Item 1.01 Entry into a Material Definitive Agreement.
On May 23, 2022, Goldenbridge Acquisition Limited,
a British Virgin Islands business company (“Goldenbridge”), SunCar Technology Group Inc., a Cayman Islands exempted company
and a wholly-owned subsidiary of Goldenbridge (“Purchaser”), SunCar Technology Global Inc., a Cayman Islands exempted company
and a wholly-owned subsidiary of Purchaser (“Merger Sub,” together with Goldenbridge, Purchaser, the “Purchaser Parties”),
Auto Services Group Limited, a Cayman Islands exempted company (“SunCar”), the principal shareholders of SunCar (“Principal
Shareholders”), and Ye Zaichang, as representative of the Principal Shareholders, entered into an Agreement and Plan of Merger (the
“Agreement”).
Acquisition Merger and Acquisition Consideration
Upon the closing of the transactions contemplated
by the Agreement, Goldenbridge will merge with and into the Purchaser, resulting in all Goldenbridge shareholders becoming shareholders
of the Purchaser as described under the below section titled “Reincorporation Merger.” Concurrently therewith, Merger Sub
will merge with and into SunCar, resulting in the Purchaser acquiring 100% of the issued and outstanding equity securities of SunCar (the
“Acquisition Merger”). Upon the closing of the Acquisition Merger, ordinary shares of Purchaser shall be reclassified into
class A (“Purchaser Class A Ordinary Shares”) and class B ordinary shares (“Purchaser Class B Ordinary Shares,”
together with Purchaser Class A Ordinary Shares, collectively “Purchaser Ordinary Shares”) whereby each Purchaser Class A
Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general and special meetings of the post-closing company,
and each Purchaser Class B Ordinary Share shall be entitled to 10 votes on all matters subject to vote at general and special meetings
of the post-closing company.
The aggregate consideration to be paid to SunCar shareholders
for the Acquisition Merger is US$800 million, payable in the form of a number of newly issued Purchaser Ordinary Shares (the “Closing
Payment Shares”) valued at $10.00 per share. Under the Merger Agreement, 1,000,000 shares of the Closing Payment Shares (“Escrow
Shares”) will be held in escrow for a period of six months after the closing to satisfy indemnification obligations.
In addition to the Closing Payment Shares, certain
SunCar shareholders may be entitled to receive earn-out shares as follows: (i) 1,600,000 Purchaser Class A Ordinary Shares if SunCar’s
revenue equals or exceeds US$258,000,000 for the fiscal year ending December 31, 2022, as reflected on the audited consolidated financial
statements of SunCar as of and for the fiscal year ended December 31, 2022; (ii) 1,600,000 Purchaser Class A Ordinary Shares if SunCar’s
revenue equals or exceeds US$352,000,000 for the fiscal year ending December 31, 2023, as reflected on the audited consolidated financial
statements of SunCar as of and for the fiscal year ended December 31, 2023; and (iii) 1,600,000 Purchaser Class A Ordinary Shares if SunCar’s
revenue equals or exceeds US$459,000,000 for the fiscal year ending December 31, 2024, as reflected on the audited consolidated financial
statements of SunCar as of and for the fiscal year ended December 31, 2024.
Furthermore, the parties agreed that immediately following
the closing of the Acquisition Merger, Purchaser’s board of directors will consist of five (5) directors, a majority of whom shall
qualify as independent directors under Nasdaq rules.
Under the Agreement, commencing from the closing of
the transactions, certain SunCar shareholders shall be entitled to (i) make a written demand for registration under the Securities Act
of all or part of their shares, with one minority shareholder, KMBP Holdings Limited, having the right to demand up to three registration
statements covering some or all of its shares; and (ii)“piggy-back” registration rights with respect to registration statements
filed following the consummation of the transactions. Purchaser will bear the expenses incurred in connection with the filing of any such
registration statements.
Reincorporation Merger
Immediately prior to the Acquisition Merger, Goldenbridge
will be merged with and into Purchaser, the separate corporate existence of Goldenbridge will cease and Purchaser will continue as the
surviving corporation (the “Reincorporation Merger”). In connection with the Reincorporation Merger, every issued and outstanding
unit of Goldenbridge shall separate into each unit’s individual components, consisting of one ordinary share, one warrant and one
right, and all units shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist. In addition,
each of Goldenbridge’s issued and outstanding securities will be converted into an equivalent amount of Purchaser’s securities,
as follows:
| ● | Each ordinary share of Goldenbridge
will be converted automatically into one Purchaser Class A Ordinary Share; |
| ● | Each right to acquire one-tenth
of one Goldenbridge ordinary share will be converted automatically into one right to acquire one-tenth of one Purchaser Class A Ordinary
Share; |
| ● | Each warrant entitled to purchase
one half (1/2) of one Goldenbridge ordinary share at a price of $11.50 per whole share will be converted automatically into one warrant
to purchase one half (1/2) of one Purchaser Class A Ordinary Share at a price of $11.50 per whole share; and |
| ● | Each unit purchase option of
Goldenbridge will be converted automatically into one unit purchase option of Purchaser. |
Representations and Warranties
In the Agreement, SunCar and the Principal Shareholders
make certain representations and warranties (with certain exceptions set forth in the disclosure schedules to the Agreement) relating
to, among other things: (a) proper corporate organization of SunCar and its affiliates and subsidiaries and similar corporate matters;
(b) authorization, execution, delivery and enforceability of the Agreement and other transaction documents; (c) neither the execution,
delivery nor performance of the Agreement need any consent, approval, license or other action of any government authority; (d) absence
of conflicts; (e) capital structure; (f) accuracy of charter documents and corporate records; (g) required consents and approvals; (h)
financial information; (i) absence of certain changes or events; (j) title to assets and properties; (k) material contracts; (l) ownership
of real property; (m) licenses and permits; (n) compliance with laws; (o) ownership of intellectual property; (p) customers and suppliers;
(q) employment and labor matters; (r) tax matters; (s) environmental matters; (t) brokers and finders; (u) that SunCar is not an investment
company; (p) no Action pending or threatened against SunCar; and (u) other customary representations and warranties.
In the Agreement, Goldenbridge makes certain representations
and warranties relating to, among other things: (a) proper corporate organization and similar corporate matters; (b) authorization, execution,
delivery and enforceability of the Agreement and other transaction documents; (c) no governmental authorization required; (d) Non-Contravention;
(e) brokers and finders; (f) capital structure; (g) validity of share issuance; (h) minimum trust fund amount; (i) validity of Nasdaq
Stock Market listing; (j) SEC filing requirements and financial statements; (k) litigation; (l) compliance with laws; (m) material contracts;
(n) that Goldenbridge is not an investment company; and (o) other customary representations and warranties.
Conduct Prior to Closing; Covenants
The parties made customary representations, warranties
and covenants in the Agreement, including, among other things, covenants with respect to the conduct of SunCar and its affiliates/subsidiaries
prior to the closing of the business combination. The parties have also agreed to customary “no shop” obligations.
The Agreement also contains covenants providing for:
| ● | SunCar purchasing up to an
aggregate of 400,000 of the insider shares held by the initial shareholders (as defined in the final prospectus of Goldenbridge as of
March 1, 2021) at a price of $10.00 per share at the closing of the Acquisition Merger; |
| ● | SunCar’s former shareholders
obtaining the rights to appoint a majority of the members of the board of SunCar Technology Group Inc.; and |
| ● | all rights to exculpation,
indemnification and advancement of expenses existing in favor of D&O Indemnified Persons shall survive the closing and continue in
full force and effect in accordance with their respective terms to the extent permitted by applicable Law. |
Conditions to Closing
General Conditions
Consummation of the Agreement and the transactions
therein is conditioned on, among other things: (i) the absence of any order or provisions of any applicable Law making the transactions
illegal or otherwise preventing the transactions; (ii) SunCar and Goldenbridge receiving approval from their respective shareholders to
the transactions; (iii) there shall not be any Action brought by a third party that is not an Affiliate of the parties thereto to enjoin
or otherwise restrict the consummation of the closing; (iv) the SEC shall have declared the Form F-4 effective; (v) no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have been issued; and (vi) each of the Additional Agreements
shall have been entered into and the same shall be in full force and effect; provided that the non-execution of the Lock-up Agreements
by (a) shareholders who are not the Key Personnel nor Controlled by the Key Personnel and (b) grantees of SunCar options that are vested
as of the closing, collectively holding no more than 5% of share capital in SunCar (on a fully-diluted basis) immediately prior to the
closing shall not affect the closing or occurrence of the closing.
SunCar’s Conditions to Closing
The obligations of SunCar to consummate the transactions
contemplated by the Agreement, in addition to the conditions described above, are conditioned upon each of the following, among other
things:
| ● | Purchaser Parties complying
with all of their obligations under the Agreement in all material respects; |
| ● | subject to applicable materiality
qualifiers, the representations and warranties of Purchaser Parties being true on and as of the closing date of the transactions and
Purchaser Parties complying with all required covenants in the Agreement; |
| ● | Purchaser Parties complying
with the reporting requirements under the Securities Act and Exchange Act, as applicable; |
| ● | there having been no material
adverse effect to Purchaser Parties; and |
| ● | Purchaser shall remain listed
on Nasdaq and the additional listing application for the Closing Payment Shares shall have been approved by Nasdaq. |
Purchaser Parties’ Conditions to Closing
The obligations of Purchaser Parties to consummate
the transactions contemplated by the Agreement, in addition to the conditions described above in the first paragraph of this “Conditions
to Closing” section, are conditioned upon each of the following, among other things:
| ● | SunCar and its subsidiaries
complying with all of the obligations under the Agreement in all material respects; |
|
● |
subject to applicable materiality qualifiers, the representations and warranties of SunCar and its subsidiaries being true on and as of the closing date of the transactions and SunCar and its subsidiaries complying with all required covenants in the Agreement; |
| ● | all necessary governmental
approvals have been received in form and substance reasonably satisfactory; |
| ● | there having been no material
adverse effect to SunCar’s business; |
| ● | Goldenbridge receiving legal
opinions from SunCar’s counsels in the PRC and Cayman Islands; and |
Termination
The Agreement may be terminated and/or abandoned at
any time prior to the closing, whether before or after approval of the proposals being presented to Goldenbridge’s shareholders,
by:
| ● | Goldenbridge, if SunCar has
materially breached any representations, warranties, agreements or covenants contained therein or in any Additional Agreement to be performed
on or prior to the closing date, or the Agreement or the transactions contemplated thereby fail to be authorized or approved by the shareholders
of SunCar, and such breach shall not be cured within fifteen (15) days following receipt by SunCar of a notice describing in reasonable
detail the nature of such breach. Goldenbridge will be entitled to a break-up fee of $2,000,000 promptly after such termination, in absence
of the factors set forth under the third point regarding force majeure below; |
| ● | SunCar, if Goldenbridge has
materially breached any of its covenants, agreements, representations, and warranties contained therein or in any Additional Agreement
to be performed on or prior to the closing date and such breach has not been cured within fifteen (15) days following the receipt by
Goldenbridge of a notice describing in reasonable detail the nature of such breach. SunCar will be entitled to a break-up fee of $2,000,000
promptly after such termination, in absence of the factors set forth under the third point regarding force majeure below; |
| ● | For the avoidance of doubt,
in the event of a force majeure such as the SEC holding the clearance of the Form F-4 for more than six months from the filing of such
Registration Statement or the SEC’s proposed rules amendment on Special Purpose Acquisition Companies dated March 30, 2022 (Release
No., 33-11048; IC-34549) becomes effective, such break-up fees will not apply. |
Indemnification
Until six (6) months from and after the closing date,
the Principal Shareholders of SunCar agreed to indemnify Purchaser from any and all losses incurred or sustained by the Purchaser as a
result of or in connection with any breach, inaccuracy or nonfulfillment of any of the representations, warranties and covenants of SunCar
contained in the Agreement. The indemnification applies only to amounts (in aggregate) in excess of $1,000,000, and the indemnification
obligations are capped at the value of the shares that are being held in escrow. Such indemnification can only be satisfied with the cancellation
of Purchaser Ordinary Shares.
The foregoing summary of the Agreement does not purport
to be complete and is qualified in its entirety by reference to the actual Agreement, which is filed as Exhibit 2.1 hereto and incorporated
herein by reference. Capitalized terms not otherwise defined above have the meaning ascribed to them in the Agreement.
In addition to the Agreement, the following agreements
have been or will be entered into in connection with the closing of the business combination.
Shareholder Support Agreements
Concurrently with the execution of the Agreement,
certain of SunCar’s officers, directors, founders and holders who collectively own approximately 87.86% of SunCar’ voting
stock entered into support agreements, pursuant to which each such holder agreed to vote in favor of the business combination, subject
to the terms of such shareholder support agreements. A copy of the form of shareholder support agreement is attached to this report as
Exhibit 10.1 and incorporated herein by reference.
Insider Share Purchase Agreement
In connection with the closing of the transactions,
SunCar and the initial shareholders of Goldenbridge will enter into an Insider Share Purchase Agreement whereby SunCar will agree to buy
up to an aggregate of 400,000 Goldenbridge ordinary shares held by the initial shareholders at a price of $10.00 per share for up to an
aggregate purchase price of $4,000,000.
Escrow Agreement
In connection with the closing of the transactions,
the Purchaser, Ye Zaichang as the representative of SunCar shareholders, and an escrow agent will enter into an Escrow Agreement, pursuant
to which SunCar shareholders will deposit 1,000,000 of their Purchaser Ordinary Shares to secure the indemnification obligations as contemplated
by the Agreement.
Lock-up Agreements
In connection with the closing of the transactions,
Purchaser will enter into Lock-Up Agreements with certain SunCar shareholders, which will provide that such SunCar shareholders will not,
within twelve (12) months from the closing of the business combination and subject to certain exceptions, offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any of the ordinary shares issued in connection with the Acquisition Merger, enter
into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of
any such shares, in cash, or otherwise.