Share Purchase Agreement
Between:
Koma
Co., Ltd., a corporation duly formed under the laws of Republic of Korea with
its legal address at 000-00, Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxxxxx Xxxxxxxx,
Xxxxx herein represented by Xx. Xxxxxxx
Xx,
its
authorized representative (hereinafter referred to as the
“Seller”);
AND:
Wonder
Auto Limited. a corporation duly formed under the laws of the British Virgin
Islands with its legal address at P.O. Box 957, Offshore Incorporations Centre,
Road Town, Tortola, British Virgin Islands, herein represented by Xx.
Xxxxxxx
Xxxx,
its
authorized. representative and board chairman (hereinafter referred herein
to as
the “Purchaser”, and together with the Seller, the “Parties”);
WHEREAS,
the Seller is the 65% shareholder of Jinzhou Karham Electrical Equipment Co.,
Ltd. {“Karham”) so as to manufacture, market, sell. supply and distribute
components of automotive alternators and starter within the PRC;
WHEREAS,
the Seller and the Jinzhou Electrical Automatic Control Research Institute
executed all agreements and amendments of articles of association necessary
to
give effect to the objectives and business scope of the Karham, including,
without limitation, the other contract, articles of association, agreements
and
documents contemplated thereunder shall be collectively referred to as the
“Karham Documents”;
WHEREAS,
the Karham has received all approvals necessary for its establishment and
operation from the relevant governmental authorities of the PRC, including
its
business license;
WHEREAS,
according to Section 16 of the Karham Articles of Association, the board of
directors (the “Board”) is the highest authority of Karham and has the authority
and responsibility to determines all important issues regarding
Karham;
WHEREAS,
on 19
February, 2008,
the
Board has unanimously adopted board resolutions to authorizing and approving
the
amendment of the Karham Documents and the sale by the Seller and the purchase
by
the Purchaser of 65% of the share, of Karham held by the Seller and any other
interest held by the Seller in Karham (collectively. the “Seller Interest”), and
the Board has agreed to do all such things and to sign all such documents as
may
he necessary and proper to give edict to such resolutions;
NOW,
THEREFORE, the Parties. adhering to the principle of equality and mutual benefit
and through friendly consultations at Jinzhou city, Liaoning Province of PRC,
reached this Agreement as follows at the date of 19
February, 2008
(the
“Execution Date”):
Article
1
Transfer of the Seller Interest to the Purchaser
1.1
In
accordance with this Agreement, the Seller agrees to sell to the Purchaser
and
the Purchaser agrees to purchase from the Seller the Seller Interest (the “Share
Transfer”).
1.2
For
greater certainty and without limiting the generality of the foregoing, the
Purchaser hereby agrees to assume all of the obligations relating to the Seller
interest under the Karham Documents.
Article
2
Purchase Price and Other Terms
2.1
The
Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Seller the Seller interest, in exchange for a sum of Eight Hundred
and
Twenty Thousand U.S. Dollar’s (US$820,000) (the “Purchase Price”) pursuant to
the terms of this Agreement.
2.2
On or
immediately after the Execution Date, the Purchaser shall pay the amount of
US$820,000 in cash to the Seller’s designated bank account.
2.3
This
agreement shall be finally effective as of the date of completion of payment
of
all Purchase Price (hereinafter referred as “Effective Date”).
2.4
The
Seller agrees that after both execution of this agreement and payment of
Purchase Price, the Purchaser shall be deemed as the 65% shareholder of Karham
and be entitled to be involved immediately in Karham’s business
operation.
2.5
Within fifteen (15) working days from the date when the Seller receives the
payment of Purchase Price from the Purchaser:
a)
The
Purchaser and the Seller shall prepare, execute and file with the relevant
governmental authorities of the PRC all documents necessary or required for
the
governmental approval and registration of the Share Transfer
hereunder,
b)
The
Seller shall provide the Purchaser with all necessary documents and assistances
in order to realize the Purchaser’s immediate involvement in Karham’s business
operation.
2.6
The
Seller shall not retain any of the Seller Interest including its original power
and interest in Karham after the Seller receives payment of all Purchase
Price.
Article
3
Disposition of the Distributable Profit Accrued-Before the
Effective
Date of this Agreement
3.1
After
the Effective Date, the Seller’s profits and interests in Karham in and before
fiscal year 2007 (the “Profit”) shall all be allotted to the
Purchaser.
Article
4
Liabilities for Karham
4.1
After
the Effective Date of this Agreement, the Seller shall not be responsible for
any liability arising from, related to or in connection with Karham whether
arising before, on or after the consummation of the transactions contemplated
by
this Agreement. In case this Agreement is not be effected, the Seller shall
bear
the relevant liabilities of Karham.
4.2
After
the Effective Date of this agreement, any tax arising from, related to or in
connection with the transactions contemplated by this Agreement within the
boundary of PRC or pursuant to the laws or regulations of the PRC shall be
assumed by the Purchaser.
Article
5
Board of Karham
5.1
After
the Effective Date of this Agreement, the directors assigned by the Seller
shall
be deemed as resigned automatically, while the directors designated by the
Purchaser shall be on their duty immediately.
Article
6
Confirmation of Profit and Loss
6.1
The
Parties hereby confirm that they intend that the Purchase Price represents
the
cost of the Seller interest. Consequently, it is understood that the Seller
has
neither profit nor loss in connection with the Share Transfer.
Article
7
Parties’ Responsibilities
7.1
From
the Execution Date, the Parties shall take appropriate commercial measures
to
minimize any adverse consequences of the Share Transfer on the employees and
the
customers of Karham. The Parties shall properly exercise their rights as
shareholders of the Karham in light of their pre-existing ownership, and each
Party represents and warrants that its designated directors shall comply with
the terms of this Agreement.
7.2
The
Seller covenants that it will carry out no competitive businesses with Karham
from the Execution Date.
7.3
Purchaser covenants and agrees that:
7.3.1
It
shall be fully responsible for, observe and perform all of the obligations
relating to, in connection with or in respect of the Seller Interest under
the
Karham Documents and it will do all things and sign any documents that are
necessary or required to give full force and effect to this
Agreement.
7.3.2
It
will carry on and conduct its business in a proper and efficient manner so
as to
preserve and protect its properties and assets, its business and its earnings,
incomes, rents, issues and profit, and keep the major senior management, other
than directors of Karham, remain unchanged during 2008.
Article
8
Amendment
8.1
This
Agreement can be amended only by written agreement between the
Parties.
Article
9
Termination
9.1
This
Agreement can be terminated by written agreement between the
Parties.
9.2
If
one Party commits a breach or delays performance of any of its obligation under
this Agreement and fails to remedy such breach or performance delay within
thirty (30) working days of receiving a written notice of such breach or
performance delay from the non-breaching or non-delaying Party, the
non-breaching or non-delaying Party may terminate this Agreement.
9.3
If
one Party makes this Agreement impossible to perform, the other Party may
terminate this Agreement.
Article
10 Remedies
10.1
If
one Party commits a beach or does not perform its duties or obligations under
this Agreement for any reason, such breaching or non-performing Party shall
be
responsible for the breach or non-performance of its duties or obligations
and
shall compensate all losses suffered by the non-breaching Party as a result
thereof.
10.2
In
the event the Purchaser fails to perform its obligations set forth in Section
2.2 of this Agreement and such non-performance lasts up fifteen (15) calendar
days, the Seller may unilaterally terminate the Agreement, and if this Agreement
is so terminated by the Seller, the Purchaser shall compensate the Seller in
the
amount equal to ten percent (10%) of the Purchase Price.
Article
11 Force Majeure
11.1
If
performance of this Agreement in whole or in part is prevented, restricted
or
interfered with by reason of an earthquake, storm, flood, fire, war, strike
or
any other cause beyond the reasonable control of the Parties (each a “Force
Majeure condition”), the party shall provide to the other Party a valid
evidentiary document setting forth in detail the Force Majeure Condition within
fifteen (15) days, its expected duration and the consequences thereof. The
Parties shall thereafter consult with each other so as to avoid or minimize
ay
adverse effect of any Force Majeure Condition on this Agreement or the
transactions contemplated hereunder. However, in case the retiree Majeure
conditions sustain for more than three (3) months, the Parties shall try their
best to avoid or reduce damages cause by consultation. If the Parties cannot
agree on a mutually satisfying solution within three (3) months of such
consultation, either Party may terminate this Agreement by giving the other
Party a thirty (30) days written notice of such termination.
Article
12 Dispute Resolution
12.1
All
disputes between the Parties arising out of or in connection with this Agreement
shall be settled between the Parties by discussion and mutual accord. If a
mutual accord cannot reached between the Parties within thirty (30) days of
the
receipt of the written notice by one of the Parties of the dispute to the other
Party, either Party may submit the dispute to arbitration to the international
Chamber of Commerce in Stockholm, Sweden, for final resolution in accordance
with its arbitration rules. The judgment of the arbitration panel shall be
final
and binding upon the Panics and both Parties agree to abide by such judgment
of
the arbitration panel. The arbitration fees shall be borne by the losing
Party.
Article
13 Waiver
13.1
Any
act of non-performance or delay on the performance of any rights, damages for
breach, termination and any other rights under this Agreement shall not be
deemed an act of waiver. The exclusive or partial performance of any rights,
damages for breach, termination and any other rights under this Agreement shall
not affect the performance of these and other rights.
Article
14 Disclosure
14.1
The
terms of this Agreement and any information disclosed to the non-disclosing
Party by the disclosing Party in the course of executing this Agreement shall
be
deemed Confidential, and each Party will refrain from disclosing the other
Party’s Confidential Information to any third party without the approval of the
non-disclosing Party unless required by any governmental authority or
administrative agency.
Article
15 Miscellaneous
15.1
This
Agreement is written and executed in Chinese and English, and both versions
written in Chinese and in English shall have equal legal effect. In the event
of
any conflict between the two versions of this Agreement and can not be settled
by mutual discussion, either Party may refer the dispute to the above
arbitration proceeding for final resolution in accordance with its arbitration
rules. The judgment of the arbitration panel shall be final and binding upon
the
Parties and both Parties agree to abide by such judgment of the arbitration
panel. The arbitration fees shall be borne by the losing Party.
15.2
This
Agreement contains the entire agreement between the Parties with respect to
the
transactions contemplated herein and supersedes all prior negotiations,
agreements and understandings.
15.3
In
case any one or more of the provisions of this Agreement is held invalid,
illegal or unenforceable in whole or in part, the validity, legality and
enforceability of the remaining provisions shall not be affected or
impaired.
15.4
The
preamble forms is an integral part of this Agreement.
15.5
Any
notices, requests, and communications required or provided for under
this-Agreement shall be in writing (including facsimile communication) and
mailed, telecopied or courier delivered.
15.6
This
Agreement shall be executed in seven (7) copies. The Seller and the Purchaser
shall each keep two (2) copies, and Jialan shall keep one (1) copy. The
Purchaser shall keep the remaining two (2) copies for purposes of the Share
Transfer and any required filings therefore.
