Huayou Cobalt Co., Ltd. plans to invest 7.8 million yuan to participate in the establishment of an industrial fund.

I. Overview of overseas Investment

On March 5, 2021, Zhejiang Huayou Cobalt Co., Ltd. (hereinafter referred to as "Huayou Cobalt" or "the Company") and Quzhou State-owned Xin'an Capital Management Co., Ltd. (hereinafter referred to as "Xin'an Capital"), Zhejiang Huisheng Investment Group Co., Ltd. (hereinafter referred to as "Huisheng Investment"), Quzhou Industrial Asset Investment Management Co., Ltd. (hereinafter referred to as "Industrial Investment") has completed the signing of the partnership agreement of Quzhou Xinyou Equity Investment Partnership (Limited Partnership). It is proposed to jointly establish Quzhou Xinyou equity investment partnership (limited partnership) (hereinafter referred to as "Quzhou Xinyou" or "partnership"). Among them, Principal Capital is a general partner, while Huayou Cobalt, Huisheng Investment and Industrial Investment are limited partners. The total contribution of the partnership is 20 million yuan, of which Huayou Cobalt contributed 7.8 million yuan.

The matter of foreign investment has been discussed and approved by the general manager's office meeting of the company. In accordance with the relevant provisions of the rules on Stock listing of the Shanghai Stock Exchange, the articles of Association and the Authorization Management system, this outward investment does not need to be submitted to the board of directors and shareholders' meeting for deliberation.

The actual control of principal capital, Huisheng investment and industrial investment is the State-owned assets Supervision and Administration Commission of Quzhou Municipal people's Government (hereinafter referred to as Quzhou State-owned assets Supervision and Administration Commission). There is no relationship between the company and principal capital, Huisheng investment and industrial investment; principal capital, Huisheng investment and industrial investment do not hold shares in the company, and there are no related interest arrangements with the company. there are no other arrangements with third parties that affect the interests of listed companies. This foreign investment does not belong to related party transactions, nor does it constitute a major asset restructuring event.

The directors, supervisors and senior managers of the company, the shareholders who hold more than 5% of the shares of the company, the controlling shareholders, actual controllers and their directors, supervisors and senior managers of the company do not participate in the subscription of Quzhou Xinyou share, nor do they hold positions in Quzhou Xinyou.

II. Basic information of the parties to the agreement

(1) Fund manager and general partner

1. Principal Capital

Company name: Quzhou State-owned Xin'an Capital Management Co., Ltd.

Registered address: room 2005, 28 Jiulong south road, Kecheng district, Quzhou city, Zhejiang province

Legal representative: du Qing

Registered capital: RMB 10 million

Establishment date: September 06, 2013

Company type: limited liability company

Scope: private equity investment; Investment management; Asset management.

Major shareholders: Quzhou State-owned assets Supervision and Administration Commission indirectly holds 98.1% of principal capital, and Zhejiang Financial Development Co., Ltd. indirectly holds 1.9% of principal capital.

Principal Capital is the fund manager, which has carried out the registration and filing procedures in accordance with the relevant laws and regulations of private equity funds.

(2) Limited partner

1. Huayou cobalt industry

Company name: Zhejiang Huayou Cobalt Co., Ltd.

Registered address: 18 Wuzhen East Road, Phase II, Tongxiang Economic Development Zone, Zhejiang Province

Legal representative: Chen Xuehua

Registered capital: RMB 1.141261526 billion

Date of establishment: 22 May 2002

Company type: joint stock limited company (Sino-foreign joint venture, listed)

Business scope: r & D, production, sales: cobalt, nickel, copper oxides, cobalt, nickel, copper salts, cobalt, nickel, copper metals and products, cobalt powder, nickel powder, copper powder, cobalt hydroxide, lithium cobalt, ammonium chloride; metal mineral products and crude products import and import commission agent, production equipment import and import commission agent. (the above-mentioned commodities involving quotas, licenses and special regulations shall be handled in accordance with the relevant provisions of the State), and the business of contracting projects abroad (the scope is detailed in the qualification Certificate of the people's Republic of China for contracted projects).

Major shareholders: the company's largest shareholder Zhejiang Huayou holding Group Co., Ltd., the second largest shareholder Dashan Private Co., Ltd., Mr. Chen Xuehua is the concerted actor, holding a total of 29.50% of the shares of the company.

two。 Huisheng investment

Company name: Zhejiang Huisheng Investment Group Co., Ltd.

Registered address: in Quzhou Economic Development Zone, Zhejiang Province

Legal representative: Zhou Xianbiao

Registered capital: RMB 1.5 billion

Establishment date: April 13, 2000

Company type: limited liability company

Business scope: management and management of enterprise assets; project venture capital; land development and operation; investment management and consulting services; parking lot management services; market management services; other businesses permitted by laws and regulations.

Major shareholders: Quzhou SASAC indirectly holds 98.1% of Huisheng Investment, and Zhejiang Financial Development Co., Ltd. indirectly holds 1.9% of Huisheng Investment.

3. Industrial investment

Quzhou Industrial assets Investment Management Co., Ltd.

Registered address: 2 / F, 219 Sanqu Road, Quzhou City

Legal representative: Tian Jinshan

Registered capital: RMB 3 million

Establishment date: June 11, 2001

Company type: limited liability company

Business scope: disposal of non-operating assets entrusted by the Municipal State-owned assets Management Committee and non-performing assets stripped or written off in the restructuring of enterprises; market operation and management services; electricity sales business.

Major shareholders: Quzhou State-owned assets Supervision and Administration Commission indirectly holds 98.1% of the shares of industrial investment, and Zhejiang Financial Development Co., Ltd. indirectly holds 1.9% of the shares of industrial investment.

III. The basic situation of the partnership

(1) the name, place of business, duration of the partnership, total amount of capital contribution and business scope of the partnership, etc.

1. Fund name: Quzhou Xinyou Equity Investment Partnership (Limited Partnership) (subject to business license)

2. Business premises: room B409, Building 3, 288 Qinjiang East Road, Baiyun Street, Kecheng District, Quzhou City (subject to business license)

3. The term of the partnership: the duration of the partnership is irregular. The term of existence of a partnership as a partnership private equity fund is 7 years (the partnership is an investment period of 5 years from the date of first delivery). Before the investment period of the partnership as a partnership private equity fund expires, the fund manager may decide to terminate the fund ahead of time according to the specific investment situation. Where the term of existence of a partnership as a partnership private equity fund expires, it may be appropriately extended with the consent of all investors, and the specific extension period shall be decided by the partner by resolution.

4. Total subscribed capital contribution: 20 million yuan

5. Type of enterprise: limited partnership

6. Date of establishment: March 5, 2021

Business scope: equity investment (subject to business license)

8. Managing partner: principal Capital is the managing partner.

(2) the list of partners, the mode of capital contribution, the amount of capital contribution and the type of partners

IV. The main contents of the partnership agreement

(1) Partners and their capital contributions

1. This partnership only accepts one general partner, which is Quzhou State-owned Xin'an Capital Management Co., Ltd. The general partner shall bear unlimited joint and several liability for the debts of the partnership and shall enjoy the same property rights as the limited partner on the basis of his contribution to the partnership. The limited partner of the partnership shall be liable for the debts of the partnership within the limit of its subscribed capital contribution.

2. The total capital contribution of the partnership shall be 20 million yuan, which shall be paid by all the partners.

3. Each partner shall pay his subscribed capital contribution in two installments in accordance with the following provisions. The first phase of the capital contribution shall be 50% of the partner's subscribed capital contribution, and the second phase of the capital contribution shall be 50% of the partner's subscribed capital contribution:

(1) the general partner may, at any time after the establishment of the partnership, give to each partner a written notice of the first payment of the capital contribution, requiring each partner to pay the first tranche of the capital contribution within 15 working days after the notice is given. The deadline for payment as stated in the notice issued by the general partner in accordance with this item shall be the "first delivery date";

(2) three months after the first delivery date or after not less than 70% of the first tranche of the capital contribution has been used or set aside for the project investment or partnership fees, whichever is the earlier, the general partner may give to each partner a written notice of the second payment of the capital contribution not less than 15 working days in advance, requiring each partner to pay 50% of his or her own subscribed capital contribution.

(II) Rights and obligations of partners

1. The managing partner shall be the general partner of the partnership, and the partnership may change the managing partner only when the general partner withdraws from the partnership, is removed from the partnership and transfers his interests in accordance with this agreement. The managing partner shall, by notice in writing to the partnership, appoint or replace its appointed representative who shall be responsible for the specific implementation of the partnership affairs.

2. As a managing partner, a general partner has the right to:

(1) shall have exclusive power over the management and control of the operation, investment business and other affairs of the partnership, and shall have the right to make all investment and investment exit decisions for the partnership, and may make independent decisions on matters which the general partners are entitled to decide independently under this Agreement without further consent of other partners;

(2) to have the full power and authority to enter into contracts and other agreements and commitments on behalf of the partnership and to manage and dispose of the property of the partnership and to carry out all other necessary actions for the purposes of the partnership and the performance of this agreement.

3. Limited partner

(1) the limited partner shall not represent the partnership externally if he does not carry out the affairs of the partnership. No limited partner shall participate in the management or control of the partnership's investment business and other activities, transactions and business conducted in the name of the partnership, or sign documents on behalf of the partnership, or engage in other acts that bind the partnership.

(2) the exercise by a limited partner of any of the rights provided for in this Agreement shall not be deemed to constitute the participation of a limited partner in the management or control of the partnership's investment or other activities, resulting in the determination of a limited partner as a general partner who is jointly and severally liable for the debts of the partnership under law or otherwise.

(3) meeting of partners

1. The partners' meeting is divided into annual meetings and ad hoc meetings.

2. The partnership shall hold an annual meeting every year, its contents are to communicate information, report the investment situation of the general partner to the limited partner and other major events of the partnership, discuss among the partners and make recommendations to the general partner.

3. The functions of the meeting of temporary partners shall include: (1) modification of this Agreement, except where it is necessary to amend this Agreement as a result of matters expressly authorized by the general partner to decide independently (in which case, the general partner has the right to decide on his own and amend this Agreement); (2 accordingly) to decide that the partnership shall make new investment during the withdrawal period; (3) to decide on the dissolution of the partnership; (4) approve the transfer of limited partnership interests by general partners; (5) approve conflicts of interest and related transactions of the partnership; (6) approve non-cash distribution of the partnership; (7) decide to remove and replace general partners, and accept new general partners.

4. When items (1) to (6) are discussed at the meeting of temporary partners, The meeting of effective partners shall be constituted by the general partners and limited partners with more than 75% of the actual contribution on behalf of all limited partners in the manner stipulated in the agreement (but if the actual contribution represented by the limited partners present at the meeting in accordance with the notice of the meeting does not reach 75% of the actual contribution of all limited partners, The meeting is automatically postponed to be held again in the same manner at the same time in the following week, at that time, the general partners and limited partners with more than 50% of the actual contribution on behalf of all limited partners shall participate in such postponed meetings in the manner stipulated in the agreement shall constitute a meeting of effective partners, And a resolution can only be made through the approval of the general partner and the limited partner who represents the limited partner attending the meeting with an actual contribution of more than 2/3 of the capital contribution. In the discussion of item (7), the effective partners' meeting shall be constituted by the limited partners with more than 9/10 of the actual contribution on behalf of all the limited partners in the manner stipulated in the agreement, and a resolution may be made only through the approval of the limited partners representing more than 4/5 of the actual contribution of all the limited partners.

(4) Investment business

1. The investment goal of the partnership is to give full play to the business advantages of the manager's professional investment, help the invested enterprise grow rapidly, and obtain investment income for the partners from the capital market.

2. The investment scope of this partnership is as follows: the main funds are to be invested solely in the equity of unlisted enterprises of Zhejiang Times Lithium material Co., Ltd. (to be established). Idle funds can be used for low-risk, high-liquidity investments, including but not limited to short-term bank financing.

(5) income distribution

1. In accordance with the requirements of laws and regulations or the needs of the operation of the partnership, the general partner may decide to retain part of the cash to cover the expenses, debts and other obligations that can be reasonably expected in the current or near future of the partnership.

2. When the partnership allocates its distributable funds from the investment project, it shall be carried out in the following order: (1) the principal return of the partners: first, to distribute among all the partners in proportion to their actual contributions up to the date of distribution, until each partner recovers his actual contribution as of the date of distribution; (2) threshold income: then, if there is a balance, it shall be distributed proportionately among all partners according to their paid-up contributions as of the date of distribution, until the rate of return calculated on the basis of the actual contribution of each partner reaches a simple interest of 8% / year; (3) excess income distribution: finally, if there is a balance, 80% of the balance shall be distributed pro rata among all partners according to their actual contributions as of the date of distribution; 20% of the balance is allocated to general partners.

3. The distributable funds obtained by the partnership from temporary investment shall be distributed in advance among all the partners according to the actual contribution.

4. The liquidated damages and late fees paid to the partnership by the limited partner due to the late payment of the capital contribution and the income reduced thereby by the limited partner shall be counted as the other income of the partnership and shall be distributed in proportion among the abiding partners according to the actual contribution.

(6) Management fees

As the consideration for the management and other services provided by the manager to the partnership, the parties agree that the partnership shall pay the management fee to the manager or its designated party in accordance with the following provisions during its lifetime:

(1) during the investment period and withdrawal period, the partnership shall pay the management fee at the annual rate of 0.6% on the basis of the total amount of capital contribution on the relevant payment date;

(2) if the duration of the partnership as a partnership private equity fund is extended in accordance with the agreement, the partnership shall not pay management fees during such extended period.

(7) dispute settlement

All disputes arising from and in connection with this Agreement shall first be settled through friendly negotiation between the parties concerned, and if the parties concerned cannot be settled through consultation, they shall be submitted to Quzhou Arbitration Commission for arbitration in Quzhou in accordance with the arbitration rules in force at that time. The arbitral award is final and binding on all parties concerned.

(8) the agreement shall enter into force

This agreement shall have legal binding effect on the signatory from the date of signing by the parties.

V. significance and impact on the company

The company's development strategic plan during the 14th five-year Plan period regards the new energy lithium materials industry as the key development core business, and this foreign investment to participate in the establishment of an industrial fund is in line with the company's overall development strategic planning. the future investment target of this industry fund will mainly focus on the related fields of new energy lithium materials, which will help the company to integrate resources and speed up the pace of extension development of the company. So as to promote the transformation and upgrading of the company to the new energy lithium materials industry, which is in the interests of all shareholders and listed companies.

This foreign investment will not have a significant impact on the financial and operating conditions of the company this year.

VI. The risks of this foreign investment

The subsequent planning of the fund will introduce incremental funds, and there is still uncertainty about whether the relevant funds can be put in place according to the plan. The company will pay close attention to the relevant progress of the investment fund and fulfill the obligation of information disclosure in a timely manner as required.

The fund still needs to go through the registration and filing procedures with the China Securities Investment Fund Industry Association, and there is still uncertainty as to whether the filing can be successfully completed and the completion time. The company will provide the necessary materials or documents for filing in a timely manner and actively assist and cooperate with the general partners in carrying out the relevant filing procedures.

There are certain uncertainties in the macroeconomic environment, market changes, and the operation and management of investment targets, which may cause the Fund to fail to achieve the expected return. The company has a full understanding of the risks and uncertainties of this foreign investment and will pay close attention to the operation of the fund after its establishment to effectively reduce and avoid investment risks.

Board of Directors of Zhejiang Huayou Cobalt Co., Ltd.

March 5, 2021