Document:

EX-10.1

 Exhibit 10.1 

FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED 

LOAN AND SECURITY AGREEMENT 

THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of
August 25, 2015, is entered into by and among the Lenders (as defined below) signatory hereto, BANK OF AMERICA, N.A., as administrative agent and as security trustee for the Lenders (in such capacity, “Agent”),
CALLAWAY GOLF COMPANY, a Delaware corporation (“Parent”), CALLAWAY GOLF SALES COMPANY, a California corporation (“Callaway Sales”), CALLAWAY GOLF BALL OPERATIONS, INC., a Delaware corporation
(“Callaway Operations”, and together with Parent and Callaway Sales, collectively, “U.S. Borrowers”), CALLAWAY GOLF CANADA LTD., a Canada corporation (“Canadian Borrower”), CALLAWAY GOLF
EUROPE LTD., a company organized under the laws of England (registered number 02756321) (“U.K. Borrower” and together with the U.S. Borrowers and the Canadian Borrower, collectively, “Borrowers”), and the other
Obligors party hereto. 
 RECITALS 

A. Borrowers, the other Obligors party thereto, Agent, and the financial institutions signatory thereto from time to time (each a
“Lender” and collectively the “Lenders”) have previously entered into that certain Second Amended and Restated Loan and Security Agreement dated as of December 22, 2011 (as amended, supplemented, restated and
modified from time to time, the “Loan Agreement”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers. Terms used herein without definition shall have the meanings ascribed to
them in the Loan Agreement. 
 B. Obligors have requested that Agent and the Required Lenders amend the Loan Agreement, which Agent and the
Required Lenders are willing to do pursuant to the terms and conditions set forth herein. 
 C. Obligors are entering into this Amendment
with the understanding and agreement that, except as specifically provided herein, none of Agent’s or any Lender’s rights or remedies as set forth in the Loan Agreement or any of the other Loan Documents are being waived or modified by the
terms of this Amendment. 
 AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 1. Amendments to Loan
Agreement. 
 (a) The following definitions are hereby added to Section 1.1 of the Loan Agreement in their proper alphabetical
order: 
 Fifth Amendment: means that certain Fifth Amendment to Second Amended and Restated Loan and Security, dated as of the Fifth
Amendment Effective Date, by and among Agent, the Borrowers, the other Obligors party thereto and the financial institutions party thereto. 

 Fifth Amendment Effective Date: means August 25, 2015. 

Fifth Amendment Transaction Expenses: means the transaction expenses incurred by the Obligors in connection with the Fifth Amendment,
the Incentive Payment and the conversion of the Convertible Debt into common stock of Parent during the period beginning with the Fifth Amendment Effective Date and ending December 31, 2015 in an aggregate amount not to exceed $2,500,000. 

Fixed Charges: the sum of cash interest expense, principal payments made on Borrowed Money, and Distributions made (other than
Distributions made to Obligors to the extent permitted hereunder). For the avoidance of doubt, Fixed Charges shall not include the Incentive Payment. 

Incentive Payment: means the payment in cash by Parent of no more than $400,000 in the aggregate to the holders of the Convertible Debt
no later than 15 days after the Fifth Amendment Effective Date in connection with the conversion by such holders of their holdings of the Convertible Debt into common stock of Parent. 

Redemption Payment: means the prepayment in cash by Parent of no more than $20,000,000 in the aggregate of the Convertible Debt no later
than December 31, 2015 in connection with the redemption of the Convertible Debt by any holders of the Convertible Debt in accordance with the terms thereof and subject to the terms hereof. 

(b) The following definitions in Section 1.1 of the Loan Agreement are hereby amended and restated in their entirety as follows: 

EBITDA: determined on a consolidated basis for Parent and Subsidiaries, net income, calculated before interest expense, non-cash stock
compensation expense, provision for income taxes, depreciation and amortization expense, other non-cash expenses (except to the extent representing a reserve or accrual for cash expenses in another period) of Borrower Agent and its subsidiaries
(including, without limitation, non-cash amounts related to any downsizing, restructuring or partial close of any operations of Borrower Agent or any of its subsidiaries), gains or losses arising from the sale of capital assets, gains arising from
the write-up of assets, any extraordinary gains, any gains on account of a transaction which results in Parent receiving Top Golf Proceeds, and any Fifth Amendment Transaction Expenses (in each case, to the extent included in determining net
income). 
 Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for Parent and its Subsidiaries for the most
recent twelve calendar months, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) and cash taxes paid (which amount may not be less than zero), to (b) Fixed Charges;
provided, however, that (i) solely for the purposes of calculating the Fixed Charge Coverage Ratio under Section 10.3.1, Fixed Charges shall not include any Excluded Stock Repurchases, and (ii) Fixed Charges shall not
include any Redemption Payment. 
 (c) Section 10.2.10 of the Loan Agreement is hereby amended and restated in its entirety as follows:

  
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 “10.2.10. Restrictions on Payment of Certain Debt. Make any (a) payments
(whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Debt which is subordinated to the Obligations, except regularly scheduled payments of principal, interest and fees, but only to
the extent permitted under any subordination agreement relating to such Debt (and a Senior Officer of Borrower Agent shall certify to Agent, not less than five Business Days prior to the date of payment, that all conditions under such agreement have
been satisfied); (b) any voluntary payments with respect to any Borrowed Money (other than the Obligations and any intercompany obligations) prior to its due date; provided, however, that the restriction set forth in clause
(b) shall not apply to (i) any payment if either: (A) (1) on a pro forma basis after giving effect to such payment, Net Excess Availability has been greater than an amount equal to 15% of the Maximum Facility Amount at all times
during the thirty (30) day period immediately prior to the making of such payment, (2) Net Excess Availability is greater than an amount equal to 15% of the Maximum Facility Amount after giving effect to such payment, and (3) the
Fixed Charge Coverage Ratio, on a pro forma basis after giving effect to such payment (calculated on a trailing twelve month basis recomputed for the most recent month for which financial statements have been delivered) is not less than 1.0 to 1.0;
or (B) (1) average daily Net Excess Availability, on a pro forma basis after giving effect to such payment, has been greater than an amount equal to 20% of the Maximum Facility Amount for the ninety (90) day period immediately prior
to the making of such payment, and (2) Net Excess Availability is greater than an amount equal to 20% of the Maximum Facility Amount after giving effect to such payment, or (ii) the making of the Incentive Payment in accordance with the
definition thereof.” 
 2. Effectiveness of this Amendment. The following shall have occurred before this Amendment is
effective: 
 (a) Amendment. Agent shall have received this Amendment, executed by Agent, each Obligor and the Required Lenders in a
sufficient number of counterparts for distribution to all parties. 
 (b) Representations and Warranties. The representations and
warranties set forth herein must be true and correct. 
 (c) No Default. No event has occurred and is continuing that constitutes an
Event of Default. 
 (d) Other Required Documentation. All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Agent. 

3. Representations and Warranties. Each Obligor represents and warrants as follows: 

(a) Authority. Each Obligor has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its
obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party. The execution, delivery and performance by each Obligor of this Amendment have been duly approved by all necessary corporate action and no
other corporate proceedings are necessary to consummate such transactions. 

  
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 (b) Enforceability. This Amendment has been duly executed and delivered by each Obligor.
This Amendment and each Loan Document to which any Obligor is a party (as amended or modified hereby) is a legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability, and is in full force and effect. 

(c) Representations and Warranties. The representations and warranties contained in each Loan Document to which any Obligor is a party
(other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof. 

(d) Due Execution. The execution, delivery and performance of this Amendment are within the power of each Obligor, have been duly
authorized by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restrictions binding on any Obligor. 

(e) No Default. No event has occurred and is continuing that constitutes an Event of Default. 

4. Choice of Law. The validity of this Amendment, its construction, interpretation and enforcement, the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to Section 5-1401 of the New York General
Obligation Law and Federal laws relating to national banks). The consent to forum and judicial reference provisions set forth in Section 14.15 of the Loan Agreement are hereby incorporated in this Amendment by reference. 

5. Counterparts. This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each
of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile or
a substantially similar electronic transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or a
substantially similar electronic transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement. 

6. Reference to and Effect on the Loan Documents. 

(a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereof” or words of like import referring to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby. 
 (b) Except as specifically amended above,
the Loan Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Obligors to
Agent and the Lenders. 

  
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 (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. 

(d) To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions
of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby. 

7. Ratification. Each Obligor hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan
Agreement, as amended hereby, and the Loan Documents effective as of the date hereof. Subject to and without limiting the foregoing, all security interests, pledges, assignments and other Liens and Guarantees previously granted by any Obligor
pursuant to the Loan Documents are hereby reaffirmed, ratified, renewed and continued, and all such security interests, pledges, assignments and other Liens and Guarantees shall remain in full force and effect as security for the Obligations on and
after the date hereof. 
 8. Estoppel. To induce Lenders to enter into this Amendment and to continue to make advances to Borrowers
under the Loan Agreement, each Obligor hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of any Obligor as against Agent or any Lender with respect to the
Obligations. 
 9. Integration. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties
hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof. 

10. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

[Remainder of Page Left Intentionally Blank] 

  
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 IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written. 
  

			
	OBLIGORS:
	
	 CALLAWAY GOLF COMPANY,
 a
Delaware corporation

		
	By:	 	 /s/ Oliver G. Brewer III

	Name:	 	Oliver G. Brewer III
	Title:	 	President and Chief Executive Officer
	
	 CALLAWAY GOLF SALES COMPANY,

a California corporation

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director
	
	 CALLAWAY GOLF BALL OPERATIONS, INC.,

a Delaware corporation

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director
	
	 CALLAWAY GOLF CANADA LTD.,
 a
Canada corporation

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director
	
	 CALLAWAY GOLF EUROPE LTD.,
 a
company organized under the laws of England and Wales

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director

			
	 CALLAWAY GOLF INTERACTIVE, INC.

a Texas corporation

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director
	
	 CALLAWAY GOLF INTERNATIONAL SALES COMPANY,

a California corporation

		
	By:	 	 /s/ Patrick S. Burke

	Name:	 	Patrick S. Burke
	Title:	 	Director
	
	 CALLAWAY GOLF EUROPEAN HOLDING COMPANY LIMITED,

a company limited by shares incorporated under the laws of England and Wales

		
	By:	 	 /s/ Brian P. Lynch

	Name:	 	Brian P. Lynch
	Title:	 	Secretary

			
	AGENT AND LENDERS
	
	BANK OF AMERICA, N.A., as Agent and as a U.S. Lender
		
	By:	 	 /s/ Stephen King

	Name:	 	Stephen King
	Title:	 	Senior Vice President
	
	BANK OF AMERICA, N.A.
	(acting through its Canada branch), as a Canadian Lender
		
	By:	 	 /s/ Sylwia Durkiewicz

	Name:	 	Sylwia Durkiewicz
	Title:	 	Vice President
	
	BANK OF AMERICA, N.A.
	(acting through its London branch), as a U.K. Lender
		
	By:	 	 /s/ Stephen King

	Name:	 	Stephen King
	Title:	 	Senior Vice President

			
	MUFG UNION BANK N.A.,
	as a U.S. Lender and a U.K. Lender
		
	By:	 	 /s/ Todd Eggertsen

	Name:	 	Todd Eggertsen
	Title:	 	Director
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	 UNION BANK, CANADA BRANCH,

as a Canadian Lender

		
	By:	 	 /s/ Anne Collins

	Name:	 	Anne Collins
	Title:	 	Director
		
	By:	 	  

	Name:	 	
	Title:	 	

			
	WELLS FARGO BANK, N.A.,
	as a U.S. Lender
		
	By:	 	 /s/ Rina Shinoda

	Name:	 	Rina Shinoda
	Title:	 	Vice President
	
	WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender
		
	By:	 	 /s/ Domenic Cosentino

	Name:	 	Domenic Cosentino
	Title:	 	Vice President
	
	WELLS FARGO BANK, N.A.
	(London Branch), as a U.K. Lender
		
	By:	 	 /s/ N.B. Hoga

	Name:	 	N.B. Hoga
	Title:	 	Authorized Signatory

			
	SUNTRUST BANK,
	as a U.S. Lender, a Canadian Lender and a U.K. Lender
		
	By:	 	 /s/ Leena Stover

	Name:	 	Leena Stover
	Title:	 	Vice PresidentExhibit 10.1 Stock Purchase Agreement

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made this August 21, 2015 (“Effective Date”), by and between HK Battery Technology Inc., a Delaware corporation (the “Seller” or the “Company”), and Lianyungang HK New Energy Vehicle System Integration Corporation, a company organized under the laws of the People’s Republic of China (the “Buyer”).

WHEREAS, subject to the terms and conditions herein, Seller wishes to sell its capital stock to Buyer and Buyer wishes to purchase such capital stock from Seller; and

NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:

1.

Purchase and Sale of Stock. 

(a)

Sale of Shares.  Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties and covenants contained herein, Buyer agrees to purchase from Seller, and Seller agrees to sell to Buyer, ONE HUNDRED THIRTY-TWO MILLION (132,000,000) shares (the “Shares”) of the $0.001 par value per share common stock of the Company (the “Common Stock”) at $0.75 per share, for a total purchase price of NINETY NINE MILLION United States Dollars ($99,000,000.00) in cash (the “Purchase Price”).

(b)

Closing.

(1)

The closing of the transactions contemplated hereunder (the “Closing”) shall be held at the office of the Company within ninety (90) days (the “Closing Date”) of the Effective Date, or such other place and date as Seller and Buyer may mutually agree.

(2)

On or Before to the Closing Date, 

(i)

Seller shall deliver to Buyer stock certificate(s) representing the Shares (the “Certificate”), 

(ii)

Buyer shall deliver to Seller the sum of the aggregate Purchase Price, in immediately available funds via wire to the following coordinates:  

BANK:  

East West Bank

ABA#:  

SWIFT CODE:  

EWBKUS66XXX

BENEFICIARY:  HK Battery Technology Inc

ACCOUNT:  

80-21000701

REFERENCE/SPECIAL INSTRUCTIONS:  “HK Battery Technology Inc.”

(3)

The following shall be conditions to the consummation of the Closing (the “Closing Conditions”) and evidenced by delivery of the required documentation to the Company or as otherwise provided below:

(i)

completion and execution by Buyer of the Anti-Money-Laundering Form attached hereto as Exhibit A.

2.

Representations and Warranties of Seller. 

As an inducement to Buyer to enter into this Agreement and purchase the Shares, Seller hereby represents and warrants that the statements contained in this Section 2 are true, correct and complete as of the date hereof and will be true, correct and complete as of the Closing Date (as though made then and as though the Closing Date was substituted for the date of this Agreement).

(a)

Organization.  Seller is a corporation, duly organized and validly existing under the laws of Delaware.

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(b)

Authorization; Enforceability.  Seller has the legal right to enter into and to consummate the transactions contemplated hereby and otherwise to carry out Seller’s obligations hereunder.  The execution, delivery and performance by Seller of this Agreement and all other agreements and documents by Seller in connection with the transactions contemplated hereby (collectively, the “Transaction Documents”) have been duly authorized by all requisite action by Seller, and the Agreement and the Transaction Documents, when executed and delivered by Buyer, constitutes a valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.

Representations and Warranties of Buyer.  

Buyer hereby warrants and represents to Seller that:

(a)

Authorization; Enforceability.  Buyer has the legal right and power to enter into and to consummate the transactions contemplated hereby and otherwise to carry out Buyer’s obligations hereunder.  The execution, delivery and performance by Buyer of this Agreement have been duly authorized by all requisite action by Buyer, and the Agreement, when executed and delivered by Seller, constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(b)

Approvals and Consents. No action, approval, consent or authorization, including but not limited to, any action, approval, consent or authorization by any governmental or quasi-governmental agency, commission, board, bureau or instrumentality is necessary or required as to the Buyer in order to constitute this Agreement as a valid, binding and enforceable obligation of the Buyer in accordance with its terms.

(c)

Investor Representations.  Buyer (i) and its principals have extensive knowledge and experience in financial and business matters; (ii) has had access to all information as to the Company as it has desired; (iii) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning the operations of the Company, its business and prospects in order to evaluate the merits and risks of the transactions contemplated by this Agreement; and (iv) is aware that an investment in the Shares involves a number of very significant risks; provided that any due diligence review or other inquiry or investigation undertaken by Buyer shall not limit, qualify, modify or amend the representations and warranties of Seller made in this Agreement, irrespective of the knowledge or information received by Buyer.

(d)

Brokerage Fees.  Buyer has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Agreement or the transaction contemplated hereby.

(e)

No Other Representations or Information.  In evaluating the suitability of an investment in the Shares, the Buyer has not relied upon any representation or information (oral or written) other than as stated in this Agreement and the public filings of the Company and Seller.

(f)

No Governmental Review.  Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

(g)

No Fiduciary Duty. Buyer hereby acknowledges and agrees that (i)  the purchase and sale of the Shares is taking place in a private transaction between Seller and Buyer in an arm’s length commercial transaction at a price negotiated and agreed to by Seller as the best possible current price for the Shares; (iii) Buyer is solely responsible for making its own judgments in connection with this Agreement; and (iv) Seller has not rendered advisory services of any nature or respect, nor owes any agency, fiduciary or other duty to Buyer, in connection with such transaction or the process leading thereto other than with respect to the accuracy of Seller’s representations. 

(h)

Advice of Counsel.  Buyer further acknowledges that it is represented by counsel of its choice, that it has carefully reviewed the provisions of this Agreement with its counsel and that it understands and voluntarily accepts the Agreement as binding.

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4.

Miscellaneous.

(a)

Default by Seller.  A breach by Seller of any of its representations in this Agreement or the failure of Seller to have fulfilled its Closing Conditions by the Closing Date or the failure of Seller to have made or caused to have been made the closing deliveries contemplated herein, including the failure to deliver the Certificate(s) and Seller deliverables to Buyer prior to the Closing Date shall constitute a default under this Agreement (“Default”).  Nothing herein shall limit Buyer’s right to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein for an injunction against a violation of any of the terms hereof or thereof, or for the pursuit of any other remedy which it may have by virtue of this Agreement, for the failure of Seller, Seller’s agents, or the Company and its transfer agent to deliver the Certificates, Seller deliverables and other Closing deliveries, and Buyer shall have the right to pursue all remedies available to it at law or in equity, including, without limitation, a decree of specific performance or injunctive relief.  In the event of Default, Seller shall pay to the Buyer the reasonable costs and expenses of collection and of any other actions referred to in this paragraph (a) or otherwise reasonably appropriate, including without limitation reasonable attorneys’ fees, expenses and disbursements.  

(b)

Default by Buyer.  Buyer’s failure to deliver the Purchase Price prior to the Closing Date shall constitute a default.  If such default is not cured by the Closing Date, then Seller may terminate this Agreement and demand the immediate return of the Certificate(s) and Seller Deliverables by notice to Seller.  Until the Closing Date, Seller’s sole remedy in case of such a default shall be to delay the Closing.  Upon Buyer’s timely cure of such a default, Seller shall be required to fulfill its obligations hereunder.

(c)

Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties.

(d)

Choice of Law; Choice of Venue.  This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements entered into and to be performed entirely within California without applying its principles of choice of law.  Any dispute or controversy concerning or relating to this Agreement shall be exclusively resolved in the federal or state courts located in County of Los Angeles, State of California. Each of the parties hereto irrevocably submits to the jurisdiction of the courts of the State of California located in County of Los Angeles and the United States District Court for the Central District of California for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated herein. Service of process in connection with any such suit, action, proceeding or judgment may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and the laying venue in such court.  Each party hereto further irrevocably waives any objection to the laying of venue of any suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(e)

Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE AND AGREES NOT TO REQUEST A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(f)

Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or sent by overnight delivery by a nationally recognized overnight courier upon proof of sending thereof and addressed to the party to be notified at the address indicated for such party on its signature page hereto, or at such other address as such party may designate by written notice to the other parties.  

(g)

Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Seller and Buyer.

(h)

Expenses.  Each of the parties shall bear its own costs and expenses incurred with respect to the negotiation, execution, delivery, and performance of this Agreement.

(i)

Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(j)

Entire Agreement.  This Agreement represents and constitutes the entire agreement and understanding among the parties with regard to the subject matter contained herein.  All prior agreements, understandings and representations are hereby merged into this Agreement.

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(k)

Construction.  The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.  Among other things, “or” is not exclusive and the singular may include the plural and the plural may include the singular, all as the context requires.  All representations and warranties given by any party herein shall survive the Closing.

(l)

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties.  This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(m)

Severability. In the case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(n)

Waiver.  The failure of any party to give any notice or to take any action hereunder shall not be deemed a waiver of any of the rights of such party hereunder, except to the extent that the other party is actually prejudiced by such failure.

(o)

Recitals.  The recitals contained herein are hereby incorporated by reference and made a part of this Agreement as if set forth in full herein.

(p)

Further Acts.  Each of Buyer and Seller shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as another party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent thereunto duly authorized, this Agreement as of the date first above written.

SELLER:

HK BATTERY TECHNOLOGY INC.

By:   /s/ Jianguo Xu                  

Name: Jianguo Xu

Title: Chief Executive Officer

Address of Record:

800 E. Colorado Blvd., Suite 888

Pasadena, California 91101

United States of America

Number of Shares of Common Stock being sold: 

132,000,000

Purchase Price per share: 

$0.75

Total Purchase Price:

$99,000,000

Delivery instructions (wire or otherwise):

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

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PURCHASER  

LIANYUNGANG HK NEW ENERGY VEHICLE SYSTEM INTEGRATION CORPORATION

By:   /s/ Zhenhua Chen                         

Name: Zhenhua Chen

Title:   Executive Manager

Address of Record:

Suite 1408 14/F Great Eagle Centre

23 Harbour Road 

Wanchai, Hong Kong

Number of Shares of Common Stock being sold: 

132,000,000

Purchase Price per share: 

$0.75

Total Purchase Price:

$100,000,000

Delivery instructions for stock certificate:

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

6

 

EXHIBIT A

HK BATTERY TECHNOLOGY INC.

ANTI MONEY-LAUNDERING INFORMATION FORM

(Please fill out and return with requested documentation.)

The following is required in accordance with the AML provision of the USA PATRIOT ACT.

		
	

INVESTOR NAME:

	

Lianyungang HK New Energy Vehicle System Integration Corporation

	

LEGAL ADDRESS:

	 

	

	  

	 
	 

	SS# or TAX ID#

	of INVESTOR:

	 

IDENTIFICATION, DOCUMENTATION AND SOURCE OF FUNDS:

1.

Please submit a copy of a non-expired identification for the authorized signatory(ies) on the investment documents, showing name, date of birth and signature:

					
	Current Driver’s License

	or

	Valid Passport

	or

	Identity Card

(Circle one or more)

2.

If the Investor is a corporation, please submit the following corporate documents:

(i) Articles of Incorporation (or similar); (ii) Corporate Resolution granting authority to signatory(ies) and designating that they are permitted to make the proposed investment.

3.

Please advise where the funds were derived from to make the proposed investment:

				
	  X . Investments

	Savings

	Proceeds of Sale

	Other ____________

(Circle one or more)

		
	

Signature:

	 

	

Print Name:

	Zhenhua Chen

	

Title (if applicable):

	Executive Manager

	

Date:

	8/21/2015

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