) days), the Licensor shall at its own discretion decide whether or not to oppose that trade mark application.

 

6.9

The Licensee will (and shall ensure that its Affiliates and any third party granted a sublicence in accordance with this Agreement will) provide assistance to the Licensor in protecting and defending the legal ownership and beneficial interest of the Licensed Trademarks.

 

6.9A

Notwithstanding clause 6.6, where a court injuncts that the use of a Licensed Trade Mark infringes third party rights, the Licensee (or its Affiliates) shall immediately stop using and exploiting such Licensed Trademarks (and shall be responsible for ensuring that its sublicensees stop using and exploiting such Licensed Trademarks) as required by the court. In addition, the Parties shall discuss and agree an appropriate course of action in the Lotus Global Committee where there is a significant threat of infringement of third party rights and take appropriate action to minimise harm to either Party.

 

6.9B

For the purpose of but without limiting clause 6.6, the Licensor hereby informs the Licensee that use of the Licensed Trademarks in the country(s) in relation to the goods and/or services specified in schedule 2 may infringe third party rights and therefore the Parties shall discuss with each other to take commercially reasonable actions so that each Party can use the affected Part A Licensed Trademarks and Part B Licensed Trademarks in the Territory in accordance with this Agreement as soon as possible.

6.10

The Licensee indemnifies (and holds harmless) the Licensor against all costs (including professional costs), losses, claims, fines and judgment arising from Licensee’s or its Affiliates’ use of the Licensed Trademarks (or any third party or Affiliate that the Licensee permits to use the Licensed Trademark) which breaches the Part A Trademark License or the Part B Trademark Licence or any other part of this Agreement, provided that the indemnity under this clause 6.10 shall not apply in respect of any costs (including professional costs), losses, claims, fines and judgment that would be subject to the indemnity by the Licensee in favour of the Licensor under clause 14.1.

 

6.11

The Licensor indemnifies (and holds harmless) the Licensee against all costs (including professional costs), losses, claims, fines and judgment arising from Licensee’s or its Affiliates’ use of the Part A Licensed Trademarks and Part B Licensed Trademarks (or any third party that the Licensee permits to use the same in accordance with this Agreement) in the Territory or the Licensor, where there is no breach of the Part A Trademark License or the Part B Trademark Licence or any other part of this Agreement by the Licensee or its Affiliates (or the third party), provided that the indemnity under this clause 6.11 shall not apply in respect of any costs (including professional costs), losses, claims, fines and judgment that would be subject to the indemnity by the Licensor in favour of the Licensee under clause 14.1.

 

6.12

Notwithstanding any obligations on the Licensor to maintain any Licensed Trademarks, in the event that the Licensee does not pay any sums under this Agreement when they become due, the Licensors shall be entitled (without liability) to suspend payment of any renewals until such time as payment is received.

 

6.13

The Licensee shall ensure that its Affiliates comply with all the obligations of the Licensee’s and the Affiliates’ obligations under this Agreement and the Licensee shall indemnify the Licensor for all costs (including professional costs), losses, claims, fines and judgment arising from any non-compliance by the Licensee or its Affiliates.

 

7.

REPRESENTATIONS AND WARRANTIES

 

Each Party hereto represents and warrants that:

 

(a)

it is duly incorporated and validly existing under the laws of its country of incorporation and it has the full power and authority to enter into this Agreement and perform its obligations hereunder;

 

(b)

all necessary and required corporate approvals, consents and confirmations have been obtained by it to enter into this Agreement and perform its obligations hereunder;

 

(c)

the execution and delivery of this Agreement will not contravene or constitute a default under its constitution, memorandum and articles of association or any other agreements, instruments or other form of commitment to which it is bound;

 

(d)

no previous consent or approval of any authority, court, governmental body or agency or of any other person or entity unless otherwise provided herein will be required in order to make this Agreement fully enforceable against each Party in accordance with its terms;

8.

FORCE MAJEURE

 

8.1

If a Party is prevented by any Force Majeure Event from performing its obligations specified in this Agreement, the time to perform such obligations by that Party affected shall be extended until the Force Majeure Event ceasing to exist. With the exception of the obligation to pay the Licence Fee, any non-performance or delay performance by the Party caused by the Force Majeure Event shall not be deemed breach of this Agreement.

 

8.2

Upon the occurrence of any Force Majeure Event, the Party affected shall promptly notify the other Party, providing details of the event and reasons for which its obligations under this Agreement cannot be performed. The Party affected shall try its best efforts to perform its obligations and to minimize the losses caused to the Company and the other Party.

 

9.

TERMINATION

 

9.1

Without affecting any other right or remedy available to it, either Party may terminate this Agreement (and the licences granted under this Agreement) with immediate effect by giving written notice to the other Party if:

 

(a)

the other Party commits a material breach of any term of this agreement and (if such breach is remediable) fails to remedy that breach within a period of 30 days after being notified in writing to do so by the other Party. For the purposes of this Clause 9.1(a), only a breach (and non-remedy) of the following provisions of this Agreement shall be deemed as material:

(i)

clause 2.1;

(ii)

clause 2.3;

(iii)

clause 4.4;

 

(b)

the other Party shall have a receiver appointed of its undertaking or assets or shall go into liquidation or shall enter into any arrangement with its creditors or shall cease or threaten to cease to carry on its business;

 

(c)

if the Licensor’s Majority Shareholders as a whole no longer have the power to directly or indirectly instruct and control the management of the Licensor. For the purpose of this clause 9.1(c), “control” means that Licensor’s Majority Shareholders, beneficially own directly or indirectly more than 50% of the voting power or other equity interests of the Licensor or has the power directly or indirectly to appoint a majority of the members of the board of directors or similar governing body of the Licensor.

(d)

Lotus Cayman commits a material breach of any term of the Shareholders’ Agreement and (if such breach is remediable) fails to remedy that breach within a period of 30 days after being notified in writing to do so by the other party;

 

(e)

LGIL does not received the Consideration Shares by 31 December 2021 or the License Fee in breach of clause 4.

 

9.2

Any provision of this Agreement that expressly or by implication is intended to come into or continue in force on or after termination or expiry of this Agreement, including clauses 2.3, 4, 6, 9, 10, 11, 12, 13 and 14, shall remain in full force and effect.

 

9.3

Upon termination, all licences (and sub-licences) granted under this Agreement will cease except for the limited non-exclusive licence to comply with Applicable Law in relation to after sales service as granted at clause 2.3.

 

10.

CONFIDENTIALITY

 

10.1

Unless prior written consent is obtained, each Party shall not publish or disclose the terms and conditions of this Agreement and other Confidential Information of the other Party, except for the information:

 

(a)

which is at the relevant time within the public domain (otherwise than by reason of its wrongful disclosure);

 

(b)

which is required to be disclosed by law, any regulatory authorities, or the listing requirements of the stock exchange or an order of a court of competent jurisdiction to which any Party is subject to;

 

(c)

where such information was lawfully available to that Party on a non-confidential basis from a source other than any of the Parties prior to any disclosure thereof by any of the Parties, as evidenced by competent proof thereof,

 

(d)

which the Licensor is required to provide in order to register the licences granted under this Agreement with any trade mark registry in the Territory in order to protect its rights.

 

If the recipient of the Confidential Information becomes required, in circumstances contemplated by Clauses 10.1 (b) and (c) and (d) above to disclose any information, the recipient shall (save to the extent prohibited by law) give to the disclosing Party such notice as is practical and legally permissible in the circumstances of such disclosure and shall consult and co-operate with the disclosing Party, regarding the content, timing and manner of any such disclosure.

 

10.2

Each Party may only disclose the Confidential Information of the other Party to its officers, employees and advisors on a need to know basis. The receiving party undertakes to ensure that all persons and bodies to whom that Party discloses any Confidential Information are made aware, prior to disclosure, of the confidential nature of such information and that they owe a duty of confidence to the disclosing Party and to use all reasonable endeavours to ensure that such persons and bodies comply with the provisions of this Clause 9.

 

11.

NOTICES

 

11.1

Method of Delivery

 

Any notice or other communication to be given under or in respect of this Agreement shall be in writing and may be delivered, given or sent by registered post or reputable signed for courier with a copy sent by electronic mail to the address specified in clause 11.2 below.

 

11.2

Address

 

Any notice or other communication to be given under or in respect of this Agreement shall be sent to the addressee at its address and marked for the attention of the person or officer of the addressee, as set out below, or at such other address, or marked for the attention of such other person or officer as the addressee may give notice of to the other Party from time to time:

 

To Licensor:

 

******

 

To Licensee:

 

Address

: LOTUS ADVANCED TECHNOLOGY LIMITED

 

******

 

12.

GENERAL PROVISIONS

 

12.1

Entire agreement

 

This Agreement and the Shareholders’ Agreement represent the whole and only agreement between the Parties in relation to the grant of licensing of the Licensed Trademarks in the Territory and supersedes any previous agreement (whether written or oral) between all or any of the Parties in relation to the granting of the licence in the Territory.

12.2

Assignment

 

Unless otherwise stipulated in this Agreement, a Party must not transfer, assign, create an interest in or deal in any other way with any of its rights under this Agreement without the prior written consent of the other Parties.

 

12.3

Variation

 

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties.

 

12.4

Further assurances

 

The Parties agree to perform (or procure the performance of) all further acts and things, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required to implement or give effect to this Agreement.

 

12.5

Costs

 

Each Party shall be responsible for its own expenses incurred in connection with the negotiation, preparation and implementation of this Agreement.

 

12.6

Severability

 

(a)

If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable in any respect under the law of any jurisdiction, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement.

 

(b)

The Parties shall then use all reasonable endeavours to replace the invalid or unenforceable provision by a valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid or unenforceable provision.

 

12.7

Counterparts

 

This Agreement may be executed in several counterparts (whether original or PDF (portable document file) file counterparts, it being agreed that delivery of an executed counterpart of the execution page of this Agreement by PDF file shall be effective as delivery of a manually executed counterpart of this Agreement) and upon due execution and delivery of all such counterparts by one or more parties (so that each party has executed at least one counterpart), each counterpart shall be deemed to be an original of this Agreement but all the counterparts shall together constitute one and the same instrument.

 

12.8

This Agreement does not give rise to any rights for a third party to enforce any term of this Agreement. For the avoidance of doubt, no agreement of an Affiliate or third party is required to amend the terms of this Agreement in accordance with clause 12.3.

13

GOVERNING LAW AND DISPUTE RESOLUTION

 

13.1

Governing law

 

This Agreement shall be governed by and construed in accordance with the laws of England and Wales, without giving effect to any conflict of laws principles which might require or lead to application of the laws of a different jurisdiction.

 

13.2

Dispute Resolution

 

(a)

If any dispute arises under or in connection with this Agreement between the Parties, the Parties shall make a good faith effort to resolve the dispute before taking any legal action.

 

(b)

Any dispute, controversy or claim between the Parties arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination (“Dispute”), shall be referred to and finally resolved by arbitration administered by Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The seat of arbitration shall be Hong Kong. The language of arbitration shall be English and the number of arbitrators shall be three (or otherwise agreed by the Parties).

 

(c)

Any award of the arbitrator or arbitral tribunal will be final, conclusive and binding upon the Parties. Judgment on the award rendered by such arbitrators may be entered in any court having jurisdiction thereof.

 

14

PRODUCT LIABILITY

 

14.1

Each Party (“Indemnifying Party”) shall indemnify the other (“Indemnified Party”) against all liabilities, costs, expenses, damages and losses (including but not limited to any direct losses and legal costs (calculated on a full indemnity basis) and all other reasonable professional costs and expenses) suffered or incurred by the Indemnified Party arising out of or in connection with (i) any product liability claim relating to products manufactured, supplied or put into use by the Indemnifying Party or any sub-licensee pursuant to this Agreement or (ii) any claim made against the Indemnified Party by a third party for death, personal injury or damage to property arising out of or in connection with any such products that are defective.

 

[The rest of this page has been intentionally left blank]

 

SCHEDULE 1: LICENSED TRADEMARKS
[***]

 

 

SCHEDULE 2: LICENSED TRADEMARKS SUBJECT TO INFRINGEMENT CLAIM (CLAUSE 6.10)

[***]

 

 

SCHEDULE 3: LOTUS GLOBAL COMMITTEE

[***]

 

 

SCHEDULE 4: ADDITIONAL AFFILIATE OF THE LICENSEE

[***]

 

 

SCHEDULE 5: SIMILAR REGISTERED TRADE MAKRS AND UNREGISTERED STRAPLINES/SLOGANS

[***]

 

 

 

IN WITNESS WHEREOF the Parties hereto have hereunto set their hands and seals the day and year first above-written.

 

Signed for and on behalf of Group Lotus Limited (Company No.: 00606189)		/s/ FENG Qingfeng
		Signatory
		Name:

 

Signed for and on behalf of LOTUS ADVANCED TECHNOLOGY LIMITED		/s/ FENG Qingfeng
		Signatory
		Name:

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.15

 

 

Trademarks License Agreement

 

 

Dated: date of last signature of the Parties

 

between

 

Group Lotus Limited

 

and

 

Lotus Technology International Limited

This Trademark LICENSING AGREEMENT (“Agreement”) is made on the date of last signature of the Parties by and between:

 

(1)

Group Lotus Limited, a company incorporated in England and Wales with company number 00606189, with its registered address at Potash Lane, Hethel, Norwich, NR14 8EZ (“Licensor”); and

 

(2)

Lotus Technology International Limited, a company organized and existing under the laws of Hong Kong with company number 73290092-000-08-21-4, with its registered address at Unit 3A-8,12/F, Kaiser Centre, No. 18 Centre Street, Sai Ying Pun, Hong Kong (“Licensee”)

 

(Licensor and Licensee shall be individually referred to as a “Party” or collectively as the “Parties”).

 

WHEREAS

 

(A)

One or more Affiliates of the Licensee design, manufacture, develop and sell automobile vehicles, related parts and components, provide services in relation to and conduct any other business that it deems fit around the world.

 

(B)

The Licensee wishes to obtain a licence to certain trademarks of the Licensor for use by its Affiliates.

 

(C)

In consideration for the grant of the licence in this Agreement, the Licensor or a Lotus Group Company nominated by the Licensor will be issued with 21,519,899 ordinary shares of Lotus Cayman (as defined below), the public listing vehicle of the Licensee representing a 9.93% shareholding in Lotus Cayman.

 

(D)

The Licensor (or its nominee), Lotus Cayman, and other shareholders of Lotus Cayman intend to enter into a shareholders’ rights agreement.

 

(E)

The Parties agree that Licensor will grant the Licensee the licence in the Territory (as defined below) only according to the terms and conditions of this Agreement.

IT IS AGREED AS FOLLOWS:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

 

In this Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings:

 

	“Affiliate(s)”	means in relation to the Licensee:
		(a)           any wholly owned subsidiary of the Licensee (either directly or indirectly via one or more wholly owned subsidiaries);  (b)           any wholly owned subsidiaries of Lotus Cayman (either directly or indirectly via one or more wholly owned subsidiaries); (c)           any entity listed in Schedule 4  (d)           any entity that the Parties agree should be an affiliate (which shall be determined upon a written request by the Licensee to the email address of the Licensor specified in clause 11.12, providing full details of the proposed company and the reason for including them as an affiliate; the Licensor shall respond as to whether or not it approves such request within fourteen (14) days of receipt of the request, which approval shall not be unreasonably withheld;)

  

but the definition of Affiliates shall exclude Lotus Cayman or Lotus Advanced Technology Limited.

 

“Applicable Laws”

means, with respect to any person, any and all applicable provisions of any constitution, statute, law, regulation, ordinance, judgment, rule of common law, or order or injunction pursuant to any legal process issued by any court or tribunal with competent jurisdiction whether in China or elsewhere, whether in effect as of the date hereof or thereafter and in each case as amended, applicable to such person or its assets;

 

“Business Day”

means a day (excluding Saturday and Sunday and gazetted public holidays) when banks are open for general banking business with the public in London and Hong Kong;

“Confidential Information”

means any information which any Party or its Affiliates (or any Lotus Group Company in the case of the Licensor) may have or acquired (whether before or after the date of this Agreement) including any information in relation to the Licensed Trademarks, any financial information, know-how, trade secrets and other information of a confidential nature (including, without limitation, all proprietary technical, industrial and commercial information and techniques in whatever form held, such as paper, electronically stored data, magnetic media film and microfilm or conveyed orally), wherever in the world protectable;

 

“Cross-over”

means a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV;

 

“Effective Date”

means the date of this Agreement;

 

“Hatch-back”

means a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded;

 

“Licensed Trademarks”

means those trademarks set out in Schedule 1 in the Territory or any replacement trademark agreed by the Parties from time to time in the Territory and class unless not renewed by the Licensor prior to the Effective Date;

 

“Licensor’s Majority Shareholders”

means Etika Automotive Sdn Bhd and Zhejiang Geely Holding Group Limited;

 

“Lotus Group Company”

means in relation to the Licensor, that company, any subsidiary or holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company.

 

“Licence Fee”

has the meaning given to it in clause 4.1.

 

“Lifestyle Vehicle”

a passenger vehicle (which for the avoidance of doubt, shall exclude “Sports Car” (as defined below)) produced by Licensee (or its Affiliates), which is an SUV, Sedan, Cross-over or Hatch-back.

 

“Lotus Cayman”

Lotus Technology Inc., a company incorporated in the Cayman Islands under number 379482, the parent and sole shareholder of the Licensee.

“Sedan”

means a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats.

 

“Sports Car’’

means a vehicle low to the ground with dynamic capability as the focus; Typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

“SUV” or “Sports Utility Vehicle”

means a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

“Renminbi” or “RMB”

means Renminbi Yuan, the lawful currency of People’s Republic of China.

 

“Territory”

means worldwide excluding Hong Kong.

 

1.2

Interpretation

 

Save where specifically required or indicated otherwise:

 

(a)

all references to statutes, statutory provisions, enactments, shall include references to any consolidation, re-enactment, modification or replacement of the same, any statute, statutory provision, enactment, of which it is a consolidation, re-enactment, modification or replacement and any subordinate legislation in force under any of the same from time to time except to the extent that any consolidation, re-enactment, modification or replacement enacted after the date of this Agreement would extend or increase the liability of any Party under this Agreement;

 

(b)

clause and paragraph headings and the table of contents are inserted for ease of reference only and shall not affect construction.

 

(c)

a reference in this Agreement to “including”, “include” and other similar expressions shall not be construed restrictively but shall mean “including without prejudice to the generality of the foregoing” and “including, but without limitation”.

 

(d)

any reference to “writing” or “written” includes any method of reproducing words or text in a legible and non-transitory form (including electronic mail);

 

(e)

there shall be no presumption that any ambiguity should be construed in favour of or against any party solely as a result of such party’s actual or alleged role in drafting this Agreement or any part of it;

 

(f)

where an act is required to be done within a specified number of days after, from, or prior to a specified date, the time period shall be calculated exclusive of the date so specified and if the last day of the period of time falls on a day which is not a Business Day, then the period shall be deemed to expire on the immediately succeeding Business Day.

2.

LICENCE OF LICENSED TRADEMARKS

 

2.1

Subject to the terms of this Agreement (including clauses 2.2, 2.3 and 6.9A below), the Licensor hereby agrees to grant to Licensee and to the Affiliates of Licensee and the Licensee agrees to accept a sub-licensable licence to use those Licensed Trademarks set out in Part A to schedule 1 showing any country or region with the exception of Hong Kong in the “country” column (“Part A Licensed Trademarks”) in the Territory in those classes (and individual specification of goods and services registered for each class) covered by those Licensed Trade Marks for so long as the Licensee (or its Affiliates) conduct the business in relation to Lifestyle Vehicles (the “Term”):

 

(a)

exclusively on the Lifestyle Vehicles and parts and components in relation thereto the Licensee (or its Affiliates) designs, develops, manufactures, assembles, distributes and sells or has designed, developed, manufactured or assembled by any third party.

 

(b)

non-exclusively for Licensee’s or its Affiliates’ business of providing related after-sale services for the Lifestyle Vehicles;

 

(c)

non-exclusively on the related products (excluding anything relating to Sports Cars) such as accessories Licensee (or its Affiliates) designs, produces, distributes, and sells or has designed or produced by any third party on its behalf;

 

(d)

any other occasions in relation to the business conducted by the Licensee (or its Affiliates) as duly approved by its Board (excluding anything relating to Sports Cars);

 

(collectively, “Part A Trademark Licence”).

 

Except to the extent provided under clause 2.3, the licence granted to any Affiliates of the Licensee under this clause 2.1 shall, automatically terminate when such entity ceases to be an Affiliate of the Licensee, and all sub-licences granted by such entity shall also automatically terminate.

 

Nothing herein shall limit or impair the Licensor’s rights to prosecute or maintain any claim against any Affiliate with respect to activities, events or transactions occurring prior to the time when such entity became an Affiliate of the Licensee.

 

The Licensee remains liable for the acts and/or omissions of any of its Affiliates, or any third party who is granted a sublicence under this Agreement.

2.2

In relation to clause 2.1(a), Licensor and any Lotus Group Company (including the Licensor) shall not use by itself or allow other third parties to use the Part A Trademarks in relation to Lifestyle Vehicles in the Territory in respect of the good and services covered by the Part A Trademarks except as permitted under any distribution agreement (if any) or other agreement(s) to which the Licensee (or its Affiliates) affords a Group Lotus company such rights.

 

2.3

Subject to clause 4.4, on expiry of the Term (unless terminated earlier under clause 9), the licences granted at clause 2.1 above shall expire but the Licensee (or its Affiliates) shall be granted a non-exclusive and sub-licensable licence for a period of ten (10) years (or such longer term as required by Applicable Laws in the Territory to maintain after-sale service) from the date of the last vehicle manufactured (or has manufactured by third party) by Licensee (or its Affiliates) pursuant to this Agreement is sold to the extent necessary for providing after-sale service for the Lifestyle Vehicles manufactured or sold under this Licence.

 

2.4

Schedule 1 will be updated on the annual basis.

 

2.5

The exclusive licence granted at clause 2(a) of the Part A Trademark Licence is subject to any existing licences already granted to third parties as at the date of this Agreement.

 

2.6

Subject to the terms of this Agreement, the Licensor hereby agrees to grant to Licensee and to all Affiliates of Licensee and the Licensee agrees to accept, a non-exclusive sub-licensable licence to use those Licensed Trademarks set out in Part B to schedule 1 showing any country or region with the exception of Hong Kong in the “country” column (“Part B Licensed Trademarks”) for promotional activities in the Territory in those classes (and individual specification of goods and services registered for each class) covered by those Licensed Trade Marks (the “Part B Trade Mark Licence”) but the Licensee (or its Affiliates) is prohibited from using the Part B Licensed Trademarks for any other purpose (including for the avoidance of doubt not for use on Lifestyle Vehicles, goods or services (including after-sales parts and merchandise) or motorsport. The Licensee agrees and acknowledges that such use would conflict with activities carried out by a Lotus Group Company. For the purposes of this clause 2.6, “promotional activities” shall mean “marketing or public relations activities intended to engage with potential customers and/or increase brand awareness”.

2.7

In the event the Licensee or its Affiliate intends to or has agreed to sub-license any of the Licensed Trademarks to a third party that is not the Licensee’s Affiliate, if such sub-license is not within the ordinary course of business of the Licensee or its Affiliate and the Licensee or its Affiliate is entitled to a licensee fee for such third party’s use of the Licensed Trademarks (“Sub-Licence”), the Parties shall, in the Lotus Global Committee, agree a reasonable split of revenue for such Sub-licence, based upon the type of opportunity and the contribution of each Party and shall enter into a separate agreement regarding Licensee’s or its Affiliate’s additional payment to Licensor for such Sub-Licence (if any). The terms of any sub-licence to be granted by the Licensee shall not conflict with the material terms of this Agreement and (where appropriate) shall require the sub-licensee to comply with any brand guidelines agreed in the Lotus Global Committee.

 

2.8

Each Party agrees not to do, and the Licensee shall ensure that its Affiliates or sublicensees will not do anything or cause anything to be done that weakens or damages the Licensed Trademarks. The Licensee further agrees not to (and will ensure that its Affiliates or sublicensees will not, register a trade mark that is identical or similar to a trade mark already registered by the Licensor, without the Licensor’s prior written consent. For the purposes of this Agreement “similar” shall mean either:

 

(a)

a trade mark that contains the LOTUS wordmark, any LOTUS roundel or the ACBC mark;

(b)

the name of any vehicle (or proposed name for a vehicle) that has been applied for or registered by the Licensor; or

(c)

any other trade mark which is or has previously been registered by the Licensor or is used as a slogan/strapline by the Licensor and is explicitly listed in Schedule 5, except for those discussed and agreed by the Lotus Global Committee.

 

in an identical or different class, where the Lotus Global Committee determines that the marks are visually, orally or conceptually similar (based upon an overall impression given by the marks and bearing in mind their distinctive and dominant components) and would lead to a likelihood of confusion or would likely take unfair advantage of or be detrimental to the Licensor or the Licensed Trademarks.

 

2.9

Where a material breach of clause 2.8 occurs, the Lotus Global Committee will determine the steps that should be taken to remedy the breach, and, if not capable of being rectified, determine whether the licence granted to an Affiliate or third party should be terminated.

 

3.

LOTUS GLOBAL COMMITTEE

 

3.1

The Parties agree that, upon the execution of this Agreement, they shall establish a committee (the “Lotus Global Committee”) as set out in schedule 3, whose structure, function, governance, mechanism, powers and authorities shall be approved by LGIL’s board of directors. Upon its establishment, both parties will discuss the matters to be discussed and approved in this Lotus Global Committee.

4.

LICENCE FEE

 

4.1

The Licence Fee for the licences to be granted under this Agreement is one hundred and three million, nine hundred thousand pounds sterling (£103,900,000).

 

4.2

Payment of the Licence Fee shall be achieved by the Licensor or a Lotus Group Company nominated by the Licensor being issued with 21,519,899 ordinary shares (the “Consideration Shares”) of the Licensee’s parent, Lotus Cayman, representing a 9.93% shareholding. The issue of shares should take place after the initial subscription but before the ‘Pre-A round’ of investment when the Consideration Shares are valued at £103,900,000, and in any event before 31 December 2021 (“Long Stop Date”).

 

4.3

The Licensor (or its nominee), Lotus Cayman, and other shareholders of Lotus Cayman intend to enter into a shareholders’ rights agreement in relation to the Licensor’s (or its nominee’s) shareholding in Lotus Cayman (“Shareholders Agreement”) on terms acceptable to the Licensor (or its nominee) acting reasonably and in good faith. The Licensee shall procure that Lotus Cayman enters into the Shareholders’ Agreement.

 

4.4

In the event that the Licensor (or its nominee) does not receive the Consideration Shares in accordance with Clause 4.2, this Agreement and all licenses granted under it (including any licences or sublicences granted to Affiliates or third parties) will terminate with immediate effect unless the Licensee pays the Licence Fee to the Licensor within thirty (30) days of the Long Stop Date.

 

4.5

With the exception of any tax payable by the Licensor to the UK tax authorities, the Licensee shall be solely responsible for all taxes and duties which may be levied by any governmental authority in any jurisdiction as a result of the licences and sublicences granted under this Agreement, including, but not limited to, for the avoidance of doubt, any withholding or other tax levied by the Hong Kong or Chinese tax authorities.

 

5.

LICENCE TERM

 

5.1

Subject to clauses 2.3 and 9, the Agreement shall be effective from the Effective Date, and shall continue to be effective during the Term (as defined in clause 2.1). For the avoidance of doubt, after expiry of the Term, this Agreement shall continue to the minimum extent and period necessary to provide the limited non-exclusive licence for after sales service required by any Applicable Laws referred to in clause 2.3.

 

6.

MAINTENANCE OF THE LICENSED TRADEMARKS

 

6.1

The Licensor shall pay the agreed renewal fees in due time. As part of the budgeting process each year, the Licensor shall provide the full list of the Licensed Trademarks that are to be renewed together with any known forecasted fees and costs to be incurred in that relevant year and by December of every year for the following year, the Licensor shall provide a full list of Licensed Trademarks with insertion of updated information.

6.2

Subject to clauses 6.4 and 6.5, the Licensor shall be responsible for the registration and renewing of the Licensed Trademarks in accordance with clause 6.1 provided that the Licensee shall pay its share of the cost of registration and/or renewal of a Licensed Trademark to the Licensor within 60 days of an invoice provided to the Licensee. The Licensor shall provide the details of fees for the Licensee’s confirmation before it issues the invoice. The Licensee will bear the cost as follows:

 

(a)

100% of costs if only Lifestyle Vehicles and not Sports Cars are present in the Territory.

(b)

50% of costs if both Lifestyle Vehicles and Sports Cars are present in the Territory.

 

The Licensor shall be responsible for 100% of the costs of renewal and registration if neither Party’s products are present or only Sports Cars and not Lifestyle Cars are present in the Territory.

 

6.3

For protecting the Licensed Trademarks to the benefit of both Parties, if the Licensor is aware of any actions taken by any third party trying to cancel the registration of any Licensed Trademarks in whole or in part in the Territory, the Licensor shall use commercially reasonable endeavours to protect the validity and registration of the relevant Licensed Trademarks and the Licensee shall be responsible for providing evidence of use of the Licensed Trademarks and providing such evidence to the Licensor on an annual basis. Where the Licensee fails to provide evidence of use, the Licensor shall not be responsible for any invalidation or cancellation of a Licensed Trademark or reduction of the goods and services in a class for the Licensed Trademark.

 

6.4

If the Licensee wishes to register any marks that are not the Part A Licensed Trademarks or Part B Licensed Trademarks but are deemed similar (as defined in clause 2.8 above) and therefore would conflict with the Licensor’s trademarks, the Lotus Global Committee shall decide whether the Licensor should make such registration in the Licensor’s name. In such event, the Licensee shall reimburse the Licensor for all costs involved in making a new application in the proportions specified in clauses 6.2 above payable within 60 days of an invoice being provided by the Licensor. The Licensor shall have no liability in the event that a new trade mark is not granted. Where the Licensee wishes to register a trade mark that the Lotus Global Committee agrees is not identical or similar to a Licensor trade mark, it shall register in the Licensee’s name and at the sole cost of the Licensee.

 

6.5

Should the Licensee wish to enter new markets in the Territory or use the Licensed Trademarks on goods and services in different categories where Licensed Trademarks have not been registered in the Territory, the applications shall be discussed and agreed in the Lotus Global Committee. Subject to direction of the Lotus Global Committee and agreement by the Parties, the Licensor shall make the new applications and own the trade mark and the trademark licence granted to the Licensee as agreed in this Agreement will extend to the use of such relevant marks, but the Licensee shall reimburse the Licensor for all costs involved in making a new application in the proportions specified in clauses 6.2 and 6.3 above payable within 60 days of an invoice provided to the Licensee by the Licensor. The Licensor shall have no liability in the event that a new trade mark is not granted.

6.6

If either Party becomes aware of any actual, threatened or suspected infringement (such as misuse or misappropriation) of Licensed Trademarks in the Territory by any third party or against any third party’s rights, it shall promptly inform the other Party of such infringement. Parties will discuss and work together to take commercially reasonable actions to protect and defend the legal ownership and beneficial interest of the Licensed Trademarks, including but not limited to:

 

a.

procure the right for Licensee (or its Affiliates) to continue using the relevant part of the Licensed Trademarks in the Territory;

b.

make or procure such alterations, modifications, adjustments or substitutions to all or any part or parts of the Licensed Trademarks so that they become non-infringing in the Territory.

c.

Where possible substitute with a non-infringing version of the infringing item of equivalent; or

d.

Take such other reasonable action as the Parties deem necessary and appropriate.

 

6.7

The Parties agree that from the date of this Agreement the costs of any litigation or settling any litigation in in the Territory, including but not limited to any actions brought against the Licensor in respect of the Licensed Trademarks, or the defence of any Licensed Trademarks or any settlement with a third party or success fee payable to legal counsel will paid by the Parties in accordance with the criteria agreed in clauses 6.2 and 6.3.

  

6.8

For the purposes of this clause 6, the email address for notifying the Licensor is Legal@lotuscars.com and the email address for notifying the Licensee is peng.fu@lotuscars.com.cn. Where the Licensor receives a “watch notification” from its trade mark attorneys concerning a Part A Licensed Trademarks or a Part B Licensed Trademarks in the Territory, it shall either forward a copy of that watch notification to the email address above, or request that the watch notification is sent directly to the Licensee’s email. Unless the Licensee provides instructions that a new application from a third party should be opposed (in the Territory) within five (5) days of receiving the watch notification (or within 24 hours where the deadline to oppose is shorter than five (5) days), the Licensor shall at its own discretion decide whether or not to oppose that trade mark application.

 

6.9

The Licensee will (and shall ensure that its Affiliates and any third party granted a sublicence in accordance with this Agreement will) provide assistance to the Licensor in protecting and defending the legal ownership and beneficial interest of the Licensed Trademarks.

 

6.9A

Notwithstanding clause 6.6, where a court injuncts that the use of a Licensed Trade Mark infringes third party rights, the Licensee (or its Affiliates) shall immediately stop using and exploiting such Licensed Trademarks (and shall be responsible for ensuring that its sublicensees stop using and exploiting such Licensed Trademarks) as required by the court. In addition, the Parties shall discuss and agree an appropriate course of action in the Lotus Global Committee where there is a significant threat of infringement of third party rights and take appropriate action to minimise harm to either Party.

6.9B

For the purpose of but without limiting clause 6.6, the Licensor hereby informs the Licensee that use of the Licensed Trademarks in the country(s) in relation to the goods and/or services specified in schedule 2 may infringe third party rights and therefore the Parties shall discuss with each other to take commercially reasonable actions so that each Party can use the affected Part A Licensed Trademarks and Part B Licensed Trademarks in the Territory in accordance with this Agreement as soon as possible.

 

6.10

The Licensee indemnifies (and holds harmless) the Licensor against all costs (including professional costs), losses, claims, fines and judgment arising from Licensee’s or its Affiliates’ use of the Licensed Trademarks (or any third party or Affiliate that the Licensee permits to use the Licensed Trademark) which breaches the Part A Trademark License or the Part B Trademark Licence or any other part of this Agreement, provided that the indemnity under this clause 6.10 shall not apply in respect of any costs (including professional costs), losses, claims, fines and judgment that would be subject to the indemnity by the Licensee in favour of the Licensor under clause 14.1.

 

6.11

The Licensor indemnifies (and holds harmless) the Licensee against all costs (including professional costs), losses, claims, fines and judgment arising from Licensee’s or its Affiliates’ use of the Part A Licensed Trademarks and Part B Licensed Trademarks (or any third party that the Licensee permits to use the same in accordance with this Agreement) in the Territory or the Licensor, where there is no breach of the Part A Trademark License or the Part B Trademark Licence or any other part of this Agreement by the Licensee or its Affiliates (or the third party), provided that the indemnity under this clause 6.11 shall not apply in respect of any costs (including professional costs), losses, claims, fines and judgment that would be subject to the indemnity by the Licensor in favour of the Licensee under clause 14.1.

 

6.12

Notwithstanding any obligations on the Licensor to maintain any Licensed Trademarks, in the event that the Licensee does not pay any sums under this Agreement when they become due, the Licensors shall be entitled (without liability) to suspend payment of any renewals until such time as payment is received.

 

6.13

The Licensee shall ensure that its Affiliates comply with all the obligations of the Licensee’s and the Affiliates’ obligations under this Agreement and the Licensee shall indemnify the Licensor for all costs (including professional costs), losses, claims, fines and judgment arising from any non-compliance by the Licensee or its Affiliates.

 

7.

REPRESENTATIONS AND WARRANTIES

 

Each Party hereto represents and warrants that:

 

(a)

it is duly incorporated and validly existing under the laws of its country of incorporation and it has the full power and authority to enter into this Agreement and perform its obligations hereunder;

(b)

all necessary and required corporate approvals, consents and confirmations have been obtained by it to enter into this Agreement and perform its obligations hereunder;

 

(c)

the execution and delivery of this Agreement will not contravene or constitute a default under its constitution, memorandum and articles of association or any other agreements, instruments or other form of commitment to which it is bound;

 

(d)

no previous consent or approval of any authority, court, governmental body or agency or of any other person or entity unless otherwise provided herein will be required in order to make this Agreement fully enforceable against each Party in accordance with its terms;

 

8.

FORCE MAJEURE

 

8.1

If a Party is prevented by any Force Majeure Event from performing its obligations specified in this Agreement, the time to perform such obligations by that Party affected shall be extended until the Force Majeure Event ceasing to exist. With the exception of the obligation to pay the Licence Fee, any non-performance or delay performance by the Party caused by the Force Majeure Event shall not be deemed breach of this Agreement.

 

8.2

Upon the occurrence of any Force Majeure Event, the Party affected shall promptly notify the other Party, providing details of the event and reasons for which its obligations under this Agreement cannot be performed. The Party affected shall try its best efforts to perform its obligations and to minimize the losses caused to the Company and the other Party.

 

9.

TERMINATION

 

9.1

Without affecting any other right or remedy available to it, either Party may terminate this Agreement (and the licences granted under this Agreement) with immediate effect by giving written notice to the other Party if:

 

(a)

the other Party commits a material breach of any term of this agreement and (if such breach is remediable) fails to remedy that breach within a period of 30 days after being notified in writing to do so by the other Party. For the purposes of this Clause 9.1(a), only a breach (and non-remedy) of the following provisions of this Agreement shall be deemed as material:

(i)       clause 2.1; 

(ii)      clause 2.3; 

(iii)     clause 4.4;

(b)

the other Party shall have a receiver appointed of its undertaking or assets or shall go into liquidation or shall enter into any arrangement with its creditors or shall cease or threaten to cease to carry on its business;

 

(c)

if the Licensor’s Majority Shareholders as a whole no longer have the power to directly or indirectly instruct and control the management of the Licensor. For the purpose of this clause 9.1(c), “control” means that Licensor’s Majority Shareholders, beneficially own directly or indirectly more than 50% of the voting power or other equity interests of the Licensor or has the power directly or indirectly to appoint a majority of the members of the board of directors or similar governing body of the Licensor.

  

(d)

Lotus Cayman commits a material breach of any term of the Shareholders’ Agreement and (if such breach is remediable) fails to remedy that breach within a period of 30 days after being notified in writing to do so by the other party;

  

(e)

LGIL does not received the Consideration Shares by 31 December 2021 or the License Fee in breach of clause 4.

  

9.2

Any provision of this Agreement that expressly or by implication is intended to come into or continue in force on or after termination or expiry of this Agreement, including clauses 2.3, 4, 6, 9, 10, 11, 12, 13 and 14, shall remain in full force and effect.

 

9.3

Upon termination, all licences (and sub-licences) granted under this Agreement will cease except for the limited non-exclusive licence to comply with Applicable Law in relation to after sales service as granted at clause 2.3.

 

10.

CONFIDENTIALITY

 

10.1

Unless prior written consent is obtained, each Party shall not publish or disclose the terms and conditions of this Agreement and other Confidential Information of the other Party, except for the information:

 

(a)

which is at the relevant time within the public domain (otherwise than by reason of its wrongful disclosure);

 

(b)

which is required to be disclosed by law, any regulatory authorities, or the listing requirements of the stock exchange or an order of a court of competent jurisdiction to which any Party is subject to;

 

(c)

where such information was lawfully available to that Party on a non-confidential basis from a source other than any of the Parties prior to any disclosure thereof by any of the Parties, as evidenced by competent proof thereof,

  

(d)

which the Licensor is required to provide in order to register the licences granted under this Agreement with any trade mark registry in the Territory in order to protect its rights.

If the recipient of the Confidential Information becomes required, in circumstances contemplated by Clauses 10.1 (b) and (c) and (d) above to disclose any information, the recipient shall (save to the extent prohibited by law) give to the disclosing Party such notice as is practical and legally permissible in the circumstances of such disclosure and shall consult and co-operate with the disclosing Party, regarding the content, timing and manner of any such disclosure.

 

10.2

Each Party may only disclose the Confidential Information of the other Party to its officers, employees and advisors on a need to know basis. The receiving party undertakes to ensure that all persons and bodies to whom that Party discloses any Confidential Information are made aware, prior to disclosure, of the confidential nature of such information and that they owe a duty of confidence to the disclosing Party and to use all reasonable endeavours to ensure that such persons and bodies comply with the provisions of this Clause 9.

 

11.

NOTICES

 

11.1

Method of Delivery

 

Any notice or other communication to be given under or in respect of this Agreement shall be in writing and may be delivered, given or sent by registered post or reputable signed for courier with a copy sent by electronic mail to the address specified in clause 11.2 below.

 

11.2

Address

 

Any notice or other communication to be given under or in respect of this Agreement shall be sent to the addressee at its address and marked for the attention of the person or officer of the addressee, as set out below, or at such other address, or marked for the attention of such other person or officer as the addressee may give notice of to the other Party from time to time:

 

To Licensor:

 

			Group Lotus Limited
			******

  

to Licensee:

 

Address

: Lotus Technology International Limited

******

 

12.

GENERAL PROVISIONS

 

12.1

Entire agreement

 

This Agreement and the Shareholders’ Agreement represent the whole and only agreement between the Parties in relation to the grant of licensing of the Licensed Trademarks in the Territory and supersedes any previous agreement (whether written or oral) between all or any of the Parties in relation to the granting of the licence in the Territory.

 

12.2

Assignment

 

Unless otherwise stipulated in this Agreement, a Party must not transfer, assign, create an interest in or deal in any other way with any of its rights under this Agreement without the prior written consent of the other Parties.

 

12.3

Variation

 

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties.

 

12.4

Further assurances

 

The Parties agree to perform (or procure the performance of) all further acts and things, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required to implement or give effect to this Agreement.

 

12.5

Costs

 

Each Party shall be responsible for its own expenses incurred in connection with the negotiation, preparation and implementation of this Agreement.

 

12.6

Severability

 

(a)

If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable in any respect under the law of any jurisdiction, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement.

 

(b)

The Parties shall then use all reasonable endeavours to replace the invalid or unenforceable provision by a valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid or unenforceable provision.

12.7

Counterparts

 

This Agreement may be executed in several counterparts (whether original or PDF (portable document file) file counterparts, it being agreed that delivery of an executed counterpart of the execution page of this Agreement by PDF file shall be effective as delivery of a manually executed counterpart of this Agreement) and upon due execution and delivery of all such counterparts by one or more parties (so that each party has executed at least one counterpart), each counterpart shall be deemed to be an original of this Agreement but all the counterparts shall together constitute one and the same instrument.

 

12.8

This Agreement does not give rise to any rights for a third party to enforce any term of this Agreement. For the avoidance of doubt, no agreement of an Affiliate or third party is required to amend the terms of this Agreement in accordance with clause 12.3.

 

13

GOVERNING LAW AND DISPUTE RESOLUTION

 

13.1

Governing law

 

This Agreement shall be governed by and construed in accordance with the laws of England and Wales, without giving effect to any conflict of laws principles which might require or lead to application of the laws of a different jurisdiction.

 

13.2

Dispute Resolution

 

(a)

If any dispute arises under or in connection with this Agreement between the Parties, the Parties shall make a good faith effort to resolve the dispute before taking any legal action.

 

(b)

Any dispute, controversy or claim between the Parties arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination (“Dispute”), shall be referred to and finally resolved by arbitration administered by Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The seat of arbitration shall be Hong Kong. The language of arbitration shall be English and the number of arbitrators shall be three (or otherwise agreed by the Parties).

 

(c)

Any award of the arbitrator or arbitral tribunal will be final, conclusive and binding upon the Parties. Judgment on the award rendered by such arbitrators may be entered in any court having jurisdiction thereof.

14

PRODUCT LIABILITY

 

14.1

Each Party (“Indemnifying Party”) shall indemnify the other (“Indemnified Party”) against all liabilities, costs, expenses, damages and losses (including but not limited to any direct losses and legal costs (calculated on a full indemnity basis) and all other reasonable professional costs and expenses) suffered or incurred by the Indemnified Party arising out of or in connection with (i) any product liability claim relating to products manufactured, supplied or put into use by the Indemnifying Party or any sub-licensee pursuant to this Agreement or (ii) any claim made against the Indemnified Party by a third party for death, personal injury or damage to property arising out of or in connection with any such products that are defective.

 

[The rest of this page has been intentionally left blank]

 

SCHEDULE 1: LICENSED TRADEMARKS

[***]

 

 

SCHEDULE 2: LICENSED TRADEMARKS SUBJECT TO INFRINGEMENT CLAIM (CLAUSE 6.10)

[***]

 

 

SCHEDULE 3: LOTUS GLOBAL COMMITTEE

[***]

 

 

SCHEDULE 4: ADDITIONAL AFFILIATE OF THE LICENSEE

[***]

 

 

SCHEDULE 5: SIMILAR REGISTERED TRADE MAKRS AND UNREGISTERED STRAPLINES/SLOGANS

[***]

 

 

IN WITNESS WHEREOF the Parties hereto have hereunto set their hands and seals the day and year first above-written.

 

Signed for and on behalf of Group Lotus Limited (Company No.: 00606189)		/s/ FENG Qingfeng
		Signatory
		Name:

 

 

 

Signed for and on behalf of Lotus Technology International Limited		/s/ FENG Qingfeng
		Signatory
		Name:

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.16

 

Manufacturing Cooperation Agreement

 

among

 

Wuhan Lotus Cars Co., Ltd.

 

and

 

Wuhan Lotus Cars Sales Limited

 

and

 

Wuhan Geely Auto Parts Co., Ltd.

 

and

 

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch

 

 

Project Name: LAMBDA/ALPHA/SIGMA Model Cooperation Project

 

Contract No:_________________

 

Date of Execution: June 21, 2022

 

 

Manufacturing Cooperation Agreement

 

This Cooperation Framework Agreement (the “Agreement”) is made, entered into and executed on [  ] [  ], 2022 by and among:

 

(1)            Wuhan Lotus Cars Co., Ltd.

 

(a company incorporated in accordance with the laws of People’s Republic of China (Unified social credit code: 91420113MA4L0T9R0Y), with its registered office at A404, No.3 Building, No.28 Chuanjiangchi 2nd Road, Wuhan Economic and Technological Development Zone, Wuhan, China)

 

(2)            Wuhan Lotus Cars Sales Limited

 

(a company incorporated in accordance with the laws of People’s Republic of China (Unified social credit code: 91420100MA49PPD93K), with its registered office at A511, No.3 Building, No.28 Chuanjiangchi 2nd Road, Wuhan Economic and Technological Development Zone, Wuhan, China)

 

(3)            Wuhan Geely Auto Parts Co., Ltd.

 

(a company incorporated in accordance with the laws of People’s Republic of China (Unified social credit code: 91420113MA4L0YQNXP), with its registered office at No.l Building,No.l00 Weihu Road, Shamao Street, Hannan District, Wuhan, China)

 

(4)

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch

 

(a company incorporated in accordance with the laws of People’s Republic of China (Unified social credit code: 91420113MA4IC27XL4B), with its registered office at No.368 Shamao Avenue, Shamao Street, Hannan District, Wuhan, China)

 

Each of Wuhan Lotus Cars Co., Ltd. and Wuhan Lotus Cars Sales Limited is hereinafter referred to as the “Lotus Party” and collectively referred to as “Lotus”; and each of Wuhan Geely Auto Parts Co., Ltd. and Zhejiang Geely Automobile Co., Ltd. Wuhan Branch is hereinafter referred to as “Geely Party” and collectively referred to as “Geely”. Lotus and Geely are hereinafter referred to as a “Party” individually and the “Parties” collectively.

 

The Parties to the Agreement, on the basis of equality and free will, have reached a consensus through full negotiation and entered into the Agreement on the production and manufacture of vehicle models internally codenamed LAMBDA/ALPHA/SIGMA for mutual compliance.

 

1

Cooperation Background

 

1.1

Lotus is a company dedicated to the design and development of luxury high-end electric lifestyle vehicles. It is currently developing high-end electric vehicles such as Lambda, Alpha, and Sigma, and has the functions of sales and global distribution of luxury electric lifestyle vehicles related to the Lotus brand.

 

1.2

Geely is a company capable of producing high-end luxury electric lifestyle vehicles, has the qualifications for manufacturing complete vehicles as required by laws, and applies for and holds product announcements for cooperative models.

 

 

1.3

Lotus agrees to commission Geely with the production of Lambda, Alpha and Sigma models and license relevant technologies, and Geely agrees to accept Lotus’ commissioned production.

 

1.4

Geely, as an entity with the production qualification, is responsible for applying for the Qualified Certificate of Vehicle (the “Certificate”) and selling the produced vehicles to Lotus. Lotus agrees to purchase vehicles of the cooperative models from Geely, and sell and distribute the same in Mainland China and the countries to which such vehicles are exported.

 

2

Cooperation Principles

 

2.1

The Parties shall adhere to the principles of openness, transparency and sharing, and share fully trust and share resources each other.

 

2.2

In the process of development of the Project, the control, verification and acceptance of each node shall be dominated by Lotus.

 

2.3

In the process of production of the Project, quality control shall be carried out in accordance with the Geely quality assurance system recognized by Lotus.

 

2.4

The Agreement will be implemented in strict accordance with China’s laws, regulations, policies, law enforcement practices on taxation, auditing, related transactions, intellectual property rights, etc., and Geely’s audit requirements. If there are changes in relevant laws, regulations, policies, law enforcement practices or Geely’s audit requirements, or any provisions in the Agreement is found to be invalid, illegal or unenforceable in accordance with applicable laws, regulations, policies, law enforcement practices or Geely’s audit requirements, the Parties shall, through negotiation in good faith, try their best to replace those provisions that do not meet the requirements with the provisions that comply with relevant laws, regulations, policies, law enforcement practices and Geely’s audit requirements, so as to minimize or reduce any adverse impact on Geely.

 

3

Cooperation Content

 

3.1

Lotus will develop its own high-end luxury electric lifestyle vehicles (the “Cooperative Models”) internally codenamed LAMDBA/ALPHA/SIGMA. The Cooperative Models will use the “Lotus” brand, and the Announcement of Road Motor Vehicle Manufacturers and Products corresponding to the Cooperative Models (the “Product Announcement”) will be registered in the name of Geely Party.

 

3.2

For the foregoing purposes, Lotus will commission Geely to produce the Cooperative Models, and Lotus will be responsible for the design and development of the Cooperative Models, as well as the designation of relevant suppliers; it will also be responsible for domestic Product Announcement, 3C certification, and overseas certifications including EU EWVTA, and those in the United States and Japan, and for production consistency management.

 

 

3.3

Geely Party is responsible for placing raw material orders, incoming inspection, production planning, production quality control, logistics and transportation of finished vehicles and spare parts, as well as factory operations, worker recruitment, equipment procurement, production organization, and for producing and delivering vehicles and parts in accordance with the agreed quality standards and the delivery plan; Geely Party will sell the complete vehicles to Lotus Party after testing and processing the vehicles of the Cooperative Models and going through necessary procedures such as the Certificate; Lotus Party will act as the exclusive general distributor of the Cooperative Models.

 

3.4

Geely Party shall ensure that it has the qualifications and licenses required by relevant laws and regulations to engage in the production, testing, processing and applying for and obtaining the Certificates of the Cooperative Models, and shall ensure that the Cooperative Models can be used and provided to Lotus as per the cooperation model and the arrangement of division of work.

 

4

Rights and Obligations of the Parties

 

4.1

Wuhan Lotus Cars Co., Ltd. shall be responsible for the Project’s development tasks and goals, costs, development progress and R&D quality control, as well as domestic and foreign product certification (the Product Announcement, 3C certification and environmental protection announcement declaration, EWVTA/overseas COC certificate), production consistency management, etc.

 

4.2

Geely shall assist in providing the required technical information and relevant documents in line with the needs of domestic and foreign product certification of Lotus products. If relevant laws and regulations or government authorities require on-site audits or on-site inspections at factory, Geely shall cooperate therein in accordance with the requirements of the government authorities and Lotus (including but not limited to cooperating in on-site work and providing documents, etc.).

 

4.3

The supply chain management work, that Wuhan Lotus Cars Co., Ltd. is responsible for, includes supplier selection, pricing and designation, supplier quality management, etc. and the supply chain management work, that Wuhan Geely Auto Parts Co., Ltd. is responsible for, includes but is not limited to signing raw material procurement contracts, inbound logistics, incoming inspection, purchase order release, etc. Wuhan Geely Auto Parts Co., Ltd. shall, in a timely manner, inspect and accept the materials delivered by the supplier in accordance with the acceptance standards and requirements recognized by Wuhan Lotus Cars Co., Ltd. (including but not limited to packaging confirmation, appearance inspection, quantity count, model check, whether there are quality problems or not, etc.), and keep the materials properly and settle the material price in time. If it is necessary to pay the supplier in advance due to material shortage and other reasons, Lotus Party shall pay the corresponding material price to Geely Party in advance, and the material price paid Geely Party in advance may be deducted from the payment for the complete vehicle kit payable by Lotus Party to Geely Party as per the actual consumption quantity. If the cost of imported parts is affected by exchange rate fluctuations, Geely Party shall have the right to take hedging and other related financial measures in response to exchange rate changes, and the resulting costs or benefits shall belong to Lotus Party. Lotus shall bear the corresponding cost for the obsolete and slow-moving inventories due to Lotus’s unreasonable procurement plan or order placement or Lotus’s failure to sell as expected.

 

 

4.4

Wuhan Lotus Cars Co., Ltd., as the designer, shall have the right to submit technical guidance documents (including national standards, ECE regulations, EU directives, local standards, and industry norms) to Zhejiang Geely Automobile Co., Ltd. Wuhan Branch regarding the production process; meanwhile, Wuhan Lotus Cars Co., Ltd. shall have the right to inspect the relevant production and test equipment of Zhejiang Geely Automobile Co., Ltd. Wuhan Branch, and supervise the entire manufacturing process.

 

4.5

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch shall be responsible for the production and factory operation management of the Cooperative Models, including material management, production process development, equipment procurement, worker recruitment and management, production organization, product packaging, product delivery, in-plant logistics, inventory management, water and electricity, safety and environmental protection, production quality, etc., and shall also be responsible for the product quality problems of the Cooperative Models caused by Geely. Wuhan Lotus Cars Co., Ltd. shall be responsible for the product quality problems of the Cooperative Models caused by Lotus. Zhejiang Geely Automobile Co., Ltd. Wuhan Branch shall formulate inspection documents for the Cooperative Models according to the acceptance criteria otherwise confirmed with Wuhan Lotus Cars Co., Ltd., and shall conduct process inspection and pre-delivery inspection for the Cooperative Models based thereon. Wuhan Lotus Cars Co., Ltd. shall have the right to inspect the vehicles of the Cooperative Models before they are delivered from factory, and shall also have the right to conduct random inspections after delivery by Zhejiang Geely Automobile Co., Ltd. Wuhan Branch.

 

4.6

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch undertakes to strictly implement the product technical specifications issued by Wuhan Lotus Cars Co., Ltd., use production and inspection equipment according to the specifications, and follow the technical instructions issued in accordance with the Agreement. Zhejiang Geely Automobile Co., Ltd. Wuhan Branch shall not be liable for any product quality problems caused by its implementation of product technical specifications or technical instructions issued by Wuhan Lotus Cars Co., Ltd.

 

4.7

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch shall be responsible for applying for and obtaining the Certificate, certificate of conformity, 3C labeling and environmental protection on-board list of Cooperative Models, printing of overseas COC certificates and uploading information; based on the corresponding data provided by Lotus, Geely shall be responsible for the input of information on various platforms including but not limited to the new energy vehicle monitoring platform and the battery traceability system, and shall be responsible for timely and accurate provision of other information required to complete the foregoing tasks (including but not limited to vehicle production, warehousing, billing and other information) and for the authenticity, accuracy and completeness of such information.

 

 

4.8

The Parties hereby confirm that, unless otherwise agreed, although the Product Announcement of the Cooperative Models is registered under the name of Geely, all the benefits of the new energy credits and carbon emission credits (if applicable) related to the Cooperative Models, the central and/or or various local grants and subsidies for new energy vehicles (including but not limited to car purchase subsidies, energy conservation and emission reduction subsidies, and rights and interests under various support/incentive policies related to the Cooperative Models issued by the national or local governments) shall vest in Lotus, and Geely shall not have any interest therein, Geely shall take necessary actions (for example, sell to a third party) in accordance with the instructions of Lotus, with all taxes and fees arising therefrom to be borne by Lotus. For the sake of clarity, under the same conditions, Lotus shall give priority to selling new energy credits to Geely Party or a Geely’s affiliates recognized by Lotus.

 

4.9

Relevant Parties may carry out follow-up negotiations and enter into separate agreements on general distribution, quality assurance, after-sales services, claims and other matters related to the manufacture and delivery of vehicles of the Cooperative Models.

 

5

Factory Construction

 

5.1

Geely shall ensure the construction of a new, high-quality automobile production base with first-class manufacturing and management levels, which can meet the quality requirements and production capacity requirements of Lotus. For the avoidance of doubt, the construction of the capitalized part of the Geely factory (including but not limited to land, buildings, machinery and equipment, power equipment, transportation equipment, office equipment, mold inspection tools, tools and instruments and other fixed assets and intangible assets) and its operation should be paid by Geely with its own or self-raised funds, and the relevant expenses will then be apportioned to Lotus through the purchase of complete vehicle kits for the Cooperative Models in accordance with the provisions of the Agreement. Lotus shall not pay or bear any other expenses or costs for the construction and operation of the capitalized part of the Geely Factory. For the expensed cost of the Geely factory (including the salary of the administrative personnel in the early stage of the factory project construction, entertainment expenses, travel expenses, postal and communication expenses, etc.), the terms of payment shall be agreed otherwise by the Parties.

 

5.2

The commissioning costs refer to the costs and expenses of direct materials, energy consumption, material consumption, low-value consumables related to the test car, exhibition car, and test pieces incurred in the trial production stage of vehicles of the Cooperative Model, including the wages of workers in production (including welfare, social security, provident fund), training fees of trainees on contract, expert support fees, etc. incurred before the FSR (Final Status Report).

 

6

Capacity Reservation

 

6.1

Geely Party shall introduce necessary general and special equipment on time according to the plan from development to production of the three Lotus models. When the production capacity cannot meet the sales demand, Geely Party shall promptly expand the plant and equipment to ensure the delivery quantity and quality (however, if the delivery quantity and quality are not met due to reasons other than Geely Party, Geely Party shall not be liable therefor). When the original planned production capacity cannot meet the sales demand, Lotus Party and Geely Party should jointly evaluate and confirm whether to expand the plant and equipment, and the resulting production costs that need to be borne by Lotus should be paid to Geely on a lump-sum basis, and the costs of other assets (land, plant, equipment and other supporting facilities) should be amortized to the cost of each vehicle under the principle of dedicated use and shared use.

 

 

 

6.2

Lotus shall have the priority to use the spare capacity of Geely’s factory.

 

7

Calculation and Payment of Ex-factory Price

 

7.1

The Parties hereby unanimously confirm that the ex-factory price of the complete vehicle kit is calculated according to the following formula:

 

Ex-factory price (excluding tax) = ******

 

Where:

 

“Royalty”: ******;

 

“Factory three costs”: ******

 

“Fixed amortization”: ******

 

“Support & guarantee fee”: ******

 

 

“Value-added cost”: ******;

 

“Non-value-added cost”: ******;

 

7.2

******.

 

7.3

Wuhan Geely Auto Parts Co., Ltd. shall take necessary measures to control the “factory three costs” within a reasonable range. The “factory three costs” are apportioned on a monthly basis according to the actual production capacity of Lotus.

 

7.4

Lotus and Geely shall make monthly settlement based on the quantity of vehicles delivered in the current month, and Lotus shall pay the corresponding amount to the bank account designated by Geely within ****** after receiving the special value-added tax invoice issued by Geely.

 

7.5

The prices listed or calculated in the Agreement do not include value-added tax. If the national value-added tax rate is adjusted, the actual amount to be paid by the payer will be adjusted accordingly, but the value-added tax-free price under the Agreement will not be affected by the national value-added tax rate adjustment.

 

7.6

Terms of payment: wire transfer. Currency for payment: RMB.

 

7.7

******.

 

7.8

If the Parties introduce other brands, the above pricing and criteria will be adjusted through further negotiation between the Parties.

 

 

8

Delivery and Risks

 

8.1

After the vehicle enters the finished product garage and the vehicle key and the Certificate are delivered to Lotus Party (or the carrier designated by Lotus Party), the ownership and risks of the corresponding vehicle and its parts and components shall be deemed to have been transferred to Lotus Party.

 

8.2

Geely Party shall assume the risks of destruction and loss of the raw materials, parts and components, complete vehicles and deliverables held in the process of manufacture due to reasons not caused by Lotus Party; and Lotus Party shall assume the risks of destruction and loss of the same due to reasons caused by Lotus Party.

 

8.3

Geely Party shall deliver each vehicle in a condition that meets the specifications before the delivery date agreed by the Parties.

 

9

Quality Assurance

 

9.1

Geely, as the manufacturer of the contracted products, shall be obliged to deliver the contracted products that meet the technical specifications and quality requirements stipulated by Lotus, and to ensure that the contracted products conform to the technical specifications and have no defects in manufacturing and assembly processes (Geely shall not be liable for any defects resulting from (1) Geely’s compliance with the foregoing technical specifications, technical specifications or other technical guidance documents provided by Lotus; (2) other reasons not caused by Geely). All vehicles and products delivered by Geely must comply with (including but not limited to) national standards, ECE regulations, EU directives, local standards, industry norms, provided by Lotus to Geely and confirmed by Geely, and the acceptance criteria mutually confirmed by the Parties in writing.

 

9.2

Geely shall provide new vehicle warranty, organize production in a timely manner and provide after-sales spare parts as per the consensus of the Parties, so as to make reasonable commercial efforts to meet customer needs.

 

9.3

The Parties shall immediately identify any contracted products that do not meet the technical specifications and quality requirements, and ensure that such contracted products do not flow into the market. The Parties shall cooperate in any recall actions or other measures related to the contracted products ordered by the Chinese or EU competent approval authorities.

 

10

Intellectual Property Rights

 

10.1

Intellectual property rights: The intellectual property rights owned by each Party before the execution of the Agreement, or not generated or acquired due to the performance of the Agreement, shall still be fully and exclusively owned by that Party.

 

10.2

Licensing of rights: The Parties understand that if Geely needs to use any intellectual property rights owned or legally licensed by Lotus during the performance of the Agreement, Lotus agrees to grant Geely a worldwide, non-exclusive and non-sublicensable (other than sub-license to Geely and its affiliates for bringing to effect the purpose of the Agreement) license to use the licensed technologies for the production, manufacture, assembly, testing, inspection, vehicle certification, sale, after-sales service, maintenance of the vehicles. Lotus undertakes, to the best knowledge of Lotus, such licensed technologies do not infringe upon the intellectual property rights of any third party; otherwise, Lotus shall be liable for Geely’s losses arising therefrom.

 

 

11

Representations and Warranties

 

Each Party hereby warrants that each of the following representations is true and accurate as of the date of execution of the Agreement:

 

(1)

Each Party is a legal entity established in accordance with the laws of China and has the necessary power and authorization to execute the Agreement and perform its obligations under the Agreement.

 

(2)

The information disclosed by any Party to other Parties is true, accurate and sufficient.

 

(3)

Each Party shall abide by the ethics, integrity and product technical compliance standards, processes and procedures (especially various compliance requirements related to the Agreement, including those on safety, emission, certification, information security and personal data protection, etc.), and shall ensure that its management and employees abide by these standards.

 

(4)

Each Party shall meet the qualifications and qualifications required by the vehicle model cooperation project, sign, execute and perform all relevant documents and decision-making procedures requisite, necessary or required to bring to effect the purpose of the Agreement.

 

(5)

The execution and performance of the Agreement by any Party will not violate its constitutional documents or rules and regulations, nor will it violate the laws or government orders applicable to a Party and the agreements binding on a Party.

 

(6)

Each Party owns, and will continue to own, the intellectual property rights or legal authorization to perform its obligations under the Agreement or provide any materials.

 

12

Confidentiality

 

12.1

During the term and after the expiration, of the Agreement, any Party shall not divulge or disclose confidential information to a third party without the written consent of the other Parties, unless the information has become publicly available.

 

12.2

The Parties (including their respective employees) shall be obliged to treat in confidence the Agreement and all decision-making policies, regulations, operation manuals, customer information, product information, etc. in the business.

 

 

13

Liabilities for Default

 

13.1

The Agreement is a clear expression of the true intents of the Parties. During the performance of the Agreement, if a Party fails to strictly follow the Agreement or perform its corresponding duties and obligations hereunder, it constitutes a default, and the Party shall assume the corresponding liability therefor. In addition to compensating the non-defaulting party for all its direct losses, the defaulting party must also bear all expenses paid by the non-defaulting party to obtain such compensation, including but not limited to legal fees, attorney fees, travel expenses, etc.

 

13.2

If a Party is in breach of the Agreement and causes any losses to any other third party and cause any dispute, and the settlement of such dispute eventually causes the non-defaulting party to assume any liabilities, the defaulting party shall fully compensate the non-defaulting party for the losses suffered thereby.

 

13.3

Unless the Agreement is terminated or rescinded in accordance with the provisions of Article 15, Lotus undertakes that it will commission Geely to produce the models under the Agreement until the fixed depreciation and amortization promised by Lotus is completed.

 

13.4

If Geely fails to deliver the vehicle products according to the quality standards agreed by the Parties (including but not limited to the Agreement, contract appendices, written notices from Lotus, product specifications, the same below), Geely shall take appropriate measures to make the products repaired up to conformity or replaced to returned, and bear any costs arising therefrom; meanwhile, Lotus shall have the right to demand Geely Party to assume joint and several liabilities and compensate Lotus Party for all direct losses suffered thereby. If Geely fails to deliver the vehicle products according to the quality standards agreed by the Parties due to Lotus’s reasons, Lotus shall bear any expenses incurred by Geely for making the products repaired up to conformity or replaced to returned; meanwhile, Geely shall have the right to demand Lotus Party to assume joint and several liabilities and compensates Geely Party for all direct losses suffered thereby. If Geely fails to deliver vehicle products according to the quality standards agreed by the Parties due to common reasons between Geely and Lotus, the Parties shall negotiate amicably and assume corresponding liabilities pro rata based on their respective liabilities.

 

13.5

If due to Geely’s reasons, the quality of the product is not up to standard, causing Lotus or consumers to suffer personal injury or property damage, or causing disputes or lawsuits for consumer claims, or causing Lotus to be subject to administrative punishment by the competent government authorities, Geely Party must be jointly and severally liable for all direct losses caused to Lotus. If due to Lotus’s reasons, the quality of the product is not up to standard, causing Geely or consumers to suffer personal injury or property damage, or causing disputes or lawsuits for consumer claims, or causing Geely to be subject to administrative punishment by the competent government authorities, Lotus Party must be jointly and severally liable for all direct losses caused to Geely. If due to common reasons between Geely and Lotus, the quality of the product is not up to standard, causing a Party or consumers to suffer personal injury or property damage, or causing disputes or lawsuits for consumer claims, or causing a Party to be subject to administrative punishment by the competent government authorities, the Parties shall negotiate amicably and assume corresponding liabilities pro rata based on their respective liabilities.

 

 

14

Special Provisions of Integrity and Self-discipline

 

14.1

The Parties undertake to strictly abide by the following stipulations during business dealings:

 

(1)

Do not transfer various property and non-property benefits or advantages to other Parties (including the entities participated, held or actually controlled by such other Parties or their affiliates, the same below) and their personnel (including their relatives or other interested parties, etc., the same below) in any name.

 

(2)

Do not carry out business activities with the other Parties’ personnel, and those who are related to each other shall disqualify themselves. Within two years after the termination of the cooperation among the Parties, a Party shall not employ, accept the services provided by, the other Parties’ personnel, without the consent of the other Parties.

 

14.2

In the event of default of any such stipulation, the defaulting party shall pay liquidated damages to the non-defaulting party at ****** of the contract amount (or of the amount actually incurred for contracts with non-fixed amounts, the same below); if the contract amount cannot be determined, the defaulting party shall pay liquidated damages of ****** to the non-defaulting party. If an crime is constituted, the defaulting party shall be sent to the judiciary to investigate its criminal liability.

 

14.3

If a Party discovers that any other Party’s personnel have been in default of the foregoing provisions on integrity and self-discipline, it shall report to the compliance department of the other Party or judicial authority.

 

14.4

The modification, assignment, termination, revocation, and invalidation of the Agreement shall not affect the effectiveness of the foregoing provisions on integrity and self-discipline.

 

15

Termination and Rescission of the Agreement

 

15.1

If a Party is in any of the following circumstances, the Parties shall terminate the Agreement in writing without any liability therefor:

 

(1)

insolvency or bankruptcy liquidation, or any other similar event as required by law; and

 

(2)

any change in ownership, or disposition of all or any of its significant business or assets (other than legal organizational adjustments) that materially affects the Party’s ability to perform the Agreement.

 

15.2

The Agreement may be terminated upon consensus of the Parties.

 

15.3

If a Party delays the performance of the Agreement and fails to perform within [30] days after being urged by the non-defaulting party, the non-defaulting party may unilaterally terminate the Agreement.

 

 

15.4

Except for the aforementioned circumstances, the Agreement shall not be terminated or rescinded early for any other reason. If any other circumstances other than the aforementioned circumstances occur, the Parties shall negotiate amiably and in good faith, in a timely manner, based on the long-term cooperation, mutual benefit and win-win principles.

 

15.5

Upon termination of the Agreement, Geely shall immediately return or destroy all retained Lotus documents and other materials, including but not limited to storage media and computer files containing Lotus confidential information. Meanwhile, Lotus shall pay the payable and unpaid fees and expenses in accordance with the provisions of Article 7 of the Agreement, and Geely shall deliver all the produced vehicles, parts and raw materials as soon as possible. Geely shall be responsible for safekeeping of the vehicles and all deliverables before delivery thereof.

 

16

Term

 

The Agreement shall take effect from the date of execution hereof by the Parties, unless terminated according to Article 15, the term of the Agreement will be 10 years, and if any Party does not raise any objection within 60 days before the expiration, the Agreement will be automatically renewed for 3 years.

 

17

Settlement of Disputes

 

The Agreement shall be governed by the laws of the People’s Republic of China. Disputes arising during the performance of the Agreement shall be settled by the Parties involved in the dispute through negotiation; if the negotiation fails, any Party may bring a lawsuit to the competent people’s court where Wuhan Geely Auto Parts Co., Ltd. is located.

 

18

Miscellaneous

 

18.1

If a Party is unable to perform its obligations under the Agreement due to a force majeure event, the Party shall notify the other Parties in writing within fifteen (15) days after the occurrence of the force majeure event and provide evidence of the force majeure event available by it. The Party claiming to be unable to perform its obligations due to a force majeure event shall take appropriate measures to reduce or eliminate the impact of the force majeure event, and shall endeavor to resume performance of its obligations affected by the force majeure event within the shortest possible time.

 

18.2

In the event of a force majeure event, any Party shall not be liable for any damages, increased expenses or losses incurred by any other Party due to the cessation or delay of performance of obligations due to the force majeure event. The aforementioned cessation or delay in performance of the obligations shall not be deemed a default.

 

18.3

The Agreement shall take effect on the date of execution by the authorized representatives of the Parties and affixing the official seal or contract seal thereto, and shall be terminated in accordance with the relevant provisions on termination of the Agreement. After the termination of the Agreement, the provisions of the Agreement on quality, intellectual property rights, confidentiality, liabilities for default, integrity and self-discipline and settlement of disputes shall continue to be effective, and the termination of the Agreement shall not affect the rights and obligations that have arisen before the termination.

 

 

18.4

The Agreement is written and executed in Chinese, and the English version (if any) is for reference only; if there is any inconsistency or conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

18.5

Any matters uncovered herein shall be subject to a supplemental agreement that may be executed otherwise by the Parties through negotiation, which will constitute an appendix to the Agreement. The appendix shall have the same effect as the Agreement.

 

18.6

The Agreement is executed in twelve counterparts, with Lotus holding four counterparts and Geely holding eight counterparts, all of which shall have the same legal effect.

 

18.7

For the avoidance of doubt, the years mentioned in the Agreement refer to natural years.

 

 

[Execution Page]

 

IN WITNESS WHEREOF, the Parties have procured their duly authorized representatives to execute the Agreement on the date first written above.

 

Wuhan Lotus Cars Co., Ltd.

 

/s/

Wuhan Lotus Cars Co., Ltd.

Wuhan Lotus Cars Sales Limited

 

/s/

Wuhan Lotus Cars Sales Limited

Wuhan Geely Auto Parts Co., Ltd.

 

/s/

Wuhan Geely Auto Parts Co., Ltd.

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch

 

/s/

Zhejiang Geely Automobile Co., Ltd. Wuhan Branch

 

Schedule 1

[***]

 

 

Schedule 2

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******. 

 

Exhibit 10.17

 

 

Convertible Note Investment Agreement

 

among

 

Hubei Changjiang Jingkai Automobile Industry Investment Fund Partnership (Limited Partnership)

 

and

 

Wuhan Lotus Technology Co., Ltd. and its shareholders

 

regarding

 

Wuhan Lotus Technology Co., Ltd.

 

 

September 23, 2021

 

 

Contents

 

Recitals		1
Article 1	Definitions and Interpretations	2
Article 2	Convertible Note Arrangements	4
Article 3	Conversion of Convertible Notes and Related Arrangements	5
Article 4	ShareholderRights after the Conversion of Convertible Notes into Equity	6
Article 5	Representations, Warranties and Undertakings	8
Article 6	Confidentiality Obligations	9
Article 7	Effectiveness, Modification, Change and Termination of the Agreement	10
Article 8	Liabilities for Default and Compensation	11
Article 9	Governing Laws and Settlement of Disputes	11
Article 10	Notices and Service	11
Article 11	Supplementary Provisions	12

 

 

Convertible Note Investment Agreement

 

This Convertible Note Investment Agreement (the “Agreement”) is made, entered into and executed on [ ] [ ], 2021 by and among:

 

Present Investor:

 

Hubei Changjiang Jingkai Automobile Industry Investment Fund Partnership (Limited Partnership) (the “Present Investor”), a limited partnership established and validly existing in accordance with Chinese laws, with its address at ******, represented by ******appointed by its executive partner.

 

Target Company:

 

Wuhan Lotus Technology Co., Ltd. (the “Company”), a limited liability company registered and validly existing in accordance with Chinese laws, established on December 29, 2020, with its address at ******, represented by its legal representative Feng Qingfeng.

 

Original shareholders of the Target Company (collectively, the “Original Shareholders”):

 

Zhejiang Geely Holding Group Co., Ltd. (“Geely Holding”), a limited liability company established and validly existing in accordance with Chinese laws, with its address at ******, represented by its legal representative Li Donghui.

 

Ningbo Juhe Yinqing Enterprise Management Consulting Partnership (Limited Partnership) (“Juhe Yinqing” or the “Guarantor”), a limited partnership established and validly existing in accordance with Chinese laws, with its address at ******, represented by the authorized representative ******.

 

In the Agreement, the above parties are hereinafter referred to as a “Party” individually and the “Parties” collectively.

 

Recitals

 

(A)

Pursuant to the Lotus Technology Global Headquarters Project Investment Cooperation Agreement executed by the Management Committee of Wuhan Economic and Technological Development Zone and Zhejiang Geely Holding Group Co., Ltd., the Present Investor intends to invest in the Company in the form of convertible notes to support Geely Auto Lotus Technology Global Headquarters Project.

 

(B)

******

 

 

(C)

Due to the needs of business development, the Company plans to implement the Lotus Technology Global Headquarters Project in Wuhan Economic and Technological Development Zone. The Present Investor intends to, subject to the terms and conditions of the Agreement, invest in the Company in the form of convertible notes and make equity investment in the Company in tranches when the equity conversion event occurs; the Original Shareholders of the Company agree to the Present Investment, agree to the Present Investor’s investing in convertible notes subject to the terms and conditions of the Agreement, and agree to cooperate in the conversion of shares when the equity conversion event occurs; and the Original Shareholders of the Company guarantee that other shareholders of the Target Company newly added on or after the date of execution of the Agreement shall also agree the Present Investor’s investing in convertible notes subject to the terms and conditions of the Agreement, and agree to cooperate in the conversion of shares when the equity conversion event occurs.

 

Therefore, now, the Parties agree as follows:

 

Article 1      Definitions and Interpretations

 

1.1

For the purpose of the Agreement, unless otherwise specified, the following terms and expressions in the Agreement shall have the following meanings:

 

“Present Investment”	means the Present Investor’s investment in the Company with RMB3 billion in aggregate in the form of convertible notes within a one-year period for the purpose of equity investment, which will be used for equity investment in, and  to subscribe for the newly-increased registered capital of, the Company when the conversion conditions are met.
“Present Investor”	means Hubei Changjiang Jingkai Automobile Industry Investment Fund Partnership (Limited Partnership).
“Company”	means Wuhan Lotus Technology Co., Ltd.
“Affiliate”	means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with the person; with respect to any person that is an individual, includes that individual and their close relatives. For the purposes of this definition, “control” means the power, directly or indirectly, to direct or cause the direction of the management and decisions of a person, whether through the ownership of 50% or more of the voting securities, by contract or through other arrangements.
“Working Day”	means any day other than Chinese public holidays.
“Person”	means any individual, firm, company, partnership, association, trust or estate or any other entity or organization (whether or not having separate legal personality), including any government authority.
“RMB, yuan”	means the lawful currency of China: Renminbi.
“China”	means the People’s Republic of China; for the purpose of the Agreement, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region.

 

 

“Chinese Laws”	means the laws, regulations, rules and judicial interpretations officially promulgated by Chinese legislatures and other competent authorities at all levels and known to the public; only for the purpose of the Agreement, excluding the laws, regulations and jurisprudence of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region.
“Material Adverse Effect”	means any of the following circumstances, changes or effects involving the Company: (i) causing, or having sufficient evidence to show that it may cause, adverse effects on the Company’s business, assets, liabilities (including but not limited to contingent liabilities), operating performance or financial positions, thereby causing the Company to suffer pecuniary or non-pecuniary losses exceeding ******, or an loss of ****** of its net assets in the latest audit report, other than losses caused by the following reasons: (a) events or changes that generally affect the industry or market in which the Company operates, (b) changes in financial markets, the general economic or political environment, (c) changes in laws or accounting standards that apply to the Company, or (d) ) expenditures and financial losses incurred in the ordinary course of business of the Company; or (ii) affecting the legitimate existence and legal operation of the Company; or (iii) affecting the legality, validity, binding force or enforceability of the Agreement.
“Material”	means a term describing the materiality of a relevant act or fact and, if such act or fact is “material” in nature, the amount involved (such amounts include income or expenditure of any nature, whether investment, debt, restructuring, guarantee, fines, indemnity, compensation, etc.) will exceed ******, or account for ****** of its net assets in the latest audit report when such act or fact occurs.
“Lotus Headquarters Agreement”	means the Lotus Technology Global Headquarters Project Investment Cooperation Agreement executed by the Management Committee of Wuhan Economic and Technological Development Zone and Zhejiang Geely Holding Group Co., Ltd.
“Lotus Headquarters Project”	means the global operation and management headquarters of Lotus Technology as stipulated in the Lotus Technology Global Headquarters Project Investment Cooperation Agreement executed by the Management Committee of Wuhan Economic and Technological Development Zone and Zhejiang Geely Holding Group Co., Ltd., including but not limited to Lotus Technology’s future product R&D center, procurement and logistics center, sales center and after-sales center, marketing and public relations departments, finance department, administrative department and other functional departments in China.

 

1.2

Unless otherwise provided in the context, amendments, supplements, updates, substitutions, and combinations of documents in the Agreement shall be made in writing as appendices to the Agreement, and such appendices shall be deemed an integral part of the Agreement.

 

1.3

References to any statute or statutory provisions, or rules or regulations shall be construed as references to the same as amended from time to time (whether before or after the date of the Agreement).

 

 

1.4

The headings in the Agreement are for convenience only and shall not affect the interpretation of the Agreement.

 

1.5

Unless otherwise stated, if the last day for implementation under the Agreement occurs on a non-Working Day, it shall be postponed to the first Working Day after the non-Working Day.

 

Article 2       Convertible Note Arrangements

 

2.1

Amount of convertible notes

 

  The Present Investor agrees to provide the Company with a convertible note investment of RMB3 billion.

 

2.2

Delivery in tranches

 

The convertible note investment funds of the Present Investor will be delivered in two tranches, of which RMB2 billion will be paid within 30 Working Days after the execution of the Agreement (the “First Tranche Delivery Date”), and RMB1 billion will be paid within 30 Working Days after a written notice of completion of the commencement ceremony given by the Company and confirmed by the Present Investor (the “Second Tranche Delivery Date”, together with the First Tranche Delivery Date, the “Delivery Dates”).

 

2.3

Use of funds

 

The Parties confirm that the Company is the headquarters of Lotus Technology, and all the Present Investment funds will be specifically used for the investment, construction and operation of the Lotus Technology headquarters Project, including but not limited to Lotus Technology’s future product R&D center, procurement and logistics center, sales center and after-sales center, marketing and public relations departments, finance department, administrative department and other functional departments in China. Without the prior written consent of the Present Investor, the Company shall not use the convertible note funds for purposes other than those for the Lotus Headquarters Project.

 

2.4

Convertible note investment period

 

The period of the convertible note investment under the Agreement is one year from respective Delivery Date of each tranche of the investment funds. When an equity conversion event (as defined below) occurs, the Company and the Original Shareholders shall assist the Present Investor to subscribe for the Company’s newly-increased registered capital (the “Conversion of Convertible Notes into Equity”) with the convertible note investment funds provided to the Company.

 

2.5

Convertible note interest

 

The interest on the convertible notes under the Agreement is an annualized 3% simple interest, which is calculated from the Delivery Dates of the funds to the date of repayment of the debts. If the convertible notes in question are converted into equity, the Present Investor shall waive the interest on the convertible notes.

 

2.6

Transfer of convertible notes

 

The Present Investor shall, on the Delivery Dates, pay the convertible note funds to the bank account designated by the Company through a written notice, and shall promptly inform the Company that the funds have been transferred.

 

 

2.7

Guarantee

 

The existing shareholder Ningbo Juhe Yinqing Enterprise Management Consulting Partnership (Limited Partnership) provides an unconditional joint and several liability guarantee to the Present Investor for the exit of the convertible notes. The guarantee period ends when the Company repays in full the principal of the convertible notes and the interest thereon to the Present Investor or when all the convertible notes are converted into equity of the Company (whichever is earlier). When the exit of the convertible notes set out in the Agreement occurs, the Present Investor may send a letter to claim rights against the Company and the Guarantor.

 

Article 3     Conversion of Convertible Notes and Related Arrangements

 

3.1

Conversion of convertible notes: When any of the following events (the “Equity Conversion Events”) occurs, the Present Investor shall convert the debt held by it into equity of the Company, and the Parties shall cooperate with the Present Investor to complete the Conversion of Convertible Notes into Equity.

 

(1)           Within one year from the First Tranche Delivery Date, after the Company sends a written notice of the first equity conversion to the Present Investor, the Present Investor is entitled to subscribe for the then-current registered capital of the Company corresponding to the investment amount of RMB200 million, at the time of equity conversion and the post-money equity valuation as specified in the written notice.

 

(2)           Within one year from the respective delivery date of the remaining RMB2.8 billion of funds, after the Company sends written notices of the equity conversion to the Present Investor, the Present Investor is entitled to subscribe for the then-current registered capital of the Company corresponding to the investment amount of RMB2.8 billion, at the time of equity conversion and the post-money equity valuation as specified in the written notices.

 

In making the Conversion of Convertible Notes into Equity, if it is infeasible for the Present Investor to complete in time the subscription for the newly-increased registered capital of the Company directly with its claims against the Company under the convertible notes provided to the Company due to laws, policies or government department reasons, the Present Investor and the Company shall negotiate to reach an alternative solution, including the Company’s repayment, in installments, of the principal of the convertible note and the interest thereon (the specific amount and time limit of each installment fund will be negotiated separately by the Parties, but, in principle, the time should not exceed one year from each delivery date of the convertible note funds), and the Present Investor shall, after receiving each repayment fund, subscribe for the newly-increased registered capital of the Company with such fund within 10 Working Days after the conditions precedent for each capital contribution (if any) as agreed in the equity investment agreement, so as to achieve the same purpose as the Conversion of Convertible Notes into Equity.

 

The Company and the Original Shareholders agree that they will do their best to cooperate, and procure the Company’s subsequent investors to cooperate, with the Present Investor to complete the conversion of convertible notes under Article 3, and cooperate to sign relevant documents.

 

3.2

After the First Installment Delivery Date and during the period when the Present Investor holds the Company’s equity after the equity conversion is completed, the Present Investor shall have the right to be informed of the Company, including but not limited to:

 

(1)           The Company shall provide the Present Investor with the audited consolidated income statement, balance sheet and cash flow statement within 4 months after the end of each fiscal year;

 

(2)           The Company shall, at the reasonable requests in writing from the Present Investor or its authorized representative, promptly provide the Present Investor with a report on the use of investment funds of the Present Investor, and other information about the Company’s production, operation and financial positions;

 

 

(3)           The Company shall disclose to the Present Investor within 5 Working Days of an event that has a Material Adverse Effect causes the Present Investor to lose more than ****** of its investment funds.

 

Article 4    Shareholder Rights after the Conversion of Convertible Notes into Equity

 

After completing each Conversion of Convertible Notes into Equity, the Present Investor, as a shareholder of the Company, shall have the following rights with respect to the Company’s equity held by it:

 

4.1

Restrictions on equity transfer

 

(1)           During the period when the Present Investor holds the Company’s equity, Juhe Yinqing shall not directly or indirectly sell, donate, pledge, create encumbrances, or otherwise dispose of (collectively, “transfer”) the Company’s equity held by it without the permission of the Present Investor; the transfer by each shareholder to its affiliate shall not be subject to the above restrictions, but the transferee shall enter into the joint agreement, recognizing the rights of the Present Investor under the Agreement;

 

(2)           For the avoidance of doubt, a transfer of no more than 10% in aggregate of the Company’s equity by the Original Shareholders at that time, shall not be subject to the equity transfer restrictions, right of first refusal, and tag-along right under the Agreement.

 

4.2

Right of first refusal

 

(1)           Subject to the provisions of Paragraph 4.1 of the Agreement, when the Original Shareholders (the “Transferors”) intend to directly or indirectly transfer all or part of the Company’s equity held by them to any unrelated third party (the “Equity to Be Transferred”), and the transferee of the Equity to Be Transferred (the “Target Transferee”) has made a legally binding offer, the Present Investor shall have the right of first refusal of the Equity to Be Transferred on the same terms in proportion to the Company’s equity held by them For the avoidance of doubt, the transfer of the Equity to Be Transferred by the Transferors to their affiliates shall not be subject to the right of first refusal that the Present Investors have, regardless of the provisions of the Agreement or legal provisions.

 

(2)           When the foregoing occurs, the Transferors shall notify the Present Investor in writing of the amount of Equity to Be Transferred, the transfer price and the main conditions (the “Transfer Notice”).

 

(3)            The Present Investor shall notify the Transferors in writing within twenty (20) days after receiving the Transfer Notice whether to exercise its right of first refusal; if the Present Investor fails to do so within such twenty (20) days, it shall be deemed to have waived its right of first refusal.

 

4.3

Tag-along right (co-sale right)

 

(1)            If the Present Investor fails to exercise its right of first refusal of the Equity to Be Transferred in accordance with Paragraph 4.2 of the Agreement, it shall have the right to transfer, together with the Transferors, the Company’s equity held by it, at the same price and conditions proposed by the Target Transferee, and at the co-sale ratio based on the number of remaining shares after other shareholders exercise their right of first refusal (co-sale ratio = the ratio of the Company’s equity held by the Present Investor at that time ÷ (the ratio of the Company’s equity held by all investors who exercise the co-sale right at that time + the ratio of the Company’s equity held by the Transferors)) to the Target Transferee.

 

 

(2)           The Present Investor failing to exercise its right of first refusal shall have the right to submit to the Transferors a written notice of exercising its co-sale right, within twenty (20) days after receiving the Transfer Notice; if the Present Investor fails to do so within such twenty (20) days, it shall be deemed to have waived the tag-along right.

 

(3)           If the Present Investor chooses to exercise the tag-along right, the Company and the Transferors shall ensure that the Target Transferee purchases the equity of the Present Investor at the same price and conditions, and deduct the equity sold by the Present Investor under the tag-along right pro rata from the total number of Equity to Be Transferred. If the Target Transferee does not agree to purchase the equity that the Present Investor intends to sell under the tag-along right, the Transferors shall not sell the equity to the Target Transferee, unless the Transferors purchase the equity that the Present Investor intends to co-sell.

 

4.4           Preemptive right

 

The Company and the Original Shareholders undertake that the Present Investor shall have the preemptive right to subscribe for the new registered capital of the Company as per its shareholding ratio, and the subscription price, terms and conditions should be substantially the same as those of other potential fellow subscribers, other than the increase of registered capital due to equity incentives approved by the competent authority, implementation of acquisitions or mergers, profit increase or capital reserve increase, company restructuring, introduction of strategic partners, initial public offering of securities, etc.

 

4.5           Anti-dilution

 

 During the period when the Present Investor holds the Company’s equity, unless the Present Investor agrees in writing, the Company shall not conduct new equity financing at a price lower than the consideration when the Present Investor invested in the Company (that is, the investment cost corresponding to each yuan of registered capital); otherwise, anti-dilution compensation should be made to Present Investor at the weighted average algorithm.

 

4.6           Dividend distribution

 

During the period when the Present Investor holds the Company’s equity, it shall be entitled to share dividends on the distributable profits generated by the Company.

 

4.7

Equal treatment: The Company and the Original Shareholders confirm that if the Target Company grants the Original Shareholders and other fellow investors any rights or benefits that are more favorable than those to the capital increase by the Present Investor in any way (except for special treatments to leading investors and strategic partners). The Target Company guarantees that the Present Investor shall have the right to request to have the preferential rights or benefits under the same conditions, unless the Present Investor agrees to give up.

 

4.8

Guarantee of exemption from VAM: The Company and the Original Shareholders guarantee that when the Company introduces new investors in any way (including but not limited to capital increase and stock expansion, and transfer of old shares) in the future, any clause shall not regard the Present Investor as one of the responsible subjects of performance VAM and repurchase, and such performance VAM and repurchase clauses, guarantees and undertakings shall exempt the Present Investor from a joint and several liability therefor.

 

4.9           Liquidation preference right

 

(1)           In the case of a required liquidation in accordance with legal procedures (including bankruptcy liquidation or any deemed liquidation event (as defined below)) during the period when the Present Investor holds the Company’s equity, the Parties agree that the Present Investor shall have priority over the Original Shareholders of the Company in recovering its investment cost from the Company’s assets or from the assets obtained by the shareholders as a result of the deemed liquidation event.

 

 

 

   (2)            Deemed liquidation events. “Deemed Liquidation Events” for the Company shall include the following events:

 

1)             A change in the actual control of the Company due to the merger, reorganization or sale of substantial assets of the Company;

 

2)             Any event that causes ****** or more of the Company’s assets or business to be transferred or sold.

 

(3)            If the Company is liquidated or any Deemed Liquidation Event occurs and the Present Investors fails to recover its investment cost within 18 months after the liquidation event, the difference shall be borne by the Juhe Yinqing.

 

4.10

If the special rights of the Present Investor may pose obstacles to the smooth listing of the project company, the Company will notify the Present Investor in writing and provide relevant supporting materials. After the Present Investor agree, such rights will be automatically suspended. If the listing fails, such rights are automatically restored.

 

Article 5     Representations, Warranties and Undertakings

 

5.1           Representations and warranties

 

  The Company and the Guarantor hereby represent and warrant:

 

(1)           The Company is a company duly established and validly existing in accordance with Chinese laws, and have the right to own its assets and to carry on the business it is currently carrying on;

 

(2)           Photocopies of the due diligence documents provided by the Company to the Present Investors or the intermediaries hired by them are true, accurate and complete, free from any material omissions or misleading or false statements, information or materials;

 

(3)           Each of them has the authority to enter into, perform and deliver, and has taken all necessary actions to authorize it to execute, perform and deliver, the Agreement and the transactions contemplated by the Agreement and these documents;

 

(4)           Before the execution of the Agreement, the Company and the Guarantor have no material economic disputes and lawsuits; other than the lawsuits and arbitrations that have been disclosed to the Present Investor, there is no lawsuit, arbitration or administrative procedure pending before any court, arbitration institution or administrative agency, that is reasonably expected to have a Material Adverse Effect on the Company or the Guarantor if there is an unfavorable decision;

 

(5)           The representations and warranties made by them in this Article 5 are true, complete and accurate as of the date of execution of the Agreement and the Delivery Dates.

 

5.2

Undertakings

 

During the period when the Present Investor holds the Company’s convertible notes/equity, the Company and the Guarantor undertake to the Present Investor:

 

(1)           To use investment funds for the purpose as specified in the Agreement;

 

(2)           Any matter concerning changes in the Company’s items registered with the competent administration for industry and commerce, such as domicile, mailing address, business scope, legal representative, etc., shall be notified to the Present Investor in writing within 7 days after the change of relevant items;

 

 

(3)           When the Company goes out of business, dissolves, suspends business for rectification, or its business license is revoked, it shall notify the Present Investor in writing within 5 days after the occurrence of the event;

 

(4)           When any of their shareholders, directors and current officers is involved in major criminal cases or involve major economic administrative penalties, it shall be notified to the Present Investor in writing within 5 days after the occurrence of the event;

 

(5)           If the Company undergoes shareholding system reform, association, combination, merger, joint venture, splitting, capital increase, capital reduction, equity change, substantial asset transfer, and other actions that may affect the realization of the rights and interests of the Present Investor, it shall be notifies to the Present Investor at least 30 days in advance;

 

(6)           In the case of any other event that poses a danger to their normal operation or has a Material Adverse Effect on their performance of repayment obligations under the Agreement, including but not limited to major economic disputes, bankruptcy, deterioration of financial conditions, etc., it shall be notified to the Present Investor in writing within 5 days after the occurrence of the event.

 

Article 6      Confidentiality Obligations

 

6.1

The terms and conditions of the Agreement and its appendices (including all clauses and even the existence of the Agreement and all transaction documents related to the Present Investment) are confidential information, and the Parties to the Agreement shall not disclose them to third parties, unless otherwise provided. Each Party shall treat in confidence proprietary or secret or confidential data and information concerning the Company, its business or other Parties, or disclosed by other Parties at any time or for the purpose of negotiating the Agreement or operating the Company and the relevant contents of the Agreement (the “Confidential Information”), and shall not disclosed the same to third parties or persons other than the Parties to the Agreement, the Company and professional consultants, with the exception where disclosure is required by mandatory legal provisions.

 

6.2

Notwithstanding the foregoing, each Party may disclose such information to its governing bodies, shareholders, employees, directors, officers, consultants or agents for the purposes of the Agreement, provided that such Party shall take all reasonable steps to ensure that such persons are aware of the confidentiality of the Confidential Information and agree to perform the aforementioned confidentiality obligations in accordance with the Agreement.

 

6.3           The confidentiality obligations under Paragraphs 6.1 to 6.2 above do not apply to:

 

(1)           the information that has become available to the public (other than that available to the public through a breach of the confidentiality obligations under this Article);

 

(2)           the information that the receiving party has learned through legal channels before the disclosure by the disclosing party;

 

(3)           the information independently developed by the receiving party through legal means (excluding information formed through integration, analysis, compilation and other processing means of acquired information);

 

(4)           the information that the receiving party learns or obtains from a third party who is not under the obligation of confidentiality;

 

(5)           the information of which the disclosure has been consented to by the disclosing party in writing to the receiving party; with the exception where it is agreed in the letter of consent that the information receiving shall not disclose the same to a third party again; and

 

 

(6)           the information disclosed by the receiving party to relevant government departments, regulators or judicial authorities as required by laws.

 

6.4

For the avoidance of doubt, the Parties confirm and agree that, subject to the restrictive conditions specified in this Paragraph, the disclosure of the Confidential Information by the Present Investor to its partners in accordance with their partnership agreement shall not be deemed a breach of confidentiality obligations. However, when the Present Investor discloses the Confidential Information to its partners, it shall disclose the Confidential Information at a minimum to the extent necessary under the following conditions and ensure that its partners agree to perform the above confidentiality obligations in accordance with the Agreement: (1) Without the prior consent of the Company, the Present Investor shall not disclose the Confidential Information of the Company known to or obtained by it; (2) Without the prior written consent of the disclosing shareholder, the Present Investor shall not disclose any Confidential Information of the shareholder. For the avoidance of doubt, the Parties confirm and agree that, subject to the restrictive conditions specified in this Paragraph, the disclosure of the Confidential Information by the Company to its shareholders in accordance with its shareholder agreement, or to its potential investors based on financing needs, shall not be deemed a breach of confidentiality obligations. Such information disclosure shall be disclosed at a minimum to the extent necessary and ensure that the receiving party shall keep the same confidential in accordance with the degree of confidentiality not lower than the Agreement.

 

Article 7    Effectiveness, Modification, Change and Termination of the Agreement

 

7.1

The Agreement shall take effect after being signed/sealed by respective legal representatives or authorized representatives, and affixed with the official seals, of the Parties.

 

7.2

The appendices of the Agreement constitute an integral part of the Agreement and as a supplement to the Agreement. If the documents in the appendices to the Agreement that need to be signed and executed separately conflict with the text of the Agreement, the agreement so signed and executed separately shall prevail.

 

7.3

The Agreement may be modified, supplemented or changed upon consensus of the Parties to the Agreement. Any such modification, supplement or change must be made in writing, and shall not take effect until it is signed by the Parties to the Agreement. A waiver of any provision of the Agreement shall not be deemed to constitute a waiver of the Agreement or any other provision of the Agreement.

 

7.4           Termination of the Agreement

 

(1)           Upon execution of the Agreement, without the unanimous written consent of the Parties to the Agreement, no Party may unilaterally terminate the Agreement.

 

(2)           In the event of any of the following circumstances, any Party to the Agreement shall have the right to notify other Parties in writing to terminate the Agreement at least 10 Working Days in advance, and shall indicate the effective date of termination in the notice:

 

a)           After the execution of the Agreement and before the Delivery Date, there are new provisions or changes in applicable laws and regulations, which makes the content of the Agreement inconsistent with such laws and regulations, and the Parties cannot reach a consensus on the revision of the Agreement in accordance with new laws and regulations;

 

b)           A Party materially breaches its obligations, representations and warranties and undertakings under the Agreement, and fails to rectify the breach within 30 days from the date that the non-defaulting party gives a notice of rectification in writing.

 

 

7.5           Effect of termination of the Agreement

 

   (1)           If the Agreement is terminated, all rights and obligations of the Parties hereto under the Agreement shall be terminated immediately, except for the responsibilities and liabilities that shall be assumed in accordance with Articles 6 and 8 of the Agreement.

 

(2)           If the Agreement is terminated without the fault of any Party hereto, each Party shall return the consideration received from other Parties under the Agreement and restore the status when the Agreement was executed in accordance with the principles of fairness, reasonableness and good faith.

 

Article 8       Liabilities for Default and Compensation

 

8.1

Any Party hereto breaches, fails to perform, fails to fully perform, or fails to properly perform any of its obligations under the Agreement, or breaches any provision of the Agreement (including but not limited to the representations, warranties or undertakings), whether due to acts or omissions, it shall constitute a default (the “default”, the Party in breach hereinafter referred to as the “defaulting party”).

 

8.2

The defaulting party shall be liable for all losses, damages, liabilities, lawsuits and reasonable costs and expenses (collectively, the “losses”) incurred by the non-defaulting party due to the breach of the Agreement by the defaulting party, including but not limited to reasonable litigation fees/arbitration fees, reasonable legal fees, preservation fees, letter of guarantee fees, announcement fees, execution fees, travel expenses, etc., but shall not exceed the possible losses that the defaulting party foresees or should have foreseen when entering into the Agreement.

 

8.3

The compensation made by the defaulting party in accordance with the Paragraph Article 8.2 above shall not affect other rights and reliefs that the non-defaulting party shall have in accordance with Chinese laws or other provisions of the Agreement.

 

8.4

Upon execution of the Agreement, the Parties shall fully perform the Agreement. Any breach by a Party of its representations, warranties and undertakings in the Agreement, or the terms of the Agreement, shall constitute a default. The defaulting party shall compensate the non-defaulting party for reasonable losses suffered thereby, unless otherwise expressly specified in the Agreement.

 

Article 9     Governing Laws and Settlement of Disputes

 

9.1

The conclusion, effectiveness, interpretation, construction, performance and dispute settlement of the Agreement shall be governed by, and interpreted or construed in accordance with, Chinese laws.

 

9.2

All disputes arising from or in connection with the performance of the Agreement shall be settled through amiable negotiation among the Parties. If any dispute cannot be resolved through negotiation within 30 days after the occurrence of the dispute, any Party may file a lawsuit with the court.

 

Article 10      Notices and Service

 

10.1

Any notice or other communication (collectively, “notices”) given by a Party to other Parties in connection with the Agreement shall be in writing (including fax, e-mail), and shall be delivered to or served on the addressee(s) at the mailing addresses or communication numbers listed in Appendix 1. The Parties agree and confirm that the contact information listed in Appendix 1 is the confirmed means for service of process, and the service of process in accordance with the means specified in the Agreement shall be deemed as successful service.

 

 

10.2

The service time for various communication methods specified in the preceding paragraph shall be determined as follows:

 

(1) The notice presented in person shall be deemed served when the addressee signs for receipt, and the failure of the addressee to sign for receipt shall not constitute effective service;

 

(2) All notices that may be delivered by post should be delivered by registered mail or express mail service, and the notice shall be deemed to have been served on the addressee on the 7th day after posting;

 

10.3

If there is any change in the aforementioned mailing address or communication number of any Party (the “Changing Party”), the change party shall notify other Parties in writing within 15 days after the occurrence of the change. If the Changing Party fails to notify in time as agreed, the Changing Party shall assume the losses arising therefrom.

 

Article 11    Supplementary Provisions

 

11.1

The Agreement represents the agreement of the Parties on the subject matter under the Agreement. If any other written or oral agreements or other documents made by the Parties on the subject matter are inconsistent with the Agreement, the Agreement shall prevail; any matters uncovered by the Agreement shall be subject to a separate written supplementary agreement that may be executed; when the Present Investor carries out the Conversion of Convertible Notes into Equity in accordance with the Agreement, the Parties shall enter into an investment agreement otherwise, and the relevant content specified in the Agreement shall be reflected in the investment agreement, which shall not be in breach of the express provisions of the Agreement.

 

11.2

If any provision of the Agreement is invalid or unenforceable due to the applicable laws, the provision shall be deemed as non-existent from the beginning without affecting the validity of other provisions of the Agreement, and the Parties shall negotiate and determine new provision to the extent permitted by the laws, to ensure that the intent of the original provision is realized to the greatest extent.

 

11.3

Unless otherwise specified in the Agreement, a Party’s failure to exercise or delay in exercising the rights, powers or privileges under the Agreement shall not be deemed to be a waiver of these rights, powers and privileges, and the single or partial exercise of these rights, powers and privileges does not preclude the exercise of any other rights, powers and privileges.

 

11.5

The Agreement is executed in eight counterparts, with each Party holding two counterparts respectively, all of which shall have the same legal effect.

 

(There is no text below on this page)

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement Regarding Lotus Technology Co., Ltd.]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Present Investor	Hubei Changjiang Jingkai Automobile Industry Investment Fund Partnership (Limited Partnership) (official seal)
	Signed by:	/s/ Luo Guoxin
	Name: Luo Guoxin
	Title: representative appointed by the executive partner

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement Regarding Lotus Technology Co., Ltd.]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Company	Wuhan Lotus Technology Co., Ltd. (official seal)
	Signed by:	/s/ Feng Qingfeng
	Name: Feng Qingfeng
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement Regarding Lotus Technology Co., Ltd.]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Original Shareholder	Zhejiang Geely Holding Group Co., Ltd. (official seal)
	/s/ Li Donghui
	Name: Li Donghui
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement Regarding Lotus Technology Co., Ltd.]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Original Shareholder	Ningbo Juhe Yinqing Enterprise Management Consulting Partnership (Limited Partnership) (official seal)
	/s/ Feng Qingfeng
	Name: Feng Qingfeng
	Title: authorized representative

 

Schedule 1

Notice Information

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.18

 

Contract No: HYSP202206010003

 

Investment Agreement

 

Regarding

 

Ningbo Lotus Robotics Co., Ltd.

 

June 2022

 

 

Contents

 

Article 1	Definitions and Interpretations	3
Article 2	Specific Equity Instrument Investment	6
Article 3	Dividends for the Specific Equity Instruments	7
Article 4	Conversion of the Specific Equity Instruments into Ordinary Shares	9
Article 5	Statements, Representations, Warranties and Undertakings of the Target Company	12
Article 6	Pre-delivery Undertakings	13
Article 7	Rights and Obligations of the Parties	13
Article 8	Liabilities for Default	14
Article 9	Taxes	14
Article 10	Post-investment Supervision	14
Article 11	Conclusion, Effectiveness, Change and Termination of the Contract	15
Article 12	Severability	15
Article 13	No Waiver	15
Article 14	Confidentiality	15
Article 15	Force Majeure	16
Article 16	Governing Laws and Settlement of Disputes	16
Article 17	Notices	17
Article 18	Appendices	18
Article 19	Miscellaneous	18
Article 20	Counterparts	18
Article 21	Interpretation and Construction	18
Article 22	Understanding of the Contract	19

 

 

This Contract is made, entered into and executed in Ningbo Qianwan New Area on June 1, 2022 by and among:

 

Ningbo Hangzhou Bay New Area Emerging Industry Venture Capital Co., Ltd. (the “Investor”)

Domicile: ******

Legal representative: ******

 

Ningbo Lotus Robotics Co., Ltd. (the “Target Company”)

Domicile: ******

Legal representative: ******

 

Sanya Lotus Venture Capital Co., Ltd. (“Lotus Venture Capital”)

Domicile: ******

Legal representative: ******

 

Wuhan Lotus E-Commerce Co., Ltd. (“Lotus E-Commerce”)

Domicile: ******

Legal representative: ******

 

Momenta (Suzhou) Technology Limited Company (“Momenta”)

Domicile: ******

Legal representative: ******

 

Whereas:

 

1.             The Target Company is a limited liability company incorporated and validly existing in accordance with Chinese Laws, with a registered capital of RMB100 million; as of the date of execution of this Contract, the shareholding structure of the Target Company is as follows:

 

Shareholder name	Corresponding registered capital (RMB0’000)		Shareholding ratio
	Subscribed for	Paid in
Sanya Lotus Venture Capital Co., Ltd.	6,000	6,000	60%
Momenta (Suzhou) Technology Limited Company	4,000	4,000	40%
Total	10,000	10,000	100%

 

 

Lotus Technology Inc. (the “Cayman Company”) is the overseas parent company of Wuhan Lotus Technology Co., Ltd. (“Lotus Technology”). As stated in the Disclosure Letter (Appendix 1), Lotus Technology controls Lotus E-commerce through agreement, and thus indirectly controls the Target Company.

 

Principal business of the Target Company: intelligent driving software development, hardware domain controller design and sales, and online operation services.

 

2.             The Investor intends to purchase from the Target Company, and the Target Company intends to sell to the Investor, specific equity instruments issued by the Target Company.

 

In order to clarify the rights and obligations of the parties hereto, under the principle of equality and mutual benefit, and upon amiable negotiation, the parties hereto agree as follows with respect to the purchase of specific equity instruments by the Investor.

 

Article 1         Definitions and Interpretations

 

In this Contract, unless the context requires otherwise, the following words and expressions shall have the following meanings:

 

(1)            Specific Equity Instruments: mean the equity instruments issued by the Target Company, which are included in the item of owner’s equity of the Target Company’s statements before they are converted into Ordinary Shares in accordance with this Contract.

 

(2)            Ordinary Shares: mean the equity issued by the Target Company in accordance with the Company Law and the Articles of Association of the Target Company and has no priority in all aspects such as profit distribution and voting mechanism. All the shares of the Target Company held by Lotus Venture Capital and Momenta are ordinary shares.

 

(3)           Present Investment: means the specific equity instruments issued by the Target Company which are purchased by the Investor from the Target Company and offered by the Target Company to the Investor in accordance with this Contract.

 

(4)           Investment Price: means the investment price paid by the Investor to the Target Company for the purchase of the Specific Equity Instruments.

 

(5)           Contract: means this Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd. and its appendices and relevant supplementary agreements (if any).

 

(6)           Articles of Association of the Target Company: means the Articles of Association of Ningbo Lotus Robotics Co., Ltd. and its amendments (if any).

 

(7)           Shareholders’ Agreement: means the Shareholders’ Agreement of the Joint Venture Company and the supplementary agreement entered into by the shareholders holding the Target Company on November 11, 2021.

 

 

(8)           Transaction Documents of the Present Investment: mean the Contract, the Articles of Association of the Target Company and other legal documents related to the Present Investment, as well as their appendices and relevant supplementary agreements (if any).

 

(9)           Investor Account: means the bank account opened by the Investor to receive dividends distributed by the Target Company and other funds agreed in this Contract.

 

(10)         Equity Instrument Dividend Rate/Dividend Rate: means the dividend rate applicable to the calculation of the then-current dividends distributed to the Investor in accordance with the Contract.

 

(11)          Equity Instrument Dividends/Dividends: mean the dividends that the Target Company shall distribute to the Investor calculated at the Equity Instrument Dividend Rate.

 

(12)         Commencement Date: means the commencement date for calculating the Equity Instrument Dividends that shall be distributed to the Investor by the Target Company in the year, i.e. the Payment Date of the Investment Price.

 

(13)         Settlement Date: means the settlement date for calculating the Equity Instrument Dividends that shall be distributed to the Investor by the Target Company in the year.

 

(14)         Payment Date: means the date on which the Investor pays the Investment Price to the Target Company.

 

(15)         Accounting Period: means the period from the Commencement Date (inclusive) of a year to the Settlement Date (inclusive) of the year. The last Accounting Period is the period from the Commencement Date (inclusive) of the last year to the Settlement Date (exclusive) of the last year.

 

(16)         Distribution Date: has the meaning set out in Sub-paragraph 3.1.3 of the Contract.

 

(17)          Full Distribution: On the corresponding Distribution Date or other dates when the Target Company distributes the dividends in full, the Target Company will pay the dividends to the Investor Account in the form of cash: from the Payment Date (inclusive) to the Settlement Date (inclusive, and exclusive for the last Settlement Date) corresponding to the Distribution Date/Payment Date (If the Equity Instrument Dividends are distributed in full on a date other than the Distribution Date, the date is the Payment Date, the same below), the Equity Instrument Dividends calculated based on the Equity Instrument Dividend Rate and the Investment Price, minus the dividends distributed to the Investor from the Target Company before the Distribution Date/Payment Date.

 

(18)         Change Date: has the meaning set out in Paragraphs 4.1, 4.2 of the Contract.

 

(19)          Material Adverse Changes: mean any adverse changes in the legal status, financial position, assets or business prospects of any natural person, legal person or other organization, which have a material adverse effect on ability of such natural person, legal person or other organization to perform its obligations under the Transaction Documents of the Present Investment.

 

 

(20)          Material Adverse Effect: means the events or circumstances that, in one’s reasonable judgment, will or may cause other parties to the Contract to be unable to perform their main obligations under the Contract, and will individually or jointly cause the total assets of the Target Company to decrease by more than ****** of the ending balance of the last audited consolidated financial and accounting report (other than those approved by the Investor) (but such events or circumstances do not include: (i) changes in China’s GAAP, (ii) the act or omission of a party expressly permitted by the Contract or any other Transaction Document of the Present Investment).

 

(21)          Regulators: mean the relevant national government functional departments related to approval and continued supervision and other matters of the Present Investment, as well as other institutions authorized by laws to perform administrative functions.

 

(22)          Person: means a natural person or a legal person.

 

(23)          Fiscal Year, Year: means (1) the period from the Effective Date of the Contract to December 31 of the same year, for the year when the Contract takes effect; (2) the period from January 1 to the termination date of the Contract for the year when the Contract terminates; and (3) the period from January 1 to December 31 every year during the term of the Contract, other than the year when the Contract takes effect and the year when the Contract terminates.

 

(24)          Working Day: means any day other than Saturday, Sunday and the legal holidays in China; if it is not clearly specified as a “Working Day” in the Contract, it means a calendar day/natural day.

 

(25)          Corresponding Date: means the date corresponding to a specific date in a certain month or a certain year. If there is no corresponding date in the month, the corresponding date will be the last day of the month; if there is no corresponding date in the year, the corresponding date will be the last day of the corresponding month of the year.

 

(26)          RMB: means RMB yuan, unless otherwise specified.

 

(27)          Chinese Laws: mean the laws, administrative regulations, local regulations, departmental rules, regulations, orders, notices, rules, detailed rules, opinions, measures and regulations of the People’s Republic of China; for the purpose of the Contract, excluding the laws of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region.

 

(28)          Principal Business: means intelligent driving software development, hardware domain controller design and sales, and online operation services carried on by the Target Company.

 

 

(29)          Controlling Shareholder/Actual Controller: For the purpose of the Contract, the controlling shareholder of the Target Company means Wuhan Lotus E-Commerce Co., Ltd., and the actual controller of the Target Company means Lotus Technology Inc. (“Cayman Company”).

 

(30)         A date referred to in the Contract is a Gregorian calendar date, and the time is Beijing time.

 

(31)         “Over”, “under”, “not less than”, “not more than” and “not exceeding” referred to in the Contract include the number itself immediately following such words, “more than”, “less than”, “no more than”, “below”, etc., do not include the number itself immediately following such words.

 

Article 2         Specific Equity Instrument Investment

 

2.1          Issuance, sale and purchase

 

The Target Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Target Company, the Specific Equity Instruments, subject to the terms and conditions contained in the Contract. Unless otherwise agreed by the parties or otherwise specified in the Contract, the accumulative dividend amount shall be calculated from the Payment Date of the Investment Price, and take this date as the Commencement Date of dividends for the Investment Price. The Equity Instrument Dividends for the Specific Equity Instrument shall be calculated and paid in accordance with Article 3.

 

Pursuant to the Accounting Standards for Business Enterprises and relevant regulations, the Target Company intends to include the Specific Equity Instruments in the owner’s equity at initial recognition after a comprehensive analysis and judgment of the relevant information on the Equity Instrument Investment.

 

2.2          Purpose of the Investment Price

 

The Investment Price received by the Target Company from the Investor shall be used exclusively for the operation and development of the Company’s Principal Business, including research and development, marketing, and daily operations.

 

Within 2 months after the end of each Fiscal Year, the Target Company shall provide the Investor with the details of the actual use of the Investment Price in the previous year and reasonable proofs stamped with the official seal of the Target Company.

 

2.3           Investment Price

 

On the premise that all the preconditions for payment set out in this Article are met or waived in writing by the investee, the Investor shall pay the Investment Price to the Target Company in accordance with the provisions of the Contract (if any of the following preconditions for payment are not met or waived, the Investor shall not be obliged to pay the Investment Price to the Target Company, without any liability therefor:

 

(1)           The Contract has been executed by all parties hereto and taken effect;

 

 

(2)            The Target Company has issued a resolution of the shareholders meeting approving the Present Investment, and submitted the original resolution of the shareholders meeting to the Investor;

 

(3)            All approvals, licenses, filings by, with and from governments and/or third parties (if applicable) and/or other relevant procedures required for the Present Investment and required to be obtained/completed by the Target Company before the completion of the Present Investment have been obtained and/or completed;

 

(4)           There is no event, fact, condition, change or other circumstance that has a Material Adverse Effect on the Target Company;

 

(5)           There are no Chinese Laws, or judgments, awards, rulings, injunctions or pending lawsuits, arbitrations or administrative procedures before courts, arbitration institutions or relevant government authorities’ that may prohibit or cancel the Present Investment.

 

The Investor shall pay the Investment Price of RMB500 million to the collection account designated by the Target Company within 5 Working Days after the corresponding preconditions for payment set out in this Article have been met.

 

Article 3    Dividends for the Specific Equity Instruments

 

3.1          The Target Company shall make a Full Distribution to the Investor based on the Specific Equity Instruments held by the Investor in accordance with the Contract, specifically:

 

3.1.1         Equity Instrument Dividend Rate: the loan prime rate (LPR) for five-year loans announced by the China Foreign Exchange Trade System National Interbank Funding Center during the period when the Investor holds the Specific Equity Instruments rising by 79.87%. In the event of changes in the LPR, the Equity Instrument Dividend Rate will be dynamically adjusted accordingly.

 

3.1.2        Calculation of dividends

 

From the date of payment of the Investment Price, the dividends that shall be distributed to the Investor each year (the “Then-current Dividends”) = Investment Price actually paid by the Investor × Equity Instrument Dividend Rate × actual number of days that the Investment Price is occupied in the year (that is, the number of days of the Accounting Period) ÷ 365.

 

Example: Annual dividends distributed to the Investor in 2023 = Investment Price × [the five-year loan LPR announced in December 2022 × 179.8% /365 × (the number of days from January 1, 2023 to the date of announcement of the LPR in January 2023) + the five-year loan LPR announced in January 2023 × 179.8% /365 × (the number of days from the date of announcement of the LPR in January 2023 to the date of announcement of the LPR in February 2023) + the five-year loan LPR announced in February 2023 × 179.8% /365 × (the number of days from the date of announcement of the LPR in February 2023 to the date of announcement of the LPR in March 2023)...+ the five-year loan LPR announced in December 2023 × 179.8% /365 × (the number of days from the date of the announcement of the LPR in December 2023 to December 31, 2023)]

 

 

3.1.3        Distribution Date

 

After the Investor pays the Investment Price, the Investor shall be entitled to dividends on an annual basis. The Distribution Dates of dividends are as follows:

 

(1)           The first Distribution Date shall fall on June 30, 2023. The Investor shall be entitled to the dividends distributed by the Target Company for the previous year on the first Distribution Day (that is, the dividends for 2022, also known as the dividends for the first Accounting Period).

 

(2)           The Distribution Date each year, other than the last Distribution Date, shall fall on June 30. The Investor shall be entitled to the dividends distributed by the Target Company for the previous year on the Distribution Day (that is, the Then-current Dividends).

 

(3)           Last Distribution Date:

 

If the Specific Equity Instruments are converted into Ordinary Shares in accordance with the Contract, the last Distribution Date should be the date on which the Specific Equity Instruments specified in the Contract are changed into Ordinary Shares, namely, the Change Date).

 

(4)          Adjustment when the Distribution Day is a non-Working Day

 

As for the Distribution Date mentioned in items (1) to (3) above of Sub-paragraph 3.1.3, if it is a non-Working Day, the latest Working Day earlier than the Distribution Date shall be taken as the Distribution Date. For the avoidance of doubt, such adjustments to the Distribution Date or the distribution of dividends to the Investor by the Target Company before the Distribution Date shall not lead to corresponding adjustments in the Accounting Period.

 

3.1.4         Confirmation by all parties before the Distribution Date

 

In order to ensure the timeliness and accuracy of the Target Company’s distribution to the Investor on the Distribution Date, the Target Company shall confirm the then-current distribution amount with the Investor at least 5 Working Days before each Distribution Date.

 

3.1.5        Distribution form

 

Distributions are in the form of cash. Without the prior written consent of the Investor, the Target Company shall not distribute dividends to the Investor in non-cash form.

 

3.2           Deferred distribution option

 

On each Distribution Date specified in the Contract, the Target Company may opt to defer the Then-current Dividends and all dividends that have been deferred to the next Distribution Date in accordance with this Paragraph, free from any restrictions on the number of deferred dividend payments. If the Target Company opts to defer the payment of dividends, it shall give a written notice of the deferred distribution to the Investor, Lotus E-Commerce, Momenta and Lotus Venture Capital 20 Working Days before the Distribution Date.

 

 

3.3          Distribution for Ordinary Shares

 

After the Investor obtains the then-current Full Distribution from the Target Company, the shareholders who hold the Ordinary Shares of the Target Company may determine the profit distribution plan of the Ordinary Shares by themselves. If the Investor has not received a Full Distribution, the Target Company shall not distribute any dividends, profits, etc. to the shareholders holding Ordinary Shares of the Target Company.

 

Article 4            Conversion of the Specific Equity Instruments into Ordinary Shares

 

4.1          During the period when the Investor holds the Specific Equity Instruments, if all of the following conditions are met at the same time in any Fiscal Year, the Investor shall have the right (but not the obligation) to give a notice of application for change to the Target Company (see Appendix 2 for the form), and from the date when the Specific Equity Instruments contained herein are changed into Ordinary Shares of the Target Company (the “Change Date”), the Specific Equity Instruments held by the Investor shall be unconditionally and irrevocably converted into the equity of the Target Company.

 

(1)           The annual operating income of the Target Company exceeds ******;

 

(2)           The annual net profit of the Target Company exceeds ****** million; and

 

(3)           The annual operating income and net profit of the Target Company have increased by more than ****** over the previous year.

 

4.2          Once the Investor gives the notice of application for change specified in Paragraph 4.1 to the Target Company, from the date when the Specific Equity Instruments contained herein are changed to Ordinary Shares of the Target Company (the “Change Date”, the Change Date shall not be earlier than 15 Working Days after the notice of application for change is given), the Specific Equity Instruments will be changed to Ordinary Shares of the Target Company (the “Changed Specific Equity Instruments”).

 

4.3          Before the Change Date, the Specific Equity Instruments shall still be entitled to dividends calculated and distributed in accordance with Article 3 hereof, and the Target Company shall complete the settlement and distribution of the aforementioned dividends on the Change Date. From the Change Date, the Changed Specific Equity Instruments held by the Investor (the specific amount is determined based on the amount stated in the notice of application for change given by the Investor to the Target Company) shall be included in the registered capital of the Target Company in the form of capital increase; the amount of the Target Company’s registered capital/Ordinary Shares converted from the Specific Equity Instruments on the Change Date is: the amount stated in the notice of application for change / 135. If the registered capital of the Target Company at the time of share conversion changes compared with that on the date of execution of the Contract, the amount of the Target Company’s registered capital/Ordinary Shares converted from the Specific Equity Instruments on the Change Date is: the amount stated in the notice of application for change / RMB13.5 billion × the amount of registered capital of the Target Company at the time of share conversion. The aforementioned adjustments to the number of converted shares are only anti-dilution adjustments to ensure that the potential interests of the Target Company’s shareholders in the Target Company’s equity will not be diluted.

 

 

4.4           If the Investor opts to change the Specific Equity Instruments it holds then to Ordinary Shares of the Target Company based on Paragraph 4.4 of the Contract, from the Change Date, the Investor shall have the right to take one or more of the following measures at the same time, and the Target Company undertakes to unconditionally cooperate in the implementation of relevant measures:

 

(1)           After the Target Company distributes the dividends specified in the Contract to the Investor in advance, the Changed Specific Equity Instruments and the Ordinary Shares of the Target Company will participate in the distribution of the remaining profits based on their respective shareholding ratios.

 

(2)            Immediately convene a shareholders’ meeting to amend the Articles of Association of the Target Company, specifying:

 

(i)            The Investor will exercises its voting rights based on the shareholding ratio of the Changed Specific Equity Instruments in the Target Company, and any resolutions of the shareholders’ meeting of the Target Company deliberating important matters (for the avoidance of doubt, important matters include revision of the Company’s articles of association, increase or reduction of the Company’s registered capital, business combinations, and splits-off, dissolution, liquidation or change of company form) shall be subject to the approval by the Investor; and

 

(ii)            The Investor shall have the right to appoint supervisors or observers (at the option of the Investor) to the Target Company.

 

(3)           If the Investor and its affiliates jointly hold more than 5% of the equity of the Target Company at that time, the Investor and its affiliates shall have the right to jointly appoint a director, and the Target Company shall reorganize the board of directors.

 

(4)           If a third party intends to acquire all or part of the Target Company’s equity held by a shareholder of the Target Company (the “Transferring Shareholder”), and the transfer has been approved by the Investor, the Investor shall have the right to request to transfer the equity of the Target Company held by it to the same party in accordance with the shareholding ratio of the Investor and the Transferring Shareholder at that time, subject to the same terms and conditions as those of the Transferring Shareholder (“tag-along right”). The Target Company and the Transferring Shareholders shall take all reasonable and necessary actions to complete the equity transfer. For the avoidance of doubt, the transfer between shareholders of the Target Company, the transfer of the equity of the Target Company between the shareholders of the Target Company and its affiliates, and the transfer of equity in accordance with the Shareholder Agreement do not require the consent of the Investor and the Investor does not have the tag-along right above.

 

 

4.5          The Target Company shall complete the registration of the conversion of the Specific Equity Instruments into Ordinary Shares with the competent administration for industry and commerce no later than 45 Working Days from the Change Date, including registering the Investor as a shareholder with the corresponding shareholding ratio of the Changed Specific Equity Instruments in the Target Company’s equity calculated in accordance with Paragraph 4.3, completing the industrial and commercial registration of the director appointed by the Investor as specified in Subparagraph 4.4.4, changing the Company’s articles of association, etc. The Target Company shall also provide the Investor with the photocopies of the original and duplicate of the Target Company’s business license newly issued after completing the industrial and commercial change registration (stamped with the Target Company’s official seal) and the machine-readable materials from industrial and commercial archives (stamped with the special seal of the competent administration for industry and commerce for archive inspection).

 

4.6          In the event of any of the following circumstances, the Investor shall have the right to require Lotus E-Commerce and/or Lotus Venture Capital (the “Repurchasing Entities”) to repurchase all the Ordinary Shares/Changed Specific Equity Instruments of the Target Company held by the Investor at that time, and the Repurchasing Entities shall have the right to repurchase all the Ordinary Shares/Changed Specific Equity Instruments of the Target Company held by the Investor at that time:

 

(1)            Any measure that the Investor is entitled to take under Paragraph 4.4 of the Contract still fails to be implemented within 30 Working Days after the Investor gives a written notice to the Target Company;

 

(2)            The industrial and commercial change registration specified in Paragraph 4.5 has not been completed within 45 Working Days from the Change Date.

 

The Investor may require the Repurchasing Entities to perform the repurchase obligation in accordance with Paragraph 4.6 of the Contract, and the repurchase price shall be determined in accordance with the appraisal value of the Target Company’s Ordinary Shares/Changed Specific Equity Instruments held by the Investor at that time by the appraisal agency engaged by the Investor. The Repurchasing Entities shall pay the Investor within 30 days after receiving the Investor’s written notice specifying the repurchase price. For the repurchase above, Lotus E-Commerce and Lotus Venture Capital shall assume joint and several liabilities to the Investor.

 

 

Article 5    Statements, Representations, Warranties and Undertakings of the Target Company

 

The Target Company represents and warrants to the Investor as follows as of the date of execution of the Contract and the Payment Date (but for any matter with an express time point, only as of that time point):

 

(1)            It has the qualifications of a legal subject in accordance with laws, and has the qualifications and ability to execute and perform the Contract; it has obtained all necessary authorizations or approvals for executing the Contract, and its execution and performance of the Contract do not violate the provisions of the Company’s articles of association and relevant laws and regulations, not do they conflict with its obligations under other contracts or agreements.

 

(2)            All the documents and materials it provides to the Investor are true, accurate, complete and valid, free from any false records, material omissions or misleading statements.

 

(3)            License to operate. The business carried on by the Target Company complies with the national industrial policy.

 

(4)            Shareholding structure. The shareholding structure of the Target Company (including the Target Company’s structure and agreement control structure recorded in the registration authorities) is shown in Appendix 3. The Target Company undertakes and warrants that the shareholding structure shown in Appendix 3 can accurately and completely reflect its shareholding structure as of the date of execution of the Contract.

 

(5)           Registered capital. The shareholders of the Target Company have paid in full the subscribed registered capital, and there is no false capital contribution or withdrawal of capital contribution.

 

(6)           Equity. As of the date of execution of the Contract, there are no encumbrances, such as pledges, claims, other restrictive conditions or claims of rights or legal defects in the equity of the Target Company (other than those disclosed in the Disclosure Letter).

 

(7)           No major legal disputes or major procedures. The Target Company is not subject to major legal disputes, lawsuits, arbitration, enforcement and other compulsory measures, or legal procedures such as criminal and administrative procedures, which have a major and adverse effect on the legality, validity, binding force or enforceability of the Contract or may have a major and adverse effect on the Target Company’s timely performance of its obligations under the Contract.

 

(8)            The Target Company hereby further undertakes that if the occurrence of any event between the date of execution of the Contract and the Payment Date makes any of the representations and warranties of the Target Company become untrue, inaccurate, incomplete or misleading in any respect, it shall promptly notify the Investor in writing, and take all necessary measures as reasonably required by the Investor.

 

 

Article 6      Pre-delivery Undertakings

 

6.1          No change

 

The Target Company hereby agrees and warrants that during the period from the date of execution of the Contract to the Payment Date, the Target Company shall carry on its existing business as a going concern entity in the ordinary and normal course of business, without interruption or unfavorable changes in the nature, scope or manner of business, and shall adopt sound commercial principles consistent with those in force prior to the date of the Contract, including but not limited to:

 

6.1.1        Operate the Target Company in a normal manner, continue to maintain its good cooperative relationship with customers, so as to ensure that the Target Company’s goodwill, operations and business will not undergo major adverse changes;

 

6.1.2        The Target Company shall not reduce its capital;

 

6.1.3        Ensure the integrity and continuity of the Target Company’s organizational structure and business organization, and make reasonable efforts to maintain the stability of the Target Company’s management personnel and technical team; and

 

6.1.4        Maintain the continuous validity of the Target Company’s various business licenses and qualifications.

 

Article 7            Rights and Obligations of the Parties

 

7.1          Rights and obligations of the Investor

 

7.1.1        Obtain Equity Instrument Dividends in full amount as agreed;

 

7.1.2        The Target Company shall notify the Investor in writing within 5 days of the occurrence of the following important events (the “Important Events”):

 

(1)           change in the Target Company’s business policy and business scope;

 

(2)           reduction in the registered capital of the Target Company;

 

(3)           merger, split-off, acquiring/being acquired, reorganization, dissolution, cancellation, liquidation or change of company form;

 

(4)           amendment to the Articles of Association of the Target Company;

  

(5)           transfer and disposal of substantial assets or interests of the Target Company; and

 

(6)          transfer of all or part of the equity of the Target Company by the shareholders of the Target Company.

 

7.1.3        Obtain the audited annual consolidated financial report of the Target Company for the previous year before April 30 of each year.

 

7.2.          Rights and Obligations of the Target Company

 

7.2.1       Distribute dividends to the Investor in accordance with the Contract and have the option to defer distribution;

 

7.2.2      Use the Investment Price as per the purpose specified in the Contract, and ensure that the funds accepted by the Target Company will not flow into the securities market, futures market and other purposes prohibited or restricted by relevant laws and regulations in any form;

 

 

7.2.3        Comply with its representations, warranties and undertakings under the Contract.

 

Article 8    Liabilities for Default

 

8.1           General principles

 

Any party’s breach of the provisions of the Contract shall be deemed to have breached the Contract, and the defaulting party shall compensate the other party for the losses suffered due to its default.

 

8.2            Default by the Target Company, Lotus E-Commerce, and Lotus Venture Capital

 

The Investor shall have the right to take one or more of the following measures:

 

8.2.1        Require the Target Company, Lotus E-Commerce, and Lotus Venture Capital to rectify the breach within a time limit;

 

8.2.2      Require the Target Company, Lotus E-Commerce, and Lotus Venture Capital to compensate the Investor for the losses caused by the breach;

 

8.2.3      Other measures required by laws and regulations, agreed in the Contract or deemed necessary by the Investor.

 

Article 9 Taxes

 

Relevant government charges, taxes and the fees, costs and expenses of hiring an intermediary agency incurred by a party hereto due to the execution and performance of the Contract shall be borne by the party itself in accordance with the laws and regulations of China.

 

Article 10  Post-investment Supervision

 

10.1          In the event of any of the following circumstances or the Investor being aware of the possible occurrence of such circumstances, the Investor shall have the right to give an inquiry notice to the Target Company, and the Target Company shall disclose relevant information and give a written explanation to the Investor within five days after receiving the inquiry notice:

 

(1)          Major changes in the external conditions of production and operation of the Target Company;

 

(2)          The Target Company is involved in a material contract that may have a significant effect on its assets, liabilities, equity and operating results;

 

(3)          The Target Company involves market rumors that need to be clarified;

 

(4)          Other events that may affect the Target Company’s performance of its obligations under the Contract.

 

 

10.2          Special audit

 

In order to check the actual use of the Investment Price by the Target Company, within 6 months after the end of each accounting year, the Investor shall have the right to appoint, at its own discretion, an accounting firm to conduct a special audit on the Target Company. However, if the competent State-owned assets authority governing the Investor has audit requirements otherwise, it is not subject to the aforementioned time limit. The Target Company shall cooperate with the Investor to complete the special audit.

 

Article 11       Conclusion, Effectiveness, Change and Termination of the Contract

 

11.1         Conclusion and effectiveness of the Contract

 

The Contract shall take effect on the date of execution by the parties hereto.

 

11.2          Changes to the Contract

 

Any changes to the Contract shall be made in writing.

 

11.3         Termination of the Contract

 

The Contract shall be terminated when any of the following events occurs:

 

11.3.1      The performance of the Contract is completed; and

 

11.3.2     Other circumstances that the Contract should be terminated as provided by Chinese Laws or the Transaction Documents of the Present Investment.

 

11.4         When the Contract is terminated, the provisions on liquidation, confidentiality, liabilities for default and settlement of disputes under the Contract shall still be valid.

 

Article 12       Severability

 

If any provision of the Contract is held to be invalid or unenforceable in accordance with laws in effect, other provisions of the Contract will continue to be valid and enforceable. In this case, the parties hereto will replace the provision with a valid provision, and the valid provision should be as close as possible to the original provision and the corresponding spirit and purpose of the Contract.

 

Article 13       No Waiver

 

Unless provided by laws otherwise, or a party hereto waives a right in writing, otherwise, any party’s failure to exercise, or delay in exercising, its rights under the Contract shall not be deemed as a waiver of such right, and a partial exercise of such right shall not prevent future exercises of such right.

 

Article 14       Confidentiality

 

14.1         Unless otherwise specified by Chinese Laws or relevant Regulators, or in order to meet the information disclosure requirements of relevant Regulators, without the prior written permission of other parties hereto, any party hereto shall not provide or disclose information to any company, enterprise, organization or individual, any materials and information related to the other parties’ business, or related to the Contract or obtained from the performance of the Contract.

 

 

14.2         The documents and materials of the other party or other parties hereto that cannot be obtained from public channels, including but not limited to the financial information of the Target Company viewed by the Investor, and the customer information, business plans, confidential operation data and internal non-public documents of the parties hereto, known by a party, shall be confidential information, and the party shall treat it in confidence. Without the written consent of the other party hereto, neither party shall disclose confidential information to other parties, otherwise, it shall be liable for the losses of the related party caused thereby, other than otherwise provided by laws, regulations and national regulatory rules, or disclosed by the Investor to the government authorities, or to relevant entities for the implementation of projects, or to its consultants or related service agencies for seeking opinions, or disclosed by the Target Company, Lotus Technology and the Momenta to their respective perennial consultants or related service agencies for seeking opinions on internal evaluation, review and listing, or for preparing application materials, etc.

 

14.3          Such provisions on confidentiality will not be terminated due to the termination of the Contract, and shall survive the termination of the Contract.

 

Article 15      Force Majeure

 

15.1         When a force majeure event occurs, the party suffering from the force majeure shall notify the other parties in a timely manner and shall take effective measures to prevent the loss from expanding. The party suffering from force majeure shall provide the other parties with details of the force majeure event and supporting documents concerning the occurrence and impact of the force majeure event within seven months after the event occurs. Meanwhile, the parties hereto shall decide on the performance of the Contract through amiable negotiation. After the force majeure event or its impact is terminated or eliminated, the parties hereto shall immediately resume their respective obligations under the Contract.

 

15.2         When any party hereto cannot perform the Contract due to force majeure, the party may be partially or completely exempted from the failure to perform the Contract as per the impact of force majeure.

 

Article 16        Governing Laws and Settlement of Disputes

 

16.1        The Contract shall be governed by, and construed, interpreted and implemented in accordance with, the laws of the People’s Republic of China.

 

16.2         Disputes arising from or in connection with the performance of the Contract among the parties hereto shall be resolved through negotiation among them. If the negotiation fails, a lawsuit shall be brought to the competent people’s court in the place where the Contract is executed.

 

 

16.3         During the litigation period, the provisions of the Contract that do not involve the dispute shall still be performed.

 

16.4         Unless expressly provided by the laws themselves, subsequent legislation or legal changes shall have no legal effect on the Contract. The parties hereto may amend or supplement the Contract based on the relevant provisions of the Contract in accordance with subsequent legislation or legal changes and upon consensus through consultation.

 

16.5         Relevant expenses incurred due to litigation (including but not limited to litigation fees, preservation fees, preservation guarantee fees, attorney fees, etc.) shall be borne by the losing party.

 

Article 17       Notices

 

17.1         Any notices related to the Contract shall be made in writing, delivered personally, or sent by fax or express mail by a party hereto to the other parties. Such notices shall be deemed served, at the time of delivery, if delivered personally; at the time when the fax machine of the sender indicates that the fax has been sent, if sent by fax; or on the third Working Day after posting the mail, if delivered by express mail service. Any notice shall take effect upon service.

 

17.2         Addresses of the parties for notice are as follows:

 

******

 

 

Article 18       Appendices

 

The following appendices constitute an integral part of the Contract. The definitions and interpretations used in the Contract shall also apply to the appendices to the Contract.

 

Appendix 1: Disclosure Letter

Appendix 2: Notice of Application for Change

Appendix 3: Shareholding Structure Chart of the Target Company

 

Article 19       Miscellaneous

 

Without the unanimous written consent of the other parties, no party may assign all or part of its rights or obligations under the Contract.

 

However, if the Investor transfers its rights and obligations under the Contract to its affiliates in general, it shall not be subject to the aforementioned restrictions, provided that the Investor gives a written notice to the Target Company. From the date when the written notice is received by the Target Company, the rights and obligations of the Investor under the Contract shall be generally transferred by the Investor to the transferee, and such transferee shall, in stead of the Investor, have and assume the Investor’s rights and obligations under the Contract.

 

Article 20       Counterparts

 

The Contract is executed in twelve counterparts, with each party hereto holding two counterparts respectively.

 

Article 21       Interpretation and Construction

 

21.1          Headings

 

The headings in the Contract and the headings of the appendices are for convenience only and do not affect the meaning, interpretation and construction of the Contract or any provision of the Contract.

 

 

21.2          Systematical interpretation

 

The Contract constitutes an integral part of the Transaction Documents of the Present Investment. When interpreting the Contract, all Transaction Documents of the Present Investment shall be deemed as a whole and systematically interpreted. If there are loopholes, incompleteness or ambiguity in the content of the Contract, the method or content to fill the loopholes shall be found from other Transaction Documents of the Present Investment.

 

Article 22        Understanding of the Contract

 

22.1         The parties hereto confirm that the Contract was concluded on the basis of full discussion and equal negotiation among the parties to the Contract. The text of the Contract is not a standard contract provided by one party, nor is there any standard clause formulated by one party to the Contract.

 

22.2         Before executing the Contract, the parties hereto have a full and clear understanding of the relevant content, rights and obligations, legal consequences and legal responsibilities of the Contract; meanwhile, the execution of the Contract is a manifestation of the free will of the parties to the Contract. There is no circumstance where one party coerces another party into executing the Contract. Therefore, there is no obvious unfairness, major misunderstanding, coercion, etc. for the Contract, which may cause the Contract to be revoked or deemed invalid.

 

(There is no text below)

 

 

[There is no text on this page, and it is the execution page of the Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd.]

 

IN WITNESS WHEREOF, each party to the Contract has procured its duly authorized representatives to execute the Contract on the date first written above.

 

Ningbo Hangzhou Bay New Area Emerging Industry Venture Capital Co., Ltd. (official seal)
/s/ Ningbo Hangzhou Bay New Area Emerging Industry Venture Capital Co., Ltd.

 

 

[There is no text on this page, and it is the execution page of the Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd.]

 

IN WITNESS WHEREOF, each party to the Contract has procured its duly authorized representatives to execute the Contract on the date first written above.

 

Ningbo Lotus Robotics Co., Ltd. (official seal) 

Legal representative:

/s/ Feng Qingfeng

 

 

[There is no text on this page, and it is the execution page of the Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd.]

 

IN WITNESS WHEREOF, each party to the Contract has procured its duly authorized representatives to execute the Contract on the date first written above.

 

Sanya Lotus Venture Capital Co., Ltd. (official seal)

Legal representative:

/s/ Feng Qingfeng

 

 

[There is no text on this page, and it is the execution page of the Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd.]

 

IN WITNESS WHEREOF, each party to the Contract has procured its duly authorized representatives to execute the Contract on the date first written above.

 

Wuhan Lotus E-Commerce Co., Ltd. (official seal)

Legal representative:

/s/ Feng Qingfeng

 

 

[There is no text on this page, and it is the execution page of the Investment Agreement Regarding Ningbo Lotus Robotics Co., Ltd.]

 

IN WITNESS WHEREOF, each party to the Contract has procured its duly authorized representatives to execute the Contract on the date first written above.

 

Momenta (Suzhou) Technology Limited Company (official seal)

Legal representative:

/s/ Cao Xudong

 

 

Schedule One: Disclosure Letter

[***]

 

 

Schedule Two: Notice for Modification Application

[***]

 

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.19 

 

Convertible Note Investment Agreement

 

This Convertible Note Investment Agreement (the “Agreement”) is made, entered into and executed on November 8, 2022 by and among:

 

Present Investor:

 

Hangzhou Fuyang Development Zone Industrial Investment Co., Ltd. (the “Present Investor”), a limited liability company established and validly existing in accordance with Chinese laws, with its domicile at******, represented by its legal representative ******.

 

Target Company:

 

Hangzhou Lightning Speed Technology Co., Ltd. (the “Company”), a limited liability company registered and validly existing in accordance with Chinese laws, established on September 22, 2022, with its domicile at ******, represented by its legal representative ******.

 

Original shareholders of the Target Company (collectively, the “Original Shareholders”):

 

Sanya Lotus Venture Capital Co., Ltd.(the “Original Shareholder”), a limited liability company established and validly existing in accordance with Chinese laws, with its address at******, represented by its legal representative******.

 

Ningbo Weili Enterprise Management Consulting Partnership (Limited Partnership) (the “Original Shareholder”), a limited partnership established and validly existing in accordance with Chinese laws, with its domicile at******, represented by ****** appointed by its executive partner.

 

Hangzhou Fuyang Development Zone Industrial Investment Co., Ltd. (the “Original Shareholder”), a limited company established and validly existing in accordance with Chinese laws, with its domicile at******, represented by its legal representative******.

 

Joint and Several Liability Guarantor:

 

Wuhan Lotus Technology Co., Ltd. (the “Lotus Technology”), a limited liability company registered and validly existing in accordance with Chinese laws, with its address at******, represented by its legal representative******.

 

In the Agreement, the above parties are hereinafter referred to as a “Party” individually and the “Parties” collectively.

 

Recitals

 

(A)

Pursuant to the Energy Headquarters Project Investment Agreement between Fuyang Economic and Technological Development Zone Management Committee and Wuhan Lotus Technology Co., Ltd. (the “Energy Headquarters Project Investment Agreement”) executed by Lotus Technology and Fuyang Economic and Technological Development Zone Management Committee (“Fuyang Development Zone”), Fuyang Development Zone agrees to invest RMB1 billion in the Company for industrial support. The Company issues convertible notes for financing, and the entity designated by Fuyang Development Zone agrees to subscribe for RMB1 billion convertible notes issued by the Company. In consideration of the foregoing, the Present Investor, as the entity designated by Fuyang Development Zone, intends to invest in the Company in the form of convertible notes to support the Lotus’s Energy Headquarters Project.

  

 

(B)

The Present Investor intends to invest in the Company in the form of convertible notes and make equity investment in the Company when the equity conversion event occurs, on the premise that the Parties abide by the terms and conditions of the Agreement. The Original Shareholders of the Company agree to the Present Investment and agree that the Present Investor will invest in convertible notes and cooperate in equity conversion when the equity conversion event occurs, subject to the terms and conditions of this agreement.

 

Therefore, now, the Parties hereby agree as follows:

 

Article 1    Definitions and Interpretations

 

1.1            For the purpose of the Agreement, unless otherwise specified, the following terms and expressions in the Agreement shall have the following meanings:

 

“Present Investment”	means the Present Investor’s investment in the Company with a total of RMB1 billion in the form of convertible notes within a five-year period for the purpose of equity investment, which will be used for equity investment in, and  to subscribe for the equity of, the Company when the conversion conditions are met.
“Present Investor”	means Hangzhou Fuyang Development Zone Industrial Investment Co., Ltd.
“Company”	means Hangzhou Lightning Speed Technology Co., Ltd.
“Affiliate”	means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with the person; with respect to any person that is an individual, includes that individual and their close relatives. For the purposes of this definition, “control” means the power, directly or indirectly, to direct or cause the direction of the management and decisions of a person, whether through the ownership of 50% or more of the voting securities, by contract or through other arrangements.
“Working Day”	means any day other than Chinese public holidays.
“Person”	means any individual, firm, company, partnership, association, trust or estate or any other entity or organization (whether or not having separate legal personality), including any government authority.
“RMB, yuan”	means the lawful currency of China: Renminbi.
“Chinese Laws”	means the laws, regulations, rules and judicial interpretations officially promulgated by Chinese legislatures and other competent authorities at all levels and known to the public; only for the purpose of the Agreement, excluding the laws, regulations and jurisprudence of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region.
“Material Adverse Effect”	means any of the following circumstances, changes or effects involving the Company: (i) causing, or having sufficient evidence to show that it may cause, material adverse effects on the Company’s business, assets, liabilities (including but not limited to contingent liabilities), operating performance or financial positions, thereby causing the Company to suffer pecuniary or non-pecuniary losses exceeding******, or an loss of ****** of its net assets in the latest audit report, other than losses caused by the following reasons: (a) events or changes that generally affect the industry or market in which the Company operates, (b) changes in financial markets, the general economic or political environment, (c) changes in laws or accounting standards that apply to the Company, or (d) ) expenditures and financial losses incurred in the ordinary course of business of the Company; or (ii) affecting the legitimate existence and legal operation of the Company, including the events, facts, conditions, changes or effects causing damage to the Company’s continuous operation or causing the Company to suffer major administrative penalties (such as the Company being ordered to suspend production and business operations, suspending or revoking permits, licenses, confiscation of illegal income, confiscation of illegal finances, or penalties accounting for 20% of net assets in the latest audit report); (iii) causing the suspension of the Company’s operations (except for those caused by force majeure) for more than******; or (iv) affecting the legality, validity, binding force or enforceability of the Agreement.

 

 

“Material”

means a term describing the materiality of a relevant act or fact and, if such act or fact is “material” in nature, the amount involved (such amounts include income or expenditure of any nature, whether investment, debt, restructuring, guarantee, fines, indemnity, compensation, etc.) will exceed******, or account for ****** of its net assets in the latest audit report when such act or fact occurs.

 

1.2

Unless otherwise provided in the context, amendments, supplements, updates, substitutions, and combinations of documents in the Agreement shall be made in writing as appendices to the Agreement, and such appendices shall be deemed an integral part of the Agreement.

 

1.3

References to any statute or statutory provisions, or rules or regulations shall be construed as references to the same as amended from time to time (whether before or after the date of the Agreement).

 

1.4

The headings in the Agreement are for convenience only and shall not affect the interpretation of the Agreement.

 

1.5

Unless otherwise stated, if the last day for implementation under the Agreement occurs on a non-Business Day, it shall be postponed to the first Business day after the non-Business Day.

 

Article 2    Arrangement of Convertible Notes

 

2.1          Amount of convertible notes

 

The Present Investor agrees to provide the Company with a convertible note investment of RMB1 billion.

 

2.2          Delivery arrangement

 

The convertible note investment funds of the Present Investor will be delivered in two tranches, of which RMB500 million will be paid within 45 days from the date when the Company completes its registration with the competent administration for industry and commerce (the first delivery date); and the other RMB500 million will be paid before March 31, 2024 (the second delivery date).

 

******.

 

 

2.3           Use of funds

 

The convertible note investment funds will be fully used for the Lotus Energy headquarters Project, including R&D, manufacturing, marketing, station construction and daily operations of the Energy Headquarters operation project company and industrialization project company. Without the prior written consent of the Present Investor, the Company shall not use the convertible note funds for purposes other than those for the Lotus Energy Headquarters Project. The controlling shareholder shall not use the funds in any form for purposes other than those specified in the Agreement. The Company shall deposit such convertible note investment funds in its bank account opened within the jurisdiction of Fuyang District, and provide the Investor with the convenience of checking and auditing financial information on a regular basis.

 

2.4           Convertible bond investment period

 

The convertible note investment period under the Agreement is five years from respective Delivery Date of each tranche of the investment funds.

 

2.5

Convertible bond interest

 

The interest on convertible notes under the Agreement is calculated at the loan prime rate (LPR) for the same period loans announced by the China Foreign Exchange Trade System National Interbank Funding Center, from the date of delivery of the fund to the date of repayment of the debt.

 

2.6

Transfer of convertible notes

 

The Present Investor shall, on the Delivery Dates, pay the convertible note funds to the bank account designated by the Company, and shall promptly inform the Company that the funds have been transferred.

 

2.7

Guarantee of convertible notes

 

The existing Original Shareholders (excluding Hangzhou Fuyang Development Zone Industrial Investment Co., Ltd.) provide an unconditional joint and several liability guarantee, in proportion to their respective shareholding ratio, to the Present Investor for the exit of the convertible notes. The guarantee period ends when the Company repays in full the principal of the convertible notes that have not been converted into equity and the interest thereon to the Present Investor or when all the convertible notes are converted into equity of the Company (whichever is earlier). If there is a subsequent change in the Company's shareholders or changes in the proportion of capital contributions subscribed by shareholders, the Parties shall enter into a supplementary agreement, and each shareholder of the Company shall undertake joint and several liability guarantees in proportion to the capital contributions actually subscribed for by it at that time.

 

For the convertible note debts or obligations that Sanya Lotus Venture Capital Co., Ltd. shall perform to the Present Investor based on the terms above, Lotus Technology shall provide a joint and several liability guarantee to the Present Investor. The guarantee period is from the date when Sanya Lotus Venture Capital Co., Ltd. fails to perform the aforementioned convertible note debts or obligations, to the date when the principal of the unconverted part of the convertible notes and the interest thereon are repaid in full or when all the convertible notes are converted into equity of the Company (whichever is earlier).

 

 

If Lotus Technology or its overseas listing entity applies for listing, Lotus Technology may apply to the Present Investor to release the aforementioned guarantee under the condition of providing an alternative guarantee plan acceptable by the Present Investor. After Lotus Technology submits a written application for releasing the aforementioned guarantee and an alternative guarantee plan to the Present Investor, and with the written consent of the Present Investor and after the effective implementation of the alternative guarantee plan, the Present Investor will release the aforementioned guarantee of Lotus Technology. If, after receiving the written application from Lotus Technology, the Present Investor does not agree in writing to release the aforementioned guarantee of Lotus Technology, it is deemed that the Present Investor does not agree to release the guarantee liability of Lotus Technology under the supplementary contract.

 

2.8

Prohibitive provisions on the convertible note investment period

 

During the convertible note investment period, the Company must abide by the following prohibitive provisions (except with the prior consent of the Investor); otherwise, the Investor shall have the right to refuse or postpone the implementation of the debt-to-equity swap arrangement and require the Company to repay the loan in advance:

 

(1)            The Company has an event of major adverse effect and fails to reach an unanimous solution with the Investor within ******;

 

(2)            No concealment or delay in disclosing any fact that any investor learns that may violate any representations, warranties and undertakings under the Agreement (whether existing before the date of execution of the Agreement or occurring after the date of execution of the Agreement and before the date of completion of debt-to-equity swap registration), disclose the Company’s regular financial statements, financial budget statements, etc. (annual report, semi-annual report, quarterly report) to investors as agreed.

 

(3)            Without the written consent of the Present Investor, the Company shall not provide external guarantees with an amount exceeding ******.

 

Article 3    Conversion of Convertible Notes into Equity and Related Arrangements

 

3.1

Conversion of convertible notes into equity: When the following events (the “Equity Conversion Events”) occurs, the Present Investor may convert the claims held by it into equity of the Company, and the Parties shall cooperate with the Present Investor to complete the conversion of convertible notes into equity:

 

(1)            Within five years from the date when the convertible note investment amount of RMB1 billion is fully delivered, both the Company and the Present Investor may apply for the conversion of all or part of the convertible notes into equity (the application may be made by telephone, mail, or face-to-face), after both parties reach a consensus and form an equity conversion plan, the Company shall cooperate with the Present Investor to subscribe for the corresponding registered capital of the Company in proportion to the equity conversion amount and valuation as specified in such plan.

 

 

(2)            After the investment period of each tranche of the convertible note investments expires or when the conditions for early repayment are triggered, the Company shall repay the investment fund that has not been converted into the Company’s equity and pay the investment income calculated according to the provisions of Paragraph 2.5 hereof no later than 6 months.

 

(3)            If necessary due to reasons such as company development or conversion of convertible notes into equity, the investment period of each investment fund as specified in Paragraph 2.4 may be extended twice, but each extension should not exceed one year. During the extension period, the Company shall pay the Present Investor the investment income at a rate rising by 10% of the LPR for same-period loans. The Company shall give a notice of extension of the investment period to the Investor. If the Investor does not express any objection thereto in writing within 15 days, it shall be deemed to agree to the extension of the investment period.

 

 

(4)            In making the conversion of convertible notes into equity, if it is infeasible for the Present Investor to complete in time the subscription for the newly-increased registered capital of the Company directly with its claims against the Company under the convertible notes provided to the Company due to laws, policies or government department reasons, the Present Investor and the Company shall negotiate to reach an alternative solution. If the Company repays the principal of the convertible notes and the interest thereon in installments (the specific amount and time limit of each installment will be negotiated separately by both parties), the Present Investor shall, after receiving each repayment fund, subscribe for the newly-increased registered capital of the Company with such fund within 1 Working Day after the conditions precedent for each capital contribution (if any) as agreed in the equity investment agreement, so as to achieve the same purpose as the conversion of convertible notes into equity.

 

(5)            In the event of investment by any subsequent investors, the Company shall ensure that the content of the Agreement is disclosed to such subsequent investors and shall obtain the confirmation by the Present Investor. The Company and the Original Shareholders agree, at the time of convention of convertible notes into equity, they will do their best to cooperate, and procure the Company’s subsequent investors to cooperate, with the Present Investor to complete the conversion of convertible notes under Article 3, and cooperate to sign relevant documents.

 

(6)            The Parties agree that, under any circumstances, it should be ensured that after the conversion of the convertible notes, the Present Investor will hold no more than 20% of the Company’s equity, and must not become the Company’s first majority shareholder or controlling shareholder.

 

Article 4    Representations and Warranties

 

4.1

Representations and warranties

 

The Company and the Original Shareholders hereby represent and warrant:

 

(1)            The Company is a company duly established and validly existing in accordance with the laws of China, and have the right to own its assets and to carry on the business it is currently carrying on;

 

(2)            Each of them has the authority to enter into, perform and deliver, and has taken all necessary actions to authorize it to execute, perform and deliver, the Agreement and the transactions contemplated by the Agreement and these documents;

 

(3)            Before the execution of the Agreement, the Company has no material economic disputes and lawsuits; other than the lawsuits and arbitrations that have been disclosed to the Present Investor, there is no lawsuit, arbitration or administrative procedure pending before any court, arbitration institution or administrative agency, that is reasonably expected to have a material adverse effect on the Company if there is an unfavorable decision;

 

Article 5    Confidentiality Obligations

 

5.1

The terms and conditions of the Agreement and its appendices (including all clauses and even the existence of the Agreement and all transaction documents related to the Present Investment) are confidential information, and the Parties to the Agreement shall not disclose them to third parties, unless otherwise provided. Each Party shall treat in confidence proprietary or secret or confidential data and information concerning the Company, its business or other Parties, or disclosed by other Parties at any time or for the purpose of negotiating the Agreement or operating the Company and the relevant contents of the Agreement (the “Confidential Information”), and shall not disclosed the same to third parties or persons other than the Parties to the Agreement, the Company and professional consultants, with the exception where disclosure is required by mandatory legal provisions.

 

 

5.2

Notwithstanding the foregoing, each Party may disclose such information to its governing bodies, shareholders, employees, directors, officers, consultants or agents for the purposes of the Agreement, provided that such Party shall take all reasonable steps to ensure that such persons are aware of the confidentiality of the Confidential Information and agree to perform the aforementioned confidentiality obligations in accordance with the Agreement.

 

5.3

The confidentiality obligations under Paragraphs 5.1 to 5.2 above do not apply to:

 

(1)            the information that has become available to the public (other than that available to the public through a breach of the confidentiality obligations under this Article);

 

(2)            the information that the receiving party has learned through legal channels before the disclosure by the disclosing party;

 

(3)            the information independently developed by the receiving party through legal means (excluding information formed through integration, analysis, compilation and other processing means of acquired information);

 

(4)            the information that the receiving party learns or obtains from a third party who is not under the obligation of confidentiality;

 

(5)            the information of which the disclosure has been consented to by the disclosing party in writing to the receiving party; with the exception where it is agreed in the letter of consent that the information receiving shall not disclose the same to a third party again; and

 

(6)            the information disclosed by the receiving party to relevant government departments, regulators or judicial authorities as required by laws.

 

Article 6    Effectiveness, Modification, Change and Termination of the Agreement

 

6.1

The Agreement shall take effect after being signed/sealed by respective legal representatives or authorized representatives, and affixed with the official seals, of the Parties.

 

6.2

The appendices of the Agreement constitute an integral part of the Agreement and as a supplement to the Agreement. If the documents in the appendices to the Agreement that need to be signed and executed separately conflict with the text of the Agreement, the agreement so signed and executed separately shall prevail.

 

6.3

The Agreement may be modified, supplemented or changed upon consensus of the Parties to the Agreement. Any such modification, supplement or change must be made in writing, and shall not take effect until it is signed by the Parties to the Agreement. A waiver of any provision of the Agreement shall not be deemed to constitute a waiver of the Agreement or any other provision of the Agreement.

 

6.4

Termination of the Agreement

 

(1)            Upon execution of the Agreement, without the unanimous written consent of the Parties to the Agreement, no Party may unilaterally terminate the Agreement.

 

(2)            A Party materially breaches its obligations, representations and warranties and undertakings under the Agreement, and fails to rectify the breach within 30 days from the date that the non-defaulting party gives a notice of rectification in writing. The non-defaulting party shall have the right to notify the defaulting party in writing to terminate the Agreement at least 10 Working Days in advance, and shall indicate the effective date of termination in the notice.

 

6.5            Effect of termination of the Agreement

 

(1)            If the Agreement is terminated, all rights and obligations of the Parties hereto under the Agreement shall be terminated immediately, except for the responsibilities and liabilities that shall be assumed in accordance with Articles 5 and 7 of the Agreement.

 

(2)            If the Agreement is terminated without the fault of any Party hereto, each Party shall return the consideration received from other Parties under the Agreement and restore the status when the Agreement was executed in accordance with the principles of fairness, reasonableness and good faith.

 

 

Article 7    Liabilities for Default and Compensation

 

7.1

Any Party’s default of, failure to perform, failure to fully perform, or failure to properly perform, any of its obligations under the Agreement, or default of any provision of the Agreement (including but not limited to the Party’s representations, warranties and undertakings under the Agreement), whether due to acts or omissions, shall constitute a default ( the “default”, the Party in default hereinafter referred to as the “defaulting party”).

 

7.2

The defaulting party shall be liable for all losses, damages, liabilities, lawsuits and reasonable costs and expenses (collectively, the “losses”) incurred by the non-defaulting party due to the breach of the Agreement by the defaulting party, including but not limited to reasonable litigation fees/arbitration fees, reasonable legal fees, preservation fees, letter of guarantee fees, announcement fees, execution fees, travel expenses, etc., but shall not exceed the possible losses that the defaulting party foresees or should have foreseen when entering into the Agreement.

 

7.3

The compensation made by the defaulting party in accordance with the Paragraph Article 7.2 above shall not affect other rights and reliefs that the non-defaulting party shall have in accordance with Chinese laws or other provisions of the Agreement.

 

7.4

Upon execution of the Agreement, the Parties shall fully perform the Agreement. Any breach by a Party of its representations, warranties and undertakings in the Agreement, or the terms of the Agreement, shall constitute a default. The defaulting party shall compensate the non-defaulting party for reasonable losses suffered thereby, unless otherwise expressly specified in the Agreement.

 

Article 8    Governing Laws and Settlement of Disputes

 

8.1

The conclusion, effectiveness, interpretation, construction, performance and dispute settlement of the Agreement shall be governed by, and interpreted or construed in accordance with, Chinese laws.

 

8.2

All disputes arising from or in connection with the performance of the Agreement shall be settled through amiable negotiation among the Parties. If the negotiation fails, any Party has the right to submit such controversies, disputes or claims to China International Economic and Trade Arbitration Commission Zhejiang Sub-Commission for arbitration in accordance with its arbitration rules in effect at the time of submission for arbitration. The seat of arbitration is Hangzhou. The arbitral award is final and binding on either Party. The losing party shall bear all actual expenses related to the arbitration, including but not limited to arbitration fees, attorney fees, travel expenses, etc.

 

Article 9    Notices and Service

 

9.1

Any notice or other communication (collectively, “notices”) given by a Party to other Parties in connection with the Agreement shall be in writing (including fax, e-mail), and shall be delivered to or served on the addressee(s) at the mailing addresses or communication numbers listed in Appendix 1. The Parties agree and confirm that the contact information listed in Appendix 1 is the confirmed means for service of process, and the service of process in accordance with the means specified in the Agreement shall be deemed as successful service.

 

9.2

The service time for various communication methods specified in the preceding paragraph shall be determined as follows:

 

(1)            The notice presented in person shall be deemed served when the addressee signs for receipt, and the failure of the addressee to sign for receipt shall not constitute effective service;

 

(2)            All notices that may be delivered by post should be delivered by registered mail or express mail service, and the notice shall be deemed to have been served on the addressee on the 7th day after posting;

 

9.3

If there is any change in the aforementioned mailing address or communication number of any Party (the “Changing Party”), the change party shall notify other Parties in writing within 15 days after the occurrence of the change. If the Changing Party fails to notify in time as agreed, the Changing Party shall assume the losses arising therefrom.

 

 

Article 10        Supplementary Provisions

 

10.1

The Agreement represents the agreement of the Parties on the subject matter under the Agreement. If any other written or oral agreements or other documents made by the Parties on the subject matter are inconsistent with the Agreement, the Agreement shall prevail; any matters uncovered by the Agreement shall be subject to a separate written supplementary agreement that may be executed.

 

10.2

If any provision of the Agreement is invalid or unenforceable due to the applicable laws, the provision shall be deemed as non-existent from the beginning without affecting the validity of other provisions of the Agreement, and the Parties shall negotiate and determine new provision to the extent permitted by the laws, to ensure that the intent of the original provision is realized to the greatest extent.

 

10.3

Unless otherwise specified in the Agreement, a Party’s failure to exercise or delay in exercising the rights, powers or privileges under the Agreement shall not be deemed to be a waiver of these rights, powers and privileges, and the single or partial exercise of these rights, powers and privileges does not preclude the exercise of any other rights, powers and privileges.

 

10.4

The Agreement is executed in ten counterparts, with each Party holding two counterparts respectively, all of which shall have the same legal effect.

 

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IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Present Investor	Hangzhou Fuyang Development Zone Industrial Investment Co., Ltd. (official seal)
	/s/ Guo Jiangang
	Name: Guo Jiangang
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Company	Hangzhou Lightning Speed Technology Co., Ltd. (official seal)
	/s/ Wang Xiaofei
	Name: Wang Xiaofei
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Original Shareholder (Guarantor)	Sanya Lotus Venture Capital Co., Ltd. (official seal)
	/s/ Feng Qingfeng
	Name: Feng Qingfeng
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Original Shareholder (Guarantor)	Ningbo Weili Enterprise Management Consulting Partnership (Limited Partnership) (official seal)
	/s/ Ao Xianzhi
	Name: Ao Xianzhi
	Title: legal representative

 

 

[There is no text on this page, and it is the execution page of the Convertible Note Investment Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to execute the Agreement on the date first written above.

 

Joint and Several Guarantor:	Wuhan Lotus Technology Co., Ltd. (official seal)
	/s/ Feng Qingfeng
	Name: Feng Qingfeng
	Title: legal representative

 

 

SCHEDULE 1

NOTICE INFORMATION LIST

[***]

 

 

SCHEDULE 2

SHARHOLDING PERCENTAGE OF THE TARGET COMPANY

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.20

 

LOTUS TECHNOLOGY INC.

 

AMENDED AND RESTATED SERIES PRE-A PREFERRED SHARE PURCHASE AGREEMENT

 

March 17, 2022

Table of Contents

 

1.	DEFINITIONS	2
2.	SALE AND PURCHASE	8
3.	CLOSING	10
4.	REPRESENTATIONS AND WARRANTIES	11
5.	CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS	13
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	16
7.	COVENANTS	17
8.	INDEMNITY	19
9.	MISCELLANEOUS	19

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Third Restated Constitution

 

Exhibit C: Warrantors’ Representations and Warranties

 

Exhibit D: Indemnification Agreement

 

Exhibit E: Fourth Restated Constitution

 

Exhibit F: Second Restated Shareholders’ Agreement

 

Exhibit G: Third Restated Shareholders’ Agreement

 

Exhibit H: Disclosure Schedule

 

Exhibit I: Key Management Staff

AMENDED AND RESTATED SERIES PRE-A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS AMENDED AND RESTATED SERIES PRE-A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of March 17, 2022, by and among:

 

(1)          the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

 

(2)          Lotus Advanced Technology Limited Partnership, a limited partnership under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)          Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 216,700,000 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

 

C.

Mission (as defined below), the Offshore Founder Holdco and the Company executed a Convertible Loan Agreement on November 5, 2021 (the “Convertible Loan Agreement”), pursuant to which, Mission provided a convertible loan facility of RMB150,000,000 (the “Loan Amount”) to the Company on November 29, 2021, which will be converted into 2,407,778 Series Pre-A Preferred Shares upon the Initial Closing (as defined below).

 

D.

On January 30, 2022, Mission, the Offshore Founder Holdco and the Company have executed a termination agreement to the Convertible Loan Agreement (“CB Termination Agreement”), pursuant to which, the parties agree that the Convertible Loan Agreement will terminate upon the Initial Closing and have no further effect. The Loan Amount paid under the Convertible Loan Agreement shall be deemed as the Initial Purchase Price (as defined below) at the Initial Closing.

 

E.

Investors, Offshore Founder Holdco and the Company have executed a share purchase agreement (“Prior Agreement”), dated as of January 30, 2022 (“Effective Date”).

F.

Subject to the terms and conditions set forth in the Prior Agreement and the other Transaction Documents (as defined below), (a) Mission desires to purchase 2,407,778 Series Pre-A Preferred Shares of the Company via conversion of the Loan Amount and the Company agrees to the conversion of the Loan Amount and desires to issue to Mission 2,407,778 Series Pre-A Preferred Shares at the Initial Closing, and (b) each of the Investors desire to purchase certain number of Series Pre-A Preferred Shares from the Company and the Company agrees to sell to Mission and/or Mission Bloom Limited (“Mission Bloom”) certain number of Series Pre-A Preferred Shares at the Final Closing (as defined below), provided that the aggregate purchase price paid by Mission and/or Mission Bloom at both Closings (including the Loan Amount) hereunder shall be equivalent to RMB1,000,000,000 (“Aggregate Purchase Price”).

 

G.

The Initial Closing took place on February 28, 2022.

 

H.

The Parties agree that this Agreement amends and restates the Prior Agreement in its entirety for the purpose of adding Additional Closing(s) after the Initial Closing and prior to the consummation of the Final Closing, and references herein to the “date of this Agreement” and the “date hereof” shall be deemed to refer to the Effective Date; and

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

“Final Closing Transaction Documents” means (a) this Agreement, (b) the Third Restated Shareholders’ Agreement, (c) the Fourth Restated Constitution, and (d) the Indemnification Agreement.

 

“Fourth Restated Constitution” means the fourth amended and restated memorandum and articles of association of the Company as set forth in Exhibit E adopted as of the Final Closing (or as of the Additional Closing, only in the case where Mission and/or Mission Bloom have fully paid the Aggregate Purchase Price to the Company as of the Additional Closing) (as the case may be).

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, 16, and 17 in Exhibit C.

 

“Geely Deutschland” means Geely Auto Technical (Deutschland) GMBH.

 

“Geely Holding” means Zhejiang Geely Holding Group Limited (浙江吉利控股集团有限公司) (unified social credit code: 91330000747735638J).

 

“Geely UK” means Geely Research & Development UK Limited.

 

“Group Companies” or “Group” means:

 

(a)     Lotus Technology;

 

(b)     Entities Controlled by Lotus Technology;

 

(c)     the Company; and

 

(d)     any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Indemnification Agreement” means an indemnification agreement in the form attached hereto as Exhibit D to be entered into between the Company and the director of the board of the Company appointed by Mission.

 

“Initial Closing Transaction Documents” means Prior Agreement, the Second Restated Shareholders’ Agreement and the Third Restated Constitution.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

“Investor” means any person set forth in the “Investor” column in the tables in Exhibit A hereto.

 

“Key Person” means Qingfeng Feng.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Lotus Technology” means Wuhan Lotus Technology Company Limited (武汉路特斯科技有限公司) (unified social credit code: 91420100MA49N0MG9W).

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person's entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person's control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the date of the Initial Closing; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) -  (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

 

“Mission” means MISSION PURPLE L.P., an exempted limited partnership registered in the British Virgin Islands with its registered office at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands.

 

“Ordinary Shares” means ordinary shares in the capital of the Company.

“Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Production Site Cooperation Agreement” means the Geely Group Lotus Brand Luxury Compact SUV Production Site Project (《吉利集团路特斯品牌豪华紧凑型 SUV 生产 基 地 项 目 》 ) executed between Geely Holding and Wuhan Development Zone Administrative Committee on July 23, 2018.

 

“Purchase Price” means the Initial Purchase Price or the Final Purchase Price (as the case may be) or any part of either of them.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, or any other stock exchange or quotation system that is approved in writing by Mission.

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

 

“Restated Constitution” means the Third Restated Constitution or the Fourth Restated Constitution (as applicable).

 

“Restructuring Goals” means the restructuring goals agreed between the Company and Hefei Weixin Equity Investment Partnership (Limited Partnership) (合肥蔚新股权投资合伙企业(有限合伙), “Weixin”) as of the date of this Agreement in the form agreed between such parties in writing.

 

“RMB” means the lawful currency of the People’s Republic of China.

 

“Second Restated Shareholders’ Agreement” means the second amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and Mission and other parties thereto substantially in the form as set forth in Exhibit F hereof, which is to take effect from the Initial Closing.

 

“Series Pre-A Preferred Shares” means redeemable convertible preferred shares in the share capital of the Company, having the terms and conditions in the applicable Shareholders’ Agreement and the applicable Restated Constitution, each as amended from time to time.

 

“Shareholders’ Agreement” means the Second Restated Shareholders’ Agreement or the Third Restated Shareholders’ Agreement (as applicable).

 

“Third Restated Constitution” means the third amended and restated memorandum and articles of association of the Company as set forth in Exhibit B hereof adopted as of the Initial Closing.

 

“Third Restated Shareholders’ Agreement” means the third amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company, Mission and Mission Bloom substantially in the form as set forth in Exhibit G, which is to take effect from the Final Closing (or as of the Additional Closing, only in the case where Mission and/or Mission Bloom have fully paid the Aggregate Purchase Price to the Company as of the Additional Closing) (as the case may be).

“Trademarks License Agreements” means the Trademarks License Agreements entered into between two Hong Kong Affiliates of Lotus Technology and Group Lotus Limited.

 

“Transaction Documents” collectively means the Initial Closing Transaction Documents and the Final Closing Transaction Documents.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors” collectively mean the Company and the Offshore Founder Holdco.

 

“Wuhan Headquarter Investment Agreement” means the Investment Cooperation Agreement for Lotus Technology Global Headquarter Project (《路特斯科技全球总部项目投资合作协议》 ) entered into between Geely Holding and Wuhan Development Zone Administrative Committee on December 14, 2020.

 

1.2

Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Acceleration Notice	Section 3.1(c)
Additional Closing	Section 3.1(c)
Aggregate Purchase Price	Recitals
Agreement	Preamble
CB Termination Agreement	Recitals
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 3.1(a)
Company	Preamble
Confidential Information	Section 9.9(a)
Convertible Loan Agreement	Recitals
Conversion Shares	Section 2.1
Disclosure Schedule	Section 4.1
Effective Date	Recitals
Final Closing	Section 3.1(b)
Final Closing Purchased Shares	Section 2.2(b)
Final Purchase Price	Section 2.2(b)
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Initial Closing	Section 3.1(a)
Initial Long Stop Date	Section 9.14(a)
Initial Purchase Price	Section 2.2(a)
Individual Claim	Section 8.2(a)

Individual Claim Loss Threshold	Section 8.2(a)
Initial Closing Purchased Shares	Section 2.2(a)
Investor or Investors	Preamble
Key Management Staff	Section 5.1(e)(iv)
Loan Amount	Recitals
Losses	Section 8.1
Lotus Technology	Recitals
Mission Bloom	Recitals
Offshore Founder Holdco	Preamble
Party or Parties	Preamble
Per Share Purchase Price	Section 2.2(a)
Portion Final Closing Purchase Price	Section 2.2(a)a)(c)
Portion Final Closing Purchased Shares	Section 2.2(a)a)(c)
Principal Business	Recitals
Prior Agreement	Recitals
Purchased Shares	Section 2.1
Schedule of the Investors	Preamble
Supplemental Disclosure	Section 4.1

 

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)           unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(ii)          any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)         dates and times are to PRC time;

 

(iv)         reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)          unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)         headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)        person includes any individual, firm, company or other incorporated or unincorporated body;

(viii)       in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)         Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the Cayman Islands and Hong Kong;

 

(x)          anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)         agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)        including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)       other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)       law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

 

2.

SALE AND PURCHASE

 

2.1

Authorization

 

As of the Initial Closing, the Company have authorized (i) the sale and issuance of 16,051,853 Company’s Series Pre-A Preferred Shares (the “Purchased Shares”); (ii) the reservation of Ordinary Shares for issuance upon conversion of the Purchased Shares (the “Conversion Shares”).

 

2.2

Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)           at the Initial Closing, Mission hereby agrees, to subscribe for and purchase, and the Company agrees to sell and issue to Mission, the number of Purchased Shares set forth in the column designated “Number of Series Pre-A Preferred Shares” opposite Mission under the heading “Initial Closing” on Exhibit A attached hereto, (the “Initial Closing Purchased Shares”), at the purchase price equivalent to RMB 62.2981 per share, as appropriately adjusted for any share split, share division, share combination, share dividend or similar events with respect to such shares (the “Per Share Purchase Price”), with Mission paying as consideration for such Initial Closing Purchased Shares the purchase price in the column designated “Purchase Price” set forth opposite Mission under the heading “Initial Closing” on Exhibit A attached hereto ( the “Initial Purchase Price”).

 

The Company acknowledges that Mission has fully paid the Loan Amount to the Company as of the date of this Agreement. On and upon the Initial Closing, the entire Loan Amount paid by Mission under the Convertible Loan Agreement to the Company shall be deemed as the payment of the Initial Purchase Price and the payment obligations of Mission at the Initial Closing shall be considered as being fully satisfied.

(b)          At the Final Closing, unless there is one or more Additional Closing(s) taken place prior to the Final Closing, Mission and Mission Bloom hereby agree, severally and not jointly, subscribe for and purchase, and the Company agrees to sell and issue to Mission and Mission Bloom respectively, at the Per Share Purchase Price (subject to and in the event of the share dividend contemplated to be declared by the Company or declared by the Company as of the date of this Agreement, the Per Share Purchase Price for the Final Closing (including any Additional Closing as set forth in Section 2.2(c)) shall be accordingly adjusted to RMB 6.22981), the number of Purchased Shares set forth in the column designated “Number of Series Pre-A Preferred Shares” opposite Mission and Mission Bloom under the heading “Final Closing” on Exhibit A attached hereto (the “Final Closing Purchased Shares”), with Mission and Mission Bloom paying as consideration for such Final Closing Purchased Shares the purchase price in the column designated “Purchase Price” set forth opposite Mission and Mission Bloom under the heading “Final Closing” on Exhibit A attached hereto (the “Final Purchase Price”), as appropriately adjusted for any share split, share division, share combination, share dividend or similar events with respect to such shares.

 

(c)          At the Additional Closing(s) (if applicable), Mission and/or Mission Bloom (as the case may be) hereby agree, to subscribe for and purchase, and the Company agrees to sell and issue to Mission and/or Mission Bloom (as the case may be), a portion of the Final Closing Purchased Shares set forth in the Acceleration Notice (as defined below) provided by Mission and/or Mission Bloom to the Company pursuant to Section 3.1(c) (the “Portion Final Closing Purchased Shares”), at the Per Share Purchase Price (subject to adjustment thereto as set forth in Section 2.2(b)), with Mission and/or Mission Bloom paying as consideration for such Portion Final Closing Purchased Shares the purchase price being equivalent to the product of the Portion Final Closing Purchased Shares times Per Share Purchase Price (in aggregate, the “Portion Final Closing Purchase Price”, with the Per Share Purchase Price being subject to adjustment as set forth in Section 2.2(b)).

 

(d)          In the case where there is one or more Additional Closing(s) taken place prior to the Final Closing, the “Final Closing Purchased Shares” acquired by any of the Investors at the Final Closing shall be correspondingly adjusted which shall be a number equivalent to the Final Closing Purchased Shares minus the aggregate Portion Final Closing Purchased Shares acquired at all the Additional Closing(s); and the “Final Closing Purchase Price” payable by the Investors at the Final Closing shall be an amount equivalent to the Final Closing Purchase Price minus the aggregate Portion Final Closing Purchase Price. Exhibit A of this Agreement shall be updated at each Closing by the Company to reflect the details of such allocation, including the respective number of Purchased Shares purchased by Mission and/or Mission Bloom (as the case may be) at the Additional Closing and the Final Closing and the Purchase Price paid by each of them in respect thereof.

 

(e)          The Company’s agreement with each Investor is a separate agreement, and the sale and issuance of the Purchased Shares to each Investor is a separate sale and issuance. For the avoidance of doubt, each Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

3.

CLOSING

 

3.1          Closing

 

(a)          Initial Closing. The consummation of the purchase and sale of the Purchased Shares shall take place at one or more closings (each of which is referred to in this Agreement as a “Closing”). The initial closing (the “Initial Closing”) shall take place on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions to the Initial Closing as set forth in Section 5.1 and Section 6.1 respectively, or at such other place and time as the Company and Mission may mutually agree upon. The Initial Closing has taken place on February 28, 2022.

 

(b)          Final Closing. Subject to terms and conditions of this Agreement, the final closing (“Final Closing”) shall take place on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions applicable to the Final Closing as set forth in Section 5.2 and Section 6.2 respectively, or at such other place and time as the Company and the Investors may mutually agree upon.

 

(c)          Additional Closing(s). After the Initial Closing and prior to the consummation of the Final Closing, the Parties agree that Mission has the right to, accelerate any portion of the Final Closing by providing written notice (“Acceleration Notice”) to the Company (specifying the number of Portion Final Closing Purchased Shares to be purchased and the amount of the Portion Final Closing Purchase Price to be paid at the Additional Closing (as defined below)). Such accelerated additional closing (the “Additional Closing”) shall take place within ten (10) Business Days after the date of Mission’s notice or such other time as the Company and Mission may mutually agree.

 

3.2          Company’s Closing Deliverables

 

At each Closing, in addition to any items the delivery of which is made as an express condition to each applicable Investor’s obligations at such Closing pursuant to Section 5, the Company shall deliver to each Investor in such Closing:

 

(a)          a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of such Closing, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors (as updated for each Additional Closing);

 

(b)          a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A (as updated for each Additional Closing) registered in the name of such Investor, certified by a director of the Company as true and complete as of such Closing (the original of which shall be delivered to such Investor at the address set forth in Section 9.2 within ten (10) Business Days after such Closing); and

 

(c)          at the Final Closing (or the Additional Closing, only in the case where Mission and/or Mission Bloom have fully paid the Aggregate Purchase Price to the Company as of the Additional Closing), a scanned copy of the updated register of directors of the Company, evidencing the appointment of one (1) director of the board of the Company jointly appointed by the Investors.

 

3.3          Payment of the Purchase Price

 

(a)          Subject to terms and conditions of this Agreement, at each Closing, each Investor at such Closing shall pay its corresponding Purchase Price listed opposite such Investor’s name on the Exhibit A (as updated for each Additional Closing) by wire transfer of immediately available funds of USD to a bank account of the Company, the details of which shall be provided by the Company to such Investor at least five (5) Business Days prior to such Closing; provided, however, that Mission shall make the payment of its Purchase Price by conversion of the Loan Amount at the Initial Closing.

(b)          The exchange rate for the Initial Purchase Price paid by Mission via conversion of the Loan Amount shall be the average of the selling and buying rate of the U.S. Dollar as announced by the People’s Bank of China on the date when Mission disbursed the Loan Amount to the Company. The exchange rate for the Portion Final Closing Purchase Price to be paid by Mission for any Additional Closing shall be a fixed exchange rate of RMB 6.38 per U.S. Dollar; the applicable exchange rate for the Final Purchase Price to be paid by Mission for the Final Closing (to the extent applicable) shall be the average of the selling and buying rate of the U.S. Dollar as announced by the People’s Bank of China on the date of Final Closing. The Final Purchase Price (including any Portion Final Closing Purchase Price, if applicable) to be paid by Mission Bloom shall be RMB377,115,000 (for the avoidance of doubt, as long as the total RMB amount that Mission Bloom’s parent entity applies to domestic banks for exchange of RMB into U.S. Dollar in connection with outbound investment in the Company is RMB377,115,000, the obligation of payment of the Final Purchase Price (including any Portion Final Closing Purchase Price, if applicable) on the part of Mission Bloom shall be fully discharged through payment of the U.S. Dollars resulting from such currency exchange, regardless the exchange rate to be offered by relevant banks).

 

4.

REPRESENTATIONS AND WARRANTIES

 

4.1          Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit H (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to each Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the date of the relevant Closing applicable to such Investor, (b) each of the statements contained in Exhibit C (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the date of the relevant Closing applicable to such Investor, except if a representation or warranty is made as of a specified date, as of such date; provided, that at each of the Additional Closing(s) and the Final Closing (as the case may be), the Company shall be permitted to supplement and update the Disclosure Schedule by way of a supplemental disclosure document (the “Supplemental Disclosure”) submitted to the relevant Investor prior to the date of the Additional Closing(s) or the Final Closing (as the case may be). The Parties agree that (a) the form and substance of such Supplemental Disclosure shall be delivered to the relevant Investor no less than five (5) Business Days prior to the date of such relevant Closing; and (b) in no event shall the Supplemental Disclosure provided by the Company to the relevant Investor be deemed to have amended or qualified any of the statements in this Section 4.1 (including the Disclosure Schedule as of the date hereof) for any purpose.

 

4.2          Representations and Warranties of Investors

 

Each Investor hereby represents and warrants to the Warrantors, severally and not jointly, that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the date of the relevant Closing applicable to such Investor (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

(a)          it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s assets;

 

(b)          it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the relevant Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

 

(c)          the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

 

(d)          The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

5.

CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS

 

5.1          Conditions to Mission’s Obligations at the Initial Closing

 

Mission’s obligation to purchase the Initial Closing Purchased Shares at the Initial Closing is subject to the fulfilment of each of the following conditions at or prior to the Initial Closing, unless otherwise waived by Mission in the Initial Closing:

 

(a)          Execution and Delivery of Initial Closing Transaction Documents

 

Each Warrantor shall have delivered to Mission each of the Initial Closing Transaction Documents to which it is a party, duly executed by all parties thereto except Mission.

 

(b)          Constitutional Documents

 

The Third Restated Constitution set forth in Exhibit B shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors, and such adoption shall have been duly submitted for filing with the Companies Registry of the Cayman Islands as of the Initial Closing as evidenced by an email confirmation from the registered agent of the Company.

 

(c)          Representations and Warranties

 

(i)          The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the date of the Initial Closing, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)         The representations and warranties made by each Warrantors contained in Exhibit C (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the date of the Initial Closing, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)          Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Initial Closing Transaction Documents to be performed or complied with by such Warrantor on or prior to the Initial Closing.

 

(e)          Conversion Conditions

 

The conditions as set forth herein below have been fulfilled as of the date of the relevant Closing (in this Section 5.1(e), capitalized terms if not defined in this Agreement shall have the meaning ascribed to them in the Convertible Loan Agreement):

 

(i)          the Group Companies having completed the Restructuring Goals;

 

(ii)         the Offshore Founder Holdco, ETIKA Automotive SDN BHD, Geely Holding and Lotus Group International Limited having entered into a shareholders’ agreement of the Company, which has taken effect and whereby each of the shareholders of the Company other than the Offshore Founder Holdco has fully paid its capital contribution to the Company;

 

(iii)        certain Hong Kong Affiliates of Lotus Technology having executed the Trademarks License Agreements with Group Lotus Limited, and such Trademarks License Agreements having taken effect;

(iv)        the key management staff as listed in Exhibit I to this Agreement (“Key Management Staff”) who is required to be transferred to the Group Companies having been transferred to the Group Companies from Geely Holding or its Affiliates, and such individuals having entered into employment agreements, confidentiality and non-compete agreements and intellectual property agreements with the Group Companies;

 

(v)         the Company or designated entity thereof having entered into a share transfer agreement with Geely UK Limited for the acquisition of Geely Deutschland, such share transfer agreement having become effective and the aforesaid acquisition having been approved by the board of directors and shareholders of Geely Deutschland;

 

(vi)        the Company or designated entity thereof having entered into a share transfer agreement with Geely International (Hong Kong) Limited for the acquisition of Geely UK, such share transfer agreement having become effective and the aforesaid acquisition having been approved by the board of directors and the shareholders of Geely UK;

 

(vii)       the ownership of the official accounts relating to the Lotus branded Lifestyle Vehicles, including the website, APP, WeChat official account and accounts in other platforms confirmed by Weixin in writing prior to the execution of this Agreement, having been transferred to the Group Companies;

 

(viii)      all internal and external authorizations, consents, approvals, etc. (if applicable) required with respect to the subscription of the Purchased Shares under the Initial Closing Transaction Documents by Mission in the Initial Closing having been obtained by the Company and such authorizations, consents, approvals, etc. (if applicable) being valid on an ongoing basis, including but not limited to the relevant written resolutions/decisions of the shareholders and the directors/board of directors of the Company respectively, consenting to the execution and performance by the Company of the proposed transactions under the Initial Closing Transaction Documents for the subscription of the Purchased Shares at the Initial Closing;

 

(ix)         there having been no Material Adverse Effect in the business, assets, technology, legal or financial aspects of the Group Companies since June 6, 2021; and

 

(x)         delivery by the Company of a confirmation letter to such Investor stating that all the conditions as set forth in this Section 5.1 have been fulfilled.

 

(f)           CB Termination Agreement

 

The CB Termination Agreement shall have been duly executed and remain effective at the Initial Closing.

 

5.2

Conditions to the Investors’ Obligations at the Final Closing

 

Each Investor’s obligation to purchase the Final Closing Purchased Shares at the Final Closing is subject to the fulfilment of the following conditions at or prior to the Final Closing, unless otherwise waived by such Investor prior to the Final Closing:

 

(a)

Execution and Delivery of Final Closing Transaction Documents

 

Each Warrantor shall have delivered to such Investor the Final Closing Transaction Documents to which it is a party, duly executed by all parties thereto except the Investors, provided that, with respect to the Third Restated Shareholders’ Agreement, in the case where there is one or more new investors become or propose to become the shareholder(s) of the Company after the Initial Closing and prior to the Final Closing, each Investor acknowledges and agrees that the Company shall be entitled to make necessary amendment to the form of Third Restated Shareholders’ Agreement as attached hereto as Exhibit G without the prior written consent of any Investor solely for the purpose of reflecting the joinder of such new shareholder(s) and their respective rights and obligations of such shareholder(s) and such Investor shall take all necessary actions and execute all necessary documents reflecting the foregoing amendments, as long as such amendments would not affect any rights granted to such Investor under the Exhibit G hereunder and terms and/or conditions (including purchase price per share) given to such new investors are no more favourable than those given to such Investor, unless otherwise agreed to by such Investor.

(b)

Constitutional Documents

 

The Fourth Restated Constitution set forth in Exhibit E shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors, and such adoption shall have been duly submitted for filing with the Companies Registry of the Cayman Islands as of the Final Closing as evidenced by an email confirmation from the registered agent of the Company.

 

(c)

Board of Directors

 

The Company shall have taken all necessary corporate action such that, as of the Final Closing, the board of directors of the Company shall be authorized to have no more than five members, which members shall be appointed in accordance with the Third Restated Shareholders’ Agreement and the Fourth Restated Constitution, with one member of the board of directors of the Company being jointly appointed by the Investors.

 

(d)

Representations and Warranties

 

(i)          The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the date of the Final Closing, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)         The representations and warranties made by each Warrantors contained in Exhibit C (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the date of the Final Closing, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(e)

Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Final Closing Transaction Documents to be performed or complied with such Warrantor on or prior to the Final Closing.

 

(f)

Consents

 

All internal and external authorizations, consents, approvals, etc. (if applicable) required with respect to the subscription of the Final Closing Purchased Shares under the Final Closing Transaction Documents by such Investors in the Final Closing having been obtained by the Company and such authorizations, consents, approvals, etc. (if applicable) being valid on an ongoing basis, including but not limited to the relevant written resolutions/decisions of the shareholders and the directors/board of directors of the Company respectively, consenting to the execution and performance by the Company of the proposed transactions under the Final Closing Transaction Documents for the subscription of the Final Closing Purchased Shares at the Final Closing.

(g)

No Material Adverse Effect

 

There being no Material Adverse Effect in the business, assets, technology, legal or financial aspects of the Group Companies;

 

(h)

Other Conditions

 

Each condition to the Initial Closing set forth in Section 5.1(e)(i) through (ix) having been fully fulfilled.

 

(i)

Confirmation Letter

 

The Company has delivered to such Investor a confirmation letter stating that all the conditions as set forth in this Section 5.2 have been fulfilled.

 

(j)

ODI Approvals

 

With respect to Mission Bloom, any and all of (a) the consents, filings and/or registrations with respect to Mission Bloom’s direct or indirect outbound investment to the Company with applicable governmental authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by Mission Bloom shall have been duly obtained and completed.

 

6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

6.1

Conditions to the Company’s Obligations at the Initial Closing

 

The Company’s obligation to sell and issue the Initial Closing Purchased Shares at the Initial Closing is subject to the fulfilment of each of the following conditions at or prior to the Initial Closing, unless otherwise waived by the Company in writing:

 

(a)

Representations and Warranties

 

The representations and warranties made by Mission in Section 4.2 shall be true, correct and not mis-leading as of the Effective Date and the Initial Closing in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Initial Closing Transaction Documents

 

Each of the Initial Closing Transaction Documents to which Mission is a party shall have been duly executed and delivered by Mission.

 

(c)

Covenants

 

Mission shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by Mission on or prior to the Initial Closing.

(d)

CB Termination Agreement

 

The CB Termination Agreement shall have been duly executed and remain effective at the Initial Closing.

 

6.2

Conditions to the Company’s Obligations at the Final Closing

 

The Company’s obligation to sell and issue the Final Closing Purchased Shares at the Final Closing is subject to the fulfilment of the following conditions at or prior to the Final Closing, unless otherwise waived by the Company in writing:

 

(a)

Representations and Warranties

 

Representations and warranties made by the Investors in the Final Closing in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Final Closing in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Final Closing Transaction Documents

 

Each of the Final Closing Transaction Documents (with respect to the Third Restated Shareholders’ Agreement, subject to amendments made pursuant to Section 5.2(a)) to which such Investor is a party shall have been duly executed and delivered by such Investor.

 

(c)

Covenants

 

Each Investor in the Final Closing shall have performed or complied with all covenants, agreements and conditions contained in the Final Closing Transaction Documents to be performed or complied with by such Investor on or prior to the Final Closing.

 

(d)

ODI Approvals

 

With respect to Mission Bloom, any and all of (a) the consents, filings and/or registrations with respect to Mission Bloom’s direct or indirect outbound investment to the Company with applicable governmental authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by Mission Bloom shall have been duly obtained and completed.

 

7.

COVENANTS

 

7.1

Interim Covenants

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the date of the Initial Closing, to Mission:

 

(a)

to maintain the normal operation and management of the Group Companies;

 

(b)

that there shall be no change of Control of any of the Group Companies without the written consent of the Investors (change of Control of the Group Companies occurs if the shareholding percentage of the Company being held by the Offshore Founder Holdco is less than that of any other shareholder of the Company, or where the Key Person is no longer able to determine or influence the operation of the Group Companies, excluding, for the avoidance of doubt, restructuring conducted for the purpose of the Restructuring Goals);

(c)

to ensure that the Related Party Transactions entered into by the Group Companies are priced fairly and in accordance with its related-party transaction decision-making process and authorization and approval mechanism;

 

(d)

without the written consent of the Investors, the Group Companies shall not materially amend or early terminate the following material agreements that have been entered into and that have a material impact on the Principal Business of the Group Companies. Such agreements include (i) the Production Site Cooperation Agreement; (ii) the Wuhan Headquarter Investment Agreement;

 

(e)

if the Wuhan Development Zone Administrative Committee or its designated entity's RMB 3 billion convertible loan to Lotus Technology or the Wuhan Development Zone Administrative Committee or its designated entity's equity interest in the Company or any other Group Company constitutes a material impediment to the Company's overseas listing (including causing a delay in the Company's overseas listing), Lotus Technology and Offshore Founder Holdco shall use their best reasonable commercial efforts to remove such impediment; and

 

(f)

without the written consent of the Investors, the Group Companies shall not materially change its Principal Business and shall not dispose of its principal assets or business outside the scope of its normal business operations.

 

7.2

Post-Closing Covenants

 

Each of the Warrantors jointly and severally covenants to the applicable Investor after the relevant Closing:

 

(a)          the Lotus Technology shall reach a written agreement with the Wuhan Development Zone Administrative Committee or its designated entity on the key terms of the Wuhan Development Zone Administrative Committee's RMB 3 billion convertible loan to Lotus Technology under the Wuhan Headquarter Investment Agreement (including the interest rate of the convertible loan, the conditions to conversion, the conversion amount, the pre-investment valuation of the Group Companies and the redemption terms (if any));

 

(b)          two Hong Kong Affiliates of Lotus Technology and Group Lotus Limited shall enter into the Trademarks License Agreements no later than the end of the sixth (6) months after the Initial Closing;

 

(c)          it shall deliver to the Investors the direct and indirect shareholding structure of Offshore Founder Holdco and the structure of the Group Companies as well as the basic information on each Group Company; and

 

(d)          the Group Companies shall comply with applicable laws in all material respects, including applicable laws related to their manufacture, distribution and after-sale of the Lifestyle Vehicles and no Group Company shall commit a material infringement of any intellectual property right of any third party.

8.

INDEMNITY

 

8.1

General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

 

8.2

Liability Limitations

 

The following limitations on liabilities shall apply:

 

(a)          the Warrantors shall have no obligation to indemnify Investors for any individual claim by the Investors arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed RMB 5,000,000 (“Individual Claim Loss Threshold”);

 

(i)          the Warrantors shall have no obligation to indemnify the Investors unless the aggregate amount of all such Individual Claims made by the Investors under the Transaction Documents exceed RMB 20,000,000 (the “Claim Loss Threshold”). If the aggregate Losses exceed the Claim Loss Threshold, the Warrantors shall be liable for the entire amount exceeding the Individual Claim Loss Threshold;

 

(ii)         the aggregate liability of the Warrantors as indemnifier to the Investors arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)        an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

 

(b)          (i) The Fundamental Warranties shall survive each Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Final Closing until the second anniversary of the date of Final Closing.

 

9.

MISCELLANEOUS

 

9.1

Successors and Assigns; No Third-Party Beneficiary

 

(a)

Each Party (save for the Investors) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

9.2

Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company and Offshore Founder Holdco

******

 

The Investors

******

 

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)          if delivered, on the date of delivery;

 

(ii)         if sent by post, on the seventh day after it was put into the post; or

 

(iii)        if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

9.3

Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by any Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

 

(f)

Without prejudice to any other rights or remedies that the Investors may have, the Parties acknowledge and agree that damages alone would not be an adequate remedy for any breach of the terms of this Agreement. Accordingly, the Parties shall be entitled to the remedies of injunctions, specific performance or other suitable relief for any threatened or actual breach of this Agreement.

 

9.4

Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or any Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or any Investor of any breach or default under this Agreement or any waiver on the part of the Company or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or any Investor shall be cumulative and not alternative.

 

9.5

Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them, provided that in addition and without prejudice to any other rights and remedies available to each Party, if (i) the Initial Closing occurs, or (ii) the Initial Closing does not occur due to any reason not attributable to the Investors, the Company shall fully reimburse the Investors on demand for all costs and expenses incurred by the Investors relating to the negotiation, preparation (including conduct of due diligence), execution and performance of this Agreement, the Convertible Loan Agreement, and all ancillary documents and matters contemplated herein and therein, no more than an amount of RMB2,000,000.

9.6

Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

9.7

Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

 

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8

Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)

the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)

the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

 

9.9

Confidentiality

 

(a)

Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)

the negotiations concerning this Agreement;

 

(2)

the provisions of the Transaction Documents;

 

(3)

the subject matter of the Transaction Documents; or

 

(4)

the other Parties.

 

(b)

Duty of confidentiality

 

Save as permitted by Section 9.9 (c), each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

(c)

Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)          to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)          to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Initial Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(3)          when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)          to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 9;

 

(5)          if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)          when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)          in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realised by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

 

(d)

Continuance of obligations

 

The obligations in this Section 9 shall continue to apply after termination of this Agreement without limit in time.

9.10

Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11

Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investors and the Company.

 

9.12

Governing Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

9.13

Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14

Termination of This Agreement

 

(a)          This Agreement may be terminated (i) prior to the Initial Closing by mutual written consent of all Parties; (ii) prior to the Initial Closing by Mission or the Company, if the Initial Closing fails to occur within thirty (30) days after the Effective Date (the “Initial Long Stop Date”, provided the right to terminate this Agreement under this Section 9.14(a)(ii) shall not be available to such Party if its failure to fulfil any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Initial Closing to occur on or prior to the Initial Long Stop Date) (in which case this Agreement in its entirety shall terminate, subject to Section 9.14(d)); (iii) by the Company or any Investor if the Final Closing fails to occur on or prior to April 30, 2022 (the “Final Long Stop Date”), provided the right to terminate this Agreement under this Section 9.14(a)(iii) shall not be available to such Party if its failure to fulfil any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Final Closing to occur on or prior to the Final Long Stop Date (for the avoidance of doubt, the application for the consents, filings and/or registrations with respect to Mission Bloom’s parent company’s outbound investment to the Company fails to be completed on or prior to April 30, 2022 shall be regarded as Mission Bloom’s failure to fulfil the obligation under this Agreement, and therefore the Investors shall not be granted the right to terminate the Agreement under such occasion) (in which case only the provisions relating to the issuance and purchase of the Final Closing Purchased Shares with respect to the relevant Investor shall terminate while the other provisions shall remain effective and legally binding); (iv) prior to the Initial Closing by either the Company, on the one hand, or any Investor, on the other hand by written notice to the other Parties if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of the Investors or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within twenty (20) Business Days of such notice.

(b)          If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)          Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

 

(d)          Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 8 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9 (Confidentiality), Section 9.11 (Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

 

9.15

Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16

Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	Lotus Technology Inc.
	By	/s/ FENG Qingfeng
	Name:

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	OFFSHORE FOUNDER HOLDCO
	Lotus Advanced Technology Limited Partnership
	By	/s/ FENG Qingfeng
	Name:

IN WITNESS WHEREOPF, the Parties hereto have executed this Agreement as of the date first above written.

 

	MISSION
	Mission Purple L.P.
	By	/s/ Ning YU
	Name:	Ning YU

 

Lotus Technology Inc.

Signature Page to Amended and Restated Series Pre-A Preferred Share Purchase Agreement

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	MISSION BLOOM
	Mission Bloom Limited
	By	/s/ Ning Yu
	Name:	Ning Yu

 

Lotus Technology Inc.

Signature Page to Amended and Restated Series Pre-A Preferred Share Purchase Agreement

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

 

(For the avoidance of doubt,

1.

“Post Share Dividend” column under the heading “Initial Closing” of this Exhibit A reflects the adjustments to the number of Series Pre-A Preferred Shares due to the share dividend contemplated to be declared by the Company or declared by the Company as of the date of this Agreement;

2.

this Exhibit A shall be updated pursuant to Section (d)2.2(d) to reflect the number of Portion Final Closing Purchased Shares to be purchased and the amount of the Portion Final Closing Purchase Price to be paid as set forth in any Acceleration Notice for any Additional Closing.)

 

Initial Closing

 

				Number of Series Pre-A Preferred Shares
Investor		Jurisdiction and Registered Office		Prior to Share Dividend		Post Share Dividend		Purchase Price
MISSION  PURPLE  L.P.		an exempted limited partnership registered in the British Virgin islands with its registered office at ******		2,407,778		24,077,780		RMB150,000,000 Paid via conversion of the Loan Amount disbursed under the Convertible Loan Agreement

 

Final Closing (including Additional Closing)

 

Investor		Jurisdiction and Registered Office		Number of Series Pre-A Preferred Shares		Purchase Price		Timing
MISSION PURPLE L.P.		an exempted limited partnership registered in the British Virgin islands with its registered office at ******		75,906,798		RMB 472,885,000		Additional Closing
MISSION BLOOM LIMITED		an exempted limited company registered in the British Virgin Islands with its registered office at ******		60,533,941		RMB 377,115,000		Final Closing

 

 

 

EXHIBIT B

 

THIRD RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT C

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT D

 

INDEMNIFICATON AGREEMENT

 

[***]

 

 

EXHIBIT E

 

FOUTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT F

 

SECOND RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT G

 

THIRD RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT H

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT I

 

KEY MANAGEMENT STAFF

 

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.21

 

LOTUS TECHNOLOGY INC.

 

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

July 8, 2022

Table of Contents

 

1.	DEFINITIONS	1
2.	SALE AND PURCHASE	7
3.	CLOSING	7
4.	REPRESENTATIONS AND WARRANTIES	8
5.	CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS	10
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	11
7.	COVENANTS	12
8.	INDEMNITY	13
9.	MISCELLANEOUS	14

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Warrantors’ Representations and Warranties

 

Exhibit C: Fifth Restated Constitution

 

Exhibit D: Fourth Restated Shareholders’ Agreement

 

Exhibit E: Disclosure Schedule

 

Exhibit F: Key Management Staff

 

Exhibit G: Form of Joinder Agreement

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 8, 2022 (“Effective Date”), by and among:

 

(1)         the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

 

(2)         Lotus Advanced Technology Limited Partnership, a limited partnership incorporated under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)         Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 2,142,922,222 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles (as defined below) of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

 

C.

Subject to the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), at the Closing, the Company desires to issue and sell to each Investor, and each Investor desires to purchase from the Company, such number of Preferred Shares set forth opposite such Investor’s name on the Schedule of the Investors attached hereto.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

 

“Circular 37” means the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment and Financing and Round-Trip Investment via Special Purpose Companies (  ) issued by SAFE on July 4, 2014, as amended, and its relevant or supplementing rules and regulations.

 

“Control Documents” means collectively (i) the Exclusive Call Option Agreement (  ) entered into by and among the WFOE, the Domestic Company and each nominee shareholder of the Domestic Company; (ii) the Exclusive Consulting and Service Agreement (  ) entered into by and between the Domestic Company and the WFOE; (iii) the Equity Pledge Agreement (  ) entered into by and among the WFOE, the Domestic Company, and each nominee shareholder of the Domestic Company; (iv) the Loan Agreement (  ) entered into by and among the WFOE and the Domestic Company; (v) the Power of Attorney (  ) issued by each nominee shareholder of Domestic Company; (v) the Spouse Consent Letters (  ) issued by the spouse of FENG Qingfeng (  ), LI Donghui (  ), LI Shufu (  ) each entered into or issued on March 8, 2022, and any amendment or supplement thereto.

 

“Domestic Company” means Wuhan Lotus E-Commerce Co., Ltd. (  ). 

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

 

“Fifth Restated Constitution” means the fifth amended and restated memorandum and articles of association of the Company substantially in the form as set forth in Exhibit C adopted as of the Closing.

 

“Fourth Restated Shareholders’ Agreement” means the fourth amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and the Investors substantially in the form as set forth in Exhibit D, which is to take effect from the Closing.

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, and 17 in Exhibit B.

 

“Group Companies” or “Group” means:

 

(a)           the WFOE;

 

(b)           Entities Controlled by the WFOE;

 

(c)           the Company; and

(d)          any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Majority Series A Investors” means the shareholder(s) of the Company holding more than fifty percent (50%) of the outstanding Series A Preferred Shares.

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person’s entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person’s control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the Closing Date; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) - (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

“Ordinary Shares” means ordinary shares in the capital of the Company. “Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, London Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, or any other stock exchange or quotation system that is approved in writing by MISSION PURPLE L.P. and Majority Series A Investors, that implies a post-offering market capitalization of the Company (on a fully-diluted basis) upon the consummation of such offering of not less than the Qualified Valuation. Notwithstanding the foregoing, any listing of the Shares of the Company not meeting the requirements above but in no event less than US$5.5 billion may nevertheless be deemed to be a Qualified IPO with the vote or written consent of Mission and Majority Series A Investors.

 

“Qualified Valuation” means a post-offering market capitalization of the Company that is at least: (a) US$5.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated on or before the third (3^rd) anniversary of the Closing Date; (b) US$6.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the third (3^rd) anniversary of the Closing Date and the fourth (4^th) anniversary of the Closing Date (inclusive); (c) US$10 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the fourth (4^th) anniversary of the Closing Date and the fifth (5^th) anniversary of the Closing Date (inclusive).

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

 

“RMB” means the lawful currency of the People’s Republic of China.

 

“SAMR” means the State Administration for Market Regulation of the PRC or its local counterpart, or, with respect to any matter to be submitted for examination by and registration with the Administration for Market Regulation of the PRC, any Governmental Authority which is similarly competent to examine and register such matter under the Laws of the PRC.

“Series A Preferred Shares” means redeemable convertible Series A preferred shares in the share capital of the Company, having the terms and conditions in the Fourth Shareholders’ Agreement and the Fifth Restated Constitution, each as amended from time to time.

 

“Transaction Documents” means this Agreement, the Fourth Restated Shareholders’ Agreement and the Fifth Restated Constitution.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors” means the Company and the Offshore Founder Holdco collectively and “Warrantor” means any one of them.

 

“WFOE” means Wuhan Lotus Technology Co., Ltd. (  ).

 

1.2

Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Action	Section 9.1 of Exhibit B
Agreement	Preamble
Balance Sheet Date	Section 10.1 of Exhibit B
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 3.1
Closing Date	Section 3.1
Company	Preamble
Company Real Properties	Section 12.2 of Exhibit B
Company Intellectual Properties	Section 12.3 of Exhibit B
Company Licensed IP	Section 12.3(v) of Exhibit B
Confidential Information	Section 9.9(a)
Charter Documents	Section 8.2 of Exhibit B
Designated Account	Section 3.3(a)
Disclosure Schedule	Section 4.1
Effective Date	Preamble
Financial Statements	Section 10.1 of Exhibit B
Governmental Authority”	Section 7 of Exhibit B
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Individual Claim	Section 8.2(a)
Investor or Investors	Preamble
Indebtedness	Section 10.1 of Exhibit B
Knowledge	Section 9.1 of Exhibit B
Liability	Section 10.1 of Exhibit B

Losses	Section 8.1
Long Stop Date	Section 9.14(a)
Lien	Section 4 of Exhibit B
Material Contract	Section 8.2 of Exhibit B
Party or Parties	Preamble
Principal Business	Recitals
Purchase Price	Section 2.2(a)
Purchased Shares	Section 2.2(a)
Schedule of the Investors	Preamble
Social Insurances	Section 13.1 of Exhibit B
Subsidiary	Section 6 of Exhibit B
Subject Entity	Section 6 of Exhibit B
Tax Return	Section 14 of Exhibit B
Offshore Founder Holdco	Preamble

 

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)            unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(ii)           any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)          dates and times are to PRC time;

 

(iv)          reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)           unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)          headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)         Person includes any individual, firm, company or other incorporated or unincorporated body;

 

(viii)        in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)          Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the British Virgin Islands, the Cayman Islands and Hong Kong;

(x)           anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)          agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)         including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)        other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)        law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

 

2.

SALE AND PURCHASE

 

2.1           Authorization

 

As of the Closing, the Company will have authorized the sale and issuance of the Purchased Shares (as defined below) to the respective Investors.

 

2.2           Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)           at the Closing, each Investor hereby agrees to subscribe for and purchase from the Company, and the Company agrees to issue and sell to such Investor that number of Series A Preferred Shares set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchased Shares”), against the consideration set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchase Price”).

 

(b)          The Company’s agreement with each Investor is a separate agreement, and the sale and issuance of the Purchased Shares to each Investor is a separate sale and issuance. For the avoidance of doubt, each Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

 

3.

CLOSING

 

3.1           Closing

 

The consummation of the purchase and sale of the Purchased Shares (the “Closing”, with respect to each Investor, referred to the issuance of the respective Purchased Shares to such Investor by the Company; and the date of the Closing, the “Closing Date”) shall be conducted by exchange of documents, on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions to the Closing as set forth in Section 5 and Section 6 respectively, or at such other place and time as the Company and the applicable Investor may mutually agree upon.

3.2          Company’s Closing Deliverables

 

At the Closing, in addition to any items the delivery of which is made as an express condition to each applicable Investor’s obligations at such Closing pursuant to Section 5, the Company shall deliver to each Investor:

 

(a)          a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors;

 

(b)          a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A registered in the name of such Investor, certified by a director of the Company as true and complete as of the Closing Date (with the original of the share certificate delivered to such Investor as soon as practical after the Closing Date).

 

3.3          Payment of the Purchase Price

 

(a)          At the Closing, each Investor shall pay its Investment Amount by wire transfer in immediately available funds of US$ to a bank account designated by the Company (“Designated Account”), the details of which shall be provided by the Company to the Investors pursuant to Section 5.

 

(b)          The exchange rate for the Purchase Price to be paid by Investors shall be RMB 6.7098 per U.S. Dollar.

 

4.

REPRESENTATIONS AND WARRANTIES

 

4.1      Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to each Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date; (b) each of the statements contained in Exhibit B (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date.

 

4.2      Representations and Warranties of Investors

 

Each Investor hereby represents and warrants to the Warrantors, severally and not jointly, that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the Closing Date (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

 

(a)           it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s assets;

(b)          it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

 

(c)          the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

 

(d)         The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

 

(e)         Such Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the purchase of the applicable Purchased Shares and can bear the economic risk of its investment in the Purchased Shares.

 

(f)          All Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor, have been duly obtained or completed (as applicable) and are in full force and effect.

 

(g)         Such Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed decision with respect to the purchase of the Purchased Shares. Such Investor has had an opportunity to ask questions and receives answers from the Company regarding the terms and conditions of the offering of the Purchased Shares and the business, properties, prospects and financial condition of the Group Companies.

(h)          Such Investor has sufficient self-owned funds or financing sources to make payments of funds and relevant fees set out in this Agreement and capacity to obtain and maintain the financing for the purpose of completion of the transactions contemplated in this Agreement. The source of such Investor’s funds for the fulfilment of this Agreement is fully lawful, and shall not infringe any third parties’ lawful rights and interests.

 

5.            CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS

 

The obligation of an Investor to consummate its respective Closing under Section 3 of this Agreement is subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor in writing (for the avoidance of any doubt, Section 5(h) shall in no event be waived):

 

(a)           Execution and Delivery of Transaction Documents

 

Each Warrantor shall have delivered to such Investor each of the Transaction Documents to which it is a party, duly executed by all parties thereto except such Investor.

 

(b)          Constitutional Documents

 

The Fifth Restated Constitution substantially in the form set forth in Exhibit C shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors.

 

(c)           Representations and Warranties

 

(i)            The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)           The representations and warranties made by each Warrantor contained in Exhibit B (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)          Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Transaction Documents to be performed or complied with by such Warrantor on or prior to the Closing Date.

 

(e)           Proceedings and Documents

 

All corporate and other proceedings of the Group Companies and necessary authorizations in connection with the transactions contemplated hereby at the Closing shall have been duly obtained or completed. The Company has delivered to each Investor the copies of the aforementioned documentation.

(f)           No Material Adverse Effect

 

Since the date of this Agreement, the Company shall not have suffered a Material Adverse Effect.

 

(g)          Consents, Permits, and Waivers

 

The Company shall have obtained any and all Permits and waivers necessary for consummation of the transactions contemplated by each Transaction Document.

 

(h)          ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

 

(i)           Bank Account Information

 

The Company shall have provided the information of the Designated Account and wiring instruction to such Investor.

 

(j)           Compliance Certificate

 

The Warrantors shall deliver to the Investor a certificate certified by a director of the Company certifying that the conditions specified in Section 5 (except for Section 5(h)) have been fulfilled at the time of issuance of such certificate.

 

6.            CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

The obligations of the Company under this Agreement to consummate the Closing with respect to the Investors are subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by the Company (for the avoidance of any doubt, Section 6(d) shall in no event be waived):

 

(a)          Representations and Warranties

 

The representations and warranties made by the Investors in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Closing Date in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)          Execution and Delivery of Transaction Documents

 

Subject to Section 7.3, each Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.

 

(c)          Covenants

 

Such Investor shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Investor on or prior to the Closing Date.

(d)          ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

 

7.           COVENANTS

 

7.1         Interim Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the Closing Date, to each Investor to maintain the normal operation and management of the Group Companies.

 

7.2         Post-Closing Covenants of the Warrantors

 

7.2.1        Each of the Warrantors jointly and severally covenants to the applicable Investor after the Closing Date that the Group Companies shall comply with applicable laws in all material respects.

 

7.2.2        The Company shall execute an employment agreement with each Key Management Staff, containing confidentiality, non-competition, non-solicitation and invention assignment provisions consistent with market practice as soon as possible but in no event shall be later than one (1) month after the Closing Date.

 

7.2.3        The Company shall, and the Warrantors shall procure the Company to, take reasonable measures to ensure that its Qualified IPO will not be materially advisedly affected by noncompliance with regulations of stock exchanges and security regulators on horizontal competition or related-party transactions as soon as practical, in particular, the Company shall cause a manufacturing cooperation agreement to be entered into by and between a Group Company and Zhejiang Geely Holding Group Limited (or its designated Affiliate(s)) as soon as practical but no later than two (2) months after the Closing.

 

7.2.4        The Warrantors shall cause the Fifth Restated Constitution to be duly submitted for filing with the appropriate corporate registration authority(ies) of the Cayman Islands as soon as practicable after the Closing Date, and in any event within thirty (30) Business Days of the Closing Date.

 

7.2.5        The Company shall, and the Warrantors shall cause the Company to, use the proceeds from the issuance and sale of the Purchased Shares for purposes of business operations, business development, investment in related business, and general working capital needs of the Group Companies or otherwise as approved by the Board or the shareholders (as applicable) in accordance with the Transaction Documents.

 

7.2.6        The Warrantors shall, on a continuous basis, use their reasonable best efforts to, and to urge their respective direct or indirect owners of their shares or equity interest, of record or beneficial, to duly comply with Circular 37 and other applicable PRC laws, to the extent applicable, with respect to such person’s direct and indirect of record or beneficiary ownership of the shares or equity interest in the Company and each other Group Company.

7.3         Covenants of the Investors

 

In the case where an additional Investor (as prescribed in Section 9.17) proposes to amend the Fourth Restated Shareholders’ Agreement solely for the purpose of reflecting the joinder of such additional Investor as a new shareholder and its respective rights, privileges, liabilities and obligations, without prejudice to the rights and privileges entitled to any existing parties under the Fourth Restated Shareholders’ Agreement, each of the Investors shall take all necessary actions and execute all necessary documents to consummate the foregoing amendments.

 

8.           INDEMNITY

 

8.1         General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

 

8.2         Liability Limitations

 

The following limitations on liabilities shall apply:

 

(a)            the Warrantors shall have no obligation to indemnify Investors for any individual claim by the Investors arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed 0.5% of the Investment Amount of such Investor”);

 

(i)           the Warrantors shall have no obligation to indemnify the Investors unless the aggregate amount of all such Individual Claims made by the Investors under the Transaction Documents exceed 2% of the Investment Amount of such Investor (the “Claim Loss Threshold”) (in which event the liability of the Warrantors shall be limited to the amount by which such aggregate amount exceeds that figure);

 

(ii)           the aggregate liability of the Warrantors as indemnifier to the Investors arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)          an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

 

Notwithstanding any other provision to the contrary in this Agreement, no limitations on the Warrantors’ liability shall apply in the case of fraud or intentional misrepresentation by the Warrantors.

(b)          (i) The Fundamental Warranties shall survive the Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Closing until the second anniversary of the Closing Date. No claim for breach of any representation or warranty or covenant may be brought by the Investors unless a claim has been raised in writing before the end of the survival period, and its formal proceedings have commenced within six (6) months after the end of the survival period set forth in this Section 8.2(b).

 

9.           MISCELLANEOUS

 

9.1          Successors and Assigns; No Third-Party Beneficiary

 

(a)

Each Party (save for the Investors) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

 

9.2          Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company and Offshore Founder Holdco

 

Address:

 

****** 

 

The Investor

 

Skymacro Resources Limited

 

******

 

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)               if delivered, on the date of delivery;

(ii)

if sent by post, on the seventh day after it was put into the post; or

 

(iii)

if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

 

9.3         Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by any Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

 

9.4         Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or any Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or any Investor of any breach or default under this Agreement or any waiver on the part of the Company or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or any Investor shall be cumulative and not alternative.

9.5         Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them.

 

9.6         Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

9.7         Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

 

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8         Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)          the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)          the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

 

9.9         Confidentiality

 

(a)           Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)           the negotiations concerning this Agreement;

 

(2)           the provisions of the Transaction Documents;

 

(3)           the subject matter of the Transaction Documents; or

 

(4)           the other Parties.

(b)           Duty of confidentiality

 

Save as permitted by Section 9.9 (c), each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

 

(c)           Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)           to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)           to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(3)           when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)           to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 9;

 

(5)          if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)           when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)           in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realized by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

 

(d)          Continuance of obligations

 

The obligations in this Section 9 shall continue to apply after termination of this Agreement without limit in time.

9.10        Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11        Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investors and the Company.

 

9.12        Governing Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

9.13        Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14        Termination of This Agreement

 

(a)           This Agreement may be terminated prior to the Closing (i) by mutual written consent of all Parties; (ii) by either the Company, on the one hand, or such Investor, on the other hand if the Closing fails to occur on or prior to September 30, 2022,_(the “Long Stop Date”) (however, with respect to the onshore RMB Investor, the Long Stop Date would be automatically extended to October 31, 2022 if the application for the consents, filings and/or registration with respect to such onshore RMB Investor’s outbound investment to the Company have been submitted to and accepted by the Governmental Authority prior to September 30, 2022), provided that neither the Company nor such Investor shall be permitted to terminate this Agreement if the failure to consummate the Closing was caused by the breach by such Party of any material representation, warranty or covenant in this Agreement (for the avoidance of any doubt, in case where the application for the consents, filings and/or registrations with respect to the onshore RMB Investor’s outbound investment to the Company fails to be completed on or prior to the Long Stop Date, such onshore RMB Investor shall be regarded as failed to fulfil the obligation under this Agreement, and therefore such onshore RMB Investor shall not be granted the right to terminate the Agreement under such occasion) (for further avoidance of any doubt, the termination shall only become effective to and binding on such relevant Investor); or (iii) by either the Company, on the one hand, or any Investor, on the other hand (and only with respect to such Investor) by written notice to the other Party if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of such Investor or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within ten (10) Business Days of such notice (for the avoidance of any doubt, the termination shall only become effective to and binding on such breaching Investor ).

(b)           If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)           Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

 

(d)           Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 8 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9     (Confidentiality), Section 9.11 (Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

 

9.15       Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16       Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

9.17       Additional Investors

 

Any person who, after the date hereof, agrees to subscribe for and purchase from the Company Series A Preferred Shares at the same per share purchase price as that applicable to the Investor hereof and executes and delivers to the Company a duly executed joinder agreement in the form attached hereto as Exhibit G (“Joinder Agreement”) (where such delivery is accepted by the Company) shall be deemed to be a party to this Agreement from the date of such delivery and shall be afforded the applicable rights and be subject to the responsibilities and liabilities under this Agreement as a “Party” and/or an “Investor” (as the case may be) hereunder, provided that such Joinder Agreement shall be entered into on or prior to September 30, 2022 (or such other date as the Company and the Investor hereof may mutually agree upon), whereupon the Schedule of the Investors as attached hereto as Exhibit A shall be deemed to have updated with the information of such person as set forth in the Joinder Agreement. No action or consent by the Parties shall be required for such joinder to this Agreement by such additional Investor. The Parties shall take all necessary actions and execute all necessary documents to effect the foregoing (including without limitation, voting in favour of and giving all its consents and approvals as may be required with respect to the joinder of such additional Investors and their subscription of Series A Preferred Shares pursuant to the Joinder Agreement to which such additional Investor is a party thereof).

In terms of such person who becomes an additional Investor hereunder by executing a Joinder Agreement, the Effective Date applicable to such additional Investor shall be the date when such Investor executes and delivers the Joinder Agreement to the Company and such delivery is accepted by the Company.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	OFFSHORE FOUNDER HOLDCO
	Lotus Advanced Technology Limited Partnership
	By:	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	Lotus Technology Inc.
	By:	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	SERIES A INVESTOR
	Skymacro Resources Limited
	By:	/s/ Wang Peng
	Name:	Wang Peng
	Title:	Director

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

 

Investor		Jurisdiction and Registered Office		Number of Series A Preferred Shares		Purchase Price
SKYMACRO RESOURCES LIMITED		a business company incorporated under the laws of British Virgin Islands with its registered office at ******		15,906,391		US$ 25,000,000

 

 

EXHIBIT B

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT C

 

FIFTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT D

 

FOURTH RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT E

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT F

 

KEY MANAGEMENT STAFF

 

[***]

 

 

EXHIBIT G

 

FORM OF KOINDER AGREEMENT

 

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.22

 

LOTUS TECHNOLOGY INC.

 

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

August 29, 2022

Table of Contents

1.	DEFINITIONS	1
2.	SALE AND PURCHASE	7
3.	CLOSING	7
4.	REPRESENTATIONS AND WARRANTIES	8
5.	CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS	9
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	11
7.	COVENANTS	11
8.	INDEMNITY	12
9.	MISCELLANEOUS	13

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Warrantors’ Representations and Warranties

 

Exhibit C: Fifth Restated Constitution

 

Exhibit D: Fourth Restated Shareholders’ Agreement

 

Exhibit E: Disclosure Schedule

 

Exhibit F: Key Management Staff

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of August 29, 2022 (“Effective Date”), by and among:

 

(1)           the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

 

(2)           Lotus Advanced Technology Limited Partnership, a limited partnership incorporated under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)           Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 2,142,922,222 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles (as defined below) of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

 

C.

Subject to the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), at the Closing, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, such number of Preferred Shares set forth opposite such Investor’s name on the Schedule of the Investors attached hereto.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

“Circular 37” means the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment and Financing and Round-Trip Investment via Special Purpose Companies (《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》) issued by SAFE on July 4, 2014, as amended, and its relevant or supplementing rules and regulations.

 

“Control Documents” means collectively (i) the Exclusive Call Option Agreement (《独家购买权协议》) entered into by and among the WFOE, the Domestic Company and each nominee shareholder of the Domestic Company; (ii) the Exclusive Consulting and Service Agreement (《独家咨询与服务协议》) entered into by and between the Domestic Company and the WFOE, (iii) the Equity Pledge Agreement (《股权质押协议》) entered into by and among the WFOE, the Domestic Company, and each nominee shareholder of the Domestic Company, (iv) the Loan Agreement (《借款协议》) entered into by and among the WFOE and the Domestic Company; (v) the Power of Attorney (《授权委托书》) issued by each nominee shareholder of Domestic Company, (vi) the Spouse Consent Letters (《配偶同意函》) issued by the spouse of FENG Qingfeng (冯擎峰), LI Donghui (李东辉), LI Shufu (李书福), each entered into or issued on March 8, 2022, and any amendment or supplement thereto.

 

“Domestic Company” means Wuhan Lotus E-Commerce Co., Ltd. (武汉路特斯电子商务有限公司).

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

 

“Fifth Restated Constitution” means the fifth amended and restated memorandum and articles of association of the Company substantially in the form as set forth in Exhibit C adopted as of the Closing.

 

“Fourth Restated Shareholders’ Agreement” means the fourth amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and the Investors substantially in the form as set forth in Exhibit D, which is to take effect from the Closing.

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, and 17 in Exhibit B.

 

“Group Companies” or “Group” means:

 

(a)

the WFOE;

 

(b)

Entities Controlled by the WFOE;

(c)

the Company; and

 

(d)        any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Majority Series A Investors” means the shareholder(s) of the Company holding more than fifty percent (50%) of the outstanding Series A Preferred Shares.

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person’s entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person’s control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the Closing Date; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) - (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

“Ordinary Shares” means ordinary shares in the capital of the Company.

 

“Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, London Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, or any other stock exchange or quotation system that is approved in writing by MISSION PURPLE L.P. and Majority Series A Investors, that implies a post-offering market capitalization of the Company (on a fully-diluted basis) upon the consummation of such offering of not less than the Qualified Valuation. Notwithstanding the foregoing, any listing of the Shares of the Company not meeting the requirements above but in no event less than US$5.5 billion may nevertheless be deemed to be a Qualified IPO with the vote or written consent of Mission and Majority Series A Investors.

 

“Qualified Valuation” means a post-offering market capitalization of the Company that is at least: (a) US$5.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated on or before the third (3rd) anniversary of the Closing Date; (b) US$6.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the third (3rd) anniversary of the Closing Date and the fourth (4th) anniversary of the Closing Date (inclusive); (c) US$10 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the fourth (4th) anniversary of the Closing Date and the fifth (5th) anniversary of the Closing Date (inclusive).

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

 

“RMB” means the lawful currency of the People’s Republic of China.

 

“SAMR” means the State Administration for Market Regulation of the PRC or its local counterpart, or, with respect to any matter to be submitted for examination by and registration with the Administration for Market Regulation of the PRC, any Governmental Authority which is similarly competent to examine and register such matter under the Laws of the PRC.

“Series A Preferred Shares” means redeemable convertible Series A preferred shares in the share capital of the Company, having the terms and conditions in the Fourth Shareholders’ Agreement and the Fifth Restated Constitution, each as amended from time to time.

 

“Transaction Documents” means this Agreement, the Fourth Restated Shareholders’ Agreement and the Fifth Restated Constitution.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors” means the Company and the Offshore Founder Holdco collectively and “Warrantor” means any one of them.

 

“WFOE” means Wuhan Lotus Technology Co., Ltd. (武汉路特斯科技有限公司).

 

1.2          Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Agreement	Preamble
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 3.1
Closing Date	Section 3.1
Company	Preamble
Designated Account	Section 3.3
Disclosure Schedule	Section 4.1
Effective Date	Preamble
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Individual Claim	Section 8.2(a)
Investor or Investors	Preamble
Long Stop Date	Section 9.14(a)
Losses	Section 8.1
Lotus Technology	Recitals
Party or Parties	Preamble
Principal Business	Recitals
Purchase Price	Section 2.2(a)
Purchased Shares	Section 2.2(a)
Schedule of the Investors	Preamble
Offshore Founder Holdco	Preamble

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)          unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(ii)         any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)        dates and times are to PRC time;

 

(iv)        reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)         unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)        headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)       Person includes any individual, firm, company or other incorporated or unincorporated body;

 

(viii)      in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)        Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the British Virgin Islands, the Cayman Islands and Hong Kong;

 

(x)         anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)        agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)       including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)      other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)      law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

2.

SALE AND PURCHASE

 

2.1          Authorization

 

As of the Closing, the Company will have authorized the sale and issuance of the Purchased Shares (as defined below) to the respective Investors.

 

2.2          Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)         at the Closing, the Investor hereby agrees to subscribe for and purchase from the Company, and the Company agrees to issue and sell to such Investor that number of Series A Preferred Shares set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchased Shares”), against the consideration set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchase Price”).

 

(b)         The Company’s agreement with the Investor is a separate agreement, and the sale and issuance of the Purchased Shares to the Investor is a separate sale and issuance. For the avoidance of doubt, the Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

 

3.

CLOSING

 

3.1          Closing

 

The consummation of the purchase and sale of the Purchased Shares (the “Closing”, with respect to the Investor, referred to the issuance of the respective Purchased Shares to such Investor by the Company; and the date of the Closing, the “Closing Date”) shall be conducted by exchange of documents, on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions to the Closing as set forth in Section 4.2(h) and Section 5(f) respectively, or at such other place and time as the Company and the applicable Investor may mutually agree upon.

 

3.2          Company’s Closing Deliverables

 

At the Closing, in addition to any items the delivery of which is made as an express condition to each applicable Investor’s obligations at such Closing pursuant to Section 4.2(h), the Company shall deliver to the Investor:

 

(a)         a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors;

 

(b)        a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A registered in the name of such Investor, certified by a director of the Company as true and complete as of the Closing Date (with the original of the share certificate delivered to such Investor as soon as practical after the Closing Date).

3.3          Payment of the Purchase Price

 

(a)         At the Closing, the Investor shall pay its Investment Amount by wire transfer in immediately available funds of US$ to a bank account designated by the Company (“Designated Account”), the details of which shall be provided by the Company to the Investors pursuant to Section 5.

 

(b)         The exchange rate for the Purchase Price to be paid by Investors shall be RMB 6.7098 per U.S. Dollar.

 

4.

REPRESENTATIONS AND WARRANTIES

 

4.1          Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to the Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date; (b) each of the statements contained in Exhibit B (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date.

 

4.2          Representations and Warranties of the Investor

 

The Investor hereby represents and warrants to the Warrantors, severally and not jointly, that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the Closing Date (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

 

(a)         it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s assets;

 

(b)         it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

(c)         the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

 

(d)         The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

 

(e)         Such Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the purchase of the applicable Purchased Shares and can bear the economic risk of its investment in the Purchased Shares.

 

(f)          All Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor, have been duly obtained or completed (as applicable) and are in full force and effect.

 

(g)         Such Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed decision with respect to the purchase of the Purchased Shares. Such Investor has had an opportunity to ask questions and receives answers from the Company regarding the terms and conditions of the offering of the Purchased Shares and the business, properties, prospects and financial condition of the Group Companies.

 

(h)         Such Investor has sufficient self-owned funds or financing sources to make payments of funds and relevant fees set out in this Agreement and capacity to obtain and maintain the financing for the purpose of completion of the transactions contemplated in this Agreement. The source of such Investor’s funds for the fulfilment of this Agreement is fully lawful, and shall not infringe any third parties’ lawful rights and interests.

 

5.           CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS

 

The obligation of an Investor to consummate its respective Closing under Section 0 of this Agreement is subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor in writing:

 

(a)

Execution and Delivery of Transaction Documents

 

Each Warrantor shall have delivered to such Investor each of the Transaction Documents to which it is a party, duly executed by all parties thereto except such Investor.

(b)

Constitutional Documents

 

The Fifth Restated Constitution substantially in the form set forth in Exhibit C shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors.

 

(c)

Representations and Warranties

 

     (i)         The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

     (ii)        The representations and warranties made by each Warrantor contained in Exhibit B (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)

Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Transaction Documents to be performed or complied with by such Warrantor on or prior to the Closing Date.

 

(e)

Proceedings and Documents

 

All corporate and other proceedings of the Group Companies and necessary authorizations in connection with the transactions contemplated hereby at the Closing shall have been duly obtained or completed. The Company has delivered to the Investor the copies of the aforementioned documentation.

 

(f)

No Material Adverse Effect

 

Since the date of this Agreement, the Company shall not have suffered a Material Adverse Effect.

 

(g)

Consents, Permits, and Waivers

 

The Company shall have obtained any and all Permits and waivers necessary for consummation of the transactions contemplated by each Transaction Document,

 

(h)

Bank Account Information

 

The Company shall have provided the information of the Designated Account and wiring instruction to such Investor.

 

(i)

Compliance Certificate

 

The Warrantors shall deliver to the Investor a certificate certified by a director of the Company certifying that the conditions specified in Section 5 have been fulfilled at the time of issuance of such certificate.

6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

The obligations of the Company under this Agreement to consummate the Closing with respect to the Investors are subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by the Company:

 

(a)

Representations and Warranties

 

The representations and warranties made by the Investors in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Closing Date in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Transaction Documents

 

The Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.

 

(c)

Covenants

 

Such Investor shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Investor on or prior to the Closing Date.

 

7.

COVENANTS

 

7.1          Interim Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the Closing Date, to the Investor to maintain the normal operation and management of the Group Companies.

 

7.2          Post-Closing Covenants of the Warrantors

 

7.2.1     Each of the Warrantors jointly and severally covenants to the applicable Investor after the Closing Date that the Group Companies shall comply with applicable laws in all material respects.

 

7.2.2     The Company shall execute an employment agreement with each Key Management Staff, containing confidentiality, non-competition, non-solicitation and invention assignment provisions consistent with market practice as soon as possible but in no event shall be later than one (1) month after the Closing Date.

 

7.2.3     The Company shall, and the Warrantors shall procure the Company to, take reasonable measures to ensure that its Qualified IPO will not be materially advisedly affected by noncompliance with regulations of stock exchanges and security regulators on horizontal competition or related-party transactions as soon as practical, in particular, the Company shall cause a manufacturing cooperation agreement to be entered into by and between a Group Company and Zhejiang Geely Holding Group Limited (or its designated Affiliate(s)) as soon as practical but no later than two (2) months after the Closing.

 

7.2.4     The Warrantors shall cause the Fifth Restated Constitution to be duly submitted for filing with the appropriate corporate registration authority(ies) of the Cayman Islands as soon as practicable after the Closing Date, and in any event within thirty (30) Business Days of the Closing Date.

 

7.2.5     The Company shall, and the Warrantors shall cause the Company to, use the proceeds from the issuance and sale of the Purchased Shares for purposes of business operations, business development, investment in related business, and general working capital needs of the Group Companies or otherwise as approved by the Board or the shareholders (as applicable) in accordance with the Transaction Documents.

7.2.6     The Warrantors shall, on a continuous basis, use their reasonable best efforts to, and to urge their respective direct or indirect owners of their shares or equity interest, of record or beneficial, to duly comply with Circular 37 and other applicable PRC laws, to the extent applicable, with respect to such person’s direct and indirect of record or beneficiary ownership of the shares or equity interest in the Company and each other Group Company.

 

8.

INDEMNITY

 

8.1          General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

 

8.2          Liability Limitations

 

The following limitations on liabilities shall apply:

 

(a)             the Warrantors shall have no obligation to indemnify the Investor for any individual claim by the Investor arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed 0.5% of the Investment Amount of such Investor”);

 

(i)           the Warrantors shall have no obligation to indemnify the Investors unless the aggregate amount of all such Individual Claims made by the Investors under the Transaction Documents exceed 2% of the Investment Amount of such Investor (the “Claim Loss Threshold”) (in which event the liability of the Warrantors shall be limited to the amount by which such aggregate amount exceeds that figure);

 

(ii)          the aggregate liability of the Warrantors as indemnifier to the Investors arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)         an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

 

Notwithstanding any other provision to the contrary in this Agreement, no limitations on the Warrantors’ liability shall apply in the case of fraud or intentional misrepresentation by the Warrantors.

 

(b)            (i) The Fundamental Warranties shall survive the Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Closing until the second anniversary of the Closing Date. No claim for breach of any representation or warranty or covenant may be brought by the Investors unless a claim has been raised in writing before the end of the survival period, and its formal proceedings have commenced within six (6) months after the end of the survival period set forth in this Section 8.2(b).

9.

MISCELLANEOUS

 

9.1

Successors and Assigns; No Third-Party Beneficiary

 

(a)

Each Party (save for the Investors) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

 

9.2

Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company and Offshore Founder Holdco

 

******

 

The Investor

 

******

 

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)

if delivered, on the date of delivery;

(ii)

if sent by post, on the seventh day after it was put into the post; or

 

(iii)

if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

 

9.3

Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by the Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by the Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

 

9.4

Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or the Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or the Investor of any breach or default under this Agreement or any waiver on the part of the Company or the Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or the Investor shall be cumulative and not alternative.

9.5

Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them.

 

9.6

Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

9.7

Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

 

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8

Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)

the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)

the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

 

9.9

Confidentiality

 

(a)

Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)

the negotiations concerning this Agreement;

 

(2)

the provisions of the Transaction Documents;

 

(3)

the subject matter of the Transaction Documents; or

 

(4)

the other Parties.

(b)

Duty of confidentiality

 

Save as permitted by Section 9.9 (c), each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

 

(c)

Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)           to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)            to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(3)           when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)           to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 0;

 

(5)           if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)           when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)            in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realized by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

 

(d)

Continuance of obligations

 

The obligations in this Section 0 shall continue to apply after termination of this Agreement without limit in time.

9.10

Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11

Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investors and the Company.

 

9.12

Governing Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

9.13

Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14

Termination of This Agreement

 

(a)             This Agreement may be terminated prior to the Closing (i) by mutual written consent of all Parties; (ii) by either the Company, on the one hand, or such Investor, on the other hand if the Closing fails to occur on or prior to September 30, 2022, (the “Long Stop Date”), provided that neither the Company nor the Investor shall be permitted to terminate this Agreement if the failure to consummate the Closing was caused by the breach by such Party of any material representation, warranty or covenant in this Agreement ; or (iii) by either the Company, on the one hand, or the Investor, on the other hand by written notice to the other Party if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of such Investor or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within ten (10) Business Days of such notice.

 

(b)             If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)             Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

(d)            Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 7.2.2 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9 (Confidentiality), Section 9.11(Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

 

9.15

Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16

Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	OFFSHORE FOUNDER HOLDCO
	Lotus Advanced Technology Limited Partnership

 

By

/s/ FENG Qingfeng

 

Name:

FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	Lotus Technology Inc.

 

By

/s/ FENG Qingfeng

 

Name:

FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	SERIES A INVESTOR
	Northpole GLY 3 LP

 

By

/s/ ZHANG Quan

 

	Name:	ZHANG Quan
	Title:	Director, Northpole GLY GP1
	The General Partner of Northpole GLY 3 LP

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

 

Investor		Jurisdiction and Registered Office		Number of Series A Preferred Shares		Purchase Price
Northpole GLY 3 LP		a limited partnership registered in the Cayman Islands with its registered office at ******		12,725,113		US$ 20,000,000

 

 

EXHIBIT B

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT C

 

FIFTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT D

 

FOURTH RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT E

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT F

 

KEY MANAGEMENT STAFF

 

[***]

 

 

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.23

 

LOTUS TECHNOLOGY INC.

 

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

August 29, 2022

Table of Contents

 

1.	DEFINITIONS	1
2.	SALE AND PURCHASE	6
3.	CLOSING	7
4.	REPRESENTATIONS AND WARRANTIES	8
5.	CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS	9
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	11
7.	COVENANTS	11
8.	INDEMNITY	12
9.	MISCELLANEOUS	13

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Warrantors’ Representations and Warranties

 

Exhibit C: Fifth Restated Constitution

 

Exhibit D: Fourth Restated Shareholders’ Agreement

 

Exhibit E: Disclosure Schedule

 

Exhibit F: Key Management Staff

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of August 29, 2022 (“Effective Date”), by and among:

 

(1)            the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

  

(2)            Lotus Advanced Technology Limited Partnership, a limited partnership incorporated under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)            Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 2,142,922,222 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles (as defined below) of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

  

C.

Subject to the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), at the Closing, the Company desires to issue and sell to each Investor, and each Investor desires to purchase from the Company, such number of Preferred Shares set forth opposite such Investor’s name on the Schedule of the Investors attached hereto.

  

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

“Circular 37” means the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment and Financing and Round-Trip Investment via Special Purpose Companies (《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》) issued by SAFE on July 4, 2014, as amended, and its relevant or supplementing rules and regulations.

 

“Control Documents” means collectively (i) the Exclusive Call Option Agreement (《独家购买权协议》) entered into by and among the WFOE, the Domestic Company and each nominee shareholder of the Domestic Company; (ii) the Exclusive Consulting and Service Agreement (《独家咨询与服务协议》) entered into by and between the Domestic Company and the WFOE, (iii) the Equity Pledge Agreement (《股权质押协议》) entered into by and among the WFOE, the Domestic Company, and each nominee shareholder of the Domestic Company, (iv) the Loan Agreement (《借款协议》) entered into by and among the WFOE and the Domestic Company; (v) the Power of Attorney (《授权委托书》) issued by each nominee shareholder of Domestic Company, (vi) the Spouse Consent Letters (《配偶同意函》) issued by the spouse of FENG Qingfeng (冯擎峰), LI Donghui (李东辉), LI Shufu (李书福), each entered into or issued on March 8, 2022, and any amendment or supplement thereto.

 

“Domestic Company” means Wuhan Lotus E-Commerce Co., Ltd. (武汉路特斯电子商务有限公司).

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

 

“Fifth Restated Constitution” means the fifth amended and restated memorandum and articles of association of the Company substantially in the form as set forth in Exhibit C adopted as of the Closing.

 

“Fourth Restated Shareholders’ Agreement” means the fourth amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and the Investors substantially in the form as set forth in Exhibit D, which is to take effect from the Closing.

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, and 17 in Exhibit B.

 

“Group Companies” or “Group” means:

 

(a)

the WFOE;

 

(b)

Entities Controlled by the WFOE;

(c)

the Company; and

 

(d)

any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Majority Series A Investors” means the shareholder(s) of the Company holding more than fifty percent (50%) of the outstanding Series A Preferred Shares.

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person's entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person's control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the Closing Date; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) - (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

“Ordinary Shares” means ordinary shares in the capital of the Company.

 

“Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, London Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, or any other stock exchange or quotation system that is approved in writing by MISSION PURPLE L.P. and Majority Series A Investors, that implies a post-offering market capitalization of the Company (on a fully-diluted basis) upon the consummation of such offering of not less than the Qualified Valuation. Notwithstanding the foregoing, any listing of the Shares of the Company not meeting the requirements above but in no event less than US$5.5 billion may nevertheless be deemed to be a Qualified IPO with the vote or written consent of Mission and Majority Series A Investors.

 

“Qualified Valuation” means a post-offering market capitalization of the Company that is at least: (a) US$5.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated on or before the third (3rd) anniversary of the Closing Date; (b) US$6.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the third (3rd) anniversary of the Closing Date and the fourth (4th) anniversary of the Closing Date (inclusive); (c) US$10 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the fourth (4th) anniversary of the Closing Date and the fifth (5th) anniversary of the Closing Date (inclusive).

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

 

“RMB” means the lawful currency of the People’s Republic of China.

 

“SAMR” means the State Administration for Market Regulation of the PRC or its local counterpart, or, with respect to any matter to be submitted for examination by and registration with the Administration for Market Regulation of the PRC, any Governmental Authority which is similarly competent to examine and register such matter under the Laws of the PRC.

“Series A Preferred Shares” means redeemable convertible Series A preferred shares in the share capital of the Company, having the terms and conditions in the Fourth Shareholders’ Agreement and the Fifth Restated Constitution, each as amended from time to time.

 

“Transaction Documents” means this Agreement, the Fourth Restated Shareholders’ Agreement and the Fifth Restated Constitution.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors” means the Company and the Offshore Founder Holdco collectively and “Warrantor” means any one of them.

 

“WFOE” means Wuhan Lotus Technology Co., Ltd. (武汉路特斯科技有限公司).

 

1.2

Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Agreement	Preamble
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 0
Company	Preamble
Confidential Information	Section 9.9(a)
Disclosure Schedule	Section 4.1
Effective Date	Preamble
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Individual Claim	Section 8.2(a)
Investor or Investors	Preamble
Losses	Section 8.1
Lotus Technology	Recitals
Party or Parties	Preamble
Principal Business	Recitals
Purchased Shares	Section 2.1
Schedule of the Investors	Preamble
Offshore Founder Holdco	Preamble

 

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)              unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

(ii)            any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)           dates and times are to PRC time;

 

(iv)           reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)            unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)           headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)          Person includes any individual, firm, company or other incorporated or unincorporated body;

 

(viii)         in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)           Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the British Virgin Islands, the Cayman Islands and Hong Kong;

 

(x)            anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)           agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)          including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)         other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)         law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

 

2.

SALE AND PURCHASE

 

2.1

Authorization

 

As of the Closing, the Company will have authorized the sale and issuance of the Purchased Shares (as defined below) to the respective Investors.

2.2

Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)            at the Closing, each Investor hereby agrees to subscribe for and purchase from the Company, and the Company agrees to issue and sell to such Investor that number of Series A Preferred Shares set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchased Shares”), against the consideration set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchase Price”).

 

(b)            The Company’s agreement with each Investor is a separate agreement, and the sale and issuance of the Purchased Shares to each Investor is a separate sale and issuance. For the avoidance of doubt, each Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

 

3.

CLOSING

 

3.1

Closing

 

The consummation of the purchase and sale of the Purchased Shares (the “Closing”, with respect to each Investor, referred to the issuance of the respective Purchased Shares to such Investor by the Company; and the date of the Closing, the “Closing Date”) shall be conducted by exchange of documents, on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions to the Closing as set forth in Section 4.2(h) and Section 5(f) respectively, or at such other place and time as the Company and the applicable Investor may mutually agree upon.

 

3.2

Company’s Closing Deliverables

 

At the Closing, in addition to any items the delivery of which is made as an express condition to each applicable Investor’s obligations at such Closing pursuant to Section 4.2(h), the Company shall deliver to each Investor:

 

(a)            a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors;

 

(b)           a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A registered in the name of such Investor, certified by a director of the Company as true and complete as of the Closing Date (with the original of the share certificate delivered to such Investor as soon as practical after the Closing Date).

 

3.3

Payment of the Purchase Price

 

(a)            At the Closing, each Investor shall pay its Investment Amount by wire transfer in immediately available funds of US$ to a bank account designated by the Company (“Designated Account”), the details of which shall be provided by the Company to the Investors pursuant to Section 5.

 

(b)            The exchange rate for the Purchase Price to be paid by Investors shall be RMB 6.7098 per U.S. Dollar.

4.

REPRESENTATIONS AND WARRANTIES

 

4.1

Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to each Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date; (b) each of the statements contained in Exhibit B (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date.

 

4.2

Representations and Warranties of Investors

 

Each Investor hereby represents and warrants to the Warrantors, severally and not jointly, that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the Closing Date (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

 

(a)            it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s;

 

(b)            it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

 

(c)            the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

(d)          The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

 

(e)          Such Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the purchase of the applicable Purchased Shares and can bear the economic risk of its investment in the Purchased Shares.

 

(f)           All Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor, have been duly obtained or completed (as applicable) and are in full force and effect.

 

(g)          Such Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed decision with respect to the purchase of the Purchased Shares. Such Investor has had an opportunity to ask questions and receives answers from the Company regarding the terms and conditions of the offering of the Purchased Shares and the business, properties, prospects and financial condition of the Group Companies.

 

(h)          Such Investor has sufficient self-owned funds or financing sources to make payments of funds and relevant fees set out in this Agreement and capacity to obtain and maintain the financing for the purpose of completion of the transactions contemplated in this Agreement. The source of such Investor's funds for the fulfilment of this Agreement is fully lawful, and shall not infringe any third parties' lawful rights and interests.

 

5.            CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS

  

The obligation of an Investor to consummate its respective Closing under Section 0 of this Agreement is subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor in writing (for the avoidance of any doubt, Section 5(h) shall in no event be waived):

 

(a)

Execution and Delivery of Transaction Documents

 

Each Warrantor shall have delivered to such Investor each of the Transaction Documents to which it is a party, duly executed by all parties thereto except such Investor.

 

(b)

Constitutional Documents

 

The Fifth Restated Constitution substantially in the form set forth in Exhibit C shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors.

(c)

Representations and Warranties

 

(i)        The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)       The representations and warranties made by each Warrantor contained in Exhibit B (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)

Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Transaction Documents to be performed or complied with by such Warrantor on or prior to the Closing Date.

 

(e)

Proceedings and Documents

 

All corporate and other proceedings of the Group Companies and necessary authorizations in connection with the transactions contemplated hereby at the Closing shall have been duly obtained or completed. The Company has delivered to each Investor the copies of the aforementioned documentation.

 

(f)

No Material Adverse Effect

 

Since the date of this Agreement, the Company shall not have suffered a Material Adverse Effect.

 

(g)

Consents, Permits, and Waivers

 

The Company shall have obtained any and all Permits and waivers necessary for consummation of the transactions contemplated by each Transaction Document,

 

(h)

ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

 

(i)

Bank Account Information

 

The Company shall have provided the information of the Designated Account and wiring instruction to such Investor.

(j)

Compliance Certificate

 

The Warrantors shall deliver to the Investor a certificate certified by a director of the Company certifying that the conditions specified in Section 5 (except for Section 5(h)) have been fulfilled at the time of issuance of such certificate.

 

6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

The obligations of the Company under this Agreement to consummate the Closing with respect to the Investors are subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by the Company (for the avoidance of any doubt, Section 6(d) shall in no event be waived):

 

(a)

Representations and Warranties

 

The representations and warranties made by the Investors in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Closing Date in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Transaction Documents

 

Each Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.

 

(c)

Covenants

 

Such Investor shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Investor on or prior to the Closing Date.

 

(d)

ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

 

7.

COVENANTS

 

7.1

Interim Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the Closing Date, to each Investor to maintain the normal operation and management of the Group Companies.

 

7.2

Post-Closing Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants to the applicable Investor after the Closing Date that the Group Companies shall comply with applicable laws in all material respects.

7.2.1    The Company shall execute an employment agreement with each Key Management Staff, containing confidentiality, non-competition, non-solicitation and invention assignment provisions consistent with market practice as soon as possible but in no event shall be later than one (1) month after the Closing Date.

 

7.2.2    The Company shall, and the Warrantors shall procure the Company to, take reasonable measures to ensure that its Qualified IPO will not be materially advisedly affected by noncompliance with regulations of stock exchanges and security regulators on horizontal competition or related-party transactions as soon as practical, in particular, the Company shall cause a manufacturing cooperation agreement to be entered into by and between a Group Company and Zhejiang Geely Holding Group Limited (or its designated Affiliate(s)) as soon as practical but no later than two (2) months after the Closing.

 

7.2.3    The Warrantors shall cause the Fifth Restated Constitution to be duly submitted for filing with the appropriate corporate registration authority(ies) of the Cayman Islands as soon as practicable after the Closing Date, and in any event within thirty (30) Business Days of the Closing Date.

 

8.

INDEMNITY

 

8.1

General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

 

8.2

Liability Limitations

 

The following limitations on liabilities shall apply:

 

(a)            the Warrantors shall have no obligation to indemnify Investors for any individual claim by the Investors arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed 0.5% of the Investment Amount of such Investor”);

 

(i)           the Warrantors shall have no obligation to indemnify the Investors unless the aggregate amount of all such Individual Claims made by the Investors under the Transaction Documents exceed 2% of the Investment Amount of such Investor (the “Claim Loss Threshold”) (in which event the liability of the Warrantors shall be limited to the amount by which such aggregate amount exceeds that figure);

 

(ii)          the aggregate liability of the Warrantors as indemnifier to the Investors arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)         an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

Notwithstanding any other provision to the contrary in this Agreement, no limitations on the Warrantors’ liability shall apply in the case of fraud or intentional misrepresentation by the Warrantors.

 

(b)          (i) The Fundamental Warranties shall survive the Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Closing until the second anniversary of the Closing Date. No claim for breach of any representation or warranty or covenant may be brought by the Investors unless a claim has been raised in writing before the end of the survival period, and its formal proceedings have commenced within six (6) months after the end of the survival period set forth in this Section 8.2(b).

 

9.

MISCELLANEOUS

 

9.1

Successors and Assigns; No Third-Party Beneficiary

 

(a)

Each Party (save for the Investors) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

 

9.2

Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company and Offshore Founder Holdco

 

******

 

The Investor

 

******

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)

if delivered, on the date of delivery;

 

(ii)

if sent by post, on the seventh day after it was put into the post; or

 

(iii)

if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

 

9.3

Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by any Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

9.4

Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or any Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or any Investor of any breach or default under this Agreement or any waiver on the part of the Company or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or any Investor shall be cumulative and not alternative.

 

9.5

Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them.

 

9.6

Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

9.7

Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

 

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8

Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)

the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)

the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

9.9

Confidentiality

 

(a)

Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)

the negotiations concerning this Agreement;

 

(2)

the provisions of the Transaction Documents;

 

(3)

the subject matter of the Transaction Documents; or

 

(4)

the other Parties.

 

(b)

Duty of confidentiality

 

Save as permitted by Section 9.9 (c), each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

 

(c)

Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)          to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)          to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(3)          when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)          to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 0;

 

(5)          if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)          when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)          in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realized by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

(d)

Continuance of obligations

 

The obligations in this Section 0 shall continue to apply after termination of this Agreement without limit in time.

 

9.10

Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11

Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investors and the Company.

 

9.12

Governing Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

9.13

Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14

Termination of This Agreement

 

(a)          This Agreement may be terminated prior to the Closing (i) by mutual written consent of all Parties; (ii) by either the Company, on the one hand, or such Investor, on the other hand if the Closing fails to occur on or prior to September 30, 2022, (the “Long Stop Date”) (however, with respect to the onshore RMB Investor, the Long Stop Date would be automatically extended to October 31, 2022 if the application for the consents, filings and/or registration with respect to such onshore RMB Investor’s outbound investment to the Company have been submitted to and accepted by the Governmental Authority prior to September 30, 2022), provided that neither the Company nor such Investor shall be permitted to terminate this Agreement if the failure to consummate the Closing was caused by the breach by such Party of any material representation, warranty or covenant in this Agreement (for the avoidance of any doubt, in case where the application for the consents, filings and/or registrations with respect to the onshore RMB Investor’s outbound investment to the Company fails to be completed on or prior to the Long Stop Date, such onshore RMB Investor shall be regarded as failed to fulfil the obligation under this Agreement, and therefore such onshore RMB Investor shall not be granted the right to terminate the Agreement under such occasion) (for further avoidance of any doubt, the termination shall only become effective to and binding on such relevant Investor); or (iii) by either the Company, on the one hand, or any Investor, on the other hand (and only with respect to such Investor) by written notice to the other Party if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of such Investor or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within ten (10) Business Days of such notice (for the avoidance of any doubt, the termination shall only become effective to and binding on such breaching Investor ).

(b)             If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)            Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

 

(d)            Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 7.2.1 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9 (Confidentiality), Section 9.11 (Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

 

9.15

Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16

Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	OFFSHORE FOUNDER HOLDCO
	Lotus Advanced Technology Limited Partnership

 

By

/s/ FENG Qingfeng

 

Name:

FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	Lotus Technology Inc.

 

By

/s/ FENG Qingfeng

 

Name:

FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	SERIES A INVESTOR
	HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP)
	By:	/s/ WUHAN JINGKAI INDUSTRY INVESTMENT FUND MANAGEMENT CO., LTD.
	Title: Managing Partner

 

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

 

Investor		Jurisdiction and Registered Office		Number of Series A Preferred Shares		Purchase Price
HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) 湖北长江经开汽车产业投资基金合伙企业(有限合伙)		a limited partnership registered in the PRC with its registered office at ******		37,929,931		RMB 400,000,000

 

 

EXHIBIT B

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT C

 

FIFTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT D

 

FOURTH RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT E

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT F

 

KEY MANAGEMENT STAFF

 

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.24

 

LOTUS TECHNOLOGY INC.

 

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

August 29, 2022

Table of Contents

 

1.	DEFINITIONS	1
2.	SALE AND PURCHASE	7
3.	CLOSING	7
4.	REPRESENTATIONS AND WARRANTIES	8
5.	CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS	10
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	11
7.	COVENANTS	12
8.	INDEMNITY	12
9.	MISCELLANEOUS	13

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Warrantors’ Representations and Warranties

 

Exhibit C: Fifth Restated Constitution

 

Exhibit D: Fourth Restated Shareholders’ Agreement

 

Exhibit E: Disclosure Schedule

 

Exhibit F: Key Management Staff

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of                       , 2022 (“Effective Date”), by and among:

 

(1)          the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

 

(2)          Lotus Advanced Technology Limited Partnership, a limited partnership incorporated under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)          Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 2,142,922,222 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles (as defined below) of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

 

C.

Subject to the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), at the Closing, the Company desires to issue and sell to each Investor, and each Investor desires to purchase from the Company, such number of Preferred Shares set forth opposite such Investor’s name on the Schedule of the Investors attached hereto.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

 

“Circular 37” means the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment and Financing and Round-Trip Investment via Special Purpose Companies ( ) issued by SAFE on July 4, 2014, as amended, and its relevant or supplementing rules and regulations.

 

“Control Documents” means collectively (i) the Exclusive Call Option Agreement ( ) entered into by and among the WFOE, the Domestic Company and each nominee shareholder of the Domestic Company; (ii) the Exclusive Consulting and Service Agreement ( ) entered into by and between the Domestic Company and the WFOE; (iii) the Equity Pledge Agreement ( ) entered into by and among the WFOE, the Domestic Company, and each nominee shareholder of the Domestic Company; (iv) the Loan Agreement ( ) entered into by and among the WFOE and the Domestic Company; (v) the Power of Attorney ( ) issued by each nominee shareholder of Domestic Company; (vi) the Spouse Consent Letters ( ) issued by the spouse of FENG Qingfeng ( ), LI Donghui ( ), LI Shufu ( ), each entered into or issued on March 8, 2022, and any amendment or supplement thereto.

 

“Domestic Company” means Wuhan Lotus E-Commerce Co., Ltd. ( ).

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

 

“Fifth Restated Constitution” means the fifth amended and restated memorandum and articles of association of the Company substantially in the form as set forth in Exhibit C adopted as of the Closing.

 

“Fourth Restated Shareholders’ Agreement” means the fourth amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and the Investors substantially in the form as set forth in Exhibit D, which is to take effect from the Closing.

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, and 17 in Exhibit B.

 

“Group Companies” or “Group” means:

 

(a)           the WFOE;

(b)          Entities Controlled by the WFOE;

 

(c)          the Company; and

 

(d)          any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Majority Series A Investors” means the shareholder(s) of the Company holding more than fifty percent (50%) of the outstanding Series A Preferred Shares.

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person’s entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person’s control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the Closing Date; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) - (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

“Ordinary Shares” means ordinary shares in the capital of the Company.

 

“Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, London Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, or any other stock exchange or quotation system that is approved in writing by MISSION PURPLE L.P. and Majority Series A Investors, that implies a post-offering market capitalization of the Company (on a fully-diluted basis) upon the consummation of such offering of not less than the Qualified Valuation. Notwithstanding the foregoing, any listing of the Shares of the Company not meeting the requirements above but in no event less than US$5.5 billion may nevertheless be deemed to be a Qualified IPO with the vote or written consent of Mission and Majority Series A Investors.

 

“Qualified Valuation” means a post-offering market capitalization of the Company that is at least: (a) US$5.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated on or before the third (3rd) anniversary of the Closing Date; (b) US$6.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the third (3rd) anniversary of the Closing Date and the fourth (4th) anniversary of the Closing Date (inclusive); (c) US$10 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the fourth (4th) anniversary of the Closing Date and the fifth (5th) anniversary of the Closing Date (inclusive).

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

“RMB” means the lawful currency of the People’s Republic of China.

 

“SAMR” means the State Administration for Market Regulation of the PRC or its local counterpart, or, with respect to any matter to be submitted for examination by and registration with the Administration for Market Regulation of the PRC, any Governmental Authority which is similarly competent to examine and register such matter under the Laws of the PRC.

 

“Series A Preferred Shares” means redeemable convertible Series A preferred shares in the share capital of the Company, having the terms and conditions in the Fourth Shareholders’ Agreement and the Fifth Restated Constitution, each as amended from time to time.

 

“Transaction Documents” means this Agreement, the Fourth Restated Shareholders’ Agreement and the Fifth Restated Constitution.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors” means the Company and the Offshore Founder Holdco collectively and “Warrantor” means any one of them.

 

“WFOE” means Wuhan Lotus Technology Co., Ltd. ( ).

 

1.2

Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Agreement	Preamble
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 3.1
Closing Date	Section 3.1
Company	Preamble
Designated Account	Section 3.3
Disclosure Schedule	Section 4.1
Effective Date	Preamble
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Individual Claim	Section 8.2(a)
Investor or Investors	Preamble
Long Stop Date	Section 9.14(a)
Losses	Section 8.1
Lotus Technology	Recitals
Party or Parties	Preamble
Principal Business	Recitals
Purchase Price	Section 2.2(a)
Purchased Shares	Section 2.2(a)
Schedule of the Investors	Preamble
Offshore Founder Holdco	Preamble

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)          unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(ii)         any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)        dates and times are to PRC time;

 

(iv)        reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)         unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)        headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)       Person includes any individual, firm, company or other incorporated or unincorporated body;

 

(viii)      in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)        Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the British Virgin Islands, the Cayman Islands and Hong Kong;

 

(x)         anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)        agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)       including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)      other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)      law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

 

2.

SALE AND PURCHASE

 

2.1

Authorization

 

As of the Closing, the Company will have authorized the sale and issuance of the Purchased Shares (as defined below) to the respective Investors.

 

2.2

Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)         at the Closing, each Investor hereby agrees to subscribe for and purchase from the Company, and the Company agrees to issue and sell to such Investor that number of Series A Preferred Shares set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchased Shares”), against the consideration set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchase Price”).

 

(b)        The Company’s agreement with each Investor is a separate agreement, and the sale and issuance of the Purchased Shares to each Investor is a separate sale and issuance. For the avoidance of doubt, each Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

 

3.

CLOSING

 

3.1

Closing

 

The consummation of the purchase and sale of the Purchased Shares (the “Closing”, with respect to each Investor, referred to the issuance of the respective Purchased Shares to such Investor by the Company; and the date of the Closing, the “Closing Date”) shall be conducted by exchange of documents, on a date no later than ten (10) Business Days after the fulfilment or waiver of the conditions to the Closing as set forth in Section 5 and Section 6 respectively, or at such other place and time as the Company and the applicable Investor may mutually agree upon.

 

3.2

Company’s Closing Deliverables

 

At the Closing, in addition to any items the delivery of which is made as an express condition to each applicable Investor’s obligations at such Closing pursuant to Section 5, the Company shall deliver to each Investor:

 

(a)         a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors;

 

(b)         a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A registered in the name of such Investor, certified by a director of the Company as true and complete as of the Closing Date (with the original of the share certificate delivered to such Investor as soon as practical after the Closing Date).

3.3

Payment of the Purchase Price

 

At the Closing, each Investor shall pay its Investment Amount by wire transfer in immediately available funds of US$ to a bank account designated by the Company (“Designated Account”), the details of which shall be provided by the Company to the Investors pursuant to Section 5.

 

4.

REPRESENTATIONS AND WARRANTIES

 

4.1

Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to each Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date; (b) each of the statements contained in Exhibit B (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date.

 

4.2

Representations and Warranties of Investors

 

Each Investor hereby represents and warrants to the Warrantors, severally and not jointly, that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the Closing Date (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

 

(a)        it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s assets;

 

(b)        it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

(c)        the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

 

(d)         The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

 

(e)         Such Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the purchase of the applicable Purchased Shares and can bear the economic risk of its investment in the Purchased Shares.

 

(f)         All Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor, have been duly obtained or completed (as applicable) and are in full force and effect.

 

(g)        Such Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed decision with respect to the purchase of the Purchased Shares. Such Investor has had an opportunity to ask questions and receives answers from the Company regarding the terms and conditions of the offering of the Purchased Shares and the business, properties, prospects and financial condition of the Group Companies.

 

(h)        Such Investor has sufficient self-owned funds or financing sources to make payments of funds and relevant fees set out in this Agreement and capacity to obtain and maintain the financing for the purpose of completion of the transactions contemplated in this Agreement. The source of such Investor’s funds for the fulfilment of this Agreement is fully lawful, and shall not infringe any third parties’ lawful rights and interests.

5.

CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT THE CLOSINGS

 

The obligation of an Investor to consummate its respective Closing under Section 3 of this Agreement is subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor in writing (for the avoidance of any doubt, Section 5(h) shall in no event be waived):

 

(a)

Execution and Delivery of Transaction Documents

 

Each Warrantor shall have delivered to such Investor each of the Transaction Documents to which it is a party, duly executed by all parties thereto except such Investor.

 

(b)

Constitutional Documents

 

The Fifth Restated Constitution substantially in the form set forth in Exhibit C shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors.

 

(c)

Representations and Warranties

 

(i)            The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)            The representations and warranties made by each Warrantor contained in Exhibit B (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)

Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Transaction Documents to be performed or complied with by such Warrantor on or prior to the Closing Date.

 

(e)

Proceedings and Documents

 

All corporate and other proceedings of the Group Companies and necessary authorizations in connection with the transactions contemplated hereby at the Closing shall have been duly obtained or completed. The Company has delivered to each Investor the copies of the aforementioned documentation.

 

(f)

No Material Adverse Effect

 

Since the date of this Agreement, the Company shall not have suffered a Material Adverse Effect.

 

(g)

Consents, Permits, and Waivers

 

The Company shall have obtained any and all Permits and waivers necessary for consummation of the transactions contemplated by each Transaction Document,

(h)

ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

 

(i)

Bank Account Information

 

The Company shall have provided the information of the Designated Account and wiring instruction to such Investor.

 

(j)

Compliance Certificate

 

The Warrantors shall deliver to the Investor a certificate certified by a director of the Company certifying that the conditions specified in Section 5 (except for Section 5(h)) have been fulfilled at the time of issuance of such certificate.

 

6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

The obligations of the Company under this Agreement to consummate the Closing with respect to the Investors are subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by the Company (for the avoidance of any doubt, Section 6(d) shall in no event be waived):

 

(a)

Representations and Warranties

 

The representations and warranties made by the Investors in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Closing Date in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Transaction Documents

 

Each Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.

 

(c)

Covenants

 

Such Investor shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Investor on or prior to the Closing Date.

 

(d)

ODI Approvals

 

With respect to any onshore RMB Investor (if any), any and all of (a) the consents, filings and/or registrations with respect to such onshore RMB Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such onshore RMB Investor shall have been duly obtained and completed.

7.

COVENANTS

 

7.1

Interim Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the Closing Date, to each Investor to maintain the normal operation and management of the Group Companies.

 

7.2

Post-Closing Covenants of the Warrantors

 

7.2.1     Each of the Warrantors jointly and severally covenants to the applicable Investor after the Closing Date that the Group Companies shall comply with applicable laws in all material respects.

 

7.2.2     The Company shall execute an employment agreement with each Key Management Staff, containing confidentiality, non-competition, non-solicitation and invention assignment provisions consistent with market practice as soon as possible but in no event shall be later than one (1) month after the Closing Date.

 

7.2.3     The Company shall, and the Warrantors shall procure the Company to, take reasonable measures to ensure that its Qualified IPO will not be materially advisedly affected by noncompliance with regulations of stock exchanges and security regulators on horizontal competition or related-party transactions as soon as practical, in particular, the Company shall cause a manufacturing cooperation agreement to be entered into by and between a Group Company and Zhejiang Geely Holding Group Limited (or its designated Affiliate(s)) as soon as practical but no later than two (2) months after the Closing.

 

7.2.4     The Warrantors shall cause the Fifth Restated Constitution to be duly submitted for filing with the appropriate corporate registration authority(ies) of the Cayman Islands as soon as practicable after the Closing Date, and in any event within thirty (30) Business Days of the Closing Date.

 

7.2.5     The Company shall, and the Warrantors shall cause the Company to, use the proceeds from the issuance and sale of the Purchased Shares for purposes of business operations, business development, investment in related business, and general working capital needs of the Group Companies or otherwise as approved by the Board or the shareholders (as applicable) in accordance with the Transaction Documents.

 

7.2.6      The Warrantors shall, on a continuous basis, use their reasonable best efforts to, and to urge their respective direct or indirect owners of their shares or equity interest, of record or beneficial, to duly comply with Circular 37 and other applicable PRC laws, to the extent applicable, with respect to such person’s direct and indirect of record or beneficiary ownership of the shares or equity interest in the Company and each other Group Company.

 

8.

INDEMNITY

 

8.1

General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

8.2

Liability Limitations

 

The following limitations on liabilities shall apply:

 

(a)         the Warrantors shall have no obligation to indemnify Investors for any individual claim by the Investors arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed 0.5% of the Investment Amount of such Investor”);

 

(i)             the Warrantors shall have no obligation to indemnify the Investors unless the aggregate amount of all such Individual Claims made by the Investors under the Transaction Documents exceed 2% of the Investment Amount of such Investor (the “Claim Loss Threshold”) (in which event the liability of the Warrantors shall be limited to the amount by which such aggregate amount exceeds that figure);

 

(ii)            the aggregate liability of the Warrantors as indemnifier to the Investors arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)           an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

 

Notwithstanding any other provision to the contrary in this Agreement, no limitations on the Warrantors’ liability shall apply in the case of fraud or intentional misrepresentation by the Warrantors.

 

(b)         (i) The Fundamental Warranties shall survive the Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Closing until the second anniversary of the Closing Date. No claim for breach of any representation or warranty or covenant may be brought by the Investors unless a claim has been raised in writing before the end of the survival period, and its formal proceedings have commenced within six (6) months after the end of the survival period set forth in this Section 8.2(b).

 

9.

MISCELLANEOUS

 

9.1

Successors and Assigns; No Third-Party Beneficiary

 

(a)

Each Party (save for the Investors) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

9.2

Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company and Offshore Founder Holdco

 

******

 

The Investor

 

******

 

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)          if delivered, on the date of delivery;

 

(ii)         if sent by post, on the seventh day after it was put into the post; or

 

(iii)       if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

9.3

Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by any Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

 

9.4

Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or any Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or any Investor of any breach or default under this Agreement or any waiver on the part of the Company or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or any Investor shall be cumulative and not alternative.

 

9.5

Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them.

 

9.6

Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

9.7

Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

 

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8

Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)

the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)

the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

 

9.9

Confidentiality

 

(a)

Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)

the negotiations concerning this Agreement;

 

(2)

the provisions of the Transaction Documents;

 

(3)

the subject matter of the Transaction Documents; or

 

(4)

the other Parties.

 

(b)

Duty of confidentiality

 

Save as permitted by Section 9.9 (c), each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

 

(c)

Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)         to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)         to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

(3)         when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)         to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 9;

 

(5)         if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)         when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)         in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realized by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

 

(d)        Continuance of obligations

 

The obligations in this Section 9 shall continue to apply after termination of this Agreement without limit in time.

 

9.10

Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11

Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investors and the Company.

9.12

Governing Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

 

9.13

Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14

Termination of This Agreement

 

(a)         This Agreement may be terminated prior to the Closing (i) by mutual written consent of all Parties; (ii) by either the Company, on the one hand, or such Investor, on the other hand if the Closing fails to occur on or prior to September 30, 2022, (the “Long Stop Date”) (however, with respect to the onshore RMB Investor, the Long Stop Date would be automatically extended to December 31, 2022 if the application for the consents, filings and/or registration with respect to such onshore RMB Investor’s outbound investment to the Company have been submitted to and accepted by the Governmental Authority prior to September 30, 2022), provided that neither the Company nor such Investor shall be permitted to terminate this Agreement if the failure to consummate the Closing was caused by the breach by such Party of any material representation, warranty or covenant in this Agreement (for the avoidance of any doubt, in case where the application for the consents, filings and/or registrations with respect to the onshore RMB Investor’s outbound investment to the Company fails to be completed on or prior to the Long Stop Date, such onshore RMB Investor shall be regarded as failed to fulfil the obligation under this Agreement, and therefore such onshore RMB Investor shall not be granted the right to terminate the Agreement under such occasion) (for further avoidance of any doubt, the termination shall only become effective to and binding on such relevant Investor); or (iii) by either the Company, on the one hand, or any Investor, on the other hand (and only with respect to such Investor) by written notice to the other Party if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of such Investor or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within ten (10) Business Days of such notice (for the avoidance of any doubt, the termination shall only become effective to and binding on such breaching Investor ).

 

(b)         If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided, that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)         Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

(d)        Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 8 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9 (Confidentiality), Section 9.11 (Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

 

9.15

Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16

Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.  

 

	OFFSHORE FOUNDER HOLDCO   Lotus Advanced Technology Limited Partnership
	By	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY   Lotus Technology Inc.
	By	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	SERIES A INVESTOR
	Ningbo Shangchuang Equity Investment Partnership (Limited Partnership)
	/s/ Ningbo Shangchuang Equity Investment Partnership (Limited Partnership)

 

 

   

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

 

Investor		Jurisdiction and Registered Office		Number of Series A Preferred Shares		Purchase Price
Ningbo Shangchuang Equity Investment Partnership (Limited Partnership)		a limited partnership registered in the PRC with its registered office at ******		37,929,931		RMB 400,000,000

 

EXHIBIT B

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT C

 

FIFTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT D

 

FOURTH RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT E

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT F

 

KEY MANAGEMENT STAFF

 

[***]

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Exhibit 10.25

 

LOTUS TECHNOLOGY INC.

 

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

August 30, 2022

Table of Contents

 

1.	DEFINITIONS	1
2.	SALE AND PURCHASE	7
3.	CLOSING	7
4.	REPRESENTATIONS AND WARRANTIES	8
5.	CONDITIONS TO THE INVESTOR’S OBLIGATIONS AT THE CLOSINGS	10
6.	CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS	11
7.	COVENANTS	12
8.	INDEMNITY	12
9.	MISCELLANEOUS	13

 

EXHIBITS

 

Exhibit A: Schedule of the Investors

 

Exhibit B: Warrantors’ Representations and Warranties

 

Exhibit C: Fifth Restated Constitution

 

Exhibit D: Fourth Restated Shareholders’ Agreement

 

Exhibit E: Disclosure Schedule

 

Exhibit F: Key Management Staff

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of                     , 2022 (“Effective Date”), by and among:

 

(1)           the investors (each, an “Investor” and collectively, the “Investors” listed on the Schedule of the Investors attached hereto as Exhibit A (the “Schedule of the Investors”);

 

(2)           Lotus Advanced Technology Limited Partnership, a limited partnership incorporated under the laws of the British Virgin Islands with its registered office at Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands (the “Offshore Founder Holdco”); and

 

(3)           Lotus Technology Inc., a company incorporated in the Cayman Islands with its registered office at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands (the “Company”).

 

The foregoing parties are hereinafter collectively referred to as the “Parties” and respectively referred to as a “Party”.

 

RECITALS

 

A.

The Company is an exempted company limited by shares incorporated in the Cayman Islands and has at the date of this Agreement 2,142,922,222 issued and outstanding Ordinary Shares (as defined below), par value US$0.00001 each share.

 

B.

The Group Companies (as defined below) are engaged in design, research, development, manufacturing, assembling, distribution, and sales of the Lifestyle Vehicles (as defined below) of brand Lotus as well as providing the related products such as accessories and related after-sale services for the Lifestyle Vehicles (the “Principal Business”).

 

C.

Subject to the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), at the Closing, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, such number of Preferred Shares set forth opposite such Investor’s name on the Schedule of the Investors attached hereto.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

1.

DEFINITIONS

 

1.1

Certain Defined Terms

 

For purposes of this Agreement:

 

“Affiliate” means, in relation to any person, any other person who directly or indirectly Controls, is Controlled by or is subject to common Control with the first-mentioned person, and for the purpose of this Agreement, “Control” (including as used in “Controlled by” and “common Control”) means the possession by a person, directly or indirectly, of (a) the legal and beneficial ownership of more than 50% of the voting shares of another person; or (b) the power to direct or cause the direction of the management and policies of another person, whether through the ownership of shares or other securities carrying the right to vote, through the composition of the board of directors of such other person, by contract or otherwise, and includes, with respect to any individual, such individual’s spouse, parents and parents of the spouse, siblings and their spouse, children over 18 years old and their spouse, siblings of the spouse and parents of the spouse of the children.

 

“Circular 37” means the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment and Financing and Round-Trip Investment via Special Purpose Companies ( ) issued by SAFE on July 4, 2014, as amended, and its relevant or supplementing rules and regulations.

 

“Control Documents” means collectively (i) the Exclusive Call Option Agreement (  ) entered into by and among the WFOE, the Domestic Company and each nominee shareholder of the Domestic Company; (ii) the Exclusive Consulting and Service Agreement (  ) entered into by and between the Domestic Company and the WFOE; (iii) the Equity Pledge Agreement (  ) entered into by and among the WFOE, the Domestic Company, and each nominee shareholder of the Domestic Company; (iv) the Loan Agreement (  ) entered into by and among the WFOE and the Domestic Company; (v) the Power of Attorney (  ) issued by each nominee shareholder of Domestic Company; (vi) the Spouse Consent Letters (  ) issued by the spouse of FENG Qingfeng (  ), LI Donghui (  ), LI Shufu (  ), each entered into or issued on March 8, 2022, and any amendment or supplement thereto.

 

“Domestic Company” means Wuhan Lotus E-Commerce Co., Ltd. (  ).

 

“Equity Securities” means, with respect to any person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such person, and any right, warrant, option, call, commitment, conversion privilege, pre-emptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing.

 

“Fifth Restated Constitution” means the fifth amended and restated memorandum and articles of association of the Company substantially in the form as set forth in Exhibit C adopted as of the Closing.

 

“Fourth Restated Shareholders’ Agreement” means the fourth amended and restated shareholders’ agreement to be entered into between the Company, the existing shareholders of the Company and the Investors substantially in the form as set forth in Exhibit D, which is to take effect from the Closing.

 

“Fundamental Warranties” means the representations and warranties given by the Warrantors as set forth in Sections 1 to 6, and 17 in Exhihit B.

 

“Group Companies” or “Group” means:

 

(a)

the WFOE;

 

(b)

Entities Controlled by the WFOE;

 

(c)

the Company; and

(d)          any entity established, Controlled and/or financially consolidated from time to time by (a), (b) and/or (c) above. “Group Company” means any one of them.

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“Intellectual Property” means any and all (a) patents, patent rights and applications therefor and reissues, re-examinations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) registered and unregistered copyrights, copyright registrations and applications, mask works and registrations and applications therefor, author’s rights and works of authorship (including artwork, software, computer programs, source code, object code and executable code, firmware, development tools, files, records and data, and related documentation), (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other intellectual property, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing.

 

“Lifestyle Vehicles” means all passenger vehicles other than Sports Car, including Sports Utility Vehicle (SUVs), Sedan, Cross-over and Hatch-back (each as defined below).

 

(a)

“Sports Car” means a vehicle low to the ground with dynamic capability as the focus; typically, with 2 doors and 2 or 4 seats with either metal roof or a convertible hood.

 

(b)

“Sport Utility Vehicle (SUV)” refers to a vehicle with increased ground clearance, space and visibility over a Sedan; they can be either off-road focused or comfort focused.

 

(c)

“Sedan” refers to a vehicle whose length is divided into three distinct sections, an engine compartment, a cabin for passengers and a trunk, typically, with 4 doors and 4 or 5 seats. Sedans with low rear roof lines are referred to as coupes.

 

(d)

“Cross-over” refers to a vehicle with a mixture of Sedan and SUV attributes, often with some increase in ride height and roof line but maintaining a lower overall height than the SUV.

 

(e)

“Hatchback (Hatch-back)” refers to a Sedan but with five doors, where the fifth door provides access to the trunk area and the main body of the car with seats folded.

 

“Majority Series A Investors” means the shareholder(s) of the Company holding more than fifty percent (50%) of the outstanding Series A Preferred Shares.

 

“Material Adverse Effect” with respect to any person, means any condition, change or effect with respect to the business, operations, assets, liabilities (including contingent liabilities), results of operations, financial status or prospects of such person which, alone or in conjunction with any other condition, change or effect: (a) results in any of the following effect and cannot be effectively remedied within twenty (20) Business Days: (i) such person’s entire or substantially equivalent to the entire business of such person is suspended for more than three (3) consecutive months or is terminated; (ii) such person is unable to perform more than 30% of the contracts of its Principal Business; (iii) a change of Control of the person or such person’s control is severely restricted; or (b) would reasonably be expected to constitute a substantial impediment to a Qualified IPO of such person and cannot be removed by rectification within sixty (60) months from the Closing Date; other than to the extent caused by (i) changes in the general economic or political conditions in jurisdictions in which the Group Companies are operating, (ii) changes (including changes in law) or conditions generally affecting the industry in which the Group Companies are operating; (iii) acts of war, sabotage or terrorism or natural disasters involving any jurisdiction in which the Group Companies are operating, (iv) any action taken by the Group Companies that is required or contemplated pursuant to the Transaction Documents; provided, with respect to clauses (i) - (iii), that such changes do not affect the Group Companies disproportionately as compared to other persons in the same industry.

“Ordinary Shares” means ordinary shares in the capital of the Company.

 

“Permit” means any governmental approvals, permits, licenses, authorizations, certifications, registrations, and filings.

 

“PRC” means the People’s Republic of China, and solely for the purpose of this Agreement, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

“Qualified IPO” means an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company, on the Shanghai Stock Exchange, Shenzhen Stock Exchange, London Stock Exchange, New York Stock Exchange, Nasdaq Stock Exchange, Hong Kong Stock Exchange, or any other stock exchange or quotation system that is approved in writing by MISSION PURPLE L.P. and Majority Series A Investors, that implies a post-offering market capitalization of the Company (on a fully-diluted basis) upon the consummation of such offering of not less than the Qualified Valuation. Notwithstanding the foregoing, any listing of the Shares of the Company not meeting the requirements above but in no event less than US$5.5 billion may nevertheless be deemed to be a Qualified IPO with the vote or written consent of Mission and Majority Series A Investors.

 

“Qualified Valuation” means a post-offering market capitalization of the Company that is at least: (a) US$5.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated on or before the third (3rd) anniversary of the Closing Date; (b) US$6.5 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the third (3rd) anniversary of the Closing Date and the fourth (4th) anniversary of the Closing Date (inclusive); (c) US$10 billion if an initial public offering and listing or back door listing (including via SPAC) or other similar transactions to achieve the listing of the shares of the Company is consummated during any time between the date after the fourth (4th) anniversary of the Closing Date and the fifth (5th) anniversary of the Closing Date (inclusive).

 

“Related Party Transaction” means any transaction by and among any officer, director, or direct or indirect holder of over 5% equity security of any Group Company, and any Affiliate of any of the foregoing, on the one hand, and any Group Company on the other hand.

 

“RMB” means the lawful currency of the People’s Republic of China.

 

“SAMR” means the State Administration for Market Regulation of the PRC or its local counterpart, or, with respect to any matter to be submitted for examination by and registration with the Administration for Market Regulation of the PRC, any Governmental Authority which is similarly competent to examine and register such matter under the Laws of the PRC.

“Series A Preferred Shares” means redeemable convertible Series A preferred shares in the share capital of the Company, having the terms and conditions in the Fourth Shareholders’ Agreement and the Fifth Restated Constitution, each as amended from time to time.

 

“Transaction Documents” means this Agreement, the Fourth Restated Shareholders’ Agreement and the Fifth Restated Constitution.

 

“US$” or “U.S. Dollar” means the lawful currency of the United States of America.

 

“Warrantors “ means the Company and the Offshore Founder Holdco collectively and “Warrantor” means any one of them.

 

“WFOE” means Wuhan Lotus Technology Co., Ltd. (  ).

 

1.2

Definitions

 

The following terms have the meanings set forth in the Sections set forth below:

 

Agreement	Preamble
Claim Loss Threshold	Section 8.2(a)(i)
Closing	Section 3.1
Company	Preamble
Confidential Information	Section 9.9(a)
Disclosure Schedule	Section 4.1
Effective Date	Preamble
HKIAC	Section 9.13
Indemnified Party	Section 8.1
Individual Claim	Section 8.2(a)
Investor or Investors	Preamble
Losses	Section 8.1
Lotus Technology	Recitals
Onshore Deposit	Section 3.3
Party or Parties	Preamble
Principal Business	Recitals
Purchased Shares	Section 2.2(a)
Schedule of the Investors	Preamble
Offshore Founder Holdco	Preamble

1.3

Interpretation and Rules of Construction

 

In this Agreement, unless otherwise specified:

 

(i)            unless the context otherwise requires, the definition of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(ii)           any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(iii)          dates and times are to PRC time;

 

(iv)          reference to any statute, by-law, regulation, rule, delegated legislation or order is to any statute, by-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, by-law, regulation, rule, delegated legislation or order replacing or made under any of them;

 

(v)           unless otherwise specified herein, references to any Section, paragraph or Exhibit are to those contained in this Agreement and all Exhibits to this Agreement are an integral part of this Agreement, and have the same force and effect as if expressly set out in the main body of this Agreement;

 

(vi)          headings are for ease of reference only and shall not be taken into account in construing this Agreement;

 

(vii)         Person includes any individual, firm, company or other incorporated or unincorporated body;

 

(viii)        in writing means any communication made by letter or email, and written shall be construed accordingly;

 

(ix)          Business Day means a day (other than a Saturday, Sunday or gazetted public holiday) on which banks are open for normal banking business in PRC, the British Virgin Islands, the Cayman Islands and Hong Kong;

 

(x)           anything or obligation to be done under this Agreement which is required or falls to be done on a stipulated day, shall be done on the next succeeding Business Day, if the day upon which that thing or obligation is required or falls to be done falls on a day which is not a Business Day;

 

(xi)           agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise;

 

(xii)         including and in particular shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words;

 

(xiii)        other and otherwise shall not be construed ejusdem generis with any foregoing words where a wider construction is possible; and

 

(xiv)        law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed).

2.

SALE AND PURCHASE

 

2.1

Authorization

 

As of the Closing, the Company will have authorized the sale and issuance of the Purchased Shares (as defined below) to the Investor.

 

2.2

Agreement to Purchase and Sale of the Purchased Shares

 

Subject to the terms and conditions hereof,

 

(a)            at the Closing, the Investor hereby agrees to subscribe for and purchase from the Company, and the Company agrees to issue and sell to such Investor that number of Series A Preferred Shares set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchased Shares”), against the consideration set forth opposite such Series A Investor’s name on the Schedule of the Investors (the “Purchase Price”).

 

(b)            The Company’s agreement with the Investor is a separate agreement, and the sale and issuance of the Purchased Shares to the Investor is a separate sale and issuance. For the avoidance of doubt, the Investor shall proceed to the Closing and purchase its portion of the Purchased Shares hereto pursuant to this Section 2 as long as all closing conditions specified in Section 5 applicable to such Investor and closing conditions specified in Section 6 applicable to the Warrantors have been satisfied or waived by the relevant Party.

 

3.

CLOSING

 

3.1

Closing

 

The consummation of the purchase and sale of the Purchased Shares (the “Closing”, with respect to the Investor, referred to the issuance of the respective Purchased Shares to such Investor by the Company; and the date of the Closing, the “Closing Date”) shall be conducted by exchange of documents, on a date no later than ten (10) Business Days after the fulfilment or waiver of all the conditions to the Closing as set forth in Section 5 and Section 6 respectively, or at such other place and time as the Company and the applicable Investor may mutually agree upon.

 

3.2

Company’s Closing Deliverables

 

At the Closing, in addition to any items the delivery of which is made as an express condition to the Investor’s obligations at such Closing pursuant to Section 5, the Company shall deliver to the Investor:

 

(a)            a scanned copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show such Investor as the holder of the Purchased Shares opposite such Investor’s name on the Schedule of the Investors;

 

(b)            a scanned copy of the duly issued share certificate representing the Purchased Shares opposite such Investor’s name on the Exhibit A registered in the name of such Investor, certified by a director of the Company as true and complete as of the Closing Date (with the original of the share certificate delivered to such Investor as soon as practical after the Closing Date).

 

3.3

Payment of the Purchase Price

 

(a)             Within five (5) Business Days after the date of this Agreement, the Investor shall pay (or cause to be paid) a no-interest bearing deposit (the “Onshore Deposit”) amounting to the Investment Amount to the designated bank account of the WFOE. Such Onshore Deposit shall be returned to the Investor by the Company no later than five (5) Business Days once all of the conditions to the Closing as set forth in Section 5 and Section 6 have been fulfilled (or waived by the Company or the Investor (as the case may be) to the extent permitted to be waived under this Agreement). If, upon the expiration of six (6) months from the date when the WFOE has received such Onshore Deposit, the Investor fails to obtain the ODI Approvals as set forth in Section 5(h) and Section 6(d), the Investor may notify the Company and the WFOE of such situation in writing. The WFOE shall, and the Company shall procure the WFOE, to return such Onshore Deposit to the Investor within ten (10) Business Days after both the WFOE and the Company have received such written notice from the Investor.

(b)            At the Closing, the Investor shall pay its Investment Amount by wire transfer in immediately available funds of US$ to a bank account designated by the Company (“Designated Account”), the details of which shall be provided by the Company to the Investors pursuant to Section 5.

 

(c)            The exchange rate for the Purchase Price to be paid by the Investor shall be RMB 6.7098 per U.S. Dollar .

 

4.

REPRESENTATIONS AND WARRANTIES

 

4.1

Representations and Warranties of Warrantors

 

Subject to such exceptions as may be specifically set forth in the Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”) which forms part of the representation and warranties herein, each of the Warrantors severally and jointly represents and warrants to the Investor that, (a) each of the Fundamental Warranties is true, accurate and is not misleading in all respects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such date; (b) each of the statements contained in Exhibit B (other than the Fundamental Warranties) is true and accurate and is not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the date hereof and as of the Closing Date, except if a representation or warranty is made as of a specified date, as of such

 

4.2

Representations and Warranties of the Investor

 

The Investor hereby represents and warrants to the Warrantors that the representations and warranties set forth in this Section 4.2 are true and accurate and are not misleading as of the date hereof and as of the Closing Date (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects, except if a representation or warranty is made as of a specified date, as of such date:

 

(a)            it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is not insolvent or unable to pay its debts, and it has not stopped paying its debts as they fall due. No order has been made or petition presented or resolution passed for the winding up, liquidation or dissolution of such Investor and no distress, execution or other similar process has been levied on the Investor’s assets;

(b)            it has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor (and, as applicable, its officers, directors and shareholders) necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance of all obligations of such Investor thereunder, has been taken or will be taken prior to the Closing applicable to such Investor. This Agreement has been duly executed and delivered by the Investor. Assuming the due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and each of the Transaction Documents to which such Investor is a party are, or when executed and delivered by such Investor shall be, valid and legally binding obligations of the Investor, enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies;

 

(c)            the execution, delivery and performance by such Investor of, and compliance by such Investor with, each of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) result in any violation, breach or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a default under the Charter Documents of such Investor or any applicable law (including Circular 37), (b) result in a breach of any order, judgment or decree of any government entity to which such Investor is a party or by which such Investor is bound; or (c) result in a breach by the Investor of any contract to which the Investor is a party; except, in each case of (a), (b) and (c), as would not have a Material Adverse Effect on the ability of such Investor to consummate the transactions contemplated by the Transaction Documents;

 

(d)            The Purchased Shares to be acquired by such Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Purchased Shares.

 

(e)            Such Investor has the knowledge, sophistication and experience necessary to make an investment decision like that involved in the purchase of the applicable Purchased Shares and can bear the economic risk of its investment in the Purchased Shares.

 

(f)             As of the date of this Agreement, all Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor (except for the ODI Approvals as set forth in Section 5(h) and Section 6(d)). have been duly obtained or completed (as applicable) and are in full force and effect. As of the Closing Date, all Approvals from or of any Governmental Authority or any other person required in connection with the execution, delivery and performance by such Investor of this Agreement and other Transaction Documents, and the consummation of the transactions contemplated hereby on the part of such Investor, have been duly obtained or completed (as applicable) and are in full force and effect.

 

(g)            Such Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed decision with respect to the purchase of the Purchased Shares. Such Investor has had an opportunity to ask questions and receives answers from the Company regarding the terms and conditions of the offering of the Purchased Shares and the business, properties, prospects and financial condition of the Group Companies.

(h)            Such Investor has sufficient self-owned funds or financing sources to make payments of funds and relevant fees set out in this Agreement and capacity to obtain and maintain the financing for the purpose of completion of the transactions contemplated in this Agreement. The source of such Investor’s funds for the fulfilment of this Agreement is fully lawful, and shall not infringe any third parties’ lawful rights and interests.

 

5.

CONDITIONS TO THE INVESTOR’S OBLIGATIONS AT THE CLOSINGS

 

The obligation of the Investor to consummate its Closing under Section 3 of this Agreement is subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by such Investor in writing (for the avoidance of any doubt, Section 5(h) shall in no event be waived):

 

(a)

Execution and Delivery of Transaction Documents

 

Each Warrantor shall have delivered to such Investor each of the Transaction Documents to which it is a party, duly executed by all parties thereto except such Investor.

 

(b)

Constitutional Documents

 

The Fifth Restated Constitution substantially in the form set forth in Exhibit C shall have been duly adopted by the Company by all necessary corporate action of its shareholders and its board of directors.

 

(c)

Representations and Warranties

 

(i)            The Fundamental Warranties shall be true, correct and not misleading in all respects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(ii)           The representations and warranties made by each Warrantor contained in Exhibit B (other than Fundamental Warranties) shall be true, correct and not misleading (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) in all material aspects as of the Effective Date and as of the Closing Date, with the same force and effect as if they were made on and as of such date, or as of another date if any representations and warranties are made with respect to such other date.

 

(d)

Covenants

 

Each Warrantor shall have performed or complied with all covenants, agreements and conditions contained in the Transaction Documents to be performed or complied with by such Warrantor on or prior to the Closing Date.

 

(e)

Proceedings and Documents

 

All corporate and other proceedings of the Group Companies and necessary authorizations in connection with the transactions contemplated hereby at the Closing shall have been duly obtained or completed. The Company has delivered to the Investor the copies of the aforementioned documentation.

(f)

No Material Adverse Effect

 

Since the date of this Agreement, the Company shall not have suffered a Material Adverse Effect.

 

(g)

Consents. Permits, and Waivers

 

The Company shall have obtained any and all Permits and waivers necessary for consummation of the transactions contemplated by each Transaction Document,

 

(h)

ODI Approvals

 

Any and all of (a) the consents, filings and/or registrations with respect to such Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such Investor shall have been duly obtained and completed.

 

(i)

Bank Account Information

 

The Company shall have provided the information of the Designated Account and wiring instruction to such Investor.

 

(j)

Compliance Certificate

 

The Warrantors shall deliver to the Investor a certificate certified by a director of the Company certifying that the conditions specified in Section 5 (except for Section 5(h)) have been fulfilled at the time of issuance of such certificate.

 

6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

 

The obligations of the Company under this Agreement to consummate the Closing with respect to the Investor are subject to the fulfilment of each of the following conditions at or prior to the Closing, unless otherwise waived by the Company (for the avoidance of any doubt, Section 6(d) shall in no event be waived):

 

(a)

Representations and Warranties

 

The representations and warranties made by the Investor in Section 4.2 shall be true, correct and not misleading as of the Effective Date and the Closing Date in all material respects, with the same force and effect as if they were made on and as of such date.

 

(b)

Execution and Delivery of Transaction Documents

 

The Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.

(c)

Covenants

 

Such Investor shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Investor on or prior to the Closing Date.

 

(d)

ODI Approvals

 

Any and all of (a) the consents, filings and/or registrations with respect to such Investor’s direct or indirect outbound investment to the Company with applicable Governmental Authority pursuant to the applicable PRC laws and (b) the relevant foreign exchange registration procedures with State Administration of Foreign Exchange or one of its designated banks in the PRC with respect to its direct or indirect outbound investment to the Company and the remittance of funds out of PRC by such Investor shall have been duly obtained and completed.

 

7.

COVENANTS

 

7.1

Interim Covenants of the Warrantors

 

Each of the Warrantors jointly and severally covenants, from the Effective Date until the Closing Date, to the Investor to maintain the normal operation and management of the Group Companies.

 

7.2

Post-Closing Covenants of the Warrantors

 

7.2.1        Each of the Warrantors jointly and severally covenants to the applicable Investor after the Closing Date that the Group Companies shall comply with applicable laws in all material respects.

 

7.2.2        The Company shall execute an employment agreement with each Key Management Staff, containing confidentiality, non-competition, non-solicitation and invention assignment provisions consistent with market practice as soon as possible but in no event shall be later than one (1) month after the Closing Date.

 

7.2.3        The Company shall, and the Warrantors shall procure the Company to, take reasonable measures to ensure that its Qualified IPO will not be materially advisedly affected by noncompliance with regulations of stock exchanges and security regulators on horizontal competition or related-party transactions as soon as practical, in particular, the Company shall cause a manufacturing cooperation agreement to be entered into by and between a Group Company and Zhejiang Geely Holding Group Limited (or its designated Affiliate(s)) as soon as practical but no later than two (2) months after the Closing.

 

7.2.4        The Warrantors shall cause the Fifth Restated Constitution to be duly submitted for filing with the appropriate corporate registration authority(ies) of the Cayman Islands as soon as practicable after the Closing Date, and in any event within thirty (30) Business Days of the Closing Date.

 

8.

INDEMNITY

 

8.1

General Indemnification

 

Each Party shall indemnify, defend and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all costs, expenses, damages, liabilities, claims, losses (the “Losses”) resulting from or arising out of any breach by such defaulting party of any of the covenants, representations, warranties or other agreements in the Transaction Documents.

8.2

Liability Limitations

 

 The following limitations on liabilities shall apply:

 

(a)           the Warrantors shall have no obligation to indemnify the Investor for any individual claim by the Investor arising out of the Transaction Documents, unless the aggregate Losses related to such individual claim (the “Individual Claim”) exceed 0.5% of the Investment Amount of such Investor”);

 

(i)        the Warrantors shall have no obligation to indemnify the Investor unless the aggregate amount of all such Individual Claims made by the Investor under the Transaction Documents exceed 2% of the Investment Amount of such Investor (the “Claim Loss Threshold”) (in which event the liability of the Warrantors shall be limited to the amount by which such aggregate amount exceeds that figure);

 

(ii)        the aggregate liability of the Warrantors as indemnifier to the Investor arising from any Warrantor’s breach of Transaction Documents shall not exceed the aggregate Purchase Price paid by the relevant Investor less the cash income (including cash dividends, repurchase payments, equity transfer consideration, to extent applicable) already received by such Investor by virtue of their shareholding in the Company;

 

(iii)        an Investor who obtains any remedy under this Agreement shall not seek or obtain any other remedy under this Agreement or any other Transaction Documents for the same subject matter, regardless of whether such remedy covers the Losses of such Investor.

 

Notwithstanding any other provision to the contrary in this Agreement, no limitations on the Warrantors’ liability shall apply in the case of fraud or intentional misrepresentation by the Warrantors.

 

(b)           (i)            The Fundamental Warranties shall survive the Closing perpetually; and (ii) the other representations and warranties made by any Warrantor other than the Fundamental Warranties shall survive the Closing until the second anniversary of the Closing Date. No claim for breach of any representation or warranty or covenant may be brought by the Investor unless a claim has been raised in writing before the end of the survival period, and its formal proceedings have commenced within six (6) months after the end of the survival period set forth in this Section 8.2(b).

 

9.

MISCELLANEOUS

 

9.1

Successors and Assigns: No Third-Party Beneficiary

 

(a)

Each Party (save for the Investor) may not assign, hold in trust or otherwise transfer any rights or benefits under this Agreement without prior written consent of other Parties.

 

(b)

Subject to and upon any assignment permitted by this Agreement, any assignee of the Parties shall in its own right be able to enforce any term of this Agreement in accordance with its terms as if it were a Party, but until such time any such assignee of the Parties shall have no such rights whether as a third party or otherwise.

9.2

Notices

 

(a)

Any notice or other communication to be given under this Agreement must be in writing (which includes electronic mail) and must be delivered or sent by post or electronic mail to the Party to whom it is to be given at its address appearing below:

 

The Company, the WFOE and Offshore Founder Holdco

 

Address:

 

******

 

The Investor

 

Hangzhou Fuyang Investment Development Co. Ltd.

 

******

 

or at any such other address of which it shall have given notice for this purpose to the other Parties under this Clause. Any notice or other communication sent by post shall be sent by prepaid registered post or registered airmail in the case of international service.

 

(b)

Any notice or other communication shall be deemed to have been given:

 

(i)

if delivered, on the date of delivery;

 

(ii)

if sent by post, on the seventh day after it was put into the post; or

 

(iii)

if sent by electronic mail, at the time that it is received in the recipient’s inbox.

 

(c)

In proving the giving of a notice or other communication, it shall be sufficient to prove that delivery was made or that the envelope containing the communication was properly addressed and posted by prepaid registered post or registered airmail or that the email was properly addressed and transmitted.

 

(d)

If there is any change regarding the address or email address of any Party, such Party shall give written notice on this within seven (7) days after such change. If such Party fails to notify the other Parties in time, such Party shall bear any losses incurred by such failure of notification.

9.3

Amendments and Waivers

 

(a)

Unless otherwise specified under the Transaction Documents, no variation of this Agreement (or of any of the documents referred to in this Agreement) shall be valid unless it is in writing and signed by or on behalf of each Party. The expression “variation” shall include any amendment, supplement, deletion or replacement however effected.

 

(b)

Unless expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

 

(c)

No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties.

 

(d)

No failure or delay by any Investor in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Investor of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

 

(e)

The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise.

 

9.4

Delays or Omissions

 

No delay or omission to exercise any right, power or remedy accruing to the Company or any Investor, upon any breach or default of any Party hereto under this Agreement, shall impair any such right, power or remedy of the Company or such Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or any Investor of any breach or default under this Agreement or any waiver on the part of the Company or any Investor of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Company or any Investor shall be cumulative and not alternative.

 

9.5

Expenses

 

Each Party shall be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of the Transaction Documents and all documents ancillary to them.

 

9.6

Interpretation; Titles and Subtitles

 

This Agreement shall be construed according to its fair language. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

9.7

Counterparts

 

(a)

This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart, but this Agreement shall not be effective until each Party has executed at least one counterpart.

(b)

Each counterpart shall constitute an original of this Agreement, but all the counterparts together constitute the same instrument.

 

9.8

Invalidity

 

If at any time any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that shall not in any way affect or impair:

 

(a)

the validity, legality or enforceability in that jurisdiction of any other provision of this Agreement; or

 

(b)

the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable laws in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law.

 

9.9

Confidentiality

 

(a)

Definitions in this Section

 

In this Section:

 

“Confidential Information” means all information received or obtained by a Party in connection with entering into or performing this Agreement and which relates to:

 

(1)

the negotiations concerning this Agreement;

 

(2)

the provisions of the Transaction Documents;

 

(3)

the subject matter of the Transaction Documents; or

 

(4)

the other Parties.

 

(b)

Duty of confidentiality

 

Save as permitted by Section 9.9 (c) each Party shall, and shall procure that any person connected with it and its directors, officers and employees shall, keep confidential and not disclose to any person any Confidential Information.

 

(c)

Permitted disclosures

 

A Party may disclose or permit the disclosure of Confidential Information:

 

(1)          to its directors, officers, employees, legal or other professional advisers, on a need-to-know basis, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

 

(2)          to its directors, officers, employees, legal or other professional advisers, on a need to know basis, to the extent necessary to enable it or them to perform or cause to be performed or to discharge their duties and responsibilities to the Company after the Closing and only under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible);

(3)          when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction;

 

(4)          to the extent that the Confidential Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Section 9;

 

(5)          if such disclosure is expressly permitted by some other provision of this Agreement or if the corresponding Party has given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed;

 

(6)          when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make the disclosure, whether or not the requirement for disclosure has the force of law or

 

(7)          in the case of an Investor, to its stockholders, limited partners, members or other bona fide prospective investors, as the case may be, regarding the general status of its investment in the Company, the name of the Company, a general description of the business of the Company and the actual or estimated return on investment realized by such Investor resulting from or relating to its investment in the Company, and in each case only where such person is under binding obligations of confidence at least as comprehensive as those contained in this Agreement (which it undertakes to enforce and for which it shall be legally responsible) and no Investor shall be permitted to disclose any Confidential Information to any stockholders, limited partners, members or other bona fide prospective investors who (i) establish, carry out, is engaged, concerned or interested directly or indirectly in any business in competition with the business of any Group Company in any jurisdiction or (ii) are included in a list of sensitive parties the Company notifies the Investor of in writing from time to time.

 

(d)

Continuance of obligations

 

The obligations in this Section 9 shall continue to apply after termination of this Agreement without limit in time.

 

9.10

Further Assurances

 

Each Party shall, and shall use all reasonable endeavours to procure that any necessary third party shall execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement.

 

9.11

Press Release

 

The Parties shall not make any announcement regarding the consummation of the transaction contemplated by this Agreement, other Transaction Documents and any related documentation in any press release, conference, advertisement, announcement, professional or trade publication, marketing materials or otherwise to the general public without the prior written mutual consent of the Investor and the Company.

 

9.12

Goveming Law

 

This Agreement and any non-contractual obligation arising out of or in connection with this Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong.

9.13

Dispute Resolution

 

Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be three. The arbitration proceedings shall be conducted in the English language.

 

9.14

Termination of This Agreement

 

(a)          This Agreement may be terminated prior to the Closing (i) by mutual written consent of all Parties; (ii) by either the Company, on the one hand, or such Investor, on the other hand if the Closing fails to occur on or prior to September 30, 2022, (the “Long Stop Date”) (the Long Stop Date would be automatically extended to January 31, 2023 if the application for the consents, filings and/or registration with respect to such Investor’s outbound investment to the Company have been submitted to and accepted by the Governmental Authority prior to September 30, 2022), provided that neither the Company nor such Investor shall be permitted to terminate this Agreement if the failure to consummate the Closing was caused by the breach by such Party of any material representation, warranty or covenant in this Agreement (for the avoidance of any doubt, in case where the application for the consents, filings and/or registrations with respect to the Investor’s outbound investment to the Company fails to be completed on or prior to the Long Stop Date, such Investor shall not be granted the right to terminate the Agreement under such occasion) (for further avoidance of any doubt, the termination shall only become effective to and binding on such relevant Investor); or (iii) by either the Company, on the one hand, or any Investor, on the other hand (and only with respect to such Investor) by written notice to the other Party if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of such Investor or the Company, respectively, and such breach, if curable, has not been cured to the reasonable satisfaction of the other Party within ten (10) Business Days of such notice (for the avoidance of any doubt, the termination shall only become effective to and binding on such breaching Investor).

 

(b)          If this Agreement is terminated pursuant to the provisions of Section 9.14(a) above, this Agreement shall become void and have no further effect with respect to the terminating Parties; provided. that no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation.

 

(c)          Termination shall not affect the then accrued rights and obligations of the Parties (including the right to damages for the breach, if any, giving rise to the termination and any other pre-termination breach by any of the Parties).

 

(d)          Notwithstanding any provision to the contrary, the provisions of Section 1 (Definitions), Section 8 (Indemnity), Section 9.2 (Notices), Section 9.5 (Expenses), Section 9.9 (Confidentiality), Section 9.11 (Press Release), Section 9.12 (Governing Law), Section 9.13 (Dispute Resolution) and this Section 9.14 (Termination of This Agreement) shall survive any expiration or termination of this Agreement.

9.15

Signing and Binding

 

Notwithstanding that there may be Parties not having executed this Agreement at the same time together with other Parties, this Agreement shall be binding upon, effective to and enforceable against and among those Parties which have duly executed this Agreement, in which case, the “Parties” or “Party” used in this Agreement shall refer to those Parties which have duly executed this Agreement.

 

9.16

Effectiveness and Validity

 

Upon execution of this Agreement by any of the signing Parties listed in the signing columns at the end of this Agreement, this Agreement shall become immediately effective and binding among all those Parties which have duly executed, either sequentially or concurrently, copies of this Agreement.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	OFFSHORE FOUNDER HOLDCO
	Lotus Advanced Technology Limited Partnership
	By	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	Lotus Technology Inc.
	By	/s/ FENG Qingfeng
	Name:	FENG Qingfeng

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	SERIES A INVESTOR
	Hangzhou Fuyang Investment Development Co., Ltd.
	/s/ Hangzhou Fuyang Investment Development Co., Ltd.

 

EXHIBIT A

 

SCHEDULE OF THE INVESTORS

Investor		Jurisdiction and Registered Office		Number of Series A Preferred Shares		Purchase Price
HANGZHOU FUYANG INVESTMENT DEVELOPMENT CO., LTD.		a limited liability company registered in the PRC with its registered office at ******		18,964,966		RMB 200,000,000

 

 

EXHIBIT B

 

WARRANTOR'S REPRESENTATIONS AND WARRANTS

 

[***]

 

 

EXHIBIT C

 

FIFTH RESTATED CONSTITUTION

 

[***]

 

 

EXHIBIT D

 

FOURTH RESTATED SHAREHOLDER'S AGREEMENT

 

[***]

 

 

EXHIBIT E

 

DISCLOSURE SCHEDULE

 

[***]

 

 

EXHIBIT F

 

KEY MANAGEMENT STAFF

 

[***]

 

 

 

Exhibit 10.26

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Restructuring Agreement

 

This Restructuring Agreement (the “Agreement”) is made, entered into and executed on June 30, 2023 by and among:

 

Party A: Wuhan Lotus Technology Limited Company Ltd.

 

Registered address:	A504, No. 3 Building, No. 28 Chuanjiangchi 2nd Road, Wuhan
	Economic and Technological Development Zone, Wuhan, China

 

Party B 1: Liu Bin

 

ID Card No. ******

 

Party B 2: Feng Qingfeng

 

ID Card No. ******

 

Party B 3: Li Shufu

 

ID Card No. ******

 

Party B 4: Li Donghui (with Party B 1, Party B 2 and Party B 3, collectively, “Party B”)

 

ID Card No. ******

 

Party C: Wuhan Lotus E-Commerce Co., Ltd.

 

Registered address:	A311, No. 3 Building, No. 28 Chuanjiangchi 2nd Road, Wuhan
	Economic and Technological Development Zone, Wuhan, China

 

(The above parties are hereinafter referred to as a “Party” individually and the “Parties” collectively)

 

Party D: Lotus Technology Inc.

 

Registered address: Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands

 

Whereas:

 

1.

Party A is a limited liability company incorporated in China, which is an indirect wholly-owned subsidiary of Party D (with its subsidiaries, collectively, the “Group Company”); Party C is a limited liability company incorporated in China. Each person constituting Party B is a Chinese citizen with full capacity for civil conduct. As of the date of execution of the Agreement, Party B 1, Party B 2, Party B 3 and Party B 4 hold 33.3%, 27.8%, 22.2% and 16.7% of the equity of Party C respectively.

 

 

2.

On July 26, 2021, each Party B completed the initial registration of foreign exchange for overseas investment by domestic residents at the Hubei Branch of the State Administration of Foreign Exchange in accordance with the Circular of the SAFE on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Round-tripping Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicles (《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》). On July 30, 2021, Ming Jun Holdings Limited, Yin Qing Holdings Limited, Xing Rong Holdings Limited and Jing Can Holdings Limited, wholly-owned shareholding platforms respectively established by each Party B in the British Virgin Islands, jointly established Lotus Advanced Technology Limited Partnership in the British Virgin Islands. On August 9, 2021, Lotus Advanced Technology Limited Partnership established Party D in the Cayman Islands.

 

3.

On August 9, 2021, Party D passed a shareholder resolution confirming that Party B 1, Party B 2, Party B 3 and Party B 4 have committed to contribute RMB130,020,000, RMB108,350,000, RMB86,680,000 and RMB65,010,000 (the "natural person contributions") to Party C as their capital contribution to Party D to indirectly hold 13,002,000, 10,835,000, 8,668,000 and 6,501,000 ordinary shares of Party D through Lotus Advanced Technology Limited Partnership (the "Cayman ordinary shares").

 

4.

As of the date hereof, Party B has completed their respective natural person contributions to Party C and indirectly holds Cayman ordinary shares paid in full.

 

 

5.

The Parties concerned executed the Exclusive Consulting and Service Agreement, Power of Attorney, Exclusive Option Agreement and Equity Pledge Agreement on March 8, 2022 (collectively, the “Original Transaction Documents”), In addition, each person constituting Party B has completed the equity pledge registration procedure under the Original Transaction Documents (the “Equity Pledge Registration”) with the competent market supervision and management authority.

 

6.

As of the date of execution of the Agreement, in addition to other subsidiaries, Party A holds one hundred percent (100%) equity of Sanya Lotus Venture Capital Co., Ltd. (“Sanya Lotus”) and Hangzhou Lotus Technology Service Co., Ltd. (“Hangzhou Lotus”) respectively.

 

7.

The Parties concerned intend to dissolve the Original Transaction Documents to dissolve the VIE structure. After the dissolution of the VIE structure, (1) Sanya Lotus and Hangzhou Lotus will become wholly-owned subsidiaries of Party A; (2) all assets and properties of Party C will be transferred to Party A and/or other designated entities within the Group Company of Party A; (3) the Original Transaction Documents will be terminated, and Wuhan Lotus E-Commerce Co., Ltd. will no longer be an entity within the Group Company.

 

THEREFORE, NOW, the Parties, upon consensus through negotiation, have agreed as follows:

 

Article 1          Restructuring before Dissolution of the VIE Structure

 

1.1

After the execution of the Agreement, Party C will sort out its own debts, notify the creditors, and make Party C pay off all debts owed to the creditors by repaying the debts to the creditors, obtaining creditors’ exemption and/or any other means permitted by laws.

 

 

1.2

The Parties hereby irrevocably agree and acknowledge that, from the date of execution of the Agreement, each Party shall sign any and all documents, and take any and all actions, which are requisite and necessary to transfer all property and assets owned or held by Party C (including but not limited to cash/cash equivalents, business, assets, personnel, if any; but excluding the value-added telecommunications service operating permit obtained by Party C) to Party A and/or other designated entities within the Group Company of Party A at zero consideration or the lowest price permitted by laws. Specifically, the property and assets of Party C include:

 

(1)

All cash and cash equivalents held in Party C’s bank account;

 

(2)

Assets listed in Schedule 1;

 

(3)

Contracts listed in Schedule 2, to which Party C is a party, and which remain valid now.

 

1.3

The Parties hereby irrevocably agree and acknowledge that Party C will, and Party B will use its best efforts to procure Party C to, promptly after the execution of the Agreement, (1) give Party A, all cash and cash equivalents held in Party C’s bank account at zero consideration or the lowest price permitted by laws; (2) transfer to/register in the name of Party A and/or other designated entities within the Group Company of Party A, all assets listed in Schedule 1; (3) transfer to Party A, all contracts listed in Schedule 2, to which Party C is a party, and which remain valid now.

 

Article 2          Dissolution of the VIE Structure

 

2.1

The Parties will promptly: (i) cancel the Equity Pledge Registration with the competent market supervision and management authority; (ii) enter into and execute the termination agreement as set out in Appendix 1 to terminate and rescind the Original Transaction Documents, after the rescission of the Original Transaction Documents, no Party shall claim any rights against other Parties based on the Original Transaction Documents, nor shall there be any disputes or potential disputes between each Party and any other Parties and/or any other third parties regarding the Original Transaction Documents and their rescission; from the date of rescission of the Original Transaction Documents, Party C is no longer a consolidated entity of the Group Company, and the Group Company no longer has a VIE structure; (iii) immediately terminate all business operations of Party C (if any), after the following conditions are met or waived by Party A:

 

(1)

Party A has completed the acquisition from Party C and foreign shareholders of their respective holdings of Sanya Lotus and Hangzhou Lotus; Sanya Lotus and Hangzhou Lotus become a wholly-owned subsidiary of Party A A in which it holds one hundred percent (100%) shares;

 

 

(2)

The matters specified in Paragraph 1.2 of the Agreement have been performed, all properties and assets owned or held by Party C have been owned by Party A or have been registered in the name of Party A and/or other designated entities within the Group Company of Party A, and all contracts, to which Party C is a party, and which remain valid now, have been transferred to Party A and/or other designated entities within the Group Company of Party A;

 

(3)

Wuhan Quanqing Information Technology Co., Ltd. has obtained the value-added telecommunications service operating permit issued by the Ministry of Industry and Information Technology of the People’s Republic of China, whose business scope covers Internet information service business.

 

Notwithstanding the foregoing provisions, if any of the above conditions is waived by Party A, both Party B and Party C shall be obliged to complete the waived conditions within ten (10) working days after the waiver or within other time allowed by Party A. For the avoidance of any doubt, if any assets listed in Schedule 1 of the Agreement (the “Untransferred Assets”) have not been registered in the name of Party A and/or other designated entities within the Group Company of Party A, Party C will irrevocably grant to Party A an exclusive license to use the Untransferred Assets, and such licensing arrangement will terminate after the Untransferred Assets has been registered in the name of Party A and/or other designated entities within the Group Company of Party A.

 

2.2

After the Original Transaction Documents are terminated in accordance with Paragraph 2.1 above, Party C shall deregister the value-added telecommunications service operating permit according to the instructions of Party A and go through the liquidation and deregistration procedures with the competent market supervision and management authority, and Party A shall have the right to appoint a liquidator to manages the assets of Party C, to the extent permitted by Chinese laws. Party C and Party B shall provide any and all necessary cooperation as requested by Party A from time to time, including but not limited to signing and executing any and all documents and taking any and all actions requisite and necessary for the liquidation and deregistration of Party C.

 

 

2.3

Each person constituting Party B hereby irrevocably agrees and acknowledges that Party A or its designated liquidator shall have the right to give at zero consideration, or return to, Party A through other means approved by it in writing, any and all remaining distributable properties (if any) acquired during the process of liquidation and deregistration of Party C; and Party C shall exempt Party A or its designated eligible entities from any payment obligations arising therefrom within the applicable scope of Chinese laws and regulations in effect at that time. If any person constituting Party B obtains any remaining distributable property (if any) during the process of liquidation and deregistration of Party C according to the laws, the person shall, at the request of Party A, give at zero consideration, or return to, Party A through other means approved by Party A in writing, any and all such remaining distributable property (if any).

 

Article 3          Representations and Warranties

 

3.1

Each Party has sufficient legal rights, powers and authority to execute the Agreement, and the execution of the Agreement is the expression of genuine intention of the Party;

 

3.2

The execution and performance of the Agreement does not constitute a breach of any constitutional documents, executed agreements to which the Party is a party or which is binding on the Party, or permits and licenses obtained by the Party, nor will it result in, the Party’s violation of, or a necessity for the Party to obtain, any judgments, rulings, decisions, orders or consents issued by any competent courts, government authorities or regulators;

 

3.3

The Party has obtained all consents, approvals and authorizations necessary to effectively enter into and execute the Agreement and to comply with and perform its obligations hereunder; and

 

3.4

Once executed, the Agreement constitutes a legal, valid, binding obligation upon it, and shall be enforceable against it in accordance with the terms of the Agreement.

 

Article 4          Liabilities for Default and Compensation

 

4.1

Any Party’s breach of, or failure to perform, its representations, warranties, undertakings, obligations or responsibilities in the Agreement, shall constitute a default.

 

 

4.2

If any Party is in default of the Agreement and causes the any other Parties to assume any expenses, responsibility or liabilities, or suffer any losses, the defaulting party shall compensate the non-defaulting party for any and all losses arising therefrom (including but not limited to interest paid or lost, and attorney fees, due to the default).

 

Article 5          Governing Laws and Settlement of Disputes

 

5.1

The performance, interpretation, construction and enforcement of the Agreement shall be governed by Chinese laws.

 

5.2

In the event of any dispute among the Parties regarding the interpretation, construction and performance of the terms of the Agreement, the Parties shall settle the dispute through negotiation in good faith. If the dispute cannot be settled by the Parties through negotiation, any Party may submit the dispute to the Wuhan Arbitration Commission for settlement by arbitration in accordance with its arbitration rules in effect at that time. The seat of arbitration shall be Wuhan, and the language used in the arbitration shall be Chinese. The arbitral award shall be final and binding on the Parties.

 

5.3

During the arbitration, except for the disputes or obligations submitted for arbitration, the Parties shall continue to perform other obligations specified in the Agreement. The arbitrator has the right to make an appropriate decision based on the actual situation to give Party A appropriate legal relief, including restricting, prohibiting or ordering the transfer or disposal of, the equity or assets of Party B and/or Party C, liquidating Party B and/or Party C, etc.

 

5.4

Upon the request of the disputing party, the competent court shall have the power to grant temporary relief, such as withholding or freezing the property or equity of the defaulting party under a judgment or ruling. After the arbitral award becomes effective, any Party shall have the right to apply to the competent court for enforcement of the arbitral award.

 

 

Article 6          Confidentiality

 

The Parties acknowledge and confirm that any and all oral or written information exchanged with one another regarding the Agreement is considered confidential information. Each Party shall treat in confidence all such information, and shall not disclose any such information to any third party without the written consent of other Parties, except for any information: (a) available or to be available to the public (other than disclosed to the public without permission by the party receiving the information); (b) required to be disclosed in accordance with applicable laws and regulations, stock exchange rules; or (c) disclosed by a Party to its legal or financial advisors necessary and requisite for the transactions contemplated herein, but such legal or financial advisors are also subject to a duty of confidentiality similar to this clause. If any Party’s personnel or retained agencies divulge or reveal the confidential information, it shall be deemed that the Party divulges or reveals such confidential information, and the Party shall be liable for default therefor in accordance with the Agreement.

 

Article 7          Supplementary Provisions

 

7.1

The Agreement shall take effect immediately after being stamped or executed by the Parties (and their respective authorized representatives).

 

7.2

Amendments to the Agreement shall be subject to the consent of the Parties in writing. Amendment and supplementary agreements to the Agreement duly executed by the Parties constitute an integral part of the Agreement and shall have the same legal effect as the Agreement.

 

7.3

If any provision of the Agreement is invalid or unenforceable due to conflicts with relevant laws, such provision shall only be deemed invalid within the governance of relevant laws and shall not affect the legal effect of other provisions of the Agreement.

 

7.4

Unless otherwise specified in the Agreement, a Party’s failure to exercise or delay in exercising the rights, powers or privileges under the Agreement shall not be deemed to be a waiver of these rights, powers and privileges, and the single or partial exercise of these rights, powers and privileges does not preclude the exercise of any other rights, powers and privileges.

 

7.5

The Agreement may be executed in one or more counterparts, each of which shall constitute an enforceable original of the Agreement, and each of the originals shall have the same legal effect.

 

(The following is the execution page, without text)

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party A: Wuhan Lotus Technology Limited Company Ltd. (official seal)

 

Signed by:

/s/ Wuhan Lotus Technology Limited Company Ltd.

 

Name: Feng Qingfeng

 

Title: legal representative

 

Execution Page

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party B:

 

Lin Bin

 

Signature:

/s/ Liu Bin

 

Feng Qingfeng

 

Signature:

/s/ Feng Qingfeng

 

Li Shufu

 

Signature:

/s/ Li Shufu

 

Li Donghui

 

Signature:

/s/ Li Donghui

 

Execution Page

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party C: Wuhan Lotus E-Commerce Co., Ltd. (official seal)

 

Signed by:

/s/ Wuhan Lotus E-Commerce Co., Ltd.

 

Name:

 

Title:

 

Execution Page

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Party hereto has procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party D: Lotus Technology Inc.

 

Signed by:

/s/ Feng Qingfeng

 

Name: Feng Qingfeng

 

Title: Director

 

Execution Page

 

 

Schedule 1

 

Assets of Party C

 

[***]

 

 

Schedule 2

 

Contracts to Which Party C is a Party, and Which Remain Valid Now

 

[***]

 

 

Appendix 1

 

Termination Agreement

 

[***]

 

 

 

Exhibit 10.27

 

Confidential treatment has been requested for redacted portions of this exhibit.

 

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

Termination Agreement

 

This Termination Agreement (the “Agreement”) is made, entered into and executed on June 30, 2023 by and among:

 

Party A: Wuhan Lotus Technology Co., Ltd.

 

Registered address:	A504, No. 3 Building, No. 28 Chuanjiangchi 2nd Road, Wuhan
	Economic and Technological Development Zone, Wuhan, China

 

Party B 1: Liu Bin

 

ID Card No. ******

 

Party B 2: Feng Qingfeng

 

ID Card No. ******

 

Party B 3: Li Shufu

 

ID Card No. ******

 

Party B 4: Li Donghui (with Party B 1, Party B 2 and Party B 3, collectively, “Party B” or the “Nominal Shareholders”)

 

ID Card No. ******

 

Party C: Wuhan Lotus E-Commerce Co., Ltd.

 

Registered address:	A311, No. 3 Building, No. 28 Chuanjiangchi 2nd Road, Wuhan
	Economic and Technological Development Zone, Wuhan, China

 

(The above parties are hereinafter referred to as a “Party” individually and the “Parties” collectively)

 

Whereas:

 

1.

Either Party A or Party C is a limited liability company incorporated in the People’s Republic of China (“China”). Each person constituting Party B is a Chinese citizen with full capacity for civil conduct.

 

2.

As of the date of execution of the Agreement, Party B 1, Party B 2, Party B 3 and Party B 4 hold 33.3%, 27.8%, 22.2% and 16.7% of the equity of Party C respectively.

 

3.

Party A and Party C executed the Exclusive Consulting and Service Agreement (the “Service Agreement”) on March 8, 2022 Pursuant to the Service Agreement, Party C shall pay Party A the consulting and service fees for the exclusive consulting and services provided by Party A.

 

4.

Party A executed a Power of Attorney (the “Power of Attorney”) with each Nominal Shareholder on March 8, 2022. Pursuant to the Power of Attorney, the Nominal Shareholders authorize and appoint Party A to participate in the shareholders’ meeting of Party C and sign relevant resolutions of the shareholders’ meeting on behalf of them, and to exercise all shareholder rights that the Nominal Shareholders shall have in accordance with the laws and the articles of association of Party C.

 

 

5.

Party A, Party B and Party C executed an Exclusive Option Agreement on March 8, 2022 (the “Exclusive Option Agreement”, with the Service Agreement and the Power of Attorney, collectively, the “Master Agreements”), under which each Nominal Shareholder irrevocably grants Party A the right to purchase from the Nominal Shareholder at any time all or part of the equity held by the Nominal Shareholder in Party C in accordance with the provisions of the agreement; and Party C also irrevocably grants Party A the right to purchase from Party C at any time all or part of Party C’s assets in accordance with the provisions of the agreement.

 

6.

Party A and Party C respectively executed an Equity Pledge Agreement (the “Equity Pledge Agreement”) with each Nominal Shareholder on March 8, 2022, under which each Nominal Shareholder pledges all the equity held by the Nominal Shareholder in Party C as a pledge guarantee for Party C’s performance of the Service Agreement, and each Nominal Shareholder has completed the pledge registration procedures for the pledged equity of Party C with the competent market supervision and management authority; (the Service Agreement, the Power of Attorney, the Exclusive Option Agreement and the Equity Pledge Agreement, as well as other agreements, contracts or legal documents which are signed, executed or issued by one or more of the Parties from time to time to ensure the performance of the aforesaid agreements and which are signed or approved by Party A in writing, are hereinafter referred to as the “Control Agreements” collectively).

 

7.

The Parties agree to terminate all Control Agreements in accordance with the provisions of the Agreement.

 

THEREFORE, NOW, the Parties, upon consensus through negotiation, have agreed as follows:

 

Article 1          Termination of Control Agreements

 

1.1

The Parties hereby irrevocably agree and confirm that any and/or all Control Agreements shall be terminated and no longer have any effect since the effective date of the Agreement. With regard to the equity pledge as specified in the Equity Pledge Agreement in the Control Agreements, the Parties shall forthwith apply to the competent market supervision and management authority for the deregistration procedures for the release of the pledged equity, and complete the aforesaid procedures for the release of the pledge registration promptly after the effective date of the Agreement. To this end, the Parties concerned shall sign all necessary documents and take all necessary actions.

 

1.2

From the effective date of the Agreement, the Parties no longer have any and/or all rights under the Control Agreements, and no longer need to perform any and/or all obligations under the Control Agreements, but the rights and obligations that the Parties have actually exercised and performed shall be effective.

 

 

1.3

Except as otherwise specified in Paragraph 1.2 above, each Party hereto hereby irrevocably and unconditionally releases any and/or all disputes, claims, demands, rights, obligations, liabilities or actions of any kind or nature, directly or indirectly in connection with or arising from any and/or all the Controlling Agreements, that the Party has or may have against other Parties hereto in the past, present or future.

 

1.4

Without prejudice to the provisions of Paragraph 1.2 and the generality of Paragraph 1.3 above, from the effective date of the Agreement, each Party hereto hereby releases undertakings, debts, claims, demands, obligations and liabilities of any kind or nature, in connection with or arising from the Controlling Agreements, that the Party, its heirs, successors, assigns or executors have or may have against other Parties hereto, the current and former directors, officers, employees, legal advisors and agents of such other Parties, the affiliates of such persons, and their respective successors and assigns in the past, present or future, whether such claims or demands have been filed or not yet filed, known or unknown.

 

Article 2          Representations and Warranties

 

Each Party hereby represents and warrants as follows:

 

2.1

The Party has sufficient legal rights, powers and authority to execute the Agreement, and the execution of the Agreement is the expression of genuine intention of the Party;

 

2.2

The execution and performance of the Agreement does not constitute a breach of any constitutional documents, executed agreements to which the Party is a party or which is binding on the Party, or permits and licenses obtained by the Party, nor will it result in, the Party’s violation of, or a necessity for the Party to obtain, any judgments, rulings, decisions, orders or consents issued by any competent courts, government authorities or regulators;

 

2.3

The Party has obtained all consents, approvals and authorizations necessary to effectively enter into and execute the Agreement and to comply with and perform its obligations hereunder; and

 

2.4

Once executed, the Agreement constitutes a legal, valid, binding obligation upon it, and shall be enforceable against it in accordance with the terms of the Agreement.

 

Article 3          Liabilities for Default and Compensation

 

3.1

Any Party’s breach of, or failure to perform, its representations, warranties, undertakings, obligations or responsibilities in the Agreement, shall constitute a default.

 

3.2

If any Party is in default of the Agreement and causes the any other Parties to assume any expenses, responsibility or liabilities, or suffer any losses, the defaulting party shall compensate the non-defaulting party for any and all losses arising therefrom (including but not limited to interest paid or lost, and attorney fees, due to the default).

 

Article 4          Governing Laws and Settlement of Disputes

 

4.1

The performance, interpretation, construction and enforcement of the Agreement shall be governed by Chinese laws.

 

 

4.2

In the event of any dispute among the Parties regarding the interpretation, construction and performance of the terms of the Agreement, the Parties shall settle the dispute through negotiation in good faith. If the dispute cannot be settled by the Parties through negotiation, any Party may submit the dispute to the Wuhan Arbitration Commission for settlement by arbitration in accordance with its arbitration rules in effect at that time. The seat of arbitration shall be Wuhan, and the language used in the arbitration shall be Chinese. The arbitral award shall be final and binding on the Parties.

 

Article 5          Confidentiality

 

The Parties acknowledge and confirm that any and all oral or written information exchanged with one another regarding the Agreement is considered confidential information. Each Party shall treat in confidence all such information, and shall not disclose any such information to any third party without the written consent of other Parties, except for any information: (a) available or to be available to the public (other than disclosed to the public without permission by the party receiving the information); (b) required to be disclosed in accordance with applicable laws and regulations, stock exchange rules; or (c) disclosed by a Party to its legal or financial advisors necessary and requisite for the transactions contemplated herein, but such legal or financial advisors are also subject to a duty of confidentiality similar to this clause. If any Party’s personnel or retained agencies divulge or reveal the confidential information, it shall be deemed that the Party divulges or reveals such confidential information, and the Party shall be liable for default therefor in accordance with the Agreement.

 

Article 6          Supplementary Provisions

 

6.1

The Agreement shall take effect immediately after executed by the Parties (and their respective authorized representatives).

 

6.2

Amendments to the Agreement shall be subject to the consent of the Parties in writing. Amendment and supplementary agreements to the Agreement duly executed by the Parties constitute an integral part of the Agreement and shall have the same legal effect as the Agreement.

 

6.3

If any provision of the Agreement is invalid or unenforceable due to conflicts with relevant laws, such provision shall only be deemed invalid within the governance of relevant laws and shall not affect the legal effect of other provisions of the Agreement.

 

6.4

Unless otherwise specified in the Agreement, a Party’s failure to exercise or delay in exercising the rights, powers or privileges under the Agreement shall not be deemed to be a waiver of these rights, powers and privileges, and the single or partial exercise of these rights, powers and privileges does not preclude the exercise of any other rights, powers and privileges.

 

6.5

The Agreement may be executed in one or more counterparts, each of which shall constitute an enforceable original of the Agreement, and each of the originals shall have the same legal effect.

 

(The following is the execution page, without text)

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party A: Wuhan Lotus Technology Co., Ltd. (official seal)

 

Signed by:

/s/ Wuhan Lotus Technology Co., Ltd.

 

Name: Feng Qingfeng

 

Title: legal representative

 

Execution Page

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

Party B:

 

Lin Bin

 

Signature:

/s/ Liu Bin

 

Feng Qingfeng

 

Signature:

/s/ Feng Qingfeng

 

Li Shufu

 

Signature:

/s/ Li Shufu

 

Li Donghui

 

Signature:

/s/ Li Donghui

 

Execution Page

 

 

[There is no text on this page]

 

IN WITNESS WHEREOF, the Parties hereto have procured their respective legal representatives or authorized representatives to execute the Agreement on the date first written above.

 

 

 

Party C: Wuhan Lotus E-Commerce Co., Ltd. (official seal)

 

Signed by:

/s/ Wuhan Lotus E-Commerce Co., Ltd.

 

Name:

 

Title:

 

Execution Page

 

 

Exhibit 10.28

 

FINAL FORM

 

[●], 2023

 

LOTUS TECHNOLOGY INC.
as the Issuer

 

and

 

[●]
as the Investor

 

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

 

 

Contents

 

Clause

PAGE

 

1.

DEFINITIONS

1

 

2.

ISSUANCE AND PURCHASE OF THE NOTE

6

 

3.

CLOSING

6

 

4.

CONDITIONS PRECEDENT

7

 

5.

REPRESENTATIONS AND WARRANTIES

8

 

6.

RESTRICTIONS ON DISPOSITION

13

 

7.

USE OF PROCEEDS

13

 

8.

EXPENSES

13

 

9.

COVENANTS

13

 

10.

CONFIDENTIALITY

13

 

11.

INDEMNIFICATION

14

 

12.

TERMINATION

15

 

13.

NOTICES

15

 

14.

MISCELLANEOUS

16

 

15.

GOVERNING LAW AND DISPUTE RESOLUTION

17

 

SCHEDULE 1    FORM OF CONVERTIBLE SENIOR NOTE

 

SCHEDULE 2    DISCLOSURE SCHEDULE

 

 

THIS CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) is made on [●], 2023

 

BETWEEN:

 

(1)	LOTUS TECHNOLOGY INC., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”); and

 

(2)	[●] (the “Investor”).

 

(All the foregoing parties shall together be referred to as the “Parties” and each a “Party”.)

 

WHEREAS:

 

(A)

The Issuer proposes to issue, and the Investor proposes to subscribe for, on and subject to the terms and conditions set out in this Agreement, a senior unsecured convertible note in the principal amount equal to the Purchase Price (as defined below), convertible into fully paid Conversion Shares (as defined below).

 

(B)

The Issuer intends to apply for a listing of its securities on New York Stock Exchange, The Nasdaq Stock Market or such other internationally recognized stock exchange duly approved by the Issuer (“Approved Exchange”), as the case may be, through a De-SPAC Transaction (the “Listing”), following the consummation of the transactions contemplated hereby.

 

IT IS HEREBY AGREED as follows:

 

1.	DEFINITIONS

 

1.1	The following terms and expressions used in this Agreement, unless the context otherwise requires, shall have the following meanings:
	“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. Without limiting the generality of the foregoing, (i) a natural person’s Affiliates shall include such natural person’s spouse, children, parents, siblings, spouse’s parents, spouse’s siblings and their spouses, children’s spouses, siblings’ spouses, and any other Person that directly or indirectly Controlled by any of the aforesaid individuals, and (ii) if a Person is an investment fund or an entity directly or indirectly Controlled by an investment fund, Affiliates of such Person shall additionally include any fund manager associated with such investment fund and any investment fund managed or co-managed by such fund manager, and the general partner(s) and limited partner(s) of any such investment fund.   “Articles” means the memorandum and articles of association of the Issuer as amended from time to time;   “Authority” means any governmental or regulatory commission, board, body, authority or agency, or any stock exchange, self-regulatory organisation or other non-governmental regulatory authority, or any court, tribunal or arbitrator, in each case whether national, central, federal, provincial, state, regional, municipal, local, domestic or foreign;   “Board” means the board of directors of the Issuer;

 

 

“Business Day” means any day that is not a Saturday, Sunday, legal holiday or another day on which commercial banks are required or authorized by law to be closed in the PRC, Hong Kong, the U.S. or the Cayman Islands;   “Closing” means the completion of the issuance and subscription of the Note by the Investor in accordance with clause 3;   “Closing Date” means the date of the Closing, which shall be the third (3rd) Business Day after the conditions to the Closing set forth in clause 4 below (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or duly waived, or on such other date as the parties may otherwise agree in writing;   “Company Registered IP” means Company Owned IP issued by, registered, recorded or filed with, renewed by or the subject of a pending application before any applicable Authority;   “Company Owned IP” means all Intellectual Property owned or purported to be owned by the Issuer or any of its Subsidiaries,   “Confidential Information” has the meaning given to it in clause 10.1;   “Contract” means, a contract, agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, purchase order, and other legally binding arrangement, whether written or oral;   “Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing;   “Conversion Shares” means the ordinary shares, par value US$0.00001 per share, of the Issuer issuable upon the conversion of the Note in accordance with the Convertible Senior Note;   “Convertible Senior Note” or “Note” means each instrument to be executed by the Issuer constituting the Note in the form set out in Schedule 1 to this Agreement, and “Convertible Senior Notes” or “Notes” shall be construed accordingly;   “De-SPAC Transaction” means a business combination involving a special purpose acquisition company, pursuant to which the Issuer’s capital stock is, or is exchanged for equity securities of a person that is, listed or approved for listing on an Approved Exchange.   “Event of Default” means any event or circumstances specified as such in the Convertible Senior Note;   “GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

 

 

“Governmental Order” means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Authority;   “Group” or “Group Companies” means collectively the Issuer and its Subsidiaries, and a “Group Company” means any entity within the Group;   “Intellectual Property” means all intellectual property, industrial property and proprietary rights in any and all jurisdictions worldwide, including: (a) patents, (b) trade names, logos, trademarks, service marks, service names, trade dress, company names, collective membership marks, certification marks, slogans, toll-free numbers, domain names, social media handles and accounts, and other forms indicia of origin, whether or not registerable as a trademark in any given jurisdiction, together with registrations, renewals, and applications therefor, and the goodwill associated with any of the foregoing, (c) copyrights, rights in works of authorship and mask works, (d) rights in software, (e) all trade secrets and other confidential or proprietary information, including know-how and inventions (whether or not patentable or reduced to practice), invention disclosures, improvements, source code, documentation, processes, models, technology, formulae, customer lists, supplier lists, data, databases, and data collections and all rights therein, business and marketing plans, methodologies and all other information, in each case, that derives economic value (actual or potential) from not being generally known to other persons who can obtain economic value from its disclosure or use, (f) “moral” rights, rights of publicity or privacy, data base or data collection rights and other similar intellectual property rights, (g) registrations, applications, extensions, combinations, divisions, reissues and renewals for any of the foregoing in (a)-(d), and (h) all rights in all of the foregoing (a)-(g), including all rights to claim for damages by reason of infringement, misappropriation or violation thereof, with the right to sue for, and collect the same;   “Knowledge of the Issuer” means the actual knowledge of Mr. Feng Qingfeng and Mr. LEE Kuen Long;   “Law” or “Laws” means any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Authority, in each case as amended, and any and all applicable Governmental Orders;   “Lien” means any claim, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by Contract, understanding, law, equity or otherwise;   “Material Adverse Effect” means any event or circumstance or any combination of them that is materially adverse to (x) the business, operations, assets, properties, business or financial condition, results or prospects of the Group taken as a whole or (y) the ability of the Issuer to perform its obligations under this Agreement or any other Transaction Document; provided, however, that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect”: (a) any change in applicable Laws or generally accepted accounting principles or any interpretation thereof following the date of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the taking or refraining from taking of any action required to be taken or refrained from being taken under this Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), epidemic or pandemic, acts of nature or change in climate, (e) any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions, riots or insurrections, (f) any action taken by, or at the request of, the Investor, (g) any matter set forth on the Disclosure Schedule or disclosed to the Investor on any document made available to the Investor on or prior to the date of this Agreement, (h) any events that are cured by the Issuer prior to the Closing, or (i) any worsening of the events referred to in clauses (a), (b), (d), (e) or (g) to the extent existing as of the date of this Agreement;

 

 

“Material Contract” means each currently effective agreements, contracts, leases, licenses, instruments, commitments and other obligations to which a Group Company is a party or by which it is bound that: (i) involves obligations (contingent or otherwise), payments or revenues to or by the Issuer or any of its Subsidiaries in excess of $10,000,000 during the twelve-month period ended on September 30, 2022, (ii) involves (A) indebtedness for borrowed money having an outstanding principal amount in excess of $10,000,000 or (B) an extension of credit, a guaranty, surety, deed of trust, or the grant of a Lien, in each case, to secure any indebtedness having a principal or stated amount in excess of $10,000,000; (iii) involves the lease, license, sale, use, disposition or acquisition of a business or assets constituting a business involving purchase price, payments or revenues in excess of $10,000,000; (iv) grants a right of first refusal, right of first offer or similar right with respect to any material properties, assets or businesses of the Issuer and its Subsidiaries, taken as a whole; (v) involves the establishment, contribution to, or operation of a partnership, joint venture or similar arrangement, or involving a sharing of profits or losses, involving payments of an amount higher than $10,000,000; or (vi) contains any exclusivity, “most favored nation”, minimum use or purchase requirements.   “Material Subsidiary” has the meaning ascribed to such term in the Convertible Senior Note;   “Maturity Date” shall have the meaning ascribed to such term in the Convertible Senior Note.   “Person” means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity;   “PRC” means the People’s Republic of China, and for the purposes of this Agreement excludes Hong Kong, the Macau Special Administrative Region and Taiwan;   “Purchase Price” has the meaning given to it in clause 2.1;   “Representatives” has the meaning given to it in clause 10.1;   “Required Internal Approval” has the meaning given to it in clause 3.2;   “SEC” means the U.S. Securities and Exchange Commission;   “Securities Act” means the U.S. Securities Act of 1933, as amended;

 

 

	“Shareholders Agreement” means the Fourth Amended and Restated Shareholders Agreement of Lotus Technology Inc., dated as of September 20, 2022;   “Subsidiary” means, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person from time to time;   “Surviving Provisions” means clauses 1 (Definitions), 8 (Expenses), 13 (Confidentiality), 15 (Termination), 13 (Notices), 17 (Miscellaneous) and 15 (Governing law and Dispute Resolution);   “Tax Return” means any return, report or statement showing Taxes, used to pay Taxes, or required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated or provisional Tax.   “Taxes” means, (i) in the PRC: (a) any national, provincial, municipal, or local taxes, charges, fees, levies, or other assessments, including without limitation, all net income (including enterprise income tax and individual income withholding tax), turnover (including value-added tax, business tax, and consumption tax), resource (including urban and township land use tax), special purpose (including land value-added tax, urban maintenance and construction tax, and additional education fees), property (including urban real estate tax and land use fees), documentation (including stamp duty and deed tax), filing, recording, social insurance (including pension, medical, unemployment, housing, and other social insurance withholding), tariffs (including import duty and import value-added tax), and estimated and provisional taxes, charges, fees, levies, or other assessments of any kind whatsoever, (b) all interest, penalties (administrative, civil or criminal), or additional amounts imposed by any Authority in connection with any item described in sub-clause (a) above, and (c) any form of transferee liability imposed by any Authority in connection with any item described in sub-clauses (a) and (b) above, and (ii) in any jurisdiction other than the PRC: all similar liabilities as described in sub-clause (i)(a) and (i)(b) above;   “Transaction Documents” means this Agreement, the Convertible Senior Note, and any and all other agreements and instruments being or to be entered into by the parties to this Agreement in connection with the transactions contemplated by any of the foregoing;   “U.S.” means the United States of America; and   “US$” and “US dollars” means United States dollars, the legal currency of the U.S.
1.2	In this Agreement:

 

(a)

words denoting the singular shall include the plural and vice versa;

 

(b)

words denoting one gender shall include each gender and all genders;

 

(c)

the term “or” is not exclusive;

 

(d)

the term “including” shall be deemed to be followed by “but not limited to”;

 

(e)

references to clauses and the Schedules are, unless stated otherwise, references to clauses of and the schedules to this Agreement;

 

 

(f)

headings are inserted for convenience only and will not affect the construction of this Agreement;

 

(g)

any reference to an enactment or a statutory provision is a reference to it as it may have been or may from time to time be amended, modified, consolidated or re-enacted;

 

(h)

the terms “hereof”, “herein” and “hereunder” (and any other similar expressions) refer to this Agreement as a whole and not to any particular clause or other portion hereof; and

 

(i)

each representation, warranty, agreement, and covenant contained herein will have independent significance, regardless of whether also addressed by a different or more specific representation, warranty, agreement, or covenant.

 

1.3	The recitals and the Schedules shall be deemed to be incorporated in this Agreement.
2.	ISSUANCE AND PURCHASE OF THE NOTE

 

2.1	Subject to and in accordance with the provisions of this Agreement, the Issuer agrees to issue and sell to the Investor, and the Investor agrees to subscribe for and purchase, a Convertible Senior Note for a purchase price equal to US$[●] (the “Purchase Price”) at the Closing.

 

3.

CLOSING

 

3.1

The Closing shall take place remotely on the Closing Date via the exchange of documents and signatures, so long as the conditions precedent to the Closing set forth in clause 4 below (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or duly waived as of the Closing Date.

 

3.2

The Issuer shall, prior to the Closing Date, procure that (a) meetings of the Board are duly convened and held or resolutions in writing of the Board are passed in accordance with the Articles and the Shareholders Agreement at/for which: (i) the execution of this Agreement and the other Transaction Documents and the performance of the Issuer’s obligations hereunder and thereunder; (ii) the issuance of the Note to the Investor in accordance with this Agreement; (iii) the conversion of the Note and the issuance of the Conversion Shares; and (iv) the performance by the Issuer of its other obligations under the Transaction Documents, have been approved and/or ratified, and (b) waiver from each of its shareholders of any pre-emptive right to subscribe for the Note or Conversion Shares is obtained ((a) and (b) are collectively referred to as the “Required Internal Approval”).

 

3.3	At the Closing:

 

(a)

the Issuer shall deliver the following to the Investor:

 

(i)

a Convertible Senior Note dated as of the Closing Date with an aggregate principal amount of the Purchase Price, duly executed by the Issuer;

 

(ii)

a certificate referred to in clause 4.2(d); and

 

 

(iii)

copies of all other Transaction Documents, if applicable, duly executed by all parties thereto (other than the Investor or its Affiliates).

 

(b)

against delivery of the items set out in clause 3.3(a) and the Issuer delivering a written notice to the Investor of all closing conditions being satisfied or waived (as applicable), the Investor shall (i) pay or cause to be paid the Purchase Price to the Issuer by wire transfer of immediately available funds in US dollars to a bank account designated by the Issuer, evidence of such payment taking the form of a confirmation from the paying bank that it has made such payment or a SWIFT message showing such wire transfer, and (ii) deliver to the Issuer a certificate, referred to in clause 4.3(c).

 

4.	CONDITIONS PRECEDENT
4.1	The obligations of the Parties to consummate the transactions contemplated under this Agreement are subject to the satisfaction, on the Closing Date, of the following condition:

 

(a)

no injunction, interim or otherwise, having been granted in respect of the Issuer and no law having been enacted, issued or promulgated that would enjoin or prohibit or fundamentally alter the terms of the transactions contemplated by the Transaction Documents.

 

4.2	The obligations of the Investor to consummate the transactions contemplated under this Agreement are subject to the satisfaction, on the Closing Date, of the following conditions, any of which may be waived in writing by the Investor in its sole discretion:

 

(a)

the representations and warranties of the Issuer contained in clause 5.1 shall be true and correct as of the date hereof and as of the Closing Date (except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date) in all material respects (except for those representations and warranties that are qualified by “material” or “Material Adverse Effect” or any similar qualification or exception, which shall be true and correct to such extent);

 

(b)

the Issuer shall have performed and complied with, in all material respects, the covenants, obligations and agreements required under the Transaction Documents to be performed or complied with by the Issuer on or prior to the Closing Date, including providing all deliverables set forth in clause 3.3(a) hereof;

 

(c)

there shall not exist or have occurred any event, circumstance, development or change that, individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect; and

 

(d)

the Issuer shall have delivered to the Investor a certificate, dated as of the Closing Date, executed by a duly authorized director or officer of the Issuer, certifying (i) the satisfaction of the conditions specified in clauses 4.2(a) through (c) above; and (ii) that the Required Internal Approval was duly obtained by the Issuer in accordance with the Articles and the Shareholders Agreement, and are correct, complete and in full force and effect as of the Closing Date.

 

 

4.3

The obligations of the Issuer to consummate the transactions contemplated under this Agreement with the Investor are subject to the satisfaction, on the Closing Date, of the following conditions, any of which may be waived in writing by the Issuer with respect to that Investor in its sole discretion:

 

(a)

the representations and warranties of the Investor contained in clause 5.2 hereof shall be true and correct as of the date hereof and as of the Closing Date (except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date) in all material respects (except for those representations and warranties that are qualified by “material” or “Material Adverse Effect” or any similar qualification or exception, which shall be true and correct to such extent);

 

(b)

the Investor shall have performed and complied with, in all material respects, the covenants, obligations and agreements required under the Transaction Documents to be performed or complied with by the Investor on or prior to the Closing Date; and

 

(c)

the Investor shall have delivered to the Issuer a certificate, dated as of the Closing Date, executed by a duly authorized director or officer of the Investor, certifying the satisfaction of the conditions specified in clauses 4.3(a) through (b) above.

 

5.	REPRESENTATIONS AND WARRANTIES
	Representations and Warranties of the Issuer
5.1	Subject to such exceptions specifically set forth in the Disclosure Schedule attached hereto as Schedule 2 (the “Disclosure Schedule”), the Issuer represents and warrants to the Investor as of the date hereof as follows:

 

(a)

Organization, Good Standing and Qualification. Each Group Company is (i) duly incorporated, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation, (ii) has requisite corporate power and authority to own and operate its properties and assets, to carry on its business as presently conducted and contemplated to be conducted, and (iii) is duly licensed or qualified and in good standing as a foreign or extra-provincial corporation (or other entity, if applicable) in each jurisdiction in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except in the case of clause (iii), where the failure to be so licensed or qualified or in good standing would not be material to the business of the Group taken as a whole.

 

(b)

Authorization. The Issuer has all corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to carry out and perform its obligations hereunder and thereunder. All corporate actions on the part of the Issuer for the authorization, execution, delivery and performance of each Transaction Document and the transactions contemplated thereby, have been taken or will be taken prior to the Closing. Each Transaction Document has been duly executed and delivered by the Issuer and constitutes valid and legally binding obligations of such party, enforceable against such party in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by applicable Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies (collectively, the “Enforceability Exceptions”).

 

 

(c)

Approvals. Each approval, authorization or consent which is required to be obtained by the Issuer in connection with the consummation of the transactions contemplated under this Agreement and the other Transaction Documents will have been obtained prior to and be effective as of the Closing.

 

(d)

Corporate Structure; Subsidiaries. A complete list, as of the date of this Agreement, of each Subsidiary of the Issuer and its jurisdiction of incorporation, formation or organization, outstanding equity securities, and holders of equity securities, as applicable, is set forth in the Disclosure Schedule.

 

(e)

Valid Issuance. The Note, when issued and delivered by the Issuer, will constitute a senior, direct, unconditional, unsubordinated and unsecured indebtedness of the Issuer, and will at all times rank pari passu with all existing and future unsubordinated and unsecured obligations of the Issuer. The Conversion Shares, when issued and delivered by the Issuer to the Investor in accordance with the terms of the Convertible Senior Note, will be duly and validly issued, fully paid and non-assessable, free from any Liens (except for any restrictions on transfer under applicable securities Laws, the Articles, the Shareholders Agreement and under the Transaction Documents).

 

(f)

Capitalization

 

(i)

The Disclosure Schedule provides a true and correct list of all shareholders owning issued and outstanding shares of the Issuer, together with the number and class of shares held by each such shareholder as of the date hereof.

 

(ii)

As of the date of this Agreement, the authorized share capital of the Issuer is US$50,000 divided into 5,000,000,000 shares of $0.00001 par value each, comprised of (i) 4,691,947,371 ordinary shares, par value of $0.00001 each, of which 2,142,922,222 ordinary shares are issued and outstanding; (ii) 184,596,297 Series Pre-A preferred shares, par value of $0.00001 each, all of which are issued and outstanding; and (iii) 123,456,332 Series A preferred shares, par value of $0.00001 each, all of which are issued and outstanding.

 

(g)

Compliance with Laws; Permits.

 

(i)

Except as set forth in the Disclosure Schedule and except as would not be or reasonably be expected to be material to the business of the Issuer and its Subsidiaries, taken as a whole, in the three (3) years prior to the date hereof, the Issuer and its Subsidiaries are, and have been, in compliance with all applicable Laws.

 

(ii)

Except as set forth in the Disclosure Schedule, each of the Group Companies has in effect all material approvals, authorizations, clearances, licenses, registrations, permits or certificates of the applicable Authority that are required for such Group Company to own, lease or operate its properties and assets and to conduct its business as currently conducted in all material respects.

 

 

(h)

Actions. There is no action, suit, proceeding, claim, arbitration or investigation pending or, to the Knowledge of the Issuer, threatened in writing against or affecting any Group Company or , or any of their respective directors or officers (solely in their capacity as such), except as would not, individually or in the aggregate, reasonably be expected to be material to the business of the Group taken as a whole.

 

(i)

Material Contracts. Except for any Material Contract that will terminate upon the expiration of the stated term thereof prior to the Closing Date, each Material Contract is (A) in full force and effect and (B) represents the legal, valid and binding obligations of the applicable Group Company which is a party thereto and, to the Knowledge of the Issuer, represents the legal, valid and binding obligations of the counterparties thereto. Except as set forth in the Disclosure Schedule, and except, in each case, where the occurrence of such breach or default or failure to perform would not be material to the business of the Group taken as a whole, the applicable Group Company has duly performed all of its material obligations under each Material Contract to which it is a party to the extent such obligations to perform have accrued, (y) no breach or default thereunder by the Group with respect thereto, or, to the Knowledge of the Issuer, any other party or obligor with respect thereto, has occurred, and (z) no event has occurred that with notice or lapse of time, or both, would constitute such a default or breach of such Material Contract by the Issuer or any of its Subsidiaries or, to the Knowledge of the Issuer, any other party thereto, or would entitle any third party to prematurely terminate any Material Contract. No Group Company has within the last twelve (12) months provided to or received from the counterparty to any Material Contract any written notice or written communication to terminate, or not renew, any Material Contract.

 

(j)

Intellectual Properties.

 

(i)

IP Ownership. Each applicable Group Company has made all required filings and registrations (and corresponding payments of fees therefor) to the applicable Authority in connection with issuances, registrations and applications for the Company Registered IP in all material respects. Each item of Company Registered IP is subsisting and, to the Knowledge of the Issuer and other than any Company Registered IP in the application process, valid and enforceable. The Group Companies have good and valid title to and exclusively own all right, title and interest in and to each item of Company Registered IP and other material Company Owned IP, free and clear of any Liens (except for licenses of Intellectual Property granted by the Issuer or any of its Subsidiaries in the ordinary course).

 

(ii)

Infringement, Misappropriation and Claims. Except as set forth in the Disclosure Schedule, neither the Issuer nor any of its Subsidiaries violates, infringes or misappropriates, or in the three (3) years prior to the date hereof, has violated, infringed or misappropriated, any Intellectual Property of any Person in any material respect, nor has the Issuer or any of its Subsidiaries received in the three (3) years prior to the date hereof any written notice alleging any of the foregoing. During the three (3) years prior to the date hereof, (i) to the Knowledge of the Issuer, no Person has violated, infringed or misappropriated any Company Owned IP in any material respect and (ii) neither the Issuer nor any of its Subsidiaries has given any written notice to any other Person alleging any of the foregoing.

 

 

(k)

Employment Matters.

 

(i)

Except as set forth in the Disclosure Schedule and except as would not be material to the business of the Group taken as a whole, (i) each Group Company has, for the three (3) years prior to the date hereof, complied with all applicable Laws relating to employment and labor, and (ii) there is no pending or, to the Knowledge of the Issuer, threatened in writing claim relating to the violation of any applicable Law by the Issuer or any of its Subsidiaries related to labor or employment;

 

(ii)

There has not been, and there is not now pending or, to the Knowledge of the Issuer, threatened, any strike, union organization activity, lockout, slowdown, picketing, or work stoppage or any unfair labor practice charge against any Group Company. No Group Company is bound by or subject to (and none of their assets or properties is bound by or subject to) any written or oral Contract, commitment or arrangement with any labor union or any collective bargaining agreements.

 

(l)

Tax Matters. Except as set forth in the Disclosure Schedule, each Group Company (i) has timely filed (taking into account any extensions) all material Tax Returns that are required to be filed by or with respect to it with any applicable Authority, and (ii) has timely paid or will timely pay all Taxes owed by it which are due and payable, except with respect to matters being contested in good faith by appropriate proceeding and with respect to which adequate reserves have been made in accordance with GAAP. No material deficiencies for any Taxes that are currently outstanding with respect to any Tax Returns of a Group Company have been asserted in writing by, and no written notice of any action, audit, assessment or other proceeding, in each case that is currently pending, with respect to such Tax Returns or any Taxes of a Group Company has been received from, any applicable Authority, and no dispute or assessment relating to such Tax Returns or such Taxes with any such applicable Authority is currently outstanding.

 

Except for this clause 5.1, the Issuer makes no express or implied representation or warranty (oral or written) with respect to the Group Companies or their respective businesses, assets or conditions (financial or otherwise), and the Issuer hereby disclaims any such other representations or warranties, if any, and all other warranties expressed or implied by law, trade, custom, usage or otherwise are hereby expressly excluded by the Issuer.

 

 

	Representations and Warranties of the Investor
5.2	The Investor hereby represents and warrants to the Issuer as of the date hereof as follows:

 

(a)

Organization and Good Standing. The Investor is (i) duly incorporated, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation, and (ii) has requisite corporate power and authority to own and operate its properties and assets, to carry on its business as presently conducted and contemplated to be conducted. It is not in receivership or liquidation and has taken no steps to enter into liquidation, and no petition has been presented for the winding-up of the Investor.

 

(b)

Authorization. The Investor has all corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to carry out and perform its obligations hereunder and thereunder. The execution and delivery by the Investor of this Agreement and the performance by the Investor of the transactions contemplated hereunder have been duly authorized by all necessary corporate or other action of the Investor. This Agreement has been duly executed and delivered by the Investor and constitutes valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with its terms, subject to Enforceability Exceptions. No consent, approval, authorization, order, filing, registration or qualification of or with any court, Authority or third person is required to be obtained by the Investor in connection with the execution and delivery of this Agreement by the Investor or the performance of the Investor’s obligations hereunder or thereunder.

 

(c)

Purchase for Own Account. The Note and the Conversion Shares will be acquired for the Investor’s own account, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof, and the Investor does not have any present intention of selling, granting any participation in, or otherwise distributing the same. The Investor does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to such Person or any third Person, with respect to any Note or Conversion Shares.

 

(d)

Restricted Securities. The Investor understands that the Note and the Conversion Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended. The Investor further understands that the Note are and the Conversion Shares will be “restricted securities” under applicable U.S. federal securities laws that are subject to transfer restrictions under such laws. The Investor acknowledges that the Issuer has no obligation to register or qualify the Note or the Conversion Shares (other than registration rights attached to such Conversion Shares, if any), as the case may be, for resale. The Investor further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Note or the Conversion Shares, and on requirements relating to the Issuer which are outside of the Investor’s control, and which the Issuer is under no obligation and may not be able to satisfy.

 

(e)

No Public Market. The Investor understands that no public market now exists for the Note or the Conversion Shares, and that the Issuer has made no assurances that there will ever be a public market for the Note or the Conversion Shares.

 

 

6.	RESTRICTIONS ON DISPOSITION
	The Investor shall not assign or transfer this Agreement or any Note, or any of its rights, interests or obligations hereunder or thereunder, in whole or in part, to any person without the prior written consent of the Issuer (which consent shall not be unreasonably withheld if such assignment or transfer is to an Affiliate of the Investor).

 

7.	USE OF PROCEEDS
	The Issuer shall use the proceeds from the subscription of the Note only for working capital requirements and other general corporate purposes (including but not limited to business expansion, capital expenditure, new product development, talent acquisition, operating expenses, investments and mergers and acquisitions, and fees and expenses in connection with the issuance of the Note).

 

8.	EXPENSES
	Each Party shall bear its own costs and expenses in connection with (i) the preparation and negotiation of this Agreement and the other Transaction Documents, (ii) its performance under this Agreement and the other Transaction Documents and (iii) the consummation of the transactions contemplated hereby and thereby, including all fees and expenses of such Party’s agents, representatives, financial and legal advisors and accountants.

 

9.	COVENANTS
	Prior to the conversion of the Note into Conversion Shares, the Issuer shall have duly authorized and validly reserved for issuance such number of Conversion Shares as shall be sufficient to effect the conversion of the Note.

 

10.	CONFIDENTIALITY
10.1	Each Party undertakes that it shall, and shall procure that its Affiliates, directors, officers, employees, agents and professional and other advisers (collectively, its “Representatives”) will, use its best endeavours to keep confidential at all times and not permit or cause the disclosure of any information (other than to its Representatives) which it may possess or acquire before, on or after the date of this Agreement relating to the provisions of, and negotiations leading to, this Agreement or the other Transaction Documents and the performance of the obligations hereunder or thereunder (such information, “Confidential Information”).

 

10.2	Each Party shall alert the other Parties as soon as reasonably practicable after it becomes aware of any unauthorized use or disclosure, or suspected unauthorized use or disclosure of Confidential Information.

 

10.3	Any release of Confidential Information by any Party, privately or to the public, shall be subject to the prior written approval of the other Party. Notwithstanding the foregoing, Confidential Information may be disclosed by any Party:

 

(a)

if the Confidential Information is or becomes generally available to the public other than as a result of disclosure by or at the direction of a Party or any of its Representatives in violation of this Agreement;

 

 

(b)

after giving prior notice to the concerned Party or Parties to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, to the extent requested or required under the rules of any stock exchange on which the shares of a Party or its parent company are listed or by applicable laws or governmental regulations or judicial or regulatory process or in connection with any judicial process regarding any legal action, suit or proceeding arising out of or relating to this Agreement;

 

(c)

to its shareholders and Representatives who need to know such information for the purpose of assisting the Parties in the transactions contemplated and performance of the obligations under this Agreement and the other Transaction Documents; and

 

(d)

to its current or prospective investors, provided that such persons are bound by appropriate confidentiality obligations at least as strict as the confidentiality provisions hereunder.

 

11.	INDEMNIFICATION
11.1	From and after the Closing, subject to the limits set forth in this clause 11, the Issuer shall indemnify, defend and hold harmless the Investor, its Affiliates and their respective officers, directors, employees and agents (collectively, the “Indemnitees”) from and against any and all losses, costs, liabilities, damages and expenses, including reasonable attorneys’ fees and disbursements in connection therewith (collectively, the “Indemnifiable Liabilities”), incurred by any Indemnitee as a result of or arising out of any breach by the Issuer of any representation, warranty, covenant, obligation or agreement contained in the Transaction Documents.

 

11.2	Except in the case of fraud, willful misconduct or gross negligence,

 

(a)

the aggregate liability of the Issuer for Indemnifiable Liabilities incurred by the Investor shall not exceed the Purchase Price, provided that this limit on liability shall not apply to any payment obligation of the Issuer under the Transaction Documents or the Issuer’s obligations to deliver any relevant Conversion Shares in accordance with this Agreement;

 

(b)

the Issuer shall not be liable to the Indemnitees in respect of any claim under this Agreement for any breach of the Issuer’s representations or warranties unless (i) the Investor has given the Issuer written notice of the claim (stating in reasonable detail the nature of the claim and, if practicable, the amount claimed) on or before the date that is one (1) year from the Closing Date and (ii) the aggregate amount of the Indemnifiable Liabilities suffered or incurred by such Indemnitees thereunder exceeds US$1,000,000, in which case the Issuer shall be liable to the Indemnitees for the excess amount; and

 

(c)

notwithstanding any other provision to the contrary, the Issuer shall not be liable for any consequential, exemplary, punitive, special, indirect or incidental damages, including, without limitation, loss of profits or revenue.

 

 

12.	TERMINATION
12.1	This Agreement shall automatically terminate as between the Issuer and the Investor upon the earliest to occur of:

 

(a)

the mutual written consent of the Issuer and the Investor;

 

(b)

the delivery of written notice to terminate by either the Issuer or the Investor if Closing shall not have occurred by the date that is three (3) months (or such other date as may be agreed by the Issuer and the Investor) after the date of this Agreement; provided, however, that such right to terminate this Agreement under this clause 12.1(b) shall not be available to any Party whose failure to fulfil any obligation under this Agreement shall have been the principal cause of, or shall have resulted in, the failure of Closing to occur on or prior to such date; or

 

(c)

by the Issuer or the Investor in the event that any Authority shall have issued an order or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by the Transaction Agreements and such order or other action shall have become final and non-appealable.

 

12.2

If this Agreement is terminated pursuant to clause 12.1, this Agreement shall become null and void and of no further force and effect, except that the Surviving Provisions shall remain in full force and effect; provided that nothing herein shall relieve any Party from liability for any breach of this Agreement that occurred prior to such termination.

 

13.	NOTICES
13.1	Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address or number of the relevant Party as set out in clause 13.2 (or at such other address or number as such Party may designate by fifteen (15) days’ advance written notice to the other Parties given in accordance with this clause 13.1). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognised courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (i) delivery (or when delivery is refused) and (ii) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organisation, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day. Notwithstanding the foregoing, to the extent a “with a copy to” address is designated, notice must also be given to such address in the manner above for such notice, request, consent or other communication hereunder to be effective.

 

13.2	The addresses, fax numbers and electronic mail addresses of the Parties for the purpose of clause 13.1 are as follows:

 

	If to the Issuer:
	Address:	No. 800 Century Avenue, Pudong District, Shanghai 200120, People’s Republic of China
	For the attention of:	Alexious Lee, Chief Financial Officer
	Email:	[●]

 

 

	If to the Investor:
	Address:	[●]
	For the attention of:	[●]
	Email:	[●]

 

14.	MISCELLANEOUS
14.1	Further Assurance. Upon the terms and subject to the conditions herein, each of the Parties agrees to take or cause to be taken all action, to do or cause to be done, to execute such further instruments, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable laws or otherwise to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the other Transaction Documents and, to the extent reasonably requested by another Party, to enforce rights and obligations pursuant hereto or thereto.

 

14.2	No Third Party Rights. Except to the extent otherwise set out herein, no person other than the Parties to this Agreement shall have any right to enforce, or enjoy the benefit of, any of the provisions of this Agreement.

 

14.3

Rights Cumulative; Specific Performance. Each and all of the various rights, powers and remedies of a Party will be considered to be cumulative with and in addition to any other rights, powers and remedies that such Party may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. Without limiting the foregoing, the Parties acknowledge and agree irreparable harm may occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, notwithstanding anything in this Agreement to the contrary, any Party shall be entitled to injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.

 

14.4

Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If, however, any provision of this Agreement shall be invalid, illegal or unenforceable under any applicable law in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law, or, if for any reason it is not deemed so modified, it shall be invalid, illegal, or unenforceable only to the extent of such invalidity, illegality or limitation on enforceability without affecting the remaining provisions of this Agreement, or the validity, legality or enforceability of such provision in any other jurisdiction.

 

14.5

Amendments and Waivers. No term of this Agreement may be amended, modified or supplemented, and no provision hereof may be waived, except by a written instrument executed by all the Parties. Any amendment effected in accordance with this clause 14.5 shall be binding upon each Party. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Party against whom such waiver is sought.

 

 

14.6

No Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of such term, covenant or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy hereunder at any one or more times be deemed a waiver or relinquishment of such right, power or remedy at any other time or times.

 

14.7

Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

 

14.8

Entire Agreement. This Agreement and the other Transaction Documents, together with all schedules and exhibits hereto and thereto, constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof and thereof, and supersede all other agreements between or among any of the Parties with respect to the subject matters hereof and thereof. This Agreement shall take effect and become binding on and enforceable against the parties upon execution hereof.

 

14.9

Counterparts. This Agreement may be executed in any number of counterparts, and by each Party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Facsimile and e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement.

 

15.	GOVERNING LAW AND DISPUTE RESOLUTION
15.1	This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereunder.

 

15.2	The Parties agree to negotiate in good faith to resolve any dispute between them regarding this Agreement. If the negotiations fail to resolve the dispute within fifteen (15) days after the commencement of the negotiation, clause 15.3 shall apply.

 

15.3

In the event the Parties are unable to resolve a dispute between them regarding this Agreement in accordance with clause 15.2 above, such dispute shall be referred to and finally settled by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force at the time of commencement of the arbitration. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The claimant and respondent shall each nominate one (1) arbitrator and the third arbitrator shall be appointed by the HKIAC. The arbitration proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

 

(Remainder of page intentionally left blank)

 

 

SCHEDULE 1

 

FORM OF CONVERTIBLE SENIOR NOTE

 

 

SCHEDULE 2

 

DISCLOSURE SCHEDULE

 

 

IN WITNESS WHEREOF this Agreement has been duly executed by the authorised representatives of the Parties on the date first above written.

 

LOTUS TECHNOLOGY INC.
By:
Name:
Title:

 

[Signature Page to Convertible Note Purchase Agreement]

 

IN WITNESS WHEREOF this Agreement has been duly executed by the authorised representatives of the Parties on the date first above written.

 

[●]
By:
Name:
Title:

 

[Signature Page to Convertible Note Purchase Agreement]

 

 

Exhibit 10.29

FINAL FORM

 

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on [●], 2023, by and between Lotus Technology Inc., an exempted company incorporated with limited liability in the Cayman Islands (the “Issuer”), and the undersigned subscriber (the “Investor”). Capitalized terms used and not defined in this Subscription Agreement have the meanings ascribed to such terms in the Transaction Agreement (as defined below).

 

WHEREAS, this Subscription Agreement is being entered into in connection with that certain Agreement and Plan of Merger, dated as of January 31, 2023 (as may be amended, modified, supplemented or waived from time to time in accordance with its terms, the “Transaction Agreement”), by and among the Issuer, L Catterton Asia Acquisition Corp, an exempted company incorporated with limited liability in the Cayman Islands (“SPAC”), Lotus Temp Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 1”), and Lotus EV Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 2”), pursuant to which, on the terms and subject to the conditions set forth therein, among other things, (a) Merger Sub 1 will merge with and into SPAC (the “First Merger”), with SPAC as the surviving company in the First Merger and, after giving effect to the First Merger, becoming a wholly owned subsidiary of the Issuer, and (b) SPAC will merge with and into Merger Sub 2 (the “Second Merger,” and together with the First Merger and the other transactions contemplated by the Transaction Agreement, the “Transaction”), with Merger Sub 2 as the surviving company in the Second Merger and, after giving effect to the Second Merger, becoming a wholly owned subsidiary of the Issuer; and

 

WHEREAS, in connection with the Transaction, the Investor desires to subscribe for and purchase, prior to the closing of the Transaction but following the consummation of the Recapitalization (as defined in the Transaction Agreement), such number of ordinary shares in the Issuer, par value $0.00001 per share (the “Shares”) set forth on opposite such Investor’s name on Schedule I hereto for a purchase price of $10.00 per share (the “Per Share Purchase Price”), for the aggregate purchase price set forth opposite such Investor’s name on Schedule I hereto (the “Subscription Amount”), and the Issuer desires to issue and sell to the Investor the Shares in consideration of the payment of the Subscription Amount therefor by or on behalf of the Investor to the Issuer, all on the terms and conditions set forth herein.

 

WHEREAS, in connection with the Transaction, the Issuer is entering into separate subscription agreements (the “Other Subscription Agreements”) with certain other investors (the “Other PIPE Investors,” together with the Investor, collectively, the “PIPE Investors”), pursuant to which the Other PIPE Investors will agree to subscribe for and purchase in cash, and the Issuer will agree to issue and sell to the Other PIPE Investors, on the Closing Date, Shares at the Per Share Purchase Price.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.

Subscription. Subject to the terms and conditions hereof, the Investor hereby irrevocably subscribes for and agrees to purchase from the Issuer, and the Issuer hereby agrees to issue and sell to the Investor, the Shares, on the terms and subject to the conditions provided for herein.

 

 

2.

Closing. The closing of the sale of the Shares contemplated hereby (the “Closing”) shall occur on the closing date of the Transaction (the “Closing Date”) and be conditioned upon the substantially concurrent consummation of the Transaction and satisfaction of the other conditions set forth in Section 3 hereof. Upon delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”) that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on an expected closing date that is not less than five (5) business days from the date on which the Closing Notice is delivered to the Investor, the Investor shall deliver to the Issuer, three (3) business days prior to the expected closing date specified in the Closing Notice, the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account in an escrow bank specified by the Issuer in the Closing Notice, to be held in escrow until the First Merger Effective Time. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall (i) issue the Shares to the Investor, free and clear of any liens or other restrictions (other than those arising under applicable securities laws) and subsequently cause the Shares to be registered in book-entry form in the name of the Investor on the Issuer’s register of members and (ii) provide to the Investor evidence of such issuance from the Issuer’s transfer agent (the “Transfer Agent”). For purposes of this Subscription Agreement, “business day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, the Cayman Islands, Hong Kong SAR and People’s Republic of China (excluding, for the purposes of this Agreement only, Hong Kong SAR, Macau SAR and Taiwan, “PRC”), are authorized or required by law to close. If the Closing does not occur within ten (10) business days following the expected closing date specified in the Closing Notice, unless otherwise agreed to in writing by the Issuer and the Investor, the Issuer shall promptly (but not later than two (2) business days thereafter) cause the return of the Subscription Amount in full to the Investor by wire transfer of U.S. dollars in immediately available funds to the account specified by the Investor, and any book-entries for the Shares shall be deemed cancelled (to the extent the Shares are issued); provided that unless this Subscription Agreement has been terminated pursuant to Section 6, such return of funds shall not terminate this Subscription Agreement or relieve the Investor of its obligation to purchase the Shares at the Closing upon delivery by the Issuer of a subsequent Closing Notice in accordance with the terms of this Section 2. Prior to or on the Closing Date, the Investor shall deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Shares, including, without limitation, the legal name of the person in whose name such Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable.

 

3.

Conditions to Closing

 

3.1

Conditions to Closing of the Issuer. The Issuer’s obligations to sell and issue the Shares at the Closing are subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the closing of the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the consummation of the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Investor in Section 4.2 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

(d)

Performance and Compliance under Subscription Agreement. The Investor shall have wired the Subscription Amount in accordance with Section 2 of this Subscription Agreement and otherwise performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Investor to consummate the Closing.

 

 

(e)

ODI Approval. All of the consents from, and filings and/or registrations with, applicable governmental authority as required by applicable PRC laws for the Investor’s outbound direct investment in the Issuer shall have been duly obtained and completed.

 

3.2

Conditions to Closing of the Investor. The Investor’s obligation to subscribe for and purchase the Shares at the Closing is subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the consummation of the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 4.1 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality, Material Adverse Effect (as defined below) or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality, Material Adverse Effect or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

(d)

Performance and Compliance under Subscription Agreement. The Issuer shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Closing.

 

(e)

Transaction Agreement. The terms of the Transaction Agreement (including the conditions thereto) shall not have been amended or waived in a manner that materially and adversely affect the economic benefits the Investor reasonably expects to receive under this Subscription Agreement.

 

(f)

ODI Approval. All of the consents from, and filings and/or registrations with, applicable governmental authority as required by applicable PRC laws for the Investor’s outbound direct investment in the Issuer shall have been duly obtained and completed.

 

4.

Representations, Warranties and Agreements.

 

4.1

Issuer’s Representations, Warranties and Agreements. The Issuer hereby represents and warrants to the Investor as follows:

 

(a)

The Issuer is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. The Issuer has all power (corporate or otherwise) and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(b)

At the Closing, subject to the receipt of the Subscription Amount in accordance with the terms of this Subscription Agreement and registration on the Issuer’s register of members, the Shares will be duly authorized, validly issued and allotted and fully paid, free and clear of any liens or other encumbrances (other than those arising under applicable securities laws) and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents (as in effect at such time of issuance) or the laws of the Cayman Islands.

 

 

(c)

This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Investor, is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally and (ii) principles of equity, whether considered at law or equity.

 

(d)

The issuance and sale of the Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein, will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, which would reasonably be expected to have a material adverse effect on the ability of the Issuer to enter into and timely perform its obligations under this Subscription Agreement (a “Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have a Material Adverse Effect.

 

(e)

Assuming the accuracy of the Investor’s representations and warranties set forth in Section 4.2, in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Subscription Agreement, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Shares by the Issuer to the Investor.

 

(f)

Neither the Issuer nor anyone acting on its behalf has offered the Shares or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the PIPE Investors and other Institutional Accredited Investors, each of which has been offered the Shares at a private sale for investment. “Institutional Accredited Investor” means an institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

(g)

None of the Issuer nor any of its affiliates has offered the Shares or any similar securities during the six months prior to the date hereof to anyone other than the PIPE Investors. The Issuer has no intention to offer the Shares or any similar security during the six months from the date hereof (which, for the avoidance of doubt, does not include the offer or issuance of the Shares to any PIPE Investors in accordance with the applicable Subscription Agreements).

 

(h)

Neither the Issuer nor any person acting on its behalf has offered or sold the Shares by any form of general solicitation or general advertising, including, but not limited to, the following: (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; (ii) any website posting or widely distributed e-mail; or (iii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(i)

Other than Credit Suisse Securities (USA) LLC (“Credit Suisse”) or Deutsche Bank AG, Hong Kong Branch (together with Credit Suisse, the “Placement Agents”), the Issuer has not dealt with any broker, finder, commission agent, placement agent or arranger in connection with the sale of the Shares and the transactions contemplated by this Subscription Agreement (the “Subscription”) and the other Subscription Agreements, and the Issuer is not under any obligation to pay any broker’s fee or commission in connection with such transactions other than to the Placement Agents. Neither the Issuer nor any of its affiliates nor any other person acting on its behalf (other than its officers acting in such capacity) has solicited offers for, or offered or sold, the Shares through any broker, finder, commission agent, placement agent or arranger other than the Placement Agents.

 

 

4.2

Investor’s Representations, Warranties and Agreements. The Investor hereby represents and warrants to the Issuer and acknowledges as follows:

 

(a)

The Investor (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule II, (ii) is acquiring the Shares only for its own account and not for the account of others, or if the Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” or an institutional “accredited investor” and the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws (and shall provide the requested information on Schedule II). The Investor is not an entity formed for the specific purpose of acquiring the Shares and is an “institutional account” as defined by FINRA Rule 4512(c). The information provided by Investor on Schedule II is true and correct in all respects. The purchase of the Shares by the Investor has not been solicited by or through anyone other than the Issuer or the Placement Agents.

 

(b)

The Investor acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and, that the Shares have not been registered under the Securities Act and the Issuer is not required to register the Shares except as set forth in Section 5. The Investor acknowledges and agrees that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the states of the United States and other applicable jurisdictions. The Investor further represents and warrants that it will not sell, transfer or otherwise dispose of the Shares or any interest therein except in a registered transaction or in a transaction exempt from or not subject to the registration requirements of the Securities Act, and that any certificates representing the Shares shall contain a restrictive legend to the following effect:

 

THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, ANY SUCH TRANSFER OR OTHER DISPOSITION IS SUBJECT TO THE CONDITIONS CONTAINED IN A SUBSCRIPTION AGREEMENT, DATED [●]. A COPY OF SUCH CONDITIONS WILL BE PROVIDED TO THE HOLDER HEREOF UPON REQUEST.

 

(c)

The Investor acknowledges and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The Investor acknowledges and agrees that the Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Shares.

 

 

(d)

The Investor acknowledges and agrees that the Investor is purchasing the Shares directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Issuer expressly set forth in Section 4.1 of this Subscription Agreement.

 

(e)

The Investor acknowledges and agrees that the Investor has (i) received, reviewed and understood the offering materials made available to it in connection with the Subscription, (ii) had the opportunity to ask questions of and receive answers from the Issuer directly and to obtain any additional information which the Issuer possesses or can acquire without unreasonable effort or expense, and (iii) conducted and completed its own independent due diligence with respect to the Subscription. Except for the representations, warranties and agreements of the Issuer expressly set forth in this Subscription Agreement, the Investor is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it may deem appropriate) with respect to the Subscription, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Issuer, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.

 

(f)

The Investor became aware of this offering of the Shares solely by means of direct contact between the Investor, on one hand, and the Issuer or a representative of the Issuer, on the other hand, and the Shares were offered to the Investor solely by such direct contact. The Investor did not become aware of this offering of the Shares, nor were the Shares offered to the Investor, by any other means. The Investor acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 4.1 of this Subscription Agreement, in making its investment or decision to invest in the Issuer.

 

(g)

The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Issuer’s and SPAC’s respective filings with the SEC. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision and the Investor has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Shares.

 

(h)

Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Issuer. The Investor acknowledges specifically that a possibility of total loss exists.

 

(i)

The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

(j)

The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.

 

 

(k)

The Investor has been duly formed or incorporated and is validly existing and, where such concept is recognized, in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(l)

The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature of the Investor on this Subscription Agreement is genuine, and the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

(m)

Neither the Investor, nor any of its officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function, is (i) a person or entity named on the Specially Designated Nationals and Blocked Persons List administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC Sanctions program, or any similar list of sanctioned persons administered by the European Union, United Nations Security Council, Switzerland or the United Kingdom (collectively, “Sanctions Lists”); (ii) directly or indirectly, owned or controlled by, or acting on behalf of, one or more persons that are named on the Sanctions Lists; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea, the so-called Donetsk and Luhansk People’s Republic region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union, United Nations Security Council, Switzerland or the United Kingdom, or (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that the Investor is permitted to do so under applicable law. If the Investor is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed to ensure compliance with sanctions programs administered by the United States, the European Union and the United Kingdom. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

(n)

If the Investor is or is acting on behalf of an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986 (the “Code”), or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (“Similar Law”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) none of the Issuer or any of its affiliates (the “Transaction Parties”) has provided investment advice or otherwise acted as the Plan’s fiduciary, with respect to its decision to acquire and hold the Shares, and none of the Transaction Parties is or shall at any time be the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares and (ii) its purchase of the Shares will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any applicable Similar Law.

 

 

(o)

Except as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by the Investor with the SEC with respect to the beneficial ownership of SPAC’s ordinary shares prior to the date hereof (if applicable), the Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

(p)

The Investor has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2, will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Shares pursuant to this Subscription Agreement.

 

(q)

The Investor does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof, the Investor has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or end of day short sale positions with respect to the securities of SPAC.

 

(r)

No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability of the Issuer for the payment of any fees, costs, expenses or commissions.

 

(s)

The Investor agrees that, from the date of this Subscription Agreement until the Closing Date (or earlier termination of this Subscription Agreement), none of the Investor or any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor will engage in any Short Sales (as defined below) with respect to securities of the Issuer or SPAC. For purpose of this Section 4.2(s), “Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all types of direct and indirect share pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) the restrictions in this Section 4.2(s) shall not apply to any sale of securities of the Issuer or SPAC (A) held by the Investor or any person or entity acting on behalf of the Investor prior to the execution of this Subscription Agreement or (B) purchased by the Investor or any person or entity acting on behalf of the Investor in an open market transaction after the execution of this Subscription Agreement. Further, notwithstanding the foregoing, (ii) nothing herein shall prohibit other entities under common management with the Investor that have no knowledge of this Subscription Agreement or of the Investor’s subscription of the Shares (including the Investor’s controlled affiliates and/or affiliates) from entering into any Short Sales and (iii) in the case of an Investor that is a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the limitations set forth in the first sentence of this Section 4.2(s) shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Subscription Agreement (the “Investing Portfolio Manager”) and other portfolio managers or desks who have direct knowledge of the investment decisions made by the Investing Portfolio Manager.

 

 

5.

Registration Rights

 

5.1

The Issuer agrees that, within [thirty (30)] / [forty five (45)] calendar days after the Closing Date, it will file with the SEC (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that the Issuer’s obligations to include such shares in the Registration Statement are contingent upon Investor furnishing in writing to the Issuer such information regarding Investor, the securities of the Issuer beneficially owned by Investor and the intended method of disposition of the Shares as shall be reasonably requested by the Issuer to effect the registration of the Shares, and Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement as permitted hereunder.

 

5.2

The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be issued pursuant to this Subscription Agreement, to remain effective until the earliest of (i) the second anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Shares issued pursuant to this Subscription Agreement, or (iii) on the first date on which the Investor is able to sell all of its Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

5.3

Prior to the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) of Section 5.2 above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act.

 

5.4

Notwithstanding the foregoing, if the SEC prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Shares by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted by the SEC. In such event, the number of Shares to be registered shall be reduced (a) firstly, pro rata among all the selling shareholders other than the PIPE Investors; and (b) secondly, only if the number of Shares to be registered for the selling shareholders other than the PIPE Investors has been reduced to zero, pro rata among the PIPE Investors, and the Issuer shall use its commercially reasonable efforts to file with the SEC, as promptly as practicable and as allowed by the SEC, one or more registration statements to register the resale of those Shares that were not registered on the initial Registration Statement, as so amended.

 

5.5

Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (a) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (b) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, (i) an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act or (ii) the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event that the Issuer reasonably believes would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that (i) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.

 

 

5.6

Indemnification.

 

(a)

The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein or such Investor has omitted a material fact from such information or otherwise violated the Securities Act, Exchange Act or any state securities law or any other law, rule or regulation thereunder; provided, however, that the indemnification contained in this Section 5.6(a) shall not apply to amounts paid by the Investor in settlement of any losses, claims, damages, liabilities or out-of-pocket expenses if such settlement is effected without the consent of the Issuer. In no event shall the liability of the Issuer be greater in amount than the dollar amount received by the Issuer under this Subscription Amount.

 

(b)

In connection with any Registration Statement in which an Investor is participating, the Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained (or not contained, in the case of an omission) in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein; provided, however, that the liability of the Investor shall be several and not joint with any Other PIPE Investor and in no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares purchased pursuant to this Subscription Agreement giving rise to such indemnification obligation.

 

(c)

Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

 

(d)

The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares purchased pursuant to this Subscription Agreement.

 

(e)

If the indemnification provided under this Section 5.6(e) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 5.6(e) from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 5.6(e) by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.

 

6.

Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement, and (c) March 15, 2024; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the termination of this Subscription Agreement in accordance with this Section 6, any monies paid by the Investor to the Issuer in connection herewith shall be promptly (and in any event within two (2) business days after such termination) returned to the Investor.

 

 

7.

Miscellaneous.

 

7.1

Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the parties hereunder (other than the Shares acquired hereunder, if any) may be transferred or assigned without the prior written consent of the Issuer, other than (a) an assignment to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) thereof, and (b) an assignment of the Investor’s rights under Section 5 to an assignee or transferee of the Shares; provided that prior to such assignment or transfer any such assignee or transferee shall agree in writing to be bound by the terms hereof, and, if the Issuer so requests, any such assignee or transferee shall deliver to the Issuer an opinion of counsel in form and substance reasonably satisfactory to the Issuer to the effect that registration under the Securities Act is not required in connection with such assignment; provided, further, that no assignment pursuant to the foregoing terms shall relieve the Investor of its obligations hereunder.

 

7.2

Additional Information. The Issuer may request from Investor such additional information as is necessary for SPAC or the Issuer, as applicable, to comply with public disclosure requirements of applicable securities laws or any filing requirements pursuant to the rules of any stock exchange or the Financial Industry Regulatory Authority, and Investor shall provide such information; provided that, subject to Section 5.5, the Issuer shall keep any such information provided by the Investor confidential except (a) as necessary to include in any registration statement the Issuer is required to file hereunder, (b) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (c) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges that SPAC and/or the Issuer may file a copy of the form of this Subscription Agreement with the SEC as an exhibit to a current or periodic report or a registration statement of SPAC or the Issuer, as applicable. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 5 hereof.

 

7.3

Further Assurances.

 

(a)

The Investor acknowledges that the Issuer will rely on the acknowledgments, understandings, agreements, covenants, representations and warranties of the Investor contained in this Subscription Agreement, including Schedule II hereto. Prior to the Closing, the Investor agrees to promptly notify the Issuer if any of the acknowledgments, understandings, agreements, covenants representations and warranties made by the Investor set forth herein are no longer accurate in all material respects.

 

(b)

The Issuer acknowledges that the Investor will rely on the acknowledgements, understandings, agreements, covenants, representations and warranties of the Issuer contained in this Subscription Agreement. Prior to the Closing, the Issuer agrees to promptly notify the Investor if any of the acknowledgements, understandings, agreements, covenants, representations and warranties made by the Issuer set forth herein are no longer accurate in all material respects.

 

(c)

The Issuer is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any action, suit, hearing, claim, charge, audit, lawsuit, litigation, inquiry or proceeding (in each case, whether civil, criminal or administrative or at law or in equity) with respect to the matters covered hereby.

 

(d)

The Investor acknowledges and agrees that none of the other parties to the Transaction Agreement (other than the Issuer) or any Non-Party Affiliate, shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor pursuant to this Subscription Agreement related to the private placement of the Shares, the negotiation hereof or thereof or the subject matter hereof or thereof, or the transactions contemplated hereby or thereby, for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares, or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Issuer or any Non-Party Affiliate concerning the Issuer, any of its controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of the Issuer or any of the Issuer’s controlled affiliates or any family member of the foregoing.

 

 

7.4

Survival of Representations and Warranties. All of the agreements, representations and warranties contained in this Subscription Agreement shall survive the Closing.

 

7.5

Modifications and Amendments. This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 6 above) except by an instrument in writing, signed by each of the parties hereto. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

7.6

Entire Agreement. This Subscription Agreement (including the schedule hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 5.6 and Section 7.3(a), with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns.

 

7.7

Benefit. Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

7.8

Severability. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

7.9

Transaction Expenses. Each party shall pay all of its own costs and expenses incurred in anticipation of, relating to and in connection with the negotiation and execution of this Subscription Agreement and the transactions contemplated hereby, whether or not such transactions are consummated.

 

7.10

Counterparts. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

7.11

Remedies. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that it may be difficult to prove damages with reasonable certainty, that it may be difficult to procure suitable substitute performance, and that injunctive relief and/or specific performance will not cause an undue hardship to the parties hereto. The parties hereto further acknowledge that the existence of any other remedy contemplated by this Subscription Agreement does not diminish the availability of specific performance of the obligations hereunder or any other injunctive relief. Each party hereto further agrees that in the event of any action by the other party for specific performance or injunctive relief, it will not assert that a remedy at law or other remedy would be adequate or that specific performance or injunctive relief in respect of such breach or violation should not be available on the grounds that money damages are adequate or any other grounds.

 

 

7.12

Adjustment of Number of Shares. If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), shall occur between the date hereof and immediately prior to the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.

 

7.13

Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws that would otherwise require the application of the law of any other state.

 

7.14

Consent to Jurisdiction; Waiver of Jury Trial. Any proceeding or action based upon, arising out of or related to this Subscription Agreement or the transactions contemplated hereby must be referred to and finally settled by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force at the time of commencement of the arbitration. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The claimant and respondent shall each nominate one (1) arbitrator and the third arbitrator shall be appointed by the HKIAC. The arbitration proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

 

7.15

Notice. Any notice or communication required or permitted hereunder to be given to the Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page hereto, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three (3) business days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to the Issuer.

 

(a)

if to the Investor, to such address or addresses set forth on the signature page hereto;

 

(b)

if to the Issuer, to:

 

Lotus Technology Inc.

No. 800 Century Avenue
Pudong District

Shanghai 200120, People’s Republic of China

Attention: Alexious Lee, Chief Financial Officer

Email: [●]

 

with a required copy (which will not constitute notice) to:

[●]

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.

 

Name of Investor:		State/Country of Formation or Domicile:
[INVESTOR]
By:
Name:
Title:
Name in which Shares are to be registered (if different):
Investor’s EIN:
Business Address-Street:		Mailing Address-Street (if different):
City, State, Zip:		City, State, Zip:
Attn:		Attn:
Telephone No.:		Telephone No.:
Facsimile No.:		Facsimile No.:

 

Investor must pay the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.

 

	LOTUS TECHNOLOGY INC.
	By:
		Name:
		Title:

 

 

SCHEDULE I

 

PARTICULARS OF SUBSCRIPTION

 

Investor Name	Number of Shares subscribed for	Subscription Amount
[●]	The number of the Shares subscribed for by the Investor shall be equal to the quotient obtained by dividing (a) the Subscription Amount by (b) US$10.00.	The Subscription Amount to be paid by the Investor shall be equal to [●], converted into U.S. dollars using the exchange rate as of the date of payment of such Subscription Amount by the Investor to the escrow account.

 

 

SCHEDULE II

 

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

1.            ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB.

 

2.            ¨ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.

 

*** OR ***

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):

 

1.            ¨ We are an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are institutional accredited investors) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an institutional “accredited investor.”

 

*** AND ***

 

C.

AFFILIATE STATUS (Please check the applicable box)

 

SUBSCRIBER:

 

¨ is:

 

¨ is not:

 

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.

 

This page should be completed by the Investor
and constitutes a part of the Subscription Agreement.

 

 

Investor is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to Investor (Please check the applicable subparagraphs):

 

¨            Investor is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and:

 

¨            is an insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨            is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;

 

¨            is a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);

 

¨            is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;

 

¨            is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);

 

¨            is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, of (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;

 

¨            is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);

 

¨            is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Securities Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Securities Act, or a foreign bank or savings and loan association or equivalent institution), partnership, limited liability company or Massachusetts or similar business trust;

 

¨            is an investment adviser registered under the Investment Advisers Act; or

 

¨           any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR 230.501(a)), of a type not listed above;

 

¨            Investor is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with Investor;

 

¨            Investor is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;

 

¨            Investor is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies¹ which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Investor or are part of such family of investment companies;

 

1

“Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided, that (a) each series of a series company (as defined in Rule 1 8f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor).

 

 

¨            Investor is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or

 

¨            Investor is a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.

 

Rule 501(a) under the Securities Act, in relevant part, states that an institutional “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Investor has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Investor and under which Investor accordingly qualifies as an institutional “accredited investor.”

 

¨            Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

 

¨            Any broker or dealer registered pursuant to section 15 of the Exchange Act;

 

¨            Any insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨            Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a) (48) of the Investment Company Act;

 

¨            Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act;

 

¨            Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

¨            Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;

 

¨            Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act;

 

¨            Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000;

 

¨            Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in section 230.506(b)(2)(ii) of Regulation D under the Securities Act;

 

 

¨            Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act; or

 

¨            Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000.

 

 

Exhibit 10.30 

FINAL FORM

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on [●], 2023, by and among Lotus Technology Inc., an exempted company incorporated with limited liability in the Cayman Islands (the “Issuer”), Wuhan Lotus Technology Limited Company (武汉路特斯科技有限公司), a limited liability company incorporated under the laws of the People’s Republic of China and a wholly-owned subsidiary of the Issuer (the “WFOE”), which shall be deemed as a party to this Subscription Agreement solely with respect to Section 4 and Section 7 herein, and the undersigned subscriber (the “Investor”). Capitalized terms used and not defined in this Subscription Agreement have the meanings ascribed to such terms in the Transaction Agreement (as defined below).

 

WHEREAS, this Subscription Agreement is being entered into in connection with that certain Agreement and Plan of Merger, dated as of the date hereof (as may be amended, modified, supplemented or waived from time to time in accordance with its terms, the “Transaction Agreement”), by and among the Issuer, L Catterton Asia Acquisition Corp, an exempted company incorporated with limited liability in the Cayman Islands (“SPAC”), Lotus Temp Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 1”), and Lotus EV Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 2”), pursuant to which, on the terms and subject to the conditions set forth therein, among other things, (a) Merger Sub 1 will merge with and into SPAC (the “First Merger”), with SPAC as the surviving company in the First Merger and, after giving effect to the First Merger, becoming a wholly owned subsidiary of the Issuer, and (b) SPAC will merge with and into Merger Sub 2 (the “Second Merger,” and together with the First Merger and the other transactions contemplated by the Transaction Agreement, the “Transaction”), with Merger Sub 2 as the surviving company in the Second Merger and, after giving effect to the Second Merger, becoming a wholly owned subsidiary of the Issuer; and

 

WHEREAS, in connection with the Transaction, the Investor desires to subscribe for and purchase, prior to the closing of the Transaction but following the consummation of the Recapitalization (as defined in the Transaction Agreement), such number of ordinary shares in the Issuer, par value $0.00001 per share (the “Shares”) set forth opposite such Investor’s name on Schedule I hereto for a purchase price of $10.00 per share (the “Per Share Purchase Price”), for the aggregate purchase price set forth opposite such Investor’s name on Schedule I hereto (the “Subscription Amount”), and the Issuer desires to issue and sell to the Investor the Shares in consideration of the payment of the Subscription Amount therefor by or on behalf of the Investor to the Issuer, all on the terms and conditions set forth herein.

 

WHEREAS, in connection with the Transaction, the Issuer is entering into separate subscription agreements (the “Other Subscription Agreements”) with certain other investors (the “Other PIPE Investors,” together with the Investor, collectively, the “PIPE Investors”), pursuant to which the Other PIPE Investors will agree to subscribe for and purchase in cash, and the Issuer will agree to issue and sell to the Other PIPE Investors, on the Closing Date, Shares at the Per Share Purchase Price.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.

Subscription. Subject to the terms and conditions hereof, the Investor hereby irrevocably subscribes for and agrees to purchase from the Issuer, and the Issuer hereby agrees to issue and sell to the Investor, the Shares, on the terms and subject to the conditions provided for herein.

 

 

2.

Closing. The closing of the sale of the Shares contemplated hereby (the “Closing”) shall occur on the closing date of the Transaction (the “Closing Date”) and be conditioned upon the substantially concurrent consummation of the Transaction and satisfaction of the other conditions set forth in Section 3 hereof. Upon delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”) that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on an expected closing date that is not less than ten (10) business days from the date on which the Closing Notice is delivered to the Investor, the Investor shall deliver to the Issuer, two (2) business days prior to the expected closing date specified in the Closing Notice and following the Investor’s receipt of return of the Deposit pursuant to Section 4.2, the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account in an escrow bank specified by the Issuer in the Closing Notice, to be held in escrow until the closing of the First Merger. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall (i) issue the Shares to the Investor, free and clear of any liens or other restrictions (other than those arising under applicable securities laws) and subsequently cause the Shares to be registered in book-entry form in the name of the Investor on the Issuer’s register of members and (ii) provide to the Investor evidence of such issuance from the Issuer’s transfer agent (the “Transfer Agent”). For purposes of this Subscription Agreement, “business day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, the Cayman Islands, Hong Kong SAR and People’s Republic of China (excluding, for the purposes of this Agreement only, Hong Kong SAR, Macau SAR and Taiwan, “PRC”), are authorized or required by law to close. If the Closing does not occur within ten (10) business days following the expected closing date specified in the Closing Notice, the Issuer shall, unless the Issuer and the Investor otherwise agree in writing that the Subscription Amount continues to be held in escrow in favor of the Investor, promptly (but not later than two (2) business days thereafter) cause the return of the Subscription Amount in full to the Investor by wire transfer of U.S. dollars in immediately available funds to the account specified by the Investor, and any book-entries for the Shares shall be deemed cancelled (to the extent the Shares are issued); provided that unless this Subscription Agreement has been terminated pursuant to Section 7, such return of funds shall not terminate this Subscription Agreement or relieve the Investor of its obligation to purchase the Shares at the Closing upon delivery by the Issuer of a subsequent Closing Notice in accordance with the terms of this Section 2. Prior to or on the Closing Date, the Investor shall deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Shares, including, without limitation, the legal name of the person in whose name such Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable.

 

3.

Conditions to Closing

 

3.1

Conditions to Closing of the Issuer. The Issuer’s obligations to sell and issue the Shares at the Closing are subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the closing of the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the consummation of the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Investor in Section 5.2 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

 

(d)

Performance and Compliance under Subscription Agreement. The Investor shall have wired the Subscription Amount in accordance with Section 2 of this Subscription Agreement and otherwise performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Investor to consummate the Closing.

 

(e)

ODI Approval. All of the approvals, registrations, permits, consents and authorizations by the applicable PRC governmental authorities and/or the relevant banks in connection with the Investor’s outbound investment in the Issuer and the remittance of the Subscription Amount outbound (the “ODI Approvals”) shall have been duly obtained and completed.

 

3.2

Conditions to Closing of the Investor. The Investor’s obligation to subscribe for and purchase the Shares at the Closing is subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 5.1 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality, Material Adverse Effect (as defined below) or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality, Material Adverse Effect or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

(d)

Performance and Compliance under Subscription Agreement. The Issuer shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Closing.

 

(e)

Transaction Agreement. The terms of the Transaction Agreement (including the conditions thereto) shall not have been amended or waived in a manner that materially and adversely affect the economic benefits the Investor reasonably expects to receive under this Subscription Agreement.

 

(f)

ODI Approval. All of the ODI Approvals shall have been duly obtained and completed.

 

4.

Payment and Return of the Deposit.

 

4.1

Within five (5) Business Days following the date of this Agreement or such other time as agreed by the Issuer and the Investor, the Investor shall pay or cause to be paid a deposit (the “Deposit”) in such amount set forth opposite the Investor’s name on Schedule I hereto in immediately available funds in Renminbi (calculated using the middle exchange rate published by the People’s Bank of China on the date of payment of such Deposit) to the designated bank account of the WFOE. The Deposit shall bear a simple interest rate of 8% per annum, which interest shall accrue from the date on which the WFOE receives the Deposit from the Investor until and including the date on which such Deposit is returned to the Investor pursuant to Section 4.2 or Section 4.3, as the case may be.

 

4.2

Following the delivery of the Closing Notice by the Issuer to the Investor and, prior to the payment of the Subscription Amount by the Investor to the escrow bank, in each case, pursuant to Section 2, the WFOE shall, and the Issuer shall cause the WFOE to, return the Deposit (plus any interest accrued thereon) to the Investor or its designee(s) in full.

 

 

4.3

If (a) Section 3.1(e) and Section 3.2(f) fail to be satisfied or waived on or prior to the date on which the Issuer delivers the Closing Notice and (b) the Investor has not completed transfer or assignment of its rights, interests and obligations under this Subscription Agreement to a person not subject to the ODI Approvals pursuant to Section 8.1, the Issuer shall notify the Investor in writing that this Subscription Agreement be terminated with immediate effect, and the WFOE shall, and the Issuer shall cause the WFOE to, return the Deposit (plus any interest accrued thereon) to the Investor or its designee(s) in full within five (5) Business Days following the Investor’s receipt of such written notice.

 

5.

Representations, Warranties and Agreements.

 

5.1

Issuer’s Representations, Warranties and Agreements. The Issuer hereby represents and warrants to the Investor as follows:

 

(a)

The Issuer is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. The Issuer has all power (corporate or otherwise) and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(b)

At the Closing, subject to the receipt of the Subscription Amount in accordance with the terms of this Subscription Agreement and registration on the Issuer’s register of members, the Shares will be duly authorized, validly issued and allotted and fully paid, free and clear of any liens or other encumbrances (other than those arising under applicable securities laws) and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents (as in effect at such time of issuance) or the laws of the Cayman Islands.

 

(c)

This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Investor, is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally and (ii) principles of equity, whether considered at law or equity.

 

(d)

The issuance and sale of the Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein, will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, which would reasonably be expected to have a material adverse effect on the ability of the Issuer to enter into and timely perform its obligations under this Subscription Agreement (a “Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have a Material Adverse Effect.

 

(e)

Assuming the accuracy of the Investor’s representations and warranties set forth in Section 5.2, in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Subscription Agreement, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Shares by the Issuer to the Investor.

 

(f)

None of the Issuer nor any of its affiliates has offered the Shares or any similar securities during the six months prior to the date hereof to anyone other than the PIPE Investors. The Issuer has no intention to offer the Shares or any similar security during the six months from the date hereof.

 

 

(g)

Neither the Issuer nor any person acting on its behalf has offered or sold the Shares by any form of general solicitation or general advertising, including, but not limited to, the following: (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; (ii) any website posting or widely distributed e-mail; or (iii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. None of the Issuer, its subsidiaries or their respective affiliates or any person acting on its or their behalf have engaged in any “directed selling efforts” within the meaning of Rule 903 of Regulation S under the Securities Act in connection with the execution of this Agreement.

 

(h)

Other than Credit Suisse Securities (USA) LLC (“Credit Suisse”) or Deutsche Bank AG, Hong Kong Branch (together with Credit Suisse, the “Placement Agents”), the Issuer has not dealt with any broker, finder, commission agent, placement agent or arranger in connection with the sale of the Shares and the transactions contemplated by this Subscription Agreement (the “Subscription”) and the other Subscription Agreements, and the Issuer is not under any obligation to pay any broker’s fee or commission in connection with such transactions other than to the Placement Agents. Neither the Issuer nor any of its affiliates nor any other person acting on its behalf (other than its officers acting in such capacity) has solicited offers for, or offered or sold, the Shares through any broker, finder, commission agent, placement agent or arranger other than the Placement Agents.

 

5.2

Investor’s Representations, Warranties and Agreements. The Investor hereby represents and warrants to the Issuer and acknowledges as follows:

 

(a)

The Investor (i) is either (A) not a “U.S. Person” as defined in Rule 902 of Regulation S of the Securities Act or (B) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule II, (ii) is acquiring the Shares only for its own account and not for the account of others, or if the Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” or an institutional “accredited investor” and the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws (and shall provide the requested information on Schedule II). The Investor is not an entity formed for the specific purpose of acquiring the Shares and is an “institutional account” as defined by FINRA Rule 4512(c). The information provided by Investor on Schedule II is true and correct in all respects. The purchase of the Shares by the Investor has not been solicited by or through anyone other than the Issuer or the Placement Agents.

 

(b)

The Investor acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and, that the Shares have not been registered under the Securities Act and the Issuer is not required to register the Shares except as set forth in Section 6. The Investor acknowledges and agrees that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the states of the United States and other applicable jurisdictions. The Investor further represents and warrants that it will not sell, transfer or otherwise dispose of the Shares or any interest therein except in a registered transaction or in a transaction exempt from or not subject to the registration requirements of the Securities Act, and that any certificates representing the Shares shall contain a restrictive legend to the following effect:

 

 

THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, ANY SUCH TRANSFER OR OTHER DISPOSITION IS SUBJECT TO THE CONDITIONS CONTAINED IN A SUBSCRIPTION AGREEMENT, DATED [●]. A COPY OF SUCH CONDITIONS WILL BE PROVIDED TO THE HOLDER HEREOF UPON REQUEST.

 

(c)

The Investor acknowledges and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The Investor acknowledges and agrees that the Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Shares.

 

(d)

The Investor acknowledges and agrees that the Investor is purchasing the Shares directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Issuer expressly set forth in Section 5.1 of this Subscription Agreement.

 

(e)

The Investor acknowledges and agrees that the Investor has (i) received, reviewed and understood the offering materials made available to it in connection with the Subscription, (ii) had the opportunity to ask questions of and receive answers from the Issuer directly and to obtain any additional information which the Issuer possesses or can acquire without unreasonable effort or expense, and (iii) conducted and completed its own independent due diligence with respect to the Subscription. Except for the representations, warranties and agreements of the Issuer expressly set forth in this Subscription Agreement, the Investor is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it may deem appropriate) with respect to the Subscription, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Issuer, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.

 

(f)

The Investor became aware of this offering of the Shares solely by means of direct contact between the Investor, on one hand, and the Issuer or a representative of the Issuer, on the other hand, and the Shares were offered to the Investor solely by such direct contact. The Investor did not become aware of this offering of the Shares, nor were the Shares offered to the Investor, by any other means. The Investor acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 5.1 of this Subscription Agreement, in making its investment or decision to invest in the Issuer.

 

 

(g)

The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Issuer’s and SPAC’s respective filings with the SEC. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision and the Investor has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Shares.

  

(h)

Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Issuer. The Investor acknowledges specifically that a possibility of total loss exists.

 

(i)

The Investor acknowledges that (i) the Issuer currently may have, and later may come into possession of, information regarding the Issuer that is not known to the Investor and that may be material to a decision to enter into this transaction to purchase the Shares (“Excluded Information”), (ii) the Investor has determined to enter into the this transaction to purchase the Shares notwithstanding its lack of knowledge of the Excluded Information, and (iii) the Issuer shall have no liability to the Investor, and the Investor hereby to the extent permitted by law waives and releases any claims it may have against the Issuer, with respect to the nondisclosure of the Excluded Information.

 

(j)

The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

(k)

The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.

 

(l)

The Investor has been duly formed or incorporated and is validly existing and, where such concept is recognized, in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(m)

The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature of the Investor on this Subscription Agreement is genuine, and the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

 

(n)

Neither the Investor, nor any of its officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function, is (i) a person or entity named on the Specially Designated Nationals and Blocked Persons List administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC Sanctions program, or any similar list of sanctioned persons administered by the European Union, United Nations Security Council, Switzerland or the United Kingdom (collectively, “Sanctions Lists”); (ii) directly or indirectly, owned or controlled by, or acting on behalf of, one or more persons that are named on the Sanctions Lists; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea, the so-called Donetsk and Luhansk People’s Republic region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union, United Nations Security Council, Switzerland or the United Kingdom, or (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that the Investor is permitted to do so under applicable law. If the Investor is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed to ensure compliance with sanctions programs administered by the United States, the European Union and the United Kingdom. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

(o)

If the Investor is or is acting on behalf of an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986 (the “Code”), or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (“Similar Law”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) none of the Issuer or any of its affiliates (the “Transaction Parties”) has provided investment advice or otherwise acted as the Plan’s fiduciary, with respect to its decision to acquire and hold the Shares, and none of the Transaction Parties is or shall at any time be the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares and (ii) its purchase of the Shares will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any applicable Similar Law.

 

(p)

Except as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by the Investor with the SEC with respect to the beneficial ownership of SPAC’s ordinary shares prior to the date hereof (if applicable), the Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

(q)

The Investor has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2, will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Shares pursuant to this Subscription Agreement.

 

(r)

The Investor does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof, the Investor has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or end of day short sale positions with respect to the securities of SPAC.

 

 

(s)

No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability of the Issuer for the payment of any fees, costs, expenses or commissions.

 

(t)

The Investor agrees that, from the date of this Subscription Agreement until the Closing Date (or earlier termination of this Subscription Agreement), none of the Investor or any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor will engage in any Short Sales (as defined below) with respect to securities of the Issuer or SPAC. For purpose of this Section 5.2(t), “Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all types of direct and indirect share pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) the restrictions in this Section 5.2(t) shall not apply to any sale of securities of the Issuer or SPAC (A) held by the Investor or any person or entity acting on behalf of the Investor prior to the execution of this Subscription Agreement or (B) purchased by the Investor or any person or entity acting on behalf of the Investor in an open market transaction after the execution of this Subscription Agreement. Further, notwithstanding the foregoing, (ii) nothing herein shall prohibit other entities under common management with the Investor that have no knowledge of this Subscription Agreement or of the Investor’s subscription of the Shares (including the Investor’s controlled affiliates and/or affiliates) from entering into any Short Sales and (iii) in the case of an Investor that is a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the limitations set forth in the first sentence of this Section 5.2(t) shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Subscription Agreement (the “Investing Portfolio Manager”) and other portfolio managers or desks who have direct knowledge of the investment decisions made by the Investing Portfolio Manager.

 

6.

Registration Rights

 

6.1

The Issuer agrees that, within thirty (30) calendar days after the Closing Date, it will file with the SEC (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that the Issuer’s obligations to include such shares in the Registration Statement are contingent upon Investor furnishing in writing to the Issuer such information regarding Investor, the securities of the Issuer beneficially owned by Investor and the intended method of disposition of the Shares as shall be reasonably requested by the Issuer to effect the registration of the Shares, and Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement as permitted hereunder.

 

6.2

The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be issued pursuant to this Subscription Agreement, to remain effective until the earliest of (i) the second anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Shares issued pursuant to this Subscription Agreement, or (iii) on the first date on which the Investor is able to sell all of its Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

 

6.3

Prior to the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) of Section 6.2 above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act.

 

6.4

Notwithstanding the foregoing, if the SEC prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Shares by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted by the SEC. In such event, the number of Shares to be registered shall be reduced (a) firstly, pro rata among all the selling shareholders other than the PIPE Investors; and (b) secondly, only if the number of Shares to be registered for the selling shareholders other than the PIPE Investors has been reduced to zero, pro rata among the PIPE Investors, and the Issuer shall use its commercially reasonable efforts to file with the SEC, as promptly as practicable and as allowed by the SEC, one or more registration statements to register the resale of those Shares that were not registered on the initial Registration Statement, as so amended.

 

6.5

Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (a) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (b) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, (i) an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act or (ii) the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event that the Issuer reasonably believes would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that (i) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.

 

6.6

Indemnification.

 

(a)

The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein or such Investor has omitted a material fact from such information or otherwise violated the Securities Act, Exchange Act or any state securities law or any other law, rule or regulation thereunder; provided, however, that the indemnification contained in this Section 6.6(a) shall not apply to amounts paid by the Investor in settlement of any losses, claims, damages, liabilities or out-of-pocket expenses if such settlement is effected without the consent of the Issuer. In no event shall the liability of the Issuer be greater in amount than the dollar amount received by the Issuer under this Subscription Amount.

 

 

(b)

In connection with any Registration Statement in which an Investor is participating, the Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained (or not contained, in the case of an omission) in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein; provided, however, that the liability of the Investor shall be several and not joint with any Other PIPE Investor and in no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares purchased pursuant to this Subscription Agreement giving rise to such indemnification obligation.

 

(c)

Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(d)

The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares purchased pursuant to this Subscription Agreement.

 

(e)

If the indemnification provided under this Section 6.6(e) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 6.6(e) from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 6.6(e) by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.

 

 

7.

Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon written notice to the Investor from the Issuer pursuant to Section 4.3, (c) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement, and (d) March 15, 2024, or, if the Termination Date (as defined in the Transaction Agreement) is extended by the parties thereto, such later date, if the Closing has not occurred by such date other than as a result of a breach of the Investor’s obligations hereunder; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the termination of this Subscription Agreement in accordance with this Section 7, any monies paid or caused to be paid by the Investor to the Issuer or the WFOE, as applicable, in connection herewith (and with respect to the WFOE, plus any interest accrued thereon calculated based on a simple rate of 8% per annum from the date on which the WFOE receives such monies, until and including the date on which such monies are returned to the Investor) shall be promptly (and in any event within two (2) business days after such termination) returned to the Investor or its designee(s).

 

8.

Miscellaneous.

 

8.1

Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the parties hereunder (other than the Shares acquired hereunder, if any) may be transferred or assigned without the prior written consent of the Issuer (which consent shall not be unreasonably withheld, delayed or conditioned), other than (a) an assignment to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) thereof, (b) an assignment to an affiliate (as defined in Rule 12b-2 of the Exchange Act) of the Investor, and (c) an assignment of the Investor’s rights under Section 6 to an assignee or transferee of the Shares; provided that prior to such assignment or transfer any such assignee or transferee shall agree in writing to be bound by the terms hereof, and, if the Issuer so requests, any such assignee or transferee shall deliver to the Issuer an opinion of counsel in form and substance reasonably satisfactory to the Issuer to the effect that registration under the Securities Act is not required in connection with such assignment; provided, further, that no assignment pursuant to the foregoing terms shall relieve the Investor of its obligations hereunder.

 

8.2

Additional Information. The Issuer may request from Investor such additional information as is necessary for SPAC or the Issuer, as applicable, to comply with public disclosure requirements of applicable securities laws or any filing requirements pursuant to the rules of any stock exchange or the Financial Industry Regulatory Authority, and Investor shall provide such information; provided that, subject to Section 6.5, the Issuer shall keep any such information provided by the Investor confidential except (a) as necessary to include in any registration statement the Issuer is required to file hereunder, (b) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (c) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges that SPAC and/or the Issuer may file a copy of the form of this Subscription Agreement with the SEC as an exhibit to a current or periodic report or a registration statement of SPAC or the Issuer, as applicable. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 6 hereof.

 

 

8.3

Further Assurances.

 

(a)

The Investor acknowledges that the Issuer will rely on the acknowledgments, understandings, agreements, covenants, representations and warranties of the Investor contained in this Subscription Agreement, including Schedule II hereto. Prior to the Closing, the Investor agrees to promptly notify the Issuer if any of the acknowledgments, understandings, agreements, covenants representations and warranties made by the Investor set forth herein are no longer accurate in all material respects.

 

(b)

The Issuer acknowledges that the Investor will rely on the acknowledgements, understandings, agreements, covenants, representations and warranties of the Issuer contained in this Subscription Agreement. Prior to the Closing, the Issuer agrees to promptly notify the Investor if any of the acknowledgements, understandings, agreements, covenants, representations and warranties made by the Issuer set forth herein are no longer accurate in all material respects.

 

(c)

The Issuer is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any action, suit, hearing, claim, charge, audit, lawsuit, litigation, inquiry or proceeding (in each case, whether civil, criminal or administrative or at law or in equity) with respect to the matters covered hereby.

 

(d)

The Investor acknowledges and agrees that none of the other parties to the Transaction Agreement (other than the Issuer) or any Non-Party Affiliate, shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor pursuant to this Subscription Agreement related to the private placement of the Shares, the negotiation hereof or thereof or the subject matter hereof or thereof, or the transactions contemplated hereby or thereby, for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares, or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Issuer or any Non-Party Affiliate concerning the Issuer, any of its controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of the Issuer or any of the Issuer’s controlled affiliates or any family member of the foregoing.

 

8.4

Survival of Representations and Warranties. All of the agreements, representations and warranties contained in this Subscription Agreement shall survive the Closing.

 

8.5

Modifications and Amendments. This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 7 above) except by an instrument in writing, signed by each of the parties hereto. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

 

8.6

Entire Agreement. This Subscription Agreement (including the schedule hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 6.6 and Section 8.3(a), with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns.

  

8.7

Benefit. Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

8.8

Severability. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

8.9

Transaction Expenses. Each party shall pay all of its own costs and expenses incurred in anticipation of, relating to and in connection with the negotiation and execution of this Subscription Agreement and the transactions contemplated hereby, whether or not such transactions are consummated.

 

8.10

Counterparts. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

8.11

Remedies. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that it may be difficult to prove damages with reasonable certainty, that it may be difficult to procure suitable substitute performance, and that injunctive relief and/or specific performance will not cause an undue hardship to the parties hereto. The parties hereto further acknowledge that the existence of any other remedy contemplated by this Subscription Agreement does not diminish the availability of specific performance of the obligations hereunder or any other injunctive relief. Each party hereto further agrees that in the event of any action by the other party for specific performance or injunctive relief, it will not assert that a remedy at law or other remedy would be adequate or that specific performance or injunctive relief in respect of such breach or violation should not be available on the grounds that money damages are adequate or any other grounds.

 

8.12

Adjustment of Number of Shares. If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), shall occur between the date hereof and immediately prior to the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.

 

8.13

Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws that would otherwise require the application of the law of any other state.

 

 

8.14

Consent to Jurisdiction; Waiver of Jury Trial. Any proceeding or action based upon, arising out of or related to this Subscription Agreement or the transactions contemplated hereby must be referred to and finally settled by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force at the time of commencement of the arbitration. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The claimant and respondent shall each nominate one (1) arbitrator and the third arbitrator shall be appointed by the HKIAC. The arbitration proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

 

8.15

Notice. Any notice or communication required or permitted hereunder to be given to the Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page hereto, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three (3) business days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to the Issuer.

 

(a)

if to the Investor, to such address or addresses set forth on the signature page hereto, with a required copy (which will not constitute notice) to:

 

[●]

 

(b)

if to the Issuer, to:

 

Lotus Technology Inc.
No. 800 Century Avenue
Pudong District 

Shanghai 200120, People’s Republic of China 

Attention: [●]
Email: [●]
 

with a required copy (which will not constitute notice) to: 

[●]

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.

 

Name of Investor:			State/Country of Formation or Domicile:
[INVESTOR]
By:
Name:
Title:
Name in which Shares are to be registered (if different):

Investor’s EIN:
Business Address-Street:		Mailing Address-Street (if different):
City, State, Zip:		City, State, Zip:
Attn:		Attn:
Telephone No.:		Telephone No.:
Facsimile No.:		Facsimile No.:

 

Investor must pay the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.

 

	LOTUS TECHNOLOGY INC.
	By:
		Name:
		Title:

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the WFOE has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.

 

	WUHAN LOTUS TECHNOLOGY LIMITED COMPANY (武汉路特斯科技有限公司)
	By:
		Name:
		Title:

 

[Signature Page to Subscription Agreement]

 

 

SCHEDULE I

 

PARTICULARS OF SUBSCRIPTION

 

Investor Name	Number of Shares subscribed for	Subscription Amount	Deposit
[●]	The number of the Shares subscribed for by the Investor shall be equal to the quotient obtained by dividing (a) the Subscription Amount by (b) US$10.00.	The Subscription Amount to be paid by the Investor shall be equal to (a) the Deposit (converted into Renminbi using the middle exchange rate published by the People’s Bank of China on the date of payment of such Deposit) plus (b) any interest accrued on the Deposit at the rate set forth herein, converted into U.S. dollars using the exchange rate as of the date of payment of such Subscription Amount by the Investor to the escrow account.	[●]

 

 

SCHEDULE II

 

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR

 

A.            QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

1.            ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB.

 

2.            ¨ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.

 

*** OR ***

 

B.            INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):

 

1.            ¨ We are an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are institutional accredited investors) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an institutional “accredited investor.”

 

*** AND ***

 

C.            AFFILIATE STATUS (Please check the applicable box)

 

SUBSCRIBER:

 

¨ is:

 

¨ is not:

 

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.

 

This page should be completed by the Investor
and constitutes a part of the Subscription Agreement.

 

 

Investor is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to Investor (Please check the applicable subparagraphs):

 

¨      Investor is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and:

 

¨     is an insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨     is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;

 

¨     is a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);

 

¨     is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;

 

¨     is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);

 

¨     is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, of (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;

 

¨     is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);

 

¨     is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Securities Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Securities Act, or a foreign bank or savings and loan association or equivalent institution), partnership, limited liability company or Massachusetts or similar business trust;

 

¨     is an investment adviser registered under the Investment Advisers Act; or

 

¨     any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR 230.501(a)), of a type not listed above;

 

¨     Investor is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with Investor;

 

¨     Investor is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;

 

¨     Investor is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies¹ which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Investor or are part of such family of investment companies;

 

¹ “Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided, that (a) each series of a series company (as defined in Rule 1 8f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor).

 

 

¨     Investor is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or

 

¨     Investor is a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.

 

Rule 501(a) under the Securities Act, in relevant part, states that an institutional “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Investor has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Investor and under which Investor accordingly qualifies as an institutional “accredited investor.”

 

¨     Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

 

¨     Any broker or dealer registered pursuant to section 15 of the Exchange Act;

 

¨     Any insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨     Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a) (48) of the Investment Company Act;

 

¨     Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act;

 

¨     Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

¨     Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;

 

¨     Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act;

 

¨     Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000;

 

¨     Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in section 230.506(b)(2)(ii) of Regulation D under the Securities Act;

 

¨     Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act; or

 

¨     Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000.

 

 

 

Exhibit 10.31

 

Execution Version

 

 

Confidential treatment has been requested for redacted portions of this exhibit.

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

April 28, 2023

 

LOTUS TECHNOLOGY INC.
as the Issuer

 

and

 

Momenta Global Limited
as the Investor

 

CONVERTIBLE NOTE PURCHASE AGREEMENT 

 

 

 

Contents

 

Clause

Page

 

1.	DEFINITIONS	1
2.	ISSUANCE AND PURCHASE OF THE NOTE	6
3.	CLOSING	6
4.	CONDITIONS PRECEDENT	7
5.	REPRESENTATIONS AND WARRANTIES	8
6.	RESTRICTIONS ON DISPOSITION	15
7.	USE OF PROCEEDS	15
8.	EXPENSES	15
9.	COVENANTS	15
10.	CONFIDENTIALITY	16
11.	INDEMNIFICATION	17
12.	TERMINATION	18
13.	NOTICES	18
14.	MISCELLANEOUS	19
15.	GOVERNING LAW AND DISPUTE RESOLUTION	20

 

SCHEDULE 1	FORM OF CONVERTIBLE SENIOR NOTE
SCHEDULE 2	DISCLOSURE SCHEDULE
SCHEDULE 3	REGISTRATION RIGHT

 

 

THIS CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) is made on April 28, 2023

 

BETWEEN:

 

(1)

LOTUS TECHNOLOGY INC., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”); and

 

(2)

Momenta Global Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Investor”).

 

(All the foregoing parties shall together be referred to as the “Parties” and each a “Party”.)

 

WHEREAS:

 

(A)

The Issuer proposes to issue, and the Investor proposes to subscribe for, on and subject to the terms and conditions set out in this Agreement, a senior unsecured convertible note in the principal amount equal to the Purchase Price (as defined below), convertible into fully paid Conversion Shares (as defined below).

 

(B)

The Issuer intends to apply for a listing of its securities on New York Stock Exchange, The Nasdaq Stock Market or such other internationally recognized stock exchange duly approved according to the Shareholders Agreement (as defined below) and the Articles (as defined below) (“Approved Exchange”), as the case may be, through a De-SPAC Transaction (the “Listing”), following the consummation of the transactions contemplated hereby.

 

IT IS HEREBY AGREED as follows:

 

1.

DEFINITIONS

 

1.1

The following terms and expressions used in this Agreement, unless the context otherwise requires, shall have the following meanings:

 

“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. Without limiting the generality of the foregoing, a natural person’s Affiliates shall include such natural person’s spouse, children, parents, siblings, spouse’s parents, spouse’s siblings and their spouses, children’s spouses, siblings’ spouses, and any other Person that directly or indirectly Controlled by any of the aforesaid individuals.

 

“Articles” means the memorandum and articles of association of the Issuer as amended from time to time;

 

“Authority” means any governmental or regulatory commission, board, body, authority or agency, or any stock exchange, self-regulatory organisation or other non-governmental regulatory authority, or any court, tribunal or arbitrator, in each case whether national, central, federal, provincial, state, regional, municipal, local, domestic or foreign;

 

“Board” means the board of directors of the Issuer;

 

 

“Business Day” means any day that is not a Saturday, Sunday, legal holiday or another day on which commercial banks are required or authorized by law to be closed in the PRC, Hong Kong, the U.S. or the Cayman Islands;

 

“Closing” means the completion of the issuance and subscription of the Note by the Investor in accordance with clause 3;

 

“Closing Date” means the date of the Closing, which shall be within ten (10) Business Days after the conditions to the Closing set forth in clause 4 below (other than those conditions that by their nature are to be satisfied at the Closing including without limitation, clause 4.2(d), but subject to the satisfaction or waiver of those conditions) are satisfied or duly waived, or on such other date as the parties may otherwise agree in writing;

 

“Company Registered IP” means Company Owned IP issued by, registered, recorded or filed with, renewed by or the subject of a pending application before any applicable Authority;

 

“Company Owned IP” means all Intellectual Property owned or purported to be owned by the Issuer or any of its Subsidiaries,

 

“Confidential Information” has the meaning given to it in clause 10.1;

 

“Contract” means, a contract, agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, purchase order, and other legally binding arrangement, whether written or oral;

 

“Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing;

 

“Conversion Shares” means the ordinary shares, par value US$0.00001 per share, of the Issuer issuable upon the conversion of the Note in accordance with the Convertible Senior Note;

 

“Convertible Senior Note” or “Note” means each instrument to be executed by the Issuer constituting the Note in the form set out in Schedule 1 to this Agreement, and “Convertible Senior Notes” or “Notes” shall be construed accordingly;

 

“De-SPAC Transaction” means a business combination involving a special purpose acquisition company, pursuant to which the Issuer’s capital stock is, or is exchanged for equity securities of a person that is, listed or approved for listing on an Approved Exchange.

 

“Event of Default” means any event or circumstances specified as such in the Convertible Senior Note;

 

 

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

 

“Governmental Order” means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Authority;

 

“Group” or “Group Companies” means collectively the Issuer and its Subsidiaries, and a “Group Company” means any entity within the Group;

 

“Intellectual Property” means all intellectual property, industrial property and proprietary rights in any and all jurisdictions worldwide, including: (a) patents, (b) trade names, logos, trademarks, service marks, service names, trade dress, company names, collective membership marks, certification marks, slogans, toll-free numbers, domain names, social media handles and accounts, and other forms indicia of origin, whether or not registerable as a trademark in any given jurisdiction, together with registrations, renewals, and applications therefor, and the goodwill associated with any of the foregoing, (c) copyrights, rights in works of authorship and mask works, (d) rights in software, (e) all trade secrets and other confidential or proprietary information, including know-how and inventions (whether or not patentable or reduced to practice), invention disclosures, improvements, source code, documentation, processes, models, technology, formulae, customer lists, supplier lists, data, databases, and data collections and all rights therein, business and marketing plans, methodologies and all other information, in each case, that derives economic value (actual or potential) from not being generally known to other persons who can obtain economic value from its disclosure or use, (f) “moral” rights, rights of publicity or privacy, data base or data collection rights and other similar intellectual property rights, (g) registrations, applications, extensions, combinations, divisions, reissues and renewals for any of the foregoing in (a)-(d), and (h) all rights in all of the foregoing (a)-(g), including all rights to claim for damages by reason of infringement, misappropriation or violation thereof, with the right to sue for, and collect the same;

 

“Knowledge of the Issuer” means the actual knowledge of Mr. Feng Qingfeng and Mr. LEE Kuen Long or the knowledge that any of them would be deemed to have after making such due inquiry as a prudent business person would have made in the management of his or her business affairs;

 

“Law” or “Laws” means any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Authority, in each case as amended, and any and all applicable Governmental Orders;

 

“Lien” means any claim, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by Contract, understanding, law, equity or otherwise;

 

 

“Material Adverse Effect” means any event or circumstance or any combination of them that is materially adverse to (x) the business, operations, assets, properties, business or financial condition, results or prospects of the Group taken as a whole or (y) the ability of the Issuer to perform its obligations under this Agreement or any other Transaction Document; provided, however, that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect”: (a) any change in applicable Laws or generally accepted accounting principles or any interpretation thereof following the date of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the taking or refraining from taking of any action required to be taken or refrained from being taken under this Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), epidemic or pandemic, acts of nature or change in climate, (e) any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions, riots or insurrections, (f) any action taken by, or at the request of, the Investor, (g) any matter set forth on the Disclosure Schedule or disclosed to the Investor on any document made available to the Investor on or prior to the date of this Agreement, (h) any events that are cured by the Issuer prior to the Closing, or (i) any worsening of the events referred to in clauses (a), (b), (d), (e) or (g) to the extent existing as of the date of this Agreement;

 

“Material Contract” means each currently effective agreements, contracts, leases, licenses, instruments, commitments and other obligations to which a Group Company is a party or by which it is bound that: (i) involves obligations (contingent or otherwise), payments or revenues to or by the Issuer or any of its Subsidiaries in excess of $10,000,000 during the twelve-month period ended on September 30, 2022, (ii) involves (A) indebtedness for borrowed money having an outstanding principal amount in excess of $10,000,000 or (B) an extension of credit, a guaranty, surety, deed of trust, or the grant of a Lien, in each case, to secure any indebtedness having a principal or stated amount in excess of $10,000,000; (iii) involves the lease, license, sale, use, disposition or acquisition of a business or assets constituting a business involving purchase price, payments or revenues in excess of $10,000,000; (iv) grants a right of first refusal, right of first offer or similar right with respect to any material properties, assets or businesses of the Issuer and its Subsidiaries, taken as a whole; (v) involves the establishment, contribution to, or operation of a partnership, joint venture or similar arrangement, or involving a sharing of profits or losses, involving payments of an amount higher than $10,000,000; or (vi) contains any exclusivity, “most favored nation”, minimum use or purchase requirements.

 

“Material Subsidiary” has the meaning ascribed to such term in the Convertible Senior Note;

 

“Maturity Date” shall have the meaning ascribed to such term in the Convertible Senior Note.

 

“PIPE Investment” shall have the meaning ascribed to such term in the Convertible Senior Note.

 

“Person” means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity;

 

“PRC” means the People’s Republic of China, and for the purposes of this Agreement excludes Hong Kong, the Macau Special Administrative Region and Taiwan;

 

“Purchase Price” has the meaning given to it in clause 2.1;

 

 

“Representatives” has the meaning given to it in clause 10.1;

 

“Required Internal Approval” has the meaning given to it in clause 3.2;

 

“SEC” means the U.S. Securities and Exchange Commission;

 

“Securities Act” means the U.S. Securities Act of 1933, as amended;

 

“Shareholders Agreement” means the Fourth Amended and Restated Shareholders Agreement of Lotus Technology Inc., dated as of September 20, 2022;

 

“Subsidiary” means, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person from time to time;

 

“Surviving Provisions” means clauses 1 (Definitions), 8 (Expenses), 13 (Confidentiality), 15 (Termination), 13 (Notices), 17 (Miscellaneous) and 15 (Governing law and Dispute Resolution);

 

“Tax Return” means any return, report or statement showing Taxes, used to pay Taxes, or required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated or provisional Tax.

 

“Taxes” means, (i) in the PRC: (a) any national, provincial, municipal, or local taxes, charges, fees, levies, or other assessments, including without limitation, all net income (including enterprise income tax and individual income withholding tax), turnover (including value-added tax, business tax, and consumption tax), resource (including urban and township land use tax), special purpose (including land value-added tax, urban maintenance and construction tax, and additional education fees), property (including urban real estate tax and land use fees), documentation (including stamp duty and deed tax), filing, recording, social insurance (including pension, medical, unemployment, housing, and other social insurance withholding), tariffs (including import duty and import value-added tax), and estimated and provisional taxes, charges, fees, levies, or other assessments of any kind whatsoever, (b) all interest, penalties (administrative, civil or criminal), or additional amounts imposed by any Authority in connection with any item described in sub-clause (a) above, and (c) any form of transferee liability imposed by any Authority in connection with any item described in sub-clauses (a) and (b) above, and (ii) in any jurisdiction other than the PRC: all similar liabilities as described in sub-clause (i)(a) and (i)(b) above;

 

“Transaction Documents” means this Agreement, the Convertible Senior Note, and any and all other agreements and instruments being or to be entered into by the parties to this Agreement in connection with the transactions contemplated by any of the foregoing;

 

“U.S.” means the United States of America; and

 

“US$” and “US dollars” means United States dollars, the legal currency of the U.S.

 

1.2           In this Agreement:

 

(a)

words denoting the singular shall include the plural and vice versa;

 

 

(b)

words denoting one gender shall include each gender and all genders;

 

(c)

the term “or” is not exclusive;

 

(d)

the term “including” shall be deemed to be followed by “but not limited to”;

 

(e)

references to clauses and the Schedules are, unless stated otherwise, references to clauses of and the schedules to this Agreement;

 

(f)

headings are inserted for convenience only and will not affect the construction of this Agreement;

 

(g)

any reference to an enactment or a statutory provision is a reference to it as it may have been or may from time to time be amended, modified, consolidated or re-enacted;

 

(h)

the terms “hereof”, “herein” and “hereunder” (and any other similar expressions) refer to this Agreement as a whole and not to any particular clause or other portion hereof; and

 

(i)

each representation, warranty, agreement, and covenant contained herein will have independent significance, regardless of whether also addressed by a different or more specific representation, warranty, agreement, or covenant.

 

1.3           The recitals and the Schedules shall be deemed to be incorporated in this Agreement.

 

2.

ISSUANCE AND PURCHASE OF THE NOTE

 

2.1

Subject to and in accordance with the provisions of this Agreement, the Issuer agrees to issue and sell to the Investor, and the Investor agrees to subscribe for and purchase, a Convertible Senior Note for a purchase price equal to US$ equivalent of RMB 80,000,000 as calculated based on the Exchange Rate (the “Purchase Price”) at the Closing. “Exchange Rate” means the US$/RMB central parity rate set by the People’s Bank of China as of the Closing Date.

 

3.

CLOSING

 

3.1

The Closing shall take place remotely on the Closing Date via the exchange of documents and signatures, so long as the conditions precedent to the Closing set forth in clause 4 below (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or duly waived as of the Closing Date.

 

3.2

The Issuer shall, prior to the Closing Date, procure that (a) meetings of the Board are duly convened and held or resolutions in writing of the Board are passed in accordance with the Articles and the Shareholders Agreement at/for which: (i) the execution of this Agreement and the other Transaction Documents and the performance of the Issuer’s obligations hereunder and thereunder; (ii) the issuance of the Note to the Investor in accordance with this Agreement; (iii) the conversion of the Note and the issuance of the Conversion Shares; and (iv) the performance by the Issuer of its other obligations under the Transaction Documents, have been approved and/or ratified, and (b) waiver from each of its shareholders of any pre-emptive right to subscribe for the Note or Conversion Shares is obtained ((a) and (b) are collectively referred to as the “Required Internal Approval”).

 

 

3.3

At the Closing:

 

(a)

the Issuer shall deliver the following to the Investor:

 

(i)

a Convertible Senior Note dated as of the Closing Date with an aggregate principal amount of the Purchase Price, duly executed by the Issuer;

 

(ii)

a certificate referred to in clause 4.2(f); and

 

(iii)

copies of all other Transaction Documents, if applicable, duly executed by all parties thereto (other than the Investor or its Affiliates).

 

(b)

against delivery of the items set out in clause 3.3(a) and the Issuer delivering a written notice to the Investor of all closing conditions being satisfied or waived (as applicable), the Investor shall (i) pay or cause to be paid the Purchase Price to the Issuer by wire transfer of immediately available funds in US dollars to a bank account designated by the Issuer, evidence of such payment taking the form of a confirmation from the paying bank that it has made such payment or a SWIFT message showing such wire transfer, and (ii) deliver to the Issuer a certificate, referred to in clause 4.3(c).

 

4.            CONDITIONS PRECEDENT

 

4.1

The obligations of the Parties to consummate the transactions contemplated under this Agreement are subject to the satisfaction, on the Closing Date, of the following condition:

 

(a)

no injunction, interim or otherwise, having been granted in respect of the Issuer and no law having been enacted, issued or promulgated that would enjoin or prohibit or fundamentally alter the terms of the transactions contemplated by the Transaction Documents.

 

4.2

The obligations of the Investor to consummate the transactions contemplated under this Agreement are subject to the satisfaction, on the Closing Date, of the following conditions, any of which may be waived in writing by the Investor in its sole discretion:

 

(a)

the representations and warranties of the Issuer contained in clause 5.1 shall be true and correct as of the date hereof and as of the Closing Date (except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct at and as of such date) in all material respects (except for those representations and warranties that are qualified by “material” or “Material Adverse Effect” or any similar qualification or exception, which shall be true and correct to such extent);

 

(b)

the Issuer shall have performed and complied with, in all material respects, the covenants, obligations and agreements required under the Transaction Documents to be performed or complied with by it on or prior to the Closing Date, including providing all deliverables set forth in clause 3.3(a) hereof;

 

(c)

there shall not exist or have occurred any event, circumstance, development or change that, individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect;

 

 

(d)

the transactions contemplated under the equity transfer agreement (《股权转让协议》) (the “Onshore Transfer Agreement”) dated April 28, 2023 by and among Chusudu (Suzhou) Technology Co., Ltd. (初速度（苏州）科技有限公司), Sanya Lotus Venture Investment Co., Ltd. (三亚路特斯创业投资有限责任公司) and certain other parties thereto shall have been completed; and

 

(e)

the Issuer shall have delivered to the Investor a certificate, dated as of the Closing Date, executed by a duly authorized director or officer of the Issuer, certifying (i) the satisfaction of the conditions specified in clauses 4.2(a) through (d) above; and (ii) that the Required Internal Approval was duly obtained by the Issuer in accordance with the Articles and the Shareholders Agreement, and are correct, complete and in full force and effect as of the Closing Date.

 

4.3

The obligations of the Issuer to consummate the transactions contemplated under this Agreement with the Investor are subject to the satisfaction, on the Closing Date, of the following conditions, any of which may be waived in writing by the Issuer with respect to that Investor in its sole discretion:

 

(a)

the representations and warranties of the Investor contained in clause 5.2 hereof shall be true and correct as of the date hereof and as of the Closing Date (except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date) in all material respects (except for those representations and warranties that are qualified by “material” or “Material Adverse Effect” or any similar qualification or exception, which shall be true and correct to such extent);

 

(b)

the Investor shall have performed and complied with, in all material respects, the covenants, obligations and agreements required under the Transaction Documents to be performed or complied with by the Investor on or prior to the Closing Date; and

 

(c)

the Investor shall have delivered to the Issuer a certificate, dated as of the Closing Date, executed by a duly authorized director or officer of the Investor, certifying the satisfaction of the conditions specified in clauses 4.3(a) through (b) above.

 

5.           REPRESENTATIONS AND WARRANTIES

 

Representations and Warranties of the Issuer

 

5.1

Subject to such exceptions specifically set forth in the Disclosure Schedule attached hereto as Schedule 2 (the “Disclosure Schedule”), the Issuer represents and warrants to the Investor that each of the statements as follows as of the date hereof and as of the Closing:

 

(a)

Organization, Good Standing and Qualification. Each Group Company is (i) duly incorporated, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation, (ii) has requisite corporate power and authority to own and operate its properties and assets, to carry on its business as presently conducted and contemplated to be conducted, and (iii) is duly licensed or qualified and in good standing as a foreign or extra-provincial corporation (or other entity, if applicable) in each jurisdiction in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except in the case of clause (iii), where the failure to be so licensed or qualified or in good standing would not be material to the business of the Group taken as a whole.

 

 

(b)

Authorization. The Issuer has all corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to carry out and perform its obligations hereunder and thereunder. All corporate actions on the part of the Issuer for the authorization, execution, delivery and performance of each Transaction Document and the transactions contemplated thereby, have been taken or will be taken prior to the Closing. Each Transaction Document has been duly executed and delivered by the Issuer and constitutes valid and legally binding obligations of such party, enforceable against such party in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by applicable Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies (collectively, the “Enforceability Exceptions”).

 

(c)

Approvals. Each approval, authorization or consent which is required to be obtained by the Issuer in connection with the consummation of the transactions contemplated under this Agreement and the other Transaction Documents will have been obtained prior to and be effective as of the Closing.

 

(d)

Corporate Structure; Subsidiaries. A complete list, as of the date of this Agreement, of each Subsidiary of the Issuer and its jurisdiction of incorporation, formation or organization, outstanding equity securities, and holders of equity securities, as applicable, is set forth in the Disclosure Schedule. Except as set forth in the Disclosure Schedule, the Issuer does not presently own, directly or indirectly, any equity or similar interest in any other corporation, partnership, trust, joint venture, association, or other entity.

 

(e)

Valid Issuance. The Note, when issued and delivered by the Issuer, will constitute a senior, direct, unconditional, unsubordinated and unsecured indebtedness of the Issuer, and will at all times rank pari passu with all existing and future unsubordinated and unsecured indebtedness owed or to be owed by the Issuer. As of the Closing, the Issuer shall have duly and validly authorized for issuance such number of Conversion Shares as shall be sufficient to effect the conversion of the Note. The Conversion Shares, when issued and delivered by the Issuer to the Investor in accordance with the terms of the Convertible Senior Note, will be duly and validly issued, fully paid and non-assessable, free from any Liens (except for any restrictions on transfer under applicable securities Laws, the Articles and under the Transaction Documents).

 

(f)

Capitalization

 

(i)

The Disclosure Schedule provides the Issuer’s capital structure on fully-diluted and as-converted basis (including a true and correct list of all shareholders owning issued and outstanding shares of the Issuer, together with the number and class of shares held by each such shareholder) as of the date hereof and as of the Closing (which, for the avoidance of doubt, excludes any investment that may be made by any third party other than the Investor from the date hereof through the Closing).

 

 

(ii)

As of the date of this Agreement, the authorized share capital of the Issuer is US$50,000 divided into 5,000,000,000 shares of $0.00001 par value each, comprised of (i) 4,691,947,371 ordinary shares, par value of $0.00001 each, of which 2,142,922,222 ordinary shares are issued and outstanding; (ii) 184,596,297 Series Pre-A preferred shares, par value of $0.00001 each, all of which are issued and outstanding; and (iii) 123,456,332 Series A preferred shares, par value of $0.00001 each, all of which are issued and outstanding.

 

(g)

Compliance with Laws; Permits.

 

(i)

Except as set forth in the Disclosure Schedule and except as would not be or reasonably be expected to be material to the business of the Issuer and its Subsidiaries, taken as a whole, in the three (3) years prior to the date hereof, (A) the Issuer and its Subsidiaries are, and have been, in compliance with all applicable Laws, and (B) neither the Issuer nor any of its Subsidiaries, to the Knowledge of the Issuer, is or has been subject to any investigation by or for any applicable Authority with respect to any violation of any applicable law.

 

(ii)

Except as set forth in the Disclosure Schedule, each of the Group Companies has in effect all material approvals, authorizations, clearances, licenses, registrations, permits or certificates of the applicable Authority that are required for such Group Company to own, lease or operate its properties and assets and to conduct its business as currently conducted in all material respects.

 

(h)

Actions. There is no action, suit, proceeding, claim, arbitration or investigation pending or, to the Knowledge of the Warrantors, threatened in writing against or affecting any Group Company or, or any of their respective directors or officers (solely in their capacity as such), except as would not, individually or in the aggregate, reasonably be expected to be material to the business of the Group taken as a whole.

 

(i)

Financial Information. The Issuer has provided to the Investor the unaudited consolidated balance sheet of the Group as of September 30, 2022, and the related unaudited consolidated cash flow statements and income statements for the period then ended (the “Financial Statements”). The Financial Statements (i) have been prepared in accordance with the books and records of the Issuer, (ii) present fairly, in all material respects, the financial condition of the Issuer and its Subsidiaries on a consolidated basis at the date or dates therein indicated and the results of operations for the period or periods therein specified, subject to the omission of notes thereto and normal year-end audit adjustments, and (iii) have been prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto), subject to the omission of notes thereto and normal year-end audit adjustments. Specifically, but not by way of limitation, the most recent balance sheet included within the Financial Statements disclose all of the Issuer’s indebtedness and liabilities, as of the date thereof (including, without limitation, absolute liabilities, accrued liabilities, and contingent liabilities) to the extent such indebtedness and liabilities are required to be disclosed on a balance sheet in accordance with GAAP applied on a consistent basis, except for indebtedness and liabilities which would not, individually or in the aggregate, reasonably be expected to be material to the business of the Issuer and its Subsidiaries, taken as a whole

 

 

(j)

Material Contracts. Except for any Material Contract that will terminate upon the expiration of the stated term thereof prior to the Closing Date, each Material Contract is (A) in full force and effect and (B) represents the legal, valid and binding obligations of the applicable Group Company which is a party thereto and, to the Knowledge of the Issuer, represents the legal, valid and binding obligations of the counterparties thereto. Except as set forth in the Disclosure Schedule, and except, in each case, where the occurrence of such breach or default or failure to perform would not be material to the business of the Group taken as a whole, the applicable Group Company has duly performed all of its material obligations under each Material Contract to which it is a party to the extent such obligations to perform have accrued, (y) no breach or default thereunder by the Group with respect thereto, or, to the Knowledge of the Issuer, any other party or obligor with respect thereto, has occurred, and (z) no event has occurred that with notice or lapse of time, or both, would constitute such a default or breach of such Material Contract by the Issuer or any of its Subsidiaries or, to the Knowledge of the Issuer, any other party thereto, or would entitle any third party to prematurely terminate any Material Contract. No Group Company has within the last twelve (12) months provided to or received from the counterparty to any Material Contract any written notice or written communication to terminate, or not renew, any Material Contract.

 

(k)

Intellectual Properties.

 

(i)

IP Ownership. Each applicable Group Company has made all required filings and registrations (and corresponding payments of fees therefor) to the applicable Authority in connection with issuances, registrations and applications for the Company Registered IP in all material respects. Each item of Company Registered IP is subsisting and, to the Knowledge of the Issuer and other than any Company Registered IP in the application process, valid and enforceable. The Group Companies have good and valid title to and exclusively own all right, title and interest in and to each item of Company Registered IP and other material Company Owned IP, free and clear of any Liens (except for licenses of Intellectual Property granted by the Issuer or any of its Subsidiaries in the ordinary course).

 

(ii)

Infringement, Misappropriation and Claims. Except as set forth in the Disclosure Schedule, neither the Issuer nor any of its Subsidiaries violates, infringes or misappropriates, or in the three (3) years prior to the date hereof, has violated, infringed or misappropriated, any Intellectual Property of any Person in any material respect, nor has the Issuer or any of its Subsidiaries received in the three (3) years prior to the date hereof any written notice alleging any of the foregoing. During the three (3) years prior to the date hereof, (i) to the Knowledge of the Issuer, no Person has violated, infringed or misappropriated any Company Owned IP in any material respect and (ii) neither the Issuer nor any of its Subsidiaries has given any written notice to any other Person alleging any of the foregoing.

 

 

(l)

Employment Matters.

 

(i)

Except as set forth in the Disclosure Schedule and except as would not be material to the business of the Group taken as a whole, (i) each Group Company has, for the three (3) years prior to the date hereof, complied with all applicable Laws relating to employment and labor, and (ii) there is no pending or, to the Knowledge of the Issuer, threatened in writing claim relating to the violation of any applicable Law by the Issuer or any of its Subsidiaries related to labor or employment;

 

(ii)

There has not been, and there is not now pending or, to the Knowledge of the Issuer, threatened, any strike, union organization activity, lockout, slowdown, picketing, or work stoppage or any unfair labor practice charge against any Group Company. No Group Company is bound by or subject to (and none of their assets or properties is bound by or subject to) any written or oral Contract, commitment or arrangement with any labor union or any collective bargaining agreements.

 

(m)

Tax Matters. Except as set forth in the Disclosure Schedule, each Group Company (i) has timely filed (taking into account any extensions) all material Tax Returns that are required to be filed by or with respect to it with any applicable Authority, and (ii) has timely paid or will timely pay all Taxes owed by it which are due and payable, except with respect to matters being contested in good faith by appropriate proceeding and with respect to which adequate reserves have been made in accordance with GAAP. No material deficiencies for any Taxes that are currently outstanding with respect to any Tax Returns of a Group Company have been asserted in writing by, and no written notice of any action, audit, assessment or other proceeding, in each case that is currently pending, with respect to such Tax Returns or any Taxes of a Group Company has been received from, any applicable Authority, and no dispute or assessment relating to such Tax Returns or such Taxes with any such applicable Authority is currently outstanding.

 

(n)

No Registration. Assuming the accuracy of the Investor’s representations and warranties set forth in clause 5.2, in connection with the offer, sale and delivery of the Note and the Conversion Shares in the manner contemplated by this Agreement, no registration under the Securities Act is required for the offer and sale of the Note and the Conversion Shares (the “Securities”) by the Issuer to the Investor or for the conversion of the Notes.

 

(o)

No General Solicitation. Neither the Issuer nor any person acting on its behalf has offered or sold the Note or the Conversion Shares by any form of general solicitation or general advertising, including, but not limited to, the following: (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; (ii) any website posting or widely distributed e-mail; or (iii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

 

(p)

Other Agreements. The definitive agreements the Issuer has entered, or will enter, into with any other third party in connection with any private placement of convertible notes with an investment term of no longer than eighteen (18) months in connection with the Listing (the “Other Agreements”) reflect or will reflect the same conversion price and the same type of securities issuable upon conversion of such convertible notes, and the same conversion and redemption mechanism (other than the procedural provisions thereof) of such convertible notes and rights attached to such securities (collectively, the “Material Terms”) that are no more favorable to such third party thereunder than those provided to the Investor under this Agreement.

 

Except for this clause 5.1, the Issuer makes no express or implied representation or warranty (oral or written) with respect to the Group Companies or their respective businesses, assets or conditions (financial or otherwise), and the Issuer hereby disclaims any such other representations or warranties, if any, and all other warranties expressed or implied by law, trade, custom, usage or otherwise are hereby expressly excluded by the Issuer.

 

Representations and Warranties of the Investor

 

5.2

The Investor hereby represents and warrants to the Issuer as of the date hereof as follows:

 

(a)

Organization and Good Standing. The Investor is (i) duly incorporated, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation, and (ii) has requisite corporate power and authority to own and operate its properties and assets, to carry on its business as presently conducted and contemplated to be conducted. It is not in receivership or liquidation and has taken no steps to enter into liquidation, and no petition has been presented for the winding-up of the Investor.

 

(b)

Authorization. The Investor has all corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to carry out and perform its obligations hereunder and thereunder. The execution and delivery by the Investor of this Agreement and the performance by the Investor of the transactions contemplated hereunder have been duly authorized by all necessary corporate or other action of the Investor. This Agreement has been duly executed and delivered by the Investor and constitutes valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with its terms, subject to Enforceability Exceptions.

 

(c)

Investor Status. The Investor (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), (ii) is acquiring the Securities only for its own account and not for the account of others, or if the Investor is subscribing for the Securities as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” or an institutional “accredited investor” and the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Securities with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws. The Investor is not an entity formed for the specific purpose of acquiring the Securities and is an “institutional account” as defined by FINRA Rule 4512(c). The purchase of the Securities by the Investor has not been solicited by or through anyone other than the Issuer.

 

 

(d)

No Registration. The Investor acknowledges and agrees that the Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act and, that the Securities have not been registered under the Securities Act and the Issuer is not required to register the Securities except as set forth in Schedule 3. The Investor acknowledges and agrees that the Securities may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the states of the United States and other applicable jurisdictions. The Investor further represents and warrants that it will not sell, transfer or otherwise dispose of the Securities or any interest therein except in a registered transaction or in a transaction exempt from or not subject to the registration requirements of the Securities Act, and that any certificates representing the Securities shall contain a restrictive legend to the following effect:

 

THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF ANY TRANSACTION UNDER CLAUSE (B), THE ISSUER RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO CONFIRM THE EXEMPTION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.

 

(e)

Restricted Securities. The Investor acknowledges and agrees that the Securities will be subject to transfer restrictions and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Securities and may be required to bear the financial risk of an investment in the Securities for an indefinite period of time. The Investor acknowledges and agrees that the Securities will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Securities.

 

 

 

(f)

No General Solicitation. The Investor became aware of this offering of the Securities solely by means of direct contact between the Investor, on one hand, and the Issuer or a representative of the Issuer, on the other hand, and the Securities were offered to the Investor solely by such direct contact. The Investor did not become aware of this offering of the Securities, nor were the Securities offered to the Investor, by any other means. The Investor acknowledges that the Securities (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

 

(g)

No Public Market. The Investor understands that no public market now exists for the Securities, and that the Issuer has made no assurances that there will ever be a public market for the Note or the Conversion Shares.

 

6.           RESTRICTIONS ON DISPOSITION

 

The Issuer shall not assign or transfer this Agreement or any Note, as applicable, or any of its rights, interests or obligations hereunder or thereunder, in whole or in part, to any person without the prior written consent of the Holder. The Investor may transfer its rights, interests or obligations under this Agreement to its Affiliates without any limitation. Except as otherwise expressly provided herein, the Investor shall not assign or transfer this Agreement or any Note, or any of its rights, interests or obligations hereunder or thereunder, in whole or in part, to any person without the prior written consent of the Issuer.

 

7.           USE OF PROCEEDS

 

The Issuer shall use the proceeds from the subscription of the Note only for working capital requirements and other general corporate purposes (including but not limited to business expansion, capital expenditure, new product development, talent acquisition, operating expenses, investments and mergers and acquisitions, and fees and expenses in connection with the issuance of the Note).

 

8.

EXPENSES

 

Each Party shall bear its own costs and expenses in connection with (i) the preparation and negotiation of this Agreement and the other Transaction Documents, (ii) its performance under this Agreement and the other Transaction Documents and (iii) the consummation of the transactions contemplated hereby and thereby, including all fees and expenses of such Party’s agents, representatives, financial and legal advisors and accountants.

 

9.

COVENANTS

 

9.1

Prior to the conversion of the Note into Conversion Shares, the Issuer shall have duly authorized and validly reserved for issuance such number of Conversion Shares as shall be sufficient to effect the conversion of the Note.

 

9.2

If the Note is converted into the Conversion Shares pursuant to Section 3.1 of the Note, the Issuer shall ensure that the Investor shall be entitled to the same rights of other investors participating in the PIPE Investment, if applicable, including the rights set out in Schedule 3 with respect the Conversion Shares.

 

 

9.3

The Issuer shall use its commercially reasonable efforts to cause the transfer agent to remove the legend set forth above in Section 5.2(d), at the Investor’s request, when the Shares are permitted to be sold pursuant to Rule 144 under the Securities Act or an effective registration statement.

 

9.4

The Issuer hereby covenants that it shall use its commercially reasonable efforts to (a) obtain PIPE Investment in an aggregate amount of no less than US$300 million (which shall include, for the avoidance of doubt, all of the PIPE Investment subscribed by the investors listed under Section 9.4 of the Disclosure Schedule) as soon as practicable following the Closing, and (b) consummate the Listing.

 

9.5

During the period beginning on the date hereof and ending on the date on which the Note is redeemed in full or (if earlier) the date that the Note has been fully converted into the Conversion Shares, the Issuer hereby covenants that it shall provide the Investor with material information on the business operations and financial condition of the Group, at the Investor’s reasonable request; provided, that no such information shall be provided to the extent such information constitutes “material non-public information” as reasonably determined in writing by the Issuer (after consultation with its U.S. counsel).

 

9.6

The Issuer hereby covenants that if it has granted to any other investor under any Other Agreements any Material Terms more favorable than those granted to the Investor under the Transaction Documents, it shall notify the Investor promptly after entering into such Other Agreements, and upon the Investor’s request, the Issuer shall promptly amend any Transaction Documents as necessary to provide terms and conditions substantially identical to such more favorable Material Terms to the Investor, as applicable.

 

10.           CONFIDENTIALITY

 

10.1

Each Party undertakes that it shall, and shall procure that its Affiliates, shareholders, directors, officers, employees, agents and professional and other advisers (collectively, its “Representatives”) will, use its best endeavours to keep confidential at all times and not permit or cause the disclosure of any information (other than to its Representatives) which it may possess or acquire before, on or after the date of this Agreement relating to the provisions of, and negotiations leading to, this Agreement or the other Transaction Documents and the performance of the obligations hereunder or thereunder (such information, “Confidential Information”).

 

10.2

Each Party shall alert the other Parties as soon as reasonably practicable after it becomes aware of any unauthorized use or disclosure, or suspected unauthorized use or disclosure of Confidential Information.

 

10.3

Any release of Confidential Information by any Party, privately or to the public, shall be subject to the prior written approval of the other Party. Notwithstanding the foregoing, Confidential Information may be disclosed by any Party:

 

(a)

if the Confidential Information is or becomes generally available to the public other than as a result of disclosure by or at the direction of a Party or any of its Representatives in violation of this Agreement;

 

(b)

after giving prior notice to the concerned Party or Parties to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, to the extent requested or required under the rules of any stock exchange on which the shares of a Party or its parent company are listed or by applicable laws or governmental regulations or judicial or regulatory process or in connection with any judicial process regarding any legal action, suit or proceeding arising out of or relating to this Agreement;

 

 

(c)

to its shareholders and Representatives who need to know such information for the purpose of assisting the Parties in the transactions contemplated and performance of the obligations under this Agreement and the other Transaction Documents; and

 

(d)

to its current or prospective investors, provided that such persons are bound by appropriate confidentiality obligations at least as strict as the confidentiality provisions hereunder.

 

11.           INDEMNIFICATION

 

11.1

From and after the Closing, subject to the limits set forth in this clause 11, the Issuer shall indemnify, defend and hold harmless the Investor, its Affiliates and their respective officers, directors, employees and agents (collectively, the “Indemnitees”) from and against any and all losses, costs, liabilities, damages and expenses, including reasonable attorneys’ fees and disbursements in connection therewith (collectively, the “Indemnifiable Liabilities”), incurred by any Indemnitee as a result of or arising out of any breach by the Issuer of any representation, warranty, covenant, obligation or agreement contained in the Transaction Documents.

 

11.2

Except in the case of fraud, willful misconduct or gross negligence,

 

(a)

the aggregate liability of the Issuer for Indemnifiable Liabilities incurred by the Investor (to the extent such claim brought by the Investor occurs prior to the date on which the Investor delivers the Redemption Notice (as defined under the Convertible Senior Note) to the Issuer upon occurrence of an Event of Default under Section 2.5(c) of the Note pursuant to the terms of the Note and continues thereafter), together with any payment obligation of the Issuer to such Investor as a result of occurrence of an Event of Default under Section 2.5(c) of the Note, shall not exceed the aggregated amount of the Purchase Price and all interests accrued on the Note (as applicable), provided that this limit on liability shall not apply to any other payment obligation of the Issuer under the Transaction Documents or the Issuer’s obligations to deliver any relevant Conversion Shares in accordance with this Agreement and shall not apply to the Issuer’s obligations under Section 7(a) of Schedule 3 attached hereto;

 

(b)

the Issuer shall not be liable to the Indemnitees in respect of any claim under this Agreement for any breach of the Issuer’s representations or warranties unless: (i) the Investor has given the Issuer written notice of the claim (stating in reasonable detail the nature of the claim and, if practicable, the amount claimed) on or before the date that is one (1) year from the Closing Date; and (ii) the aggregate amount of the Indemnifiable Liabilities suffered or incurred by such Indemnitees thereunder exceeds US$1,000,000, in which case the Issuer shall be liable to the Indemnitees for the full amount of the Indemnifiable Liabilities ;

 

 

(c)

notwithstanding any other provision to the contrary, the Issuer shall not be liable for any consequential, exemplary, punitive, special, indirect or incidental damages, including, without limitation, loss of profits or revenue.

 

11.3

For the avoidance of doubt, if the Investor chooses to require the Issuer to redeem the Note as a result of occurrence of an Event of Default under Section 2.5(c) of the Note and no claim has been brought by the Investor under this clause 11, the Investor shall no longer be entitled to claim any Indemnifiable Liabilities under this clause 11 upon full receipt of the Redemption Price pursuant to the Note.

 

12.           TERMINATION

 

12.1

This Agreement shall terminate as among the Parties upon the earliest to occur of:

 

(a)

the mutual written consent of the Issuer and the Investor;

 

(b)

the delivery of written notice to terminate by either the Issuer or the Investor if Closing shall not have occurred by the date that is three (3) months (or such other date as may be agreed by the Issuer and the Investor) after the date of this Agreement; provided, however, that such right to terminate this Agreement under this clause 12.1(b) shall not be available to any Party whose failure to fulfil any obligation under this Agreement shall have been the principal cause of, or shall have resulted in, the failure of Closing to occur on or prior to such date;

 

(c)

the Onshore Transfer Agreement is terminated pursuant to its termination clause thereof; or

 

(d)

by the Issuer or the Investor in the event that any Authority shall have issued an order or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by the Transaction Documents and such order or other action shall have become final and non-appealable.

 

12.2

If this Agreement is terminated pursuant to clause 12.1, this Agreement shall become null and void and of no further force and effect, except that the Surviving Provisions shall remain in full force and effect; provided that nothing herein shall relieve any Party from liability for any breach of this Agreement that occurred prior to such termination.

 

13.           NOTICES

 

13.1

Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address or number of the relevant Party as set out in clause 13.2 (or at such other address or number as such Party may designate by fifteen (15) days’ advance written notice to the other Parties given in accordance with this clause 13.1). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognised courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (i) delivery (or when delivery is refused) and (ii) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organisation, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day. Notwithstanding the foregoing, to the extent a “with a copy to” address is designated, notice must also be given to such address in the manner above for such notice, request, consent or other communication hereunder to be effective.

 

 

13.2

The addresses, fax numbers and electronic mail addresses of the Parties for the purpose of clause 13.1 are as follows:

 

If to the Issuer:

 

Address:

No. 800 Century Avenue, Pudong District, Shanghai 200120, People’s Republic of China

For the attention of:

Alexious Lee, Chief Financial Officer

Email:

******

 

If to the Investor:

 

Address:

******

For the attention of:

******

Email:

******

 

14.           MISCELLANEOUS

 

14.1

Further Assurance. Upon the terms and subject to the conditions herein, each of the Parties agrees to take or cause to be taken all action, to do or cause to be done, to execute such further instruments, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable laws or otherwise to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the other Transaction Documents and, to the extent reasonably requested by another Party, to enforce rights and obligations pursuant hereto or thereto.

 

14.2

No Third Party Rights. Except to the extent otherwise set out herein, no person other than the Parties to this Agreement shall have any right to enforce, or enjoy the benefit of, any of the provisions of this Agreement.

 

14.3

Rights Cumulative; Specific Performance. Each and all of the various rights, powers and remedies of a Party will be considered to be cumulative with and in addition to any other rights, powers and remedies that such Party may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. Without limiting the foregoing, the Parties acknowledge and agree irreparable harm may occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, notwithstanding anything in this Agreement to the contrary, any Party shall be entitled to injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.

 

14.4

Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If, however, any provision of this Agreement shall be invalid, illegal or unenforceable under any applicable law in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law, or, if for any reason it is not deemed so modified, it shall be invalid, illegal, or unenforceable only to the extent of such invalidity, illegality or limitation on enforceability without affecting the remaining provisions of this Agreement, or the validity, legality or enforceability of such provision in any other jurisdiction.

 

 

14.5

Amendments and Waivers. No term of this Agreement may be amended, modified or supplemented, and no provision hereof may be waived, except by a written instrument executed by all the Parties. Any amendment effected in accordance with this clause 14.5 shall be binding upon each Party. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Party against whom such waiver is sought.

 

14.6

No Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of such term, covenant or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy hereunder at any one or more times be deemed a waiver or relinquishment of such right, power or remedy at any other time or times.

 

14.7

Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

 

14.8

Entire Agreement. This Agreement and the other Transaction Documents, together with all schedules and exhibits hereto and thereto, constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof and thereof, and supersede all other agreements between or among any of the Parties with respect to the subject matters hereof and thereof. This Agreement shall take effect and become binding on and enforceable against the parties upon execution hereof.

 

14.9

Counterparts. This Agreement may be executed in any number of counterparts, and by each Party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Facsimile and e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement.

 

15.           GOVERNING LAW AND DISPUTE RESOLUTION

 

15.1

This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws thereunder.

 

 

15.2

The Parties agree to negotiate in good faith to resolve any dispute between them regarding this Agreement. If the negotiations fail to resolve the dispute within fifteen (15) days after the commencement of the negotiation, clause 15.3 shall apply.

 

15.3

In the event the Parties are unable to resolve a dispute between them regarding this Agreement in accordance with clause 15.2 above, such dispute shall be referred to and finally settled by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force at the time of commencement of the arbitration. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The claimant and respondent shall each nominate one (1) arbitrator and the third arbitrator shall be appointed by the HKIAC. The arbitration proceedings shall be conducted in English. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

 

(Remainder of page intentionally left blank)

 

 

SCHEDULE 1

 

FORM OF CONVERTIBLE SENIOR NOTE

 

 

SCHEDULE 2

 

DISCLOSURE SCHEDULE

 

 

SCHEDULE 3

 

REGISTRATION RIGHT

 

1.

In the event that the Conversion Shares are issued upon completion of the De-SPAC Transaction and such Conversion Shares are not registered in connection with the consummation of the transactions contemplated thereby, the Issuer agrees that, within forty-five (45) calendar days after the date of completion of the De-SPAC Transaction (the “Transaction Closing Date”), it will file with the U.S. Securities and Exchange Commission (the “SEC”) (at the Issuer’s sole cost and expense), a registration statement registering the resale of the Conversion Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that the Issuer’s obligations to include such shares in the Registration Statement are contingent upon the Investors furnishing in writing to the Issuer such information regarding the Investors, the securities of the Issuer beneficially owned by the Investor and the intended method of disposition of the Conversion Shares as shall be reasonably requested by the Issuer to effect the registration of the Conversion Shares, and the Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement as permitted hereunder.

 

2.

The Issuer shall provide to the Investor (i) extracts from the draft of the Registration Statement which contain information regarding such Investor for review at least five (5) business days in advance of filing the Registration Statement and (ii) with respect to any subsequent filings related to the Registration Statement, updates to the foregoing extracts only to the extent such extracts materially change. In no event shall the Investor be identified as a statutory underwriter in the Registration Statement unless requested by the Commission; provided, that if the Commission requests that the Investor be identified as a statutory underwriter in the Registration Statement, the Investor will have the opportunity to withdraw from the Registration Statement.

 

3.

The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Conversion Shares to be issued pursuant to this Agreement, to remain effective until the earliest of (i) the second anniversary of the Transaction Closing Date, (ii) the date on which the Investor ceases to hold any Conversion Shares, or (iii) on the first date on which all Conversion Shares held by or issuable to the Investor pursuant to this Agreement may be sold under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

4.

The Issuer will use all commercially reasonable efforts, at all times from the Transaction Closing Date through the End Date, to satisfy any applicable continuing listing requirements of the stock exchange on which the shares of the Issuer are then listed. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) of Section 3 above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provided that any such suspension shall be for the shortest period of time, determined in good faith by the Issuer’s board of directors to be necessary for such purpose.

 

 

5.

The Issuer shall use its commercially reasonable efforts to file all reports and other materials required to be filed by the Exchange Act to the extent required to enable the Investor to sell the Conversion Shares under Rule 144 for so long as the Investor holds Conversion Shares.

 

6.

Notwithstanding anything to the contrary in this Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (a) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (b) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, (i) an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act or (ii) the negotiation or consummation of a transaction by the Issuer or its Subsidiaries is pending or an event has occurred, which negotiation, consummation or event that the Issuer reasonably believes would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that (i) it will immediately discontinue offers and sales of the Conversion Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Conversion Shares in the Investor’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Conversion Shares shall not apply (i) to the extent the Investor is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.

 

 

7.

Indemnification.

 

(a)

The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein or the Investor has omitted a material fact from such information or otherwise violated the Securities Act, Exchange Act or any state securities law or any other law, rule or regulation thereunder; provided, however, that the indemnification contained in this Section 7(a) shall not apply to amounts paid by the Investor in settlement of any losses, claims, damages, liabilities or out-of-pocket expenses if such settlement is effected without the consent of the Issuer, which consent shall not be unreasonably withheld. In no event shall the liability of the Issuer be greater than the proceeds received by such Holder in the offering giving rise to such indemnification obligation.

 

(b)

In connection with any Registration Statement in which the Investor is participating, the Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained (or not contained, in the case of an omission) in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein; provided, however, that the liability of the Investor shall be several and not joint with any other selling shareholder and in no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Conversion Shares issued pursuant to this Agreement giving rise to such indemnification obligation.

 

(c)

Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

 

(d)

The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Conversion Shares issued pursuant to this Agreement.

 

(e)

If the indemnification provided under this Section 7 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 7(e) from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 7(e) by any seller of the Conversion Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Conversion Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Agreement.

 

 

IN WITNESS WHEREOF this Agreement has been duly executed by the authorised representatives of the Parties on the date first above written.

 

LOTUS TECHNOLOGY INC.

 

By:	/s/ FENG Qingfeng
Name:	FENG Qingfeng
Title:

 

[Signature Page to Convertible Note Purchase Agreement]

 

 

 

IN WITNESS WHEREOF this Agreement has been duly executed by the authorised representatives of the Parties on the date first above written.

 

Momenta Global Limited

 

By:	/s/ CAO Xudong
Name:	CAO Xudong
Title:

 

[Signature Page to Convertible Note Purchase Agreement]

 

 

 

Exhibit 10.32

 

Execution Version

 

Confidential treatment has been requested for redacted portions of this exhibit.

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on April 27, 2023, by and between Lotus Technology Inc., an exempted company incorporated with limited liability in the Cayman Islands (the “Issuer”), and the undersigned subscriber (the “Investor”). Capitalized terms used and not defined in this Subscription Agreement have the meanings ascribed to such terms in the Transaction Agreement (as defined below).

 

WHEREAS, this Subscription Agreement is being entered into in connection with that certain Agreement and Plan of Merger, dated as of January 31, 2023 (as may be amended, modified, supplemented or waived from time to time in accordance with its terms, the “Transaction Agreement”), by and among the Issuer, L Catterton Asia Acquisition Corp, an exempted company incorporated with limited liability in the Cayman Islands (“SPAC”), Lotus Temp Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 1”), and Lotus EV Limited, an exempted company incorporated with limited liability in the Cayman Islands and a direct wholly owned subsidiary of the Issuer (“Merger Sub 2”), pursuant to which, on the terms and subject to the conditions set forth therein, among other things, (a) Merger Sub 1 will merge with and into SPAC (the “First Merger”), with SPAC as the surviving company in the First Merger and, after giving effect to the First Merger, becoming a wholly owned subsidiary of the Issuer, and (b) SPAC will merge with and into Merger Sub 2 (the “Second Merger,” and together with the First Merger and the other transactions contemplated by the Transaction Agreement, the “Transaction”), with Merger Sub 2 as the surviving company in the Second Merger and, after giving effect to the Second Merger, becoming a wholly owned subsidiary of the Issuer; and

 

WHEREAS, in connection with the Transaction, the Investor desires to subscribe for and purchase, prior to the closing of the Transaction but following the consummation of the Recapitalization (as defined in the Transaction Agreement), such number of ordinary shares in the Issuer, par value $0.00001 per share (the “Shares”) set forth opposite such Investor’s name on Schedule I hereto for a purchase price of $10.00 per share (the “Per Share Purchase Price”), for the aggregate purchase price set forth opposite such Investor’s name on Schedule I hereto (the “Subscription Amount”), and the Issuer desires to issue and sell to the Investor the Shares in consideration of the payment of the Subscription Amount therefor by or on behalf of the Investor to the Issuer, all on the terms and conditions set forth herein.

 

WHEREAS, in connection with the Transaction, the Issuer is entering into separate subscription agreements (the “Other Subscription Agreements”) with certain other investors (the “Other PIPE Investors,” together with the Investor, collectively, the “PIPE Investors”), which are on substantially the same terms as the terms of this Subscription Agreement, pursuant to which the Other PIPE Investors will agree to subscribe for and purchase in cash, and the Issuer will agree to issue and sell to the Other PIPE Investors, on the Closing Date, Shares at the Per Share Purchase Price.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.

Subscription. Subject to the terms and conditions hereof, the Investor hereby irrevocably subscribes for and agrees to purchase from the Issuer, and the Issuer hereby agrees to issue and sell to the Investor, the Shares, on the terms and subject to the conditions provided for herein.

 

 

2.

Closing. The closing of the sale of the Shares contemplated hereby (the “Closing”) shall occur on the closing date of the Transaction (the “Closing Date”) and be conditioned upon the substantially concurrent consummation of the Transaction and satisfaction of the other conditions set forth in Section 3 hereof. Upon delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”) that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on an expected closing date that is not less than five (5) business days from the date on which the Closing Notice is delivered to the Investor, the Investor shall deliver to the Issuer, (a) three (3) business days prior to the expected closing date specified in the Closing Notice, the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account in an escrow bank specified by the Issuer in the Closing Notice, to be held in escrow until the closing of the First Merger, or (b) on the expected closing date specified in the Closing Notice, the Subscription Amount to an account specified by the Issuer, or otherwise mutually agreed by the Investor and the Issuer due to regulatory reasons that apply to such Investor, by wire transfer of U.S. dollars in immediately available funds. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall (i) issue the Shares to the Investor, free and clear of any liens or other restrictions (other than those arising under applicable securities laws) and subsequently cause the Shares to be registered in book-entry form in the name of the Investor on the Issuer’s register of members and (ii) provide to the Investor evidence of such issuance from the Issuer’s transfer agent (the “Transfer Agent”). For purposes of this Subscription Agreement, “business day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, the Cayman Islands, Hong Kong SAR and People’s Republic of China (excluding, for the purposes of this Agreement only, Hong Kong SAR, Macau SAR and Taiwan, “PRC”), are authorized or required by law to close. If the Closing does not occur within ten (10) business days following the expected closing date specified in the Closing Notice, unless otherwise agreed to in writing by the Issuer and the Investor, the Issuer shall promptly (but not later than two (2) business days thereafter) cause the return of the Subscription Amount in full to the Investor by wire transfer of U.S. dollars in immediately available funds to the account specified by the Investor, and any book-entries for the Shares shall be deemed cancelled (to the extent the Shares are issued); provided that unless this Subscription Agreement has been terminated pursuant to Section 6, such return of funds shall not terminate this Subscription Agreement or relieve the Investor of its obligation to purchase the Shares at the Closing upon delivery by the Issuer of a subsequent Closing Notice in accordance with the terms of this Section 2. Prior to or on the Closing Date, the Investor shall deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Shares, including, without limitation, the legal name of the person in whose name such Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable.

 

3.

Conditions to Closing

 

3.1

Conditions to Closing of the Issuer. The Issuer’s obligations to sell and issue the Shares at the Closing are subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the closing of the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the consummation of the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Investor in Section 4.2 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

 

(d)

Performance and Compliance under Subscription Agreement. The Investor shall have wired the Subscription Amount in accordance with Section 2 of this Subscription Agreement and otherwise performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Investor to consummate the Closing.

 

(e)

ODI Approval. All of the consents from, and filings and/or registrations with, applicable governmental authority as required by applicable PRC laws for the Investor’s outbound direct investment in the Issuer shall have been duly obtained and completed.

 

3.2

Conditions to Closing of the Investor. The Investor’s obligation to subscribe for and purchase the Shares at the Closing is subject to the fulfillment or (to the extent permitted by applicable law) written waiver, on or prior to the Closing Date, of each of the following conditions:

 

(a)

Closing of the Transaction. All conditions precedent to effect the Transaction shall have been satisfied or waived (other than those conditions that, by their nature, may only be satisfied at the closing of the Transaction but subject to satisfaction or waiver thereof).

 

(b)

Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 4.1 shall be true and correct in all material aspects as of the Closing Date other than (i) such representations and warranties qualified by materiality, Material Adverse Effect (as defined below) or similar qualification, which shall be true and correct in all respects as of the Closing Date and (ii) such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality, Material Adverse Effect or similar qualification, in all respects) as of such date.

 

(c)

Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, law, statute, rule or regulation enjoining or prohibiting the issuance and sale of the Shares under this Subscription Agreement.

 

(d)

Performance and Compliance under Subscription Agreement. The Issuer shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Closing.

 

(e)

Transaction Agreement. The terms of the Transaction Agreement (including the conditions thereto) shall not have been amended or waived in a manner that materially and adversely affect the economic benefits the Investor reasonably expects to receive under this Subscription Agreement.

 

(f)

ODI Approval. All of the consents from, and filings and/or registrations with, applicable governmental authority as required by applicable PRC laws for the Investor’s outbound direct investment in the Issuer shall have been duly obtained and completed.

 

4.

Representations, Warranties and Agreements.

 

4.1

Issuer’s Representations, Warranties and Agreements. The Issuer hereby represents and warrants to the Investor as follows:

 

(a)

The Issuer is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. The Issuer has all power (corporate or otherwise) and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(b)

At the Closing, subject to the receipt of the Subscription Amount in accordance with the terms of this Subscription Agreement and registration on the Issuer’s register of members, the Shares will be duly authorized, validly issued and allotted and fully paid, free and clear of any liens or other encumbrances (other than those arising under applicable securities laws) and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents (as in effect at such time of issuance) or the laws of the Cayman Islands.

 

 

(c)

This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Investor, is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally and (ii) principles of equity, whether considered at law or equity.

 

(d)

The issuance and sale of the Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein, will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, which would reasonably be expected to have a material adverse effect on the ability of the Issuer to enter into and timely perform its obligations under this Subscription Agreement (a “Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have a Material Adverse Effect.

 

(e)

Assuming the accuracy of the Investor’s representations and warranties set forth in Section 4.2, in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Subscription Agreement, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Shares by the Issuer to the Investor.

 

(f)

Neither the Issuer nor anyone acting on its behalf has offered the Shares or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the PIPE Investors and other Institutional Accredited Investors, each of which has been offered the Shares at a private sale for investment. “Institutional Accredited Investor” means an institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

(g)

None of the Issuer nor any of its affiliates has offered the Shares or any similar securities during the six months prior to the date hereof to anyone other than the PIPE Investors. The Issuer has no intention to offer the Shares or any similar security during the six months from the date hereof.

 

(h)

Neither the Issuer nor any person acting on its behalf has offered or sold the Shares by any form of general solicitation or general advertising, including, but not limited to, the following: (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; (ii) any website posting or widely distributed e-mail; or (iii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(i)

Other than Credit Suisse Securities (USA) LLC (“Credit Suisse”) or Deutsche Bank AG, Hong Kong Branch (together with Credit Suisse, the “Placement Agents”), the Issuer has not dealt with any broker, finder, commission agent, placement agent or arranger in connection with the sale of the Shares and the transactions contemplated by this Subscription Agreement (the “Subscription”) and the other Subscription Agreements, and the Issuer is not under any obligation to pay any broker’s fee or commission in connection with such transactions other than to the Placement Agents. Neither the Issuer nor any of its affiliates nor any other person acting on its behalf (other than its officers acting in such capacity) has solicited offers for, or offered or sold, the Shares through any broker, finder, commission agent, placement agent or arranger other than the Placement Agents.

 

 

4.2

Investor’s Representations, Warranties and Agreements. The Investor hereby represents and warrants to the Issuer and acknowledges as follows:

 

(a)

The Investor (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule II, (ii) is acquiring the Shares only for its own account and not for the account of others, or if the Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” or an institutional “accredited investor” and the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any other securities laws (and shall provide the requested information on Schedule II). The Investor is not an entity formed for the specific purpose of acquiring the Shares and is an “institutional account” as defined by FINRA Rule 4512(c). The information provided by Investor on Schedule II is true and correct in all respects. The purchase of the Shares by the Investor has not been solicited by or through anyone other than the Issuer or the Placement Agents.

 

(b)

The Investor acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and, that the Shares have not been registered under the Securities Act and the Issuer is not required to register the Shares except as set forth in Section 5. The Investor acknowledges and agrees that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the states of the United States and other applicable jurisdictions. The Investor further represents and warrants that it will not sell, transfer or otherwise dispose of the Shares or any interest therein except in a registered transaction or in a transaction exempt from or not subject to the registration requirements of the Securities Act, and that any certificates representing the Shares shall contain a restrictive legend to the following effect:

 

THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, ANY SUCH TRANSFER OR OTHER DISPOSITION IS SUBJECT TO THE CONDITIONS CONTAINED IN A SUBSCRIPTION AGREEMENT, DATED APRIL 27, 2023. A COPY OF SUCH CONDITIONS WILL BE PROVIDED TO THE HOLDER HEREOF UPON REQUEST.

 

(c)

The Investor acknowledges and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The Investor acknowledges and agrees that the Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Shares.

 

 

(d)

The Investor acknowledges and agrees that the Investor is purchasing the Shares directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Issuer expressly set forth in Section 4.1 of this Subscription Agreement.

 

(e)

The Investor acknowledges and agrees that the Investor has (i) received, reviewed and understood the offering materials made available to it in connection with the Subscription, (ii) had the opportunity to ask questions of and receive answers from the Issuer directly and to obtain any additional information which the Issuer possesses or can acquire without unreasonable effort or expense, and (iii) conducted and completed its own independent due diligence with respect to the Subscription. Except for the representations, warranties and agreements of the Issuer expressly set forth in this Subscription Agreement, the Investor is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it may deem appropriate) with respect to the Subscription, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Issuer, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.

 

(f)

The Investor became aware of this offering of the Shares solely by means of direct contact between the Investor, on one hand, and the Issuer or a representative of the Issuer, on the other hand, and the Shares were offered to the Investor solely by such direct contact. The Investor did not become aware of this offering of the Shares, nor were the Shares offered to the Investor, by any other means. The Investor acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 4.1 of this Subscription Agreement, in making its investment or decision to invest in the Issuer.

 

(g)

The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares .

 

(h)

Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Issuer.

 

(i)

The Investor acknowledges that (i) the Issuer currently may have, and later may come into possession of, information regarding the Issuer that is not known to the Investor and that may be material to a decision to enter into this transaction to purchase the Shares (“Excluded Information”), (ii) the Investor has determined to enter into the this transaction to purchase the Shares notwithstanding its lack of knowledge of the Excluded Information.

 

(j)

The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

 

(k)

The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.

 

(l)

The Investor has been duly formed or incorporated and is validly existing and, where such concept is recognized, in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(m)

The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature of the Investor on this Subscription Agreement is genuine, and the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

(n)

Neither the Investor, nor any of its officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function, is (i) a person or entity named on the Specially Designated Nationals and Blocked Persons List administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC Sanctions program, or any similar list of sanctioned persons administered by the European Union, United Nations Security Council, Switzerland or the United Kingdom (collectively, “Sanctions Lists”); (ii) directly or indirectly, owned or controlled by, or acting on behalf of, one or more persons that are named on the Sanctions Lists; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea, the so-called Donetsk and Luhansk People’s Republic region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union, United Nations Security Council, Switzerland or the United Kingdom, or (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that the Investor is permitted to do so under applicable law. If the Investor is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed to ensure compliance with sanctions programs administered by the United States, the European Union and the United Kingdom. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

(o)

If the Investor is or is acting on behalf of an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986 (the “Code”), or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (“Similar Law”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) none of the Issuer or any of its affiliates (the “Transaction Parties”) has provided investment advice or otherwise acted as the Plan’s fiduciary, with respect to its decision to acquire and hold the Shares, and none of the Transaction Parties is or shall at any time be the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares and (ii) its purchase of the Shares will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any applicable Similar Law.

 

 

(p)

Except as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by the Investor with the SEC with respect to the beneficial ownership of SPAC’s ordinary shares prior to the date hereof (if applicable), the Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

(q)

The Investor has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2, will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Shares pursuant to this Subscription Agreement.

 

(r)

The Investor does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof, the Investor has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or end of day short sale positions with respect to the securities of SPAC.

 

(s)

No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability of the Issuer for the payment of any fees, costs, expenses or commissions.

 

(t)

The Investor agrees that, from the date of this Subscription Agreement until the Closing Date (or earlier termination of this Subscription Agreement), none of the Investor or any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor will engage in any Short Sales (as defined below) with respect to securities of the Issuer or SPAC. For purpose of this Section 4.2(t), “Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all types of direct and indirect share pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) the restrictions in this Section 4.2(t) shall not apply to any sale of securities of the Issuer or SPAC (A) held by the Investor or any person or entity acting on behalf of the Investor prior to the execution of this Subscription Agreement or (B) purchased by the Investor or any person or entity acting on behalf of the Investor in an open market transaction after the execution of this Subscription Agreement. Further, notwithstanding the foregoing, (ii) nothing herein shall prohibit other entities under common management with the Investor that have no knowledge of this Subscription Agreement or of the Investor’s subscription of the Shares (including the Investor’s controlled affiliates and/or affiliates) from entering into any Short Sales and (iii) in the case of an Investor that is a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the limitations set forth in the first sentence of this Section 4.2(t) shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Subscription Agreement (the “Investing Portfolio Manager”) and other portfolio managers or desks who have direct knowledge of the investment decisions made by the Investing Portfolio Manager.

 

 

5.

Registration Rights

 

5.1

The Issuer agrees that, within thirty (30) calendar days after the Closing Date, it will file with the SEC (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that the Issuer’s obligations to include such shares in the Registration Statement are contingent upon Investor furnishing in writing to the Issuer such information regarding Investor, the securities of the Issuer beneficially owned by Investor and the intended method of disposition of the Shares as shall be reasonably requested by the Issuer to effect the registration of the Shares, and Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement as permitted hereunder.

 

5.2

The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be issued pursuant to this Subscription Agreement, to remain effective until the earliest of (i) the second anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Shares issued pursuant to this Subscription Agreement, or (iii) on the first date on which the Investor is able to sell all of its Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

5.3

Prior to the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) of Section 5.2 above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act.

 

5.4

Notwithstanding the foregoing, if the SEC prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Shares by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted by the SEC. In such event, the number of Shares to be registered shall be reduced (a) firstly, pro rata among all the selling shareholders other than the PIPE Investors; and (b) secondly, only if the number of Shares to be registered for the selling shareholders other than the PIPE Investors has been reduced to zero, pro rata among the PIPE Investors, and the Issuer shall use its commercially reasonable efforts to file with the SEC, as promptly as practicable and as allowed by the SEC, one or more registration statements to register the resale of those Shares that were not registered on the initial Registration Statement, as so amended.

 

5.5

Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (a) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (b) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, (i) an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act or (ii) the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event that the Issuer reasonably believes would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Issuer’s board of directors to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that (i) it will immediately discontinue offers and sales of the Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.

 

 

5.6

Indemnification.

 

(a)

The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein or such Investor has omitted a material fact from such information or otherwise violated the Securities Act, Exchange Act or any state securities law or any other law, rule or regulation thereunder; provided, however, that the indemnification contained in this Section 5.6(a) shall not apply to amounts paid by the Investor in settlement of any losses, claims, damages, liabilities or out-of-pocket expenses if such settlement is effected without the consent of the Issuer. In no event shall the liability of the Issuer be greater in amount than the dollar amount received by the Issuer under this Subscription Amount.

 

(b)

In connection with any Registration Statement in which an Investor is participating, the Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained (or not contained, in the case of an omission) in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein; provided, however, that the liability of the Investor shall be several and not joint with any Other PIPE Investor and in no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares purchased pursuant to this Subscription Agreement giving rise to such indemnification obligation.

 

(c)

Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

 

(d)

The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares purchased pursuant to this Subscription Agreement.

 

(e)

If the indemnification provided under this Section 5.6(e) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 5.6(e) from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 5.6(e) by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.

 

6.

Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement, and (c) March 15, 2024, or, if the Termination Date (as defined in the Transaction Agreement) is extended by the parties thereto, such later date, if the Closing has not occurred by such date other than as a result of a breach of the Investor’s obligations hereunder; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination (for the avoidance of doubt, the Investor shall provide basic information as required for the ODI Approval, and shall not be deemed as in breach hereof nor be liable in the event that the Investor fails to obtain and complete the ODI Approval despite that the Investor has provided such necessary information), and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the termination of this Subscription Agreement in accordance with this Section 6, any monies paid by the Investor to the Issuer in connection herewith shall be promptly (and in any event within two (2) business days after such termination) returned to the Investor.

 

 

7.

Miscellaneous.

 

7.1

Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the parties hereunder (other than the Shares acquired hereunder, if any) may be transferred or assigned without the prior written consent of the Issuer, other than (a) an assignment to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) thereof, and (b) an assignment of the Investor’s rights under Section 5 to an assignee or transferee of the Shares; provided that prior to such assignment or transfer any such assignee or transferee shall agree in writing to be bound by the terms hereof, and, if the Issuer so requests, any such assignee or transferee shall deliver to the Issuer an opinion of counsel in form and substance reasonably satisfactory to the Issuer to the effect that registration under the Securities Act is not required in connection with such assignment; provided, further, that no assignment pursuant to the foregoing terms shall relieve the Investor of its obligations hereunder.

 

7.2

Additional Information. The Issuer may request from Investor such additional information as is necessary for SPAC or the Issuer, as applicable, to comply with public disclosure requirements of applicable securities laws or any filing requirements pursuant to the rules of any stock exchange or the Financial Industry Regulatory Authority, and Investor shall provide such information; provided that, subject to Section 5.5, the Issuer shall keep any such information provided by the Investor confidential except (a) as necessary to include in any registration statement the Issuer is required to file hereunder, (b) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (c) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges that SPAC and/or the Issuer may file a copy of the form of this Subscription Agreement with the SEC as an exhibit to a current or periodic report or a registration statement of SPAC or the Issuer, as applicable. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 5 hereof.

 

7.3

Further Assurances.

 

(a)

The Investor acknowledges that the Issuer will rely on the acknowledgments, understandings, agreements, covenants, representations and warranties of the Investor contained in this Subscription Agreement, including Schedule I hereto. Prior to the Closing, the Investor agrees to promptly notify the Issuer if any of the acknowledgments, understandings, agreements, covenants representations and warranties made by the Investor set forth herein are no longer accurate in all material respects.

 

(b)

The Issuer acknowledges that the Investor will rely on the acknowledgements, understandings, agreements, covenants, representations and warranties of the Issuer contained in this Subscription Agreement. Prior to the Closing, the Issuer agrees to promptly notify the Investor if any of the acknowledgements, understandings, agreements, covenants, representations and warranties made by the Issuer set forth herein are no longer accurate in all material respects.

 

(c)

The Issuer is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any action, suit, hearing, claim, charge, audit, lawsuit, litigation, inquiry or proceeding (in each case, whether civil, criminal or administrative or at law or in equity) with respect to the matters covered hereby.

 

 

(d)

The Investor acknowledges and agrees that none of the other parties to the Transaction Agreement (other than the Issuer) or any Non-Party Affiliate, shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor pursuant to this Subscription Agreement related to the private placement of the Shares, the negotiation hereof or thereof or the subject matter hereof or thereof, or the transactions contemplated hereby or thereby, for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares, or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Issuer or any Non-Party Affiliate concerning the Issuer, any of its controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of the Issuer or any of the Issuer’s controlled affiliates or any family member of the foregoing.

 

7.4

Survival of Representations and Warranties. All of the agreements, representations and warranties contained in this Subscription Agreement shall survive the Closing.

 

7.5

Modifications and Amendments. This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 6 above) except by an instrument in writing, signed by each of the parties hereto. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

7.6

Entire Agreement. This Subscription Agreement (including the schedule hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 5.6 and Section 7.3(a), with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns.

 

7.7

Benefit. Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

7.8

Severability. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

7.9

Transaction Expenses. Except as otherwise agreed, each party shall pay all of its own costs and expenses incurred in anticipation of, relating to and in connection with the negotiation and execution of this Subscription Agreement and the transactions contemplated hereby, whether or not such transactions are consummated.

 

7.10

Counterparts. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

 

7.11

Remedies. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that it may be difficult to prove damages with reasonable certainty, that it may be difficult to procure suitable substitute performance, and that injunctive relief and/or specific performance will not cause an undue hardship to the parties hereto. The parties hereto further acknowledge that the existence of any other remedy contemplated by this Subscription Agreement does not diminish the availability of specific performance of the obligations hereunder or any other injunctive relief. Each party hereto further agrees that in the event of any action by the other party for specific performance or injunctive relief, it will not assert that a remedy at law or other remedy would be adequate or that specific performance or injunctive relief in respect of such breach or violation should not be available on the grounds that money damages are adequate or any other grounds.

 

7.12

Adjustment of Number of Shares. If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), shall occur between the date hereof and immediately prior to the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.

 

7.13

Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws that would otherwise require the application of the law of any other state.

 

7.14

Consent to Jurisdiction; Waiver of Jury Trial. Any proceeding or action based upon, arising out of or related to this Subscription Agreement or the transactions contemplated hereby must be referred to and finally settled by arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force at the time of commencement of the arbitration. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The claimant and respondent shall each nominate one (1) arbitrator and the third arbitrator shall be appointed by the HKIAC. The arbitration proceedings shall be conducted in English and Chinese. The award of the arbitral tribunal shall be final and binding upon the parties thereto, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.

 

7.15

Notice. Any notice or communication required or permitted hereunder to be given to the Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page hereto, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three (3) business days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to the Issuer.

 

(a)

if to the Investor, to such address or addresses set forth on the signature page hereto;

 

(b)

if to the Issuer, to:

 

Lotus Technology Inc.

No. 800 Century Avenue
Pudong District

Shanghai 200120, People’s Republic of China

Attention: Alexious Lee, Chief Financial Officer

Email: ******

 

 

with a required copy (which will not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

30/F, China World Office 2

No. 1, Jian Guo Men Wai Avenue

Beijing 100004, China

Attention: Peter X. Huang, Esq.

Email: ******

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.

 

Name of Investor:   HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) (湖北长江经开汽车产业投资基金合伙企业（有限合伙）)			State/Country of Formation or Domicile:   People’s Republic of China
By:	/s/ Luo GuoXin

 

Name:	Luo GuoXin
Title:	Assigned Representation of the Managing Partner
Name in which Shares are to be registered (if different):
Investor’s EIN:
Business Address-Street: ******			Mailing Address-Street (if different):
City, State, Zip: ******			City, State, Zip:
Attn: ******			Attn:
Telephone No.:			Telephone No.:
Facsimile No.:			Facsimile No.:

 

Investor must pay the Subscription Amount by wire transfer of U.S. dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.

 

	LOTUS TECHNOLOGY INC.
	By:	/s/ Feng Qingfeng
		Name: Feng Qingfeng
		Title:

 

 

SCHEDULE I 

 

PARTICULARS OF SUBSCRIPTION 

 

Investor Name	Number of Shares subscribed for	Subscription Amount
HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) (湖北长江经开汽车产业投资基金合伙企业（有限合伙）)	The number of the Shares subscribed for by the Investor shall be equal to the quotient obtained by dividing (a) the Subscription Amount by (b) US$10.00.	The Subscription Amount to be paid by the Investor shall be equal to RMB2,600,000,000, converted into U.S. dollars using the exchange rate as of the date of payment of such Subscription Amount by the Investor to the escrow account.

 

 

SCHEDULE II 

 

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR 

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

1.       ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) (a “QIB”) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as a QIB.

 

2.       ¨ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.

 

*** OR ***

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):

 

1.       x We are an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are institutional accredited investors) and have marked and initialed the appropriate box on the following pages indicating the provision under which we qualify as an institutional “accredited investor.”

 

*** AND ***

 

C.

AFFILIATE STATUS (Please check the applicable box)

 

SUBSCRIBER:

 

¨ is:

 

x is not:

 

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.

 

This page should be completed by the Investor
and constitutes a part of the Subscription Agreement.

 

 

Investor is a “qualified institutional buyer” (within the meaning of Rule 144A under the Securities Act) if it is an entity that meets any one of the following categories at the time of the sale of securities to Investor (Please check the applicable subparagraphs):

 

¨             Investor is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and:

 

¨        is an insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨        is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any business development company as defined in section 2(a)(48) of the Investment Company Act;

 

¨        is a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended (“Small Business Investment Act”);

 

¨        is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;

 

¨        is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);

 

¨        is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, of (b) employee benefit plan within the meaning of Title I of the ERISA, except, in each case, trust funds that include as participants individual retirement accounts or H.R. 10 plans;

 

¨        is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”);

 

¨        is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), corporation (other than a bank as defined in section 3(a)(2) of the Securities Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Securities Act, or a foreign bank or savings and loan association or equivalent institution), partnership, limited liability company or Massachusetts or similar business trust;

 

¨        is an investment adviser registered under the Investment Advisers Act; or

 

¨        any institutional accredited investor, as defined in rule 501(a) under the Act (17 CFR 230.501(a)), of a type not listed above;

 

¨            Investor is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with Investor;

 

¨            Investor is a dealer registered pursuant to Section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;

 

¨            Investor is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies¹ which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Investor or are part of such family of investment companies;

 

1

“Family of investment companies” means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor); provided, that (a) each series of a series company (as defined in Rule 1 8f-2 under the Investment Company Act) shall be deemed to be a separate investment company and (b) investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor).

 

 

¨            Investor is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; or

 

¨            Investor is a bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with Investor and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale of securities in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding the date of sale of securities for a foreign bank or savings and loan association or equivalent institution.

 

Rule 501(a) under the Securities Act, in relevant part, states that an institutional “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Investor has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Investor and under which Investor accordingly qualifies as an institutional “accredited investor.”

 

¨            Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

 

¨            Any broker or dealer registered pursuant to section 15 of the Exchange Act;

 

¨            Any insurance company as defined in section 2(a)(13) of the Securities Act;

 

¨            Any investment company registered under the Investment Company Act or a business development company as defined in section 2(a) (48) of the Investment Company Act;

 

¨            Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act;

 

¨            Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

¨            Any employee benefit plan within the meaning of Title I of the ERISA, if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;

 

¨            Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act;

 

¨            Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000;

 

¨            Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in section 230.506(b)(2)(ii) of Regulation D under the Securities Act;

 

 

¨            Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act; or

 

x            Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000.

 

 

Exhibit 10.33

 

Final Version

 

Confidential treatment has been requested for redacted portions of this exhibit.

This copy omits the information subject to the confidentiality request. Omissions are designated as ******.

 

LOCK-UP AGREEMENT

 

___________, 2023

 

Lotus Technology Inc.

No. 800 Century Avenue

Pudong District

Shanghai 200120, People’s Republic of China

 

L Catterton Asia Acquisition Corp

8 Marina View, Asia Square Tower 1

#41-03 Singapore 018960

 

Re: Lock-Up Agreement

 

Ladies and Gentlemen:

 

This letter agreement (this “Letter Agreement”) is being delivered to Lotus Technology Inc., a Cayman Islands exempted company (the “Company”) and L Catterton Asia Acquisition Corp, a Cayman Islands exempted company (“SPAC”) in connection with the Agreement and Plan of Merger (the “Merger Agreement”) entered into as of January 31, 2023, by and among the Company, SPAC, Lotus Temp Limited, a Cayman Islands exempted company (“Merger Sub 1”), and Lotus EV Limited, a Cayman Islands exempted company (“Merger Sub 2”), pursuant to which, among other things, (i) Merger Sub 1 will merge with and into SPAC, with SPAC surviving the First Merger as a wholly owned subsidiary of the Company (the “First Merger”), (ii) SPAC will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of the Company (the “Second Merger”, and together with the First Merger, the “Mergers”), and (iii) in connection with the Mergers, the undersigned (the “Shareholder”) will hold such number of ordinary shares of the Company, par value $0.00001 per share (each, a “Company Ordinary Share”) equal to (a) the number of Company Shares held by the Shareholder immediately prior to the Preferred Share Conversion, multiplied by (b) the Recapitalization Factor. Capitalized terms used herein but not defined herein shall have the meaning ascribed to such terms in the Merger Agreement.

 

In order to induce SPAC and the Company to proceed with the Mergers and other transactions contemplated in the Merger Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Shareholder hereby agrees as follows.

 

As used herein, (i) “Closing” means the closing of the transactions contemplated by the Merger Agreement; (ii) “Closing Date” means the date on which the Closing occurs; (iii) “Lock-Up Period” means a period of six (6) months from and after the Closing Date; (iv) “Locked-Up Shares” means any Company Ordinary Shares that are held by the Shareholder immediately after the First Effective Time (which excludes, for the avoidance of doubt, any Company Ordinary Shares that are issued to the Shareholder (A) upon conversion of any convertible notes of the Company issued to the Shareholder in connection with any Pre-Closing Financing, or (B) in connection with any PIPE Financing, as applicable) and any Company Ordinary Shares acquired by the Shareholder upon the exercise of the Company Options; (v) “Transfer” means (x) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, with respect to any Locked-Up Shares, (y) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Locked-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (z) publicly announce any intention to effect any transaction specified in clause (x) or (y); (vi) “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended; and (vii) “immediate family” means, as to a natural person, such individual’s spouse, former spouse, domestic partner, child (including by adoption), father, mother, brother or sister, and lineal descendant (including by adoption) of any of the foregoing persons.

 

 

Subject to the exceptions set forth herein, during the Lock-Up Period, the Shareholder agrees not to, without the prior written consent of the Company Board, Transfer any Locked-Up Shares held by it; provided that, if the Company permits any amendment or modification to, or any waiver (in whole or in part) of any provisions under the Sponsor Support Agreement such that the terms and conditions of lock-up applicable to any Founder Shareholder (as defined in the Sponsor Support Agreement) become less restrictive than those agreed to herein, then such less restrictive terms and conditions shall, without further action of any of the parties hereto, automatically apply to the Shareholder and any applicable sections of this Letter Agreement shall be deemed amended accordingly.

 

The restrictions set forth in the immediately preceding paragraph shall not apply to:

 

(i)               Transfers by the Shareholder to (A) any affiliate of such Shareholder or any director, officer or employee of such affiliate, or their immediate family, (B) any officer, director or employee of such Shareholder, or their immediate family, or (C) any shareholder, partner or member of the Shareholder or its affiliates;

 

(ii)              Transfers by virtue of the Laws of the state of the Shareholder’s organization and the Shareholder’s Organizational Documents upon dissolution of the Shareholder;

 

(iii)             pledges of any Locked-Up Shares to a financial institution that create a mere security interest in such Locked-Up Shares pursuant to a bona fide loan or indebtedness transaction so long as the Shareholder continues to control the exercise of the voting rights of such pledged Locked-Up Shares (as well as any foreclosures on such pledged Locked-Up Shares so long as the transferee in such foreclosure agrees to become a party to this Letter Agreement and be bound by all obligations applicable to the Shareholder, provided that such agreement shall only take effect in the event that the transferee takes possession of the Locked-Up Shares as a result of foreclosure);

 

(iv)             Transfers of any Company Ordinary Shares acquired as part of the PIPE Financing;

 

(v)              transactions relating to Company Ordinary Shares or other securities convertible into or exercisable or exchangeable for Company Ordinary Shares acquired in open market transactions after the Closing, provided that no such transaction is required to be, or is, publicly announced (whether on Form 4, Form 5 or otherwise, other than a required filing on Schedule 13F, 13G or 13G/A) during the Lock-Up Period;

 

(vi)             the exercise of any options to purchase Company Ordinary Shares (which exercises may be effected on a cashless basis to the extent the instruments representing such options permit exercises on a cashless basis);

 

(vii)            the establishment, at any time after the Closing, by the Shareholder of a trading plan providing for the sale of Company Ordinary Shares that meets the requirements of Rule 10b5-1(c) under the Exchange Act (a “Trading Plan”); provided, however, that no sales of Locked-Up Shares shall be made by the Shareholder pursuant to such Trading Plan during the Lock-Up Period and no public announcement or filing is voluntarily made regarding such plan during the Lock-Up Period; and

 

 

(viii)          Transfers made in connection with a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Company Ordinary Shares for cash, securities or other property subsequent to the Closing Date;

 

provided, however, that in the case of clauses (i) through (iii), these permitted transferees shall enter into a written agreement in substantially the form of this Letter Agreement, agreeing to be bound by the lock-up restrictions on Transfer of Locked-Up Shares prior to such Transfer.

 

The Shareholder hereby agrees that, in accordance with the terms thereof, (i) the Shareholders Agreement, (ii) any rights of the Shareholder under the Shareholders Agreement and (iii) any rights under any other agreement providing for redemption rights, put rights, purchase rights or other similar rights not generally available to Company Shareholders, shall be terminated effective as of the First Effective Time, and thereupon shall be of no further force or effect, without any further action on the part of any of the Shareholder or the Company, and neither the Company, the Shareholder, nor any of their respective affiliates or subsidiaries shall have any further rights, duties, liabilities or obligations thereunder and each of the Shareholder and the Company hereby releases in full any and all claims with respect thereto with effect on and from the First Effective Time.

 

The Shareholder hereby represents and warrants that the Shareholder has full power and authority to enter into this Letter Agreement and that this Letter Agreement constitutes the legal, valid and binding obligation of the Shareholder, enforceable in accordance with its terms. The Shareholder will, from time to time, (i) execute and deliver, or cause to be executed and delivered, any additional or further consents, documents and other instruments as the Company may reasonably request for the purpose of effectively consummating the transactions contemplated by this Letter Agreement, the Merger Agreement and the other Transaction Documents and (ii) refrain from exercising any veto right, consent right or similar right (whether under the Organizational Documents of the Company or the Cayman Act) which would prevent, impede or, in any material respect, delay or adversely affect the consummation of the Transactions.

 

This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and the transactions contemplated hereby and supersedes any other agreements, whether written or oral, that may have been made or entered into by or between the parties hereto or any of their respective Subsidiaries relating to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.

 

Other than in connection with the Transfer of any Locked-Up Shares in accordance with the terms of this Letter Agreement, which shall not be deemed to be an assignment of this Letter Agreement or the rights or obligations hereunder, no party hereto may assign this Letter Agreement or any part hereof without the prior written consent of the other parties hereto and any such transfer without prior written consent shall be void. Subject to the foregoing, this Letter Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

 

 

This Letter Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Letter Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Letter Agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law that would otherwise require the application of the laws of another jurisdiction. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, STATE OF NEW YORK (OR ANY APPELLATE COURTS THEREFROM) SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS LETTER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS LETTER AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY ANY SUCH COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED HEREIN OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS, THE FOREGOING MUTUAL WAIVER AND CERTIFICATIONS.

 

The parties hereto agree that irreparable damage, for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their obligations under any of the provisions of this Letter Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Letter Agreement) in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that the parties hereto shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Letter Agreement and to enforce specifically the terms and provisions of this Letter Agreement, without proof of damages, prior to the valid termination of this Agreement in accordance with the terms hereof, this being in addition to any other remedy to which any party is entitled at law or in equity. In the event that any Action shall be brought in equity to enforce the provisions of this Letter Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.

 

 

This Letter Agreement may be executed in two or more counterparts (any of which may be delivered by electronic transmission), each of which shall constitute an original, and all of which taken together shall constitute one and the same instrument. This Letter Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Delivery by email to counsel for the other parties of a counterpart executed by a party shall be deemed to meet the requirements of the previous sentences.

 

All general notices, demands or other communications required or permitted to be given or made hereunder shall be in writing and delivered personally or sent by courier or sent by registered post or sent by electronic mail to the Shareholder at its address set forth on the signature page and to the Company or SPAC at its address or at its email address set out below (or to such other address or email address as each of them may from time to time notify the other parties):

 

If to the Company, to:

 

Lotus Technology Inc.

 

No. 800 Century Avenue

Pudong District

Shanghai 200120, People’s Republic of China

Attention: Chief Financial Officer

E-mail: ******

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

 

30/F, China World Office 2

No. 1, Jian Guo Men Wai Avenue

Beijing 100004, China

Attention: Peter X. Huang

Email: ******

 

and

 

Skadden, Arps, Slate, Meagher & Flom LLP

 

c/o 42/F, Edinburgh Tower, The Landmark

15 Queen’s Road Central, Hong Kong

Attention: Shu Du

Email: ******

 

If to SPAC, to:

 

L Catterton Asia Acquisition Corp
8 Marina View, Asia Square Tower 1

#41-03, Singapore 018960
Attention: James Steinthal
Email: ******

 

 

with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis

26th Floor, Gloucester Tower, The Landmark

15 Queen’s Road Central, Hong Kong

Attn:	Jesse Sheley
	Joseph Raymond Casey
E-mail:	******
	******

 

This Letter Agreement shall automatically terminate upon the earlier to occur of the (i) the expiration of the Lock-Up Period and (ii) the termination of the Merger Agreement in accordance with its terms, provided that termination hereof shall not extinguish or otherwise affect the liability of the Shareholder for any prior breach of or non-compliance with the terms hereof.

 

[Signature pages follow]

 

 

	Very truly yours,
	(Name of Shareholder – Please Print)
	(Signature)
	(Name of Signatory if Shareholder is an entity – Please Print)
	(Title of Signatory if Shareholder is an entity – Please Print)
	Address:

 

[Signature Page to Lock-Up Agreement]

 

 

Agreed to and accepted: 

 

LOTUS TECHNOLOGY INC.
By:
Name:
Title:

 

[Signature Page to Lock-Up Agreement]

 

 

Agreed to and accepted:

 

L Catterton Asia Acquisition Corp
By:
Name:
Title:

 

[Signature Page to Lock-Up Agreement]