Monday, August 07, 2023 4:19:10 PM
Under the terms of the Agreement, the Government and other beneficiaries specified in the Agreement (collectively, the “Purchaser”) will purchase, whether through outright purchase or otherwise, up to 100,000 vehicles from the Company during the Term (as defined below) pursuant to purchase orders, with a minimum purchase quantity of 50,000 vehicles and an option to purchase up to an additional 50,000 vehicles pursuant to a schedule of annual vehicle purchase quantities set forth therein. The Purchaser may reduce the minimum purchase quantity by the number of vehicles set out in any purchase order not accepted by the Company or by the number of vehicles that the Company fails to deliver within six months from the date of the applicable purchase order.
The purchase price with respect to any vehicle will be the lower of (i) the standard retail price for the relevant vehicle in the relevant market for electric vehicles in Saudi Arabia (exclusive of any applicable taxes) plus the applicable actual and direct costs of transportation, custom duties, government fees, third-party insurance, and any extra equipment or variations made to the relevant vehicle to comply with applicable standards and specifications of Saudi Arabia, which are not included in the standards specifications in the U.S. market (collectively, the “Costs”); and (ii) the standard retail price for the relevant vehicle in the U.S. market (exclusive of any applicable taxes) plus the applicable Costs, subject to adjustments as mutually agreed between the parties for vehicles modified pursuant to specific vehicle configurations or vehicles manufactured at the Purchaser’s request which are not standard configuration vehicles offered by the Company in any key markets.
The Agreement has a term of ten years from the date of the first purchase order, unless terminated earlier pursuant to the terms of the Agreement (the “Term”). The Agreement may be terminated by the Purchaser immediately upon written notice to the Company in the event of bankruptcy, insolvency or receivership, if the Company fails to supply at least one vehicle within a full calendar year, if the Company assigns the Agreement to another party without the consent of the Purchaser or fails to notify the Purchaser of any potential change of control, or if a force majeure prevents the Company from accepting any purchase order or selling or supplying the vehicles for a period of more than 120 business days. In addition, either party may terminate in the event of an uncured breach by the other party.
The Agreement also contains certain other terms and conditions in connection with the purchase, including the obligation of the Company to perform in compliance with the Agreement and purchase orders, standards and specifications applicable to vehicles in Saudi Arabia, and all applicable laws and regulations. Pursuant to the Agreement, the Company will also be subject to certain minimum conditions with respect to its operations in the Kingdom of Saudi Arabia and it will provide warranty for its vehicles for the standard warranty period offered by the Company in the relevant market for electric vehicles in Saudi Arabia or the U.S. market for such vehicle, whichever is more favorable to the Purchaser.
The foregoing description does not constitute a complete summary of the terms of the Agreement and is qualified in its entirety by reference to the copy of the Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
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