REGARDING 100% EQUITY INTERESTS OF SHENZHEN GUOFA OPTOELECTRONICS CO., LTD. EQUITY TRANSFER CONTRACT
LUCK
LOYAL INTERNATIONAL INVESTMENT LIMITED
AND
NEW-METAL
(H.K.) TECHNOLOGY LIMITED
REGARDING
100%
EQUITY INTERESTS OF
SHENZHEN
GUOFA OPTOELECTRONICS CO., LTD.
CONTENTS
ARTICLE
1 DEFINITION
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1 | |||
ARTICLE
2 EQUITY TRANSFER
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2 | |||
ARTICLE
3 EQUITY TRANSFER PRICE AND CLOSING
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2 | |||
ARTICLE
4 CONDITIONS PRECEDENT
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3 | |||
ARTICLE
5 LABOR ISSUES
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6 | |||
ARTICLE
6 REPRESENTATIONS, COMMITMENTS AND WARRANTIES
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7 | |||
ARTICLE
7 BREACH OF CONTRACT AND COMPENSATION
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10 | |||
ARTICLE
8 SELL BACK OPTION
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11 | |||
ARTICLE
9 TERMINATION
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12 | |||
ARTICLE
10 FORCE MAJEURE EVENT
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14 | |||
ARTICLE
11 CONFIDENTIALITY
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14 | |||
ARTICLE
12 NON-COMPETITION
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16 | |||
ARTICLE
13 MISCELLANEOUS
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16 |
This
Equity Transfer Contract (the “Contract”) is entered into by and between the
following two parties on January 21, 2011 in Shenzhen.
PARTY A:
NEW-METAL (H.K.) TECHNOLOGY LIMITED
Address
of Registered Office: Room 000, Xxxx Xxxxxx, 000-000 Xxxxxx Xxxx, Xxxxxxx,
Xxxxxxx, Xxxx Xxxx
PARTY B:
LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED
Address
of Registered Office: 00/X., Xxxx Tower, 000 Xxx Xxxxx, Xxxx Xxxxxxx, Xxxx
Xxxx
WHEREAS,
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A.
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Party
A is a limited liability company incorporated and validly existing under
the laws of Hong Kong Special Administrative Region, the PRC (“Hong
Kong”).
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|
B.
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Shenzhen
Guofa Optoelectronics Co., Ltd. (the “Company”) is a wholly foreign-owned
enterprise incorporated and validly existing under the laws of the PRC.
The registered capital of the Company is USD 1,000,000 and Party A
currently holds 100% of the Company’s equity
interests.
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C.
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Party
B is a limited liability company incorporated and validly existing under
the laws of Hong Kong.
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D.
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Party
A agrees to transfer 100% of the Company’s equity interests held by it to
Party B once the conditions set forth herein are satisfied; Party B agrees
to purchase the aforesaid equity interest from Party A once the conditions
set forth herein are satisfied.
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NOW
THEREFORE, the Parties hereby agree as follows:
Article
1 Definition
1.1
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Party
A
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means
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New-metal
(H.K.) Technology Limited
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1.2
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Party
B
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means
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Luck
Loyal International Investment Limited
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1.3
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Company
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means
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Shenzhen
Guofa Optoelectronics Co., Ltd.
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1.4
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Target
Equity Interest
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means
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the
100% equity interests of the Company held by Party A proposes to be
transferred to Party B and all the rights attached thereto including
titles, profit distribution rights, assets distribution rights and all the
other rights enjoyed by the Company’s shareholder(s) according to the
Company’s articles of association and PRC laws.
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1.5
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Equity
Transfer
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means
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the
transfer of the Equity Interest currently held by Party A to Party B
according to this Contract.
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1.6
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Completion
Date of Equity Transfer
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means
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the
date on which the Company obtains its new business
license.
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1.7
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PRC
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means
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the
People’s Republic of China (exclusive of Hong Kong and Macao Special
Administrative Regions and Taiwan for the purpose of this
Contract)
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||
1.8
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Equity
Transfer Price
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means
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the
consideration for the Equity Transfer from Party A to Party B, which shall
be the US dollars equivalent to RMB42,673,736 (RMB forty two million six
hundred seventy three thousand seven hundred and thirty
six).
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||
1.9
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Affiliate
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means
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any
entity whether or not incorporated as a legal person, (a) who owns or
actually controls shares/assets or equities of such entity; (b) whose
shares/assets or equities are owned or actually controlled by such entity;
(c) who, together with such entity, is owned or actually controlled by the
same entity; (d) directors, supervisors and officers of such entity, and
close relatives of any of the foregoing persons; and (e) who is owned or
actually controlled by any of the foregoing persons as described in (d).
Close relatives includes a spouse, lineal relatives, lineal relatives of a
spouse and collateral relatives by blood within three
generations.
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1
Article
2 Equity
Transfer
2.1
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Upon
the fulfillment of the conditions precedent set forth in Article 4.1
hereof, Party A agrees to transfer to Party B, and Party B agrees to
receive from Party A, the Target Equity
Interest.
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2.2
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The
Parties shall take every measure to procure the Company to acquire all
governmental approvals which are necessary to the Equity Transfer
contemplated hereunder and make the amendment to the registration with the
Administration for Industry and Commerce within 120 working days following
the execution date of this
Contract.
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Article
3 Equity
Transfer Price and Closing
3.1
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The
Parties hereby agree that the Equity Transfer Price shall be the US
dollars equivalent to RMB42,673,736 (the “Equity Transfer
Price”). Party B shall pay such Equity Transfer Price in cash
in US dollars. For the purpose of calculation, the exchange
rate of RMB to USD applicable for each installment of the Equity Transfer
Price shall be the central parity of the RMB to USD buying rate and
selling rate published by the People’s Bank of China on the payment date
of such installment.
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2
3.2
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The
Parties agree that the Equity Transfer Price hereunder shall be paid in
three installment:
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First
Installment: USD equivalent to RMB4,000,000 (“First Installment of the Equity
Transfer Price”), which shall be paid to the bank account designated by Party A
within 10 working days after the execution date of this Contract;
Second
Installment: USD equivalent to RMB28,673,736 (“Second Installment of the Equity
Transfer Price”). The Second Installment of the Equity Transfer Price shall be
paid to the bank account designated by Party A within 30 working days after the
conditions precedent as set forth in Article 4.1 hereof have been satisfied or
waived by Party B, as confirmed by Party B in writing.
Third
Installment: USD equivalent to RMB10,000,000 (“Third Installment of the Equity
Transfer Price”). The Third Installment of the Equity Transfer Price shall be
paid to the bank account designated by Party A within 30 working days after the
conditions precedent as set forth in Article 4.3 hereof have been satisfied or
waived by Party B, as confirmed by Party B in writing. The Third Installment of
the Equity Transfer Price shall be withheld as a deposit to secure the
settlement of labor issues by Party A as addressed in Article 5 hereof
(“Deposit”), namely that if Party A fails to settle all the relevant labor
issues in a manner satisfactory to Party B pursuant to Article 5 hereof, then
Party B shall have a right to keep such Deposit.
3.3
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The
Parties agree and confirm that the Second Installment of the Equity
Transfer Price shall be adjusted at Party B’s sole discretion according to
its review of the financial due diligence results and the stock take of
the Company’s fixed assets and inventories, by means of a refund for any
overpayment or additional payment for any deficiency to/by Party B. If and
when the Second Installment of the Equity Transfer Price is adjusted
pursuant to this Article 3.3, the amount of the Equity Transfer Price
shall also be adjusted accordingly.
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3.4
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Party
A shall provide Party B with a written statement indicating that it has
received each installment, including but not limited to bank receipt,
within 1 working day after receiving such installment of the Equity
Transfer Price.
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Article
4 Conditions
Precedent
4.1
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Party
B shall purchase the Target Equity Interest hereunder and pay the Second
Installment of the Equity Transfer Price only upon the consummation of the
following conditions precedent. Party B is entitled but not obligated to
waive one or several of the following
conditions:
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3
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(1)
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The
organ of power of the Company (shareholders meeting or the board of
directors, depends on the provisions of the Company’s articles of
association) has executed all relevant resolutions and approved the
execution of this Contract and the transactions contemplated
hereunder;
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(2)
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All
of the governmental approvals and registrations required in connection
with this Contract, including but not limited to the reply and
corresponding approval certificate issued by the Science Industry Trade
and Information Technology Commission of Shenzhen Municipality with
respect to the Equity Transfer hereunder, and consents and permits of any
third party, shall have been duly
obtained;
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(3)
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The
Company has duly obtained the business license being issued by the
Administration for Industry and Commerce with respect to the Equity
Transfer hereunder, the Company’s amended articles of association has been
submitted to the Administration for Industry and Commerce for record, and
copies of such business license and amended articles of association have
been delivered to Party B; according to the aforesaid documents, Party B
has been lawfully registered as the sole owner of the Target Equity
Interest;
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(4)
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Party
B shall have finished its legal due diligence of the Company and shall be
satisfied with the result of such due diligence; the Company shall have
finished the relevant rectification in manners satisfactory to Party B
according to the suggestions in connection with the results of due
diligence proposed by Party B;
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(5)
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Party
B shall have finished its financial due diligence of the Company and shall
be satisfied with the result of such due diligence. Party B, together with
Party A, shall have completed the stock take of the Company’s inventories
and fixed assets; the Parties have adjusted the Second Installment of the
Equity Transfer Price based on the results of the financial due diligence
investigation and the stock take pursuant to Article 3.3 hereof, and
confirmed the final amount of the Second Installment of the Equity
Transfer Price in writing;
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(6)
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As
of the Completion Date of Equity Transfer, no changes have occurred which
may have a material adverse influence on the Company’s business,
employees, assets and financial
situation;
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(7)
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As
of the Completion Date of Equity Transfer, the Company’s key employees
(except for those employees who leave or terminate their labor contracts
with Party B’s prior consent) who continue to work for the Company, has
not materially breached their labor contracts, confidentiality agreements
and non-competition agreements with the Company, and such contracts or
agreements shall continue to be valid and
effective;
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(8)
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As
of the Completion Date of Equity Transfer, the senior managers have signed
confirmation letters of labor contracts with respect to their labor
relationship with the Company, and Party B will provide the terms and
format of such confirmation letters of labor
contracts;
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4
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(9)
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As
of the Completion Date of Equity Transfer, commitments and warrants made
hereunder by Party A are true, accurate and sufficient, and commitments
made hereunder by Party A have been fully
completed;
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(10)
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As
of the Completion Date of Equity Transfer, there shall be no existing,
pending or contingent suit or legal proceeding, adverse injunction,
judgment, order, arbitration, claim or administrative order that may lead
to the following results: (i) preventing completion of any transaction
provided hereunder; (ii) causing any transaction hereunder to be revoked
after completion; (iii) engendering material adverse influences to Party
B’s shareholding in the Company, or (iv) engendering any material adverse
influences to the Company’s rights or capability to operate its
business;
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(11)
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As
of the Completion Date of Equity Transfer, there are no adverse changes of
PRC laws preventing the completion of the contract objective
hereunder.
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4.2
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Party
B shall have the right to unilaterally terminate this Contract and perform
the post-termination arrangements pursuant to the provisions hereof with
respect to termination, provided that any of the conditions precedent set
forth in Article 4.1 hereof has not been consummated according to this
Contract (except for those conditions waived by Party B in
writing).
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4.3
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Subject
to the provisions in relation to the withholding of the Deposit as
contemplated in Article 3.2 hereof, the Third Installment of the Equity
Transfer Price shall be paid to the bank account designated by Party A
within 30 working days after the following conditions precedent have been
satisfied or waived by Party B, as confirmed by Party B in writing (such
payment date shall be the “Payment Date of the Third
Installment”):
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(1)
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One
year has elapsed after the Completion Date of Equity Transfer
hereunder;
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(2)
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As
of the Payment Date of the Third Installment, the Company’s key employees
(except for those employees who resign from the Company or terminate their
labor contracts with Party B’s prior consent) who continue to work for the
Company, has not materially breached their labor contracts,
confidentiality agreements and non-competition agreements with the
Company, and such contracts or agreements shall continue to be valid and
effective;
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(3)
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As
of the Payment Date of the Third Installment, commitments, representations
and warrants made hereunder by Party A are true, accurate and sufficient,
and Party A has performed or observed any of its obligations and warrants
hereunder in all substantial
aspects;
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5
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(4)
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As
of the Payment Date of the Third Installment, no changes, events or
circumstances have occurred or are likely to occur which may have a
material adverse influence on the Target Equity Interest, the Company’s
employees, business, financial situation and/or the transactions
contemplated hereunder;
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(5)
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As
of the Payment Date of the Third Installment, there shall be no existing,
pending or contingent suit or legal proceeding, adverse injunction,
judgment, order, arbitration, claim or administrative order that may lead
to the following result: (i) preventing completion of any transaction
provided hereunder; (ii) causing any transaction hereunder to be revoked
after completion; (iii) engendering material adverse influences to Party
B’s ownership of the target assets, the target business and rights of
transferred employees, or (iv) engendering any material adverse influences
to the Party B’s rights or capability to operate the target
business.
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Article
5 Labor
Issues
5.1
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As
of the Completion Date of Equity Transfer, if Party B proposes any
amendments to the labor contract, confidentiality agreement,
non-competition agreement and other agreement in relation to labor
relationship entered into by and between the Company and its employees
(including key employees), then Party A shall procure and ensure the
Company and its employees to re-sign such contracts and agreements. Party
B shall determine the time and manner for such
re-signing.
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5.2
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Party
A shall procure and ensure that key employees will not resign from the
Company with one year after the Completion Date of Equity
Transfer.
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5.3
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Party
A shall be responsible for any labor disputes and any settlement,
arbitration or lawsuit incurred from the Equity Transfer, bear all
relevant fees and expenses, and compensate the Company or Party B against
any compensation amount so
incurred.
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5.4
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Party
A shall unconditionally and irrevocably pay or compensate against any
payable salaries, settlement fees, compensation or litigation fees
incurred from any labor disputes between the Company and its employees
with respect to their labor relationship established before the Completion
Date of Equity Transfer (no matter that such labor disputes arise before
or after the Completion Date of Equity Transfer), or payable economic
compensation, social insurance and housing fund and other unpaid relevant
fees; Party A shall unconditionally and irrevocably compensate Party B
and/or the Company against any fees (including but not limited to attorney
fees) arising from the resolution of such labor disputes by Party B and/or
the Company.
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5.5
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Party
A shall assume all economic compensation arising from the termination of
labor contracts between the Company and its employees before the
Completion Date of Equity Transfer; Party A shall unconditionally and
irrevocably pay or compensate against any unpaid or insufficient paid
social insurances, housing fund, social security fund or welfare fees, or
unpaid or un-implemented penalties or other punishments by the competent
labor administration bureau, which occurred before the Completion Date of
Equity Transfer.
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6
Article
6 Representations,
Commitments and Warranties
6.1
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Party
A hereby unconditionally and irrevocably makes the following
representations, commitments and warranties to Party B, as of the
Completion Date of Equity Transfer:
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(1)
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Party
A is a limited liability company duly incorporated and validly existing
under Hong Kong laws;
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(2)
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Party
A shall enjoy a sole and exclusive title and disposal right to the Target
Equity Interest hereunder to be transferred to Party B; the Target Equity
Interest is free from any pledge or any other security interests,
interests of any third party, encumbrance of all kinds, and there does not
exist any facts in relation to interest of third party nor any defect in
law;
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(3)
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Party
A warrants that all the permits and licenses required for the Company to
continuously operate, are valid and effective as of the Completion Date of
Equity Transfer, and to Party A’s best knowledge, there exists no fact,
reason or possibility that may cause such permits or licenses to be
repealed or revoked, or unable to be renewed or
extended.
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(4)
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The
execution of this Contract, the exercise of the rights or performance of
the obligations pursuant to this Contract will not cause Party A to
breach:
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(a)
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any
laws, regulations, ordinances, judgments, rulings, arbitration awards,
administration decisions and orders that are binding or relevant to Party
A;
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(b)
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any
document, contract or agreement to which Party A is a party, or any
document, contract or agreement that has a binding force on Party A’s
assets;
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(c)
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any
articles of associations and internal regulations of Party
A.
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(5)
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Party
A is not involved in any litigations, arbitrations or any other possible
legal or administrative proceedings, which are existing, pending,
contingent, potential, or asserted by a third party; and to Party A’s best
knowledge, no such litigation, arbitration or any other possible legal or
administrative proceeding is about to take
place.
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7
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(6)
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In
order that:
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(a)
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Party
A may legally enter into this Contract and perform its obligations
hereunder;
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(b)
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the
obligations and responsibility of Party A herein are legal, valid and can
be enforced in accordance with this
Contract;
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(c)
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this
Contract can be adopted as evidences within the PRC
territory;
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on or
before the execution date of this Contract, Party A has taken all the actions,
observed or satisfied all the conditions or terms required by the applicable
laws.
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(7)
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Party
A’s execution and performance of this Contract are within its scope of
power and Party A have obtained necessary authorizations for such
execution and performance;
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(8)
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The
statements under Sections A and B as provided in the “WHEREAS” section are
accurate, and the capital contribution in connection with the Target
Equity Interest has been made, and there is no withdrawal of such
contribution or feigned capital
contribution.
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(9)
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Party
A warrants that it has disclosed to Party B, all the facts that may have a
material adverse effect on Party A’s ability to fully perform its
obligations hereunder, or all the facts that may have a material adverse
effect on Party B’s willingness to enter into this Contract once disclosed
to Party B, and all the items disclosed or all the materials provided for
this purpose, are substantially true, complete and accurate, and there is
no false or misleading
representations.
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(10)
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Party
A represents, that the books of the Company are complete, and the
financial statements disclosed for the purpose of the Equity Transfer are
made in accordance with current Chinese laws and regulations and
accounting rules. The afore-mentioned books and financial statements are
complete, true and sufficient to reveal impartially the financial
conditions of the Company upon the expiration of those fiscal periods and
its performance within such fiscal periods. From the date of the issuance
of such financial statements until the Completion Date of Equity Transfer,
there is no material adverse change to the business or the financial
conditions of the Company.
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(11)
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Party
A warrants that the Company has never engaged in any acts violating PRC
laws and regulations, and has never been involved in any litigations,
arbitrations or administrative penalties, and none of the aforesaid
situation is about to take place to Party A’s best
knowledge.
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(12)
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Party
A warrants that since the establishment of the Company until the
Completion Date of Equity Transfer, it has observed all kinds of tax laws,
has paid all the taxes and fees explicitly required by the taxation
administrations, and has not received any overdue notices issued by the
tax administrations or any other authorities, has not been fined due to
taxation issues, is not involved in any pending investigation or dispute
in connection with taxation issues.
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8
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(13)
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Party
A warrants that it will strictly observe relevant PRC taxation laws and
regulations and pay taxes for the Equity Transfer Price in accordance with
laws and regulations.
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(14)
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Party
A represents and warrants that it will cooperate with Party B and other
institutions after entering into this Contract to ensure it and/or the
Company to complete the conditions precedent as provided under Article 4.1
of this Contract, strictly in accordance with this Contract, and provide
Party B with relevant documents proving the completion of such
conditions precedent within 1 working day upon the completion of every
condition precedent.
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(15)
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Party
A represents and warrants that it will be responsible or entrust the
Company to submit relevant documents to competent authorities, apply for
all the approvals, registrations and filings in connection with the
transfer of the Target Equity Interest, so as to make sure that Party B is
able to obtain all the documents required by laws and regulations and
complete the Equity Transfer within the agreed
period.
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(16)
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Party
A warrants that on the Completion Date of Equity Transfer, there is no
material asset or debt not disclosed to Party B in
prior.
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(17)
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Party
A warrants that, upon the receipt by itself or the Company of any
acceptance, rejection, approval, reply issued by the competent authority
in connection with the transfer of Target Equity Interest or notice
requiring any modifications or supplementary materials, Party A shall
timely inform Party B and provide the copies of such
documents.
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(18)
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At
any time before the Completion Date of Equity Transfer (including the
Completion Date of Equity Transfer), in the event that Party A learns any
situation that may cause its representations, commitments or warrants
hereunder to be untrue or inaccurate, Party A shall immediately inform
Party B in writing, and, as reasonably requested by Party B, take
necessary remedy measures.
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(19)
|
This
Contract shall become effective and valid binding force to Party A, upon
the execution and effectiveness of this Contract, and shall be enforceable
against Party A in accordance with the terms of this Contract. Party A
represents and warrants that it does not enjoy any exemption
rights.
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(20)
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Party
A will do its best to be responsible for or assist the Company in
fulfilling all requirements on signatures, approvals, registrations,
amendment to registration and filings
procedures.
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(21)
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All
the aforementioned representations, commitments and warranties of Party A
are true, accurate, complete, sufficient, unconditional and without
reservation.
|
9
6.2
|
Party
B hereby unconditionally and irrevocably makes the following
representations, commitments and warranties, as of the Completion Date of
Equity Transfer:
|
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(1)
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Party
B is a limited liability company duly incorporated and validly existing in
accordance with Hong Kong laws.
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(2)
|
Party
B has obtained necessary corporate authorization to sign and perform this
Contract;
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(3)
|
Party
B is not involved in any litigations, arbitrations or any other possible
legal or administrative proceedings materially impacting or likely to
materially impact the Equity Transfer, which are existing, pending,
contingent, potential, or asserted by a third
party.
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(4)
|
At
any time after the execution of this Contract, Party B warrants to
cooperate with Party A and other institutions, to ensure the consummation
of all the conditions precedent under Article 4.1
hereof.
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(5)
|
All
the statements under Section C as provided under “WHEREAS” section are
true and accurate.
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(6)
|
This
Contract shall become effective and valid binding force to Party B, upon
the execution and effectiveness of this Contract, shall be enforceable
against Party B in accordance with the terms of this Contract. Party B
represents and warrants that it does not enjoy any exemption
rights.
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(7)
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All
the afore-mentioned representations, commitments and warranties of Party B
are true, accurate, complete, sufficient, unconditional and without
reservation.
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Article
7 Breach
of Contract and Compensation
7.1
|
Failure
of performance or sufficient performance of this Contract, breach of any
commitment, representations and warrants hereunder, or failure to make
true, accurate, complete covenants, statements and warranties by any Party
shall constitute a breach of this Contract. The breaching Party
shall bear all and any liability of actual loss arising from such breach,
and pay damages in full to the Party accepting such commitment,
representation or warrant, which includes but is not limited to the whole
loss, litigation and/or arbitration fees, attorney’s fees, investigation
fees, evaluation fees and notarization fees of the non-breaching
Party. The respective breaching Parties shall bear their own
corresponding liabilities for compensation arising from their respective
breach in proportion with their respective faults in the event that both
Parties under this Contract commit breach of this
Contract. This article shall not limit the right of the Parties
to seek other legal remedies, including but not limited to the right to
demand actual performance provided by the Contract Law of the
PRC.
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10
7.2
|
Party
B shall be entitled to deduct directly the compensation amount from the
Equity Transfer Price and recover any deficiency pursuant to the laws and
this Contract in the event that Party A commits a breach under this
Contract.
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7.3
|
Party
A shall make indemnification to Party B for any loss incurred by any
litigation, arbitration, claim administrative proceeding or other legal
proceeding against Party B arising from or relating to the Target Equity
Interest occurring prior to the Completion Date of Equity
Transfer.
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7.4
|
Both
Parties shall perform the obligations hereunder with the principles of
good faith. Unless otherwise provided by this Contract, in the
event that either Party fails to perform, or breaches any terms,
conditions, covenants, representations or warranties hereunder, the other
Party shall be entitled to be compensated against all the losses, damages
and the fees and costs arising from the litigations or claims by the
non-performing or breaching Party.
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Article
8 Sell
Back Option
8.1
|
The
Parties agree that, Party B is entitled to exercise a Sell Back Option to
sell the Target Equity Interest back to Party A according to the following
provisions, provided that Party B or the Company is subject to any claims,
recourse, legal liabilities, is caused to loss the title of Target Equity
Interest, or is prevented from operating the Company’s business, due to
Party A’s material breach of this Contract (including but not limited to a
violation of the non-competition provisions applicable to Party A and its
Affiliates), malicious act and/or inaction, false statement and
concealment.
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8.2
|
The
exercise period of the Sell Back Option is 3 years following the
Completion Date of Equity Transfer.
|
8.3
|
Party
B has a complete and independent option to resell the Target Equity
Interest to Party A when exercising the Sell Back Option. Party A shall
refund Party B the Equity Transfer Price already paid and pay a breach
penalty calculated at an annual interest of 15% of the Equity Transfer
Price already paid within 10 days after receipt of the notice issued by
Party B. When Party B exercises the Sell Back Option, Party A agrees to
execute all necessary documents and take all necessary action according to
this Contract, including but not limited to timely executing documents
required for alteration approval and registration with the competent
government authorities.
|
8.4
|
In
the event that a circumstance prescribed in Article 8.1 occurs but Party B
does not exercise the Sell Back Option, Party B is entitled to rectify and
adjust the Equity Transfer Price contemplated hereunder, and the adjusted
Equity Transfer Price shall not exceed 70% of the original Equity Transfer
Price. Party A shall refund the margin of the Equity Transfer Price before
and after such adjustment unconditionally to Party B in the manner
accepted by Party B within 10 days after receipt of written notice issued
by Party B. In the event that Party A fails to pay such margin, Party B is
entitled to deduct the margin from any fund payable to Party
A.
|
11
Article
9 Termination
9.1
|
This
Contract shall terminate upon the occurrence of any following
events:
|
|
(1)
|
Both
Parties agree to terminate in writing through amicable
negotiation.
|
|
(2)
|
The
amendment to the registration with Administration for Industry and
Commerce reflecting the transaction contemplated hereunder has not been
completed within 120 days as of the execution date of this Contract due to
any reasons.
|
|
(3)
|
Party
B reasonably requests termination of this Contract and the transaction
hereunder for reasons caused by Party
A.
|
|
(4)
|
A
material adverse change occurs to the assets, business, employees or
finance of the Company prior to the Completion Date of Equity Transfer,
according to which Party B reasonably deems that the Equity Transfer
hereunder may not be completed within reasonable time or the purpose of
the transaction hereunder may not be
achieved.
|
|
(5)
|
In
the event that any conditions precedent set forth in Article 4.1 fails to
be completed as prescribed by this Contract (unless waived by Party B),
Party B shall be entitled to terminate this Contract
unilaterally.
|
|
(6)
|
In
the event that either Party materially breaches any provisions hereunder
or any of its commitment, representation or warrant hereunder is false,
the non-breaching Party may give written notice to the breaching Party
requesting immediate cure and rectification of such breach. In
the event that the breaching Party fails to take measures to cure and
rectify satisfactorily to the non-breaching Party within 60 days as of the
issuance of the aforesaid written notice by the non-breaching Party, the
non-breaching Party may terminate this Contract
immediately.
|
|
(7)
|
This
Contract may not be performed due to the newly-promulgated applicable laws
and regulations.
|
|
(8)
|
The
occurrence of Force Majeure Event as set forth in Article 10 hereof
continuing for a period over six (6) months, which caused the
impossibilities to perform this
Contract.
|
9.2
|
In
the event that this Contract terminates, Party A shall, within seven (7)
working days upon the termination confirmed by both Parties in writing
(under the circumstance of Article 9.1(1)), or upon the issuance of
written notice by Party B (under the circumstances of Article
9.1(2)(3)(4)(5)), or upon the issuance of termination notice by the
non-breaching Party (under the circumstance of Article 9.1(6)), or upon
the occurrence of the events causing termination (under the circumstance
of Article 9.1(7)(8)), refund to Party B’s designated account the Equity
Transfer Price set forth in Article 3.1 (including but not limited to the
First Installment of Equity Transfer Price) and the interests accrued
thereon calculated in accordance with the benchmark loan interest rate of
the People’s Bank of China on the refunding date for the period between
the date of receipt of such amount by Party A and the date of refunding to
Party B. However, in the event that termination of this
Contract is attributable and shall only be attributable to Party B’s
faults, Party A shall only refund the principal of such amount without any
interests.
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12
9.3
|
In
the event that this Contract terminates, either Party shall return to the
other Party any records, documents or materials delivered pursuant to this
Contract (whether the aforesaid records, documents or materials were
delivered prior to or following the signing of this
Contract).
|
9.4
|
In
the event that the registration with the Administration for Industry and
Commerce for the Equity Transfer has been completed when the Contract
terminates, both Parties shall jointly carry out the amendment
registration regarding the termination of this Contract in accordance with
the relevant laws and regulations, and restore the relationship between
both Parties and with the Company to the status prior to the execution of
this Contract as follows: Party A shall hold 100% equity interest of the
Company; Party B shall obtain from Party A the Equity Transfer Price set
forth in Article 3.1 and the interests accrued thereon calculated in
accordance with the benchmark loan interest rate of the People’s Bank of
China on the refunding date for the period between the date of receipt of
such amount by Party A and the date of refunding to Party B (in the event
that termination of this Contract is attributable and shall only be
attributable to Party B’s faults, Party A shall only refund the principal
of such amount without any interests); in the event that the restoration
of the relationship between both Parties and with the Company to the
status prior to the execution of this Contract requires the execution of
any other agreements or documents by both Parties, both Parties shall
cooperate to execute such agreements or
documents.
|
9.5
|
Any
relevant fees arising from the preparation, performance or termination of
the Equity Transfer hereunder, including but not limited to the taxes and
fees, governmental charges, intermediary fees paid for the Equity
Transfer, shall be borne by the breaching Party, if any. The
aforesaid amount shall be borne by both Parties pursuant to Article 13.2
hereunder in the event that there is no breaching
Party.
|
9.6
|
Any
liabilities for breaching this Contract shall not be released upon the
termination of this Contract.
|
13
Article
10 Force
Majeure Event
10.1
|
“Force
Majeure Event” shall mean any event that is unforeseeable and its
occurrence and consequence is unpreventable or unavoidable when executing
this Contract, as a result of which any Party is completely or partially
unable to perform any term under this Contract, including earthquake,
tsunami, typhoon, floods, wars, epidemics and other aforesaid
unforeseeable, unpreventable or unavoidable events, and also including
events commonly regarded as Force Majeure Event under international
commercial practice.
|
10.2
|
The
affected Party shall be released from performing its responsibility or
obligation hereunder during the continuation of the Force Majeure Event
upon its occurrence and shall not be deemed as a breach of this Contract,
provided that the affected Party shall immediately take all measures
to give written notice to the other Party, and give the documents
certifying the occurrence and/or continuation of the Force Majeure Event
in accordance with the laws of the PRC within 15 days as of the occurrence
of such Force Majeure Event. Otherwise it shall be deemed as no such Force
Majeure Event occurs.
|
10.3
|
The
affected Party shall make its best efforts to take all measures to
mitigate the economic losses that may be caused by the Force Majeure
Event.
|
10.4
|
The
Parties shall negotiate to seek reasonable and fair solution upon the
occurrence of any Force Majeure Event and make all the reasonable efforts
to mitigate the negative impact of such Force Majeure Event on the
performance of this Contract.
|
10.5
|
Neither
Party shall be released from any liability by claiming the occurrence of
Force Majeure Event in the event that the Force Majeure Event occurs after
such Party’s delaying to perform any obligation hereunder by breaching
this Contract.
|
Article
11 Confidentiality
11.1
|
Any
Party has disclosed or may have to disclose to the other Party
confidential and proprietary materials regarding their respective business
and financial status and other confidential matters. Unless
otherwise provided by other confidentiality agreements, the receiving
Party of the aforesaid materials (including written and non-written
materials, hereinafter “Confidential Materials”)
shall
|
|
(1)
|
keep
confidentiality of the aforesaid Confidential Materials;
and
|
|
(2)
|
refrain
from disclosing the aforesaid Confidential Materials to any person or
entity except for its own employees necessary to know the aforesaid
Confidential Materials to perform their own
duties.
|
14
11.2
|
The
provisions of Article 11.1 shall not apply to the confidentiality
materials as follows:
|
|
(1)
|
materials
known by the receiving Party prior to the disclosure to the receiving
Party by the disclosing Party, which can be proved by written
record;
|
|
(2)
|
materials
known by the public without the breach of this Contract by the receiving
Party;
|
|
(3)
|
materials
obtained from any third party without any confidentiality obligation for
the Confidential Materials; or
|
|
(4)
|
materials
contained in the documents published during process of completing relevant
procedures regarding the Equity
Transfer.
|
11.3
|
Each
Party shall ensure that its directors, senior managers and employees in
relation to this Equity Transfer, and the director, senior managers of its
Affiliates and its employees in relation to this Equity Transfer shall
comply with the same confidentiality obligation set forth in this Article
11.
|
11.4
|
The
provisions in Article 11 shall not apply to the disclosure of the
Confidential Materials to the Affiliates, intermediaries and the employees
and counsels of both Parties for the purpose of the Equity Transfer,
provided that in such event, such disclosure shall be restricted to the
persons or entities necessary to know such materials to perform their own
duties.
|
11.5
|
The
provisions in Article 11 shall not apply to the disclosure by either Party
of the materials to any governmental authorities or relevant organs or the
public as provided by the relevant laws and regulations, or required by
the listing rules both home and abroad or the securities exchanges or
securities supervisory commissions both home and abroad, provided
that the Party required to disclose as aforesaid shall give notice to
the other Party regarding such requirement and its terms immediately prior
to its disclosure.
|
11.6
|
The
provisions in Article 11 shall not prevent a Party hereto from any
publication or disclosure permitted by applicable laws and regulations in
accordance with its own bona fide
judgment.
|
15
Article
12 Non-competition
12.1
|
As
of the Completion Date of Equity Transfer, pursuant to this Contract,
Party A and its Affiliates shall not directly or indirectly engage in any
activities that constitute or may constitute competition with Party B or
the Company, or deprive of, impair or infringe upon or may deprives of,
impair or infringe upon the business interest or business opportunity of
Party B or the Company, or shall not obtain or own interest from such
activities and shall not, directly or indirectly in any capacity or in any
way procure, solicit or cause the employees, service providers, clients,
counsels or agents establishing or to establish relations of employment,
service, counseling, agent to cease or terminate any aforesaid relations
with Party B or the Company, or cause any aforesaid persons to waive or
refuse to establish any aforesaid relationship with Party B or the
Company, or conduct any activities purporting to achieve the aforesaid
consequences.
|
12.2
|
Party
A agrees and confirms that it shall compensate Party B and/or the Company
against all the losses arising from its breach of the aforesaid
non-competition obligations, including but not limited to reasonable
attorney’s fees. Any competing activities conducted by Party
A’s Affiliates shall be deemed as Party A’s breach of this article, and
Party A shall be jointly liable for such breach by its
Affiliates.
|
Article
13 Miscellaneous
13.1
|
Date
of Effectiveness
|
This
Contract shall become effective upon signature and sealing by the legal
representatives or authorized representatives of both Parties and approved by
the relevant approval authorities.
13.2
|
Fees
|
Unless
otherwise provided by this Contract, all the legal taxes and fees arising from
the execution and performance of this Contract shall be born respectively by
both Parties as provided by the relevant laws and regulations. In the
event that the relevant laws and regulations fail to determine the bearing
party, Party A and Party B shall each bear fifty percent (50%) of such fees,
and neither Party shall be obliged to withhold and remit the aforesaid amount
for the other Party. Notwithstanding the aforesaid provisions, the
fees arising from the approval and registration of the Equity Transfer shall be
borne by the Company.
13.3
|
Applicable
Laws
|
This
Contract shall be governed by the laws of the PRC, and the laws of the PRC shall
be applicable to its execution, validity, interpretation, performance and the
resolution of any dispute arising herefrom. In the event that the
laws of the PRC fail to provide for any designated matters with respect to this
Contract,
general international commercial practice shall be referred to for such
matters.
16
13.4
|
Dispute
Resolutions
|
In the
event that any dispute arising out of or relating to this Contract occurs, the
Parties shall attempt in the first instance to resolve such dispute through
friendly consultations. In the event that the Parties fail to settle
such dispute through such consultation, any dispute or claim arising from this
Contract shall be submitted to China International Economic and Trade
Arbitration Commission (the “CIETAC”) South China Sub-Commission for arbitration
in accordance with the then effective and applicable arbitration rules of CIETAC
in Shenzhen. During the proceeding of the arbitration, the provisions
of this Contract (except for the disputed matters) shall continue to be
performed.
13.5
|
Language
and Counterpart
|
This
Contract is written and executed in Chinese in four (4) original copies with
equal legal force. Each Party shall hold one (1) copy and the Company shall keep
one (1) copy on file and the remaining copy shall be used for handling the
approval and registration procedures.
13.6
|
Severability
|
The
invalidity of any provisions hereof determined by any competent authorities
shall not prejudice the validities of other provisions of this
Contract.
13.7
|
Entire
Agreement
|
This
Contract constitutes the entire agreement of the Parties on the subject matter
hereof, and shall supersede all prior intentions, understandings, agreements,
other written records, oral consensus or promises reached among the Parties with
respect to this Contract.
13.8
|
Amendment
and Supplement of this Contract
|
Both
Parties shall make amendment and supplement to this Contract by written
agreement for any matters not provided in this Contract. The
amendment and supplemental agreement with respect to this Contract signed and
sealed by both Parties shall constitute part of this Contract with equal legal
validity.
13.9
|
Exercise
of rights
|
Any
omission or delay in exercising any right hereunder by either Party shall not be
deemed as a waiver of such right by such Party. Any separate or
partial exercise of any right shall not exclude any further exercise of such
right in future circumstances. The waivers to claim for any breach
thereof shall be made in writing, and shall only be effective upon signed by its
legal representatives or authorized representatives and affixed with its
seal.
17
13.10
|
Transfer
of rights and obligations
|
Unless
otherwise provided by this Contract, without prior written consent by the other
Party, neither Party shall transfer all or part of its rights or obligations
under this Contract.
13.11
|
Notice
and Delivery
|
Unless
otherwise provided by this Contract, all notices and written
communications given hereunder by either Party shall be in Chinese and be
delivered by email, courier, facsimile or express mail. The following addresses
shall be used until any change thereto noticed in writing by either
Party:
Party
A:
|
NEW-METAL
(H.K.) TECHNOLOGY LIMITED
|
|
Address:
|
Room
000, Xxxx Xxxxxx, 000-000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, Xxxx
Xxxx
|
|
Telephone:
|
000-00000000
|
|
Facsimile:
|
852-22648570
|
|
Attn:
|
Xxx
Xxxxxxx
|
|
Party
B:
|
LUCK
LOYAL INTERNATIONAL INVESTMENT LIMITED
|
|
Address:
|
Sunna
Motor Industry park, 2nd Xxxxxx Xxxx, Xxxxxx Xx-xxxx Xxxx, Xxx'xx
Xxxxxxxx, Xxxxxxxx
|
|
Telephone:
|
x00-000
0000 0000
|
|
Facsimile:
|
x00-000
0000 0000
|
|
Attn:
|
Xx
Xxxxxxxx
|
|
Email:
|
xxx0000@xxxxx.xxx
|
The date
of receiving any notice or written communication shall be:
|
(1)
|
the
time of sending out the corresponding e-mail when delivered by
e-mail;
|
|
(2)
|
the
exact time as indicated on the corresponding transmission record when
delivered by facsimile;
|
|
(3)
|
the
third date following the delivery of such courier/express mail when
delivered by courier/express mail;
or
|
|
(4)
|
the
signing date of the recipient or the relevant person at the receiving
address when delivered by personal
service.
|
18
[Signature
Pages]
IN
WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized
representatives to execute this Contract as of the date first above
written.
Party A:
NEW-METAL (H.K.) TECHNOLOGY LIMITED
By: /s/ XXX
Xxxxxxx
Authorized
Representative: XXX
Xxxxxxx
Party B:
LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED
By: /s/ XX
Xxxxxxxx
Authorized
Representative: XX
Xxxxxxxx
19