Item 1.01
Entry into a Material Definitive Agreement.
On November 30, 2017, UQM Technologies, Inc. (“UQM” or the “Company”)
announced that it has
entered into a joint venture agreement, dated November 30, 2017 (the “Joint Venture Agreement”), with China National Heavy Duty Truck Group Co., Ltd. (“CNHTC”), a China corporation, and Sinotruk Global Village Investment Limited, a Hong Kong based limited liability company (“SGVIL”), in connection with the previously announced Stock Purchase Agreement, dated as of August 25, 2017 (the “Stock Purchase Agreement”). The joint venture (the “JV”) will be named “Sinotruk Qingdao Zhongqi New Energy Automobile Co., Ltd.” and will be headquartered in the city of
Qingdao, Shandong province, China. The purpose of the JV will be to design, produce, manufacture, market and sell commercial electric motor systems with transmission related motors in the electric vehicle market in China
and also will work to sell mutually developed E-axle products globally.
Under the Joint Venture Agreement, the Company will acquire a 25% equity interest in the JV with the option to increase its ownership interest to 33% beginning after the first anniversary of the agreement through the third anniversary, at a price equal to the then-market price of the JV shares. The initial total capital of the JV will be $24 million, with UQM contributing $6 million. Each party will contribute 16.7% of its capital contribution by December 31, 2017, 33.3% by June 30, 2018, and the remaining 50% by December 31, 2018. It is expected that the proceeds of the initial capital contribution will be used for acquisition of manufacturing facilities and related infrastructure and employment of key personnel.
UQM’s funding requirement is contingent on the closing of the second stage investment by CNHTC in the shares of common stock of UQM, in accordance with the terms of the Stock Purchase Agreement.
The board of directors of the JV will consist of five directors, with one of the directors to be nominated by the Company and the remaining directors to be nominated by CNHTC and SGVIL.
As part of the Joint Venture Agreement, the Company will license, on a royalty-free basis, certain of its intellectual property regarding the Company’s existing products to the JV for a period of seven (7) years to enable the JV to manufacture and sell the Company’s products in China in accordance with the terms of the Joint Venture Agreement.
Pursuant to the terms of the Stock Purchase Agreement, upon closing of the first stage investment by CNHTC in the shares of common stock of UQM on September 25, 2017, CNHTC exercised its right to nominate one non-voting observer to the Company’s board of directors (the “UQM Board”). Accordingly, the UQM Board appointed Mr. Ma Chunji, who is the chairman of the board of directors of CNHTC, as the UQM Board observer.
The foregoing description of the Joint Venture Agreement does not purport to be complete and is qualified in its entirety by reference to the Joint Venture Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference
.