Document:

Kandi Technologies Group, Inc.: Exhibit 10.2 - Filed by newsfilecorp.com

Exhibit 10.2

FT Global Capital, Inc. 

  1200 Abernathy Road 

  Building
  600 

  Suite 1700 

  Atlanta, GA 30328

	 	June 18th, 2013 

Hu Xiaoming
Chairman & Chief Executive Officer 
Kandi
Technologies, Inc. 
Jinhua City Industrial Zone 
Jinhua, Zhejiang Province

People’s Republic of China, 321016 

Re: Placement Agent Agreement

Dear Mr. Hu: 

     The purpose of this letter
agreement (this “Engagement Letter” or this “Agreement”) is to set
forth the terms and conditions pursuant to which FT Global Capital, Inc.
(“FTGC” or the “Placement Agent”), shall serve as the Lead
Placement Agent for Kandi Technologies, Inc. (the “Company”), on a “best
efforts” basis, in connection with the proposed placement (the
“Placement”) of registered securities (the “Securities”) of the
Company, which may include shares (the “Shares”) of the Company’s common
stock (the “Common Stock”) pursuant to a “shelf takedown.” 

     This Agreement shall become
effective upon the date it is signed by the Company (the “Effective
Date”). 

     The terms of such Placement and
the Securities shall be mutually agreed upon by the Company and the investors
(each, an “Investor” and collectively, the “Investors”) and nothing
herein enables the Placement Agent to bind the Company or any Investor. This
Agreement and the documents executed and delivered by the Company and the
Investors in connection with the Placement shall be collectively referred to
herein as the “Transaction Documents.” The date of each of the closings
of the Placement shall be referred to herein as the “Closing Date.” The
Company expressly acknowledges and agrees that the Placement Agent’s obligations
hereunder are on a reasonable “best efforts” basis only and that the execution
of this Agreement does not constitute a commitment by the Placement Agent to
purchase or to sell the Securities and does not ensure the successful placement
of the Securities or any portion thereof. The identities of the investors to
which the Placement Agent introduces the Company shall be proprietary
information of the Placement Agent and shall not be divulged to third parties by
the Company, nor used by the Company outside the scope of the
Placement Agent’s engagement as described herein, other than as required by
applicable law.

SECTION 1. COMPENSATION AND OTHER FEES. 

     (A) As compensation for the
Placement Agent’s services hereunder, the Company shall pay to the Placement
Agent (i) a cash placement fee upon each Closing, in an amount equal to six
percent (6%) of the aggregate offering price of the total amount of capital
received by the Company from the sale of its Securities to investors introduced
to the Company by the Placement Agent during the term of this Agreement (the
“Placement Agent Fee”), and (ii) a 6% cash fee payable within three
business days of (but only in the event of) the receipt by the Company of any
cash proceeds from the exercise of any warrants issued in the Placement
(“Warrants Exercise Fee”) (the Warrants Exercise Fee shall be
payable regardless of when the warrants are exercised, even if such exercise
occurs after the termination of this Agreement). Notwithstanding anything to the
contrary in this Agreement, the compensation provided for in this Agreement
shall be subject to such reduction as may be necessary for the compensation to
comply with Financial Industry Regulatory Authority (“FINRA”) Rule
5110.

     (B) Upon each Closing, the
Company shall also grant Placement Agent or its designees at the Closing
warrants (the “Placement Agent’s Warrants”) to purchase that number of shares of
common stock of the Company (“Shares”) equal to 6% of the aggregate number of
Shares placed in the Placement. The Placement Agent Warrants shall include
customary terms, such as anti-dilution and registration rights. The Exercise
price for Placement Agent Warrants will be 120% of Purchase Price of the
Placement and the Placement Agent will not have cashless exercise rights under
such warrants; provided, that, if at the time of any exercise of the Placement
Agent Warrants the Company does not have an effective registration statement for
the issuance of the warrant shares or the resale of the warrant shares, then the
Placement Agent may exercise such warrants on a cashless basis. 

     (C) The Placement Agent shall be
entitled to a Placement Agent’s Fee, calculated in the manner provided in
Section 1(A), with respect to any public or private offering or other financing
or capital-raising transaction of any kind (“Tail Financing”) to the
extent that such financing or capital is provided to the Company by investors
whom the Placement Agent had introduced to the Company during the Term, as
defined below, if such Tail Financing is consummated at any time within the
12-month period following the Effective Date (the “Tail Period”).
(The Placement Agent shall provide to the Company a list of investors it
introduced to the Company. If an investor is not on the list, the Placement
Agent shall not be compensated during the Tail Period). 

SECTION 2. COMPANY REPRESENTATIONS AND
WARRANTIES. The Company represents and warrants to, and agrees with, the
Placement Agent that: 

-2- 

     (A) The Company has filed with
the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (Registration File No. 333-188039) under the Securities Act of 1933, as amended (the “Securities
Act”), which became effective on May 23, 2013, for the registration under
the Securities Act of the Securities. At the time of such filing and on the date
hereof, the Company met the requirements of Form S-3 under the Securities Act.
Such registration statement meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies with said Rule. The Company
will file with the Commission pursuant to Rule 424(b) under the Securities Act,
and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus
included in such registration statement relating to the placement of the
Securities and the plan of distribution thereof and has advised the Placement
Agent of all further information (financial and other) with respect to the
Company required to be set forth therein. Such registration statement, including
the exhibits thereto, as amended at the date of this Agreement, is hereinafter
called the “Registration Statement”; such prospectus in the form in which
it appears in the Registration Statement is hereinafter called the “Base
Prospectus”; and the supplemented form of prospectus, in the form in which
it will be filed with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement.” Any reference in this Agreement to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to
refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the date of this Agreement, or the issue date of the
Base Prospectus or the Prospectus Supplement, as the case may be; and any
reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement, or the issue
date of the Base Prospectus or the Prospectus Supplement, as the case may be,
deemed to be incorporated therein by reference. All references in this Agreement
to financial statements and schedules and other information that
is “contained,” “included,” “described,” “referenced,” “set forth” or
“stated” in the Registration Statement, the Base Prospectus or the Prospectus
Supplement (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information that
is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. At the
date of this Agreement, no stop order suspending the effectiveness of the
Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or
has been initiated or, to the Company's knowledge, is threatened by the
Commission. For purposes of this Agreement, “free writing prospectus” has
the meaning set forth in Rule 405 under the Securities Act and the “Time of
Sale Prospectus” means the preliminary prospectus, if any, together with the
free writing prospectuses, if any, used in connection with the Placement,
including any documents incorporated by reference therein. 

-3- 

     (B) The Registration Statement
(and any further documents to be filed with the Commission) contains all
exhibits and schedules as required by the Securities Act. Each of the
Registration Statement and any post-effective amendment thereto, at the time it
became effective, complied in all material respects with the Securities Act and
the Exchange Act and the applicable Rules and Regulations and did not and, as amended or
supplemented, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement, each as of
its respective date, comply in all material respects with the Securities Act and
the Exchange Act and the applicable Rules and Regulations. Each of the Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus Supplement,
as amended or supplemented, did not and will not contain as of the date thereof
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Incorporated Documents, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations, and
none of such documents, when they were filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus Supplement), in
light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus,
the Time of Sale Prospectus, if any, or Prospectus Supplement, when such
documents are filed with the Commission, will conform in all material respects
to the requirements of the Exchange Act and the applicable Rules and
Regulations, as applicable, and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent, individually
or in the aggregate, a fundamental change in the information set forth therein
is required to be filed with the Commission. There are no documents required to
be filed with the Commission in connection with the transaction contemplated
hereby that (i) have not been filed as required pursuant to the Securities Act
or (ii) will not be filed within the requisite time period. There are no
contracts or other documents required to be described in the Base Prospectus,
the Time of Sale Prospectus, if any, or Prospectus Supplement, or to be filed as
exhibits or schedules to the Registration Statement, that have not been or will
be described or filed as required. 

     (C) The Company is currently
eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or on behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus. 

-4- 

     (D) The Company will as promptly
as practicable deliver to the Placement Agent complete conformed copies of the
Registration Statement and of each consent and certificate of experts, as
applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus,
if any, and the Prospectus Supplement, as amended or supplemented, in such
quantities and at such places as the Placement Agent reasonably requests.
Neither the Company nor any of its directors and officers has distributed and
none of them will distribute, prior to the Closing Date, any offering material
in connection with the offering and sale of the Securities other than the Base
Prospectus, the Time of Sale Prospectus, if any, the Prospectus Supplement, the
Registration Statement, copies of the documents incorporated by reference
therein and any other materials permitted by the Securities Act. 

     (E) There are no affiliations
with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the
Company. 

     (F) The Placement Agent shall
receive on each Closing Date a written opinion of counsel for the Company, dated
the Closing Date and addressed to the Placement Agent in form and substance
satisfactory to the Placement Agent, which shall include, without limitation,
opinions related to (i) the corporate existence of the Company and power to
operate its business; (ii) the corporate power and authority of the Company to
execute all agreements and perform its obligations related to the Placement;
(iii) the ability of the Company to enter into all agreements and perform its
obligations related to the Placement without contravening or violating (or
causing the triggering of any anti-dilution or similar provisions in) its
charter documents, any other agreements or any applicable law, regulation or
rule; (iv) that any Securities (and any Common Stock underlying such Securities)
will be duly authorized, fully paid, validly issued and non-assessable, as
applicable; (v) that no approval, consent, order, filing or notice is required
to complete the Placement and for the Company to perform its obligations in the
Placement; (vi) the effectiveness of the Registration Statement and that all
filings required by the Securities Act of 1933, as amended, have been made;
(vii) the listing of all Common Stock included in or underlying the Securities
on any national exchange on which the Company’s Common Stock is listed; and
(viii) the Company’s status as an “investment company” as defined in the
Investment Company Act of 1940, as amended.

     (G) The Placement Agent shall be
entitled to rely upon any and all representations and warranties of the Company
included in the purchase agreements entered into by the Company and the
Investors in connection with the Placement, subject to the qualifications and
limitations therein, including, but not limited to, any disclosure set forth on
an applicable schedule. 

SECTION 3. REPRESENTATIONS AND WARRANTIES OF
PLACEMENT AGENT. The Placement Agent represents and warrants to the Company
that: (i) it will comply with all applicable federal laws regarding trading in
securities of the Company, (ii) it will not disclose any non-public material
information of the Company without the prior written consent of the Company during the Term and the Non-exclusive Term and for a
period of one (1) year from the termination date of this Agreement, and (iii)
that it is a registered broker-dealer in good standing with the relevant
regulatory agencies.

-5- 

SECTION 4. ENGAGEMENT TERM & SURVIVAL. The
Placement Agent’s engagement under this Agreement shall be exclusive for a
period of twelve (12) months commencing on the Effective Date (the
“Term”), and thereafter shall be non-exclusive (the "Non-exclusive
Term"). Neither the Placement Agent nor the Company shall terminate the
Engagement before the Term without written consent from the other party. In the
event of the termination or expiration of this Agreement, the Placement Agent’s
compensation due under this Agreement will be payable in full and the
compensation payable under Section 1 will continue for the twelve (12) month
period (or longer if specifically set forth in Section 1) commencing with such
termination or expiration. The provisions of Sections 1, 2, 3, 4, 5, 6, 7, 9, 10
and 11 of this Agreement and Appendix A shall survive this Agreement’s
expiration or termination. 

SECTION 5. PLACEMENT AGENT INFORMATION. The
Company agrees that any information or advice rendered by the Placement Agent in
connection with this engagement is for the confidential use of the Company only
in its evaluation of the Placement and, except as otherwise required by law, the
Company will not disclose or otherwise refer to the advice or information
provided by the Placement Agent in any manner without prior written consent of
the Placement Agent. 

SECTION 6. NO FIDUCIARY RELATIONSHIP; THIRD PARTY
BENEFICIARIES. This Agreement does not create, and shall not be construed as
creating rights enforceable by any person or entity that is not a party hereto,
except those entitled hereto by virtue of the indemnification provisions hereof.
The Company acknowledges and agrees that the Placement Agent is not and shall
not be construed as a fiduciary of the Company and that the Placement Agent
shall not have any duties or liabilities to the equity holders or the creditors
of the Company or to any other person by virtue of this Agreement or the
retention of the Placement Agent hereunder, all of which are hereby expressly
waived.

SECTION 7. INDEMNIFICATION. The parties agree to
the terms of the Placement Agent’s standard indemnification agreement, which is
attached hereto as Appendix A and incorporated herein by reference.

SECTION 8. ANNOUNCEMENTS. The Company grants to
the Placement Agent the right to place customary announcement(s) of the
Placement in certain newspapers and to mail announcement(s) to persons and firms
selected by Placement Agent, at the Placement Agent’s expense, subject to the
Company’s prior approval, which shall not be unreasonably withheld. 

SECTION 9. GOVERNING LAW. This Agreement will be
governed by, and construed in accordance with, the laws of the State of Georgia
applicable to agreements made and to be performed entirely in such State. This
Agreement may not be assigned by either party without the prior written consent
of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors
and permitted assigns. Any right to trial by jury with respect to any dispute
arising under this Agreement or any transaction or conduct in connection
herewith is waived. Any dispute arising under this Agreement may be brought into
the courts of the State of Georgia located in Fulton County or into the Federal
Court located in Atlanta, Georgia and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of aforesaid courts. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by delivering a copy
thereof via overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If either party shall commence
an action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding. 

-6- 

SECTION 10. ENTIRE AGREEMENT/MISC. This Agreement
embodies the entire agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings, relating to the subject
matter hereof. If any provision of this Agreement is determined to be invalid or
unenforceable in any respect, such determination will not affect such provision
in any other respect or any other provision of this Agreement, which will remain
in full force and effect. This Agreement may not be amended or otherwise
modified or waived except by an instrument in writing signed by each of the
Placement Agent and the Company. The representations, warranties, agreements and
covenants contained herein shall survive the closing of the Placement and
delivery and/or exercise of the Securities, as applicable. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission or a .pdf format
file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or .pdf signature page were an original
thereof.

SECTION 11. NOTICES. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified on the signature pages attached
hereto prior to 6:30 p.m. (Atlanta, Georgia time) on a business day, (b) the
next business day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number on the
signature pages attached hereto on a day that is not a business day or later
than 6:30 p.m. (Atlanta, Georgia time) on any business day, (c) the business day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the 

-7- 

 

APPENDIX A - - INDEMNIFICATION PROVISIONS 

     (A) The Company agrees to
indemnify and hold harmless the Placement Agent and its affiliates and their
respective officers, directors, employees, agents, counsel, advisers and
consultants, and any persons controlling the Placement Agent or any of its
affiliates within the meaning of Section 15 of the Securities Act of 1933 or
Section 20 of the Securities Exchange Act of 1934 (the Placement Agent and each
such other person or entity being referred to herein as an “Indemnified
Person”), from and against all claims, liabilities, losses or damages (or
actions in respect thereof) or other expenses (and further agrees to advance all
expenses) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including any untrue statements made or any statements omitted to
be made) by the Company or its respective affiliates in connection with this
Agreement, the Placement or which affect the Placement; or (ii) actions taken or
omitted to be taken by an Indemnified Person with the consent or in conformity
with the actions or omissions of the Company or their respective affiliates in
connection with this Agreement, the Placement or which affect the Placement; or
(iii) any investigation, litigation, or inquiry by a regulatory or
self-regulatory agency or authority involving the Company or any transaction
arising under any agreements between the Company and the Placement Agent or (B)
are otherwise related to or arise out of the Placement Agents’ activities on
behalf of the Company or its respective affiliates pursuant to this Agreement or
(C) in any way involving or alleged to involve the Company, the Placement or the
Securities. The Company will not be responsible, however, for any losses,
claims, damages, liabilities or expenses pursuant to clause A(iii), (B) or (C)
of the preceding sentence which are finally judicially determined to have
resulted solely from such Indemnified Person’s gross negligence or from
information supplied by such Indemnified Person or by the Placement Agent itself
in writing specifically for use in the Prospectus Supplement. In addition, the
Company agrees to advance, or in the absence of advancement required hereunder
to promptly reimburse each Indemnified Person for all reasonable out-of-pocket
expenses (including fees and expenses of counsel) as they are incurred by such
Indemnified Person in connection with investigating, preparing, conducting or
defending any such action or claim, whether or not in connection with litigation
in which any Indemnified Person is a named party, or in connection with
enforcing the rights of such Indemnified Person under this Agreement, including
the costs of any claims asserted by an Indemnified Person against any
indispensible party or by way of a counterclaim in any litigation within the
scope of this provision. The Company agrees to advance such expenses incurred by
an Indemnified Person pursuant to which indemnity may be sought hereunder within
thirty (30) days after receipt by the Company of a statement requesting such
advances from time to time, whether prior to or after final disposition of any
proceeding. Such advances shall be unsecured and interest free and without
regard to the Indemnified Person’s ultimate entitlement to indemnification under
the other provisions of this Agreement. Indemnified Persons shall be entitled to
continue to receive advancement of expenses pursuant to this section unless and
until the matter of an Indemnified Person’s entitlement to indemnification
hereunder has been finally adjudicated by court order or judgment from which no
further right of appeal exists. Each Indemnified Person undertakes to repay such
amounts advanced only if, and to the extent that, it ultimately is determined
that the Indemnified Person is not entitled to be indemnified by the
Company under the provisions of this Agreement. 

     (B) Promptly after receipt by an
Indemnified Person of notice of any claim or the commencement of any action or
proceeding with respect to which the Indemnified Person is entitled to indemnity
hereunder, the Indemnified Person will notify the Company in writing of such
claim or of the commencement of such action or proceeding, and the Company will
assume the defense of such action or proceeding and will employ counsel
reasonably satisfactory to the Indemnified Person and will pay the reasonable
fees and expenses of such counsel. Notwithstanding the preceding sentence, the
Indemnified Person will be entitled to employ counsel separate from counsel for
the Company and from any other party in such action if counsel for the
Indemnified Person determines that to do so would be in the best interests of
the Indemnified Person. In such event, the reasonable fees and disbursements of
no more than one such separate counsel for all Indemnified Persons in the matter
will be paid by the Company. The Company will have the exclusive right to settle
the claim or proceeding at its sole expense provided that the Company obtains a
full and unconditional release of any claims against the Indemnified Persons
from all liability on claims that are the subject matter of such proceeding and
does not include a statement as to an admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Person. 

     (C) The Company and the Placement
Agent and any Indemnified Persons agree to notify each other promptly of the
assertion of any claim or the commencement of any action or proceeding relating
to a transaction contemplated by this engagement letter. 

     (D) If for any reason the
foregoing indemnity is unavailable to the Placement Agent or insufficient to
hold the Placement Agent harmless, then the Company shall contribute to the
amount paid or payable by the Placement Agent as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
not only the relative benefits received by the Company on the one hand and the
Placement Agent on the other, but also the relative fault of the Company on the
one hand and the Placement Agent on the other that resulted in such losses,
claims, damages or liabilities, as well as any relevant equitable
considerations. The amounts paid or payable by a party in respect of losses,
claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees and expenses reasonably incurred in defending any
litigation, proceeding or other action or claim. Notwithstanding the provisions
hereof, the Placement Agent’s share of the liability hereunder shall not be in
excess of the amount of fees actually received by Placement Agent under this
engagement letter (excluding any amounts received as reimbursement of expenses
incurred by Placement Agent). 

     (E) These indemnification
provisions shall remain in full force and effect whether or not the transaction
contemplated by this Agreement is completed and shall survive the termination of
this Agreement, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under this engagement letter or
otherwise. 

-2-exh10-1_17530.htm

EXHIBIT 10.1

 

 

AMENDMENT

TO

SENIOR SECURED CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

This Amendment is made as of June 18, 2013 by and among ZAP, a California corporation (“Company”) and China Electric Vehicle Corporation, a British Virgin Island company  (“Investor”).

 

 

RECITALS

Effective June 18, 2013, the Board of Directors adopted an amendment to the Company’s Bylaws reducing the fixed number of directors from seven (7) to five (5). As a result of the foregoing amendment to the Bylaws, the Company and Investor desire to amend the Senior Secured Convertible Note and Warrant Purchase Agreement dated as of January 12, 2011 (“Agreement”) with respect to the number of the Investor’s director designees to be elected to the Board of Directors.

AGREEMENT

1.1           Section 4.21(a) and (b)(1) of the Agreement are hereby amended to read as follows:

(a)           The Board of the Company shall not exceed five (5) members without prior written consent of the Investor and Cathaya.

(b)           The Board shall appoint directors designated as follows, and the Company shall take all necessary action, including, but not limited to, nominating such individuals for election by the stockholders, recommending such individuals to the stockholders and convening a meeting of stockholders for the election of such individuals:

(1) For as long as the Investor or Cathaya (including its affiliates and subsidiaries) hold at least 5% of the outstanding Common Stock of the Company (together or individually), Cathaya shall have the right to designate the number of designees equal to the sum of (i) the number of authorized directors of the Company divided by two, rounded down to the nearest whole number, and (ii) one. The Company shall take all action necessary to ensure that Cathaya’s designees are elected to the Board, including the Chairman of the Board. Cathaya is entitled at any time to notify the Company of its intended designees and the Company will take all efforts to ensure such designees are elected. Cathaya’s initial designee shall be Priscilla Lu, the Chairman of the Board.

  

  

  

	
  

	
1.2

	
Except as expressly set forth above, all of the terms and conditions of the Agreement remain in full force and effect.

 

	
  

	
1.3

	
This Amendment will be governed by and construed in accordance with the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

	 	
1.4 

	
This Amendment may be executed in any number of counterparts, each of which shall bean original, but all of which together shall constitute one instrument.

	
  

	
1.5

	
This Amendment may be executed and delivered by facsimile or electronic transmittal and upon such delivery the facsimile or electronic signature will be deemed to have the same effect as if the original signature had been delivered to the other party.  The original signature copy shall be subsequently delivered to the other parties.  The failure to deliver the original signature copy and/or the nonreceipt of the original signature copy shall have no effect upon the binding and enforceable nature of this Amendment.

 

[Signature Pages Follow]

 

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the date first above written.

ZAP

a California corporation

By: /s/ Chuck Schillings                    

       Chuck Schillings

       Co-Chief Executive Officer

CHINA ELECTRIC VEHICLE CORPORATION,

a British Virgin Island company

By: Cathaya Capital, L.P.

Its Sole Stockholder

By: Cathaya Capital G.P

Its General Partner

By: Cathaya Capital Co., Ltd.

Its General Partner

By: /s/ Priscilla Lu                            

       Priscilla Lu

       Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}]]