AMENDMENT TO MASTER OVERHEAD JOINT VENTURE AGREEMENT
AMENDMENT
TO MASTER OVERHEAD JOINT VENTURE AGREEMENT
This
Amendment to Master Overhead Joint Venture Agreement (the “Amendment”) is
entered into as of January 10, 2011 between Shenzen Goch Investment Ltd.
(“SGI”) and
ECOtality, Inc., a Nevada corporation (“ECOtality”).
Recitals
A. On
September 15, 0000, XXX and ECOtality entered into a Master Overhead Joint
Venture Agreement (the “Original Agreement”),
by which they agreed to form a joint venture (the “Joint Venture”)
pursuant to certain draft business agreements (the “Draft Business
Agreements”) and further agreed to work together to finalize the Draft
Business Agreements. Since then, they have been pursuing the
finalization of the Draft Business Agreements, subject to various modifications
of terms which they have been discussing. Among other things, those
modifications have included their agreement (i) that, rather than forming
two joint ventures in China (one with production rights, and a second with sales
and distribution rights), they will form a single joint venture, which will have
exclusive sales and distribution rights in China, and subject to Section 1,
exclusive supply rights in China, and (ii) that, rather than requiring a
total of $15 million of funding for the two joint ventures, the total funding
requirements for the single joint venture will be $5 million.
B. In
the interim, and based on discussions between ECOtality and SGI, ECOtality has
been in negotiations with the ABB Group of Companies (“ABB”) with respect to
a transaction (the “ABB Transaction”)
involving an investment by ABB in ECOtality combined with a supply relationship
between the companies (the “ABB/ECOtality Supply
Relationship”) under which, upon the closing of the investment, (i) ABB
would have the exclusive rights within North America to supply components to be
used in ECOtality’s electric vehicle battery charging systems (the “ABB NAM Rights”), and
(ii) ECOtality would have the obligation thereafter to negotiate in good
faith with ABB as to the possible extension of this exclusive supply right to
other territories within the world, including China (the “ABB Negotiate to Extend
Rights”); provided that (a) the ABB Negotiate to Extend Rights would
not require ECOtality to agree to extend the exclusive supply right to any
territory outside of North America, but would only require ECOtality to
negotiate in good faith about such possible extension, and (b) with respect
to China, in order to permit a reasonable period of time for such negotiations
with respect to the China market, ECOtality would represent that, during the
first six months following the closing of the ABB Transaction, it would not be
subject to any exclusive supplier agreement as to the China market with any
party not affiliated with ABB (the “Six Month Uncommitted
Provision”).
C. Having
mutually determined that the contemplated transaction with ABB would be in the
best interest of ECOtality, in which SGI and/or affiliates have investments,
ECOtality and SGI now wish to modify the Original Agreement so as to accommodate
the ABB transaction.
NOW,
THEREFORE, in consideration of the mutual promises set forth herein, and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows. (As used below, “SGI” refers, as
applicable, to SGI and/or its affiliates, including Cybernaut.)
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1. Modification to Exclusivity
Provisions. Section 2.5 of the Original Agreement and
certain of the Draft Business Agreements provided that, subject to various terms
and conditions, the Joint Venture would have the exclusive right to supply
electric vehicle charging products to ECOtality throughout the world (the “SGI Supply Exclusivity
Rights”). The parties have agreed that, subject to the other
terms and conditions of this Amendment and the closing of the ABB Transaction,
the SGI Supply Exclusivity Rights will be released in favor of the ABB NAM
Rights and the ABB Negotiate to Extend Rights; provided that (i) ECOtality
will use its best efforts to facilitate a manufacturing joint venture between
SGI and ABB in particular as it relates level 2 chargers and potentially level 3
chargers as well; and (ii) should ABB fail in providing product as
anticipated and required under the terms and conditions of the ABB/ECOtality
Supply Relationship, ECOtality will immediately offer SGI the first right to bid
to replace the products not being supplied by ABB and give SGI “most favored
nations” treatment with respect to any bids in makes in response to such
offers. Notwithstanding the foregoing, the parties further agree that
the SGI Supply Exclusivity Rights will not be released with respect to the China
market, but rather, in order to accommodate the Six Month Uncommitted Provision,
the SGI Supply Exclusivity Rights will be held in abeyance with respect to the
China market for the first six months following the closing of the ABB
Transaction; provided that if by the end of that six-month period ECOtality and
ABB have not reached an agreement acceptable to SGI with respect to ABB’s
participation in the supply of products to the China market, then, at any time
thereafter, SGI may reassert the SGI Supply Exclusivity Rights with respect to
the China market, in which case ECOtality will promptly terminate any further
negotiations with ABB under the ABB Negotiate to Extend Rights as to the China
market unless SGI otherwise agrees.
2. Issuance of
Warrants. The Draft Business Agreements provide for SGI to
receive certain warrants to purchase ECOtality common stock (the “SGI Warrant Rights”)
based on its payment of certain license fees and capital contributions to the
Joint Venture and the amount of products purchased by ECOtality from the Joint
Venture. The parties have agreed that, subject to the other terms and
conditions of this Amendment and the closing of the ABB Transaction, the SGI
Warrant Rights will be modified to provide that:
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SGI
will immediately receive warrants, with an exercise price of $0.60
(representing a pre-split exercise price of $0.01) (“$0.60
Warrants”), to purchase 477,777 shares of common stock;
and
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upon
the final formation and total $5 million funding of the Joint Venture, SGI
will receive $0.60 Warrants to purchase an additional 477,777 shares of
common stock; it being expressly agreed by the parties in this regard that
(i) they will endeavor in good faith to form and fund the Joint
Venture in a timely and expedited manner, and (ii) in doing so, they
will use the Draft Business Agreements, as modified in the respects the
parties have been discussing since entering into the Original Agreement,
and as further modified to reflect the release of the SGI Exclusivity
Rights as set forth above.
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3. Transfer of
Interest. SGI has decided to transfer all of its economic
interest in the Master Overhead Joint Venture Agreement and the Amendment to
Green Valley International Energy Investment Company at Xxxx 000, Xxxxxxxx X,
Xxxxxxxxxxxxx, Xx 00 Xxxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx, 000000, Xxxxx
(“GV”), an affiliate of SGI, or an affiliated entity assigned by
GV. Ecotality hereby irrevocably consents to such
transfer.
4. Continuation of the Original
Agreement. Except to the extent modified by this Amendment,
the Original Agreement shall remain in effect.
IN WITNESS WHEREOF, the parties have
executed this Amendment as of the date first written above.
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ECOTALITY:
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SGI:
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| Ecotality, Inc, |
Shenzen
Goch Investment Ltd.
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a
Nevada corporation
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By:
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| By: |
Name:
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Name:
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Title:
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Title:
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