Exhibit 10.1

  

EXECUTION VERSION

 

Ruili Group Co., Ltd.

No. 2666 Kaifaqu Avenue,

Ruian City, Zhejiang Province 325200, PRC

November 29, 2019

 

Ruili International Inc.

1209 Orange Street,

Wilmington, Delaware 19801

 

Re: Equity Commitment Letter

 

Ladies and Gentlemen:

 

Ruili Group Co., Ltd. (including its successors or permitted assigns, the
“Sponsor”) is pleased to offer this commitment, subject to the terms and
conditions contained in this letter agreement (“Agreement”), to purchase,
directly or indirectly, equity interests of Ruili International Inc., a company
incorporated in the state of Delaware (“Parent”). Reference is made to the
Agreement and Plan of Merger, to be entered into concurrently with this
Agreement (as may be amended, restated, supplemented or otherwise modified from
time to time in accordance with its terms, the “Merger Agreement”), by and among
the Parent, Ruili International Merger Sub Inc., a newly formed Delaware company
and a wholly owned subsidiary of Parent (“Sub”), and SORL Auto Parts, Inc., a
Delaware corporation (the “Company”), pursuant to which Sub will be merged with
and into the Company, with the Company surviving that merger on the terms and
conditions set forth in the Merger Agreement (the “Merger”). In the Merger, each
share of common stock, par value $0.002 per share, of the Company, will be
converted into the right to receive the Merger Consideration as set forth in the
Merger Agreement. This Agreement is being delivered to the Parent in connection
with the execution of the Merger Agreement by the Company, Parent and Sub.
Capitalized terms not otherwise defined in this Agreement shall have the
meanings ascribed to them in the Merger Agreement, as in effect on the date
hereof.

 

1. Commitment. This Agreement confirms the commitment of the Sponsor, upon the
terms and subject to the conditions set forth herein and in the Merger
Agreement, to purchase, or to cause one or more of its respective Affiliates to
purchase, prior to or at the Closing, equity interests of Parent representing
41.16% of the outstanding and issued common stock of Parent for an aggregate
amount equal to the product of the Aggregate Merger Consideration (as defined
below) plus related Transaction Costs (as defined below) in immediately
available funds (such sum, the “Commitment”). The Sponsor may effect the funding
of the Commitment directly or indirectly through one or more of its
intermediaries or Affiliates of the Sponsor, but the foregoing shall not relieve
the Sponsor of its obligations to fund any portion of the Commitment except to
the extent any of such intermediaries or Affiliates have actually funded such
portion pursuant to and in accordance with this Agreement. The proceeds of the
Commitment shall be used by Parent solely for the purpose of enabling Parent to
(a) pay the total amount of Merger Consideration to consummate the Merger
pursuant to and in accordance with the Merger Agreement at the time of Closing
(the “Aggregate Merger Consideration”), (b) pay all other amounts required to be
paid by Parent and Sub pursuant to and in accordance with the Merger Agreement,
(c) pay any and all fees and expenses of Parent and Sub in connection with the
Merger and the other transactions contemplated by the Merger Agreement, and (d)
satisfy all of Parent and Sub’s other payment obligations in connection with the
Merger and the other transactions contemplated by the Merger Agreement
(collectively, the “Transaction Costs”); provided, however, that the Sponsor
shall not, under any circumstances, be obligated to purchase equity from Parent
or otherwise provide any funds to Parent in an amount exceeding the amount of
the Commitment. The term “Commitment” means an amount equal to: (i)
US$37,502,844.96 (such amount, the “Maximum Commitment”); or (ii) such lesser
amount as in the aggregate suffices to fully fund an amount equal to the sum of
the Aggregate Merger Consideration and the Transaction Costs pursuant to, and in
accordance with, the Merger Agreement and the transactions contemplated thereby.
The Sponsor hereby confirms that it has available funds in an amount not less
than the RMB-equivalent of the Maximum Commitment and no internal or other
approval is required for it to fulfill its obligations hereunder (other than
those internal or other approvals which the Sponsor has obtained as of the date
hereof). Notwithstanding anything else to the contrary in this Agreement, the
aggregate amount of direct or indirect liability of the Sponsor under this
Agreement shall at no time exceed the amount of the Commitment less any portion
thereof that has been funded by the Sponsor to Parent in accordance with the
terms hereof.

 

 

 

 

2. Conditions to Funding. The Sponsor’s obligation to fund the Commitment is
subject only to the satisfaction or valid waiver by Parent of the conditions to
Parent’s and Sub’s obligations to consummate the Merger as set forth in Article
VIII of the Merger Agreement (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to those conditions being
satisfied as of such time) in accordance with the Merger Agreement.
Notwithstanding the foregoing, if the Company is awarded specific performance
with respect to the obligations of Parent and Sub to effect the Closing pursuant
to the Merger Agreement, the conditions set forth above shall be deemed
satisfied.

 

3. Termination. This Agreement, and the Sponsor’s obligation to fund the
Commitment, will terminate automatically upon the earlier to occur of (a)
consummation of the Closing and the payment by Parent and Sub of all amounts
required to be made by them under the Merger Agreement, or (b) the valid
termination of the Merger Agreement in accordance with its terms; provided that,
if any claim or proceeding has been commenced by the Company to seek specific
performance of the obligations of Parent and Sub to effect the Closing pursuant
to the Merger Agreement, this Agreement and the Sponsor’s obligation to fund the
Commitment shall survive until the earlier of (i) a final, non-appealable
judgment from a court of competent jurisdiction in respect of such claim or
proceeding (and, if determined in such judgment, payment of all amounts required
to be made by Parent and Sub) and (ii) the consummation of the Closing and the
payment by Parent and Sub of all amounts required to be made by them under the
Merger Agreement. From and after the valid termination of the obligation to fund
the Commitment in accordance with the preceding sentence, neither Sponsor nor
any Related Party (as defined below) of the Sponsor will have any liability or
obligation to any Person as a result of this Agreement.

 

4. No Recourse. Notwithstanding anything that may be expressed or implied in
this Agreement, no Person other than the Sponsor shall have any liability for
any obligations or liabilities hereunder and (a) notwithstanding that the
Sponsor may be a limited liability company, no recourse hereunder shall be had
against any former, current or future direct or indirect director, officer,
employee, agent, partner, manager, member, security holder, Affiliate,
stockholder, controlling Person, attorney or Representative of the Sponsor,
other than the Sponsor, Parent, Sub or their respective successors or assigns (a
“Related Party”) or any Related Party of any of the Sponsor’s Related Parties
(including without limitation, in respect of any liabilities or obligations
arising under, or in connection with the Merger, the Merger Agreement and the
transactions contemplated thereby or with respect to any Legal Proceeding,
including without limitation, in the event that either Parent or Sub breaches
its obligations under the Merger Agreement and including whether or not Parent’s
or Sub’s breach is caused by the breach by the Sponsor of its obligations under
this Agreement) whether by the enforcement of any judgment or assessment or by
any legal or equitable proceeding, or by virtue of any statute, regulation or
other applicable Law, and (b) no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any Related Party of the Sponsor or
any Related Party of the Sponsor’s Related Parties under this Agreement or for
any claim based on, in respect of, or by reason of such obligations hereunder or
by their creation. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any Person, other than the Company (solely to the extent
provided for in the first sentence of Section 6 of this Agreement), Parent, and
the Sponsor, any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement. For the avoidance of doubt, this Section 4 shall not
in any manner limit, restrict or affect any of the Related Parties’ obligations
or liabilities under (i) the Merger Agreement, (ii) that certain Equity
Contribution and Voting Agreement, dated as of the date hereof, by and among
Parent and Rollover Shareholders (the “Support Agreement”), or (iii) that
certain Undertaking, dated as of the date hereof, by and among the Sponsor,
Parent, Sub, Rollover Shareholders and certain other parties thereto (the
“Undertaking”), to which a Related Party is a party.

 

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5. Assignment; Reliance. This Agreement, Parent’s rights hereunder and the
Sponsor’s obligations to fund the Commitment hereunder shall not be assignable
to any other party without the prior written consent of the other parties
hereto, and any attempted assignment without such consent shall be null and void
and of no force and effect, except that the Sponsor may assign its obligations
to fund the Commitment hereunder to Affiliates of the Sponsor without the
consent of Parent; provided, however, that notwithstanding any such assignment,
the Sponsor shall remain liable to perform all of its obligations hereunder. The
Sponsor acknowledges that Parent and the Company have entered into the Merger
Agreement, and Parent will proceed with and consummate the Merger in reliance
upon, among other things, the Sponsor’s obligation to fund the Commitment as set
forth herein.

 

6. Third Party Beneficiaries. The Company is hereby made an express third party
beneficiary of this Agreement with the right to rely on the Agreement and to
cause the Sponsor to fund its Commitment pursuant to and in accordance with
Section 1 to enable Parent and Sub to effect the Closing under the Merger
Agreement; and, provided, further, that the right of the Company to enforce
Section 1 of this Agreement pursuant to this Section 6 is subject to the terms,
conditions and limitations set forth in the Merger Agreement. Except as set
forth in the preceding sentence, nothing set forth in this Agreement shall be
construed to confer upon or give any Person other than Parent any benefits,
rights or remedies under or by reason of, or any rights to enforce or cause
Parent to enforce, the Commitment or any provisions of this Agreement. For the
avoidance of doubt and notwithstanding anything to the contrary in any other
Section of this Agreement or in the Merger Agreement, and notwithstanding that
this Agreement is referred to in the Merger Agreement, no party (including any
Subsidiaries and Affiliates of the Company or any of Parent’s creditors) other
than Parent and the Company in the limited circumstances described above, shall
have any rights against the Sponsor pursuant to this Agreement.

 

7. Representations and Warranties. The Sponsor represents, warrants, and
covenants to Parent that: (a) it has (and will continue to have) the requisite
capacity and authority to execute and deliver this Agreement and to fulfill, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby; (b) the execution, delivery and performance of this
Agreement by it has been duly and validly authorized and approved by all
necessary action, and no other proceedings or actions on the part of it are
necessary therefor; (c) this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding agreement of it
enforceable by Parent against it in accordance with its terms (except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar Laws affecting the enforcement of
creditors’ rights generally or by general principles of equity); (d) it has (and
will continue to have) available funds not less than the sum of the Maximum
Commitment plus the aggregate amount of all other commitments and obligations
the Sponsor currently has outstanding; (e) the execution, delivery and
performance by it of this Agreement do not and will not (i) violate any Laws,
(ii) result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of any benefit under, or otherwise
require the consent or approval of any other Person pursuant to, any contract to
which it is a party, or (iii) violate any of its organizational documents; (f)
the Maximum Commitment is equal to or less than the maximum amount that the
Sponsor is permitted to invest in any one portfolio investment or in any form
through any method pursuant to the terms of its constituent documents; (g) all
consents, approvals, authorizations, permits of, filings with and notifications
to, any Governmental Entity or any other Person necessary for the due execution,
delivery and performance of this Agreement by it have been obtained or made, and
all conditions thereof have been duly complied with an no other action by, and
no notice to or filing with, any Governmental Entity or any other Person, is
required in connection with the execution, delivery and performance of this
Agreement; and (h) there is no Legal Proceeding pending against it, or, to the
knowledge of it, threatened against it or any other Person, that restricts or
prohibits (or, if successful, would restrict or prohibit) the performance by it
of its obligations under this Agreement.

 

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8. Relationship of the Parties. The Sponsor and Parent acknowledge and agree
that (a) this Agreement is not intended to, and does not, create any agency,
partnership, fiduciary or joint venture relationship or act in concert between
the parties hereto and neither this Agreement nor any other document or
agreement entered into by either party hereto relating to the subject matter
hereof shall be construed to suggest otherwise and (b) the obligations of the
Sponsor under this Agreement is solely contractual in nature.

 

9. Amendment and Waiver; No Modification. No amendment or waiver of any
provision of this Agreement will be valid and binding unless it is in writing
and signed by each party hereto and the Company. Neither this Agreement nor any
provision hereof may be amended, modified, supplemented, terminated or waived
except by an agreement in writing signed by each of Parent, the Sponsor and the
Company.

 

10. Governing Law; Consent to Jurisdiction; Service of Process; Venue. This
Agreement shall be governed and construed in accordance with the laws of the
State of Delaware applicable to contracts to be made and performed entirely
therein without giving effect to the principles of conflicts of law thereof or
of any other jurisdiction. All claims, actions, suits and arising out of or
relating to this Agreement shall be brought and determined in the Court of
Chancery of the State of Delaware or, only if the Court of Chancery of the State
of Delaware declines to accept or does not have jurisdiction over a particular
matter, any court of the United States or any state court located in the State
of Delaware (and each such party shall not bring any Legal Proceeding arising
out of or relating to this Agreement in any court other than the aforesaid
courts), and each of the parties hereto hereby irrevocably submits with regard
to any such Legal Proceeding for itself and in respect to its property,
generally and unconditionally, to the exclusive jurisdiction of the aforesaid
courts. Each of parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any such
Legal Proceeding, (i) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure to
lawfully serve process, (ii) that it or its property is exempt or immune from
jurisdiction of such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution of judgment, execution of judgment or otherwise), and (iii)
that (x) such Legal Proceeding in any such court is brought in an inconvenient
forum, (x) the venue of such Legal Proceeding is improper and (z) this Agreement
or the subject matter hereof or thereof, may not be enforced in or by such
courts.

 

11. Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect
of any suit, action or other proceeding directly or indirectly arising out of,
under or in connection with this Agreement. Each party hereto (a) certifies that
no Representative, agent or attorney of any other party has represented,
expressly or otherwise, that such party would not, in the event of any action,
suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement, by, among other things, the mutual waiver and certifications in this
Section 11.

 

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12. Complete Agreement. This Agreement, together with the Undertaking, the
Support Agreement, and the Merger Agreement, contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
contemporaneous or prior agreements or understandings, both written and oral,
between or among Parent or any of its Affiliates, on the one hand, and the
Sponsor or any of its Affiliates, on the other hand, with respect to the subject
matter hereof.

 

13. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

 

14. Miscellaneous. This Agreement may be executed in any number of counterparts,
as if the signatures to each counterpart were upon a single instrument, and all
such counterparts together shall be deemed an original of this Agreement.
Facsimile signatures or signatures received as a pdf attachment to electronic
mail shall be treated as original signatures for all purposes of this Agreement.
This Agreement shall become effective upon its acceptance by Parent, as
evidenced by the delivery to the Sponsor of a counterpart of this Agreement
executed by Parent, with a copy provided to the Company. The parties hereto have
participated jointly in negotiating and drafting this Agreement. If an ambiguity
or a question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provision of this Agreement.

 

Remainder of Page Intentionally Left Blank. Signature Page to Follow.

 

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IN WITNESS WHEREOF, this Agreement is executed and effective as of date first
written above.

 

  Sponsor:         Ruili Group Co., Ltd.         By: /s/ Xiaoping Zhang   Name:
Xiaoping Zhang   Title: Legal Representative         ACCEPTED AND AGREED:      
  Ruili International Inc.         By: /s/ Xiaoping Zhang   Name: Xiaoping Zhang
  Title: Director

 

[Signature Page to Equity Commitment Letter]