Exclusive Option Agreement
This Exclusive Option Agreement (this “Agreement”) is executed by and among the following parties as of _August 10, 2018 in Shenzhen, the People’s Republic of China (“China” or the “PRC”):
Party A: Shenzhen Pengai Hospital Investment Management Co., Ltd., a limited liability company duly incorporated and validly existing under the laws of the PRC, with the address at South 4/F, Building 7A, Nanyou 0xx Xxxxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx;
Party B: Zhou Pengwu, a Chinese citizen with the Identification No.: ########; and
Party C: Shenzhen Pengai Xiuqi Aesthetic Medical Hospital, a limited liability company duly incorporated and validly existing under the laws of the PRC, with the address at 1/F, 2/F and 3/F, No.252 Meihua Road, Meiling Street, Futian District, Shenzhen.
In this Agreement, each of Party A, Party B and Party C shall be hereinafter referred to as a “Party” respectively, and as the “Parties” collectively.
Whereas:
1. Party B is a shareholder of Party C and as of the date hereof holds 22% of equity interests of Party C, representing RMB2,640,000 in the registered capital of Party C (the “Target Equity Interest”).
2. Party B agrees to grant Party A an exclusive option through this Agreement, and Party A agrees to accept such exclusive option to be used for the purpose of purchasing all or part of Target Equity Interest .
Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:
Sale and Purchase of Target Equity Interest
1.1 Option Granted
Party B hereby exclusively, irrevocably and unconditionally grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) to purchase the Target Equity Interest once or at multiple times at any time in part or in whole at Party A’s sole and absolute discretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest Purchase Option”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights with respect to the Target Equity Interest. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. The term “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations.
1.2 Steps for Exercise of the Equity Interest Purchase Option
Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a written notice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest Purchase Option, and the name of the Designee(s) if any; (b) the portion of Target Equity Interest to be purchased by Party A or the Designee from Party B (the “Optioned Interest”); and (c) the date for purchasing the Optioned Interest or the date for the transfer of the Optioned Interest.
1.3 Optioned Interest Purchase Price
Unless an appraisal is required by the laws of China applicable to the Equity Interest Purchase Option when exercised by Party A, the total purchase price for the purchase by Party A of all Optioned Interest held by Party B upon exercise of the Equity Interest Purchase Option by Party A shall be the lowest price as permitted by the applicable PRC laws at the time of the transfer of the Optioned Interest. If appraisal is required by the laws of China at the time when Party A exercises the Equity Interest Purchase Option, the Parties shall negotiate in good faith and based on the appraisal result make necessary adjustment to the Equity Interest Purchase Price so that it complies with any and all then applicable laws of China (collectively, the “Equity Interest Purchase Price”). Party B shall donate the balance of the Equity Interest Purchase Price received from Party A, after deducting or withholding the relevant taxes (if any) pursuant to applicable laws of China, to Party A or the Designee(s) of Party A for free within ten (10) days after Party B receives the Equity Interest Purchase Price and pays/ withholds the relevant taxes (if any).
1.4 Transfer of Optioned Interest
For each exercise of the Equity Interest Purchase Option:
1.4.1 Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B’s transfer of the Optioned Interest to Party A and/or the Designee(s);
1.4.2 Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the Optioned Interest to Party A and/or the Designee(s) and waiving any right of first refusal or any other kind of priority with respect thereto;
1.4.3 Within thirty (30) days after receipt of the Equity Interest Purchase Option Notice by Party B from Party A and/or any Designee (whichever is applicable), Party B and Party A and/or such Designee (whichever is applicable) shall complete all procedures for Party A’s and/or such Designee’s (whichever is applicable) acquisition of such Optioned Interest and for Party A and/or such Designee (whichever is applicable) becoming a shareholder of Party C, including without limitation execution of an equity interest transfer contract and any other necessary documents or agreements, adoption of any necessary resolutions, issuance of any necessary documents by Party C and performance of all relevant procedures;
1.4.4 The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses and permits and take all necessary actions to transfer valid ownership of the Optioned Interest to Party A and/or the Designee(s), unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the Optioned Interest. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rights or interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created by this Agreement, Party B’s Equity Interest Pledge Agreement and Party B’s Power of Attorney. “Party B’s Equity Interest Pledge Agreement” as used in this Agreement shall refer to the Equity Interest Pledge Agreement executed by and among Party A, Party B and Party C on the date hereof and any modification, amendment and restatement thereto. “Party B’s Power of Attorney” as used in this Agreement shall refer to the Power of Attorney executed by Party B on the date hereof granting Party A with power of attorney and any modification, amendment and restatement thereto.
1. Covenants
2.1 Covenants regarding Party C
Party B (as a shareholder of Party C) and Party C hereby covenant as follows:
2.1.1 Without the prior written consent of Party A, Party C shall not in any manner supplement, declare any dividends or distribute any residual profits, change or amend its articles of association, increase or decrease its registered capital, or change its structure of registered capital in other manners. If Party B increases its capital injection into Party C, Party B undertakes and confirms that the additional equity shall be subject to Equity Interest Purchase Option. If Party C declare any dividends or distribute any residual profits, any such funds received must be remitted to Party A;
2.1.2 They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices, obtain and maintain all necessary government licenses and permits by prudently and effectively operating its business and handling its affairs;
2.1.3 In the event that any shareholder of Party C or Party C fails to comply with its tax obligations under the applicable laws that hinders the exercise of the Equity Interest Purchase Option by Party A, Party A is entitled to demand Party C or its shareholders to comply with the tax obligations; and
2.1.4 Party B and Party C shall procure the subsidiaries of Party C to comply with the covenants applicable to Party C as prescribed in this Section 2.1 where applicable, as such subsidiaries are the Party C under the relevant provisions.
2.2 Covenants of Party B
Party B hereby covenants as follows:
2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon, except for the interest placed in accordance with this Agreement, Party B’s Equity Interest Pledge Agreement and Party B’s Power of Attorney;
2.2.2 Without the prior written consent of Party A, Party B shall not cause the shareholders’ meeting and/or the directors (or the executive director) of Party C to approve any sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the Target Equity Interest, or allow the encumbrance thereon of any security interest, except for the interest placed in accordance with this Agreement, Party B’s Equity Interest Pledge Agreement and Party B’s Power of Attorney;
2.2.3 Without the prior written consent of Party A, Party B shall cause the shareholders’ meeting or the directors (or the executive director) of Party C not to approve the merger or consolidation with any person, or the acquisition of or investment in any person;
2.2.4 Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the Target Equity Interest;
2.2.5 Party B shall cause the shareholders’ meeting or the directors (or the executive director) of Party C to vote in favor of the transfer of the Optioned Interest as set forth in this Agreement and to take any and all other actions that may be requested by Party A;
2.2.6 To the extent necessary to maintain Party B’s ownership in the Target Equity Interest, Party B shall execute all necessary or appropriate documents, take all necessary or appropriate actions, file all necessary or appropriate complaints, and raise necessary or appropriate defenses against all claims; and
2.2.7 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Party B’s Equity Interest Pledge Agreement or under the Party B’s Power of Attorney, Party B shall not exercise such rights except in accordance with the written instructions of Party A.
2. Representations and Warranties
Party B and Party C hereby represent and warrant to Party A severally, as of the date of this Agreement and each date of transfer of the Optioned Interest, that:
3.1 They have the power, capacity and authority to execute and deliver this Agreement and any equity interest transfer contracts to which they are parties concerning the Optioned Interest to be transferred thereunder (each, a “Transfer Contract”), and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer Contracts substantially consistent with the terms of this Agreement upon Party A’s exercise of the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are parties constitute or will constitute their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;
3.2 Party B and Party C have obtained any and all approvals and consents from government authorities and third parties (if required) for execution, delivery and performance of this Agreement.
3.3 The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shall not: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions to any licenses or permits issued to either of them;
3.4 Party B has a good and merchantable title to the equity interests held by Party B in Party C. Except for Party B’s Equity Interest Pledge Agreement and Party B’s Power of Attorney, Party B has not placed any security interest on such equity interests;
3.5 There are no significant pending or threatened litigation, arbitration or administrative proceedings relating to the Target Equity Interest;
3.6 In case of Party B’s death, incapability, divorce, bankruptcy or other circumstances which may affect his exercise of equity interests in Party C, Party B’s successor (including its spouse, children, parents, siblings and grandparents) or the holder or transferee of the equity interests in Party C at the time will be deemed as one of the Parties to this Agreement, undertaking all the rights and obligations of Party B under this Agreement, and will transfer the Optioned Interest to Party A or the Designee(s) of Party A in accordance with the applicable laws at the time and this Agreement; and
3.7 The Target Equity Interest held by Party B shall not be the community property of his spouse. Party B’s spouse is not entitled to own or dispose of the equity interests in Party C; operating and management of Party C by Party B on the basis of Party B’s ownership interests in Party C and other voting matters shall not be affected by Party B’s spouse.
3. Effective Date and Term
4.1 This Agreement shall become effective upon execution by the Parties, and remain effective until all equity interests held by Party B in Party C have been transferred or assigned to Party A and/or any other person designated by Party A in accordance with this Agreement.
4.2 Within the term of this Agreement, Party A may at its sole discretion decide to unconditionally terminate this Agreement by issuing a written notice to Party B in advance and bears no liability. Unless otherwise provided for by any mandatory provision of PRC laws, neither Party B nor Party C is entitled to terminate this Agreement unilaterally.
4. Governing Law and Resolution of Disputes
5.1 Governing Law
The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the PRC laws.
5.2 Methods of Resolution of Disputes
In the event of any dispute with respect to the interpretation and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to settle the dispute through negotiations, such dispute shall be submitted to Shenzhen Court of International Arbitration (Shenzhen Arbitration Commission) for arbitration, in accordance with its arbitration rules and procedures in effect at the time. The arbitration shall be conducted in Shenzhen. The arbitration award shall be final and binding on all Parties.
5.3 To the extent permitted by PRC laws and where appropriate, the arbitration tribunal may grant any remedies in accordance with the provisions of this Agreement and applicable PRC laws, including preliminary and permanent injunctive relief (such as injunction against carrying out business activities, or mandating the transfer of assets), specific performance of contractual obligations, remedies concerning the equity interest or assets of Party C and awards directing Party C to conduct liquidation. To the extent permitted by PRC laws, when awaiting the formation of the arbitration tribunal or otherwise under appropriate conditions, either Party may seek preliminary injunctive relief or other interlocutory remedies from a court with competent jurisdiction to facilitate the arbitration. Without violating the applicable governing laws, the Parties agree that xxx xxxxxx xx Xxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxx and the place where the principal assets of Party C are located shall all be deemed to have competent jurisdiction.
5.4 Upon the occurrence of any disputes arising from the interpretation and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.
5. Taxes and Fees
Unless as otherwise agreed in this Agreement, each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.
6. Notices
7.1 All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:
7.1.1 Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of receipt or refusal at the address specified for notices;
7.1.2 Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by an automatically generated confirmation of transmission).
7.2 For the purpose of notices, the addresses of the Parties are as follows:
Party A: Shenzhen Pengai Hospital Investment Management Co., Ltd.
Address: Xxxxx 0/X, Xxxxxxxx 0X, Xxxxxx 0xx Industrial Park, Nanshan District, Shenzhen
Attn: Xxxx Xxxxxxx
Phone: #########
Party B: Zhou Pengwu
Address: Xxxxx 0/X, Xxxxxxxx 0X, Xxxxxx 0xx Industrial Park, Nanshan District, Shenzhen
Phone: #########
Party C: Shenzhen Pengai Xiuqi Aesthetic Medical Hospital
Address: 1/F, 2/F and 0/X, Xx.000 Xxxxxx Xxxx, Xxxxxxx Xxxxxx, Futian District, Shenzhen
Attn: Zhou Pengwu
Phone: #########
7.3 Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.
7. Confidentiality
The Parties acknowledge that the existence and the terms of this Agreement, and any oral or written information exchanged between the Parties in connection with the preparation and performance of this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of other Parties, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, directors, employees, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, directors, employees, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the shareholders, director, employees of or agencies engaged by any Party shall be deemed disclosure of such confidential information by such Party and such Party shall be held liable for breach of this Agreement.
8. Further Warranties
The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement.
9. Breach of Agreement
If Party B or Party C conducts any material breach of any term of this Agreement, Party A shall have right to terminate this Agreement and/or require the Party B or Party C to compensate all damages; this Section 10 shall not prejudice any other rights of Party A herein.
10. Miscellaneous
11.1 Amendment, Change and Supplement
Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.
11.2 Entire Agreement
Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and shall supersede all prior oral and written consultations, representations and contracts reached with respect to the subject matter of this Agreement.
11.3 Headings
The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of the provisions of this Agreement.
11.4 Language
This Agreement is written in both Chinese and English in three copies, each Party having one copy. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.
11.5 Severability
In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that, to the greatest extent permitted by law, accomplish the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.
11.6 Assignment
Without Party A’s prior written consent, Party B and Party C shall not assign their respective rights and obligations under this Agreement to any third party. Party B and Party C agree that Party A may assign its rights and obligations under this Agreement to any third party and in case of such assignment, Party A is only required to give written notice to Party B and Party C and does not need any consent from Party B or Party C for such assignment. Party B hereby agrees and confirms that, in the event that Party B is dead or becomes person with limited capacity or no capacity, all the Target Equity Interest shall automatically and unconditionally be transferred to Party A or the Designee(s) of Party A at the Equity Interest Purchase Price as prescribed in Section 1.3. The Equity Interest Purchase Price payable to Party B shall be handled in accordance with the provision of Section 1.3.
11.7 Successors
This Agreement shall be binding on and shall inure to the interest of the respective successors and the permitted assignees of the Parties.
11.8 Survival
11.8.1. Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shall survive the expiration or early termination thereof.
11.8.2. The provisions of Sections 5, 7, 8, 10 and this Section 11.8 shall survive the termination of this Agreement.
11.9 Waivers
Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.
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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.
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Party A: |
Shenzhen Pengai Hospital Investment Management Co., Ltd. (seal) | |
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By: |
/s/ Zhou Pengwu |
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Name: |
Zhou Pengwu |
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Title: |
Legal Representative |
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Signature Page
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.
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Party B: |
Zhou Pengwu |
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By: |
/s/ Zhou Pengwu |
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Signature Page
IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.
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Party C: |
Shenzhen Pengai Xiuqi Aesthetic Medical Hospital (seal) |
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By: |
/s/ Zhou Pengwu |
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Name: |
Zhou Pengwu |
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Title: |
Legal Representative |
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Signature Page
