Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-279108
Prospectus
Supplement No. 1
(To Prospectus dated September 23, 2024)
Lotus Technology
Inc.
15,037,030 AMERICAN
DEPOSITARY SHARES UNDERLYING WARRANTS,
680,957,495 AMERICAN
DEPOSITARY SHARES AND
5,486,784 WARRANTS
TO PURCHASE ORDINARY SHARES
This prospectus supplement is being filed to update
and supplement the information contained in the prospectus dated September 23, 2024 (as supplemented or amended from time to time, the
“Prospectus”), which forms a part of our Registration Statement on Form F-1 (Registration No. 333-279108), as amended
and supplemented, with the information contained in our Current Report on Form 6-K, furnished with the Securities and Exchange Commission
on October 1, 2024. The Prospectus relates to (i) the issuance by Lotus Technology Inc. of up to 15,037,030 Ordinary Shares upon
exercise of the Warrants, and (ii) the offer and resale from time to time by the selling securityholders identified in the Prospectus
or their pledgees, donees, transferees, assignees or other successors in interest (that receive any of the securities as a gift, distribution,
or other non-sale related transfer) of up to (a) 680,957,495 Ordinary Shares (including 5,486,784 Ordinary Shares issuable upon the exercise
of the Sponsor Warrants), and (b) up to 5,486,784 Sponsor Warrants.
This prospectus supplement updates and supplements
the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus,
including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there
is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this
prospectus supplement.
Our ADSs and Warrants are listed on the Nasdaq
Stock Market LLC, or Nasdaq, under the trading symbols “LOT” and “LOTWW,” respectively. On September 27, 2024,
the closing price of our ADSs on Nasdaq was $4.95 per share, and the closing price of our Warrants on Nasdaq was $0.30 per warrant.
We may further amend or supplement the Prospectus
and this prospectus supplement from time to time by filing amendments or supplements as required. You should read the entire Prospectus,
this prospectus supplement and any amendments or supplements carefully before you make your investment decision.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 17 of the Prospectus
for a discussion of information that should be considered in connection with an investment in our securities.
Neither the U.S. Securities and Exchange Commission
nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus supplement or
the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus supplement is October 1, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-
16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2024
Commission File Number: 001-41970
Lotus Technology Inc.
(Translation of registrant’s name into English)
No. 800 Century Avenue
Pudong District, Shanghai, People’s Republic
of China
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
INFORMATION CONTAINED
IN THIS REPORT ON FORM 6-K
LTIC Share Transfer Agreement
Lotus Technology Innovative
Limited (the “LTIL”), a wholly-owned subsidiary of Lotus Technology Inc., recently entered into a share sale and transfer
agreement (the “Share Transfer Agreement”) with Geely UK Limited (“Geely”), pursuant to which LTIL agrees to sell,
and Geely agrees to purchase, 800,000 shares in Lotus Tech Innovation Center GmbH (“LTIC”), a company incorporated in Germany
and a wholly-owned subsidiary of LTIL, for an aggregate principal amount of EUR 10,880,000 (the “Transaction”). The Transaction
closed simultaneously with the signing of the Share Transfer Agreement. Upon completion of the Transaction, Geely beneficially owns 80%
of the LTIC’s share capital.
A copy of the Share Transfer
Agreement is included in this current report on Form 6-K as Exhibit 10.1 and the foregoing description of the Share Transfer
Agreement is qualified in its entirety by reference thereto.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Lotus Technology Inc. |
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By |
: |
/s/ Alexious Kuen Long Lee |
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Name |
: |
Alexious Kuen Long Lee |
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Title |
: |
Director and Chief Financial
Officer |
Date:
October 1, 2024
Exhibit 10.1
THE SYMBOL “[REDACTED]”
DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II)
IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL
Dated September 27,
2024
Geely UK Limited
and
Lotus Technology
Innovative Limited
SHARE SALE AND
TRANSFER AGREEMENT
relating to the
sale and transfer of shares in
Lotus Tech Innovation
Center GmbH
THIS
SHARE SALE AND TRANSFER AGREEMENT (the “Agreement”) is made on September 27, 2024 (the “Signing
Date”)
BETWEEN:-
| (1) | Lotus Technology
Innovative Limited (hereinafter referred
to as the “Transferor”); and |
| (2) | Geely UK Limited
(hereinafter referred to as “Transferee”). |
(Each of the Transferor
and the Transferee shall, as the context permits, be referred to individually as a “Party” and collectively as the
“Parties”).
RECITALS:-
| (A) | Lotus Tech Innovation
Center GmbH, with seat in Raunheim and registered with the commercial register of the local
court of Darmstadt under HRB 98296), a company incorporated in Germany, is principally
engaged in auto-related research and development services, the particulars of which are set
out in Schedule 1 (hereinafter referred to as “Company”). |
| (B) | The entire share
capital of the Company amounts to EUR 1,000,000 and is divided into 1,000,000 shares,
each in the nominal amount of EUR 1.00. As of the date of this Agreement, the Transferor
holds 1,000,000 shares with cons. nos. 1 to 1,000,000 each in the nominal amount of EUR 1.00
and therefore holds 100% of the share capital of the Company. |
| (C) | The Transferor
agrees to sell and transfer, and the Transferee agrees to purchase 80% of the share capital
of the Company, subject to the terms and conditions of this Agreement. |
THE PARTIES
HEREBY AGREE as follows:-
1. DEFINITIONS
AND INTERPRETATION
| 1.1 | In this Agreement,
in addition to the definitions set out in the preamble above, where the context so admits,
the following words and expressions shall have the following meanings: |
| “Accounts” |
the audited
financial statements of the Company as at and to the Accounts Date comprising the individual accounts of the Company, including in
each case the balance sheet, profit and loss account together with the notes on them, the cash flow statement and the auditor’s
and directors’ reports. |
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| “Accounts Date” |
30th of April 2024
|
| “Articles of Association” |
the Articles of Association
of the Company |
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| “Business Day” |
a day (other than a Saturday,
Sunday or public holiday) on which banks are open in the UK, Hongkong and Frankfurt, Germany to the general public for business |
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|
| “Completion” |
completion of the transfer
of the Transfer Shares in accordance with the terms of this Agreement |
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|
| “Consideration” |
shall have the meaning of
Clause 3.1 |
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| “Transfer Shares” |
800,000 shares with cons.
no. 1 to 800,000, each in the nominal amount of EUR 1.00 in the Company representing 80% of the share capital of the Company |
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|
| “Joint Venture
Agreement” |
the joint Venture Agreement
of the Company between the Transferor and the Transferee |
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|
| “Business” |
the business of the Company
is to engage in business in the automotive industry and related business not requiring public permits as well as providing advisory
and other services, in particular in rendering research, production and development activities. The Company is also engaged in R&D
of automobiles and key components, as well as automotive engineering development services. |
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|
| “Indemnifiable
Amounts” |
shall have the meaning as
set forth in Clause 12.1 |
“Intellectual
Property Rights”
|
all Patents, Trademarks,
Non-patented IP, rights in Confidential Information and Know-How to the extent protected under applicable laws anywhere in the world.
For the purpose of this definition: (i)“Patent”
means any patent, patent application, or utility model, whether filed before, on or after execution of this Agreement, along with
any continuation, continuation-in-part, divisional, re-examined or re-issued patent, foreign counterpart or renewal or extension
of any of the foregoing; (ii) “Trademarks”
means trademarks (including part numbers that are trademarks), service marks, logos, trade names, business names, assumed names,
trade dress and get-up, and domain names, in each case whether registered or unregistered, including all applications, registrations,
renewals and the like, in each case to the extent they constitute rights that are enforceable against third parties; (iii)“Know-How”
means confidential and proprietary industrial, technical and commercial information and techniques in any form including (without
limitation) drawings, formulae, test results, reports, project reports and testing procedures, instruction and training manuals,
tables of operating conditions, specifications, component lists, market forecasts, lists and particulars of customers and suppliers;
and (iv) “Non-patented IP” means copyrights
(including rights in computer software), database rights, semiconductor topography rights, rights in designs, and other intellectual
property rights (other than Trademarks and Patents) and all rights or forms of protection having equivalent or similar effect anywhere
in the world, in each case whether registered or unregistered, and registered includes registrations, applications for registration
and renewals whether made before, on or after execution of this Agreement. |
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|
| “Tax” |
all categories of federal,
state, local taxes, customs duties and other taxes, governmental fees, and other like assessments and charges of any kind whatsoever
(including Tax liabilities incurred or borne as a transferee or successor, or by contract or otherwise), together with all interest,
penalties, additions to tax and additional amounts with respect thereto, and the term “Tax” means any one of the
foregoing Taxes. The term “Tax Returns” as used
herein means all returns, declarations, reports, claims for refund, information statements, and other documents relating to Taxes,
including all schedules and attachments thereto, and including all amendments thereof, and the term “Tax Return”
means any one of the foregoing Tax Returns. “Tax Authority” means any governmental authority responsible for the
imposition of any Tax. |
| 2. | SALE AND TRANSFER
OF THE TRANSFER SHARES/CHANGE OF ARTICLES OF ASSOCIATION/JOINT VENTURE AGREEMENT |
| 2.1 | The Transferor
hereby sells the Transfer Shares to the Transferee in accordance with the terms and conditions
of this Agreement. The Transferee hereby accepts such sale. The sale of the Transfer Shares
shall include any and all rights pertaining to the Transfer Shares, including the rights
to all profits of the Company unless they have been distributed on or before the Signing
Date. |
| 2.2 | Subject to the
condition precedent (aufschiebende Bedingung) that (i) the Conditions have been
fulfilled or duly waived in accordance with Clause 4 and (ii) the Transferee has paid
the Consideration in accordance with Clause 3.1, the Transferor hereby transfers the Transfer
Shares, free from all liens, charges and encumbrances and with the corresponding rights attached
or accruing thereto at Completion (including the right to receive corresponding dividends
and other distributions declared, made or paid on or after Completion). The Transferee hereby
accepts such transfer. |
| 2.3 | Shareholder
structure after Completion |
| Shareholders |
Number
of Ordinary
Shares |
Percentage
to Registered
Capital (%) |
| Geely
UK Limited |
800,000
(cons. nos. 1-800,000) |
80% |
| Lotus
Technology Innovative Limited |
200,000
(cons. nos. 801,000-1,000,000) |
20% |
| Total |
1,000,000 |
100% |
| 2.4 | Change of Articles
of Association |
Waiving
compliance with all requirements as to form and notice under law and the articles of association, in particular with regard to the convening
and holding of shareholders’ meeting, the Transferor as sole shareholder of the Company hereby holds a shareholders’ meeting
of the Company and hereby resolves unanimously with all votes as follows:
The Articles
of Association of the Company are amended and entirely restated as set forth in Schedule 5.
No further
resolutions are adopted. The shareholders’ meeting is hereby closed.
Irrespective of the date
on which the Articles of Association have been resolved and will be entered into the commercial register (Handelsregister) of
the competent local court (Amtsgericht), the Parties agree that the Articles of Association shall be agreed and deemed to be binding
with legal effect as of Completion and, from thereon, the Parties shall exercise their shareholders’ rights in the Company in accordance
with the Articles of Association and the Joint Venture Agreement.
| 2.5 | Joint Venture
Agreement |
The Transferor
and the Transferee hereby enter into the Joint Venture Agreement which is attached hereto as Schedule 4 with effect as
of Completion.
| 3.1 | The purchase
price (the “Consideration”) payable by the Transferee to the Transferor
for the Transfer Shares shall be Euro 10,880,000 (in words: Euro ten million eight hundred
eighty thousand). |
| 3.2 | The Consideration
shall be payable by the Transferee by cash on Completion, subject to the fulfilment or waiver
of the Conditions. The payment should be made by way of electronic transfer of funds to the
following bank account of the Transferor, or any other Transferor's designated bank account: |
| ACCOUNT NAME: |
[REDACTED] |
| ACCOUNT NUMBER: |
[REDACTED] |
| BANK NAME: |
[REDACTED] |
| BRANCH: |
[REDACTED] |
| SWIFT CODE: |
[REDACTED] |
| 4.1 | The
Parties’ obligation to complete the transfer of the Transfer Shares shall be conditional
upon: |
| (a) | the obtaining
of all consents, approvals and authorizations, including approvals or consents from the competent
regulatory authorities in relevant jurisdictions (“Relevant Authorities”)
and other third parties from which consent is required under any contract or other legal
instruments to which the Company is a party, in relation to the share transfer contemplated
under this Agreement; the submission of any notices to Relevant Authorities required prior
to Completion to effect the share transfer contemplated by this Agreement; |
| (b) | The total
amount of receivables unpaid to the Company as of the Account Date were EUR 51,106,000.00
(in words: Euro fifty-one million ten hundred six thousand), the portion of receivables
unpaid to the Company as of the Accounts Date (in the amount of EUR 25,870,000 , in words:
Euro twenty-five million eight hundred seventy thousand) shall be paid to the Company; |
| (c) | the obtaining
of approval of the Board of Directors of Transferor and Transferee; |
| (d) | the Company
and its Business, including, for the avoidance of doubt, the business, operations, assets,
liabilities of the Company taken as a whole, or the financial condition or financial performance
of the Company taken as a whole, has not been materially adverse changed by any event, circumstance,
effect, occurrence or state of affairs arising or occurring after the Signing Date of this
Agreement; and |
| (e) | the change
of net asset between the Accounts Date and the date of Completion shall not exceed 5%. (collectively
“Conditions”). |
| 4.2 | To the extent
permitted by applicable laws, the Transferor and the Transferee may jointly agree in writing
to waive in whole or in part, conditionally or unconditionally, any of the Conditions specified
in Clause 4.1 above. |
| 4.3 | The Parties
shall try their utmost efforts to have the above Conditions specified in Clause 4.1 satisfied
within 2 months upon signing of this Agreement. |
| 5.1 | Completion shall
take place at the office of the Company or any other place as otherwise agreed by the Parties
no later than 10 Business Days (or at such other time as the Parties may otherwise agree)
following the satisfaction or waiver, as the case may be, of the conditions set out in Clause
4.1 above, except for the condition specified in Clause 4.1.(d) and Clause 4.1(e) which
shall be satisfied or waivered on the same date as of the Completion. AT Completion, all
(but not some only) of the events described below shall occur simultaneously and dependent
on each other (Zug-um-Zug): |
| (a) | the Transferor
shall deliver, or procure the delivery of, to the Transferee: |
| (i) | the resolutions
passed by its board of directors approving the disposal of the Transfer Shares to the Transferee
and authorising the execution and delivery by it of this Agreement and all documents and
agreements ancillary or pursuant hereto or in connection herewith; |
| (ii) | documentation
that all required approvals, consents, and notifications with regard to the contemplated
share transfer have been obtained from or given to the Relevant Authorities; |
| (iii) | evidence
of the payment (e.g. bank statements, balance sheet) of the EUR 25,870,000 (in words:
Euro twenty-five million eight hundred seventy thousand), receivables have been paid
to the Company; and |
| (iv) | a written
confirmation duly signed by the Transferor upon due enquiry with the managing director(s) of
the Company stating that the Company and its Business, including, for the avoidance of doubt,
the business, operations, assets, liabilities of the Company taken as a whole, or the financial
condition or financial performance of the Company taken as a whole, has not been materially
adverse changed by any event, circumstance, effect, occurrence or state of affairs arising
or occurring after the Signing Date of this Agreement; |
| (b) | the Transferee
shall deliver to the Transferor: |
| (i) | the resolutions
passed by its board of directors and/or shareholder(s) approving the purchase of the
Transfer Shares from the Transferor and authorising the execution and delivery by it of this
Agreement and all documents and agreements ancillary or pursuant hereto or in connection
herewith; and |
| (ii) | the Consideration
by wire transfer in immediately available funds to the account specified by Transferor; |
| 5.2 | To the extent permitted by applicable laws, the Transferor and the
Transferee may jointly agree in writing to waive in whole or in part, conditionally or unconditionally, any of the conditions
specified in Clause 5.1 above. |
| 5.3 | Without prejudice
to any other remedies available to the Parties, if in any respect the provisions of Clause
5.1 above are not complied with by the Transferor or the Transferee at Completion, the other
Party may: |
| (a) | defer Completion
to a date as agreed by the Parties; or |
| (b) | rescind
this Agreement. |
| 5.4 | Immediately
after all actions set out in Clause 5.1 above have been performed or mutually waived, the
Transferor and the Transferee shall sign a closing protocol substantially in the form as
set forth in Schedule 7. The Parties shall without undue delay send a copy
of the signed closing protocol to the acting notary. The Parties hereby instruct the acting
notary to file (i) an updated shareholders’ list of the Company and (ii) to
apply for the changes to the Articles of Association of the Company in accordance with Clause
2.4, immediately upon receipt of a copy of the closing protocol. |
| 5.5 | Subject to Completion
having occurred, the Transferor hereby grants to the Transferee a power of attorney (with
a release from the restrictions under section 181 German Civil Code) to exercise all shareholders’
rights derived from the Transfer Shares. This power of attorney shall lapse upon registration
by the commercial register of a shareholders’ list showing the Transferee as the owner
of the Transfer Shares. |
| 6.1 | The Transferor
acknowledges that the Transferee is entering into this Agreement on the basis of, and in
reliance on, the warranties set forth in Clause 6. |
| 6.2 | The Transferor
hereby represents and warrants to the Transferee as of the Signing Date and as of Completion
that: |
| (a). | it is
the legal and beneficial owner of the Transfer Shares and the Transfer Shares are fully paid
up and free from all encumbrances. |
| (b). | each warranty
set forth in this Clause 6.2 is true, accurate and not misleading in all material aspects
as at the Signing Date of this Agreement and the Completion, except as disclosed to the Transferee
during the due diligence process. |
| (c). | the execution
and delivery by the Transferor of this Agreement and any other documents to be executed by
the Transferor pursuant hereto, and the performance by the Transferor of its obligations
hereunder, will not conflict with or result in any violation of any applicable law or any
agreement to which the Transferor is a party, or not result in the termination of, or trigger
a payment in respect of, or otherwise materially affect, any contract, license, agreement
or commitment to which the Company is a party. |
| (d). | the Company
has at all times conducted its business in accordance with, and has acted in compliance with,
all applicable laws, decrees, regulations, and rules of any relevant jurisdictions or
issued by any Relevant Authority in all material aspects. |
| (e). | the Company
holds, and at all times has held, all licenses, permits, and authorizations from all Relevant
Authorities necessary for the lawful conduct of its business pursuant to all applicable statutes,
laws, ordinances, rules and regulations of all such Relevant Authority having jurisdiction
over it or any part of its operations, excepting, however, when such failure to hold would
not have a material adverse effect on the Company’s Business. There are no material
violations or claimed violations known by the Company of any such license, permit, or authorization
or any such statute, law, ordinance, rule, or regulation. |
| (f). | The Company
has not supplied any services that were at the time they were supplied that did not, do not
or will not, comply in all material aspects with any warranties or representations expressly
or impliedly made by or on behalf of the Company in connection with such services that would
have a material adverse effect on the Company and/or its Business. |
| (g). | there
is no action, suit, claim, investigation, or proceeding (or any basis therefor known to the
Company pending against or, to the knowledge of the Transferor, threatened against the Company
or its properties and assets or affecting the Company or any of its assets or properties
or the transactions contemplated hereby before any court or arbitrator or any Relevant Authority
that will have a material adverse effect on the Company’s Business. The Company is
not subject to any order, writ, judgment, decree, or injunction that has a material adverse
effect on the Company’s Business. |
| (h). | The Company
maintains, and has at all material times maintained, adequate insurance cover against all
losses and liabilities, including business interruption, and all other risks that are required
by laws and regulations. The insurance policies are in full force and effect, all premiums
due on them have been paid and all other conditions of the insurance policies have been performed
and observed. |
| (i). | The Company
has no material obligations or liabilities (absolute or contingent) as guarantor, surety,
cosigner, endorser, indemnitor, or otherwise respecting the obligations or liabilities of
any person. |
| (j). | As of
the Accounts Date, there were no material liabilities, claims, or obligations of any nature,
whether accrued, absolute, contingent, anticipated, or otherwise, whether due or to become
due, and there is no existing condition, situation, or set of circumstances which could reasonably
be expected to result in such a material liability, claim, or obligation, that in any such
case, are not shown or provided for either in the Accounts, and since the Accounts Date,
the Company has incurred no liabilities, claims, or obligations of any nature, whether accrued,
absolute, contingent, anticipated, or otherwise other than in the ordinary course of business
and except for liabilities incurred by the Company in connection with the preparation and
execution of this Agreement and the consummation of the transactions contemplated herein. |
| (k). | There
is no outstanding indebtedness, receivables or other liability (actual or contingent) and
no outstanding contract, commitment or arrangement between the Company and the Transferor,
or any other member of the group of Transferor, unless otherwise disclosed to the Transferee
during the due diligence process. Neither the Transferor nor any member of the group or affiliates
of Transferor is entitled to a claim of any nature against the Company, or has assigned to
any person the benefit of any such claim, unless otherwise disclosed to the Transferee during
the due diligence process. |
| (l). | The debts
or receivables owing to the Company as reflected in the Accounts, and all debts or receivables
subsequently recorded in the books of the Company since the Accounts Date: (1) will
within six months after the date of Completion of this Agreement realize in cash their full
amount as included in those Accounts or books; (2) are not subject to any right of set-off
or counterclaim; (3)will still be within the statutory limitation of actions for at least
6 months after the date of Completion. |
| (m). | the assets
of the Company are not subject to any encumbrance, and the Company has not given or entered
into any encumbrance, guarantee, indemnity or other similar security arrangement over its
assets in respect of the indebtedness of, or the default in the performance of any obligation
by, itself or any other person. |
| (n). | The workshop,
laboratory, machinery, vehicles, office and other equipment used by the Company in connection
with the Business are: (1.) in good working order and have been regularly and properly maintained;
(2.) capable, and will continue to be capable, of doing the work for which they were designed;
and (3.) not surplus to the current or proposed requirements of the Company. |
| (o). | The activities
of the Company and of any licensee of Intellectual Property Rights granted by the Company
have not: (1.) infringed, do not infringe and are not likely to infringe the Intellectual
Property Rights of any third party; (2.) constituted, do not constitute and are not likely
to constitute any breach of confidence, passing off or actionable act of unfair competition;
or (3.) given and do not give rise to any obligation to pay any royalty, fee, compensation
or any other sum whatsoever. |
| (p). | For the
sake of clarification, the Intellectual Property Rights as listed in Schedule 6 are generated
as the results of' R&D· services provided by the Company to Wuhan Lotus Cars Co.
LTD. (“WLC”), a member of the group of the Transferor. In accordance with the
R&D Framework Agreement entered between the Company and WLC, such Intellectual Property
Rights shall be assigned to or be filed in the name of the WLC or any other member of Transferor's
group as designated by WLC. Notwithstanding the foregoing, the Parties shall separately discuss
and agree on the ownership of Intellectual Property Rights related to vehicle motion control
or VMC technology which is still under development by the Company. |
| (q). | Apart
from the redundancy plan (“Redundancy Plan”) as listed in Schedule 2, there is
no other redundancy plan is and will be conducted by the Company, and all costs and expenses
(including all legal costs, attorney fees, and settlement costs) arising from and/or in relation
to the Redundancy Plan shall be borne by the Transferor. |
| (r). | Any current
and future remuneration (including any benefits and privileges provided or which the Company
is bound to provide to them or their dependents, and any other allowances, and any entitlement
to, or expectation of, performance-related remuneration, short-term incentives, annual leaves
or holidays not taken, pension plan), costs and expenses (including all legal costs, attorney
fees, settlement costs) generated from the maintenance of their employment status or redundancy
payable by the Company to the employees as listed in Schedule 3 who serve for AD 4 project
shall always be borne by the Transferor. |
| (s). | There
are no claims pending, or, to the knowledge of the Transferor, threatened to be brought,
in any court or administrative agency by any former or current employee for compensation,
pending severance benefits, vacation time, vacation pay or pension benefits, or any other
claim threatened or pending in any court or administrative agency from any current or former
employee or any other person arising out of the Company’s status as employer, whether
in the form of claims for employment discrimination, harassment, unfair labor practices,
grievances, wrongful discharge, breach of contract, tort, unfair competition, or otherwise,
except as disclosed to the Transferee during the due diligence process.. |
| (t). | all costs and expenses, including
but not limited to legal fees, attorney fees, settlement fees or any compensation) arising
from and/or in relation to any confirmed and/or potential employment disputes as disclosed
by the Transferee in the due diligence process shall be borne by Transferor. |
| (u). | since
the Transferor became the shareholder of the Company: |
| i. | the Company
has timely filed all Tax Returns required to be filed, and has paid all Taxes owed (whether
or not shown, or required to be shown, on Tax Returns). In addition, the Company has withheld
and paid all Taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, shareholder, or other third party.
All Tax Returns filed by the Company were compete and correct in all respects, and such Tax
Returns correctly reflected the facts regarding the income, business, assets, operations,
activities, status and other matters of the Company and any other information required to
be shown thereon. |
| ii. | None of the
Tax Returns filed by the Company or Taxes payable by the Company have been subject to an
audit, action, suit, proceeding, claim, examination, deficiency, or assessment by any Tax
Authority, and no such audit, action, suit, proceeding, claim, examination, deficiency, or
assessment is currently pending or, to the knowledge of the Company and the Transferor, threatened. |
| 6.2 | Each of the
Transferee and the Transferor hereby represents, warrants and undertakes to the other Party
as of the Signing Date and as of Completion that: |
| (a) | it has all necessary
power (if appropriate, corporate power) and authority to enter into this Agreement, to carry
out its obligations hereunder and to complete the transactions contemplated hereby; and |
| (b) | the execution
and delivery of this Agreement, the performance of its obligations hereunder and the transactions
contemplated hereby have been or will have been duly executed and delivered by it, and (assuming
due authorization, execution and delivery by it) this Agreement constitutes its legal, valid
and binding obligations. |
| 7.1 | During the
period from the date of this Agreement (except as otherwise indicated) and continuing until
the earlier of the rescission of this Agreement or the Completion, the Transferor procures
(except as expressly contemplated by this Agreement or otherwise permitted with Transferee’s
prior written consent) each to the extent legally possible that: |
| (a). | the Company
will carry on its business in the ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent with such business, use all reasonable best efforts
consistent with past practice and policies to preserve intact its present business organization,
keep available the services of its present officers, consultants and employees and preserve
its relationships with customers, suppliers and distributors and others having business dealings
with it. The Company will confer on a regular and frequent basis with representatives of
the Transferee to report operational matters of a material nature and to report the general
status of the ongoing operations of the business of the Company. |
| (b). | the Company
will not (i) declare or pay any dividends on or make other distributions to its shareholders
(whether in cash, shares or property); (ii) change or sell, or agree to the change or
sell of any share capital of the Company, any agreements, contracts, restrictions, or rights
of any character obligating the Company to change or sell any such share capital of the Company;
(iii) repurchase or otherwise acquire, directly or indirectly, any share capital or
options or warrants related thereto. |
| (c). | The Company
will not amend its articles of association, except for amending in accordance with this Agreement
and/or the Joint Venture Agreement. |
| (d). | the Company
will not authorize, recommend, propose or enter into a letter of intent (whether or not binding),
an agreement in principle or an agreement with respect to any merger, consolidation or business
combination, or any acquisition of assets or shares of other entities. |
| (e). | The Company
will not sell, lease, license, transfer, mortgage, encumber or otherwise dispose of any of
its material assets or cancel, release, or assign any material indebtedness or claim, except
in the ordinary course of business. |
| (f). | The Company
will not incur any indebtedness for borrowed money by way of direct loan, purchase money
obligation, conditional sale, guarantee or otherwise. |
| (g). | The Company
will not settle any claim, action or proceeding, except in the ordinary course of business
consistent with prior practice. |
| (h). | Subject
to contractual and other obligations, the Company will give the Transferee and its representatives
full access, at a place reasonably acceptable to the Company, during reasonable business
hours and following reasonable notice but in such a manner as not unduly to disrupt the business
of the Company, to its senior management, senior technical personnel, premises, properties,
contracts, commitments, books, records, and affairs, and will provide the Transferee with
such financial, technical and operating data and other information pertaining to its business
as the Transferee may request. With the Company’s prior consent, which will not be
unreasonably withheld, the Transferee will be entitled in conjunction with the Company personnel
to make appropriate inquiries of third parties in the course of its investigation. |
| 7.2 | After the Completion, the Transferor
procures (except as expressly contemplated by this Agreement or otherwise permitted with Transferee’s prior written consent) that |
| (a). | The remaining
portion of receivables unpaid to the Company as of the Accounts Date (in the amount of EUR
[12,460,000], in words: [fourteen million eight hundred sixty thousand]) shall be paid to
the Company as follows: EUR 10,390,000 shall be paid within October 2024, and 2,070,000
shall be paid within November 2024. |
| (b). | The loan
owned by the Company to the Transferor, amounting to EURO 14,000,000 shall be repaid gradually
based on the cash position of the Company, and shall be repaid in full by the end of December 2024. |
| 8. | CONFIDENTIALITY OF INFORMATION |
| 8.1 | Each Party undertakes
with the other Party that it shall treat as strictly confidential all information received
or obtained orally or in writing by it or its employees, agents or advisers as a result of
entering into or performing this Agreement including information relating to the provisions
of this Agreement, the negotiations leading up to this Agreement, the subject matter of this
Agreement or the business or affairs of the other Party or any subsidiary undertaking or
parent undertaking of the other Party, and that it shall not at any time hereafter disclose
or divulge to any person any such information and shall use its best endeavours to prevent
the publication or disclosure of any such information. |
| 8.2 | The restrictions
contained in Clause 7.1 shall not apply so as to prevent any Party from making any disclosure
required by law or by any securities exchange or supervisory or regulatory or governmental
body pursuant to rules to which the relevant Party is subject, or from making any disclosure
to any employees, agents or advisers (a) who have a need to know such information in
connection with the transactions contemplated by this Agreement or (b) for the purposes
of obtaining advice (provided always that the provisions of this Clause 7 shall apply to,
and each Party shall procure that it applies to and is observed in relation to, the use or
disclosure by such employees, agents or advisers of the information provided to them), nor
shall the restrictions apply in respect of any information which comes into the public domain
otherwise than by a breach of this Clause 7 by such Party. |
| 9.1 | Subject to Clause
9.2, each Party shall bear its own expenses incurred in connection with the negotiation,
preparation, and execution of this Agreement and the transactions provided for in this Agreement. |
| 9.2 | The costs of
notarization of the Agreement shall be borne equally by the Parties; register fees incurred
in connection with the consummation of this Agreement shall be borne by the Transferor. |
| 9.3 | All taxes, fees
and other charges due in connection with this Agreement and the transfer of the Shares shall
be borne by the Parties according to the stipulations of applicable laws. |
| 10.1 | Any notice
required to be given by a Party to the other Party shall be in writing and shall be deemed
validly served by hand delivery or by prepaid registered mail sent through the post (airmail
if to an overseas address) or by email to its address given and any notice served by hand
shall be deemed to have been served on delivery, any notice served or by email shall be deemed
to have been served when sent and any notice served by prepaid registered letter shall be
deemed to have been served 48 hours (72 hours in the case of a letter sent by airmail to
an address in another country) after the time at which it was posted and in proving service
it shall be sufficient (in the case of service by hand and prepaid registered letter) to
prove that the notice was properly addressed and delivered or posted, as the case may be,
and in the case of service by email to prove that the transmission was confirmed as sent
by the email system. |
Each
of the Parties hereto undertakes to the other Party that it shall do all such acts and things and execute all such deeds and documents
as may be necessary or desirable to carry into effect or to give legal effect to the provisions of this Agreement and the transactions
hereby contemplated.
| 12.1 | The Transferor
hereby agree to defend, indemnify and hold Transferee harmless from and against, and to reimburse
Transferee with respect to, any and all losses, damages, liabilities, claims, judgments,
settlements, fines, costs and expenses (including reasonable legal fees and reasonable expenses
of investigation) (the “Indemnifiable Amounts”), of every nature whatsoever
incurred by Transferee (which will be deemed to include any of the foregoing incurred by
the Company) caused by or arising out of or in connection with (i) any inaccuracy in
or breach, by the Company or the Transferor, of any representation or warranty of the Company
or the Transferor contained in this Agreement; (ii) the failure, partial or total, of
the Company or any of the Transferor to perform any agreement or covenant required by this
Agreement; (iii)the failure to deliver, or procure the delivery of any document, obligation,
or activity which shall be delivered at the Completion as set forth in Clause 5.1(a), and
(iv) any federal or state Tax liability, or asserted liability, of the Company attributable
to periods (or any portion thereof) beginning on the date the Transferor became the shareholder
of the Company and ending on or prior to the Completion provided that such liabilities were
not accrued for on the balance sheet. |
| 12.2 | The Transferee
hereby agree to defend, indemnify and hold Transferor harmless from and against, and to reimburse
Transferor with respect to, any and all losses, damages, liabilities, claims, judgments,
settlements, fines, costs and expenses (including reasonable legal fees and reasonable expenses
of investigation) (the “Indemnifiable Amounts”), of every nature whatsoever incurred
by Transferor (which will be deemed to include any of the foregoing incurred by the Company)
caused by or arising out of or in connection with (i) the failure to deliver, or procure
the delivery of any document, obligation, or activity which shall be delivered at the Completion
as set forth in Clause 5.1(b), and (ii) any inaccuracy in or breach of any representation
or warranty of the Transferee contained in this Agreement. |
| 12.3 | The Transferor or the Transferee,
as the case may be, shall without undue delay reach an agreement with the Transferee or the Transferor regarding the Indemnifiable Amounts
and the specific plan of indemnification (“Indemnification Plan”) within 10 Business Days upon receiving such written
notification. The Indemnifiable Amounts shall be paid in accordance with the Indemnification Plan within 30 Business Days. |
| 13.1 | This Agreement
constitutes the whole agreement between the Parties and supersedes and terminates any previous
agreements or arrangements between them relating to the subject matter hereof; it is expressly
declared that no variations hereof shall be effective unless made in writing signed by duly
authorized representatives of the Parties. |
| 13.2 | All of the
provisions of this Agreement shall remain in full force and effect notwithstanding Completion
(except insofar as they set out obligations which have been fully performed at Completion). |
| 13.3 | If any provision
or part of a provision of this Agreement shall be, or be found by any authority or court
of competent jurisdiction to be, invalid or unenforceable, such invalidity or unenforceability
shall not affect the other provisions or parts of such provisions of this Agreement, all
of which shall remain in full force and effect. |
| 14. | GOVERNING
LAW AND DISPUTE RESOLUTION |
The validity,
construction, implementation and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the
Federal Republic of Germany.
Any dispute,
controversy or claim arising in any way out of or in connection with this Agreement (including, without limitation: (1) any contractual,
pre-contractual or non-contractual rights, obligations or liabilities; and (2) any issue as to the existence, validity or termination
of this Agreement) shall be referred to and finally resolved by arbitration administered by the German Institution of Arbitration e.V.
(DIS), in each case in the versions effective at the commencement of the arbitration proceedings, without recourse to the ordinary courts
of law. The arbitral tribunal shall consist of three arbitrators. The place of the arbitration proceedings shall be Frankfurt am Main.
The language of the arbitral proceedings shall be English. Taking of evidence shall also be permitted in the German language. The Sellers
may testify as witnesses. Any award of the Tribunal shall be made in writing and shall be final and binding on the Parties from the day
it is made.
[the rest is
intentionally left blank]
Lotus Technology Innovative Limited
| By: |
/s/
Authorized Signatory |
|
| Name: |
Authorized Signatory |
|
Geely UK Limited
| By: |
/s/
Authorized Signatory |
|
| Name: |
Authorized Signatory |
|
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