Document:

wtrh-ex102_6.htm

Exhibit 10.2

Executive Employment Agreement

This Employment Agreement (the “Agreement”) is made and entered into as of April 23, 2021 (the “Effective Date”) by and between Leo Bogdanov (“Executive”) and Waitr Holdings Inc., a corporation organized under the laws of the State of Delaware (the “Company”).

WHEREAS, the Company desires to employ Executive on the terms and conditions set forth herein; and

WHEREAS, Executive desires to be employed by the Company on such terms and conditions.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and obligations set forth herein, the parties agree as follows:

1.At-Will Employment Basis. Executive’s at-will employment hereunder shall be effective as of the Effective Date and shall continue on an at-will basis until such time as Executive’s employment with the Company terminates pursuant to Section 5 of this Agreement (such period is hereinafter referred to as the “Employment Term”).

2.Position and Duties.

2.1Position.  During the Employment Term, Executive shall serve as the Chief Financial Officer of the Company, reporting to the Board of Directors of the Company (the “Board”). In such position, Executive shall have such duties, authority, and responsibilities as shall be determined from time to time by the Board of Directors, which duties, authority, and responsibilities are consistent with Executive’s position. Executive shall, if requested, also serve as a member of the Board or as an officer or director of any affiliate of the Company for no additional compensation.

2.2Duties.  During the Employment Term, Executive shall devote substantially all of his business time and attention to the performance of Executive’s duties hereunder and will not engage in any other business, profession, or occupation for compensation or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the Chief Executive Officer. Notwithstanding the foregoing, Executive will be permitted to (a) act or serve as a director, trustee, committee member, or principal of any type of business, civic, or charitable organization and (b) purchase or own membership interest or shares as an investment in any public or private corporation; provided that, the activities described in clauses (a) and (b) do not (i) result in any breach of Executive’s obligations under Section 7 or Section 8, (ii) interfere with the performance of Executive’s duties and responsibilities to the Company as provided hereunder, including, but not limited to, the obligations set forth in Section 2 hereof, or (iii) conflict or compete in any way with the business of the Company or any of its subsidiaries or affiliates.

3.Place of Performance.  Executive shall work remotely; provided that, Executive may be required to travel on Company business during the Employment Term. 

4.Compensation.

4.1Base Salary.  During the Employment Term, the Company shall pay Executive an annual rate of base salary of $220,000 in periodic installments, less applicable deductions and withholdings, in accordance with the Company’s customary payroll practices and applicable wage payment laws, but no less frequently than monthly.  Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as “Base Salary”.  The parties acknowledge and agree that a portion of Executive’s Base Salary shall constitute consideration for Executive’s compliance with the restrictions and covenants set forth in Section 8 of this Agreement.

4.2Equity Award.  On or as soon as practicable following the Effective Date, Executive shall receive an award of 85,000 restricted stock units (the “RSU Award”) under the Waitr Holdings Inc. 2018 Omnibus Incentive Plan (the “Incentive Plan”), each restricted stock unit representing the right, subject to terms and conditions of the Incentive Plan and RSU Award to one share of Company common stock if and when the underlying RSU Award vests. The RSU Award will vest in three (3) equal installments on the first, second and third anniversaries of the grant date, subject to Executive’s continued employment through the applicable vesting date. The RSU Award will vest in full upon a Change in Control (as defined in the Incentive Plan), subject to Executive’s continued employment through the closing of such Change in Control.  The RSU Award shall be subject to the terms and conditions of the Incentive Plan and become effective upon entry into a written award agreement by and between the Company and Executive. All other terms and conditions applicable to the Award shall be determined by the Board or the Compensation Committee of the Board.

4.3Fringe Benefits and Perquisites.  During the Employment Term, Executive shall be entitled to fringe benefits and perquisites consistent with the practices of the Company and governing benefit plan requirements (including plan eligibility provisions), and to the extent the Company provides similar benefits or perquisites (or both) to similarly situated executives of the Company.

4.4Employee Benefits.  During the Employment Term, Executive shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time (collectively, “Employee Benefit Plans”), to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or terminate any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.

4.5Vacation; Paid Time-Off.  Executive shall receive vacation and other paid time-off in accordance with the Company’s policies for executive officers as such policies may exist from time to time.

4.6Business Expenses.  Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment, and travel expenses incurred by Executive in connection with the performance of Executive’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures.

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4.7Indemnification.  In the event that Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), other than any Proceeding initiated by Executive or the Company related to any contest or dispute between Executive and the Company or any of its affiliates with respect to this Agreement or Executive’s employment hereunder, by reason of the fact that Executive is or was a director or officer of the Company, or any affiliate of the Company, or is or was serving at the request of the Company as a director, officer, member, employee, or agent of another corporation or a partnership, joint venture, trust, or other enterprise, Executive shall be indemnified and held harmless by the Company to the maximum extent permitted under applicable law and the Company’s bylaws from and against any liabilities, costs, claims, and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys’ fees). Reasonable costs and expenses incurred by Executive in defense of such Proceeding (including attorneys’ fees) shall be paid by the Company in advance of the final disposition of such litigation upon receipt by the Company of: (i) a written request for payment; (ii) appropriate documentation evidencing the incurrence, amount, and nature of the costs and expenses for which payment is being sought; and (iii) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts so paid if it shall ultimately be determined that Executive is not entitled to be indemnified by the Company under this Agreement.

4.8Clawback Provisions.  Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to Executive pursuant to this Agreement or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation, or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation, or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

5.Termination of Employment.  The Employment Term and Executive’s at-will employment hereunder may be terminated by either the Company or Executive at any time and for any reason. Upon termination of Executive’s employment during the Employment Term, Executive shall not be entitled to any additional compensation and benefits from the Company or any of its affiliates post-Termination Date (as defined below).

5.1Termination by the Company or Executive.

(a)Executive’s employment hereunder may be terminated by either the Company or Executive, for any or no reason. Upon termination, Executive shall be entitled to receive:

(i)any accrued but unpaid Base Salary through the Termination Date, which shall be paid on the pay date immediately following the Termination Date in accordance with the Company’s customary payroll procedures;

(ii)reimbursement for unreimbursed business expenses properly incurred by Executive through the Termination Date, which shall be subject to 

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and paid in accordance with the Company’s expense reimbursement policy (the amounts described in 5.1(a)(i) and (ii) are collectively referred to as “Accrued Amounts”); and

(iii)such employee benefits, if any, to which Executive may be entitled under the Company’s employee benefit plans as of the Termination Date; provided that, in no event shall Executive be entitled to any payments in the nature of severance or termination payments.

5.2Death. 

(a)Executive’s employment hereunder shall terminate automatically upon Executive’s death and Executive’s estate and/or beneficiaries, as the case may be, shall be entitled to receive the following:

(i)the Accrued Amounts; and

(ii)any post-employment benefits due under the terms and conditions of the Employee Benefit Plans.

5.3Notice of Termination.  Any termination of Executive’s employment hereunder by the Company or by Executive (other than termination pursuant to Section 5.2 on account of Executive’s death) shall be communicated by written notice of termination (“Notice of Termination”) to the other party hereto in accordance with Section 25.

5.4Termination Date.  Executive’s “Termination Date” shall be: 

(a)if Executive’s employment hereunder terminates on account of Executive’s death, the date of Executive’s death; and

(b)if either the Company terminates Executive’s or Executive terminates his employment, upon the date the Notice of Termination is delivered to the respective party.

Notwithstanding anything contained herein, the Termination Date shall not occur until the date on which Executive incurs a “separation from service” within the meaning of Section 409A (as defined in Section 23 of this Agreement).

5.5Resignation of All Other Positions. Upon termination of Executive’s employment hereunder for any reason, Executive agrees to resign, effective on the Termination Date, from all positions that Executive holds as an officer or member of the Board (or a committee thereof) of the Company or any of its affiliates.

5.6Section 280G. 

(a)Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits received or to be received by Executive (including, without limitation, any payment or 

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benefits received in connection with a Change in Control or Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement, or otherwise) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and will be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Company shall either (i) reduce (but not below zero) such payments or benefits received or to be received by Executive so that the aggregate present value of the payments and benefits received by Executive is $1.00 less than the amount which would otherwise cause Executive to incur an Excise Tax, or (ii) be paid in full, whichever results in the greatest net after-tax payment to Executive.

(b)All calculations and determinations under this Section 5.6 shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding on the Company and Executive for all purposes. For purposes of making the calculations and determinations required by this Section 5.6, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company and Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this Section 5.6. The Company shall bear all costs the Tax Counsel may reasonably incur in connection with its services. 

6.Cooperation.  The parties agree that certain matters in which Executive will be involved during the Employment Term may necessitate Executive’s cooperation in the future. Accordingly, following the termination of Executive’s employment for any reason, to the extent reasonably requested by the Board, Executive shall cooperate with the Company in connection with matters arising out of Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive’s other activities. The Company shall reimburse Executive for reasonable expenses incurred in connection with such cooperation and, to the extent that Executive is required to spend substantial time on such matters, the Company shall compensate Executive at an hourly rate based on Executive’s Base Salary on the Termination Date.

7.Confidential Information.  Executive understands and acknowledges that during the Employment Term, he will have access to and learn about Confidential Information, as defined below.

7.1Confidential Information Defined. 

(a)Definition.

For purposes of this Agreement, “Confidential Information” includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to information that is used, developed or obtained by the Company or any of its affiliates (collectively, the “Company Group”) in connection with its business, including, but not limited to, information, observations and data obtained by Executive during 

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Executive’s employment with the Company concerning: business affairs, business processes, practices, products, methods, policies, plans, publications, documents, research, operations, services, fees, pricing structures, analyses, photographs, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, applications, operating systems, software design, web design, work-in-process, databases, manuals, records, articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, market studies, sales information, revenue, costs, formulae, notes, communications, algorithms, product plans, designs, styles, models, inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer lists, client information, client lists, restaurant partner list of the Company Group or its businesses or any existing or prospective customer, supplier, investor or other associated third party, or of any other person or entity that has entrusted information to the Company Group in confidence. 

Executive understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used. 

Executive understands and agrees that Confidential Information includes information developed by him in the course of his employment by the Company as if the Company furnished the same Confidential Information to Executive in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to Executive; provided that, such disclosure is through no direct or indirect fault of Executive or person(s) acting on Executive’s behalf.

(b)Company Creation and Use of Confidential Information.

Executive understands and acknowledges that the Company has invested, and continues to invest, substantial time, money, and specialized knowledge into developing its resources, creating a customer base, generating customer and potential customer lists, training its employees, and improving its offerings in the field of restaurant delivery services. Executive understands and acknowledges that as a result of these efforts, the Company has created, and continues to use and create Confidential Information. This Confidential Information provides the Company with a competitive advantage over others in the marketplace. 

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(c)Disclosure and Use Restrictions.

Executive agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate, or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or part, to any entity or person whatsoever (including other employees of the Company) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside of the direct employ of the Company except as required in the performance of Executive’s authorized employment duties to the Company or with the prior consent of the Board acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of the Company, except as required in the performance of Executive’s authorized employment duties to the Company or with the prior consent of the Board acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. Executive shall promptly provide written notice of any such order to the Board.

(d)Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 (“DTSA”). Notwithstanding any other provision of this Agreement: 

(i)Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that:

(A)is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or 

(B)is made in a complaint or other document filed under seal in a lawsuit or other proceeding.

(ii)If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive:

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(A)files any document containing trade secrets under seal; and

(B)does not disclose trade secrets, except pursuant to court order.

Executive understands and acknowledges that his obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon Executive first having access to such Confidential Information (whether before or after he begins employment by the Company) and shall continue during and after his employment by the Company until such time as such Confidential Information has become public knowledge other than as a result of Executive’s breach of this Agreement or breach by those acting in concert with Executive or on Executive’s behalf.

8.Restrictive Covenants.

8.1Acknowledgement. Executive understands that the nature of Executive’s position gives him access to and knowledge of Confidential Information and places him in a position of trust and confidence with the Company. Executive understands and acknowledges that the intellectual services he provides to the Company are unique, special, or extraordinary. Executive further understands and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by Executive is likely to result in unfair or unlawful competitive activity.

8.2Non-Competition.  Because of the Company’s legitimate business interest as described herein and the good and valuable consideration offered to Executive, during the Employment Term and for the twelve (12) month period beginning on the last day of Executive’s employment with the Company, Executive agrees and covenants not to engage in Prohibited Activity within any state or jurisdiction in which the Company or its subsidiaries then operate, have operated at any time during the Employment Term or demonstrably propose or intend to operate (the “Restricted Territory”).

For purposes of this Section 8, “Prohibited Activity” is activity in which Executive contributes his knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to an entity engaged in the same or similar business as the Company, including those engaged in the business of food delivery. Prohibited Activity also includes activity that may require or inevitably requires disclosure of trade secrets, proprietary information, or Confidential Information.

The Company regards the following as its primary, but not exclusive, competitors engaged in the business of food delivery: Uber Eats, GrubHub and DoorDash.

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Nothing herein shall prohibit Executive from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that Executive is not a controlling person of, or a member of a group that controls, such corporation.

This Section 8 does not, in any way, restrict or impede Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. Executive shall promptly provide written notice of any such order to the Board.

8.3Non-Solicitation of Employees.  Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company during the Employment Term and a twenty-four (24) month period beginning on the last day of Executive’s employment with the Company.

8.4Non-Solicitation of Customers.  Executive understands and acknowledges that because of Executive’s experience with and relationship to the Company, he will have access to and learn about much or all of the Company’s customer information. “Customer information” includes, but is not limited to, names, phone numbers, addresses, e-mail addresses, order history, order preferences, chain of command, pricing information, and other information identifying facts and circumstances specific to the customer and relevant to sales and services. 

Executive understands and acknowledges that loss of this customer relationship and/or goodwill will cause significant and irreparable harm to the Company. 

Executive agrees and covenants, during the Employment Term and the twenty-four (24) month period beginning on the last day of Executive’s employment with the Company, not to directly or indirectly solicit, contact (including but not limited to e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact, or meet with the Company’s current customers located in the Restricted Territory for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company. 

9.Non-Disparagement.  Executive agrees and covenants that he will not at any time, directly or indirectly, make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Company or its businesses, or any of its employees, officers, shareholders, members or advisors, or any member of the Board. 

This Section 9 does not, in any way, restrict or impede Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by 

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the law, regulation, or order. Executive shall promptly provide written notice of any such order to the Board.

The Company agrees and covenants that it shall cause its officers and directors to refrain from making any defamatory or disparaging remarks, comments, or statements concerning Executive to any third parties.

10.Acknowledgement.  Executive acknowledges and agrees that the services to be rendered by him to the Company are of a special and unique character; that Executive will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing strategies by virtue of Executive’s employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company. 

Executive further acknowledges that the amount of his compensation reflects, in part, his obligations and the Company’s rights under Section 7, Section 8, and Section 9 of this Agreement; that he has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; and that he will not be subject to undue hardship by reason of his full compliance with the terms and conditions of Section 7, Section 8, and Section 9 of this Agreement or the Company’s enforcement thereof.

11.Remedies.  In the event of a breach or threatened breach by Executive of Section 7, Section 8, or Section 9 of this Agreement, Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.

12.Arbitration.  Any dispute, controversy, or claim arising out of or related to this Agreement, except for disputes arising under Section 7, Section 8, or Section 9 of this Agreement (including, without limitation, any claim for injunctive relief), or its interpretation, application, implementation, breach or enforcement which the parties hereto are unable to resolve by mutual agreement, shall be settled by submission by either Executive or the Company of the controversy, claim or dispute to binding arbitration in Lafayette, Louisiana (unless the parties hereto agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties hereto agree to provide all discovery deemed necessary by the arbitrator. The arbitration shall be a documents-only proceeding. The decision and award made by the arbitrator shall be accompanied by a reasoned opinion, and shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. The prevailing party in such arbitration shall be entitled to reimbursement from the non-prevailing party for the totality of the arbitrator’s, administrative, and reasonable legal fees and costs. Upon the request of any of the parties hereto, at any time prior to 

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the beginning of the arbitration hearing the parties may attempt in good faith to settle the dispute by mediation administered by the American Arbitration Association.

13.Proprietary Rights.

13.1Work Product.  Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by Executive individually or jointly with others during the period of his employment by the Company and relate in any way to the business or contemplated business, products, activities, research, or development of the Company or result from any work performed by Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world (collectively, “Intellectual Property Rights”), shall be the sole and exclusive property of the Company.

For purposes of this Agreement, Work Product includes, but is not limited to, Company information, including plans, publications, research, strategies, techniques, agreements, documents, contracts, terms of agreements, negotiations, know-how, computer programs, computer applications, software design, web design, work in process, databases, manuals, results, developments, reports, graphics, drawings, sketches, market studies, formulae, notes, communications, algorithms, product plans, product designs, styles, models, audiovisual programs, inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, client information, customer lists, client lists, manufacturing information, marketing information, advertising information, and sales information. 

13.2Work Made for Hire; Assignment.  Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, Executive hereby irrevocably assigns to the Company, for no additional consideration, Executive’s entire right, title, and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or 

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dilution thereof, and all rights corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company’s rights, title, or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company would have had in the absence of this Agreement. 

13.3Further Assurances; Power of Attorney.  During and after his employment, Executive agrees to reasonably cooperate with the Company to (a) apply for, obtain, perfect, and transfer to the Company the Work Product as well as any and all Intellectual Property Rights in the Work Product in any jurisdiction in the world; and (b) maintain, protect and enforce the same, including, without limitation, giving testimony and executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers, assignments, and other documents and instruments as shall be requested by the Company. Executive hereby irrevocably grants the Company power of attorney to execute and deliver any such documents on Executive’s behalf in his name and to do all other lawfully permitted acts to transfer the Work Product to the Company and further the transfer, prosecution, issuance, and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if Executive does not promptly cooperate with the Company’s request (without limiting the rights the Company shall have in such circumstances by operation of law). The power of attorney is coupled with an interest and shall not be affected by Executive’s subsequent incapacity.

13.4No License.  Executive understands that this Agreement does not, and shall not be construed to, grant Executive any license or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software, or other tools made available to him by the Company.

14.Security.

14.1Security and Access.  Executive agrees and covenants (a) to comply with all Company security policies and procedures as in force from time to time including without limitation those regarding computer equipment, telephone systems, voicemail systems, facilities access, monitoring, key cards, access codes, Company intranet, internet, social media and instant messaging systems, computer systems, e-mail systems, computer networks, document storage systems, software, data security, encryption, firewalls, passwords and any and all other Company facilities, IT resources and communication technologies (“Facilities and Information Technology Resources”); (b) not to access or use any Facilities and Information Technology Resources except as authorized by the Company; and (iii) not to access or use any Facilities and Information Technology Resources in any manner after the termination of Executive’s employment by the Company, whether termination is voluntary or involuntary. Executive agrees to notify the Company promptly in the event he learns of any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction, or reverse engineering of, or tampering with any Facilities and Information Technology Resources or other Company property or materials by others. 

14.2Exit Obligations.  Upon (a) voluntary or involuntary termination of Executive’s employment or (b) the Company’s request at any time during Executive’s employment, 

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Executive shall (i) provide or return to the Company any and all Company property, including keys, key cards, access cards, identification cards, security devices, employer credit cards, network access devices, computers, cell phones, smartphones, PDAs, pagers, fax machines, equipment, speakers, webcams, manuals, reports, files, books, compilations, work product, e-mail messages, recordings, tapes, disks, thumb drives or other removable information storage devices, hard drives, negatives, and data and all Company documents and materials belonging to the Company and stored in any fashion, including but not limited to those that constitute or contain any Confidential Information or Work Product, that are in the possession or control of Executive, whether they were provided to Executive by the Company or any of its business associates or created by Executive in connection with his employment by the Company; and (ii) delete or destroy all copies of any such documents and materials not returned to the Company that remain in Executive’s possession or control, including those stored on any non-Company devices, networks, storage locations, and media in Executive’s possession or control.

15.Publicity.  Executive hereby irrevocably consents to any and all uses and displays, by the Company and its agents, representatives and licensees, of Executive’s name, voice, likeness, image, appearance, and biographical information in, on or in connection with any pictures, photographs, audio and video recordings, digital images, websites, television programs and advertising, other advertising and publicity, sales and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes, and all other printed and electronic forms and media throughout the world, at any time during or after the period of his employment by the Company, for all legitimate commercial and business purposes of the Company (“Permitted Uses”) without further consent from or royalty, payment, or other compensation to Executive. Executive hereby forever waives and releases the Company and its directors, officers, employees, and agents from any and all claims, actions, damages, losses, costs, expenses, and liability of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of his employment by the Company, arising directly or indirectly from the Company’s and its agents’, representatives’, and licensees’ exercise of their rights in connection with any Permitted Uses.

16.Governing Law: Jurisdiction and Venue.  This Agreement, for all purposes, shall be construed in accordance with the laws of the State of Delaware without regard to conflicts of law principles and irrespective of Executive’s work location. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the State of Louisiana, Parish of Lafayette. The parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

17.Entire Agreement.  Unless specifically provided herein, this Agreement contains all of the understandings and representations between Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement. 

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18.Modification and Waiver.  No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by Executive and by the Board. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power, or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power, or privilege.

19.Severability.  Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement. 

The parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law. 

The parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had not been set forth herein.

20.Captions.  Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

21.Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

22.Tolling.  Should Executive violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the first date on which Executive ceases to be in violation of such obligation.

23.Section 409A.

23.1General Compliance.  This Agreement is intended to comply with Section 409A of the Code and the regulations, rules and other guidance promulgated thereunder (“Section 409A”) or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments 

14

 

provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.

23.2Specified Employees.  Notwithstanding any other provision of this Agreement, if any payment or benefit provided to Executive in connection with his termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Termination Date or, if earlier, on Executive’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which Executive’s separation from service occurs shall be paid to Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

23.3Reimbursements.  To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following:

(a)the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year;

(b)any reimbursement of an eligible expense shall be paid to Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and

(c)any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

24.Successors and Assigns.  This Agreement is personal to Executive and shall not be assigned by Executive. Any purported assignment by Executive shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or 

15

 

substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permitted successors and assigns.

25.Notice.  Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below (or such other addresses as specified by the parties by like notice):

If to the Company:

Waitr Holdings Inc.

214 Jefferson Street

Lafayette, LA 70501

Attn: Carl Grimstad, Chief Executive Officer

Carl.grimstad@waitrapp.com

 

If to Executive, to his address most recently on file with the Company.

26.Representations of Executive.  Executive represents and warrants to the Company that:

(a)Executive’s acceptance of employment with the Company and the performance of his duties hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement, or understanding to which he is a party or is otherwise bound; and

(b)Executive’s acceptance of employment with the Company and the performance of his duties hereunder will not violate any non-solicitation, non-competition, or other similar covenant or agreement of a prior employer.

27.Withholding.  The Company shall have the right to withhold from any amount payable hereunder any Federal, state, and local taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.

28.Survival.  Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.

29.Acknowledgement of Full Understanding.  EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT. 

[signature page follows]

 

 

16

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	
 
	
WAITR HOLDINGS INC.

	
 
	
 

 

By: /s/ Carl Grimstad

Name: Carl Grimstad

Title: Chief Executive Officer

	
 
	
EXECUTIVE

	
 
	
 

 

/s/ Leo Bogdanov

Name: Leo Bogdanov

Title: Chief Financial Officergigm-ex41_160.htm

 

Exhibit 4.1

CONVERTIBLE NOTE PURCHASE AGREEMENT

This Convertible Note Purchase Agreement (the “Agreement”) is made as of August 31, 2020, by and among: 

1.Aeolus Robotics Corporation, a company duly organized and validly existing under the laws of the Cayman Islands (the “Company”);

2.GigaMedia Limited, a company duly organized and validly existing under the laws of Singapore (the “Purchaser”); and

3.each of the entities whose names are set forth on the Schedule of Subsidiaries attached hereto as Exhibit D (each, a “Subsidiary,” and collectively, the “Subsidiaries”).

The Company and the Subsidiaries are hereinafter referred to collectively as the “Company Parties” and individually as a “Company Party”. The Company Parties and the Purchaser shall be hereinafter individually referred to as a “Party,” and collectively, the “Parties”.

WITNESSETH

WHEREAS, the Company desires to issue, sell and deliver to the Purchaser, and the Purchaser desires to purchase from the Company, the Note (as defined below) pursuant to the terms and subject to the conditions of this Agreement; 

WHEREAS, the Parties desire to enter into this Agreement on the terms and conditions hereof.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:

AGREEMENT

1.Purchase and Sale of Note.

(a)Sale and Issuance of Note.  Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing (as defined below) and the Company agrees to sell and issue to the Purchaser a convertible promissory note, which is in the form attached as Exhibit A hereto (the “Note”), in the principal amount of ten million U.S. dollars (US$10,000,000) (the “Principal Amount”).  The purchase price of the Note shall be equal to 100% of the Principal Amount of such Note (the “Purchase Price”).  The terms and conditions of the Note, including but not limited to, the interest, repayment, conversion and others, are stipulated in the Note.

1

 

 

2.Closing; Delivery.

(a)The purchase and sale of the Note shall take place as soon as practicable and in no event later than August 31, 2020 (or such other date agreed by the Parties in writing) at the place mutually agreed upon by the Company and the Purchaser (which time and place are designated as the “Closing”).

(b)At the Closing:

(1)The Company shall first present the original duly executed Note for the Purchaser’s physical viewing.

(2)The Purchaser shall then pay the Purchase Price of the Note by wire transfer to the following bank account designated by the Company: 

Account number: 560180115302

Bank: Taipei Fubon Commercial Bank Co., LTD

Bank Address: 169 SEC.4 JEN-AI RD, TAIPEI, TAIWAN

SWIFT Code: TPBKTWTPXXX

Account name: AEOLUS ROBOTICS CORPORATION

 

(3)The Purchaser shall then deliver to the Company a copy of the bank wire remittance or exchange memo against delivery by the Company to the Purchaser the original duly executed Note.  

(4)The Closing shall be deemed consummated upon the Company’s receipt of the Purchase Price at the bank account set forth above.

3.Representations and Warranties of the Company.  The representations and warranties made jointly and severally by the Company Parties to the Purchaser are listed in Exhibit B hereto.

4.Representations and Warranties of the Purchaser.  The Purchaser hereby represents and warrants to the Company as follows:

(a)Organization.  The Purchaser is duly organized, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under, and by virtue of, the laws of the place of its incorporation.

(b)Authorization.  The execution, delivery and performance of this Agreement and/or relevant transaction documents and the consummation of the transactions contemplated thereby by the Purchaser have been duly authorized by all necessary action on the part of the Purchaser.  The Purchaser has all requisite power, authority and capacity to enter into this Agreement and to perform its obligations under this Agreement, and this Agreement has 

2

 

 

been duly authorized, executed and delivered by the Purchaser.  This Agreement, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles.

(c)Consent and Approvals.  Except for those consents and approvals disclosed in writing to the Company before the Closing, which has been obtained or to be obtained, no consent, license, approval, order or authorization of, or registration, filing or declaration with, any governmental authority or the securities exchange on which the Purchaser is listed is required to be obtained or made, and no consent of any third party is required to be obtained, by the Purchaser in connection with the execution, delivery or performance of this Agreement, or the consummation of any transactions contemplated hereby.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (i) result in a violation of any organizational document of the Purchaser, (ii) conflict with, constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to another person’s right to terminate or cancel, any material agreement, indenture or instrument to which the Purchaser is a party or (iii) result in a violation of any applicable law, rule, regulation, order, judgment or decree.

(d)No Public Market.  The Purchaser is acquiring the Note and, in the event the Note is converted into equity securities of the Company (the “Conversion Shares”) pursuant to its terms, the Purchaser understands that no public market now exists for the Note and Conversion Shares.

(e)Purchase for Own Account.  The Note and the Conversion Shares (if issued) will be acquired for the Purchaser’s own account, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same.  By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Note and/or any of the Conversion Shares.

(f)Accredited and Sophisticated Investor.  The Purchaser is an accredited investor as defined in applicable securities laws of the Unites States of America (“the U.S.”).  The Purchaser recognizes that the Company is in its early stages that is not yet, and may never be, profitable, and that an investment in the Company is speculative and involves a high degree of risk. The Purchaser acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the prospective investment in the Company. The Purchaser has experience in making investment decisions of this type. 

(g)Restrictions.  The Purchaser understands that the Note and the Conversion Shares (if issued) are being offered and sold in reliance on specific exemptions from the registration requirements of relevant laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgements and understandings 

3

 

 

set forth herein in order to determine the applicability of such exemptions and the suitability of the Purchaser to acquire the Note and the Conversion Shares (if issued).

(h)No Brokers or Finders.  No person has or will have, as a result of the transactions contemplated by this Agreement and the Note, any right, interest or claim against or upon the Purchaser for any commission, fee or other compensation as a finder or broker.

5.Conditions of the Purchaser’s Obligations to the Closing.  The obligation of the Purchaser to consummate the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Purchaser to the extent permitted by applicable laws:

(a)Due Diligence.  The result of due diligence investigation performed by the Purchaser on the Company is reasonably satisfactory to the Purchaser.

(b)Representations and Warranties; Performance of Obligations.  The representations and warranties of the Company Parties contained in Section 3 and as set out on Exhibit B shall be true and accurate on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing (except in the case of any representation and warranty which by its terms is made only as of a date specified therein, which shall be true and accurate only as of such date).  Each of the Company Parties shall have performed all obligations and conditions herein required to be performed or observed by it on or prior to the Closing.

(c)Authorization.  All required internal approvals and authorization of the Company, and all required waivers (if any), for the issuance of and subscription to the Note have been duly obtained and remain effective as of the Closing, including the written consent of the Majority of Series A Preferred Shareholders of the Company. The written consent of the Majority of Series A Preferred Shareholders shall also set forth the approval of excluding the Note from the New Securities (as defined in the Company’s Fourth Amended and Restated Memorandum and Articles of Association).

(d)Qualifications.  All authorizations, filings, consents, approvals or permits, if any, of any applicable jurisdiction that are required in connection with the lawful issuance and sale of the Note pursuant to this Agreement have been duly obtained on or prior to the Closing and remain effective as of the Closing.

(e)Corporate Documents.  The Company shall have delivered to the Purchaser: (i) the Company’s Memorandum and Articles of Association as in effect at the time of the Closing, (ii) the Company’s bylaws as in effect at the time of the Closing, (iii) resolutions approved by the Company’s board of directors authorizing the transactions contemplated hereby, and (iv) Certificate of Good Standing of the Company issued by Registry of Companies of Cayman Islands, dated April 20, 2020.

6.Conditions of the Company’s Obligations to the Closing.  The obligations of the Company to consummate the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company to the extent permitted by applicable laws:

4

 

 

(a)Representations and Warranties.  The representations and warranties of the Purchaser contained in Section 4 shall be true and accurate on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing (except in the case of any representation and warranty which by its terms is made only as of a date specified therein, which shall be true and accurate only as of such date).

(b)Authorization.  All required internal approvals and authorization of the Purchaser for the issuance of and subscription to the Note are duly obtained.

(c)Qualifications.  All authorizations, filings, consents, approvals or permits, if any, of any applicable jurisdiction that are required in connection with the lawful issuance and sale of the Note pursuant to this Agreement shall be obtained and effective as of the Closing.

7.Certain Covenants.  The Company Parties undertake and agree to honor and perform the following covenants so long as any indebtedness under this Note remains outstanding unless the Purchaser have otherwise agreed in writing:

(a)Information Rights.

(i)The Company Parties shall maintain consolidated financial statements which present fairly the financial condition of the Company Parties at the date or dates therein indicated and the results of operations for the period or periods therein specified, prepared in accordance with Enterprise Accounting Standards (企業會計準則) applied on a consistent basis and shall set aside on its books all such proper accruals and reserves as shall be required.

(ii)The Company shall deliver to the Purchaser:

(1)within one hundred and fifty (150) days after the end of each fiscal year, audited (by an independent internationally recognized accounting firm) annual consolidated financial statements of the Company Parties for such fiscal year; and 

(2)within forty-five (45) days after the end of each calendar quarter, unaudited quarterly consolidated financial statements of the Company Parties for such quarter.

(b)Use of Proceeds.  The Company agrees to use the Purchase Price received from selling the Note hereunder exclusively as working capital for the business operations of the Company Parties.

(c)Compliance with Law.  Each of the Company Parties shall preserve and keep in full force and effect its existence as a corporation in good standing under the laws of the jurisdiction of its incorporation, except in the event of a merger, consolidation, sale of all or substantially all of the Company Party’s assets, or such other transactions, where the surviving or successor entity in such transaction is also a Company Party (“Group Reorganization”).

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8.Miscellaneous. 

(a)Fees and Expenses.  The Parties shall each bear its own fees and expenses, including, without limitations, the legal fees, due diligence cost and other expenses in connection with the transactions under this Agreement.

(b)Confidentiality.  Each Party undertakes to the other Parties that it shall treat as strictly confidential the existence and content of this Agreement and all information received or obtained by it or its directors, officers, employees, agents or advisers relating to this Agreement, the negotiations leading up to this Agreement or the subject matter of this Agreement, and that it shall not at any time hereafter make use of or disclose or divulge to any person any such information and shall use their reasonable endeavors to prevent the publication or disclosure of any such information; provided, however, the foregoing restrictions shall not apply to any disclosure which, pursuant to relevant laws and rules, any governmental authority or securities exchange on which the Party’s securities are listed or traded requires a Party to make.

(c)Transferability.  Except as otherwise expressly provided in this Agreement or the Note, and except in the event of Group Reorganization, none of the Company Parties nor the Purchaser may transfer or assign any part of this Agreement or its rights or obligations hereunder to a third party without the prior written consent of the other Party, provided, that the Company shall give a written notice to the Purchaser prior to the consummation of any Group Reorganization. 

(d)Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the respective successors, heirs, executors, administrators and permitted assigns of the Parties.

(e)Survival.  The representations, warranties, covenants and agreements made herein shall survive the term of the Note, provided that such survival period shall in no event be longer than three (3) years after the Closing.

(f)Governing Law; Dispute Resolutions.  This Agreement shall be governed by and construed in accordance with the laws of the Republic of China (“Taiwan”) without regard to principles of conflicts of law thereunder.  Any unresolved controversy or claim arising out of or relating to this Agreement or the Note shall be submitted to the exclusive jurisdiction of Taipei District Court, Taiwan for the first instance. The non-prevailing Party shall pay all costs and expenses incurred by the prevailing Party, including, without limitation, all reasonable attorneys’ fees.

(g)Counterparts.  This Agreement shall be executed in one or more counterparts, all of which shall be considered one and the same agreement and each of which shall be deemed an original.  

6

 

 

(h)Notices.  All notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, and addressed as follows:

 

			
	
 
	
if to the Company:

	
 
	
 
	
 

	
 
	
Address:
	
4th Floor, No 168, Ruiguang Road,

	
 
	
 
	
Neihu District, Taipei 114

	
 
	
 
	
Taiwan

	
 
	
Attention:
	
Elaine Chen

	
 
	
 
	
 

	
 
	
if to the Purchaser:

	
 
	
 
	
 

	
 
	
Address:
	
8th Floor, No. 22, Lane 407, Section 2, Tiding Boulevard

	
 
	
 
	
Neihu District, Taipei 114

	
 
	
 
	
Taiwan

	
 
	
Attention:
	
Jack Wang

 

(i)Amendments.  Any term of this Agreement may be amended only with the written agreement of the Parties.  

(j)Reorganization and Joinder of New Taiwan Subsidiary.  The Company is currently contemplating a Group Reorganization to create a new subsidiary in Taiwan (“New Taiwan Sub”).  The Companies Parties agree to cause the New Taiwan Sub to, promptly after its incorporation, execute such joinder agreement and/or instrument as may be necessary, and in content and form reasonably satisfactory to both Company and Purchaser, in order for the New Taiwan Sub to join and become a party to this Agreement and thereafter be deemed a Subsidiary and a Company Party for all purposes herein.

(k)Joint and Several Liability.  Each of the Company Parties shall be jointly and severally liable with each other for the obligations, covenants and agreements created by or arising out of this Agreement or the Note including, without limitation, the Company’s obligations to repay the Note in accordance with the terms of the Note.

(l)Severability.  If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the Parties. 

[Signature Page Follows]

 

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The Parties have executed this Convertible Note Purchase Agreement as of the date first written above.

 

			
	
 
	
Company:

	
 
	
 
	
 

	
 
	
Aeolus Robotics Corporation

	
 
	
 
	
 

	
 
	
By:
	
/s/ TSUN-YIE, HUANG

	
 
	
Name:
	
TSUN-YIE, HUANG

	
 
	
Title:
	
DIRECTOR

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
Subsidiaries:

	
 
	
 

	
 
	
Aeolus Robotics Corporation (Samoa)

	
 
	
 

	
 
	
Aeolus Robotics Asia Limited (HK)

	
 
	
 

	
 
	
Aeolus Robotics, Inc.

	
 
	
 

	
 
	
Aeolus Robotics Corporation Limited (including its Taiwan Branch, 香港商睿智通有限公司台灣分公司)

	
 
	
 

	
 
	
Aeolus Robotics Japan Limited

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ TSUN-YIE, HUANG

	
 
	
Name:
	
TSUN-YIE, HUANG

	
 
	
Title:
	
DIRECTOR

 

[Signature Page to Convertible Note Purchase Agreement]

 

 

 

The Parties have executed this Convertible Note Purchase Agreement as of the date first written above.

 

			
	
 
	
PURCHASER:

	
 
	
 
	
 

	
 
	
GigaMedia Limited

	
 
	
 
	
 

	
 
	
By:
	
/s/ HUANG, CHENG-MING

	
 
	
Name:
	
HUANG, CHENG-MING

	
 
	
Title:
	
Chief Executive Officer

 

 

[Signature Page to Convertible Note Purchase Agreement]

 

 

 

Exhibit A

FORM OF CONVERTIBLE PROMISSORY Note

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THIS NOTE HAS NOT BEEN AND WILL NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY TO MEMBERS OF THE PUBLIC IN THE CAYMAN ISLANDS. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND THE SECURITIES LAWS OF ANY OTHER STATE OR JURISDICTION.

 

AEOLUS ROBOTICS CORPORATION

CONVERTIBLE PROMISSORY NOTE

 

 

		
	
US$10,000,000.00
	
August 31, 2020

 

 

FOR VALUE RECEIVED, Aeolus Robotics Corporation, a Cayman Islands company (the “Company”) unconditionally promises to pay to the order of GigaMedia Limited, a Singapore company (the “Holder”), the principal sum of ten million U.S. dollars (US$10,000,000.00) (the “Principal Amount”), or such lesser amount as shall then equal the outstanding principal amount hereunder, together with the Interest (as defined below) from the date of this convertible note (the “Note”) on the unpaid principal balance until the Principal Amount is paid in accordance with Section 3 hereof (or converted, as provided in Section 4 hereof).

This Note is issued pursuant to that certain Convertible Note Purchase Agreement dated August 31, 2020, (the “Purchase Agreement”) by and among the Company Parties and the Holder, and the resolutions of the board of directors and shareholders of the Company passed on or about the same date, and is subject to the provisions thereof. Any capitalized term used but not defined herein shall have such meaning ascribed to them in the Purchase Agreement.

The following is a statement of the rights of the Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:

1.Interest.  Subject to Section 4 hereof, the interest (the “Interest”) shall accrue from the date of the Note on the unpaid Principal Amount at a rate of two percent (2%) on an annual non-compound basis, computed on the basis of actual calendar days elapsed and a year of 365 days, subject to the terms and conditions of this Note.

A-1

 

 

2.Maturity and Extension.  The Principal Amount plus all accrued and unpaid Interest thereon shall be due and payable on the day which is twenty-four (24) months from the date hereof (the “Original Maturity Date”), except and to the extent all or a portion of this Note shall have been previously repaid, redeemed or converted pursuant to Sections 3 and 4 hereof.  The Original Maturity Date may be extended for an additional twelve (12) months by the Company at its sole discretion by giving written notice to the Holder at least thirty (30) days prior to the Original Maturity Date (the last day of such extended period of the Note is referred to as the “Extended Maturity Date.”)  (The Extended Maturity Date together with the Original Maturity Date shall be collectively referred to as the “Maturity Date.”)

	
 
	
3.
	
Repayments.

(a)Form of Payment.  All payments of Principal Amount and Interest (other than payment by way of conversion) shall be made in U.S. dollars to the Holder and be remitted to the bank account specified by Holder in a written notice delivered to the Company. 

(b)Repayment.  Except for the portion of the Principal Amount which has been converted into Conversion Shares (as defined below), the total outstanding Principal Amount of the Note plus all accrued and unpaid Interest thereon shall be due and payable upon the date that is the earlier of: (i) the Maturity Date;  or (ii) upon the occurrence of an Event of Default (as defined below)., or (iii) upon the occurrence of a Deemed Liquidation Event (as defined in the Company’s Fourth Amended and Restated Memorandum and Articles of Association).  

(c)Prepayment.  Subject to providing a prior written notice to the Holder (the “Prepayment Notice”) of at least sixty (60) days (the “Prepayment Notice Period”) and the Holder’s right to convert this Note as prescribed in Section 4 hereof, the Company may redeem all or a portion of this Note at any time before the Maturity Date, upon the payment of the all or a portion of outstanding Principal Amount and Interest under the Note. 

4.Conversion Rights.  Subject to the terms and conditions of the Notes, all or a portion of the Principal Amount under the Note may be convertible into, where applicable and as further detailed herein, ordinary shares (the “Ordinary Shares”) or the Preferred Shares (as defined below) of the Company, which shall be fully paid and nonassessable, and shall have the same characters, rights and privileges of ordinary shares or the preferred shares as provided in the Amended and Restated Memorandum and Articles of Association of the Company (the converted Ordinary Shares and/or Preferred Shares are referred to as “Conversion Shares”).  For the avoidance of doubt, in the event that any portion of the Principal Amount is converted into the Conversion Shares, all the Interest accrued but unpaid on such portion of Principal Amount shall be waived.

(a)Automatic Conversion.  This Note shall automatically be converted into Ordinary Shares at the conversion price of three U.S. dollars (US$3.00) per share (the “Conversion Price”) upon the date of filing formal application of a Qualified IPO (as defined in the Company’s Fourth Amended and Restated Memorandum and Articles of Association) or an earlier date as reasonably requested by the lead underwriter(s) of such Qualified IPO, which occurs on or before the Maturity Date. 

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(b)Optional Conversion.  

(i)Qualified Financing.  Except and to the extent prepaid or converted earlier pursuant to Sections 3 or 4 hereof, in the nearest next round equity financing on or before the Maturity Date where the Company contemplates to issue and sell any preferred shares of the Company to any third party (the “Qualified Financing”; for the avoidance of doubt, the Qualified Financing shall in no event include the Company’s issuance and sale of further Series A Preferred Shares and A-NDC Preferred Shares), at the option and discretion of the Holder, the Holder may elect to convert all or any part of the Principal Amount of this Note into the preferred shares to be issued at such Qualified Financing (the “Preferred Shares”), among which (i) twenty percent (20%) of such outstanding Principal Amount shall be converted at a conversion price equal to ninety percent (90%) of the purchase price offered to the investors in such Qualified Financing, and (ii) eighty percent (80%) of such outstanding Principal Amount shall be converted at a conversion price equal to one hundred percent (100%) of the purchase price offered to the investors in such Qualified Financing.  

(ii)Option upon Prepayment.  At any time before the Maturity Date, if the Holder receives a Prepayment Notice from the Company, at the Holder’s option and discretion, all or a portion of the outstanding Principal Amount under this Note may be converted into Ordinary Shares at the Conversion Price, provided that the Holder shall give prior written notice to the Company before the end of the Prepayment Notice Period, and that such amount to be converted by the Holder shall be no greater than the prepayment amount specified in the Prepayment Notice.

(iii)Option upon Deemed Liquidation Event.  At any time before the Maturity Date, the Company shall give the Holder a written notice within seven (7) days after the board of directors of the Company resolves to enter into any Deemed Liquidation Event, and at the Holder’s option and discretion, all or a portion of the outstanding Principal Amount under this Note may be converted into Ordinary Shares at the Conversion Price, provided that (a) a written notice is given to the Company by the Holder within twenty-one (21) days after it receives said notice from the Company of such Deemed Liquidation Event, and (b) the conversion shall take place on or immediately before the closing of such Deemed Liquidation Event.

(iv)Option upon Maturity.  On the Original Maturity Date or, if the Original Maturity Date is extended by the Company pursuant to Section 2 hereof, on the Extended Maturity Date, at the Holder’s option and discretion, if the Note remains outstanding, all or a portion of the outstanding Principal Amount under the Note may be converted into Ordinary Shares at the Conversion Price, provided that a prior written notice of at least thirty (30) days is given to the Company by the Holder.

(c)Conversion Price Adjustment.  If the Company, at any time while this Note is outstanding: (A) pays a dividend or otherwise makes a distribution in shares of the Company or any securities of any Group Company which entitle the holder thereof to acquire the shares of the Company; or (B) conducts a share split, reverse share split or similar event, then the Conversion Price shall be appropriately adjusted.

(d)Conversion Process.  If the Holder decides to exercise the conversion rights hereunder, the Holder shall send a written conversion request notice to the Company during the applicable notice period pursuant to Section 4(b) hereof.  The Company shall take 

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all necessary and appropriate actions as promptly as possible to convert the applicable portion of the outstanding Principal Amount owing under this Note into the Conversion Shares.  Upon such conversion, the Holder shall surrender this Note to the Company.

(e)Issuance of Certificates.  As soon as is reasonably practicable after a conversion has been effected, the Company shall deliver to Holder a certificate or certificates representing the number of the Conversion Shares (excluding any fractional share) issuable by reason of such conversion.

(f)Issuance Costs.  The issuance of certificate(s) for shares of capital stock issuable upon conversion of this Note shall be made without charge to the Holder for any issuance tax in respect thereof or other cost incurred by the Company in connection with such conversion and the related issuance of such shares of capital stock.  Upon conversion of this Note, the Company shall take all such actions as are necessary in order to ensure that the capital stock issuable with respect to such conversion shall be validly issued, fully paid and nonassessable.

(g)No Fractional Shares.  If any fractional share of capital stock would, except for the provisions hereof, be deliverable upon conversion of this Note, the Company, in lieu of delivering such fractional share, shall pay an amount equal to the value of such fractional share, as determined by the per share conversion price used to effect such conversion. 

(h)Documents.  The conversions under this Section 4 shall be made in accordance with the terms and conditions set forth in the share subscription agreement and other documents in relation to the subscription (the “Conversion Documents”), including but without limitations to the shareholders’ agreement and the amended and restated memorandum and articles of association of the Company to be provided by the Company upon the conversion, where applicable.  In connection with the conversions under this Section 4, the Holder agrees to execute and deliver to the Company any Conversion Documents reasonably requested by the Company.  In the event of conversion pursuant to Section 4(b)(i) hereof, the Holder agrees to execute and deliver to the Company any documents reasonably requested by the Company in substantially the same form to be executed by the investors in the Qualified Financing.

(i)Compliance with Laws and Regulations.  The Company shall take all such actions as may be necessary to assure that all Conversion Shares issued upon conversion pursuant hereto may be so issued without violation of any applicable law or governmental regulation or any requirement of any domestic securities exchange upon which such shares of capital stock may be listed.

(j)Termination of Rights.  All rights with respect to this Note shall terminate upon the valid issuance of the Conversion Shares credited as paid up in full upon the conversions pursuant to this Section 4, whether or not this Note has been surrendered and whether or not all share subscription, shareholders’ agreement, or other agreements have been executed and delivered by the Holder to the Company.

(k)Conditions to Conversion.  The conversion of the Note pursuant to this Section 4 shall be subject to both the Company and the Holder obtaining all permits, authorizations, approvals or consents of, notice to or registration with any governmental authority or regulatory body or other person in relation to transactions contemplated under or 

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as required by the Note and applicable laws.  Each Party agrees to provide necessary assistance to the other Party for it to obtain from the relevant governmental and regulatory authority the approvals required to convert the Note into the Conversion Shares at the other Party’s reasonable request.  In the event that the approvals cannot be obtained, the Holder may assign the Note and its rights and obligations hereunder to a third party acceptable to and agreed by the Company, provided that the Company may not unreasonably withhold its consent.

5.Default.

(a)Events of Default. For purposes of this Note, any of the following events which shall occur shall constitute an “Event of Default”:

(i)the default by the Company in the payment of the aggregate Principal Amount and Interest when due and payable and such failure continues for a period of five (5) days; 

(ii)a material breach by any of the Company Parties of its representations, warranties, obligations or covenants contained in the Purchase Agreement or a material breach by Company of the terms of this Note, which if capable of remedy has not been remedied within ten (10) days of written notice to the Company of such breach; 

(iii)a Liquidation Event (as defined in the Company’s Fourth Amended and Restated Memorandum and Articles of Association); or 

(iv)the commencement of the bankruptcy proceedings against the Company.

(b)Consequences of Events of Default.  If any Event of Default occurs before Maturity Date for any reason, whether voluntary or involuntary, and be continuing, the Company shall notify Holder in writing within five (5) days after learning of an Event of Default.  Upon the occurrence or existence of any Event of Default and at any time thereafter, all outstanding Principal Amount and Interest will become immediately due and payable by the Company to the Holder.

6.Excessive Interest.  Notwithstanding any other provision herein to the contrary, this Note is hereby expressly limited so that the interest rate charged hereunder shall at no time exceed the maximum rate permitted by applicable law.  If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shall be reduced to the maximum rate permitted, and if the Holder shall have received an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive interest shall be applied to the reduction of the Principal Amount owing hereunder, or if such excessive interest exceeds the unpaid balance of the Principal Amount, such excess shall be refunded to the Company.

7.Priority.  The Note shall rank pari passu, without preference or priority of any kind over, with all other present and future unsubordinated and unsecured senior indebtedness of the Company.

8.Amendment and Waiver.  Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular 

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instance and either retroactively or prospectively), only by the written agreement of the Company and the Holder.

9.Notices.  All notices, requests, waivers and other communications made pursuant to this Note shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, and addressed as follows:

 

			
	
 
	
if to the Company:

	
 
	
 
	
 

	
 
	
Address:
	
4th Floor, No 168, Ruiguang Road,

	
 
	
 
	
Neihu District, Taipei 114

	
 
	
 
	
Taiwan

	
 
	
Attention:
	
Elaine Chen

	
 
	
 
	
 

	
 
	
if to the Purchaser:

	
 
	
 
	
 

	
 
	
Address:
	
8th Floor, No. 22, Lane 407, Section 2, Tiding Boulevard

	
 
	
 
	
Neihu District, Taipei 114

	
 
	
 
	
Taiwan

	
 
	
Attention:
	
Jack Wang

 

10.Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

11.Transferability.  Unless otherwise agreed by the Company in writing, except as expressly permitted pursuant to Section 4(k), the Holder may not sell, transfer, assign, dispose of, realize, create any encumbrance over any part of the Note or enter into any agreement that will directly or indirectly constitute or be deemed as selling, transferring, assigning, disposing of, realizing, or creating any encumbrance over any part of the Note.

12.Governing Law; Dispute Resolutions.  This Note is to be construed in accordance with and governed by the laws of the Republic of China.  Any unresolved controversy or claim arising out of or relating to this Agreement or the Note shall be submitted to the exclusive jurisdiction of Taipei District Court, Taiwan for the first instance. The non-prevailing Party shall pay all costs and expenses incurred by the prevailing Party, including, without limitation, all reasonable attorneys’ fees.

13.Time of Essence.  Time is of the essence of this Note.

14.Purchase Agreement.  This Note incorporates by reference all the terms of the Purchase Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the date first above written.

 

			
	
 
	
Company:

	
 
	
 
	
 

	
 
	
Aeolus Robotics Corporation

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
/s/ TSUN-YIE, HUANG

	
 
	
Name:
	
TSUN-YIE, HUANG

	
 
	
Title:
	
DIRECTOR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature page to convertible PROMISSORY note]

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EXHIBIT B

REPRESENTATIONS AND WARRANTIES OF THE company PARTIES

Except as set forth in the disclosure letter as per Exhibit C attached hereto (the “Disclosure Letter”) and unless otherwise provided herein, the Company Parties hereby jointly and severally represent, warrant and covenant to the Purchaser as of the date hereof and as of the Closing, where applicable, as set forth below.

1.Corporate Power.  The Company presently has, and as of the Closing will have, full legal right, power and capacity and all necessary consents, approvals and authorizations, whether corporate, shareholder, governmental or otherwise, as may be required to execute and deliver this Agreement, the Note and other documents in relation to the transactions contemplated hereunder (the “Transaction Documents”), and the Fourth Amended Memorandum and Articles of Association of the Company (the “Company Articles”), to issue and sell the Note to the Purchaser pursuant to the Agreement and the Note in the manner contemplated hereby and to carry out the provisions of the Transaction Documents and the Company Articles.

2.Organization, Good Standing and Qualification.  Each of the Company, the Subsidiaries and their present affiliates (each an “Affiliate”) (Company, Subsidiaries and Affiliates, each a “Group Company” and collectively, the “Group Companies”) is duly incorporated, validly existing and in good standing (or has equivalent status in the relevant jurisdiction) under the laws of the place of its incorporation.  Each of the Group Companies and is qualified and is authorized to do business as a foreign corporation in all jurisdictions where the failure to be so qualified and/or authorized would have a material adverse effect on the business, the assets, liabilities, financial condition, operation or prospects of such Group Company (“Material Adverse Effect”).

(i)As of the Closing, save for the Subsidiaries, the Company does not have any other subsidiary. The Company does not hold any interest or voting rights or exercise any control in any other entity, partnership or joint venture.

(ii)Each Group Company has all requisite corporate power and authority to own and operate its properties and assets.

(iii)Each Group Company has kept all of its corporate records updated, accurate and complete, and has made all necessary filings on time in compliance with the respective laws of the country of its incorporation.

(iv)Except that the Company is contemplating an internal reorganization transaction, after which Aeolus Robotics Asia Limited and Aeolus Robotics Corporation Limited will cease their respective existence, none of the Group Companies is in liquidation or in insolvency reorganization, or has taken any steps to enter into liquidation, insolvency reorganization, or suspend its business; no application has been made for liquidating or reorganizing any of the Group Companies or to suspend its business and there are no grounds on which an application could be based for liquidation or insolvency reorganization of the same or suspension of its business.

(v)The Company has provided to the Purchaser certified true copies of each Group Company’s (where applicable) memorandum of association and articles of 

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association or other constitutional documents, register of members, and the register of directors (collectively the “Fundamental Documents”).  To the knowledge of the Company Parties, the copies of the Fundamental Documents are true, correct, complete and not misleading, and they have not been amended throughout the Closing.  To the knowledge of the Company Parties, each Group Company has complied with its Fundamental Documents in all respects, and none of its activities, agreements, commitments or rights is ultra vires or unauthorized.

(vi)No Group Company has any bank loans.  For the purpose of this Agreement, “bank loans” shall mean the loans owed by a Group Company to banks with mortgages and/or pledges on the assets owned by the Group Company.

3.Capitalization.

(i)Immediately prior to the Closing, the authorized share capital of the Company is US$52,160.00 divided into 521,600,000 shares of US$0.0001 par value each comprising: (i) US$46,090.00 divided into 460,900,000 Ordinary Shares (as defined in the Company’s Articles) and of US$0.0001 par value each, (ii) US$5,910.00 divided into 59,100,000 Series A Preferred Shares (as defined in the Company’s Articles) of US$0.0001 par value each, and (iii) US$160.00 divided into 1,600,000 Series A-NDC Preferred Shares (as defined in the Company’s Articles) of US$0.0001 par value each.

(ii)The Company will issue 5,456,250 Ordinary Shares for certain employee share options under the employee share option plan adopted by the board of directors of the Company.

4.Enforceability.  The Transaction Documents, when executed and delivered by the Company Parties, shall be duly and validly executed and delivered by the Company Parties and shall be the Company Parties’ legally binding obligations enforceable against the Company Parties in accordance with their terms, except to the extent that such enforcement may be limited by bankruptcy, insolvency or similar laws now or hereafter in effect relating to creditors’ rights and remedies generally, and as enforcement may be limited by equitable principles of general applicability.  All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of the Transaction Documents, the adoption of the Company Articles, the performance of all obligations of the Company hereunder and thereunder at the Closing and the authorization, sale, issuance and delivery of the Conversion Shares pursuant to the Agreement, the Note and the Company Articles and applicable laws has been taken or shall be taken prior to the Closing or relevant applicable conversion.  

5.Offering.  Provided that the representations and warranties made by the Purchaser herein are complete, true and accurate, then the offer, issuance, sale and conversion (as applicable) of the Note and the Conversion Shares pursuant to this Agreement is exempt from the registration requirements of the Securities and Exchange Act, and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable securities laws.

6.Intellectual Property Rights.

(i)The copyrights, patents, trademarks, licenses, trade secrets, mask works, service names, trade names, designs, know-how or other proprietary rights (whether 

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registered or not) and all pending applications therefor (the “Intellectual Properties”) that are required or likely to be required by or useful or likely to be useful to the Group Companies’ business and operations, as now conducted or presently proposed to be conducted, are (a) legally and beneficially vested in the Group Companies and without any infringement of the rights of others, (b) valid and enforceable, (c) not being infringed or attached or opposed by any person, and (d) not subject to any license or authority of any other person.

(ii)The products and services dealt with by the Group Companies do not use or embody any Intellectual Property other than (a) those belonging to the Group Companies above, or (b) those in respect of which licenses have been obtained on commercially usual terms and are currently in force.  In addition, none of the products and services infringes the right of any third party’s Intellectual Properties, and to the knowledge of the Company Parties, no claims have been made and no applications for such claims are pending.

(iii)The Group Companies have taken all necessary and appropriate security measures to protect the secrecy, confidentiality and value of the Group Companies’ Intellectual Properties.

(iv)None of the Group Companies has utilized or proposes to utilize any Intellectual Property of any of their employees (or people it currently intends to hire) made prior to his or her employment by such Group Company except for such Intellectual Property that has been assigned or licensed to the Group Company.

(v)There are no outstanding options, licenses, agreements or rights of any kind granted by any Group Company relating to any Group Company’s Intellectual Properties, nor is any Group Company bound by or a party to any options, licenses, agreements or rights of any kind with respect to the Intellectual Properties of any other person.

7.Compliance with Other Instruments.  To the knowledge of the Company, each Group Company is not in violation or default of any term of the Company Articles, the Fundamental Documents, bylaws, or any other constitutional documents of such Group Company, except for immaterial noncompliance that in the aggregate are not material to the Group Companies taken as a whole.  None of the Group Companies is in violation of any provision of any mortgage, indenture, agreement, instrument or contract to which such Group Company is a party or by which it or its assets are bound or of any judgment, decree, order or writ.  The execution, delivery, and performance of and compliance with the Transaction Documents, the Company Articles and the issuance, sale and conversion (as applicable) of the Note and the Conversion Shares pursuant to the Transaction Documents and the Company Articles, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Group Companies or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to any Group Company, its business or operations or any of its assets or properties.

8.Agreements.

(i)There are no agreements, understandings, instruments, contracts, proposed transactions or judgments or orders, in each case, to which any Group Company is a 

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party or by which it is bound which (a) may involve obligations (contingent or otherwise) of, or payments by, any Group Company in excess of US$1,000,000, (b) which are otherwise material and not entered into in the ordinary course of business, (c) are not cancelable by such Group Company without penalty on less than ninety (90)-day notice and are not entered into in any Group Company’s ordinary course of business, (d) which contain covenants directly or explicitly limiting the freedom of any Group Company to compete in any line of business or with any person, (e) is an indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for borrowing or any pledge or security arrangement in the amount exceeding US$1,000,000, other than inter-company loans and agreements and the Transaction Documents, or (f) contain provisions restricting or affecting the indemnification by any Group Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business).

(ii)All of the contracts, agreements and instruments to which any Group Company is a party, are valid, binding and in full force and effect and constitute legal, valid and binding obligations of such Group Company, as the case may be, and of the other parties, and are enforceable subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.  None of the Group Companies, nor any other party is in material default in complying with any provision of any such contract, agreement or instrument, and no condition of facts exist which, with notice, lapse of time or both, would constitute a default thereunder on the part of the Group Companies.  None of the Company Parties has knowledge of any notice or threat to terminate any such contracts, agreements or instruments.

(iii)Except for inter-company loans and the required and necessary costs and expenses for the transactions contemplated hereunder, the Group Companies have not (A) incurred or guaranteed any indebtedness for money borrowed or any other liabilities exceeding the amount of US$1,000,000, or (B) made any loans or advances to any person.

(iv)No Group Company is a party to any material written or oral contract which is not made in the ordinary course of business and on arm’s length terms.

9.Compliance with Laws.  The Group Companies are not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of their business or the ownership of their properties, except as would not have a Material Adverse Effect.  No permits are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of the Transaction Documents and the issuance of the Note or the Conversion Shares, except such as have been duly and validly obtained or filed, or with respect to any filings that must be made after Closing, as will be filed in a timely manner.  The Group Companies have all franchises, permits, licenses and any similar authority necessary for the conduct of their business as now being conducted by them (“Permits”), the lack of which could have a Material Adverse Effect, and all such Permits are valid and in full force and effect.  No Permit is subject to termination as a result of the execution of the Transaction Documents or consummation of the transactions contemplated therein.

10.Litigation.  There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or, to the knowledge of the Company Parties, currently threatened (i) against any Group Company, or any officer or director of any Group Company; 

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or (ii) that questions the validity of the Transaction Documents or the right of any Group Company to enter into the Transaction Documents, or to consummate the transactions contemplated hereunder; or (iii) that might result, either individually or in the aggregate, in a Material Adverse Effect, financially or otherwise, or any change in the current equity ownership of any Group Company.  The Company is not aware of any basis for the foregoing.  To the knowledge of the Company Parties, none of the Group Companies is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or governmental authority.  To the knowledge of the Company Parties, there is no action, suit, proceeding or investigation by any Group Companies currently pending or which any Group Company intends to initiate.

11.Financial Statements.  The Company has delivered to the Purchaser (i) an unaudited consolidated balance sheet and profit and loss sheet of the Company and the Subsidiaries for the financial year ended December 31, 2019, and (ii) an unaudited consolidated balance sheet and profit and loss sheet of the Company and Subsidiaries as of April 30, 2020 (collectively, the “Financial Statements”).  Such Financial Statements: (a) are in accordance with the books and records of each Group Company, which are complete and correct and have been maintained in accordance with reasonable business practices for companies similar to each Group Company , respectively; (b) are true, correct and complete and present fairly the financial condition of the Company and Subsidiaries at the date or dates therein indicated and the results of operations for the period or periods therein specified, respectively, and (c) have been prepared in accordance with Enterprise Accounting Standards (企業會計準則) applied on a consistent basis.  Since April 30, 2020, there has been no change in the assets, liabilities, financial condition or operations of the Group Companies from that reflected in the Financial Statements, except for NT$60,000,000 provided by the National Development Fund in exchange of 1,600,000 Series A-NDC Preferred Shares and changes arising out of the ordinary course of business which, either in any case or in the aggregate, have not been adverse in any respect.  Full provision or reserve has been made in the Financial Statements for all Taxation (deferred or otherwise) liable to be assessed on the Group Companies and all Taxation which has been assessed has been fully paid.  Each Group Company has paid all the necessary Taxation in compliance with any law, rule, regulation or government policy to which it is subject.  For the purpose of this Agreement, “Taxation” includes all form of taxation in the Cayman Islands, Hong Kong, the US, the Republic of China or elsewhere in the world, past, present and future (including, without limitation, gift tax, securities transaction tax, capital gains tax, income tax, estate duty, stamp duty, goods and services tax, customs and other import or export duties) and all other statutory, governmental or state impositions, duties and levies and all penalties, charges, costs and interest relating to any notice, demand, assessment, letter or other document issued or action taken by any revenue or taxation authority or other statutory or governmental authority, body or official whosoever whereby the Group Company is or may be placed or sought to be placed under a liability to make a payment or deprived of any relief, allowance, credit or repayment otherwise available.

12.Employment Matters.  To the knowledge of the Company Parties, none of the Group Companies’ employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s ability to promote the interest of the Group Companies or that would conflict with the Group Companies’ business.  The Group Companies are not delinquent in payments to any of their employees, consultants, or independent contractors for any wages, salaries, 

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commissions, bonuses, or other direct compensation for any service performed by them as of the Closing or amounts required to be reimbursed to such employees, consultants or independent contractors, in all material respects.  The Group Companies have complied in all material respects with all applicable equal employment opportunity laws and with other laws related to employment, including those related to pensions, wages, hours, worker classification and collective bargaining.  No Group Company has any collective bargaining agreements with any of its employees.  The existing employment contracts with each of the employees of each Group Company impose non-disclosure obligations on the employees to maintain the confidentiality of the confidential and/or proprietary information of the Group Company.  Neither any Group Company nor any of its shareholders, employees or directors has solicited any employee to leave his or her previous employment in breach of any applicable laws or which may give rise to any tortious, contractual or criminal liability.

13.Material Adverse Effects.  No other event or circumstance is outstanding which constitutes a default or termination right under any other agreement or instrument which is binding on the Group Companies or to which the Group Companies’ assets are subject which might have a Material Adverse Effect.

14.No Brokers or Finders.  No person has or will have, as a result of the transactions contemplated by the Transaction Documents, any right, interest or claim against or upon any Group Company for any commission, fee or other compensation as a finder or broker.

15.Corrupt Business Practices.  The Group Companies, their respective directors, employees, agents and their consultants and each other person acting for, or on behalf of, the Group Companies, has complied with Part 2, Chapter Four of the R.O.C. Criminal Code, the R.O.C. Statute of Punishment of Corruption, the Bribery Act of the United Kingdom of Great Britain and Northern Ireland, the U.S. Foreign Corrupt Practices Act of 1977, and any other law (broadly defined) intended to prevent or deter bribery or corrupt business practices, to the extent such laws are applicable to them (collectively the “Anticorruption Laws”). The Group Companies are not under investigation with respect to, and have not been given notice of, any violation of any Anticorruption Laws applicable to the business of the Group Companies, as presently conducted or as has been conducted.  Neither the Group Companies nor any officer, director, supervisor, agent or employee purporting to act on behalf of the Group Companies or any other related party has at any time, directly or indirectly:

(i)made, provided or paid any unlawful contributions, gifts, entertainment or other unlawful expenses to any candidate for political office, or failed to disclose fully any such contributions in violation of any applicable laws;

(ii)made any payment to any local, state, federal or any other type of governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable Anticorruption Laws;

(iii)made any payment to any agent, employee, officer or director of any entity with which any Group Company or any other related party does business for the purpose of influencing such agent, employee, officer, supervisor or director to do business with the Group Companies;

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(iv)engaged in any transactions, maintained any bank account or used any corporate funds, except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Group Companies;

(v)violated any provision of the Anticorruption Laws; or

(vi)made any payment in the nature of criminal bribery or any other unlawful payment.

16.Title to Properties and Assets.  Each Group Company has good and marketable title to, and legally and beneficially owns or has valid leasehold interests or rights to use, all its property and assets, free and clear of all mortgages, liens, loans and encumbrances, except for liens for Taxation, assessments or other governmental charges or levies not yet due, and statutory liens for landlords, carriers, warehousemen, mechanics and other liens imposed by law created in the ordinary course of business of the Group Company consistent with past practices for amounts not yet due.  

17.No Contingent Liabilities.  No Group Company has given any guarantee, indemnity or suretyship for principal amounts recoverable exceeding that stated in the last audited accounts (if any) of such Group Company.

[The remainder is intentionally left blank.]

B-7

 

 

 

 

EXHIBIT C

Disclosure Schedule OF the Company

 

Section 8.1.(a)

	
(1)
	
Engagement Agreement by and between Aeolus Robotics Corporation and Titan Capital Asia (HK) Limited dated March 6, 2020.

	
(2)
	
Engagement Agreement by and between Aeolus Robotics Corporation and GCA Taiwan Co., Ltd. dated December 2019.

 

 

C-1

 

 

 

EXHIBIT D

SCHEDULE OF SUBSIDIARIES

	
1.
	
Aeolus Robotics Corporation, a company incorporated in the State of Samoa

	
2.
	
Aeolus Robotics Asia Limited (HK), a company incorporated in the Hong Kong Special Administrative Region of the People's Republic of China

	
3.
	
Aeolus Robotics, Inc., a company incorporated in the State of Delaware

	
4.
	
Aeolus Robotics Corporation Limited, a company incorporated in the Hong Kong Special Administrative Region of the People's Republic of China (including its Taiwan Branch, 香港商睿智通有限公司台灣分公司)

	
5.
	
Aeolus Robotics Japan Limited, a company incorporated in Japan

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