Dated 17 September 2007 ZAP and YOUNGMAN AUTOMOBILE CO., LTD. and EV HOLDINGS LIMITED
EXHIBIT
10.1
Dated
17 September 2007
and
XXXXXXXX
AUTOMOBILE CO., LTD.
and
EV
HOLDINGS LIMITED
LI
& PARTNERS
SOLICITORS
22nd
Floor,
World Xxxx
Xxxxx
00
Xxx
Xxxxx Xxxx Xxxxxxx
Xxxx
Xxxx
Tel.
No.:
(000) 0000 0000 Fax No.: (000) 0000
0000
Our
Ref : TC/TC/TC/4321/01/07
|
CONTENTS
|
||
|
Clause
|
Heading
|
Page
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
1
|
|
2.
|
CONDITIONS
PRECEDENT
|
4
|
|
3.
|
SHARE
CAPITAL
|
5
|
|
4.
|
MANAGEMENT
|
5
|
|
5.
|
FUNDING
|
7
|
|
6.
|
BUSINESS
|
7
|
|
7.
|
ACCOUNTING
|
9
|
|
8.
|
DIVIDENDS
|
9
|
|
9.
|
BOARD
OF DIRECTORS
|
10
|
|
10.
|
MATTERS
REQUIRING SPECIAL APPROVAL
|
11
|
|
11.
|
REPRESENTATIONS,
WARRANTIES AND CONVENANTS
|
12
|
|
12.
|
INDEMNIFICATION
|
15
|
|
13.
|
TRANSFER
OF SHARES
|
15
|
|
14.
|
DEADLOCK
RESOLUTION
|
17
|
|
15.
|
TERMINATION
|
18
|
|
|
||
|
16.
|
CONSEQUENCES
OF NOTICES UNDER CLAUSE 15
|
19
|
|
17.
|
CONFIDENTIALITY
|
20
|
|
18.
|
RESTRICTIVE
COVENANTS
|
21
|
|
19.
|
SPECIFIC
ENFORCEMENT
|
22
|
|
20.
|
MISCELLANEOUS
|
22
|
THIS
AGREEMENT is made on the 17th day
of September 2007
BETWEEN:
|
(1)
|
|
(2)
|
XXXXXXXX
AUTOMOBILE CO., LTD., a company
incorporated with limited liability under the laws of the People’s
Republic of China having its registered office at 000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx Xxxxx. PC
321016 (“Xxxxxxxx”);
|
|
(3)
|
EV
HOLDINGS LIMITED(環保發展有限公司),
a company incorporated with limited liability under the laws of Hong
Kong
having its registered office situate at Unit A, 14/F Shun On Commercial
Xxxxxxxx, 000-000 Xxx Xxxxx Xxxx Xxxxxxx, Xxxx Xxxx (the
“Company”).
|
WHEREAS
:
|
(A)
|
|
(B)
|
ZAP
and Xxxxxxxx have agreed to enter into this Agreement for the purposes
of
regulating their relationship with each other and certain aspects
of the
affairs of and their dealings with the
Company.
|
|
(C)
|
The
Company has agreed with ZAP and Xxxxxxxx that it will comply with
the
terms and conditions of this Agreement insofar as they relate to
the
Company.
|
NOW
IT IS HEREBY AGREED as follows:
|
1.1
|
In
this Agreement and the Recitals, unless the context otherwise
requires:
|
“Affiliates”
means in respect of any specified person, a person that directly or indirectly
controls such specified person, or is controlled by or is under common control
with such specified person;
1
“Allotted
Shares” means 9,999 shares of the Company to be allotted to each
Shareholder upon execution of this Agreement as provided under Clause
3.1;
“Articles”
means the Memorandum and Articles of Association of the Company in the form
of
Schedule B attached hereto, which may be amended from time to time;
“Auditor”
means the auditors of the Company appointed from time to time;
“Board”
means the board of directors of the Company or the directors present (personally
or by their alternates) at any meeting of the directors of the Company duly
convened and held;
“Brand
Name” means the general brand name selected by the Board and used by
the Company;
“Business”
means the business of the Company in relation to developing, producing,
marketing and sale of electric vehicles, electric-hybrid vehicles, and
battery/energy recharging infrastructure throughout the Territories as set
forth
under Clause 6.1 and the Business Plan;
“Business
Plan” means the business plan of the Company to be developed by the
Company and agreed and approved between the Shareholders, including any
amendment and supplement thereto from time to time;
“Capital
Loan” means any loan to the Company granted by any Shareholder as
provided under Clause 6.3;
“CEO”
means the chief executive officer of the Company appointed from time to time
under Clause 4.2;
“Chairman
of the Board” means the chairman of the Board appointed from time to
time under Clause 4.3;
“Companies
Ordinance” means the Companies Ordinance (Chapter 32 of the Laws of
HKSAR);
“Employment
Agreement” means the Employment Agreement to be entered between the
Company and its Key Employees in the form acceptable to the
Shareholders;
“Holding
Company” shall have the meaning ascribed thereto in section 2 of the
Companies Ordinance;
“Initial
Capital Contribution” means initial contribution to the share capital
of the Company by each Shareholder upon the execution of this Agreement as
set
forth under Clause 4.1;
2
“Investment
Schedule” means the schedule for Xxxxxxxx to make a contribution of
US$51,000,000.00 and ZAP to make a contribution of US$49,000,000.00 to the
share
capital of the Company by 31 December 2008 as set out in Schedule A
hereto;
“Key
Employees” means the Chief Operating Officer, VP Engineering, VP Sales
& Marketing, VP Human Resources and VP Finance of the Company;
“Licensing
Agreement” means the agreements entered from time to time between the
Company and any other parties for the purpose of licensing the key technology
to
be incorporated into the Products;
“Management”
means the CEO, and such other executives or managers as determined by the Board
from time to time;
“Management
Options” means options of Shares issued by the Company under the order
of the Board to any Key Employees approved by the Board upon terms and subject
to conditions as determined by the Board at its discretion as set out in this
Agreement or any other related documents determined by the Board in accordance
with Clause 14.1.
“Marketing
and Distribution Agreements” means the agreements to be entered between
each Shareholder and the Company after execution of this Agreement in the form
acceptable to such Shareholder and the Company with respect to the marketing
and
distribution activities to be carried out by the Shareholders within the
Territory, which shall provide that (i) ZAP shall have the exclusive right
of
marketing and distribution of the Products in North America and South America;
(ii) Xxxxxxxx shall have the exclusive right of marketing and distribution
of
the Products in the Asia Pacific Region (including the Japan); and (iii) the
Company shall have the exclusive right of marketing and distribution of the
Products in the remaining Territories other than those set out in (i) and (ii)
above;
“PRC”
means the People’s Republic of China, which
for purposes of this Agreement excludes Hong Kong;
“Products”
means the vehicles developed and manufactured by the Company from time to time
as provided under the Business Plan;
“Shares”
means shares of US$1.00 par value each in the authorized capital of the
Company;
“Shareholders”
means the holders of the Shares; a “Shareholder” means any of
them;
“Subsidiary”
shall have the meaning ascribed thereto in section 2 of the Companies
Ordinance;
“Territories”
means the United States, Asia and all other countries, territories and
jurisdictions worldwide, without restriction;
3
“Total
Capital Contribution” means the aggregate amount of the contributions
to the share capital of the Company made by each Shareholder;
“Transfer
Notice” means the notice to transfer or otherwise dispose of any Shares
or any interest in such Shares as defined under Clause 13.2 (a);
“United
States” means the United States of America;
“US
Dollars” or the sign “US$” means the lawfully currency
of the United States;
|
1.2
|
Words
importing one gender include all other genders and words importing
the
singular include the plural and vice
versa.
|
|
1.3
|
References
to Recitals, Clauses and Schedules are references to recitals, clauses
and
schedules of this Agreement.
|
|
1.4
|
Reference
to a person includes bodies corporate or
unincorporated.
|
|
1.5
|
The
headings are inserted for convenience only and shall not affect the
construction of this Agreement.
|
|
1.6
|
Reference
in this Agreement to any legislation shall include any legislation
which
amends, consolidates or replaces the same or which has been amended,
consolidated or replaced by the same and shall include any subsidiary
and
subordinate legislation made under the relevant
legislation.
|
|
1.7
|
“Including”
or similar expressions are not words of
limitation.
|
|
1.8
|
Words
and expressions defined in the body of this Agreement (including
its
schedules) shall have the meanings thereby attributed to them whenever
the
context requires.
|
This
Agreement and everything contained herein are conditional upon the fulfilment
of
all the following terms and conditions upon execution of this
Agreement:
|
(a)
|
each
Shareholder shall procure the authorized share capital of the Company
to
be increased to US$100,000,000.00;
|
|
(b)
|
each
Shareholder shall subscribe the Allotted Shares and pay the Initial
Capital Contribution in accordance with Clause
3;
|
|
(c)
|
|
(d)
|
the
Shareholders shall procure adoption of the Articles by the Company;
and
|
4
|
(e)
|
meetings
of the Shareholders and the Board shall be held at which such resolutions
as are necessary to give effect to and implement the provisions of
this
Agreement shall be passed.
|
|
3.1
|
Upon
execution of this Agreement and fulfilment of the condition under
Clause 2
(a), each Shareholder shall subscribe Shares as provided under Clause
3.2
below and pay the consideration for subscription of the Shares (the
“Initial Capital
Contribution”).
|
|
3.2
|
After
subscription of the Allotted Shares in accordance with Clause 3.1,
the
Shares shall be beneficially owned and registered as
follows:
|
|
Shareholders
|
No.
of Shares
|
Consideration
|
|
|
4,899
|
HK$4,899.00
|
||
|
Xxxxxxxx
|
5,100
|
HK$5,100.00
|
|
3.3
|
Unless
otherwise agreed between the Shareholders, the Initial Capital
Contribution shall be paid by Xxxxxxxx by way of cash within 10 days
from
the date of this Agreement; and the Initial Capital Contribution
shall be
paid by ZAP by way of cash within 10 days from the date of this
Agreement.
|
|
3.4
|
The
Shareholders shall make additional contributions to the share capital
of
the Company from time to time in accordance with the requirements
of the
Business Plan and the Investment Schedule by way subscription of
the
Shares, so that the Total Capital Contribution, if required, made
by
Xxxxxxxx shall be US$51,000,000.00 and ZAP shall be US$49,000,000.00
(which provides the Company its share capital of US$100,000,000.00)
by 31
December 2008. Each Shareholder shall be offered the right to participate
in each subscription of the Shares in proportion to its respective
percentage of the Shares at the time of the
subscription.
|
|
3.5
|
Save
as otherwise provided in Clause 5 or other provisions in this Agreement,
any further issuance of Shares shall be made as and when the Board
may so
determine and in accordance with this Agreement and the Articles.
The
parties hereto shall procure to each other that any new shareholders
shall
first agree in writing in terms acceptable to all the parties hereto
to be
bound by and observe the provisions of this Agreement (including
this
Clause) so far as such provisions are
applicable.
|
|
4.1
|
The
Board shall be responsible for supervising the activities of the
Company
and for determining, subject to the provisions of this Agreement,
the
overall policies and objectives of the Company, provided that all
business
of the Company shall be conducted in the best interests of the Company
on
sound commercial principles.
|
5
|
4.2
|
The
Company shall have a Chief Executive Officer (the “CEO”)
who shall be responsible for the day-to-day operation of the business
of
the Company. The CEO shall be appointed on such terms as may be
approved by the Board and the first CEO shall be Xx. Xxxxxx
Xxx.
|
|
4.3
|
The
Company shall have a chairman of the Board (the “Chairman of the
Board”) who shall be responsible for chairing all meetings of
the
directors. The Chairman of the Board shall be appointed on such terms
as
may be approved by the Board and the first Chairman of the Board
shall be
Xx. Xxxxxx Xxx.
|
|
4.4
|
The
Board shall determine the remuneration, compensation and benefits
of the
Management, which shall be reasonably in conformity with the current
local
market standard adopted by other companies of similar scale, expertise and
nature of business to the Company.
|
|
4.5
|
ZAP
shall procure and arrange its staff to be transferred to the Company
as
necessary to carry on the Business by the Company. The Company shall
enter
into employment agreements with such staff and provide remuneration,
compensation and benefits reasonably in conformity with the prevailing
market standard based on the working hours, performance, experience
and
any other factors which the Management may consider
significant.
|
|
4.6
|
Appointment,
removal or replacement of any of the Key Employees of the Company
as well
as their remuneration, compensation and benefits shall be jointly
decided
by the Management.
|
|
4.7
|
Save
and except the matters requiring action, consent or agreement of
the Board
as set out in Clause 5.11 and 5.12 below, the CEO shall, subject
to the
supervision of and directions given from time to time by the Board,
be
vested with overall responsibility and authority for and control
of the
operation, management, maintenance and administration of the Business,
including but not limited to:
|
|
(a)
|
soliciting
and negotiating business on behalf of the Company with size of the
deal up
to amounts approved by the Board from time to
time;
|
|
(b)
|
dealing
with day-to-day staff (other than the Management) employment
issues;
|
|
|
(c)
|
recruiting
employees of the Company and setting benefit plans and programs for
the
employees of the Company;
|
|
(d)
|
handling
routine banking relationships and treasury
functions;
|
|
(e)
|
managing
day-to-day operations relating to the
Business;
|
|
|
(f)
|
preparing
and implementing annual and three-year business plan, budget and
forecasts
of the Company from time to time approved by the Board;
and
|
|
|
(g)
|
authorizing
capital expenditure of up to US$100,000.00 without approval of the
Board.
|
6
|
5.1
|
Financing
for the business of the Company shall be provided by (i) cash subscription
for the Shares, (ii) loan(s) from the Shareholders and/or (iii) external
funding including loans from banks or other third parties as provided
under this Agreement.
|
|
5.2
|
In
the event that the Company in the course of carrying on the Business
requires funds in addition to the capital contributions set forth
in
Clause 3.1 and 3.4, the Company may allot additional Shares as necessary
to raise sufficient funds for carrying on the Business, and ZAP and/or
Xxxxxxxx may, but neither of them shall be obliged to, subscribe
such
Shares as additional contribution to the capital of the
Company.
|
|
5.3
|
For
purposes of financing any acquisition of assets or properties by
the
Company, it shall, with the approval of holders of a majority of
the
Shares, obtain such financing as set forth in the Business Plan of
the
Company. In the event that the financing described in this
Clause is not sufficient to enable the Company to pursue the Business,
then:-
|
|
|
(i)
|
ZAP
or Xxxxxxxx may grant loans to the Company on terms and conditions
that
are commercially reasonable under the circumstances and approved
by a
majority of the Board (the “Capital Loan”);
or
|
|
|
(ii)
|
if
the Board considers that granting of the Capital Loan is unfeasible
or not
in the best interests of the Company, the Company shall, to the extent
economically feasible, obtain loan or other financing arrangement
from
other third party.
|
|
5.4
|
If
the Company shall obtain any loan from any third party, the Shareholders
agree to execute and deliver to such lender all documents and instruments
to pledge to such lender, and grant to such lender security interests
in,
(i) the Shares; and/or (ii) the assets and properties of the Company
to
the extent as permitted by the existing financing arrangements of
the
Company, in order to secure repayment of the loan by the
Company.
|
|
5.5
|
All
costs of financing the Company mentioned in this Clause shall be
considered an expense of the Company, and shall be paid before any
dividends or distributions are made to any of the
Shareholders.
|
|
6.1
|
Subject
to other provisions in this Agreement, the Company shall engage solely
and
exclusively in the business of developing, producing, marketing and
sale
of electric vehicles, electric-hybrid vehicles, and battery/energy
recharging infrastructure throughout the Territories, as provided
under
the business plan of the Company to be developed and agreed between
the
Shareholders, which may be supplemented or amended by the Shareholders
from time to time (the “Business
Plan”).
|
7
|
6.2
|
(a)
All the products licensed to the Company or its subsidiaries
by Xxxxxxxx and the products researched and developed by the
Company and its subsidiaries should be produced by the manufacturer
exclusively designated by Xxxxxxxx. Without unanimous approval of
all the
shareholders of each party, the Company and its subsidiaries are
not
entitled to license or transfer to any other party the right of
manufacturing any of the above-mentioned products. Xxxxxxxx will
consign
the production to the enterprise controlled by Xxxxxxxx. The plants,
land
and equipments required for the production should be invested or
manufactured by such enterprise designated by Xxxxxxxx and the sites
for
production should be determined by Xxxxxxxx. The prices for the products
sold to the Company and its subsidiaries by the enterprise designated
by
Xxxxxxxx should be set in the Contract on Consigned Manufacturing
based on
the following standards:
|
|
|
(i)
|
ex-work
price determined by Xxxxxxxx;
|
|
|
(ii)
|
if
required to increase the exclusive parts of the electric vehicle,
the
price shall be based on the ex-work price determined by Xxxxxxxx
plus the
purchasing costs for those exclusive parts of the
electric vehicle;
|
|
|
(iii)
|
if
there are any unnecessary parts, the price shall be based on the
ex-work
price determined by Xxxxxxxx minus the purchasing costs for those
unnecessary parts.
|
|
|
(b)
|
The
company and all its subsidiaries shall sell the products to Xxxxxxxx
and
ZAP for the exclusive distribution within defined territories. Based
upon
the above guiding principle, the distributor pricing and pricing
structure
shall be defined within the related
agreement.
|
|
6.3
|
Each
Shareholder shall use its best endeavour to assist the Company to
develop
the Business and carry out the Business
Plan.
|
|
6.4
|
The
Company may enter into any transactions with any Shareholder but,
save in
respect of transactions expressly contemplated by this Agreement,
such
Shareholder shall disclose to the Board any interest which it may
have in
a transaction to be entered into by the
Company.
|
|
6.5
|
The
Company shall set up (i) its headquarter office in Hong Kong, (ii)
a
project management office in the United Kingdom, (iii) research and
development centres in the United States (in or around San Francisco),
Malaysia and the PRC, and (iv) such other offices as agreed between
the
Shareholders.
|
|
6.6
|
The
Company shall generally conduct business under its Brand Name, provided
that any products produced or manufactured by the Company or the
Shareholders may bear the respective brand name(s) of each Shareholder,
or
such other brand name(s) as agreed between the
Shareholders.
|
|
6.7
|
The
Company shall use its best endeavour to enter into the Licensing
Agreement
|
8
|
|
with
any other parties that own or control key technology to be incorporated
into the products being manufactured by the Company, and shall
(subject to
approval of the Board from time to time) aim to make equity investments
in
these technology firms.
|
The
Company shall maintain accurate and complete accounting records and the
Shareholders or their respective appointed representatives shall each have
the
right to inspect all accounting and other records of the Company at all
reasonable times. The accounts of the Company shall be kept in
accordance with generally accepted international accounting principles in Hong
Kong and shall be audited annually. The first Auditors shall be a
firm to be selected at the discretion of the Board, and successor Auditors
may
be selected from time to time as determined by the Board. The
financial year of the Company shall end on 31 December in each year commencing
from 1 January or such other date as may be determined by the
Board.
|
8.1
|
Upon
the sales of the products within the defined territories, both
shareholders have agreed to pay 2% of the sales revenue to the
Company. The sum collected from Zap shall be paid to Xxxxxxxx and the
sum collected from Xxxxxxxx shall be paid to Zap every year by the
Company.
|
|
8.2
|
If
in respect of any financial year the Company shall have net profits
after
tax available for distribution, the parties hereto shall procure
that such
profits shall be applied in the following manner and order of
priority:
|
|
(a)
|
provision
of working capital to finance the continuing operations and internal
growth of the Business;
|
|
(b)
|
repayment
of any interest accrued on the outstanding Capital
Loan;
|
|
(c)
|
repayment
of any outstanding principal of the Capital
Loan;
|
|
(d)
|
transfer
to reserves consistent with the normal commercial requirements of
businesses similar to those carried on by the
Company;
|
|
(e)
|
payment
of cash dividends to the Shareholders after deduction of the above
items
within months after the end of such financial
year.
|
|
8.3
|
In
deciding whether in respect of any financial year, the Company had
or has
profits available for distribution, the parties hereto shall procure
that
the Auditors shall certify whether such profits are available or
not and
the amount thereof (if any). In giving such certificate the
Auditors shall act as experts and not arbitrators and their determination
shall be final and binding on the parties hereto, except in the case
of
manifest error.
|
9
|
9.1
|
Unless
otherwise agreed by the Shareholders, the Board shall consist of
minimum
of 3 and a maximum of 7 directors.
|
|
9.2
|
At
any time during the continuance in force of this Agreement, ZAP shall
be
entitled to first appoint in office one (1) directors and to appoint
one
additional director for every two directors added to the Board
subsequently and to remove any such director(s) so
appointed. For this purpose, the first directors appointed by
ZAP shall be Mr. Xxxxxx Xxxxxxxxx.
|
|
9.3
|
At
any time during the continuance in force of this Agreement, Xxxxxxxx
shall
be entitled to first appoint one (1) director and to appoint one
additional director for every two directors added to the Board
subsequently and to remove any such director(s) so appointed. For
this
purpose, the first director appointed by Xxxxxxxx shall be Xx. Xxxx
Qingnian.
|
|
9.4
|
Save
for the specific appointments made pursuant to Clauses 9.2 and 9.3, any
exercise by any Shareholder of the power of appointment or removal
conferred on it pursuant to the above provisions shall be served
upon the
other Shareholder and the Company whereupon the parties hereto shall
forthwith join in to take such action as is necessary under the Articles
to effect the appointment or removal (as the case may
be).
|
|
9.5
|
Any
Shareholder removing a director appointed by it shall indemnify the
other
Shareholder and the Company against any claim by such director for
wrongful dismissal arising out of such
removal.
|
|
9.6
|
Each
director shall be entitled to appoint and remove from time to time
without
the consent of any other director any person to act as his
alternate.
|
|
9.7
|
The
quorum necessary for the transaction of business at a Board meeting
shall
be two (2) directors at least, and the two directors shall be appointed
by
ZAP and Xxxxxxxx respectively. Such quorum shall be increased by
one (1)
director for every two directors added to the Board
subsequently.
|
|
9.8
|
Save
as otherwise provided in this Agreement, resolutions shall be passed
at a
meeting of the Board by a simple majority vote of the directors (or
their
respective alternates) present at the
meeting.
|
|
9.9
|
Unless
otherwise agreed or waived by all directors (or their respective
alternates), not less than 7 days’ notice of each directors’ meeting
specifying (wherever practicable) the nature of the business to be
transacted thereat, the time, the place and the date shall be given
to
each director.
|
|
9.10
|
The
directors (or their respective alternates) may participate in a meeting
of
the directors by means of conference telephone whereby all persons
participating in the meeting can hear each other and participation
in the
meeting in such manner shall be deemed to constitute presence in
person at
such meeting and all the provisions in this Agreement and the Articles
as
to meetings shall, mutatis mutandis, be
applicable.
|
10
|
9.11
|
A
resolution in writing signed by all the directors entitled to receive
notice of a meeting of directors (or their respective alternates)
shall be
valid and effectual as if it had been passed at a duly convened meeting
of
directors and may consist of several documents in the like form each
signed by one or more directors (or their respective
alternates).
|
|
10.1
|
Each
Shareholder shall exercise all such voting rights and other powers
or
control as may be available to them in relation to the Company so
as to
promote the development and prosperity of, and shall generally use
all
reasonable endeavours to promote and assist the Company in developing
and
promoting the Business.
|
|
10.2
|
Notwithstanding
any provisions of this Agreement or of the Articles to the contrary,
no
resolution shall be passed or other decision or action shall be taken
by
or on behalf of the Company or the Board concerning any of the following
matters with respect to the Company without (i) approval of the majority
of the Board and (ii) approval of the holders of at least 66% of
the then
issued Shares (provided that such approvals shall not be unreasonably
withheld):-
|
|
|
(a)
|
any
material change in the compensation or benefits of the Management
or any
of the Key Employees;
|
|
|
(b)
|
incurring
of any indebtedness, and any prepayment or repayment of any indebtedness
of the Company, other than in the ordinary course of business of
the
Company;
|
|
|
(c)
|
granting
by the Company of any collateral security, or allowing the Company
to
incur any charge, lien or other encumbrance on its properties or
assets to
secure any indebtedness;
|
|
|
(d)
|
participation
in any business activity beyond the scope of the
Business;
|
|
|
(e)
|
entering
into any partnership agreement with any third party, other than in
the
ordinary course of business of the
Company;
|
|
|
(f)
|
any
change in the auditor of the Company, or termination of legal counsel
acting for the Company;
|
|
|
(g)
|
acquisition
of any properties or assets for an aggregate consideration in excess
of
US$500,000.00;
|
|
|
(h)
|
issuance
of any shares to any third parties, save and except the shares to
be
issued to the Key Employees as provided under Clause
15;
|
|
|
(i)
|
any
change to the fidelity, casualty or other insurance policies obtained
by
the Company;
|
|
|
(j)
|
any
expenditure which causes the Company to exceed its budget by 3% as
set
forth in the Business Plan;
|
11
|
|
(k)
|
assignment
of any assets or properties of the Company in trust for the benefit
of any
creditors;
|
|
|
(l)
|
settlement,
compromise or acceptance of any judgment against the Company;
or
|
|
|
(m)
|
entering
into any agreement to do any of the
foregoing.
|
|
10.3
|
Notwithstanding
any provisions of this Agreement or of the Articles to the contrary,
no
resolution shall be passed or other decision or action shall be taken
by
or on behalf of the Company or the Board concerning any of the following
matters with respect to the Company without (i) unanimous approval
of the
Board and (ii) approval of the holders of at least 85% of the then
issued
Shares (provided that such approvals shall not be unreasonably
withheld):
|
|
|
(a)
|
alteration
to the scope of the Business;
|
|
|
(b)
|
any
amendments that causes any fundamental change in the Business
Plan;
|
|
|
(c)
|
Any
petition for liquidation or winding up of the
Company;
|
|
|
(d)
|
Any
sale, assignment, transfer, charge, hypothecation, or any other
disposition of all or substantial parts of the assets or properties
of the
Company; or
|
|
|
(e)
|
Entering
into any agreement or arrangement between the Company and any of
its
shareholders, directors or
managers.
|
|
11.
|
REPRESENTATIONS,
WARRANTIES AND
COVENANTS
|
|
11.1
|
ZAP
hereby represents and warrants as
follows:
|
|
|
(a)
|
ZAP
is, and shall be, validly existing and in good standing under the
laws of
the jurisdiction of its
incorporation;
|
|
|
(b)
|
ZAP
has all requisite corporate powers and authorities to enter into
this
Agreement and all other agreements in connection with the consummation
of
the transactions contemplated hereby (including but not limited to
all
exhibits and documents attached hereto) (the “Additional
Agreements”), and perform its obligations there under, and no
other approval, consent, action or proceedings shall be necessary
to
authorize such execution, delivery and
performance;
|
|
|
(c)
|
this
Agreement and each of the Additional Agreements are valid and binding
upon
ZAP as well as enforceable against ZAP in accordance with the terms
thereof;
|
12
|
|
(d)
|
the
execution, delivery and performance of this Agreement and the Additional
Agreements and the consummation by ZAP of the transactions contemplated
thereby or relating thereto do not and will not (i) result in a violation
of the constitutions, bylaws or other organizational documents of
ZAP, or
(ii) conflict with, or constitute a default (or an event which with
notice
or lapse of time or both may become a default) under, or give to
others
any rights of termination, amendment, acceleration or cancellation
of any
agreement, indenture or instrument or obligation to which ZAP is
a party
or by which its properties or assets are bound, or (iii) result in
a
violation of any law, rule, or regulation, or any order, judgment
or
decree of any court or governmental agency applicable to
ZAP;
|
|
|
(e)
|
No
petition has been taken out or threatened to be taken out for liquidation
or winding up of ZAP;
|
|
|
(f)
|
Neither
ZAP nor any affiliate of ZAP has engaged any broker, finder or investment
banker in connection with the Company;
and
|
|
|
(g)
|
ZAP
shall cause one or more of its officers to attend a monthly meeting
with
the officer or officers of Xxxxxxxx to be held at the principal office
of
the Company or via teleconference, or at such other time and place
as
agreed between the Shareholders.
|
|
11.2
|
Xxxxxxxx
hereby represents and warrants as
follows:-
|
|
|
(a)
|
Xxxxxxxx
is, and shall be, validly existing and in good standing under the
laws of
the jurisdiction of its
incorporation;
|
|
|
(b)
|
Xxxxxxxx
has all requisite corporate powers and authorities to enter into
this
Agreement and all other agreements in connection with the consummation
of
the transactions contemplated hereby (including but not limited to
all
exhibits and documents attached hereto) (the “Additional
Agreements”), and perform its obligations there
under;
|
|
|
(c)
|
this
Agreement and each of the Additional Agreements are valid and binding
upon
Xxxxxxxx as well as enforceable against Xxxxxxxx in accordance with
the
terms thereof and no other approval, consent, action or proceedings
shall
be necessary to authorize such execution, delivery and
performance;
|
|
|
(d)
|
the
execution, delivery and performance of this Agreement and the Additional
Agreements and the consummation by Xxxxxxxx of the transactions
contemplated thereby or relating thereto do not and will not (i)
result in
a violation of the constitutions, bylaws or other organizational
documents
of Xxxxxxxx, or (ii) conflict with, or constitute a default (or an
event
which with notice or lapse of time or both may become a default)
under, or
give to others any rights of termination, amendment, acceleration
or
cancellation of any agreement, indenture or instrument or obligation
to
which Xxxxxxxx is a party or by which its properties or assets are
bound,
or (iii) result in a violation of any law, rule, or regulation, or
any
order, judgment or decree of any court or governmental agency applicable
to Xxxxxxxx;
|
13
|
|
(e)
|
No
petition has been taken out or threatened to be taken out for liquidation
or winding up of Xxxxxxxx;
|
|
|
(f)
|
Neither
Xxxxxxxx nor any affiliate of Xxxxxxxx has engaged any broker, finder
or
investment banker in connection with the Company;
and
|
|
|
(g)
|
Xxxxxxxx
shall cause one or more of its officers to attend a monthly meeting
with
the officer or officers of ZAP to be held at the principal office
of the
Company or via teleconference, or at such other time and place as
agreed
between the Shareholders.
|
|
11.3
|
Each
Shareholder and the Company hereby agree and covenant
that:-
|
|
|
(a)
|
the
Shareholders shall negotiate in good faith and enter into the Marketing
and Distribution Agreements with the Company within sixty (60) days
after
the date of this Agreement;
|
|
|
(b)
|
the
Company shall use its best endeavour to prepare a definitive and
detailed
Business Plan within sixty (60) days of the date of this Agreement,
the
content of which shall be agreeable to the
Shareholders;
|
|
|
(c)
|
the
Company shall enter into the Employment Agreement with its Key Employees
in the form acceptable to the
Shareholders;
|
|
|
(d)
|
the
Company shall use its best endeavour to enter into the Licensing
Agreements with any other parties that own or control key technology
to be
incorporated into the products to be manufactured by the Company,
and
shall (subject to approval of the Board from time to time) aim to
make
equity investments in such companies or firms that own or control
the key
technology.
|
|
|
(e)
|
the
Board shall hold its regular meetings once every calendar month
and such
meetings shall be attended in person or via conference
telephone;
|
|
|
(f)
|
each
Shareholder shall not engage in any activities through joint
venture
cooperation with any electric vehicle company, whose businesses
are in
direct or indirect competition with the
Company.
|
|
11.4
|
Without
written approval from both the shareholders, the Company and its
subsidiaries shall not, at any time, provide any products and technologies
researched and developed by the Company to any third parties in any
ways.
Without written approval from Xxxxxxxx, the company shall not provide
any
Xxxxxxxx licensed products and technologies to any third parties
in any
ways.
|
|
11.5
|
The
Shareholders hereby agree that the Company shall establish a wholly
owned
subsidiary in the PRC, with a registered capital of US$90,000,000.00,
in
accordance with the laws of the PRC within eighteen (18) months from
the
date hereof.
|
14
|
12.1
|
None
of the Shareholders shall be liable to the Company or to any other
Shareholder in damages or otherwise for any actions taken in good
faith or
reasonably believed by such Shareholder to be in or not in any conflict
with the best interests of the Company, provided that such actions
are
within the scope of the Business. In the event that any actions has
been
taken by any Shareholder outside of the scope of the Business Plan,
such
Shareholder shall only be liable for those actions which constitute
wilful
misconduct, gross negligence, fraud, or any material breach of its
obligations under this Agreement.
|
|
12.2
|
The
Company shall indemnify and hold harmless against any Shareholder
in
respect of any threatened, pending or completed actions, suits or
proceedings to which such Shareholder is a party or threatened to
be made
a party by reason of the fact that it is or was a shareholder of
or
participant in the Company, or any alleged cause of action for damages
to
any third party caused by its performance in management or operation
of
the Company. The Company shall fully indemnify each Shareholder against
all claims, damages, compensations, judgments or settlements provided
that
such Shareholder has acted in good faith all along and in a manner
reasonably believed to be in or not in any conflict with the best
interests of the Company and the actions or conducts of such Shareholder
do not constitute any wilful misconduct, gross negligence, fraud,
or a
material breach of its obligations under this
Agreement.
|
|
13.1
|
Save
as otherwise provided in this Agreement, a Shareholder shall not
sell,
transfer, charge, incumber, grant options over or otherwise dispose
of any
of the Shares or any beneficial interest in any of the Shares now
owned or
to be acquired after the date of this Agreement by it to any person
without prior written consent of all other Shareholders. Any such
consent,
if given, may be subject to the condition (inter alia) that such
person
shall first agree in writing in terms acceptable to such other
Shareholders to be bound by as one of the Shareholders under this
Agreement and observe all the provisions hereunder (including this
Clause)
so far as such provisions are
applicable.
|
|
13.2
|
(a)
|
Every
Shareholder who intends to transfer or otherwise dispose of any
Shares or
any interest in such Shares (the “Proposing Transferor”)
shall, before so doing or agreeing so to do, inform the Company
of his
intention by giving it notice in writing (the “Transfer
Notice”). The Transfer Notice shall constitute the
Company the Proposing Transferor’s agent empowered to sell the Shares
referred to in the notice (together with all rights then attached
to them)
at the Prescribed Price (as hereinafter defined) to any Shareholder
in the
manner appearing below and shall not be revocable except with the
unanimous agreement of the
Board.
|
|
|
(b)
|
If
not more than 14 days after the date on which the Transfer
Notice
was given the Proposing Transferor and the Board shall have
agreed in writing a price per share as representing its fair
value, or as
being acceptable to the Proposing Transferor and not more than
its fair
value, then such price shall
be
|
15
|
|
|
the
Prescribed Price (the “Prescribed Price”). In
the absence of any agreement having been reached within the said
period of
14 days the Board shall immediately request the auditors for
the time
being of the Company to determine and certify in writing to the
Company
the sum per share considered by them to be fair value as between
a willing
seller and a willing purchaser as at the date on which the Transfer
Notice
was given and the sum per Share so determined and certified shall
be the
Prescribed Price. The auditors shall act at the cost and
expense of the Proposing Transferor as experts and not as arbitrators
and
their determination shall be final and binding for all purposes
(save in
respect of manifest error).
|
|
|
(c)
|
Within
7 days of the Prescribed Price being so agreed or determined and
fixed all
Shares included in any Transfer Notice shall be offered for purchase
at
the Prescribed Price by notice in writing (the “Offer”)
given by the Company to all Shareholders (other than the Shareholder
to
whose Shares the Transfer Notice relates). The Offer shall be
on the basis that in the case of competition for them the Shares
so
offered shall (in accordance with, but subject to Clause 13 be sold
to
acceptors in proportion (as nearly as may be without involving fractions
or increasing the number sold to any Shareholder beyond that applied
for
by it) to their existing shareholdings. Any such Offer shall
specify a period (being not less than 21 days and not more than 42
days)
within which it must be accepted or will
lapse.
|
|
|
(d)
|
If
the Shareholders or any of them (hereinafter called the
“Purchasers”) shall within the said period of the Offer
agree to purchase any of the Shares concerned, the Company shall
immediately give notice in writing as mentioned below to the Proposing
Transferor and to the Purchasers and on payment of the Prescribed
Price
the Proposing Transferor shall be bound to transfer such Shares to
the
respective Purchasers accordingly. Every such notice shall
state the name and address of each Purchaser and the number of Shares
agreed to be purchased by it and the sale and purchase shall be completed
at a place and time to be appointed by the Board being not less than
7
days nor more than 30 days after the date of such notice Provided
always
that if the Transfer Notice shall state that the Proposing Transferor
is
not willing to transfer part only of the Shares the subject of the
Transfer Notice then this Clause shall not apply unless the Company
shall have found Purchasers for all of such Shares and if the Company
fails to find such Purchasers then any such Offer shall be deemed
to have
lapsed without having been validly
accepted.
|
|
|
(e)
|
If
a Proposing Transferor shall fail or refuse to transfer any Shares
to a
Purchaser under this Clause13, the Board may authorise some person
to
execute the necessary transfer and may deliver it on its behalf and
the
Company may receive the purchase money in trust for the Proposing
Transferor (which it shall pay into a separate bank account in the
Company’s name) and cause the Purchaser to be registered as the holder of
such Shares. The receipt of the Company for the purchase money
shall be a good discharge to the Purchaser (who shall not be bound
to see
to the application of the purchase money) and after the Purchaser
has been
registered in purported exercise of the said powers the validity
of the
proceedings shall not be questioned by any
person.
|
16
|
|
(f)
|
If
at the expiry of the period referred to in Clause 13.2 the Shareholders
shall not have agreed to purchase all the Shares so offered, the
Company
shall immediately give notice in writing of that fact to the Proposing
Transferor and subject to the previous sanction of the Board it shall
then
be at liberty at any time up to the expiration of 3 months after
the
giving of such notice to transfer those Shares which the Shareholders
shall not have so agreed to purchase to any person on a bona fide
sale at
any price not being less than the Prescribed Price Provided
that:
|
|
|
(i)
|
if
the Transfer Notice shall state that the Proposing Transferor is
not
willing to transfer part only of the Shares the subject of the Transfer
Notice, then the Proposing Transferor shall not be entitled under
this
Clause to transfer any of such Shares unless in aggregate the whole
of
such Shares are so transferred; and
|
|
|
(ii)
|
the
Board may require to be satisfied that such Shares are being transferred
in pursuance of a bona fide sale for the consideration stated in
the
instrument of transfer without any deduction rebate or allowance
whatever
being given to the Purchaser and if not so satisfied may refuse to
register the instrument of
transfer.
|
|
13.3
|
Subject
to the provisions of Clause 13.2, no transfer of any share of the
Company
shall be made or registered without the previous sanction of the
Board
which may, in its absolute and uncontrolled discretion, without assigning
any reason, refuse to give such
sanction.
|
|
14.
|
MANAGEMENT
OPTIONS
|
|
14.1
|
The
Company shall have such number of Shares reserved for allotment or
issue
(the “Reserved Shares”) not exceeding 12% of the then
issued Shares, on an all as-if-converted basis, for granting of any
Management Options in favour of any Key
Employees.
|
|
14.2
|
The
Management Options may be granted by the Board from time to time
to any
Key Employees upon terms and subject to conditions as determined
by the
Board at its discretion and all Management Options shall be subject
to
annually vesting stipulation for a period of not less than three
(3)
years.
|
|
|
|
14.3
|
Any
holder of the Management Options or any rights thereof will be required
to
execute stock restriction agreements with the Company to be approved
by
the Board providing for certain restrictions on transfer and for
the first
refusal of the Shareholders and assumption of the rights and obligations
of a Shareholder under this
Agreement.
|
17
|
15.1
|
This
Agreement shall continue in full force and effect until terminated
in
accordance with the provisions of this
Clause.
|
|
15.2
|
Any
of the Shareholders (the “First Party”) shall be entitled
to terminate this Agreement immediately by notice in writing (but
not
after 90 days of the event in question first coming to the attention
of
the First Party) if any of the events set out below shall occur.
Such
notice shall be served upon the Shareholder in respect of which the
event
or events relate (“Such Other Party”) and copies of such
notice shall be given to all other Shareholders. The effect of
such notice shall be to terminate this Agreement as between Such
Other
Party and the remaining party or parties to this Agreement but this
Agreement shall continue in full force and effect as between such
remaining parties (if more than one) but not if otherwise. The said
events
are:
|
|
(a)
|
if
Such Other Party shall commit any persistent or material breach of
any of
its obligations under this Agreement and shall fail to remedy such
breach
(if capable of remedy) within 30 days after being given notice by
the
First Party so to do; or
|
|
(b)
|
if
Such Other Party shall go into liquidation whether compulsory or
voluntary
(except for the purposes of a bona fide reconstruction or amalgamation
with the consent of all other Shareholders, such consent not to be
unreasonably withheld) or if Such Other Party shall have an administrator
appointed or if a receiver, administrative receiver or manager shall
be
appointed over any part of the assets or undertaking of Such Other
Party;
or
|
|
(c)
|
if,
without the prior written consent of the all other Shareholders,
there
shall be any change in the person or persons who owns or own a majority
of
the voting shares in, or otherwise has or have effective control
of, Such
Other Party.
|
|
15.3
|
This
Agreement shall terminate in respect of any Shareholder (but shall
continue between the other Shareholders (if more than one) but not
otherwise) if at any time as a result of a transfer of Shares made
in
accordance with this Agreement that Shareholder holds no Shares in
the
capital of the Company but without prejudice to any rights which
any party
may have against any other party arising prior to such
termination.
|
|
15.4
|
This
Agreement shall terminate immediately upon an initial public offering
of
the Shares (or the shares of any new holding company formed for such
purpose on a recognized stock exchange, or if an effective resolution
is
passed to wind up the Company, or if a liquidator is otherwise appointed
(but without prejudice to any rights any party may have against any
other
party arising prior to such
termination).
|
18
|
16.
|
CONSEQUENCES
OF NOTICES UNDER CLAUSE 15
|
|
16.1
|
If
any Shareholder shall serve a notice of termination under Clause
15.2,
that Shareholder (the “Terminator”) shall be entitled by
that notice to require the recipient of such notice (the
“Terminatee”) either to purchase all (but not some only)
of the Shares of the Terminator or to sell to the Terminator all
(but not
some only) of the Shares of the Terminatee at a price determined
in
accordance with the provisions of Clause 16.2 below. On the
exercise of any such right by the Terminator, it and the Terminatee
shall
become bound respectively to sell or purchase on the terms set out
below. If in a valid termination notice no such power of sale
or purchase is exercised by the Terminator, the parties hereto shall
procure that the Company shall be immediately wound
up.
|
|
16.2
|
The
purchase price of the Shares to be bought and sold pursuant to Clause
16.1
shall be their fair value as agreed between the parties to such sale
and
purchase or in default of agreement within 45 days after the service
of
the notice of termination such sum as shall be certified (at the
request
of any such party) by the auditors for the time being of the Company
to be
the fair value of such Shares on the date when the termination notice
was
served. In so certifying the auditors are irrevocably
instructed to value the Shares at fair value as between a willing
seller
and a willing purchaser on that date but otherwise they shall take
into
account all such circumstances as shall seem to them
relevant. In so acting such auditors are instructed to act as
experts and not as arbitrators and their decision shall (save in
respect
of manifest error) be final and binding on the parties to such sale
and
purchase of purposes and their costs shall be borne in equal shares
by all
of such parties.
|
|
16.3
|
Completion
of the sale and purchase of Shares pursuant to the provisions of
Clause
16.1 shall take place at the Hong Kong business office of the Company
at
10.00 am on the fifth business day after the price payable for such
Shares
has been agreed or determined in accordance with the provisions of
Clause
16.2 (or such other time and/or place as the parties to such sale
and
purchase may agree) and in respect of which the provisions of Clauses
16.4, 16.5, 16.6 and 16.7 shall then have
effect.
|
|
16.4
|
At
any completion of the sale and purchase of Shares pursuant to Clause
16.1,
in return for a certified cheque or cashier order drawn on any licensed
bank in Hong Kong (or such other means of payment which is agreed
by the
seller) for the full amount of the purchase money for the Shares
being
bought and sold (determined in accordance with the foregoing provisions
of
this Clause) and such other amounts as referred to in Clause 16.5,
the
seller(s) shall deliver to the purchaser(s) duly executed share transfers
for the Shares being sold in favour of the purchaser(s) (in accordance
with their respective entitlements) or as they may direct together
with
the relevant share certificate(s) (or an acceptable indemnity in
lieu). Any Shares sold under or pursuant to the above
provisions shall be sold free of all liens charges and incumbrances
and
together with all rights now or in future attaching to
them.
|
|
16.5
|
If
any Shareholder (the “Outgoing Party”) shall elect or
become bound to transfer all its Shares to any other Shareholders
under or
pursuant to the
|
19
|
|
provisions
of this Clause, such other Shareholders shall upon or immediately
prior to
completion of such transfer procure:
|
|
(a)
|
the
immediate release of all guarantees, indemnities and similar covenants
(if
any) given by the Outgoing Party in favour or for the benefit of
the
Company (and pending such release shall indemnify and keep the Outgoing
Party fully and effectively indemnified from and against all claims
arising under such guarantees, indemnities and similar covenants
(if
any)); and
|
|
(b)
|
the
immediate repayment to the Outgoing Party of all money advanced to
the
Company by the Outgoing Party by way of loan or loan stock, including
any
Capital Loans, then outstanding (if any) together with all interest
(if
any) down to the date of actual payment (as well before as after
judgment).
|
|
16.6
|
In
the event of any Shareholder ceasing to be a shareholder in the Company
where the corporate name of such Shareholder or its subsidiary or
any part
thereof contains EV or similar expressions or any word or words the
same
or similar to the corporate name or any distinctive part of the corporate
name of Company, such Shareholder shall procure that within 30 days
the
corporate name of such Shareholder or its subsidiary or any thereof
shall
be changed so as to exclude such word or
words.
|
|
16.7
|
The
Shareholders shall exercise all voting and other rights available
to them
to ensure the implementation of the preceding provisions of this
Clause
and that any provisions contained in the Articles restricting transfers
of
Shares shall be waived or suspended to allow such sales and purchases
to
proceed as provided above and the Shareholders shall procure the
registration of any transfer of any Shares any pursuant to this Agreement
accordingly.
|
|
17.1
|
The
Shareholders undertake to each other and the Company that they will
not at
any time hereafter use or divulge or communicate to any person other
than
to officers or employees of the Company whose province is to know
the same
or on the instructions of the directors any confidential information
concerning the business, accounts, finance or contractual arrangements
or
other dealings, transactions or affairs of the Company which may
come to
their knowledge and they shall use their best endeavours to prevent
the
publication or disclosure of any confidential information concerning
such
matters by themselves, their respective employees and
officers.
|
|
17.2
|
The
obligations of each Shareholder contained in Clause 17.1 shall continue
without limit in point of time but shall cease to apply to any information
coming into the public domain otherwise than by breach by any such
Shareholder of its said obligations Provided that nothing contained
in
this Clause shall prevent any party from disclosing any such information
to the extent required in or in connection with legal proceedings
arising
out of this Agreement or any matter relating to or in connection
with the
Company.
|
20
|
17.3
|
All
notes and memoranda (whether in the form of originals, reproductions
or
electronically stored data) of any trade secrets or confidential
information concerning the business of the Company or any of its
suppliers, agents, distributors or customers which shall be acquired,
received or made by a Shareholder during the continuance of this
Agreement
shall be the property of the Company and shall be surrendered by
the
Shareholder to someone duly authorized by the Company in that behalf
at
the termination of this Agreement or at the request of the Board
at any
time during the continuance of this
Agreement.
|
|
18.1
|
Each
Shareholder shall not, engage in the following activities for a period
of
two years after the date on which he or she ceased to be a shareholder
of
the Company:
|
|
(a)
|
In
any location where the Company carries on the Business at the Relevant
Date (as hereinafter defined), carry on or be engaged in any activity
or
business which shall be in competition with the Business at the Relevant
Date;
|
|
(b)
|
Solicit
or endeavour to entice away from or discourage from dealing with
the
Company any person who was at any time during the period of one year
preceding the Relevant Date a manufacturer for or supplier, customer
or
client of the Company;
|
|
(c)
|
supply
or provide any goods or services to any person who was at any time
during
the period of one year preceding the Relevant Date a customer or
client of
the Company to whom the Company had during that period supplied or
provided goods or services in the ordinary course of its
business;
|
|
(d)
|
solicit
or endeavour to entice away from or discourage from being employed
by the
Company any person who was at the Relevant Date an officer or employee
of
the Company whether or not such person would commit a breach of contract
by reason of leaving service; or
|
|
(e)
|
Employ
or engage or attempt to employ or engage or negotiate or arrange
the
employment or engagement by any other person, firm or company of
any
person who was at the Relevant Date an officer or employee of the
Company.
|
|
18.2
|
The
restrictions contained in Clause 18.1 are considered reasonable by
the
parties hereto but in the event that any such restriction shall be
found
to be void but would be valid if some part thereof were deleted or
the
period or area of application reduced such restriction shall apply
with
such modification as may be necessary to make it valid and
effective.
|
|
18.3
|
For
the purposes of this Clause, the “Relevant Date” means
the date in question or the Termination Date (whichever shall be
the
earlier).
|
21
Each
Shareholder acknowledges and agrees that each Shareholder will be irreparably
damaged in the event any of the provisions of this Agreement are not performed
by any Shareholder in accordance with their specific terms or are otherwise
breached. Accordingly, it is agreed that the Company and the
Shareholders shall be entitled to an injunction to prevent breaches of this
Agreement and to specific enforcement of this Agreement and its terms and
provisions in any action instituted in any court of competent jurisdiction,
in
addition to any other remedy to which the Shareholders may be entitled at law
or
in equity. Each Shareholder hereby consents to the jurisdiction in
any such action brought in the courts of Hong Kong.
|
20.1
|
Implementation
of Agreement
|
|
|
Each
Shareholder agrees that it will at all
times:
|
|
(a)
|
use
all means reasonably available to it (including its voting power,
direct
or indirect, in relation to the Company) so as to ensure that the
Company
and any director of the Company nominated or appointed by it (and
any
alternate to such director) shall implement the provisions of this
Agreement relating to the Company;
and
|
|
(b)
|
co-operate
in good faith and execute such further documents and take such other
action as may be reasonably required in order to give full effect
to the
provisions and intent of this
Agreement.
|
|
20.2
|
Agreement
Prevails
|
|
|
In
the event that there is any inconsistency between the provisions
of this
Agreement and the provisions of the Articles, the provisions
of Articles shall
prevail.
|
|
20.3
|
Further
Assurance
|
The
Shareholders shall use their reasonable efforts to do and execute or procure
to
be done and executed all such acts, deeds, documents and things as may be
necessary to give effect to this Agreement.
|
20.4
|
Entire
Agreement
|
This
Agreement constitutes the entire agreement between the parties hereto, and
supersedes any previous agreement, understanding, arrangement, communication
or
expression of intent with respect to the subject matter hereof.
22
|
20.5
|
Amendments
|
No
amendment of or addition to this Agreement shall be effective unless in writing
and signed by or on behalf of all the parties hereto.
|
20.6
|
No
Representations
|
Each
Shareholder acknowledges that it has made its own independent evaluation of
the
business to be undertaken by the Company pursuant to this Agreement and has
not
been induced to enter into this Agreement or any of the transactions
contemplated hereby by any representation made or advice given by any other
Shareholder.
|
20.7
|
No
Partnership
|
Nothing
contained in or relating to this Agreement shall or shall be deemed to
constitute a partnership or agency relationship between any of the parties
hereto.
|
20.8
|
No
Waiver
|
No
omission or delay on the part of any party hereto in exercising its rights
under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by any party hereto of any such right preclude the further
or
other exercise thereof or the exercise of any other right which it may
have.
|
20.9
|
Severability
|
If
at any
time any one or more of the provisions hereof is or becomes illegal, invalid
or
unenforceable in any respect under the applicable laws of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
hereof, nor the legality, validity or enforceability of such provision under
the
applicable laws of any other jurisdiction, shall in any way be affected or
impaired.
|
20.10
|
Assignment
|
|
(a)
|
This
Agreement shall be binding on the parties hereto and their respective
successors and shall enure to the benefit of each of them and their
respective successors and permitted
assigns.
|
|
(b)
|
The
benefit of this Agreement may not, except as otherwise herein provided,
be
assigned or transferred in whole or in part by any Shareholder without
the
prior consent of the other
Shareholders.
|
|
20.11
|
Time
|
Time
shall be of essence under this Agreement.
|
20.12
|
Notices
|
|
(a)
|
Every
notice, demand or other communication given or made under this
|
23
|
|
Agreement
shall be in writing and delivered or sent by hand or prepaid recorded
delivery or registered post or by facsimile transmission to the
relevant
party at its address or fax number set out below (or such other
address or
fax number as the addressee shall by not less than 7 days’ prior written
notice specify to the other party):
|
|
To
ZAP:
|
(1)
|
ZAP | |
| Address: | 000 Xxxxxx Xxxxxx | ||
| Xxxxx Xxxx, Xxxxxxxxxx 00000 | |||
| Fax Number: | (000) 000-0000 | ||
| Attention: | Mr. Xxxxxx Xxxxxxxxx | ||
| (2) | Xxxxxxxxxx & Xxxxx LLP | ||
| Address: | 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 | ||
| Xxx Xxxxxxx, XX 00000 | |||
| Fax Number: | (000) 000-0000 | ||
| Attention: | Xxxxx X. Xxxx, Esq. | ||
| To Xxxxxxxx: |
Zhejiang
Xxxxxxxx Automobile
|
||
|
Group
Co., Ltd.
|
|||
| Address: | 000 Xxxx Xxxx, | ||
| Xxxxxx Xxxx, Xxxxxxxx, PRC | |||
| Fax Number: |
00-000-0000000
|
||
| Attention: |
Xx.
Xxxx Qingnian
|
||
| To the Company: |
EV
Holdings Limited
|
||
|
Address:
|
Unit A, 14/F Shun On | ||
| Commercial Building, 000-000 Xxx | |||
| Xxxxx Xxxx Xxxxxxx, | |||
| Xxxx Xxxx | |||
| Fax Number | |||
| Attention: |
|
(b)
|
Any
notice, demand, or other communication so addressed shall be deemed
to
have been delivered (i) if given or made by letter postage prepaid,
within
72 hours after posting (or 10 days later if overseas) (ii) if given
or
made by letter delivered by hand, upon delivery (iii) if given or
made by
facsimile transmission, at the time of despatch, provided that the
original is posted or delivered to the recipient immediately after
the
facsimile transmission.
|
|
20.13
|
Counterparts
|
|
(a)
|
This
instrument may be executed in several counterparts, all or any of
which
shall be treated for all purposes as one original and shall be and
constitute one and the same
instrument.
|
|
(b)
|
This
instrument may be executed by the parties in original or
telecopy
|
24
|
|
produced
by fax machine or other means of electronic communication producing
a
printed copy.
|
|
20.14
|
Governing
Law and Jurisdiction
|
This
Agreement shall be governed by and construed in accordance with the laws of
Hong
Kong. The parties hereto submit to the non-exclusive jurisdiction of the courts
of Hong Kong.
[Remainder
of Page Intentionally Left Blank]
25
IN
WITNESSWHEREOF this Agreement has been entered into
the day and year first above written.
SIGNED
BY
)
)
on
behalf
of
ZAP
)
in
the
presence
of: )
/s/
Xxxxxx Xxxxxxxxx
SIGNED
BY
)
)
on
behalf
of
Xxxxxxxx )
Automobile
Co.,
Ltd. )
in
the
presence
of: )
/s/
Pang Qingnian
SIGNED
BY
)
)
on
behalf
of EV Holdings
Limited )
in
the
presence
of: )
/s/
Xxxxxx Xxxxxxxxx
26
SCHEDULE
A
Investment
Schedule
27
SCHEDULE
B
Memorandum
and Articles of Association
28
