OPTION AGREEMENT
Exhibit 99.6
This Option Agreement (this “Agreement”) is dated November 10, 2010, and is entered into in
Yun County, Hubei Province, People’s Republic of China (“PRC” or “China”) by and among
Great Mountain Information Consulting Co., Ltd. (“Party A”); Hubei Jinlong Cement Co.,
Ltd. (“Party B”); and the undersigned shareholders of Party B (each a “Shareholder” and
collectively the “Shareholders” or “Party C”). Party A, Party B and the
Shareholders are each referred to in this Agreement as a “Party” and collectively as the
“Parties”.
RECITALS
1. Party A, a company incorporated in the PRC as a foreign investment enterprise, specializes in
consulting for International economic, technological and environmental information; developing the
saving energy technology; the development and application of resource recycling machine utilization
technology and the production of emissions re-use technology (collectively the “Business”). Party A
and Party B have entered into a Consulting Agreement dated November 10, 2010 (the “Consulting
Services Agreement”) in connection with the Business.
2. The Shareholders are shareholders of Party B, each legally holding such amount of equity
interest of the Party B as set forth on the signature page of this Agreement and collectively
holding 100% of the equity interests of Party B (collectively the “Equity Interest”).
3. The Parties are entering into this Agreement in connection with the Consulting Services
Agreement.
NOW, THEREFORE, the Parties to this Agreement hereby agree as follows:
1. PURCHASE AND SALE OF EQUITY INTEREST
1.1 Grant of Rights. The Shareholders (hereinafter the “Transferors”) hereby
collectively and irrevocably grant to Party A or a designee of Party A (the “Designee”) an
option to purchase at any time, to the extent permitted under PRC Law, all or a portion of the
Equity Interest in accordance with such procedures as determined by Party A, at the price specified
in Section 1.3 of this Agreement (the “Option”). No Option shall be granted to any party
other than to Party A and/or a Designee. Party B hereby agrees to Party C’s grant of the Option to
Party A and/or the Designee. As used herein, Designee may be an individual person, a corporation,
a joint venture, a partnership, an enterprise, a trust or an unincorporated organization.
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1.2 Exercise of Rights. According with the requirements of applicable PRC laws and
regulations, Party A and/or the Designee may exercise the Option at any time by issuing a written
notice (the “Notice”) to one or more of the Transferors and specifying the amount of the Equity
Interest to be purchased from such Transferor(s) and the manner of purchase.
1.3 Purchase Price.
1.3.1 The purchase price of the Equity Interest pursuant to an exercise of the Option shall be
equal to the original paid-in price of the Transferors, adjusted pro rata for purchase of less than
all of the Equity Interest, unless applicable PRC laws and regulations require an appraisal of the
Equity Interest or stipulate other restrictions regarding the purchase price of the Equity
Interest.
1.3.2 If the applicable PRC laws and regulations require an appraisal of the Equity Interest
or stipulate other restrictions regarding the purchase price of the Equity Interest at the time
Party A exercises the Option, the Parties agree that the purchase price shall be set at the lowest
price permissible under the applicable laws and regulations.
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1.4 Transfer of Equity Interest. Upon each exercise of the Option under this
Agreement:
1.4.1 The Transferors shall hold or cause to be held a meeting of shareholders of Party B in
order to adopt such resolutions as necessary in order to approve the transfer of the relevant
Equity Interest (such Equity Interest hereinafter the “Purchased Equity Interest”) to Party A
and/or the Designee;
1.4.2 The relevant Parties shall enter into an Equity Interest Purchase Agreement in a form
reasonably acceptable to Party A, setting forth the terms and conditions for the sale and transfer
of the Purchased Equity Interest;
1.4.3 The relevant Parties shall execute, without any security interest, all other requisite
contracts, agreements or documents, obtain all requisite approval and consent of the government,
conduct all necessary actions, transfer the valid ownership of the Purchased Equity Interest to
Party A and/or the Designee, and cause Party A and/or the Designee to be the registered owner of
the Purchased Equity Interest. As used herein, “security interest” means any mortgage, pledge, the
right or interest of the third party, any purchase right of equity interest, right of acquisition,
right of first refusal, right of set-off, ownership detainment or other security arrangements;
however, such term shall not include any security interest created under that certain Equity Pledge
Agreement dated as of November 10, 2010, by and among the Parties (the “Pledge Agreement”).
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1.5 Payment. Payment of the purchase price shall be determined through negotiation
between the Transferors and Party A in accordance with the applicable laws at the time of the
exercise of the Option.
2. REPRESENTATIONS RELATING TO EQUITY INTEREST
2.1 Party B’s Representations. Party B hereby represents and warrants:
2.1.1 Without Party A’s prior written consent, Party B’s Articles of Association shall not be
supplemented, changed or renewed in any way, Party B’s registered capital shall not be increased or
decreased, and the structure of Party B’s registered capital shall not be changed in any form;
2.1.2 To maintain the corporate existence of Party B and to prudently and effectively operate
the Business according with customary fiduciary standards applicable to managers with respect to
corporations and their shareholders;
2.1.3 Upon the execution of this Agreement, to not sell, transfer, mortgage or dispose, in any
other form, any asset, legitimate or beneficial interest of business or income, or encumber or
approve any encumbrance or imposition of any security interest on Party B’s
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assets without Party A’s prior written consent;
2.1.4 To not issue or provide any guarantee or permit the existence of any debt without Party
A’s prior written consent, other than (i) such debt that may arise from Party B’s ordinary course
of business (excepting a loan); and (ii) such debt which has been disclosed to Party A;
2.1.5 To operate and conduct all business operations in the ordinary course of business,
without damaging the Business or the value of Party B’s assets;
2.1.6 To not enter into any material agreements without Party A’s prior written consent, other
than agreements entered into in the ordinary course of business (for purpose of this paragraph, if
any agreement for an amount in excess of One Hundred Thousand Renminbi (RMB 100,000) shall be
deemed a material agreement);
2.1.7 To not provide loan or credit to any other party or organization without Party A’s prior
written consent;
2.1.8 To provide to Party A all relevant documents relating to the Business
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and its operations and finance at the request of Party A;
2.1.9 To purchase and maintain general business insurance of the type and amount comparable to
those held by companies in the same industry, with similar business operations and assets as Party
B, from an insurance company approved by Party A;
2.1.10 To not enter into any merger, cooperation, acquisition or investment without Party A’s
prior written consent;
2.1.11 To notify Party A of the occurrence or the potential occurrence of litigation,
arbitration or administrative procedure relating to Party B’s assets, business operations and/or
income;
2.1.12 In order to guarantee the ownership of Party B’s assets, to execute all requisite or
relevant documents, take all requisite or relevant actions, and make and pursue all relevant
claims;
2.1.13 To not assign the Equity Interest in any form without Party A’s prior written notice;
however, Party B shall distribute dividends to the Shareholders upon the request of Party A; and
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2.1.14 In accordance with Party A’s request, to appoint any person designated by Party A to a
management position for Party B.
2.2 Transferors’ Representations. The Transferors hereby represent and warrant:
2.2.1 Without Party A’s prior written consent, upon the execution of this Agreement, to not
sell, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of the
Equity Interest, or to approve any security interest, except as created pursuant to the Pledge
Agreement;
2.2.2 Without Party A’s prior written notice, to not adopt or support or execute any
shareholders resolution at any meeting of the shareholders of Party B that seeks to approve any
sale, transfer, mortgage or disposal of any legitimate or beneficial interest of the Equity
Interest, or to allow any attachment of security interests, except as created pursuant to the
Pledge Agreement;
2.2.3 Without Party A’s prior written notice, to not agree or support or execute any
shareholders resolution at any meeting of the shareholders of Party B that seeks to approve Party
B’s merger, cooperation, acquisition or investment;
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2.2.4 To notify Party A the occurrence or the potential occurrence of any litigation,
arbitration or administrative procedure relevant to the Equity Interest;
2.2.5 To cause Party B’s Board of Directors to approve the transfer of the Purchased Equity
Interest pursuant to this Agreement;
2.2.6 In order to maintain the ownership of Equity Interest, to execute all requisite or
relevant documents, conduct all requisite or relevant actions, and make all requisite or relevant
claims, or make requisite or relevant defense against all claims of compensation;
2.2.7 Upon the request of Party A, to appoint any person designated by Party A to be a
director of Party B; and
2.2.8 To prudently comply with the provisions of this Agreement and any other agreements
entered into with Party A and Party B in connection therewith, and to perform all obligations under
all such agreements, without taking any action or nonfeasance that may affect the validity and
enforceability of such agreements.
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3. Representations and Warranties. As of the execution date of this Agreement and on each
transfer of the Purchased Equity Interest pursuant to an exercise of the Option, Party B and the
Transferors hereby represent and warrant as follows:
3.1 Such Parties shall have the power and ability to enter into and deliver this Agreement and
to perform their respective obligations thereunder, and at each transfer of Purchased Equity
Interest, the relevant Equity Interest Purchase Agreement and to perform their obligations
thereunder. Upon execution, this Agreement and each Equity Interest Purchase Agreement will
constitute legal, valid and binding obligations and be fully enforceable in accordance with their
terms;
3.2 The execution and performance of this Agreement and any Equity Interest Purchase Agreement
shall not: (i) violate any relevant laws and regulations of the PRC; (ii) conflict with the
Articles of Association or other organizational documents of Party B; (iii) cause to breach any
agreements or instruments or having binding obligation on it, or constitute a breach under any
agreements or instruments or having binding obligation on it; (iv) breach relevant authorization of
any consent or approval and/or any effective conditions; or (v) cause any authorized consent or
approval to be suspended, removed, or cause other added conditions;
3.3 The Equity Interest is transferable in whole and in part, and neither Party B nor the
Transferors has permitted or caused any security interest to be imposed upon the
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Equity Interest other than pursuant to the Pledge Agreement;
3.4 Party B does not have any unpaid debt, other than (i) such debt that may arise during the
ordinary course of business; and (ii) debt either disclosed to Party A or incurred pursuant to
Party A’s written consent;
3.5 Party B has complied with all applicable PRC laws and regulations in connection with this
Agreement;
3.6 There are no pending or ongoing litigation, arbitration or administrative procedures with
respect Party B, its assets or the Equity Interests, and Party B and the Transferors have no
knowledge of any pending or threatened claims to the best of their knowledge; and
3.7 The Transferors own the Equity Interest free and clear of encumbrances of any kind, other
than the security interest pursuant to the Pledge Agreement.
4. ASSIGNMENT OF AGREEMENT
4.1 Party B and the Transferors shall not transfer their rights and obligations under
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this Agreement to any third party without Party A’s prior written consent.
4.2 Party B and the Transferors hereby agrees that Party A shall be able to transfer all of
its rights and obligations under this Agreement to any third party, and such transfer shall only be
subject to a written notice of Party A to Party B and the Transferors without any further consent
from Party B or the Transferors.
5. EFFECTIVE DATE AND TERM
5.1 This Agreement shall be effective as of the date first set forth above.
5.2 The term of this Agreement is ten (10) years unless it is early terminated in accordance
with this Agreement. This Agreement may be extended by Party A’s written consent prior to the
expiration of this Agreement. The terms of any such extension shall be determined through mutual
agreement of the Parties.
5.3 At the end of the term of this Agreement (including any extension thereto), or if earlier
terminated pursuant to Section 5.2, the Parties agree that any transfer of rights and obligations
pursuant to Section 4.2 shall continue to be in effect.
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6. APPLICABLE LAWS AND DISPUTE RESOLUTION
6.1 Applicable Laws. The execution, validity, interpretation and performance of this
Agreement and the dispute resolution under this Agreement shall be governed by the laws of PRC.
6.2 Dispute Resolution. The Parties shall strive to resolve any disputes arising from
the interpretation or performance of this Agreement through amicable negotiations. If such dispute
cannot be settled within thirty (30) days, any Party may submit such dispute to China International
Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall abide
by the current rules of CIETAC, and the arbitration proceedings shall be conducted in Shanghai,
China in Chinese. The determination of CIETAC shall be final and binding upon the Parties.
7. Taxes and Expenses. Each Party shall, according with PRC laws, bear any and all
registration taxes, costs and expenses for the transfer of equity arising from the preparation,
execution and completion of this Agreement and all Equity Interest Purchase Agreements.
8. Notices. Notices or other communications required to be given by any Party pursuant to
this Agreement shall be written in English and Chinese and delivered personally or sent by
registered mail or prepaid mail or by a recognized courier service or by facsimile transmission to
the relevant address of each Party as set forth below or other addresses of the Party as specified
by such Party from time to time. The date when the notice is deemed to
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be duly served shall be determined as follows: (a) a notice delivered personally is deemed duly
served upon the delivery; (b) a notice sent by mail is deemed duly served the tenth (10th) day
after the date of the air registered mail with the postage prepaid has been sent out (as is shown
on the postmark), or the fourth (4th) day after the delivery by an internationally recognized
courier service; and (c) a notice sent by facsimile transmission is deemed duly served upon the
receipt time as shown on the transmission confirmation.
Party A:
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Great Mountain Information Consulting Co., Ltd. | |
Address:
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Chadian Town, Yun City, Hubei, PRC | |
Attn:
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XXXX Xxxxxxx | |
Fax: |
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Tel: |
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Party B:
|
Hubei Jinlong Cement Co., Ltd. | |
Address:
|
Chadian Town, Yun City, Hubei, PRC | |
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Attn:
|
XXXX Xxxxxxx | |
Fax: |
||
Tel: |
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9. Confidentiality. The Parties acknowledge and confirm that any oral or written
information exchanged by the Parties in connection with this Agreement is confidential. The
Parties shall maintain the confidentiality of all such information. Without the written approval by
the other Parties, any Party shall not disclose to any third party any confidential information
except as follows:
(a) Such information was in the public domain at the time it was communicated;
(b) Such information is required to be disclosed pursuant to the applicable laws, regulations,
policies relating to the stock exchange; or
(c) Such information is required to be disclosed to a Party’s legal counsel or financial
consultant, provided however, such legal counsel and/or financial consultant shall also comply with
the confidentiality as stated hereof. The disclosure of confidential information by employees or
agents of the disclosing Party is deemed to be an act of the disclosing Party, and such Party shall
be responsible for all breach of confidentiality arising from such disclosure. This provision
shall survive even if certain clauses of this Agreement are subsequently amended, revoked,
terminated or determined to be invalid or unable to implement for any reason.
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10. Further Warranties. The Parties agree to promptly execute such documents as required
to perform the provisions of this Agreement, and to take such actions as may be reasonably required
to perform the provisions of this Agreement.
11. MISCELLANEOUS
11.1 Amendment, Modification and Supplement. Any amendments and supplements to this
Agreement shall only take effect if executed by all Parties in writing.
11.2 Entire Agreement. Notwithstanding Article 5 of this Agreement, the Parties
acknowledge that this Agreement constitutes the entire agreement of the Parties with respect to the
subject matters therein and supercede and replace all prior or contemporaneous agreements and
understandings, whether oral or in writing.
11.3 Severability. If any provision of this Agreement is deemed invalid or
non-enforceable according with relevant laws, such provision shall be deemed invalid only within
the applicable laws and regulations of the PRC, and the validity, legality and enforceability of
the other provisions hereof shall not be affected or impaired in any way. The Parties shall,
through reasonable negotiation, replace such invalid, illegal or
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non-enforceable provisions with valid provisions in order to bring similar economic effects of
those invalid, illegal or non-enforceable provisions.
11.4 Headings. The headings contained in this Agreement are for reference only and
shall not affect the interpretation and explanation of the provisions in this Agreement.
11.5 Language and Copies. This Agreement shall be executed in English in seven (7)
duplicate originals. Each Party shall hold one (1) original, each of which shall have the same
legal effect.
11.6 Successor. This Agreement shall be binding on the successors of each Party and
the transferee allowed by each Party.
11.7 Survival. Each Party shall continue to perform its obligations notwithstanding
the expiration or termination of this Agreement. Article 6, Article 8, Article 9 and Section 11.7
hereof shall continue to be in full force and effect after the termination of this Agreement.
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11.8 Waiver. Any Party may waive the terms and conditions of this Agreement in
writing with the written approval of all the Parties. Under certain circumstances, any waiver by a
Party to the breach of other Parties shall not be construed as a waiver of any other breach by any
other Parties under similar circumstances.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE]
IN WITNESS WHEREOF this Agreement is duly executed by each Party or its legal representatives.
PARTY A: Great Mountain Information Consulting Co., Ltd.
Legal/Authorized Representative: /s/ XXXX Xxxxxxx
Name: XXXX Xxxxxxx
Title: Director and Legal Representative
PARTY B: Hubei Jinlong Cement Co., Ltd.
Legal/Authorized Representative: /s/ XXXX Xxxxxxx
Name: XXXX Xxxxxxx
Title: Director and Legal Representative
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SIGNATURE PAGE FOR SHAREHOLDERS OF PARTY B
SHAREHOLDERS:
/s/ XXXX Xxxxxxx | |||
XXXX Xxxxxxx | |||
ID Card No.: ________________
________________
Owns 91% of Hubei Jinlong Cement Co., Ltd.
________________
Owns 91% of Hubei Jinlong Cement Co., Ltd.
/s/ XX Xxxxxxx | |||
XX Xxxxxxx | |||
ID Card No.: ________________
________________
Owns 4.5% of Hubei Jinlong Cement Co., Ltd.
________________
Owns 4.5% of Hubei Jinlong Cement Co., Ltd.
/s/ CHEN Xxxxxx | |||
XXXX Xxxxxx | |||
ID Card No.: ________________
________________
Owns 4.5% of Hubei Jinlong Cement Co., Ltd.
________________
Owns 4.5% of Hubei Jinlong Cement Co., Ltd.
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