PAVS Paranovus Entertainment Technology Ltd

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2023

 

PARANOVUS ENTERTAINMENT TECHNOLOGY LIMITED

(Exact name of registrant as specified in its charter)

 

No. 11, Dongjiao East Road, Shuangxi, Shunchang, Nanping City

Fujian Province, People’s Republic of China

+86-0599-782-8808

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒       Form 40-F ☐

 

 

 

Entry into Material Agreements

 

On November 12, 2023, Paranovus Entertainment Technology Limited, (the “Company”) entered into a software development agreement (the “Development Agreement”) with Blueline Studios Inc. (“Blueline”), a company incorporated in Vancouver, Canada. Pursuant to the Development Agreement, Blueline shall be responsible for developing and delivering certain interactive game application (“Hollywood Sunshine”), including the underlying software, documentation, and technical data, under the terms and conditions of the Development Agreement, and agreed to assign to the Company all the right, title, and interest in Hollywood Sunshine, excluding any Background Technology (as defined in the Development Agreement). Blueline will deliver the initial full-featured version for the PC platform (the “PC Release”) six months after the Start Date as defined in the Development Agreement, followed by the delivery of iOS version (the “iOS Release”) three months after the PC Release. In exchange, the Company agreed to pay a total of $1,500,000 development fee to Blueline for the PC Release, and $400,000 development fee for the iOS Release, in accordance with the schedule set forth in the Development Agreement. The decision to develop the iOS Release is at the discretion of the Company. Furthermore, once Hollywood Sunshine starts generating revenues, the Company agreed to pay Blueline 9% of the net revenue after deducting all the licensing fees owned to all talent partners.

 

On November 9, 2023, the Company signed a promissory note purchase agreement (the “Purchase Agreement”) with a non-U.S. investor (the “Investor”), pursuant to which, the Company issued an 8% promissory note with principal amount of $750,000 (the “Note”) to such Investor on November 14, 2023, the closing date of this transaction. The Note will mature in 12-month after its issuance and can be pre-paid in part or in whole by the Company prior to its maturity date. The proceeds from the Note will be used to fund the Hollywood Sunshine and the general corporate activities of the Company.

 

The copies of the Development Agreement, Purchase Agreement and the Note are attached hereto as Exhibits 10.1, 10.2 and 10.3. The foregoing descriptions of the Development Agreement, Purchase Agreement and the Note are summaries of the material terms of such agreements, and do not purport to be complete and are qualified in their entirety by reference to the Development Agreement, Purchase Agreement and the Note.

 

Exhibits

 

Exhibit No.		Description
10.1		The Software Development Agreement, dated November 12, 2023
10.2		The Promissory Note Purchase Agreement, dated November 9, 2023
10.3		The Promissory Note, dated November 14, 2023

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Paranovus Entertainment Technology Limited
Date: November 15, 2023	By:	/s/ Xuezhu Wang
	Name:	Xuezhu Wang
	Title:	Chief Executive Officer

 

 

2

Exhibit 10.1

 

SOFTWARE DEVELOPMENT AGREEMENT

 

This Software Development Agreement (this “Agreement”) is made as of the 12th day of November 2023 (the “Effective Date”) by and between BLUELINE STUDIOS INC. (“Blueline”), having an office at 142 – 757 West Hastings Street, Vancouver, BC V6C 1A1, and PARANOVUS ENTERTAINMENT TECHNOLOGY LTD (“Paranovus”) having an address at No. 11 Dongjiao East Road, Shuangxi, Shunchang, Nanping City Fujian Province, People’s Republic of China.

 

The parties hereby agree as follows:

 

1. DEFINITIONS

 

For the purposes of this Agreement, the following capitalized terms shall have the meaning set forth below:

 

1.1 “Development Activities” means activities and services for developing and producing the Deliverable (as defined in Section 1.2 hereof).

 

1.2 “Deliverable” means an interactive game application, including the underlying software, documentation, and technical data, (referred to herein by the code name “Hollywood Sunshine”) that may include the following features and characteristics: (a) user-generated content, (b) AI-generated content, (c) celebrity involvement, (d) social media and monetization mechanisms, and (e) is compatible with PC and mobile devices. The Deliverable shall be defined in accordance with a game design document as agreed upon by Paranovus and Blueline in writing, and shall be consistent with the description as set out in Exhibit B attached hereto (the “Description of Deliverable”).

 

1.3 “Intellectual Property Rights” means any and all registered and unregistered rights granted, applied for, or otherwise now or hereafter in existence under or related to any patent, copyright, trademark, trade secret, database protection, or other intellectual property rights laws, and all similar or equivalent rights or forms of protection, in any part of the world.

 

1.4 “Background Technology” means all software, data, know-how, ideas, methodologies, specifications, and other technology in which Blueline owns, or has been granted rights to, or such Intellectual Property Rights as are necessary for Blueline to grant the rights and licenses set forth in Section 7.3, and for Paranovus (including its licensees, successors, and assigns) to exercise such rights and licenses, without violating any right of any third party or any law, or incurring any payment obligation to any third party, and that: (a) are identified as Background Technology by Blueline; and (b) were or are developed or otherwise acquired by Blueline prior to Effective Date.

 

1.5 “Support” is defined in Exhibit A.

 

2. DEVELOPMENT ACTIVITIES AND DELIVERY

 

2.1 Paranovus hereby entrusts Blueline with, and Blueline hereby agrees to perform the Development Activities in accordance with the Description of Deliverables, and any reasonable requirements and instructions agreed upon by both parties from time to time during this Agreement.

 

2.2 Blueline shall start Development Activities promptly upon receipt of the first installment of the Development Fee specified in Paragraph 2 of Exhibit A and shall use commercially reasonable efforts to deliver the Deliverable in accordance with the dates set forth in Paragraph 1 of Exhibit A attached hereto (the “Delivery Date”). Both parties will negotiate in good faith if less time is desirable or additional time is required to complete the Deliverable.

 

3. PAYMENT OF DEVELOPMENT FEE

 

3.1 As consideration for the Development Activities to be performed by Blueline, Paranovus shall pay by milestones, as specified in Paragraph 2 of Exhibit A (the “Development Fee”).

 

3.2 Payments by Paranovus of the Development Fee shall be made in USD to the bank details specified in Paragraph 3 of Exhibit A.

 

 

4. REVENUE SHARING

 

In further consideration of the Development Activities, Paranovus or a publisher shall pay Blueline 9% of Net Revenue after Celebrity Share and other parties as specified in Paragraph 1 and 2 of Exhibit C (the “Revenue Share”). The Revenue Share to Blueline shall be payable at any time the Hollywood Sunshine game is in operation and generating any revenue.

 

5. COOPERATION OF THE PARTIES

 

5.1  Blueline and Paranovus shall closely communicate and consult with each other in respect of the status or other issues regarding the Development Activities, in order to implement the Development Activities in a prompt and efficient manner and to better manage the completion of the Development Activities.

 

5.2  Paranovus may propose modification(s) to the Development Activities. In such case, the parties shall consult with each other, as may be necessary, and must mutually agree with respect to any change to the Delivery Date and/or any adjustment to compensation to be paid to Blueline for the Development Activities. Any amendment agreed upon by the Parties will be made in writing.

 

6. EVALUATION AND ACCEPTANCE OF DELIVERABLE

 

6.1 Upon completion of each Deliverable Release set out in Exhibit A, Paranovus shall evaluate the Deliverable and determine if it meets the Description of the Deliverable for the applicable Release, at its sole discretion. In the event that Paranovus notifies Blueline of any deficiency of the Deliverable in writing, Blueline shall use commercially reasonable efforts to cure such deficiency within 15 days of such notice and in the event it is unable to do so the parties shall mutually agree on a timeline to cure the deficiency. In the event that Paranovus does not notify Blueline of any deficiency within 15 days of delivery of the Deliverable at each release, the Deliverable shall be deemed to be accepted by Paranovus.

 

7. OWNERSHIP RIGHTS

 

7.1 Subject to the terms of this Agreement, Blueline hereby assigns to Paranovus the entire right, title, and interest in the Deliverable developed by Blueline for Paranovus under this Agreement, excluding any Background Technology. Subject to the License Back described in Section 7.4 and Section 11.4.1, Paranovus is and will be the sole and exclusive owner of all right, title, and interest in and to all Deliverables, including all Intellectual Property Rights therein.

 

7.2 Blueline is and will remain the sole and exclusive owner of all right, title, and interest in and to the Background Technology, including all Intellectual Property Rights therein, subject to the license granted in Section 7.3.

 

7.3 Blueline hereby grants Paranovus an irrevocable, non-exclusive, royalty-free, perpetual license to use any Background Technology exclusively for the purpose of the Deliverable. To the extent Blueline has the rights to grant such license with respect to any third party Intellectual Property Rights, this license shall be freely assignable and sublicensable, in each case solely in connection with the assignment or licensing of the Deliverable or any portion, modification, or derivative work thereof, and only to the extent necessary to allow the assignee or sublicensee, as the case may be, to use and exploit the Deliverable or portion, modification, improvement, or derivative work thereof.

 

 

7.4 In the event Paranovus has acquired rights pursuant to Section 7.1 and 7.3 but has not completed its contemplated acquisition of Blueline by June 30, 2024 due to its own reasons: (a) Paranovus shall grant Blueline an irrevocable, perpetual, non-exclusive, royalty-free license (“License Back”) to use all Intellectual Property Rights in the Deliverable for the purpose of continuing to develop the Hollywood Sunshine game or for the purpose of developing any other project not directly competitive to the Hollywood Sunshine game; (b) in addition to the revenue share in Exhibit C, Paranovus’s revenue share in such derivative project resulting from 7.4(a) shall equal 76% of the Net Revenue after Celebrity Share multiplied by the quotient obtained by dividing the Development Fee paid by Paranovus by the total development cost invested in such derivative project; and (c) notwithstanding anything to the contrary contained herein, Blueline shall retain the right, but not the obligation, to pay Paranovus an amount mutually agreeable to both parties, and under terms mutually agreeable to both parties, in order to retain sole and exclusive ownership of all right, title and interest in and to all Deliverable, including all Intellectual Property Rights therein.

 

8. REPRESENTATIONS AND WARRANTIES

 

8.1 Blueline hereby represents and warrants, to the best of Blueline’s knowledge that, as of the time of delivery to Paranovus, the Deliverables and the Background Technology will not be the subject of any claims of intellectual property infringement from a third party.

 

8.2 Blueline represents that no trade secrets, confidential information, or proprietary data owned by any third party shall be knowingly utilized in the development of the Deliverable.

 

8.3 Blueline represents and warrants that neither it nor any other entity or individual engaged in providing services in developing or supporting the Deliverable shall be obligated to assign or transfer any work produced under this agreement to a third party.

 

8.4 Blueline will perform all Development Activities in a professional and workmanlike manner in accordance with generally recognized industry standards and practices for similar services, using personnel with the requisite skill, experience, and qualifications, and shall devote adequate resources to meet its obligations under this Agreement.

 

8.5 Blueline will perform all Development Activities in compliance with, all applicable law.

 

8.6 Paranovus hereby represents and warrants that it will use the Deliverables in compliance with applicable law.

 

9. DISCLAIMER

 

THE ABOVE WARRANTIES ARE THE ONLY WARRANTIES APPLICABLE TO THE DELIVERABLES. THE DELIVERABLES ARE PROVIDED ‘AS IS’ AND TO THE MAXIMUM EXTENT POSSIBLE UNDER APPLICABLE LAW, BLUELINE MAKES NO ADDITIONAL REPRESENTATION OR WARRANTY ABOUT THE DELIVERABLES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY. THE ABOVE LIMITATIONS DO NOT APPLY IN RESPECT OF ANY WARRANTIES IN ANY JURISDICTION THAT CANNOT BE LIMITED OR EXCLUDED UNDER APPLICABLE LAWS.

 

10. CONFIDENTIALITY

 

10.1 Any Party receiving confidential and/or proprietary information (the “Receiving Party”) from the other Party (the “Disclosing Party”) agrees to maintain the confidentiality of such information, herein referred to as “Confidential Information,” and not to disclose it to any third party without the Disclosing Party’s prior written consent. This obligation of confidentiality shall not apply to information that:

 

a) was publicly available at the time of disclosure;

 

b) becomes publicly available subsequent to disclosure through no fault of the Receiving Party;

 

c) is independently developed by the Receiving Party;

 

d) is received by the Receiving Party from a third party without any restriction on disclosure;

 

 

e) is disclosed in compliance with applicable law or a valid court order, provided that the Receiving Party gives the Disclosing Party prompt notice prior to such disclosure, allowing the Disclosing Party to seek protective measures.

 

10.2 Furthermore, notwithstanding Section 10.1(e), in the event that the Receiving Party is compelled to disclose information under such subsection, the Receiving Party shall exert its best efforts to maintain the confidentiality of the disclosed information for any other purposes.

 

10.3 Both parties agree it shall not issue any press releases, announcements, or engage in any other public disclosures regarding the Development Activities or the Hollywood Sunshine game without the other party’s agreement, such agreement cannot be unreasonably withheld. Furthermore, any use of any talent name and likeness in relation to the Deliverable, including any marketing, press release or other public disclosure, shall be subject to talent’s prior written approval, such approval not to be unreasonably withheld.

 

11. TERM AND TERMINATION

 

11.1 This Agreement will commence on the Effective Date and will remain effect until completion of the Deliverable and Support outlined in Exhibit A, unless it is terminated earlier in accordance with this Section 11.

 

11.2 This Agreement may be terminated by either party immediately upon written notice to the other party, if the other party breaches any material obligation and the breaching party fails to cure such breach within 30 days of receipt of a written notice of the breach.

 

11.3  This Agreement will terminate immediately upon Blueline’s insolvency, bankruptcy, receivership, dissolution, or liquidation.

 

11.4 Effect of Termination

 

11.4.1.  In the event Paranovus fails to pay the $1,500,0000 USD Development Fee in full, Blueline may terminate the agreement pursuant to section 11.2 due to Paranovus’ material breach. If Blueline terminates the Agreement in line with this section 11.4.1, Blueline and Paranovus shall retain joint ownership of all right, title, and interest in and to all Deliverable, including all Intellectual Property Rights therein.

 

In all other events of termination of this Agreement, Paranovus shall not be obligated to pay any further Development Fee and shall continue to be the sole and exclusive owner of all right, title, and interest in and to all Deliverable, including all Intellectual Property Rights therein.

 

In either case, whether Paranovus has joint ownership or sole ownership, Blueline shall immediately deliver in the format specified by Paranovus, to Paranovus all software, documentation, source code, and other customer property in its possession relating to the Deliverable.

 

11.4.2. Within 30 days after the termination or expiration of this Agreement, both Parties shall return, or at the option of the other Party, both Parties shall destroy all copies of any Confidential Information.

 

11.4.3 For clarity, Section 7, 8 and 10 shall survive the termination and expiration of this Agreement.

 

12. LIMITATION OF LIABILITY

 

12.1 UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF SALES, GOODWILL, PROFITS OR REVENUES. EXCEPT AS PROVIDED IN THIS SECTION, EACH PARTY’S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED THE FEES PAID TO BLUELINE HEREUNDER. 

 

12.2 ALL LIMITATIONS OF LIABILITY IN THIS AGREEMENT APPLY EVEN IF ANY REMEDY IN THIS AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE.

 

 

13. ASSIGNMENT

 

Neither party may assign, transfer or otherwise dispose of any rights or delegate any duties under this Agreement to any third party without prior written consent of the other party.

 

14. DISPUTE RESOLUTION AND GOVERNING LAW

 

14.1 Settlement of Dispute through Consultation. Matters not provided for in this Agreement or any dispute or disagreement arising between Blueline and Paranovus relating to or arising out of the interpretation or performance of this Agreement shall first be resolved through mutual consultation between the parties in good faith.

 

14.2 Jurisdiction and Governing Law. All matters arising out of or relating to this Agreement and the transactions contemplated hereby (including its interpretation, construction, performance and enforcement) shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of York or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of New York.

 

15. GENERAL PROVISIONS

 

15.1 Entire Agreement. This Agreement contains the entire agreement between the parties and supersedes all understandings and agreements whether written or oral.

 

15.2 Amendment. No amendment or modification of this Agreement is valid unless in writing, and signed by the parties.

 

15.3 Severability. If any part of this Agreement is held unenforceable, the validity of all remaining parts will not be affected

 

15.4 Force Majeure. Except with regard to payment obligations, either party shall be excused from delays in performing or failing to perform its obligations under this Agreement to the extent that the delays or failures result from causes beyond the reasonable control of the party.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the date specified at the top of the first page of this Agreement.

 

BLUELINE STUDIOS INC.		PARANOVUS ENTERTAINMENT TECHNOLOGY LTD
Mike Wang		Sophie Ye Tao
/s/ Mike Wang		/s/ Sophie Ye Tao

 

 

 

Exhibit 10.2

 

Note Purchase Agreement

 

This Note Purchase Agreement (this “Agreement”), dated as of November 9, 2023, is entered into by and between Paranovus Entertainment Technology Limited, a Cayman Islands company (“Company”), and the individual listed in Exhibit B hereto and who affixes his or her signature on the signature page of this Agreement (“Investor”).

 

A. Company and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States Securities and Exchange Commission (the “SEC”).

 

B. Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $750,000.00 (the “Note”).

 

C. This Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction Documents”.

 

NOW, THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Investor hereby agree as follows:

 

1. Purchase and Sale of Note.

 

1.1. Purchase of Note. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof, Investor shall pay the Purchase Price (as defined below) to Company.

 

1.2. Form of Payment. On the Closing Date, Investor shall pay the Purchase Price to Company via wire transfer of immediately available funds against delivery of the Note.

 

1.3. Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be November 14, 2023, or another mutually agreed upon date. The closing of the purchase and sale of the Note (the “Closing”) shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but will be deemed for all purposes to have occurred at the offices of Hunter Taubman Fischer & Li LLC, at 950 Third Avenue, 19^th Floor, New York, NY 10022.

 

1.4. Collateral for the Note. The Note shall be unsecured.

 

1.5. Purchase Price. The “Purchase Price” of the Note shall be $750,000.00.

 

Use of Proceeds. The proceeds from the Note shall be used (i) to fund the development project that is contemplated in a certain software development agreement by and between the Company and Blueline Studios Inc. and (ii) to fund working capital or other corporate purposes of the Company.

 

 

2. Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with its terms; (iii) Investor has experience as an investor in securities of companies in the development stage and acknowledges that Investor has such knowledge and experience in financial or business matters that Investor is capable of evaluating the merits and risks of this investment in the Note and protecting his or her own interests in connection with this investment; (iv) Investor understands that the Note is characterized as a “restricted security” under the 1933 Act inasmuch as it is being acquired from Company in a transaction not involving a public offering and that under the 1933 Act and applicable regulations thereunder such security may be resold without registration under the 1933 Act only in certain limited circumstances; (v) Investor represents that Investor is familiar with Rule 144 of the SEC, as presently in effect, and understands the resale limitations imposed thereby and by the 1933 Act; (vi) Investor understands that the Company is under no obligation to register the Note; (vii) at no time was Investor presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general or advertising or solicitation in connection with the offer, sale and purchase of the Note; (viii) Investor has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Note; and (ix) Investor further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Note and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Investor or to which Investor had access.

 

3. Company’s Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a limited company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary; (iii) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company and all necessary actions have been taken; (iv) this Agreement, the Note, and the other Transaction Documents have been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; and (v) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or his or her agents or representatives other than as set forth in the Transaction Documents;

 

4. Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Note to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

 

4.1. Investor shall have executed this Agreement and delivered the same to Company.

 

4.2. Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.

 

 

5. Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s sole benefit and may be waived by Investor at any time in his or her sole discretion:

 

5.1. Company shall have executed this Agreement and the Note and delivered the same to Investor.

 

6. Miscellaneous. The provisions set forth in this Section 10 shall apply to this Agreement, as well as all other Transaction Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section 10 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.

 

6.1. Governing Law; All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note shall be commenced exclusively in the state and federal courts sitting in New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of this Agreement), and hereby irrevocably waives, and agrees not to assert in any action, any claim that it is not personally subject to the jurisdiction of any such court, that such action is improper or is an inconvenient venue for such action. Each party hereby irrevocably waives personal service of process and consents to process being served in any such action by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an action to enforce any provisions of this Agreement, the prevailing party in such action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action.

 

6.2. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.3. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

6.4. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

6.5. Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters.

 

6.6. Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.

 

 

6.7. Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

 

If to Company:

 

Paranovus Entertainment Technology Limited

Attn: Sophie Ye Tao, Chief Financial Officer

Email: sophie@pavs.ai

250 Park Avenue

7th Floor

New York, NY 10177

 

With a copy to (which copy shall not constitute notice):

 

Hunter Taubman Fischer & Li LLC

Attn: Joan Wu

950 Third Avenue,

19^th Floor

New York, NY 10022

Email: jwu@htflawyers.com

 

If to Investor:

 

See Exhibit B attached hereto

 

6.8. Successors and Assigns. This Agreement shall be binding upon, and endure for the benefit of, the Lender and the Borrower and their respective successors and permitted assigns, provided that the Borrower shall not assign or transfer any of their rights or obligations under this Agreement without the prior written consent of the Lender.

 

6.9. Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor.

 

6.10. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

6.11. Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

[Remainder of page intentionally left blank; signature page follows]

 

 

IN WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.

 

	INVESTOR:
	Guangrong Ao
	By:	/s/ Guanrong Ao
		Guangrong Ao
	COMPANY:
	Paranovus Entertainment Technology Limited
	By:	/s/ Sophie Ye Tao
		Sophie Ye Tao, Chief Financial Officer

 

[Signature Page to Note Purchase Agreement]

 

 

ATTACHED EXHIBITS:

 

Exhibit A	Note
Exhibit B	Investor Information

 

 

 

 

Exhibit 10.3

 

Promissory Note

 

Effective Date: November 14, 2023

U.S. $750,000.00

 

FOR VALUE RECEIVED, Antelope Enterprise Holdings Limited, a British Virgin Islands company (“Borrower”), promises to pay to Paranovus Entertainment Technology Limited, a Cayman Islands limited liability company, or its successors or assigns (“Lender”), $750,000.00 and any interest accrued hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of eight percent (8%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be simple interest and shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months and shall be payable in accordance with the terms of this Note. This Promissory Note (this “Note”) is issued and made effective as of the date set forth above (the “Effective Date”). This Note is issued pursuant to that certain Note Purchase Agreement dated November 9, 2023, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

 

The purchase price for this Note shall be $750,000.00 (the “Purchase Price”).

 

1. Payment; Prepayment.

 

1.1. Payment. All payments owing hereunder shall be in lawful money of the United States of America as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and unpaid interest, and thereafter, to (d) principal.

 

1.2. Prepayment. Borrower may pay all or any portion of the Outstanding Balance earlier than it is due.

 

2. Security. This Note is unsecured.

 

3. Trigger Events, Defaults and Remedies.

 

3.1. Trigger Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) Borrower becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (c) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (d) Borrower defaults or otherwise fails to observe or perform any covenant, obligation, condition or agreement of Borrower contained herein or in any other Transaction Document (as defined in the Purchase Agreement) in any material respect; (e) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or misleading in any material respect when made or furnished;

 

3.2. Trigger Event Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance by applying the Trigger Effect (subject to the limitation set forth below).

 

 

3.3. Defaults. At any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that Borrower cure the Trigger Event within five (5) Trading Days following the date of such written notice. If Borrower fails to cure the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of default hereunder (each, an “Event of Default”).

 

3.4. Default Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment. No such rescission or annulment shall affect any subsequent Trigger Event or Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

4. Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

5. Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

 

6. Cancellation. After repayment of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

 

7. Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

 

8. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Purchase Agreement titled “Notices.”

 

9. Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.

 

[Remainder of page intentionally left blank; signature page follows]

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date.

 

	BORROWER:
	Paranovus Entertainment Technology Limited
	By:	/s/ Sophie Ye Tao
		Sophie Ye Tao, Chief Financial Officer

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

 

LENDER:

 

Guangrong Ao

 

By:	/s/ Guangrong Ao
	Guangrong Ao

 

[Signature Page to Promissory Note]

 

 

ATTACHMENT 1

DEFINITIONS

 

For purposes of this Note, the following terms shall have the following meanings:

 

A1.  “Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, offset, or otherwise, accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, and any other fees or charges incurred under this Note.

 

A2. “Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.

 

A3. “Trading Day” means any day on which Borrower’s principal market is open for trading.

 

A4. “Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred by five percent (5%) for each occurrence of any Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred, with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred; provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Trigger Events.

 

[Remainder of page intentionally left blank]

 

Exhibit A to Secured Promissory Note, Page 1

 

 

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