UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Hollysys Automation Technologies Ltd.
(Name of Issuer)
Ordinary Shares, par value $0.001 per share
(Title of Class of Securities)
G45667105
(CUSIP Number)
Mengyun Tang
c/o Advanced Technology (Cayman)
Limited
Suite 3501, 35/F, Jardine House
1 Connaught Place, Central
Hong Kong, China
+852-2165-9000
With Copies To:
Marcia Ellis
Rongjing Zhao
Morrison & Foerster LLP
Edinburgh Tower, 33/F
The Landmark, 15 Queen’s Road
Central Hong Kong, China
+852-2585-0888 |
Spencer Klein
Mitchell Presser
John Owen
Morrison & Foerster
LLP
250 West 55th Street
New York, NY 10019-9601
+1-212-468-8000 |
December 11, 2023
(Date of Event Which Requires Filing of this
Statement)
If the filing person has previously filed
a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of
§§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
| * |
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall
not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. G45667105
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Name of Reporting Persons
Liang Meng |
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Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ¨ |
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SEC Use Only |
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Source of Funds
AF |
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Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Item 2(d) or 2(e)
¨ |
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Citizenship or Place of Organization
Hong Kong Special Administrative Region of People’s Republic
of China |
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
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7 |
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Sole Voting Power
0 |
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8 |
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Shared Voting Power
8,491,875 |
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9 |
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Sole Dispositive Power
0 |
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10 |
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Shared Dispositive Power
8,491,875 |
| 11 |
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Aggregate Amount Beneficially Owned by Each Reporting Person
8,491,875 |
| 12 |
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Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
¨ |
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Percent of Class Represented by Amount in Row (11)
13.7%* |
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Type of Reporting Person
IN |
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| * |
Based on 62,021,930 Ordinary Shares outstanding as of June 30, 2023, as provided in the Issuer’s Form 20-F filed with the Securities and Exchange Commission on September 20, 2023. |
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CUSIP No. G45667105
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Name of Reporting Persons
Ascendent Capital Partners III GP Limited |
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Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ¨ |
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SEC Use Only |
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Source of Funds
AF |
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Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Item 2(d) or 2(e)
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Citizenship or Place of Organization
Cayman Islands |
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
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7 |
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Sole Voting Power
0 |
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8 |
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Shared Voting Power
8,491,875 |
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9 |
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Sole Dispositive Power
0 |
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10 |
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Shared Dispositive Power
8,491,875 |
| 11 |
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Aggregate Amount Beneficially Owned by Each Reporting Person
8,491,875 |
| 12 |
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Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
¨ |
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Percent of Class Represented by Amount in Row (11)
13.7%* |
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Type of Reporting Person
CO |
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| * |
Based on 62,021,930 Ordinary Shares outstanding as of June 30, 2023, as provided in the Issuer’s Form 20-F filed with the Securities and Exchange Commission on September 20, 2023. |
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CUSIP No. G45667105
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Name of Reporting Persons
Ascendent Capital Partners III GP, L.P. |
| 2 |
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Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ¨ |
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SEC Use Only |
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Source of Funds
AF |
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Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Item 2(d) or 2(e)
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Citizenship or Place of Organization
Cayman Islands |
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
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7 |
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Sole Voting Power
0 |
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8 |
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Shared Voting Power
8,491,875 |
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9 |
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Sole Dispositive Power
0 |
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10 |
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Shared Dispositive Power
8,491,875 |
| 11 |
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Aggregate Amount Beneficially Owned by Each Reporting Person
8,491,875 |
| 12 |
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Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
¨ |
| 13 |
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Percent of Class Represented by Amount in Row (11)
13.7%* |
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Type of Reporting Person
PN |
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Based on 62,021,930 Ordinary Shares outstanding as of June 30, 2023, as provided in the Issuer’s Form 20-F filed with the Securities and Exchange Commission on September 20, 2023. |
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CUSIP No. G45667105
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| 1 |
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Name of Reporting Persons
Ascendent Capital Partners III, L.P. |
| 2 |
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Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ¨ |
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SEC Use Only |
| 4 |
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Source of Funds
AF |
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Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Item 2(d) or 2(e)
¨ |
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Citizenship or Place of Organization
Cayman Islands |
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
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7 |
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Sole Voting Power
0 |
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8 |
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Shared Voting Power
8,491,875 |
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9 |
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Sole Dispositive Power
0 |
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10 |
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Shared Dispositive Power
8,491,875 |
| 11 |
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Aggregate Amount Beneficially Owned by Each Reporting Person
8,491,875 |
| 12 |
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Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
¨ |
| 13 |
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Percent of Class Represented by Amount in Row (11)
13.7% |
| 14 |
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Type of Reporting Person
PN |
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| * |
Based on 62,021,930 Ordinary Shares outstanding as of June 30, 2023, as provided in the Issuer’s Form 20-F filed with the Securities and Exchange Commission on September 20, 2023. |
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CUSIP No. G45667105
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| 1 |
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Name of Reporting Persons
Advanced Technology (Cayman) Limited |
| 2 |
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Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ¨ |
| 3 |
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SEC Use Only |
| 4 |
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Source of Funds
WC |
| 5 |
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Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Item 2(d) or 2(e)
¨ |
| 6 |
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Citizenship or Place of Organization
Cayman Islands |
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Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
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7 |
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Sole Voting Power
0 |
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8 |
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Shared Voting Power
8,491,875 |
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9 |
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Sole Dispositive Power
0 |
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10 |
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Shared Dispositive Power
8,491,875 |
| 11 |
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Aggregate Amount Beneficially Owned by Each Reporting Person
8,491,875 |
| 12 |
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Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
¨ |
| 13 |
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Percent of Class Represented by Amount in Row (11)
13.7%* |
| 14 |
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Type of Reporting Person
CO |
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| * |
Based on 62,021,930 Ordinary Shares outstanding as of June 30, 2023, as provided in the Issuer’s Form 20-F filed with the Securities and Exchange Commission on September 20, 2023. |
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EXPLANATORY NOTE
This Amendment No. 2 (this “Schedule 13D Amendment”)
to the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on November 6, 2023 (the “Original
Schedule 13D” and, as amended by Amendment No. 1 filed with the SEC on November 24, 2023 and this Schedule 13D Amendment,
the “Schedule 13D”) is being filed by Mr. Liang Meng, Ascendent Capital Partners III GP Limited (“GPGP”),
Ascendent Capital Partners III GP, L.P. (“GPLP”), Ascendent Capital Partners III, L.P. (“ACP III”)
and Advanced Technology (Cayman) Limited (“Advanced Technology” and, together with Mr. Meng, GPGP, GPLP and ACP
III, the “Reporting Persons”), with respect to Ordinary Shares, $0.001 par value per share (the “Ordinary
Shares”), of Hollysys Automation Technologies Ltd., a company organized under the laws of the British Virgin Islands (the “Issuer”).
The Reporting Persons are filing this Amendment No. 2 in connection
with the execution of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 11, 2023,
by and among the Issuer, Superior Technologies Holding Limited, an exempted company incorporated under the laws of the Cayman Islands
and a wholly owned subsidiary of Advanced Technology (“Parent”), and Superior Technologies Mergersub Limited, a business
company incorporated under the laws of the British Virgin Islands and a wholly owned subsidiary of Parent (“Merger Sub”),
and the related transactions described in Item 4 below.
Other than as set forth below, all Items in the Original Schedule 13D
are materially unchanged. Capitalized terms used in this Schedule 13D Amendment which are not defined herein have the meanings given to
them in the Original Schedule 13D.
| Item 3. |
Source and Amount of Funds or Other Consideration. |
Item 3 of the Schedule 13D is hereby amended
and supplemented to include the following:
The descriptions of the Merger Agreement,
the Equity Commitment Letters (as defined below), the Debt Commitment Letter (as defined below), the Limited Guarantee (as defined below)
and the Rollover and Support Agreement (as defined below) set forth in Item 4 of this Schedule 13D Amendment are incorporated herein by
reference.
| Item 4. |
Purpose of Transaction. |
Item 4 is amended to include the following disclosure at the end of
the Item:
On December 5, 2023, the two-week standstill provision in the
confidentiality agreement with the Issuer expired.
Agreement and Plan of Merger
On December 11, 2023, the Issuer, Parent and Merger Sub entered
into the Merger Agreement pursuant to which, among other things, Merger Sub will merge with and into the Issuer (the “Merger”),
with the Issuer surviving the Merger as a wholly owned subsidiary of Parent. The Merger Agreement was approved unanimously by the board
of directors of the Issuer (the “Board”), and the Board resolved to recommend approval of the Merger and the Merger
Agreement to the Issuer’s shareholders (the “Issuer Recommendation”).
Pursuant to the Merger Agreement, (a) each Ordinary Share issued
and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will be cancelled in exchange
for the right to receive US$26.50 per Ordinary Share in cash without interest (the “Per Share Merger Consideration”),
except for (i) the Excluded Shares, as defined in the Merger Agreement, which includes Ordinary Shares held by Parent or any direct
or indirect subsidiary of Parent and Ordinary Shares owned by the Issuer as treasury shares or by any direct or indirect subsidiary of
the Issuer, (ii) Ordinary Shares in respect of which the holder thereof has duly and validly exercised a right of dissent in accordance
with Section 179 of the BVI Business Companies Act (the “BVI Act”) and not effectively waived, withdrawn, forfeited,
failed to perfect or otherwise lost its rights to dissent from the Merger (the “Dissenting Shares”) and (iii) outstanding
awards of restricted Ordinary Shares issued by the Issuer pursuant to the Issuer’s share plan that are subject to transfer and other
restrictions which lapse upon the vesting of such awards (“Company Restricted Share Awards”), (b) the Excluded
Shares (including the Rollover Securities (as defined below)) will be cancelled and extinguished, (c) the Dissenting Shares will
be cancelled and will cease to exist or be outstanding, and each dissenting shareholder will cease to be a shareholder and will cease
to have any rights as a shareholder (including any right to receive Per Share Merger Consideration), subject to and except for the right
to receive the payment of the fair value of such Dissenting Shares held by them determined in accordance with Section 179 of the
BVI Act, and (d) the Company Restricted Share Awards will be treated as described below.
At the Effective Time, the Issuer’s equity awards will be treated
in the following manner:
| • | Each outstanding share option issued by the Issuer pursuant to the Issuer’s share plan that entitles the holder thereof to purchase
Ordinary Shares upon the vesting of such award (a “Company Option”) which is vested will be cancelled in exchange for
a cash amount equal to the product of (x) the excess, if any, of the Per Share Merger Consideration over the exercise price of such
vested Company Option, multiplied by (y) the number of Ordinary Shares underlying such vested Company Option. If the exercise price
of any vested Company Option is equal to or greater than the Per Share Merger Consideration, such Company Option will be cancelled without
any payment therefor. |
| • | Each unvested Company Option will be cancelled in exchange for an employee incentive award issued by the surviving company which will
have substantially similar (and which may be settled in cash or property other than shares) terms and conditions as under the Issuer’s
share plan and the award agreement with respect to such unvested Company Option. |
| • | Each vested Company Restricted Share Award will be cancelled in exchange for a cash amount equal to the Per Share Merger Consideration. |
| • | Each unvested Company Restricted Share Award will be cancelled in exchange for an employee incentive award issued by the surviving
company which will have substantially similar (and which may be settled in cash or property other than shares) terms and conditions as
under the Issuer’s share plan and the award agreement with respect to such unvested Company Restricted Share Award. |
The Merger Agreement contains customary representations, warranties
and covenants of the Issuer, Parent and Merger Sub, including, among others, covenants by the Issuer to conduct its business in the ordinary
course of business during the period between execution of the Merger Agreement and, the earlier of, consummation of the Merger (the “Closing”)
or the termination of the Merger Agreement and prohibiting the Issuer from engaging in certain kinds of activities during such period
without the consent of Parent. The Closing is subject to the satisfaction or waiver of customary closing conditions, including: (i) the
approval of the Merger Agreement and the Merger by the affirmative vote of holders of Ordinary Shares representing at least a majority
of the Ordinary Shares present and voting in person or by proxy (the “Shareholder Approval”), (ii) certain approvals
and clearances by governmental authorities in the Peoples Republic of China (but solely for purposes of this Schedule 13D, excluding Hong
Kong, the Macau Special Administrative Region and Taiwan) under the relevant outbound direct investment measures and foreign investment
security review measures (if applicable), (iii) the absence of any order prohibiting, restraining, staying or enjoining the consummation
of the transactions contemplated by the Merger Agreement (excluding the Director Appointment (as defined below)) and (iv) the holders
of no more than 10% of the Ordinary Shares having validly served and not validly withdrawn a notice of dissent under Section 179
of the BVI Act.
The Merger Agreement requires the Issuer to include proposals to increase
the size of the Board to create three additional director seats and nominate three individuals proposed by Parent and meet the “independence”
requirement for directors as required under the applicable NASDAQ rules as independent directors to the Board (the “Director
Appointment”) at the meeting of shareholders at which the Issuer submits the Merger Agreement, the Merger and the related documents
and transactions for the Shareholder Approval (the “Shareholders Meeting”).
For 15 days following the execution of the Merger Agreement (the “Go-Shop
Period”), the Issuer has the right to initiate, solicit and encourage alternative transaction proposals and enter into and maintain
discussions or negotiations with respect to transaction proposals or otherwise cooperate with, assist or participate in, facilitate, or
take any other action in connection with any such inquiries, proposals, discussions or negotiations.
Following the Go-Shop Period, the Issuer is subject to customary “no-shop”
provisions whereby, subject to certain customary exceptions, it may not, among other things, (i) solicit, initiate, propose, knowingly
facilitate or knowingly encourage alternative transaction proposals or any proposal, offer, inquiry or request for information or request
for negotiations or discussions that would reasonably be expected to lead to any alternative transaction proposal, (ii) (A) change,
withhold, withdraw, qualify or modify in a manner adverse to Parent or Merger Sub the Issuer Recommendation, (B) fail to make the
Issuer Recommendation or fail to include the Issuer Recommendation in the proxy statement for the Shareholders Meeting, (C) adopt,
approve or recommend, or publicly propose to adopt, approve or recommend to the shareholders of the Issuer an alternative transaction
proposal, (D) fail to recommend against any transaction proposal that is a tender offer or exchange offer subject to Regulation 14D
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (any of the foregoing, a “Change
of Recommendation”), or (iii) take any action to grant any third party a waiver, amendment or release under any standstill,
confidentiality or similar agreement or anti-takeover statutes, “poison pills”, “shareholder rights plans” or
similar contracts to which the Issuer or any of its subsidiaries is a party or subject. The “no shop” provision allows the
Issuer, under certain circumstances and in compliance with certain obligations set forth in the Merger Agreement, to provide non-public
information and engage in discussions and negotiations with respect to an unsolicited acquisition proposal that constitutes or is reasonably
expected to lead to an alternative transaction that the special committee of the Board determines would be more favorable, from a financial
point of view, to the Issuer’s shareholders than the Merger (a “Superior Proposal”). Under certain circumstances
and in compliance with certain obligations set forth in the Merger Agreement, the Issuer is permitted to terminate the Merger Agreement
prior to receipt of the Shareholder Approval to accept a Superior Proposal, subject to the payment of a termination fee of $33,000,000
(the “Termination Fee”).
The Merger Agreement contains certain termination rights for the Issuer
and Parent. Upon termination of the Merger Agreement under specified circumstances, subject to certain exceptions, the Issuer will be
required to pay Parent the Termination Fee. Specifically, the Termination Fee is payable by the Issuer to Parent if the Merger Agreement
is terminated by (i) Parent because (A) the Merger has not occurred by December 11, 2024 (the “End Date”),
(B) the failure of the Merger to occur by the End Date is a result of any action or inaction on the part of the Issuer or any of
its subsidiaries that is in breach of its obligations under the Merger Agreement, and (C) within 12 months after the termination
of the Merger Agreement, the Issuer or any of its subsidiaries consummates, or enters into a definitive agreement in connection with,
an alternative transaction proposal, (ii) the Parent due to the Issuer’s breach of any representation, warranty, covenant or
agreement such that the conditions to the Parent’s and Merger Sub’s obligations to close would not be satisfied and such breach
is not curable or is not cured within the time period specified in the Merger Agreement, (iii) the Parent due to the Board or any
committee of the Board having made a Change of Recommendation or (iv) by the Issuer due to a Change of Recommendation as result of
receiving a Superior Proposal or an Intervening Event (as defined in the Merger Agreement).
Upon termination of the Merger Agreement under specified circumstances,
subject to certain exceptions, Parent will be required to pay the Issuer the Termination Fee. Specifically, the Termination Fee is payable
by Parent to the Issuer if the Merger Agreement is terminated by the Issuer (i) due to the Parent’s or Merger Sub’s breach
of any representation, warranty, covenant or agreement such that the conditions to the Issuer’s obligations to close would not be
satisfied and such breach is not curable or is not cured within the time period specified in the Merger Agreement or (ii) in the
event (A) all of the conditions to the Parent’s and Merger Sub’s obligations to close have been satisfied, (B) the
Issuer has notified the Parent and the Merger Sub that all of the Issuer’s obligations to close have been satisfied or that the
Issuer is willing to waive unsatisfied closing conditions and (C) Parent and Merger Sub failed to consummate the Merger within the
time period specified in the Merger Agreement.
If the transactions under the Merger Agreement are consummated the
Ordinary Shares will be delisted from the Nasdaq Global Select Market and deregistered under the Exchange Act.
Equity Commitment Letters
Pursuant to equity commitment letters (the “Equity Commitment
Letters”) each dated December 11, 2023, (1) ACP III committed to provide Parent, at or prior to the Effective Time,
with an aggregate equity contribution equal to US$70,000,000 and (2) Skyline Automation Technologies L.P., for which GPGP serves
as the general partner, committed to provide Parent, at or prior to the Effective Time, with an aggregate equity contribution equal to
US$275,000,000.
Debt Commitment Letter
Concurrently
with the execution of the Merger Agreement, pursuant to a commitment letter dated December 11, 2023 (the “Debt Commitment
Letter”) provided by Industrial Bank Co., Ltd. (a joint stock company incorporated in the People’s Republic
of China with limited liability) Hong Kong Branch (the “Lender”) to Merger Sub, the Lender has irrevocably committed
to provide on the terms and subject to the conditions set forth in the Debt Commitment Letter, at or prior to the closing of the Merger,
a term loan facility of up to US$1,055,000,000, subject to certain customary conditions.
Limited Guarantee
In
connection with the Merger Agreement, ACP III provided the Issuer with a Limited Guarantee in favor of the Issuer (the “Limited
Guarantee”). The Limited Guarantee guaranties, among other things, the payment of the termination fee under the Merger Agreement
payable by Parent and certain costs and expenses, as set forth in the Merger Agreement and the Limited Guarantee, subject to the
conditions set forth in the Limited Guarantee.
Rollover and Support Agreement
Concurrently with the execution of the Merger Agreement, Parent and
Advanced Technology entered into a Rollover and Support Agreement (the “Rollover and Support Agreement”) pursuant to
which, subject to the terms and conditions of the Rollover and Support Agreement, Advanced Technology has agreed (i) to vote the
Issuer’s securities beneficially owned by it, together with any other Ordinary Shares acquired (whether beneficially or of record)
by Advanced Technology after the date of the Merger Agreement and prior to the earlier of the Effective Time and the termination of Advanced
Technology’s obligations under the Rollover and Support Agreement (collectively, the “Rollover Securities”),
in favor of the approval of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and to take
certain other actions in furtherance of the transactions contemplated by the Merger Agreement and (ii) to contribute to Parent immediately
prior to the Effective Time all the Rollover Securities in exchange for newly issued ordinary shares of Parent. Pursuant to the Rollover
and Support Agreement, Advanced Technology also irrevocably appointed Parent as its proxy and attorney-in-fact to vote the Rollover Securities
at the Shareholders Meeting. Additionally, pursuant to the Rollover and Support Agreement, Advanced Technology is subject to certain transfer
restrictions with respect to the Rollover Securities.
Amendments to the Rights Agreements
In connection with the Merger Agreement, the Issuer entered into Amendment
No. 1 to the Amended and Restated Rights Agreement (the “Amended and Restated Rights Agreement”) with Continental
Stock Transfer & Trust Company, as rights agent (the “Rights Agent”), on December 11, 2023 (the “Rights
Agreement Amendment No. 1”) and Amendment No. 2 to Amended and Restated Rights Agreement with the Rights Agent on
December 12, 2023 (together with the Rights Agreement Amendment No. 1, the “Rights Agreement Amendments”).
The Amended and Restated Rights Agreement provides, among other things, for rights each of which entitles the holder to purchase one Preferred
Share, par value $0.001 per share, of the Issuer for US$160.00 if a person or group announces an acquisition of 15% or more of the outstanding
Ordinary Shares, or announces the commencement of a tender offer for 15% or more of the Ordinary Shares. The Rights Agreement Amendments
rendered the Amended and Restated Rights Agreement inapplicable to (i) the Merger Agreement and the transactions contemplated thereby,
including the Merger, and (ii) any acquisition of securities of the Issuer by Parent, Merger Sub and their affiliates during the
term of the Merger Agreement.
The foregoing description of the Merger Agreement, the Equity Commitment
Letters, the Debt Commitment Letter, the Limited Guarantee and the Rights Agreement Amendments is a summary only and is qualified in its
entirety by reference to the Merger Agreement, the Equity Commitment Letters, the Debt Commitment Letter, the Limited Guarantee and the
Rights Agreement Amendments attached hereto as Exhibit 99.3, Exhibits 99.4 and 99.5, Exhibit 99.6, Exhibit 99.7 and Exhibits 99.8
and 99.9, respectively, which are incorporated herein by reference.
| Item 6. |
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
Item
6 of the Schedule 13D is hereby amended and supplemented to include the following:
The information set forth in Item 4 of this Schedule 13D Amendment
is incorporated by reference in its entirety into Item 6 of the Schedule 13D.
| Item 7. |
Material to be Filed as Exhibits. |
Item
7 of the Schedule 13D is hereby amended and supplemented to include the following:
The information set forth in Item 4 of this Schedule 13D Amendment
is incorporated by reference in its entirety into Item 6 of the Schedule 13D.
Exhibit
Number |
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Description |
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| 99.3 |
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Agreement and Plan of Merger, dated as of December 11, 2023, by and among the Issuer, Parent and Merger Sub (incorporated herein by reference to Exhibit 99.2 of the Report on Form 6-K dated December 12, 2023 of the Issuer). |
| 99.4 |
|
Equity Commitment Letter, dated December 11, 2023, by and between Merger Sub and ACP III. |
| 99.5 |
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Equity Commitment Letter, dated December 11, 2023, by and between Merger Sub and Skyline Automation Technologies L.P. |
| 99.6 |
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Commitment Letter, dated December 11, 2023, by and among Merger Sub and the Lender. |
| 99.7 |
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Limited Guarantee, dated as of December 11, 2023, made by ACP III in favor of the Issuer. |
| 99.8 |
|
Amendment No. 1 to Amended and Restated Rights Agreement, dated as of December 11, 2023, by and between the Issuer and the Rights Agent (incorporated herein by reference to Exhibit 4.1 of the Report on Form 6-K dated December 12, 2023 of the Issuer). |
| 99.9 |
|
Amendment No. 2 to Amended and Restated Rights Agreement, dated as of December 12, 2023, by and between the Issuer and the Rights Agent (incorporated herein by reference to Exhibit 4.2 of the Report on Form 6-K dated December 12, 2023 of the Issuer). |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and correct.
Dated: December 13, 2023
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Liang Meng |
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/s/ Liang Meng |
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Ascendent Capital Partners III GP Limited |
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By: |
/s/ Liang Meng |
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Name: |
Liang Meng |
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Title: |
Director |
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Ascendent Capital Partners III GP, L.P. |
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By: Ascendent Capital Partners III GP Limited, its General Partner |
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By: |
/s/ Liang Meng |
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Name: |
Liang Meng |
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Title: |
Director |
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Ascendent Capital Partners III, L.P. |
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By: Ascendent Capital Partners III GP, L.P., its General Partner |
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By: Ascendent Capital Partners III GP Limited, its General Partner |
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By: |
/s/ Liang Meng |
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Name: |
Liang Meng |
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Title: |
Director |
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Advanced Technology (Cayman) Limited |
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By: |
/s/ Liang Meng |
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Name: |
Liang Meng |
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Title: |
Director |
Exhibit 99.4
CONFIDENTIAL
Execution Version
EQUITY COMMITMENT LETTER
December 11, 2023
Ascendent Capital Partners III, L.P.
Address:
Walkers Corporate Limited
Cayman Corporate Center, 27 Hospital RD
George Town, Grand Cayman, Cayman Islands
Ladies and Gentlemen:
This Equity Commitment Letter
(this “letter agreement”) sets forth the commitment of Ascendent Capital Partners III, L.P. (the “Sponsor”),
subject to (i) the terms and conditions contained in the Agreement and Plan of Merger, dated as of the date of this letter agreement
(as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) by and among Hollysys
Automation Technologies Ltd. (the “Company”), Superior Technologies Mergersub Limited, a BVI business company incorporated
under the Laws of the British Virgin Islands (“Merger Sub”) and Superior Technologies Holding Limited (“Parent”),
which provides, among other things, for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving
company and a wholly owned subsidiary of Parent (the “Merger”) and (ii) the terms and conditions contained herein.
Concurrently with the delivery of this letter agreement, Skyline Automation Technologies L.P. (the “Other Sponsor”)
is entering into a letter agreement substantially identical to this letter agreement (collectively, the “Other Sponsor Equity
Commitment Letter”) committing to invest, directly or indirectly, in Merger Sub. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
1. Equity
Commitment.
(a) This
letter agreement confirms the commitment of the Sponsor, at or prior to the Effective Time, on the terms and subject to the conditions
set forth herein, to purchase, or to cause the purchase of equity interests of Parent and to pay, or cause to be paid to Merger Sub through
Parent in immediately available funds an aggregate cash purchase price equal to US$70,000,000 (the “Equity Commitment”),
which Merger Sub shall use for the purpose of funding, to the extent necessary to fund, such portion of the merger consideration and such
other amounts required to be paid by Parent or Merger Sub pursuant to and in accordance with the Merger Agreement, together with related
fees and expenses; provided that the Sponsor (together with its permitted assigns) shall not, under any circumstances, be obligated
to contribute more than the Equity Commitment to Merger Sub and the aggregate amount of liability of the Sponsor hereunder shall not exceed
the amount of the Equity Commitment (the “Cap”).
(b) The
Sponsor may effect the funding of the Equity Commitment directly or indirectly through one or more direct or indirect Subsidiaries of
the Sponsor or any investment fund or vehicles sponsored, advised or managed by the investment manager of the Sponsor or any Affiliate
thereof or any other investment fund or Person that is a limited partner of the Sponsor or of an Affiliate of the Sponsor or other Affiliates
of the Sponsor. The Sponsor will not be under any obligation under any circumstances to contribute more than the amount of the Equity
Commitment to Merger Sub or any other Person pursuant to the terms of this letter agreement.
2. Conditions.
The Equity Commitment shall be subject to (a) the satisfaction in full or waiver, if permissible, at or prior to the Closing, of
each of the conditions set forth in Section 7.1 and Section 7.2 of the Merger Agreement (other than any conditions that by their
nature are to be satisfied at the Closing but subject to the prior or substantially concurrent satisfaction of such conditions), (b) either
the substantially contemporaneous consummation of the Closing or the obtaining by the Company in accordance with Section 9.12 of
the Merger Agreement of a final and non-appealable order requiring Parent or Merger Sub to cause the Equity Financing to be funded and
to effect the Closing, (c) the Debt Financing and/or the Alternative Financing (if applicable) having been funded or will be funded
at the Closing in accordance with the terms thereof if the Equity Financing is funded at the Closing, and (d) the substantially contemporaneous
funding to Merger Sub of the contributions contemplated by the Other Sponsor Equity Commitment Letter, provided that the satisfaction
or failure of the condition set forth in this clause (d) shall not limit or impair the ability of Merger Sub or the Company to seek
enforcement of the obligations of the Sponsor under and in accordance with this letter agreement, if (x) Merger Sub or the Company,
as applicable, is also seeking enforcement of the Other Sponsor Equity Commitment Letter, or (y) the Other Sponsor has satisfied
or will satisfy its obligations under the Other Sponsor Equity Commitment Letter.
3. Limited
Guarantee. Concurrently with the execution and delivery of this letter agreement, the Sponsor is executing and delivering to the Company
an amended and restated limited guarantee related to certain payment obligations of Parent under the Merger Agreement (the “Limited
Guarantee”) relating to certain payment obligations of Parent under the Merger Agreement. Other than as set forth herein (including
without limitation, the rights of the Company pursuant to Section 4) or with respect to the Retained Claims (as defined in
the Limited Guarantee), (a) the Company’s remedies against the Sponsor under the Limited Guarantee shall be, and are intended
to be, the sole and exclusive (direct or indirect) remedies available to the Company and the Guaranteed Party Related Persons (as defined
in the Limited Guarantee) against the Sponsor or any of the Non-Recourse Parties (as defined in the Limited Guarantee) for any liability,
loss, damage or recovery of any kind (including consequential, indirect or punitive damages, and whether at law, in equity or otherwise)
arising out of or relating to this letter agreement or the Merger Agreement, or of the failure of any of the transactions contemplated
by any such agreement to be consummated or otherwise in connection with any of the transactions contemplated hereby and thereby or in
respect of any other document or theory of law or in equity, or in respect of any written or oral representations made or alleged to have
been made in connection with any such agreement, whether at law, in equity, in contract, in tort or otherwise, (whether or not Merger
Sub’s breach is caused by the Sponsor’s breach of its obligations under this letter agreement); and (b) the Company and
the Guaranteed Party Related Persons (as defined in the Limited Guarantee) shall not have, and they are not intended to have, any right
of recovery against the Sponsor or any of the Non-Recourse Parties in respect of any liabilities or obligations arising out of or relating
to, this letter agreement or the Merger Agreement, including in the event Merger Sub breaches its obligations under the Merger Agreement
and whether or not Merger Sub’s breach is caused by the Sponsor’s breach of its obligations under this letter agreement, except
for claims of the Company against the Sponsor pursuant to and in accordance with the Limited Guarantee.
4. Enforceability;
Third-Party Beneficiary.
(a) This
letter agreement may only be enforced by Merger Sub (in its sole discretion); provided that, if the conditions set forth in Section 2
are satisfied and the Company is entitled to seek specific performance pursuant to Section 9.12 of the Merger Agreement, the Company
is hereby made a third party beneficiary of the rights granted to Merger Sub under this letter agreement to the extent, and only to the
extent, of the rights set forth in Sections 1,
4, 5,
6, 7 and 12
and shall be entitled to an injunction, specific performance or other equitable remedy to cause the Sponsor to fund the Equity Commitment
in accordance with Section 1 hereof.
None of Merger Sub’s or the Company’s creditors or any provider or source of the Financing shall have the right to enforce
this letter agreement or to cause Merger Sub or the Company to enforce this letter agreement against the Sponsor.
(b) Notwithstanding
the foregoing, if the Company or any of its Affiliates asserts in any proceeding that (1) the Sponsor shall contribute an amount
of Equity Commitment that exceeds the Cap or (2) the Cap on the Sponsor’s liabilities hereunder or the Cap (as defined in the
Other Sponsor Equity Commitment Letter) on the Other Sponsor’s liabilities is illegal, invalid or unenforceable in whole or in part
(the “Impermissible Claims”), then (i) the obligations of the Sponsor under this letter agreement shall terminate
ab initio and be null and void, (ii) if the Sponsor has previously made any payments under this letter agreement, it shall
be entitled to recover such payments, and (iii) the Sponsor shall not have any liabilities or obligations to any Person under this
letter agreement. In no event shall the maximum amount of the liabilities of the Sponsor in the aggregate under this letter agreement
exceed the Cap.
(c) Each
party hereto acknowledges and agrees that (i) this letter agreement is not intended to, and does not, create any agency, partnership,
fiduciary or joint venture, relationship, between or among any of the parties hereto, and neither this letter agreement nor any other
document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise,
and (ii) the obligations of the Sponsor under this letter agreement are solely contractual in nature.
(d) Subject
to the terms and conditions set forth herein, the Company shall be entitled to specifically enforce Merger Sub’s right to cause
the Equity Commitment to be funded to Merger Sub solely to the extent specifically permitted under Section 4 (a) and
the Company shall be a third party beneficiary for such purpose but not for any other purpose (including, without limitation, any claim
for monetary damages hereunder or under the Merger Agreement) other than as specified in Section 4(a) hereof.
The Company hereby agrees that specific performance shall be its sole and exclusive remedy with respect to any breach by the Sponsor of
this letter agreement and that the Company may not seek or accept any other form of relief that may be available for any such breach of
this letter agreement (including monetary damages); provided, that, if the Company seeks specific performance for such breach of this
letter agreement as permitted under Section 4(a),
and a court of competent jurisdiction in a final, non-appealable determination as to the availability of specific performance does not
specifically enforce the obligations of the Sponsor hereunder pursuant to any proceeding for specific performance brought against the
Sponsor, then the Company shall have the right to seek the payments contemplated by, and subject to the terms and conditions of, Section 1
of the Limited Guarantee (subject to the limitations and conditions therein). In addition, the Company shall, and shall cause each of
its Affiliates to, cause any pending proceeding to be dismissed with prejudice upon the earlier of (i) the consummation of the Closing
by Merger Sub or (ii) the payment of the Parent Termination Fee pursuant to the Merger Agreement.
(e) Each
party hereto agrees that its respective agreements and obligations set forth herein are solely for the benefit of the other party hereto
and the respective successors and permitted assigns of such other party, in accordance with and subject to the terms of this letter agreement,
and this letter agreement is not intended to, and does not, confer upon any Person other than the parties hereto and their respective
successors and permitted assigns any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Merger Sub
to enforce, the obligations set forth therein; provided that the Company is a third-party beneficiary of this letter agreement
to the extent and only to the extent of its rights specifically provided in Section 4(a) in
accordance with, and subject to the terms of the Merger Agreement and this letter agreement. Except as expressly provided in the foregoing
sentence, nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Merger Sub or the Sponsor,
any rights or remedies under or by reason of this letter agreement. In no event shall this letter agreement or the Equity Commitment to
be funded hereunder be enforced by any Person unless such Person is also seeking enforcement of the Other Sponsor Equity Commitment Letter
to the extent that the Other Sponsor has not performed in full its obligations under the Other Sponsor Equity Commitment Letter.
5. No
Modification; Entire Agreement. This letter agreement may not be amended or otherwise modified without the prior written consent of
(i) Merger Sub and the Sponsor, and (ii) if such amendment or modification (for the avoidance of doubt, including any amendment
or modification of Section 11) would impact the Company’s rights as a third-party beneficiary of this letter agreement
pursuant to Section 4(a), the Company.
Together with the Merger Agreement (including any schedules, exhibits and annexes thereto and any other documents and instruments referred
to thereunder), the Other Sponsor Equity Commitment Letter, the Limited Guarantee, the Rollover and Support Agreement between Parent and
Advanced Technology (Cayman) Limited, and the Confidentiality Agreement by and between Advanced Technology (Cayman) Limited and the Company
dated as of November 21, 2023, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, understandings
and statements, written or oral, between, the Sponsor or any of its Affiliates, on the one hand, and Merger Sub or any of its Affiliates,
on the other hand, with respect to the transactions contemplated hereby. Each of the parties acknowledges that each party and its respective
counsel have reviewed this letter agreement and that any rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this letter agreement.
6. Governing
Law. This letter agreement and all disputes or controversies arising out of or relating to this letter agreement, or the transactions
contemplated hereby shall be interpreted, construed and governed by and in accordance with the Laws of the State of New York without regard
to the conflicts of law principles thereof.
7. Dispute
Resolution. Any dispute, controversy, difference, or claim arising out of or relating to this letter agreement, including the existence,
validity, interpretation, performance, breach, or termination thereof or any dispute regarding non-contractual obligations arising out
of or relating to it shall be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) and resolved in
accordance with the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted and as may be amended
by this Section 7. The law of this arbitration
clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The language of the arbitration shall be English and the tribunal
shall consist of three arbitrators. The arbitration tribunal shall have no authority to award punitive damages. The award of the arbitration
tribunal shall be final and binding upon the disputing parties. Any party to an award may apply to any court of competent jurisdiction
for enforcement of such award and, for purposes of the enforcement of such award, the parties hereto irrevocably and unconditionally submit
to the jurisdiction of any court of competent jurisdiction and waive any defenses to such enforcement based on lack of personal jurisdiction
or inconvenient forum.
8. Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH, AND THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.
9. Confidentiality.
This letter agreement shall be treated as confidential and is being provided to Merger Sub solely in connection with the Merger Agreement
and the transactions contemplated thereby. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document
by either party hereto, except with the prior written consent of the other party; provided, however, that each party hereto may
disclose the existence and content of this letter agreement to the Company, to their and their Affiliates’ respective officers,
directors, employees, partners, members, investors, financing sources, advisors (including financial and legal advisors) and any representatives
of the foregoing (collectively, “Representatives”), to the Other Sponsor and its respective Representatives and to
the extent required by applicable Law, the applicable rules of any national securities exchange or in connection with any SEC filings
relating to the Merger Agreement and the transactions contemplated thereby or in connection with any litigation relating to the Merger
Agreement and the transactions contemplated thereby as permitted by or provided in the Merger Agreement and the Sponsor may disclose the
existence and content of this letter agreement to any Non-Recourse Party which needs to know of the existence of this letter agreement
and is subject to the confidentiality obligations substantially identical to the terms contained in this Section 9.
10. No
Recourse. Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered
in connection herewith, Merger Sub, by its acceptance of the benefits of the Equity Commitment provided herein, covenants, agrees and
acknowledges that no Person (other than the Sponsor or its successors or permitted assigns hereunder) shall have any liabilities or obligations
hereunder or in connection with the transactions contemplated hereby and that, notwithstanding the fact that the Sponsor or any of its
respective successors or permitted assigns may be partnerships, limited liability companies, corporations or other entities, Merger Sub
has no rights of recovery against, and no recourse hereunder or under any document or instrument delivered in connection herewith or in
respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any Non-Recourse
Party, whether by or through attempted piercing of the corporate (or limited liability company or limited partnership) veil, by or through
a claim (whether at law or equity or in tort, contract or otherwise), by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any applicable Law; it being agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any Non-Recourse Party for any obligations or liabilities of the Sponsor or any of its successors
or permitted assigns hereunder or any document or instrument delivered in connection herewith or in respect of any oral representation
made or alleged to be made in connection herewith or therewith or for any proceeding (whether at law or equity or in tort, contract or
otherwise) based on, in respect of, or by reason of such obligations or liabilities or their creation.
11. Termination.
This letter agreement and the obligation of the Sponsor to fund the Equity Commitment will terminate automatically and immediately upon
the earliest to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the Closing, at
which time such obligation will be discharged, but subject to the performance of such obligation, (c) the Company or any of its controlled
Affiliates directly or indirectly taking affirmative steps to pursue remedies (including asserting a claim or initiating a proceeding)
against the Sponsor under the Limited Guarantee, or (d) the Company or any of its controlled Affiliates directly or indirectly (i) asserting
a claim or initiating a proceeding against Merger Sub, the Sponsor or any Non-Recourse Party (as defined in the Limited Guarantee) in
connection with or relating to this letter agreement, the Merger Agreement or any of the transactions contemplated under the Merger Agreement
(other than a claim seeking an order of specific performance or other equitable relief of the Sponsor’s obligation to fund the Equity
Commitment in the circumstances provided for in Section 4(a) or a claim seeking an order of specific performance or other
equitable relief pursuant to the Merger Agreement or the Other Sponsor Equity Commitment Letter), or (ii) asserting any Impermissible
Claim. Upon termination of this letter agreement, all rights and obligations of the Sponsor hereunder with respect to the Equity Commitment
shall terminate, and the Sponsor shall not have any further liabilities hereunder.
12. Representations
and Warranties.
(a) The
Sponsor hereby represents and warrants to Merger Sub that: (i) it has all necessary organizational power and authority to execute
and deliver this letter agreement and perform its obligations hereunder; (ii) the execution, delivery and performance of this letter
agreement by it has been duly and validly authorized and approved by all necessary limited partnership or corporate action (as applicable)
by it; (iii) this letter agreement has been duly and validly executed and delivered by the Sponsor and (assuming due execution and
delivery of this letter agreement, the Merger Agreement and the Limited Guarantee by all parties hereto and thereto, as applicable, other
than the Sponsor) constitutes a valid and legally binding obligation of the Sponsor, enforceable against the Sponsor in accordance with
the terms of this letter agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar Laws affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding
in equity or at law)); (iv) except for the applicable requirements of the Exchange Act, no action, consent, permit, authorization
by, and no notice to or filing with, any governmental entity is required in connection with the execution, delivery or performance of
this letter agreement by the Sponsor; (v) it will, at the Closing, have sufficient funds, available lines of credit, unfunded capital
commitments that it is entitled to call to fund the Equity Commitment, or other sources of immediately available funds to fulfill its
payment obligation for the sum of the Equity Commitment and all of its other unfunded contractually binding equity commitments that are
then outstanding; and (vi) the execution, delivery and performance of this letter agreement by the Sponsor do not violate the organizational
documents of the Sponsor, any applicable Law binding on the Sponsor or the assets of the Sponsor or conflict with any material agreement
binding on the Sponsor.
13. Interpretation.
When reference is made in this letter agreement to an Article, Exhibit, Schedule or Section, such reference shall be to an Article, Exhibit,
Schedule or Section of this letter agreement unless otherwise indicated. All terms defined in this letter agreement shall have the
defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. Whenever
the words “include”, “includes” or “including” are used in this letter agreement, they shall be deemed
to be followed by the words “without limitation.” The words “hereof,” “herein,” “hereby”
and “hereunder” and words of similar import when used in this letter agreement shall refer to this letter agreement as a whole
and not to any particular provision of this letter agreement. Words of any gender include each other gender and neuter genders and words
using the singular or plural number also include the plural or singular number, respectively. Any contract or Law defined or referred
to herein means such contract or Law as from time to time amended, modified or supplemented, including (in the case of contracts) by waiver
or consent and (in the case of Laws) by succession or comparable successor statutes and references to all attachments thereto and instruments
incorporated therein. The word “or” shall not be exclusive. With respect to the determination of any period of time, “from”
means “from and including”. The word “will” shall be construed to have the same meaning as the word “shall”.
Whenever this letter agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.
The word “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply
“if”. References to “dollars” or “$” are to United States dollars. Any deadline or time period set
forth in this letter agreement that by its terms ends on a day that is not a Business Day shall be automatically extended to the next
succeeding Business Day. Each of the parties hereto has participated in the drafting and negotiating of this letter agreement. If an ambiguity
or question of intent or interpretation arises, this letter agreement shall be construed as if it is drafted by all the parties hereto
and without regard to any presumption or rule requiring construction or interpretation against the parties hereto drafting or causing
any instrument to be drafted.
14. No
Assignment. The Sponsor’s obligation to fund the Equity Commitment may not be assigned (whether by operation of law, merger,
consolidation or otherwise) or delegated, except that the Sponsor may assign or delegate all or a portion of its obligations to fund the
Equity Commitment to any of the Sponsor’s Affiliates, or any affiliated investment fund or investment vehicle sponsored, advised
or managed by the general partner or the investment manager of the Sponsor or any of its Affiliates thereof (including any affiliated
investment fund or investment vehicle to be set up after the date hereof that is sponsored, advised or managed by such Sponsor or any
of its Affiliates as of such assignment) without the Company’s and Merger Sub’s consent; provided that, any such assignment
or delegation shall not relieve the Sponsor of its obligations under this letter agreement. Merger Sub may not assign its rights to any
of its Affiliates or other entity owned directly or indirectly by the beneficial owners of Merger Sub, without the prior written consent
of the Sponsor. The Company may not assign its rights without the prior written consent of Merger Sub and the Sponsor. Any transfer, assignment
or delegation in violation of this Section 14 shall be null and void and of no force and effect.
15. Severability.
If any term or other provision of this letter agreement is found by a court of competent jurisdiction or an arbitration tribunal to be
invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this
letter agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this letter agreement so
as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible.
16. Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person
or upon confirmation of receipt when transmitted by facsimile transmission or by electronic mail or on receipt after dispatch by registered
or certified mail, postage prepaid, addressed, or on the next business day if transmitted by international overnight courier, in each
case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
if
to the Sponsor, to:
Ascendent Capital Partners III, L.P.
Suite 3501, 35/F, Jardine House, 1 Connaught Place,
Central, Hong Kong
Attention: Liang Meng // John Wang
Email:
leon@ascendentcp.com; john@ascendentcp.com
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Edinburgh Tower, 33/F, The Landmark, 15 Queen’s Road
Central, Hong Kong
Email:
mellis@mofo.com; rzhao@mofo.com
Attention: Marcia Ellis // Rongjing Zhao
if
to Merger Sub, to:
Superior Technologies Mergersub Limited
Suite 3501, 35/F, Jardine House, 1 Connaught Place,
Central, Hong Kong
Attention: Liang Meng // John Wang
Email:
leon@ascendentcp.com; john@ascendentcp.com
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Edinburgh Tower, 33/F, The Landmark, 15 Queen’s Road
Central, Hong Kong
Email:
mellis@mofo.com; rzhao@mofo.com
Attention: Marcia Ellis // Rongjing Zhao
17. Counterparts.
This letter agreement may be executed and delivered (including by e-mail of PDF or scanned versions or by facsimile) in one or more counterparts,
and by the parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder of page intentionally left blank]
Sincerely,
Ascendent Capital Partners III, L.P.
By: Ascendent Capital Partners III GP, L.P., its general partner
By: Ascendent Capital Partners III GP Limited, its general partner
| By: |
/s/
Liang Meng |
|
| Name: |
Liang Meng |
|
| Title: |
Director |
|
[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]
Agreed to and accepted as of the date first written
above:
Superior Technologies Mergersub Limited
| By: |
/s/ Liang Meng |
|
| Name: |
Liang Meng |
|
| Title: |
Director |
|
[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]
Exhibit 99.5
CONFIDENTIAL
Execution Version
EQUITY COMMITMENT LETTER
December 11, 2023
Skyline Automation Technologies L.P.
Address:
Walkers Corporate Limited
Cayman Corporate Center, 27 Hospital RD
George Town, Grand Cayman, Cayman Islands
Ladies and Gentlemen:
This Equity Commitment Letter
(this “letter agreement”) sets forth the commitment of Skyline Automation Technologies L.P. (the “Sponsor”),
subject to (i) the terms and conditions contained in the Agreement and Plan of Merger, dated as of the date of this letter agreement
(as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) by and among Hollysys
Automation Technologies Ltd. (the “Company”), Superior Technologies Mergersub Limited, a BVI business company incorporated
under the Laws of the British Virgin Islands (“Merger Sub”) and Superior Technologies Holding Limited (“Parent”),
which provides, among other things, for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving
company and a wholly owned subsidiary of Parent (the “Merger”) and (ii) the terms and conditions contained herein.
Concurrently with the delivery of this letter agreement, Ascendent Capital Partners III, L.P. (the “Other Sponsor”)
is entering into a letter agreement substantially identical to this letter agreement (collectively, the “Other Sponsor Equity
Commitment Letter”) committing to invest, directly or indirectly, in Merger Sub. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
1.
Equity Commitment.
(a) This
letter agreement confirms the commitment of the Sponsor, at or prior to the Effective Time, on the terms and subject to the conditions
set forth herein, to purchase, or to cause the purchase of equity interests of Parent and to pay, or cause to be paid to Merger Sub through
Parent in immediately available funds an aggregate cash purchase price equal to US$275,000,000 (the “Equity Commitment”),
which Merger Sub shall use for the purpose of funding, to the extent necessary to fund, such portion of the merger consideration and such
other amounts required to be paid by Parent or Merger Sub pursuant to and in accordance with the Merger Agreement, together with related
fees and expenses; provided that the Sponsor (together with its permitted assigns) shall not, under any circumstances, be obligated
to contribute more than the Equity Commitment to Merger Sub and the aggregate amount of liability of the Sponsor hereunder shall not exceed
the amount of the Equity Commitment (the “Cap”).
(b) The
Sponsor may effect the funding of the Equity Commitment directly or indirectly through one or more direct or indirect Subsidiaries of
the Sponsor or any investment fund or vehicles sponsored, advised or managed by the investment manager of the Sponsor or any Affiliate
thereof or any other investment fund or Person that is a limited partner of the Sponsor or of an Affiliate of the Sponsor or other Affiliates
of the Sponsor. The Sponsor will not be under any obligation under any circumstances to contribute more than the amount of the Equity
Commitment to Merger Sub or any other Person pursuant to the terms of this letter agreement.
2. Conditions.
The Equity Commitment shall be subject to (a) the satisfaction in full or waiver, if permissible, at or prior to the Closing, of
each of the conditions set forth in Section 7.1 and Section 7.2 of the Merger Agreement (other than any conditions that by their
nature are to be satisfied at the Closing but subject to the prior or substantially concurrent satisfaction of such conditions), (b) either
the substantially contemporaneous consummation of the Closing or the obtaining by the Company in accordance with Section 9.12 of
the Merger Agreement of a final and non-appealable order requiring Parent or Merger Sub to cause the Equity Financing to be funded and
to effect the Closing, (c) the Debt Financing and/or the Alternative Financing (if applicable) having been funded or will be funded
at the Closing in accordance with the terms thereof if the Equity Financing is funded at the Closing, and (d) the substantially contemporaneous
funding to Merger Sub of the contributions contemplated by the Other Sponsor Equity Commitment Letter, provided that the satisfaction
or failure of the condition set forth in this clause (d) shall not limit or impair the ability of Merger Sub or the Company to seek
enforcement of the obligations of the Sponsor under and in accordance with this letter agreement, if (x) Merger Sub or the Company,
as applicable, is also seeking enforcement of the Other Sponsor Equity Commitment Letter, or (y) the Other Sponsor has satisfied
or will satisfy its obligations under the Other Sponsor Equity Commitment Letter.
3. Limited
Guarantee. Concurrently with the execution and delivery of this letter agreement, the Other Sponsor is executing and delivering to
the Company an amended and restated limited guarantee related to certain payment obligations of Parent under the Merger Agreement (the
“Limited Guarantee”) relating to certain payment obligations of Parent under the Merger Agreement. Other than as set
forth herein (including without limitation, the rights of the Company pursuant to Section 4) or with respect to the Retained
Claims (as defined in the Limited Guarantee), (a) the Company’s remedies against the Other Sponsor under the Limited Guarantee
shall be, and are intended to be, the sole and exclusive (direct or indirect) remedies available to the Company and the Guaranteed Party
Related Persons (as defined in the Limited Guarantee) against the Sponsor or any of the Non-Recourse Parties (as defined in the Limited
Guarantee) for any liability, loss, damage or recovery of any kind (including consequential, indirect or punitive damages, and whether
at law, in equity or otherwise) arising out of or relating to this letter agreement or the Merger Agreement, or of the failure of any
of the transactions contemplated by any such agreement to be consummated or otherwise in connection with any of the transactions contemplated
hereby and thereby or in respect of any other document or theory of law or in equity, or in respect of any written or oral representations
made or alleged to have been made in connection with any such agreement, whether at law, in equity, in contract, in tort or otherwise,
(whether or not Merger Sub’s breach is caused by the Sponsor’s breach of its obligations under this letter agreement); and
(b) the Company and the Guaranteed Party Related Persons (as defined in the Limited Guarantee) shall not have, and they are not intended
to have, any right of recovery against the Sponsor or any of the Non-Recourse Parties in respect of any liabilities or obligations arising
out of or relating to, this letter agreement or the Merger Agreement, including in the event Merger Sub breaches its obligations under
the Merger Agreement and whether or not Merger Sub’s breach is caused by the Sponsor’s breach of its obligations under this
letter agreement, except for claims of the Company against the Other Sponsor pursuant to and in accordance with the Limited Guarantee.
4. Enforceability;
Third-Party Beneficiary.
(a) This
letter agreement may only be enforced by Merger Sub (in its sole discretion); provided that, if the conditions set forth in Section 2
are satisfied and the Company is entitled to seek specific performance pursuant to Section 9.12 of the Merger Agreement, the Company
is hereby made a third party beneficiary of the rights granted to Merger Sub under this letter agreement to the extent, and only to the
extent, of the rights set forth in Sections 1,
4, 5,
6, 7 and 12
and shall be entitled to an injunction, specific performance or other equitable remedy to cause the Sponsor to fund the Equity Commitment
in accordance with Section 1 hereof.
None of Merger Sub’s or the Company’s creditors or any provider or source of the Financing shall have the right to enforce
this letter agreement or to cause Merger Sub or the Company to enforce this letter agreement against the Sponsor.
(b) Notwithstanding
the foregoing, if the Company or any of its Affiliates asserts in any proceeding that (1) the Sponsor shall contribute an amount
of Equity Commitment that exceeds the Cap or (2) the Cap on the Sponsor’s liabilities hereunder or the Cap (as defined in the
Other Sponsor Equity Commitment Letter) on the Other Sponsor’s liabilities is illegal, invalid or unenforceable in whole or in part
(the “Impermissible Claims”), then (i) the obligations of the Sponsor under this letter agreement shall terminate
ab initio and be null and void, (ii) if the Sponsor has previously made any payments under this letter agreement, it shall
be entitled to recover such payments, and (iii) the Sponsor shall not have any liabilities or obligations to any Person under this
letter agreement. In no event shall the maximum amount of the liabilities of the Sponsor in the aggregate under this letter agreement
exceed the Cap.
(c) Each
party hereto acknowledges and agrees that (i) this letter agreement is not intended to, and does not, create any agency, partnership,
fiduciary or joint venture, relationship, between or among any of the parties hereto, and neither this letter agreement nor any other
document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise,
and (ii) the obligations of the Sponsor under this letter agreement are solely contractual in nature.
(d) Subject
to the terms and conditions set forth herein, the Company shall be entitled to specifically enforce Merger Sub’s right to cause
the Equity Commitment to be funded to Merger Sub solely to the extent specifically permitted under Section 4 (a) and
the Company shall be a third party beneficiary for such purpose but not for any other purpose (including, without limitation, any claim
for monetary damages hereunder or under the Merger Agreement) other than as specified in Section 4(a) hereof.
The Company hereby agrees that specific performance shall be its sole and exclusive remedy with respect to any breach by the Sponsor of
this letter agreement and that the Company may not seek or accept any other form of relief that may be available for any such breach of
this letter agreement (including monetary damages); provided, that, if the Company seeks specific performance for such breach of this
letter agreement as permitted under Section 4(a),
and a court of competent jurisdiction in a final, non-appealable determination as to the availability of specific performance does not
specifically enforce the obligations of the Sponsor hereunder pursuant to any proceeding for specific performance brought against the
Sponsor, then the Company shall have the right to seek the payments contemplated by, and subject to the terms and conditions of, Section 1
of the Limited Guarantee (subject to the limitations and conditions therein). In addition, the Company shall, and shall cause each of
its Affiliates to, cause any pending proceeding to be dismissed with prejudice upon the earlier of (i) the consummation of the Closing
by Merger Sub or (ii) the payment of the Parent Termination Fee pursuant to the Merger Agreement.
(e) Each
party hereto agrees that its respective agreements and obligations set forth herein are solely for the benefit of the other party hereto
and the respective successors and permitted assigns of such other party, in accordance with and subject to the terms of this letter agreement,
and this letter agreement is not intended to, and does not, confer upon any Person other than the parties hereto and their respective
successors and permitted assigns any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Merger Sub
to enforce, the obligations set forth therein; provided that the Company is a third-party beneficiary of this letter agreement
to the extent and only to the extent of its rights specifically provided in Section 4(a) in
accordance with, and subject to the terms of the Merger Agreement and this letter agreement. Except as expressly provided in the foregoing
sentence, nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Merger Sub or the Sponsor,
any rights or remedies under or by reason of this letter agreement. In no event shall this letter agreement or the Equity Commitment to
be funded hereunder be enforced by any Person unless such Person is also seeking enforcement of the Other Sponsor Equity Commitment Letter
to the extent that the Other Sponsor has not performed in full its obligations under the Other Sponsor Equity Commitment Letter.
5. No
Modification; Entire Agreement. This letter agreement may not be amended or otherwise modified without the prior written consent of
(i) Merger Sub and the Sponsor, and (ii) if such amendment or modification (for the avoidance of doubt, including any amendment
or modification of Section 11) would impact the Company’s rights as a third-party beneficiary of this letter agreement
pursuant to Section 4(a), the Company.
Together with the Merger Agreement (including any schedules, exhibits and annexes thereto and any other documents and instruments referred
to thereunder), the Other Sponsor Equity Commitment Letter, the Limited Guarantee, the Rollover and Support Agreement between Parent and
Advanced Technology (Cayman) Limited, and the Confidentiality Agreement by and between Advanced Technology (Cayman) Limited and the Company
dated as of November 21, 2023, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, understandings
and statements, written or oral, between, the Sponsor or any of its Affiliates, on the one hand, and Merger Sub or any of its Affiliates,
on the other hand, with respect to the transactions contemplated hereby. Each of the parties acknowledges that each party and its respective
counsel have reviewed this letter agreement and that any rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this letter agreement.
6. Governing
Law. This letter agreement and all disputes or controversies arising out of or relating to this letter agreement, or the transactions
contemplated hereby shall be interpreted, construed and governed by and in accordance with the Laws of the State of New York without regard
to the conflicts of law principles thereof.
7. Dispute
Resolution. Any dispute, controversy, difference, or claim arising out of or relating to this letter agreement, including the existence,
validity, interpretation, performance, breach, or termination thereof or any dispute regarding non-contractual obligations arising out
of or relating to it shall be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) and resolved in
accordance with the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted and as may be amended
by this Section 7. The law of this arbitration
clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The language of the arbitration shall be English and the tribunal
shall consist of three arbitrators. The arbitration tribunal shall have no authority to award punitive damages. The award of the arbitration
tribunal shall be final and binding upon the disputing parties. Any party to an award may apply to any court of competent jurisdiction
for enforcement of such award and, for purposes of the enforcement of such award, the parties hereto irrevocably and unconditionally submit
to the jurisdiction of any court of competent jurisdiction and waive any defenses to such enforcement based on lack of personal jurisdiction
or inconvenient forum.
8. Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH, AND THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.
9. Confidentiality.
This letter agreement shall be treated as confidential and is being provided to Merger Sub solely in connection with the Merger Agreement
and the transactions contemplated thereby. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document
by either party hereto, except with the prior written consent of the other party; provided, however, that each party hereto may
disclose the existence and content of this letter agreement to the Company, to their and their Affiliates’ respective officers,
directors, employees, partners, members, investors, financing sources, advisors (including financial and legal advisors) and any representatives
of the foregoing (collectively, “Representatives”), to the Other Sponsor and its respective Representatives and to
the extent required by applicable Law, the applicable rules of any national securities exchange or in connection with any SEC filings
relating to the Merger Agreement and the transactions contemplated thereby or in connection with any litigation relating to the Merger
Agreement and the transactions contemplated thereby as permitted by or provided in the Merger Agreement and the Sponsor may disclose the
existence and content of this letter agreement to any Non-Recourse Party which needs to know of the existence of this letter agreement
and is subject to the confidentiality obligations substantially identical to the terms contained in this Section 9.
10. No
Recourse. Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered
in connection herewith, Merger Sub, by its acceptance of the benefits of the Equity Commitment provided herein, covenants, agrees and
acknowledges that no Person (other than the Sponsor or its successors or permitted assigns hereunder) shall have any liabilities or obligations
hereunder or in connection with the transactions contemplated hereby and that, notwithstanding the fact that the Sponsor or any of its
respective successors or permitted assigns may be partnerships, limited liability companies, corporations or other entities, Merger Sub
has no rights of recovery against, and no recourse hereunder or under any document or instrument delivered in connection herewith or in
respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any Non-Recourse
Party, whether by or through attempted piercing of the corporate (or limited liability company or limited partnership) veil, by or through
a claim (whether at law or equity or in tort, contract or otherwise), by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any applicable Law; it being agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any Non-Recourse Party for any obligations or liabilities of the Sponsor or any of its successors
or permitted assigns hereunder or any document or instrument delivered in connection herewith or in respect of any oral representation
made or alleged to be made in connection herewith or therewith or for any proceeding (whether at law or equity or in tort, contract or
otherwise) based on, in respect of, or by reason of such obligations or liabilities or their creation.
11. Termination.
This letter agreement and the obligation of the Sponsor to fund the Equity Commitment will terminate automatically and immediately upon
the earliest to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the Closing, at
which time such obligation will be discharged, but subject to the performance of such obligation, (c) the Company or any of its controlled
Affiliates directly or indirectly taking affirmative steps to pursue remedies (including asserting a claim or initiating a proceeding)
against the Other Sponsor under the Limited Guarantee, or (d) the Company or any of its controlled Affiliates directly or indirectly
(i) asserting a claim or initiating a proceeding against Merger Sub, the Sponsor or any Non-Recourse Party (as defined in the Limited
Guarantee) in connection with or relating to this letter agreement, the Merger Agreement or any of the transactions contemplated under
the Merger Agreement (other than a claim seeking an order of specific performance or other equitable relief of the Sponsor’s obligation
to fund the Equity Commitment in the circumstances provided for in Section 4(a) or a claim seeking an order of specific
performance or other equitable relief pursuant to the Merger Agreement or the Other Sponsor Equity Commitment Letter), or (ii) asserting
any Impermissible Claim. Upon termination of this letter agreement, all rights and obligations of the Sponsor hereunder with respect to
the Equity Commitment shall terminate, and the Sponsor shall not have any further liabilities hereunder.
12. Representations
and Warranties.
(a) The
Sponsor hereby represents and warrants to Merger Sub that: (i) it has all necessary organizational power and authority to execute
and deliver this letter agreement and perform its obligations hereunder; (ii) the execution, delivery and performance of this letter
agreement by it has been duly and validly authorized and approved by all necessary limited partnership or corporate action (as applicable)
by it; (iii) this letter agreement has been duly and validly executed and delivered by the Sponsor and (assuming due execution and
delivery of this letter agreement, the Merger Agreement and the Limited Guarantee by all parties hereto and thereto, as applicable, other
than the Sponsor) constitutes a valid and legally binding obligation of the Sponsor, enforceable against the Sponsor in accordance with
the terms of this letter agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar Laws affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding
in equity or at law)); (iv) except for the applicable requirements of the Exchange Act, no action, consent, permit, authorization
by, and no notice to or filing with, any governmental entity is required in connection with the execution, delivery or performance of
this letter agreement by the Sponsor; (v) it will, at the Closing, have sufficient funds, available lines of credit, unfunded capital
commitments that it is entitled to call to fund the Equity Commitment, or other sources of immediately available funds to fulfill its
payment obligation for the sum of the Equity Commitment and all of its other unfunded contractually binding equity commitments that are
then outstanding; and (vi) the execution, delivery and performance of this letter agreement by the Sponsor do not violate the organizational
documents of the Sponsor, any applicable Law binding on the Sponsor or the assets of the Sponsor or conflict with any material agreement
binding on the Sponsor.
13. Interpretation.
When reference is made in this letter agreement to an Article, Exhibit, Schedule or Section, such reference shall be to an Article, Exhibit,
Schedule or Section of this letter agreement unless otherwise indicated. All terms defined in this letter agreement shall have the
defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. Whenever
the words “include”, “includes” or “including” are used in this letter agreement, they shall be deemed
to be followed by the words “without limitation.” The words “hereof,” “herein,” “hereby”
and “hereunder” and words of similar import when used in this letter agreement shall refer to this letter agreement as a whole
and not to any particular provision of this letter agreement. Words of any gender include each other gender and neuter genders and words
using the singular or plural number also include the plural or singular number, respectively. Any contract or Law defined or referred
to herein means such contract or Law as from time to time amended, modified or supplemented, including (in the case of contracts) by waiver
or consent and (in the case of Laws) by succession or comparable successor statutes and references to all attachments thereto and instruments
incorporated therein. The word “or” shall not be exclusive. With respect to the determination of any period of time, “from”
means “from and including”. The word “will” shall be construed to have the same meaning as the word “shall”.
Whenever this letter agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.
The word “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply
“if”. References to “dollars” or “$” are to United States dollars. Any deadline or time period set
forth in this letter agreement that by its terms ends on a day that is not a Business Day shall be automatically extended to the next
succeeding Business Day. Each of the parties hereto has participated in the drafting and negotiating of this letter agreement. If an ambiguity
or question of intent or interpretation arises, this letter agreement shall be construed as if it is drafted by all the parties hereto
and without regard to any presumption or rule requiring construction or interpretation against the parties hereto drafting or causing
any instrument to be drafted.
14. No
Assignment. The Sponsor’s obligation to fund the Equity Commitment may not be assigned (whether by operation of law, merger,
consolidation or otherwise) or delegated, except that the Sponsor may assign or delegate all or a portion of its obligations to fund the
Equity Commitment to any of the Sponsor’s Affiliates, or any affiliated investment fund or investment vehicle sponsored, advised
or managed by the general partner or the investment manager of the Sponsor or any of its Affiliates thereof (including any affiliated
investment fund or investment vehicle to be set up after the date hereof that is sponsored, advised or managed by such Sponsor or any
of its Affiliates as of such assignment) without the Company’s and Merger Sub’s consent; provided that, any such assignment
or delegation shall not relieve the Sponsor of its obligations under this letter agreement. Merger Sub may not assign its rights to any
of its Affiliates or other entity owned directly or indirectly by the beneficial owners of Merger Sub, without the prior written consent
of the Sponsor. The Company may not assign its rights without the prior written consent of Merger Sub and the Sponsor. Any transfer, assignment
or delegation in violation of this Section 14 shall be null and void and of no force and effect.
15. Severability.
If any term or other provision of this letter agreement is found by a court of competent jurisdiction or an arbitration tribunal to be
invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this
letter agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this letter agreement so
as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible.
16. Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person
or upon confirmation of receipt when transmitted by facsimile transmission or by electronic mail or on receipt after dispatch by registered
or certified mail, postage prepaid, addressed, or on the next business day if transmitted by international overnight courier, in each
case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
if
to the Sponsor, to:
Ascendent Capital Partners III, L.P.
Suite 3501, 35/F, Jardine House, 1 Connaught Place,
Central, Hong Kong
Attention: Liang Meng // John Wang
Email:
leon@ascendentcp.com; john@ascendentcp.com
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Edinburgh Tower, 33/F, The Landmark, 15 Queen’s Road
Central, Hong Kong
Email:
mellis@mofo.com; rzhao@mofo.com
Attention: Marcia Ellis // Rongjing Zhao
if
to Merger Sub, to:
Superior Technologies Mergersub Limited
Suite 3501, 35/F, Jardine House, 1 Connaught Place,
Central, Hong Kong
Attention: Liang Meng // John Wang
Email:
leon@ascendentcp.com; john@ascendentcp.com
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Edinburgh Tower, 33/F, The Landmark, 15 Queen’s Road
Central, Hong Kong
Email:
mellis@mofo.com; rzhao@mofo.com
Attention: Marcia Ellis // Rongjing Zhao
17. Counterparts.
This letter agreement may be executed and delivered (including by e-mail of PDF or scanned versions or by facsimile) in one or more counterparts,
and by the parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder of page intentionally left blank]
Sincerely,
Skyline Automation Technologies L.P.
By: Ascendent Capital Partners III GP, L.P., its general partner
By: Ascendent Capital Partners III GP Limited, its general partner
[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]
Agreed to and accepted as of the date first written
above:
Superior Technologies Mergersub Limited
[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]
Exhibit 99.6
STRICTLY PRIVATE AND CONFIDENTIAL
Execution
version
| To: | Superior Technologies Mergersub Limited (the “Borrower”) |
11 December 2023
Dear Sirs,
Project Superior – Commitment Letter
You
have advised us that you, a company incorporated in the British Virgin Islands, is proposing to acquire all the outstanding ordinary
shares of Hollysys Automation Technologies Ltd. (the “Acquisition”).
We, Industrial
Bank Co., Ltd. (a joint stock company incorporated in the People’s Republic of China with limited liability) Hong Kong
Branch, are pleased to set out the terms and conditions on which we irrevocably commit to provide a term facility of up to US$1,055,000,000
(the “Facility”, together with the Acquisition herein referred to as the “Transaction”) in connection
with the Acquisition.
This
letter is to be read together with the term sheet attached hereto as Appendix A (the “Term Sheet”, together
with this letter, this “Commitment Letter”). Each capitalised term defined in the Term Sheet, unless otherwise defined
in this Commitment Letter, has the same meaning when used in this Commitment Letter.
We
hereby irrevocably commit to provide, 100% of the Facility subject only to the terms and conditions set out in paragraph 4 (Funding
Conditions) of this Commitment Letter (the “Commitment”).
| 2.1 | Unless and until this Commitment Letter terminates in accordance with the terms of this Commitment Letter,
you shall ensure that none of you, any of your shareholders, any member of the Group, or any affiliate of any of the foregoing appoints,
or awards any title to, any person (other than us and our affiliates) in connection with providing the Facility or any other financing
to fund the Acquisition (or any part thereof) without our prior written consent. Except as otherwise provided in this Commitment Letter,
no fees or compensation in connection with the Facility or any other financing to fund the Acquisition shall be payable to anyone without
our prior written consent. |
| 3.1 | You hereby represent
and warrant that: |
| (a) | (insofar as it relates to any member of the Target Group, to your knowledge having made due and careful
enquiry) all written (including emails) factual information (other than Projections, budgets, estimates, forward looking statements and
information of a general economic or general industry nature concerning you or the Target or your or its respective subsidiaries) that
has been or will be made available to us by or on behalf of you or any of your shareholders in connection with the transactions contemplated
hereby (the “Information”), when taken as a whole, is true and accurate in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to
all supplements and updates thereto from time to time up to and including the time when such representation or warranty is made or repeated);
and |
any
projections and forecasts that have been or will be made available to any of us by or on behalf of you or any of your shareholders
(the “Projections”), have been or will be prepared in good faith on the basis of recent historical information and
based upon assumptions believed by you in good faith to be reasonable at the time such Projections are furnished (it being recognised
by us that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which
are beyond your control, that no assurance can be given that any particular financial projections will be realised, that actual results
may differ from projected results and that such differences may be material).
| 3.2 | The representations and warranties
set out in paragraph 3.1 are deemed to be made by you (a) on the date of this Commitment Letter and (b) (to the extent
that they relate to any Information provided on or after the date of this Commitment Letter) on each date on which such Information is
provided, in each case, until the date on which the Facility Agreement is signed. |
| 3.3 | You shall promptly notify us in writing at any time prior to the Acquisition Closing after becoming aware
that any representation and warranty set out in paragraph 3.1 above is incorrect or misleading and agree to use commercially reasonable
efforts to supplement the Information promptly from time to time to ensure that each such representation and warranty, as supplemented,
is correct in any material respect and is not misleading when made. |
Our
agreement to provide (and, where applicable, to perform other specified roles with respect to) the Facility is subject only to
satisfaction of the following conditions:
| (a) | execution of a facility agreement
(that is mutually acceptable to you and us, reflecting the terms and conditions as set out in the Term Sheet) by all parties thereto
(the “Facility Agreement”) in accordance with paragraph 6 (Execution of Finance Documents) of this Commitment
Letter; |
| (b) | satisfaction (or waiver by us)
of all of the conditions precedent set out in the Facility Agreement; and |
| (c) | subject to paragraph 5.3, it
not being unlawful after the date of this Commitment Letter in an applicable jurisdiction for us to fund and make available the
Facility and to perform our obligations under this Commitment Letter and the Facility Agreement. |
| 5.1 | The Commitment in respect of
the Facility is made on a certain funds basis, which will be set out in the Facility Agreement, during the Certain Funds Period. Accordingly,
and notwithstanding anything to the contrary in this Commitment Letter, during the Certain Funds Period, the only conditions precedent
to the availability and funding of the Facility are as expressly set out in paragraph 4 (Funding Conditions) of this Commitment
Letter. |
| (a) | the Commitment hereunder has been approved by our credit committees and all of our other relevant internal
bodies required to provide the Commitment hereunder; |
| (b) | we have completed and are satisfied
with the results of all client identification procedures that we are required to carry out in connection with making the Facility
available in connection with the Acquisition in compliance with all applicable laws, regulations and internal requirements (including
but not limited to all applicable money laundering rules and all “know your customer” requirements); and |
| (c) | we have no further due diligence requirements in respect of the Facility and, for the avoidance of doubt,
do not require any additional reports or due diligence investigations to be carried out and that the Commitment, and the entry into of
the Facility Agreement by us, is not conditional upon any such further report or investigation. |
| 5.3 | On or before the Acquisition
Closing, if it becomes unlawful in any applicable jurisdiction for us to perform any of our obligations as contemplated by this Commitment
Letter or to fund the Facility, we shall: |
| (a) | promptly notify you upon becoming aware of the event; and |
| (b) | in consultation with you, take
all reasonable steps to mitigate any circumstances which arise and which would result in our obligations under this Commitment Letter
or the Commitment to fund the Facility not being available, including (but not limited to) transferring our rights and obligations
under this Commitment Letter to one or more of our affiliates, provided that: |
| (i) | you shall promptly indemnify us for all costs and expenses reasonably and properly incurred by us as a
result of steps taken by us pursuant to this paragraph (b); and |
| (ii) | we are not obliged to take any such steps if, in our opinion (acting reasonably), doing so might be materially
prejudicial to us. |
| 6 | EXECUTION OF FINANCE DOCUMENTS |
| 6.1 | Each of the parties hereto undertakes
to negotiate in good faith, to use all reasonable commercial efforts and to allocate sufficient resources and personnel for the
purposes of such negotiations, to agree the terms of, and upon such agreement to enter into, the Facility Agreement and the other Finance
Documents (required to be entered into as a condition precedent to the initial funding of the Facility in the Facility Agreement) in all
relevant capacities, as soon as reasonably practicable following the issuance of this Commitment Letter by us to the Borrower and in any
event by or on the date falling one month after the date of this Commitment Letter (the “Target Signing Date”), and,
without prejudice to the foregoing, agrees as follows: |
| (a) | firstly, where a term is covered by the terms of this Commitment Letter, such term will be included,
mutatis mutandis, in the relevant Finance Documents; |
| (b) | secondly, where
a term is not covered by the terms of this Commitment Letter, such term will adopt the drafting as that set out in the Asia Pacific Loan
Market Association recommended form of syndicated facility agreement (the “APLMA Form”) having regard to the business
of the Target Group and any deal-specific issues relating to the Transaction); |
| (c) | thirdly, where the APLMA Form does not provide any relevant drafting and/or the parties hereto
fail to reach agreement on any relevant language by the date falling one Business Day before the Target Signing Date (or such later date
notified by you to us on at least one Business Day’s prior notice), the relevant language shall be such language as reasonably requested
by us; and |
| (d) | fourthly, from and including the date on which the form of the Facility Agreement has been determined
in accordance with paragraphs (a) to (c) above (the “Agreed Forms”), we irrevocably and unconditionally undertake
to enter into the Agreed Forms upon three Business Days’ prior notice by you of the intended signing date (or such later date notified
by to us on at least three Business Days’ prior notice). |
| 6.2 | If reasonably requested by you, we shall confirm to you in writing (including by way of email) the status
of the conditions precedent to the initial funding of the Facility at the relevant time. |
| 6.3 | Our undertaking under paragraph 6.1 above shall expire on the termination or expiry of this Commitment
Letter. |
| 7.1 | You undertake to pay (or to procure payment) to each of the Indemnified Persons as soon as reasonably
practicable, and in any event within 10 Business Days following demand, an amount equal to any liability, damages, cost, loss or expense
(each, a “Loss”) (including legal fees) incurred by us or any of our affiliates or any of our (or our respective affiliates’)
directors, officers, employees or agents (each, an “Indemnified Person”) arising out of, in connection with or based
on any action, claim, suit, investigation or proceeding (in each case, whether or not any Indemnified Person is party and including any
action, claim, investigation or proceeding to preserve or enforce rights) commenced, pending or threatened in relation to: |
| (a) | the Acquisition or other transactions contemplated by this Commitment Letter or any Finance Documents; |
| (b) | the performance by any Indemnified Person of its obligations under this Commitment Letter or any Finance
Document; |
| (c) | the use of proceeds of the Facility; and |
| (d) | any breach by the Borrower of any of the terms of this Commitment Letter, |
except to the
extent that such Loss resulted primarily from (a) the gross negligence or wilful misconduct of such Indemnified Person, (b) any
breach by such Indemnified Person of any term of this Commitment Letter or any confidentiality undertaking with any of your shareholders
or any member of the Group, (c) any wilful breach by such Indemnified Person of any applicable law or (d) claims of an Indemnified
Person solely against one or more other Indemnified Persons and not arising out of any act or omission by you, any of your shareholders,
any member of the Group or any affiliate thereof.
| 7.2 | You undertake to pay (or to
procure payment) to each Indemnified Person within 10 Business Days of demand an amount equal to any cost or expense (including
legal fees) incurred by such Indemnified Person in connection with investigating, preparing, pursuing or defending any action, claim,
suit, investigation or proceeding arising out of, in connection with or based on any of the matters set forth in paragraph 7.1, whether
or not any Indemnified Person is a party. |
| 7.3 | We shall not have any duty or obligation, whether as fiduciary for any Indemnified Person or otherwise,
to recover any payment made under paragraph 7.1 or 7.2. |
| 7.4 | You agree that no Indemnified Person shall have any liability (whether direct or indirect, in contract
or tort or otherwise) to you or any of your affiliates for or in connection with anything referred to in paragraph 7.1 except for (a) any
breach of this Commitment Letter or the Facility Agreement or (b) any such liability for losses, claims, damages or liabilities incurred
by you or any of your affiliates that in each case resulted primarily from the gross negligence or wilful misconduct of that Indemnified
Person. No Indemnified Person shall be responsible or have any liability to you or any of your affiliates or anyone else for consequential
losses or damages. |
| 7.5 | Each Indemnified Person shall, to the extent legally permissible and reasonably practicable and (in the
determination of such Indemnified Person) not reasonably expected to materially prejudicial to the interests of such Indemnified Person,
consult with you in connection with the conduct of any defence in connection with any action, claim, suit, proceeding or investigation
against such Indemnified Person in respect of which such Indemnified Person seeks indemnification under paragraph 7.1 or 7.2. On the date
on which the Facility Agreement becomes effective, your obligations under this paragraph 7 shall terminate and be superseded by the relevant
terms of the Facility Agreement and this paragraph 7 shall cease to have effect, (in each case) to the extent that equivalent indemnities
are given by you under the Facility Agreement and provided that nothing shall prejudice any accrued rights and/or claims under
this paragraph 7 at the time when this paragraph 7 is so terminated or superseded. |
| 7.6 | All payments to be made by you under this Commitment Letter: |
| (a) | shall be paid in the currency specified in this Commitment Letter (or, if not so specified, as specified
in the applicable invoice(s) for such payment(s)) and in immediately available, freely transferable cleared funds to such account(s) with
such bank(s) as we or the applicable Indemnified Person (as the case may be) notify to you from time to time; |
| (b) | shall be paid without any deduction
or withholding for or on account of tax (a “Tax Deduction”) unless a Tax Deduction is required by law. If a Tax Deduction
is required to be made by law, the amount of the applicable payment due from you shall be increased to an amount which (after making
such Tax Deduction) leaves an amount equal to such payment which would have been due if no such Tax Deduction had been required; and |
| (c) | are exclusive of any value added tax or similar charge (“Indirect Tax”). If any Indirect
Tax is chargeable in respect of any such payment, you shall also and at the same time pay to the recipient of such payment an amount equal
to the amount of such Indirect Tax. |
| 8.1 | You shall pay to us a non-refundable commitment issuance fee in the amount of US$[*] on the date of this
Commitment Letter (or such later day as may be agreed by us). |
| 8.2 | You shall, within 10 Business
Days of written notice from any of us or our legal advisors, pay (or procure payment of) all reasonable costs and expenses (including
legal fees in the amount agreed with you) incurred by us or any of our affiliates in connection with the negotiation, preparation,
printing and execution of this Commitment Letter or any Finance Document. |
| 8.3 | Your obligations under paragraph 8.2 above shall be effective whether or not the Facility Agreement or
any other Finance Document is signed or any utilisation is made thereunder and whether or not the Acquisition Closing occurs. |
| 9.1 | The parties acknowledge that the terms and conditions of this Commitment Letter are confidential and are
not to be disclosed to or relied upon by anyone else, except disclosure of such terms and conditions or a copy of any of them is permitted
to the extent made as follows: |
| (a) | to the Target Group and the current direct or indirect owners and management of the Target Group or any
of their affiliates and their respective officers, directors, employees, investors and advisors or any of their affiliates on a “need
to know” and confidential basis for purposes of the Acquisition; |
| (b) | to any of your affiliates, your shareholders, us or to any of your or our respective officers, directors,
employees, attorneys, accountants, agents, investors, auditors, agents and advisors on a “need to know” and confidential basis
for purposes of the Acquisition and/or the Facility; |
| (c) | to any person to the extent required by law, regulation, rule or applicable governmental, regulatory
or administrative authority (including any applicable stock exchange and the US Securities and Exchange Commission) or court, or required
pursuant to any legal, arbitral or administrative proceedings or process (in which case, the disclosing party agrees to inform the other
party promptly thereof, to the extent permitted by applicable laws); |
| (d) | in connection with any preservation or enforcement of rights under this Commitment Letter; |
| (e) | by us on a “need to know”
and confidential basis to any potential transferee or assignee of us who has been made aware of and agrees to be bound by the obligations
under this paragraph 9; |
| (f) | to any person by any party to the extent that such information becomes publicly available other than by
reason of the violation of this paragraph 9 by any party; or |
| (g) | to any person by any party if the other party consents. |
| 9.2 | Notwithstanding anything to
the contrary in this Commitment Letter, on the date the Facility Agreement become effective, our obligations under this paragraph 9
shall automatically terminate and be superseded by the terms of the Facility Agreement. |
Each of the parties shall not make,
and shall cause each of its affiliates not to make, any public announcement regarding the Acquisition or the Facility without the prior
consent of the other party (such consent not to be unreasonably withheld or delayed), except to the extent required by law, regulation,
rule or competent governmental or regulatory authority (including any competent stock exchange and the US Securities and Exchange
Commission) or court. On and after the date on which the Acquisition is publicly announced or disclosed, we shall have the right, at our
own expense, to disclose our participation in the Facility, including without limitation, the placement of “tombstone” advertisements
in financial and other newspapers, journals and in marketing materials.
| 11.1 | You acknowledge that we and our affiliates may provide debt financing, equity capital or other services
(including financial advisory services) to other companies in respect of which you or your affiliates may have conflicting interests regarding
the transactions contemplated by this Commitment Letter, the Acquisition and otherwise. |
| 11.2 | You and we acknowledge that we or any of our affiliates may act in more than one capacity in relation
to the transactions contemplated by this Commitment Letter and/or the Acquisition, and may have conflicting interests in respect of such
different capacities. |
| 11.3 | We shall not use confidential information obtained from you or any of your affiliates by virtue of the
transactions contemplated by this Commitment Letter or its other relationships with you and your affiliates in connection with the performance
by it of services for other companies, or furnish any such information to any such other companies. |
| 11.4 | You acknowledge that we have no obligations to use in connection with the transactions contemplated by
this Commitment Letter or the Acquisition, or to furnish to you or any of your affiliates, confidential information obtained from any
other source. |
| 11.5 | You further acknowledge that we and our affiliates are or may be a full service securities firm engaged
in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course
of business, each such party may provide investment banking and other financial services to any person, and/or acquire, hold or sell (at
its sole discretion), for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of any of your shareholders, any member of the Target Group, any member of the Group and
other companies or entities with which any Obligor or any member of the Target Group or the Group may have commercial or other relationships. |
| 11.6 | You further acknowledge and agree that you are responsible for making your own independent judgment with
respect to the transactions contemplated by this Commitment Letter and the process leading thereto. Additionally, you acknowledge and
agree that we have not advised or are not advising you as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
You shall consult with your own advisors concerning such matters and shall be responsible for making your own independent investigation
and appraisal of the transactions contemplated by this Commitment Letter. |
No party hereto may assign or transfer
any of its rights or obligations under this Commitment Letter without the prior written consent of the other party.
| 13.1 | Subject to paragraph 14 (Survival), this Commitment Letter shall terminate with immediate effect
upon the earlier of: |
| (a) | us giving you notice terminating our obligations under this Commitment Letter, provided that such
notice may only be given if you inform us in writing that you are withdrawing your offer for the Acquisition or are otherwise abandoning
the Acquisition; |
| (b) | the date falling 12 months after the date of this Commitment Letter; |
| (c) | the first Utilisation Date; and |
| (d) | you giving us notice terminating
your obligations under this Commitment Letter and such obligations shall terminate immediately upon written notice to us from you,
if you have requested (acting reasonably and in good faith) amendments and/or supplements to this Commitment Letter, the Finance Documents
and any other documents delivered thereunder or in relation thereto (including the Acquisition Documents) in connection with the Minimum
Cash Deposit that are necessary for the success of your bid for the Target, to implement or complete the Acquisition or have arisen as
part of the negotiations with the Target in connection with the Acquisition, and we have not consented (to the extent required) to such
amendments and/or supplements and we have sent you a notice in writing confirming our refusal to provide such consent. |
| 13.2 | You shall promptly notify us of any withdrawal by you of your offer for the Ordinary Shares, the abandonment
of the Acquisition by you or the occurrence of any event or circumstance falling within paragraph 13.1(a). |
| 14.1 | The terms of paragraph 2
(Grant of Mandate), paragraph 3 (Information), paragraph 6 (Execution of Finance Documents) (insofar as it relates
to any Finance Document that is to be executed after execution of the Facility Agreement and that has not yet been entered into), paragraph
7 (Undertaking to Pay) (to the extent specified in paragraph 7.5), paragraph 8 (Fees and Expenses), paragraph 9 (Confidentiality)
(to the extent of your obligations thereunder), paragraph 10 (No Announcements) to paragraph 12 (Assignment or Transfer),
and this paragraph 14 to paragraph 19 (Integration) inclusive shall survive and continue after the date the Facility Agreement
becomes effective. |
| 14.2 | Without prejudice to paragraph
14.1, paragraph 7 (Undertaking to Pay) to paragraph 18 (Governing Law) (except for paragraph 13 (Termination)) inclusive
shall survive and continue after any termination or expiry of this Commitment Letter, whether as a result of paragraph 13 (Termination)
or otherwise. |
| 15.1 | No waiver or amendment of any
provision of this Commitment Letter shall be effective unless it is in writing and signed by all of the parties to this Commitment
Letter. |
| 15.2 | Our failure to exercise or our delay in exercising any right or remedy shall not constitute a waiver of
such right or remedy or a waiver of any other rights or remedies and no single or partial exercise of any right or remedy shall preclude
any further exercise thereof, or the exercise of any other right or remedy. Except as expressly provided in this Commitment Letter, our
rights and remedies contained in this Commitment Letter are cumulative and not exclusive of any rights or remedies provided by law. |
| 15.3 | We may delegate, by prior written
notice to you, any or all of our rights and obligations under this Commitment Letter to any of our subsidiaries or affiliates (each a
“Delegate”) and may designate any Delegate as responsible for the performance of any of its appointed functions under
this Commitment Letter provided that we shall remain liable to you for the performance of such rights and obligations by its Delegate
and for any loss or liability suffered by you as a result of such Delegate’s failure to perform such obligations. Each Delegate
may rely on this Commitment Letter. |
| 15.4 | Except for any Indemnified Person,
a person who is not a party to this Commitment Letter has no right to enforce or to enjoy the benefit of any term of this Commitment
Letter under the Contracts (Rights of Third Parties) Ordinance (Cap. 623 of the Laws of Hong Kong). The Commitment is given for your benefit
only and may not be relied upon by any other person. |
| 15.5 | Notwithstanding any other
term of this Commitment Letter, the consent of any person who is not a party to this Commitment Letter is not required to rescind or vary
this Commitment Letter at any time. |
| 15.6 | None of the provisions of this Commitment Letter constitutes us a fiduciary, advisor or agent of the Borrower,
any of your shareholders, any member of the Group or the Target Group or any affiliate of any of the foregoing. |
| 15.7 | Without prejudice to our obligations under this Commitment Letter, you acknowledged that we have no obligation
on whether the Acquisition Agreement can be executed, or whether the Acquisition can be completed successfully. |
This Commitment Letter may be executed
in any number of counterparts, and this has the same effect as if the signatures and/or execution on such counterparts were on a single
copy of this Commitment Letter.
| 17.1 | Any communication to be made under or in connection with this Commitment Letter shall be made in writing
and, unless otherwise stated, may be made by fax, letter or email. |
| 17.2 | Notices and communications to be given to you by us under this Commitment Letter shall be sent to: |
or such other facsimile no., other address,
other email address and/or details as may from time to time be notified by you to us.
| 17.3 | Notices and communications to be given by you to us under this Commitment Letter shall be sent to: |
or such other facsimile no., other address,
other email address and/or details as may from time to time be notified by us to you.
| 18.1 | This Commitment Letter is governed by Hong Kong law. |
| 18.2 | The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection
with this Commitment Letter. |
| 19.1 | This Commitment Letter sets out the entire agreement between you and us as to providing the Facility and
supersede any prior oral and/or written understandings or arrangements between the parties hereto relating to the Facility or the financing
of the Acquisition. |
| 19.2 | Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with
respect to the subject matter contained herein or therein (including an obligation to negotiate in good faith), in each case subject to
and in accordance with the terms of this Commitment Letter. |
This
Commitment Letter shall become effective as of the date of this Commitment Letter. We look forward to working with you on this
transaction.
Yours faithfully,
For and on behalf of
Industrial
Bank Co., Ltd. (a joint stock company incorporated in the People’s Republic of China with limited liability) Hong
Kong Branch
as Original Lender
| /s/ Meng Qingbo |
|
| Name: Meng Qingbo |
|
| Title: Deputy Chief Executive |
|
| /s/ Zhou Wenru |
|
| Name: Zhou Wenru |
|
| Title: Deputy General Manager |
|
We hereby agree to the terms of the above letter.
For and on behalf of
Superior Technologies Mergersub Limited
as Borrower
| /s/ Liang Meng |
|
| Name: Liang Meng |
|
| Title: Director |
|
| Date: 11 December 2023 |
|
APPENDIX A
PROJECT
SUPERIOR – TERM SHEET
Exhibit 99.7
CONFIDENTIAL
Execution Version
LIMITED GUARANTEE
This
LIMITED GUARANTEE, dated as of December 11, 2023 (this “Limited Guarantee”), is made by Ascendent Capital
Partners III, L.P. (the “Guarantor”), in favor of Hollysys Automation Technologies Ltd., a BVI business company incorporated
under the Laws of the British Virgin Islands (the “Company” or “Guaranteed Party”). Capitalized
terms used and not otherwise defined herein shall have the meaning ascribed to them in the Merger Agreement (as defined below).
1. Limited
Guarantee. To induce the Guaranteed Party to enter into that certain Agreement and Plan of Merger, dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), among the Guaranteed
Party, Superior Technologies Holding Limited (“Parent”), and Superior Technologies Mergersub Limited (“Merger
Sub”), pursuant to which, Merger Sub will merge with and into the Guaranteed Party (the “Merger”), with the
Guaranteed Party continuing as the surviving company in the Merger, the Guarantor, intending to be legally bound, hereby absolutely, unconditionally
and irrevocably guarantees to the Guaranteed Party, as a primary obligor and not merely as a surety, the due and punctual payment, observance,
performance and discharge of the payment obligations of Parent with respect to (i) the Parent Termination Fee owed by Parent to the
Company, if and when due, pursuant to Section 8.2(c) of the Merger Agreement, (ii) any amounts if and as required pursuant
to Section 8.2(e) of the Merger Agreement, and (iii) any amounts if and as required pursuant to Section 6.11 of the
Merger Agreement (the obligations contemplated by the immediately preceding clauses (i), (ii) and (iii) collectively, the “Obligations”);
provided, that notwithstanding anything to the contrary express or implied herein, in no event shall the Guarantor’s maximum
aggregate liability under this Limited Guarantee exceed the amount of US$33,000,000 (the “Cap”). All payments hereunder
shall be made in lawful money of the United States in immediately available funds. The parties hereto agree that this Limited Guarantee
may not be enforced without giving effect to the proviso to the immediately preceding sentence, including the Cap, and to the provisions
of Sections 7 and 8 hereof, and that the Guaranteed Party will not seek to enforce this Limited Guarantee for any amount
in excess of the Cap. This Limited Guarantee may be enforced for the payment of money only. The Guaranteed Party may, in its sole discretion,
bring and prosecute a separate action or actions against the Guarantor pursuant to and in accordance with the terms of this Limited Guarantee
for the Obligations, subject to the Cap and the other limitations described herein, regardless of whether an action is brought against
any other person (including Parent) or whether any such person is joined in any such action or actions. The Guaranteed Party, by execution
of this Limited Guarantee, agrees that in no event shall the Guarantor be required to pay to any Person under, in respect of, or in connection
with this Limited Guarantee, an amount in excess of the Cap, that the payment by the Guarantor of the Obligations (subject to the Cap)
is the sole and exclusive remedy of the Guaranteed Party against the Guarantor in the event any Obligation becomes due and payable, and
that the Guarantor shall not have any obligation or liability to the Guaranteed Party relating to, arising out of or in connection with,
this Limited Guarantee, the Equity Commitment Letter between the Guarantor and Merger Sub dated the date hereof (the “Equity
Commitment Letter”; together with equity commitment letter between Skyline Automation Technologies L.P. (the “Other
Sponsor”) and Merger Sub (the “Other Equity Commitment Letter”), collectively, the “Equity Commitment
Letters”), the Rollover and Support Agreement between Parent and Advanced Technology (Cayman) Limited (the “Support
Agreement”), the Merger Agreement (this Limited Guarantee, the Equity Commitment Letters, the Support Agreement, and the Merger
Agreement, collectively, the “Transaction Documents”), or any of the transactions contemplated hereby or thereby, other
than as expressly set forth herein (including the Retained Claims) or in the Merger Agreement, the Equity Commitment Letters or the Support
Agreement. The Guaranteed Party, by execution of this Limited Guarantee, further acknowledges that, in the event that Parent has any unsatisfied
payment obligations, payment of the Obligations in full in accordance with and subject to the terms and conditions (including the Cap)
of this Limited Guarantee by the Guarantor (or by any other Person) shall constitute satisfaction in full of the Guarantor’s obligations
with respect thereto. All payments made by the Guarantor pursuant to this Limited Guarantee shall be free and clear of any deduction,
offset, defense, claim or counterclaim of any kind. If Parent fails to pay or cause to be paid any or all of the Obligations as and when
due pursuant to the Merger Agreement, as applicable and subject to the other relevant terms and limitations of the Merger Agreement, then
the Guarantor’s liabilities to the Guaranteed Party hereunder in respect of such Obligation shall, at the Guaranteed Party’s
option, become immediately due and payable and the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s
option, and so long as Parent remains in breach of such Obligation, take any and all actions available hereunder or under applicable Law
to collect the Obligations from the Guarantor, subject to limitations described herein (including the Cap). The Guarantor agrees to pay
on demand all reasonable and documented out-of-pocket expenses (including reasonable fees and expenses of counsel) incurred by the Guaranteed
Party in connection with the enforcement of its rights hereunder if (i) the Guarantor asserts in any arbitration, litigation or other
proceeding that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms and the Guaranteed Party prevails
in such arbitration, litigation or other proceeding or (ii) the Guarantor fails or refuses to make any payment to the Guaranteed
Party hereunder when due and payable and it is determined judicially or by arbitration that the Guarantor is required to make such payment
hereunder.
2. Changes
in Obligations; Certain Waivers. (a) The Guarantor agrees that, subject to the terms hereof, the Guaranteed Party may, in its
sole discretion at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of
any portion of or waive the Obligations in accordance with the Merger Agreement, and may also enter into any agreement with Parent and/or
Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification
of the terms of the Merger Agreement or of any agreement between the Guaranteed Party, on the one hand, and Parent and/or Merger Sub,
on the other hand, in each case in accordance with the terms of the Merger Agreement, without in any way impairing or affecting the Guarantor’s
obligations as provided in this Limited Guarantee; provided, that the consent of the Guarantor shall be required to the extent
it has the effect of expanding the circumstances under which the obligations will be payable. The Guarantor agrees that, except as set
forth in clause (i) in the last sentence of Section 2(c) hereof and except for termination in accordance
with Section 7 hereof, the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by: (i) the failure or delay of the Guaranteed Party to assert any claim or demand or to enforce any right
or remedy against Parent or Merger Sub, or any other person interested in the transactions contemplated by the Merger Agreement; (ii) any
change in the time, place or manner of payment of the Obligations, or any escrow arrangement or other security therefor, or any rescission,
waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement (in each
case, to the extent effected in accordance with the terms of the Merger Agreement) or any other agreement evidencing, securing or otherwise
executed in connection with the Obligations, in each case, to the extent any of the foregoing does not have the effect of increasing the
Cap; (iii) the addition, substitution, discharge or release (in the case of a discharge or release, other than a discharge or release
of the Guarantor with respect to the Obligations as a result of payment in full of the Obligations in accordance with their terms, a discharge
or release of Merger Sub by the Company with respect to the Obligations under the Merger Agreement, or as a result of defenses to the
payment of the Obligations that would be available to Merger Sub under the Merger Agreement) of any person interested in the transactions
contemplated by the Merger Agreement; (iv) any change in the corporate existence, structure or ownership of Parent or Merger Sub
or any other person interested in the transactions contemplated by the Merger Agreement; (v) any insolvency, bankruptcy, reorganization
or other similar proceeding affecting Parent or Merger Sub or any other person interested in the transactions contemplated by the Merger
Agreement or any of their respective assets or any other person now or hereafter liable with respect to the Obligations; (vi) the
existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Guaranteed Party,
whether in connection with the Obligations or otherwise; (vii) any other act or omission that may in any manner or to any extent
vary the risk of or to the Guarantor or otherwise operate as a discharge of the Guarantor’s obligations as a matter of law or equity
(other than as a result of payment of the Obligations in accordance with its terms); (viii) the adequacy of any other means the Guaranteed
Party may have of obtaining payment of the Obligations; or (ix) the value of any other agreement or instrument referred to herein.
To the fullest extent permitted by applicable Law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason
of any applicable Law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness,
diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance,
default, dishonor and protest, notice of the Obligations incurred and all other notices of any kind (except for notices to be provided
to Parent in accordance with the Merger Agreement, this Limited Guarantee or any other agreement or instrument delivered herewith or therewith),
all defenses which may be available by virtue of any valuation, stay, moratorium Law or other similar applicable Law now or hereafter
in effect, any right to require the marshalling of assets of Parent or Merger Sub or any other Person interested in the transactions contemplated
by the Merger Agreement, and all suretyship defenses generally. Notwithstanding anything herein to the contrary, each of the following
defenses shall be retained by the Guarantor: (i) defenses to the payment of the Obligations that are available to Parent or any other
Person under the Merger Agreement; (ii) breach by the Guaranteed Party of this Limited Guarantee; and (iii) fraud or willful
misconduct by the Guaranteed Party or any of the Guaranteed Party Related Persons. The Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited
Guarantee are knowingly made in contemplation of such benefits.
(b) The
Guaranteed Party hereby covenants and agrees that it shall not institute, directly or indirectly, and it shall cause its Subsidiaries
and other controlled Affiliates and their respective officers and directors (collectively the “Guaranteed Party Related Persons”)
not to institute, directly or indirectly, in the name of or on behalf of the Guaranteed Party or any other Person, any action, suit or
proceeding or bring any other claim arising under, or in connection with, this Limited Guarantee, the Merger Agreement, the Equity Commitment
Letters, or the Support Agreement, any other agreement or instrument delivered pursuant to such Transaction Documents, or any of the transactions
contemplated hereby or thereby, or in respect of any written or oral representations made or alleged to have been made in connection herewith
or therewith, whether at law, in equity, in contract, in tort or otherwise, against Parent, Merger Sub, the Guarantor or any Non-Recourse
Party (as defined below), except for claims against (i) Parent or Merger Sub and their respective successors and assigns under and
to the extent expressly provided in the Merger Agreement, (ii) the Guarantor (but not any Non-Recourse Party) and its successors
and assigns under (and to the extent permitted by) this Limited Guarantee by the Guaranteed Party (subject to the Cap and the other limitations
described herein), (iii) the Guarantor and its respective successors and permitted assigns under the Equity Commitment Letter pursuant
to and in accordance with the terms of the Equity Commitment Letter and the Merger Agreement, (iv) the Other Sponsor and its respective
successors and permitted assigns under the Other Equity Commitment Letter pursuant to and in accordance with the terms of the Other Equity
Commitment Letter and the Merger Agreement, and (v) the Rollover Securityholder under the Support Agreement pursuant to and in accordance
with the terms of the Support Agreement (claims under clauses (i) through (v) collectively, the “Retained
Claims”). Notwithstanding anything in this Limited Guarantee to the contrary, but, for the avoidance of doubt, without prejudice
to any right to specific performance the Guaranteed Party may have under any Transaction Documents, in no event shall the Guaranteed Party
be entitled to claim, seek or collect money damages from the Guarantor under this Limited Guarantee or any other Transaction Documents
in connection with a Retained Claim involving an aggregate amount payable (inclusive of the Guarantor’s payment of the Obligations)
that would exceed the Cap.
(c) The
Guarantor hereby unconditionally and irrevocably waives, and agrees not to exercise, any rights that it may now have or hereafter acquire
against Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of the Obligations under or in respect
of this Limited Guarantee (subject to the Cap and the other limitations described herein) or any other agreement in connection therewith,
including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim
or remedy of the Guaranteed Party against Parent or Merger Sub, whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including the right to take or receive from Parent or Merger Sub, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until the Obligations
(subject to the Cap) have been paid in full in immediately available funds by the Guarantor (or by any other Person on behalf of the Guarantor)
to the Guaranteed Party. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior
to the payment in full in immediately available funds of the Obligations (subject to the Cap) by the Guarantor (or by any other Person
on behalf of the Guarantor) to the Guaranteed Party, such amount shall be received and held in trust for the benefit of the Guaranteed
Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party
in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations (subject
to the Cap) in accordance with the terms of the Merger Agreement and this Limited Guarantee, whether matured or unmatured, or to be held
as collateral for the Obligations (subject to the Cap). Notwithstanding anything to the contrary contained herein but subject to clause
(v) under Section 2(a), the Guaranteed Party hereby agrees that, (i) to the extent the Obligation is not payable
pursuant to, and in accordance with, the Merger Agreement, the Guarantor shall be similarly relieved of its obligation to make payment
under this Limited Guarantee for the same obligation for which Parent were relieved under the Merger Agreement, and (ii) the Guarantor
shall have the right to assert and shall have the benefit of all defenses to the payment of the Obligations under this Limited Guarantee
(which in any event shall be subject to the Cap and the other limitations described herein) that would be available to Parent (whether
or not any such defense has been asserted by Parent) under the Merger Agreement with respect to the Obligations as well as any defense
in respect of fraud or willful misconduct of the Guaranteed Party or the Guaranteed Party Related Persons hereunder or any breach by the
Guaranteed Party of any term hereof.
3. No
Waiver; Cumulative Rights. No failure on the part of either party hereto to exercise, and no delay in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by either party hereto of any right, remedy
or power hereunder preclude any other or future exercise of any right, remedy or power hereunder by such party. Except as otherwise set
forth herein, each and every right, remedy and power hereby granted to each party hereto or, subject to the terms hereof, allowed it by
applicable Law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by such party at any time or
from time to time. The Guaranteed Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any
or all of the Guaranteed Party’s rights against, Parent, Merger Sub, or any other Person liable for any portion of the Obligations
prior to proceeding against the Guarantor hereunder, and the failure by the Guaranteed Party to pursue rights or remedies against Parent,
Merger Sub shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of Law, of the Guaranteed Party.
4. Representations
and Warranties. The Guarantor hereby represents and warrants that: (a) the Guarantor is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, (b) the Guarantor has all necessary power and authority to execute,
deliver and perform this Limited Guarantee, (c) the execution, delivery and performance of this Limited Guarantee have been duly
authorized by all necessary action and do not contravene any provision of such Guarantor’s charter, partnership agreement, operating
agreement or similar organizational documents or any Law, regulation, rule, decree, order, judgment or contractual restriction binding
on such Guarantor or its assets; (d) all consents, approvals, authorizations, permits of, filings with and notifications to, any
governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by such Guarantor have been
obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any
governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee;
(e) this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws affecting creditors' rights generally, and (ii) general equitable principles (whether considered in a proceeding
in equity or at law); and (f) such Guarantor has the financial capacity to pay and perform its obligation under this Limited Guarantee,
and all funds necessary for such Guarantor to fulfill the Obligations shall be available to such Guarantor (or its assignee pursuant to
Section 5) for so long as this Limited Guarantee shall remain in effect in accordance with Section 7 hereof.
5. Assignment.
Neither the Guarantor nor the Guaranteed Party may assign or delegate this Limited Guarantee or their respective rights, interests or
obligations hereunder to any other Person (except by operation of law), in whole or in part, without the prior written consent of the
Guaranteed Party, in the case of any assignment or delegation by the Guarantor, or the Guarantor, in the case of any assignment or delegation
by the Guaranteed Party, and any attempted assignment or delegation without such required consents shall be null and void ab initio
and of no force or effect. Notwithstanding the foregoing, the Guarantor may assign or delegate all or a portion of its rights, interests
or obligations hereunder, without the prior written consent of the Guaranteed Party, to any Affiliate of the Guarantor, limited partner
of the Guarantor or any of its Affiliates, or any affiliated investment fund or investment vehicle that is advised, managed or sponsored
by the general partner or the investment manager of the Guarantor or any of its Affiliates; provided that no such assignment or delegation
shall relieve the Guarantor of its obligations hereunder as primary obligor.
6. Notices.
All notices and other communications hereunder shall be given by the means specified by the Merger Agreement (and shall be deemed given
as specified therein), as follows:
if to the Guarantor:
Ascendent Capital Partners III, L.P.
Suite 3501, 35/F, Jardine House, 1 Connaught Place,
Central, Hong Kong
Attention: Liang Meng // John Wang
Email:
leon@ascendentcp.com; john@ascendentcp.com
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Edinburgh Tower, 33/F, The Landmark, 15 Queen’s Road
Central, Hong Kong
Attention: Marcia Ellis // Rongjing Zhao
Email:
mellis@mofo.com; rzhao@mofo.com
If to the Guaranteed Party,
as provided in the Merger Agreement, or, in each case, to such other Persons or addresses as may be designated in writing by the party
hereto to receive such notice as provided above.
7. Continuing
Guarantee. Unless terminated pursuant to this Section 7, this Limited Guarantee shall remain in full force and effect
and shall be binding on the Guarantor and its successors and permitted assigns until all of the Obligations (subject to the Cap) under
this Limited Guarantee have been indefeasibly paid, observed, performed or satisfied in full, at which time this Limited Guarantee shall
terminate in its entirety and the Guarantor shall have no further obligations under this Limited Guarantee. Notwithstanding the foregoing,
this Limited Guarantee shall terminate and the Guarantor shall have no further obligations under this Limited Guarantee as of the earliest
to occur of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms in any circumstances,
other than pursuant to which Parent would be obligated to make a payment of the Parent Termination Fee in accordance with Section 8.2(c) of
the Merger Agreement or pay any other amounts under Section 8.2(e) of the Merger Agreement, and (iii) the payment in full
of the Obligations. Notwithstanding the immediately preceding sentence, the obligations of the Guarantor hereunder shall expire automatically
three (3) months following the valid termination of the Merger Agreement in a manner that gives rise to an obligation of Parent to
make payment of the Parent Termination Fee at the time of such termination (the “Fee Claim Period”), unless a claim
for payment of the Obligations, subject always to the Cap, is made in accordance with this Limited Guarantee prior to the end of the Fee
Claim Period, in which case the Guarantor’s obligations hereunder shall be discharged upon the date on which such claim is finally
satisfied or otherwise resolved by agreement of the parties hereto pursuant to Section 11 hereof (and payment in full of any
amounts required to be paid by such resolution). Notwithstanding anything herein to the contrary, in the event that the Guaranteed Party
or any of the Guaranteed Party Related Persons directly or indirectly asserts in any Action at law or in equity or arbitration that the
provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap, the provisions of Section 1
hereof limiting the Guaranteed Party’s enforcement hereof to the payment of money only, or the provisions of Sections 7,
8 and 17 hereof are illegal, invalid or unenforceable in whole or in part, asserts that the Guarantor is liable in excess
of or to a greater extent than the Obligations (subject to the Cap), or asserts any theory of liability against Parent, Merger Sub, the
Guarantor or any Non-Recourse Parties (as defined below) with respect to or in connection with the Transaction Documents, any other agreement
or instrument delivered pursuant to such Transaction Documents, or any of the transactions contemplated hereby or thereby, other than
a Retained Claim, then (A) the obligations of the Guarantor under this Limited Guarantee shall terminate ab initio and be
null and void, (B) if the Guarantor has previously made any payments under this Limited Guarantee, it shall be entitled to recover
such payments, and (C) none of the Guarantor, Parent, Merger Sub, or any Non-Recourse Parties (as defined below) shall have any liability
whatsoever (whether at law or in equity, whether sounding in contract, tort, statue or otherwise) to the Guaranteed Party, with respect
to the Transaction Documents or the transactions contemplated by the Transaction Documents.
8. No
Recourse. Notwithstanding anything that may be expressed or implied in this Limited Guarantee, the Merger Agreement or any other Transaction
Documents, or in any agreement or instrument delivered, or statement made or action taken, in connection with or pursuant to the transactions
contemplated by any of this Limited Guarantee, the Merger Agreement or any other Transaction Documents or the negotiation, execution,
performance or breach of this Limited Guarantee, the Merger Agreement or any other Transaction Documents, notwithstanding any equitable,
common law or statutory right or claim that may be available to the Guaranteed Party or any of its Affiliates, and notwithstanding the
fact that the Guarantor may be a partnership, limited liability company corporation or other entity, by its acceptance of the benefits
of this Limited Guarantee, the Guaranteed Party, by executing this Limited Guarantee, acknowledges and agrees, on behalf of itself and
the Guaranteed Party Related Persons, that no Person other than the Guarantor has any obligations hereunder, and it has no right of recovery
hereunder against, no recourse shall be had hereunder against and no personal liability shall hereunder attach to, the Guarantor, any
former, current or future direct or indirect holders of any equity, general or limited partnership or limited liability company interest,
controlling persons, management companies, portfolio companies, incorporators, directors, officers, employees, agents, advisors, attorneys,
Affiliates (other than any successor(s) or permitted assignee(s) under Section 5 hereof), members, managers, general
or limited partners, stockholders, shareholders, representatives, successors or assignees of the Guarantor, or any former, current or
future direct or indirect holders of any equity, general or limited partnership or limited liability company interest, controlling persons,
management companies, portfolio companies, incorporators, directors, officers, employees, agents, advisors, attorneys, Affiliates (other
than any successor(s) or permitted assignee(s) under Section 5 hereof), members, managers, general or limited partners,
stockholders, shareholders, representatives, successors or assignees of any of the foregoing (collectively, but not including the Guarantor,
the Rollover Securityholder, Parent, Merger Sub, or any permitted assignee under Section 5 hereof, or their respective successors
and permitted assigns under the Transaction Documents, collectively the “Non-Recourse Parties,” and each a “Non-Recourse
Party”), through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through
a claim (whether at law or equity in tort, contract or otherwise) by or on behalf of Parent or Merger Sub against any Non-Recourse Party,
by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, or otherwise, except for
Retained Claims; provided, however, that notwithstanding anything to the contrary in this Limited Guarantee, in the event the Guarantor
(A) consolidates with or merges with any other Person and is not the continuing or surviving entity of such consolidation or merger
or (B) transfers or conveys all or a substantial portion of its properties and other assets to any Person such that the sum of the
Guarantor’s remaining net assets plus unfunded capital commitments which it is entitled to call is less than the Cap as of the time
of such transfer, then, and in each such case, the Guaranteed Party may seek recourse, whether by the enforcement of any judgment or assessment,
by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable Law, against such continuing or surviving
entity or such Person, as the case may be, but only if the Guarantor fails to satisfy its payment obligations hereunder and only to the
extent of the liability of the Guarantor hereunder. No Person other than the Guarantor (or any successors or permitted assignees under
Section 5 hereof), the Guaranteed Party (or any successors or permitted assignees under Section 5 hereof) and
the Non-Recourse Parties shall have any rights or remedies under, in connection with or in any manner related to this Limited Guarantee
or the transactions contemplated hereby. Nothing set forth in this Limited Guarantee shall confer or give or shall be construed to confer
or give to any Person, including the Guaranteed Party (or any successors or permitted assignees under Section 5 hereof) or
any of the Guaranteed Party Related Persons, any rights or remedies hereunder against any Person other than the rights or remedies of
the Guaranteed Party against the Guarantor (or any successors or permitted assigned under Section 5 hereof) as expressly set
forth herein.
9. Nature
of Guarantee. Subject to the terms hereof, the Guarantor’s liability hereunder is absolute, unconditional, and irrevocable and
continuing irrespective of any modification, amendment or waiver of or any consent to departure from the Merger Agreement that may be
agreed to by Parent or Merger Sub, in each case to the extent that any of the foregoing does not have the effect of expanding the circumstances
under which the Obligations are payable. The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in
the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed
Party to so file shall not affect the Guarantor’s obligations hereunder. This Limited Guarantee is an unconditional guarantee of
payment and not of collection. This Limited Guarantee is a primary obligation of the Guarantor and is not merely the creation of a surety
relationship, and the Guaranteed Party shall not be required to proceed against Parent or Merger Sub first before proceeding against the
Guarantor hereunder. In the event that any payment hereunder is rescinded or must otherwise be, and is, returned to the Guarantor for
any reason whatsoever (other than as set forth in the last sentence of Section 7 hereof), the Guarantor shall remain liable
hereunder with respect to the Obligations, subject to the terms and conditions hereof (including the Cap), as if such payment had not
been made. Notwithstanding anything herein to the contrary, the Guarantor shall have the right to assert, and shall have the benefit of,
any defenses to the payment of the Obligations that are available to Parent under the Merger Agreement or otherwise expressly provided
in Section 2(a) hereof, other than defenses arising from bankruptcy, reorganization or similar proceeding of Parent.
10. Amendments
and Waivers. No amendment or waiver of any provision of this Limited Guarantee will be valid and binding unless it is in writing and
signed, in the case of an amendment, by the Guarantor and the Guaranteed Party, or in the case of a waiver, by the party against whom
the waiver is to be effective.
11. Governing
Law; Jurisdiction.
(a) This
Limited Guarantee, and all claims or causes of action (whether at law or in equity, in contract or in tort) that may be based upon, arise
out of or relate to this Limited Guarantee or the negotiation, execution or performance hereof, shall be governed by and construed in
accordance with the Laws of the State of New York, without giving effect to any choice of Law or conflict of Law rules or provisions
thereof that would cause the application of the Laws of any jurisdiction other than the State of New York.
(b) Any
dispute, controversy, difference, or claim arising out of or relating to this Limited Guarantee, including the existence, validity, interpretation,
performance, breach, or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall
be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) and resolved in accordance with the HKIAC
Administered Arbitration Rules in force when the Notice of Arbitration is submitted and as may be amended by this Section 11(b).
The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The language of the arbitration
shall be English and the tribunal shall consist of three arbitrators. The arbitration tribunal shall have no authority to award punitive
damages. The award of the arbitration tribunal shall be final and binding upon the disputing parties. Any party to an award may apply
to any court of competent jurisdiction for enforcement of such award and, for purposes of the enforcement of such award, the parties hereto
irrevocably and unconditionally submit to the jurisdiction of any court of competent jurisdiction and waive any defenses to such enforcement
based on lack of personal jurisdiction or inconvenient forum.
12. Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS LIMITED GUARANTEE, ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH, AND THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTEE BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.
13. Confidentiality.
This Limited Guarantee shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the Merger
Agreement and the transactions contemplated thereby. This Limited Guarantee may not be used, circulated, quoted or otherwise referred
to by the Guarantor, the Guaranteed Party or any of their respective Affiliates or representatives in any document, except with the prior
written consent of the Guarantor and the Guaranteed Party; provided that the parties hereto may disclose the existence and content of
this Limited Guarantee to the extent required by applicable Law, the applicable rules of any national securities exchange, in connection
with any SEC filings relating to the Merger Agreement and the transactions contemplated thereby or in connection with any litigation relating
to the Merger Agreement or the transactions contemplated thereby as permitted by or provided in the Merger Agreement and the Guarantor
may disclose the existence and content of this Limited Guarantee to any Non-Recourse Party which needs to know of the existence of this
Limited Guarantee and is subject to the confidentiality obligations substantially identical to the terms contained in this Section 13.
14. Entire
Agreement. This Limited Guarantee, together with the other Transaction Documents (including any schedules, exhibits and annexes thereto
and any other documents and instruments referred to thereunder), constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among or between any of the parties hereto with respect to the subject matter hereof and thereof.
15. No
Third-Party Beneficiaries. This Limited Guarantee shall be binding solely on the parties hereto and their respective successors and
permitted assigns. This Limited Guarantee shall inure solely to the benefit of the parties hereto and their respective successors and
permitted assigns, and nothing set forth in this Limited Guarantee shall, or shall be construed to, confer upon or give to any Person,
other than the parties hereto and their respective successors and permitted assigns, any benefits, rights or remedies under or by reason
of, or any rights to enforce or cause the Guaranteed Party to enforce, any provisions of this Limited Guarantee; provided that the Non-Recourse
Parties may rely upon and enforce the provisions of Section 8 hereof.
16. Interpretation.
When reference is made in this Limited Guarantee to an Article, Exhibit, Schedule or Section, such reference shall be to an Article, Exhibit,
Schedule or Section of this Limited Guarantee unless otherwise indicated. Whenever the words “include”, “includes”
or “including” are used in this Limited Guarantee, they shall be deemed to be followed by the words “without limitation.”
The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when
used in this Limited Guarantee shall refer to this Limited Guarantee as a whole and not to any particular provision of this Limited Guarantee.
All terms defined in this Limited Guarantee shall have the defined meanings when used in any certificate or other document made or delivered
pursuant thereto unless otherwise defined therein. Words of any gender include each other gender and neuter genders and words using the
singular or plural number also include the plural or singular number, respectively. Any contract or Law defined or referred to herein
means such contract or Law as from time to time amended, modified or supplemented, including (in the case of contracts) by waiver or consent
and (in the case of Laws) by succession or comparable successor statutes and references to all attachments thereto and instruments incorporated
therein. The word “or” shall not be exclusive. With respect to the determination of any period of time, “from”
means “from and including”. The word “will” shall be construed to have the same meaning as the word “shall”.
Whenever this Limited Guarantee refers to a number of days, such number shall refer to calendar days unless Business Days are specified.
The word “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply
“if”. References to “dollars” or “$” are to United States dollars. Any deadline or time period set
forth in this Limited Guarantee that by its terms ends on a day that is not a Business Day shall be automatically extended to the next
succeeding Business Day. Each party hereto has participated in the drafting and negotiating of this Limited Guarantee. If an ambiguity
or question of intent or interpretation arises, this Limited Guarantee shall be construed as if it is drafted by all parties hereto and
without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument
to be drafted.
17. Severability.
If any term or other provision of this Limited Guarantee is found by a court of competent jurisdiction or an arbitration tribunal
to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of
this Limited Guarantee shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Limited
Guarantee so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the greatest extent possible. Notwithstanding anything herein, this Limited Guarantee
may not be enforced without giving effect to the limitation of the amount payable hereunder to the Cap and the provisions of Sections
7, 8, and 17 hereof.
18. Counterparts.
This Limited Guarantee may be executed and delivered (including by e-mail of PDF or scanned versions or by facsimile) in one or more counterparts,
and by the parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder of this page intentionally left
blank]
IN WITNESS WHEREOF, the Guarantor
has caused this Limited Guarantee to be executed and delivered as of the date first written above by its director or officer thereunto
duly authorized.
| Ascendent Capital Partners III,
L.P. |
|
| |
|
| By: |
Ascendent Capital Partners III GP, L.P., its general partner |
|
| By: |
Ascendent Capital Partners III GP Limited, its general partner |
|
| |
|
| By: |
/s/ Liang Meng |
|
| Name: |
Liang Meng |
|
| Title: |
Director |
|
[Signature Page to Limited Guarantee]
IN WITNESS WHEREOF, the Guarantor
has caused this Limited Guarantee to be executed and delivered as of the date first written above by its director or officer thereunto
duly authorized.
| Hollysys Automation Technologies Ltd. |
|
| |
|
| By: |
/s/ Kok Peng Teh |
|
| Name: |
Kok Peng Teh |
|
| Title: |
Director |
|
[Signature Page to Limited Guarantee]
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