Page 5 of 7 – SEC Filing
The closing of the second
acquisition is subject to the approval of the Issuer’s shareholders and the approval of the Committee on Foreign
Investment in the United States (“CFIUS”) under Section 721 of the Defense Production Act of 1950. The parties
to the Stock Purchase Agreement have agreed to submit a joint draft and final voluntary notice relating to the second
acquisition to CFIUS as promptly as practicable following the execution of the Stock
Purchase Agreement, and to use reasonable best efforts to obtain all approvals and other consents necessary for completion of the
second acquisition. The parties expect to receive the aforementioned shareholder and CFIUS approval within 120 days of the
execution of the Stock Purchase Agreement, with options to extend such period as needed.
The closing of the second acquisition is also subject to the
satisfaction or waiver of other, customary closing conditions, and the completion of a joint venture agreement (the “Joint
Venture Agreement”) and a technology transfer agreement (the “Technology Transfer Agreement”) among the relevant
parties governing the development, manufacture and sale of electric motor products in China.
In the Stock Purchase Agreement, the parties have agreed that
from the date of the Stock Purchase Agreement until the end of the first anniversary following the closing of the second acquisition
of shares of Common Stock of the Issuer, neither Sinotruk BVI nor any of its affiliates will, directly or indirectly, purchase
any shares of capital stock of the Issuer representing more than a majority of the voting power of all the capital stock of the
Issuer.
The parties have also agreed that Sinotruk BVI will not, during
the period commencing on the date of the Stock Purchase Agreement and continuing for a period of one year, lend, offer, pledge,
or sell, directly or indirectly, any shares of Common Stock of the Issuer without the prior written consent of a majority of the
Board of the Issuer, subject to certain exceptions. The parties agreed that such lock-up period will be immediately terminated
and Sinotruk BVI will be entitled to sell or offer for sale the shares purchased in the first acquisition of shares if the closing
of the second acquisition of shares cannot be consummated through the failure to obtain CFIUS approval or the failure of the Issuer
to execute and deliver the Joint Venture Agreement and Technology Transfer and Service Agreement.
The Issuer and Sinotruk BVI have also entered into a registration
rights agreement (the “Registration Rights Agreement”), a copy of which is attached to
this statement on Schedule 13D as Exhibit 2. The Registration Rights Agreement provides that within 15 days of the earlier
of 75 days after submission of the initial CFIUS application and three months after the closing date of the first acquisition of
shares, the Issuer will file an initial registration statement covering the Sinotruk BVI’s registrable securities. Sinotruk
BVI will also have customary “piggyback” registration rights. The Registration Rights Agreement will require the Issuer
to pay expenses relating to such registrations, indemnify the registration rights holders against certain liabilities, and pay
the Sinotruk BVI certain liquidated damages in the event its registration statements are not declared effective.
The foregoing descriptions of the Stock Purchase Agreement and
Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the Stock Purchase
Agreement and Registration Rights Agreement, respectively, copies of which are filed as Exhibits 1 and 2, respectively, to this
statement on Schedule 13D and incorporated herein by reference.
The Reporting Persons evaluate
all their investments from time to time on an ongoing basis. The Reporting Persons reserve the right to change their investment
plans and intentions, including the right to increase or decrease their investment in the Issuer, consistent with their contractual
rights and obligations. In particular, the Reporting Persons may, consistent with their contractual rights and obligations, (i)
purchase additional shares of Common Stock of the Issuer, (ii) sell or transfer shares of Common Stock of the Issuer in public
or private transactions, (iii) enter into privately negotiated derivative transactions or public or private purchases and sales
of puts, calls and other derivative securities to hedge the market risk of some or all of their positions in the Common Stock of
the Issuer and (iv) take any other action that might relate to or result in any of the actions set forth above. Any such actions
may be effected at any time or from time to time, subject to any applicable limitations imposed on the actions by the Securities
Act of 1933, the Securities Exchange Act of 1934, or other applicable laws. The Reporting Persons reserve
the right to act in concert with any other stockholders of the Issuer or other persons, for a common purpose, if they should determine
to do so, and to recommend courses of action to the Issuer’s management, the Issuer’s board of directors, the Issuer’s
shareholders and others.
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