Purchase Option Agreement
Exhibit
10.4
This
Purchase Option Agreement (this “Agreement”) dated on March 26,
2009, is entered into in Beijing, People’s Republic of China (the “PRC”) by and
among:
Shareholder A: Dalian
Dongfangzheng Development Co., Ltd.
Address:
Santangcun, Lingang Industry Zone, Changxingdao, Dalian, P.R. China
Legal
Representative: An Fengbin
Shareholder B: Xxxx
Xx
ID No.:
000000000000000000
Nationality:
P.R. China
Shareholder C: Xxxx
Xxxx
ID No.:
000000000000000000
Nationality:
P.R. China
Shareholder D: Xxxx
Xxx
ID
No.:210624651113001
Nationality:
P.R. China
(Shareholders
A, B, C, and D including their respective successors and legal assignees, are
hereinafter referred to collectively as the “Party A”.)
Party B: Dalian Fusheng
Consulting Co., Ltd.
Address:
Xx.0 Xxxxxxxxxx, Xxxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx, X.X. Xxxxx
Legal
Representative: XXX Xxx Chi
Party C: Dalian Xingyuan
Marine Bunker Co., Ltd.
Address:Lijiacun,
Dalianwan, Ganjingzi District, Dalian, P.R. China
Legal
Representative: An Fengbin
(In
this Agreement, the parties above are hereinafter individually referred to as a
“Party”, and
collectively referred to as the “Parties”.)
WHEREAS, Party B is a wholly
foreign-owned enterprise registered in The People's Republic of China (the
"PRC") under the laws of PRC and owns resources to provide business consulting
services;
WHEREAS, Party C is a domestic
company with exclusively domestic capital registered in the PRC and is mainly
engaged in the business of producing and selling marine bunker
(“Business”);
WHEREAS, Shareholders A, B, C,
D hold 85%, 9%, 3%, and 3% of the equity in Party C, respectively;
WHEREAS, Party A agrees to
exclusively grant Party B an irrevocable purchase option (the “Purchase Option”) whereby
Party A shall, to the extent permitted by the PRC Laws, at the request of Party
B, transfer the Expected Equities (as defined below) to Party B and/or any other
entity or person designated by Party B pursuant to this Agreement. Each member
of Party A will not execute their preemptive right as
defined by the PRC company law.
WHEREAS, Party C agrees Party
A shall grant Party B the Purchase Option pursuant to this
Agreement.
Now, therefore, the Parties
agree as below:
Article
1 Definitions
1.1
Unless otherwise construed under context, in this Agreement, the following terms
shall have the meanings set forth below:
“PRC Laws”: mean the then
effective laws, administrative regulations, administrative rules, local
regulations, judicial interpretations and other binding regulatory documents of
the People’s Republic of China.
“Expected Equities”: with
respect to each of Party A, means the total equity interests held by it in the
registered capital of Party C; with respect to Party A as a whole, means the
100% equity interests in the registered capital of Party C. This term also
include the further issued shares after the signing of this
agreement.
“Transferred Equity”: means
when Party B exercises its Purchase Option (the “Exercise”), the equity
interests which Party B has the right to request each or both of the members of
Party A to transfer to it or its designated entity or person as required in
Article 3.2 hereof, in the amount of all Expected Equities or a portion thereof
to be solely determined by Party B subject to the provisions of the PRC Laws
then in force and its business concerns.
“Transfer Price”: means, for
each Exercise, the total consideration to be paid to Party A by Party B or its
designated entity or person for acquisition of the Transferred
Equity.
“Party C Assets”: means all
tangible and intangible assets that Party C owns or has the right to use during
the term of this Agreement, including but not limited to any real property,
personal property and trademark, copyright, patent, know-how, domain name,
software license and other intellectual property rights.
“Material Agreements”: mean
the agreements entered into by Party C and Party B which have a material impact
on the business or assets of Party C, including but not limited to the Exclusive
Consulting Agreement, the Operating Agreement and other agreements relating to
Party C’s business.
1.2 The
references to any PRC Laws shall be deemed:
(1) to
include the references to the amendments, alterations, supplements and
reenactments of such PRC Laws, whether effective prior to or after the date
hereof; and
(2) to
include the references to the decisions, circulars and rules that are formed
thereunder or take effect as a result thereof.
1.3
Unless the context otherwise specifies, references to the articles,
sub-articles, items and paragraphs herein shall be made to such articles,
sub-articles, items and paragraphs in this Agreement.
Article
2 Grant of Purchase Option
2.1 The
members of Party A hereby severally and jointly agree to irrevocably,
unconditionally and exclusively grant Party B a Purchase Option whereby to the
extent permitted by the PRC Laws, Party B has the right to request Party A to
transfer the Expected Equities to it or its designated entity or person in the
manner specified herein. Party B agrees to accept such option.
2.2 Party
C hereby agrees to Party A granting to Party B such Purchase Option pursuant to
above Article 2.1 and other provisions hereof.
Article
3 The Exercise of the Option
3.1 To
the extent permitted under the PRC Laws, Party B, at its sole discretion, may
decide the specific time, method and number of its Exercise.
3.2 To
the extent that the PRC Laws then in effect permit Party B and/or its designated
entity or person to hold all of the equity interests in Party C, Party B may
select to exercise its Purchase Option in whole at a time through the
acquisition of all of the Expected Equities by Party B and/or its designated
entity or person. If the PRC Laws then in effect permit Party B and/or its
designated entity or person to hold only a portion of the equity interests in
Party C, Party B shall have the right to determine the amount of the Transferred
Equity to the extent below the cap on shareholding percentage (the “Shareholding Cap”) under the
PRC Laws then in effect and Party B and/or any other entity or person designated
by it will acquire such amount of the Transferred Equity from Party A. In the
latter case, as the Shareholding Cap permitted under the PRC Laws is gradually
loosened, Party B shall have the right to exercise its Purchase Option in
phases, with a view to finally acquire all of the Expected
Equities.
3.3 Party
B, for each Exercise by it, has the right to solely determine the amount of
Transferred Equity to be transferred by Party A to Party B and/or other entity
or person designated by it in such Exercise and Party A shall respectively
transfer the Transferred Equity in the amount specified by Party B to Party B
and/or other entity or person designated by it. Party B and/or other entity or
person designated by it shall, for the Transferred Equity received by each of
them in each Exercise, pay the Transfer Price to Party A who transfers such
Transferred Equity.
3.4 At
the time of each Exercise, Party B may itself accept the Transferred Equity or
designate any third party to accept all or a portion of the Transferred
Equity.
3.5 Each
time after Party B decides on an Exercise, it shall deliver to Party A a notice
on exercise of the Purchase Option (the “Exercise Notice”, in the form
attached hereto as Appendix 1). Upon receipt of the Exercise Notice, Party A
shall immediately transfer the Transferred Equity to Party B and/or other entity
or person designated by it in the manner specified in Article 3.3
hereof.
3.6 The
members of Party A hereby severally and jointly undertake and warrant that upon
delivery of the Exercise Notice by Party B:
(1) Party
A shall immediately convene a meeting of shareholders and, by adopting
shareholders’ resolutions and taking all other necessary actions, agree to
transfer all of the Transfer Equity to Party B and/or other entity or person
designated by it at the Transfer Price;
(2) Party
A shall enter into an equity transfer agreement with Party B and/or other entity
or person designated by it to transfer all of the Transfer Equity to Party B
and/or other entity or person designated by it at the Transfer Price;
and
(3) Party
A shall, at the request of Party B and as provided under laws and regulations,
provide necessary assistance to Party B (including providing and executing all
relevant legal documents, completing all governmental approval and registration
procedures and assuming all relevant obligations) to allow Party B and/or other
entity or person designated by it to acquire all of the Transferred Equity free
from any defect in law.
Article
4 Transfer Price
At the
time of each Exercise by Party B, the total Transfer Price paid to Party A or
its designated entity or person shall be determined by Party A and Party B from
one of following two prices: i) RMB 10.00; or ii) the lowest price permitted
under PRC laws. Subject to the compliance with any applicable law, the Transfer
Price received by Party A as a result of such equity transfer shall be delivered
to Party C.
Article
5 Representations and Warranties
5.1 The members of Party A
hereby severally and jointly represent and warrant as below and such
representations and warranties shall remain valid the same as they were made at
the time of transfer of the Expected Equities:
5.1.1
Each of Party A is a PRC resident with full civil capacity; it has the full and
independent legal status and capability to execute, deliver and perform this
Agreement and can act independently as a subject in a legal action.
5.1.2
Each of Party A has the full powers and authorizations to execute and deliver
this Agreement and all other documents in connection with the transaction
contemplated hereby to which it is a party and has the full powers and
authorizations to consummate the transaction contemplated by this
Agreement.
5.1.3
This Agreement will be lawfully and duly executed and delivered by Party A. This
Agreement will constitute a valid and binding obligation of Party A, enforceable
against it in accordance with the terms hereof.
5.1.4 The
members of Party A are the registered lawful owners of the Expected Equities as
of the time when this Agreement become effective. Except for the rights created
by means of this Agreement, the Equity Pledge Agreement entered into between
Party A and Party B, and other agreements or legal documents entered into by
Party A and Party B and/or Party C, the Expected Equities shall be free from any
liens, pledges, claims and other security interests and third-parties rights.
Under this Agreement, Party B and/or other entity or person designated by it
may, following each Exercise, have the clean title to the Transferred Equity
free from any liens, pledges, claims and other security interests or
third-parties rights.
5.2 Party
C hereby represents and warrants that:
5.2.1
Party C is a limited liability company duly incorporated and validly existing in
the PRC and has the independent legal person status. It has the full and
independent legal status and capability to execute, deliver and perform this
Agreement and can act independently as a party in litigation.
5.2.2
Party C has the full corporate powers and authorizations to execute and deliver
this Agreement and all other documents in connection with the transaction
contemplated hereby to which it is a party and has the full powers and
authorizations to consummate the transaction contemplated by this
Agreement.
5.2.3
This Agreement will be lawfully and duly executed and delivered by Party C. This
Agreement will constitute a valid and binding obligation of Party
C.
5.2.4 The
members of Party A are the registered lawful shareholders of Party C as of the
time when this Agreement become effective. Under this Agreement, Party B and/or
other entity or person designated by it may, following each Exercise, have the
clean title to the Transferred Equity free from any liens, pledges, claims and
other security interest or third-parties rights.
Article
6 Party A’s Undertakings
Each of
Party A hereby severally undertakes as follows:
6.1
During the term of this Agreement, unless otherwise disclosed to Party B and
consented to by Party B in writing in advance or imposed by any applicable laws,
it shall not:
6.1.1
assign or otherwise dispose of any Expected Equities or create any security
interest or other third-party right on any Expected Equities;
6.1.2
increase or decrease the registered capital of Party C;
6.1.3
declare distribution of or actually distribute any distributable profits or
dividends;
6.1.4
agree to or cause any merger or division of Party C;
6.1.5
directly or indirectly hold any equity interest in, serve as a director of,
become an employee of or provide any service to (except for the services
provided during the ordinary course of Party C’s business), any domestic or
foreign entity which engages in any business similar or competitive to that of
Party C;
6.1.6
cause Party C to be terminated, liquidated or dissolved; and
6.1.7
amend the articles of association of Party C.
6.2 It
shall ensure that Party C will comply with Party C’s undertakings set forth
below under Article 7.1 during the term of this Agreement.
6.3
During the term of this Agreement, it shall use all its endeavors to grow Party
C’s business, ensure Party C is operated in a lawful and compliant manner and
shall have no action or omission which may damage Party C’s assets or goodwill
or affect the validity of the various business certificates, licenses and
qualifications required to be obtained by Party C. When it ceases to be a
shareholder of Party C, it shall cause its successor to accept in writing the
rights and obligations hereunder with equal validity.
6.4 Party
A undertakes to, upon the reasonable request of Party B, take all the necessary
actions and execute any necessary documents (including without limitation to
complementary agreements to this Agreement) for the purpose of the exercise and
realization of all the rights under this Agreement.
6.5
Without breach of other provisions of this Agreement, if at any time the PRC
publishes or amends any laws, regulations and rules or the interpretation or
application thereof is changed, or any alteration occurs to the relevant
registration procedures, in each case making it illegal for Party B to maintain
the validity of this Agreement and/or to exercise the rights specified herein in
such manner as provided hereunder, or deemed to violate such laws, regulations
or rules, in order to achieve the following purposes, it shall, at the written
instructions and reasonable request of Party B, promptly take certain actions
and/or enter into certain agreements or other documents:
(1)
maintaining the validity of this Agreement;
(2) being
able to dispose of any pledged collateral in such manner as specified herein;
and/or
(3)
sustaining or fulfilling the intent of this Agreement.
Article
7 Party C’s Undertakings
7.1 Party
C undertakes that during the term of this Agreement, unless otherwise disclosed
to Party B and consented to by Party B in writing in advance or imposed by any
applicable laws, it shall not:
7.1.1
dispose of any Party C’s Assets other than in the ordinary course of
business;
7.1.2
dispose of in any way its operation rights and/or profit-sharing rights in
connection with any of its business other than in the ordinary course of
business;
7.1.3
terminate any Material Agreement to which it is a party or enter into any other
agreement in conflict with any existing Material Agreement;
7.1.4
make any lendings or borrowings, or provide guarantee or perform in such manner
as providing a guarantee, or assume any substantial obligations other than in
the ordinary course of business;
7.1.5
acquire any entity or invest in any entity; and
7.1.6
maintain or permit maintenance of, any money of Party C in the account of any
other entity or person except in the ordinary course of business under temporary
circumstances.
7.2 If
any third-party consent, permit, waiver, authorization or any approval, permit,
exemption from or registration or filing with (as required under law) any
governmental entity for the execution and performance of this Agreement and the
grant of the Purchase Option hereunder is required, Party C shall endeavor to
assist in satisfying the foregoing requirements.
7.3
Without the prior written consent of Party B, Party C will not assist or permit
Party A to assign or otherwise dispose of any Expected Equities or encumber any
Expected Equities with any security interest or other third-party
rights.
7.4 Party
C shall not take or allow any act or action which may adversely affect Party B’s
interests under this Agreement.
Article
8 Confidentiality Obligations
8.1
Whether or not this Agreement is terminated, Party A shall remain subject to the
confidentiality obligations with respect to the information set forth
below:
(1) the
execution and performance of this Agreement and the terms hereof;
(2) the
trade secrets, proprietary information and customer information in respect of
Party B acquired or received by it as a result of the execution and performance
of this Agreement; and
(3) the
trade secrets, proprietary information and customer information (the “Confidential Information”) in
respect of Party C acquired or received by it in the capacity of Party C’s
shareholder.
Party A
shall use such Confidential Information solely for the purpose of performing its
obligations under this Agreement. Without Party B’s written consent, none of
Party A may disclose such Confidential Information to any third party, failing
which the disclosing party shall be held liable for such breach and compensate
any losses arising therefore.
8.2 Upon
the termination of this Agreement, Party A shall, at the request of Party B,
return, destroy or otherwise dispose of all documents, materials or software
containing the Confidential Information and cease to use such Confidential
Information.
8.3
Notwithstanding the other provisions hereof, this Article Nine shall survive the
suspension or termination of this Agreement.
Article
9 Term
This
Agreement shall become effective from the date of signing by the parties and
shall terminate after all Expected Equities are duly transferred as agreed
herein to Party B and/or other entity or person designated by it.
Article
10 Notice
10.1 Any
notices, requests, demands and other communications required under this
Agreement or to be given pursuant to this Agreement shall be made in writing and
delivered to the relevant Party/ies.
10.2 If
such a notice or other communication is sent by facsimile or electronic mail, it
shall be deemed served when so sent, or if sent by personal delivery, upon a
delivery face to face, or if sent by post, five (5) days after the day
mailed.
Article
11 Liability for Breach
11.1 The
Parties consent and acknowledge that if either Party (the “Breaching Party”)
substantially breaches any agreement hereunder or substantially fails to perform
any of its obligations hereunder, in each case constituting a breach under this
Agreement (the “Breach”), the non-breaching
Party/ies has the right to request the Breaching Party to make a redress or take
remedial actions within the reasonable period of time. If the Breaching Party
fails to make any redress or take remedial actions within the above reasonable
period of time or within fifteen (15) days after the non-breaching
Party/ies sending a written notice to the Breaching Party for request of a
redress of such Breach, the non-breaching Party/ies may elect to:
(1)
terminate this Agreement and claim full damages against the Breaching Party;
or
(2)
require a specific performance of the obligations of the Breaching Party
hereunder and claim full damages against the Breaching Party.
But in no
event may Party A or Party C require a termination of this Agreement for any
cause pursuant to the above Article 11.1 (1).
11.2 The
rights and remedies provided herein are cumulative and shall not exclude other
rights or remedies available in law.
11.3
Notwithstanding the other provisions hereof, this Article Twelve shall survive
the suspension or termination of this Agreement.
Article
12 Miscellaneous
12.1 This
Agreement is prepared in Chinese and English, and each language with six
counterparts, and all the counterparts shall have the same effectiveness. If any
dispute of interpretation should arise, the Chinese version shall be considered
the primary instrument.
12.2 The
conclusion, effectiveness, performance, amendment, interpretation and
termination of this Agreement shall be governed by the laws of the People’s
Republic of China.
12.3 If
any dispute arises out of the interpretation and performance of the provisions
hereof among the Parties, the Parties shall resolve such dispute in good faith
through consultation. If the dispute cannot be resolved through consultation,
any Party may bring such dispute to Beijing Office of the China International
Economic and Trade Arbitration Commission for a resolution through arbitration
in accordance with its arbitration rules then in force. The place of arbitration
shall be in Beijing. The arbitration proceedings shall be conducted in Chinese.
The arbitral award shall be final and equally binding upon the Parties. This
Article 12.3 shall survive the termination or cancellation of this
Agreement.
12.4 No
failure or delay of a Party to exercise any right, power and remedy available to
it under this Agreement or law (“Such Party’s Rights”) shall
constitute a waiver of such right.
12.5
Article headings in this Agreement are included herein for convenience of
reference only and in no event shall be used for or affect the interpretation of
the terms of this Agreement.
12.6 Each
provision of this Agreement may be severed and separated from each of the other
provisions hereof. If at any time one or more of the provisions hereof become
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be affected.
12.7 This
Agreement, when executed, shall supersede any other legal instrument previously
executed by and between the Parties with respect to the same subject matter. Any
amendment or supplement to this Agreement shall be in writing and become
effective after duly signed by the Parties.
12.8
Without the prior written consent of Party B, neither Party A nor Party C may
assign any of its rights and/or obligations under this Agreement to any third
party. Upon a notice served on Party A and Party C, Party B has the right to
assign any of its rights and/or obligations hereunder to any third party
designated by it.
12.9 This
Agreement shall be binding upon the lawful successors of each
Party.
Signature
Page
Party
A:
Shareholder A: Dalian
Dongfangzheng Development Co., Ltd.
Legal
Representative: An Fengbin
Signature/Seal:
Shareholder B: Xxxx
Xx
Signature:
Shareholder C: Xxxx
Xxxx
Signature:
Shareholder D: Xxxx
Xxx
Signature:
PARTY B: Dalian Fusheng Consulting
Co., Ltd.
Legal
Representative: XXX Xxx Chi
Signature/Seal:
PARTY C: Dalian Xingyuan Marine
Bunker Co., Ltd.
Legal
Representative: An Fengbin
Signature/Seal:
Appendix
1
Form of Exercise
Notice
To:
[Dalian Dongfangzheng Development Co., Ltd., Xxxx Xx, Xxxx Xxxx, and Xxxx
Xxx]
Whereas
you, our company and Dalian Xingyuan Marine Bunker Co., Ltd. (“Party C”) entered
into a Purchase Option Agreement (the “Option Agreement”) dated March 26, 2009,
pursuant to which you shall, at the request of our company and to the extent
permitted under PRC laws and regulations, transfer the equity interests you hold
in Party C to our company or any third party designated by our
company.
Therefore,
now our company serves this notice on you as below:
Our
company hereby proposes to exercise the Purchase Option under the Purchase
Option Agreement and our company will be transferred [ ]%
of equity interests you hold in Party C (the “Transferred Shares”). Upon receipt
of this notice, please immediately transfer the Transferred Shares to our
company as agreed in the Purchase Option Agreement.
Best
regards,
Dalian
Fusheng Consulting Co., Ltd.
(Official
Seal)
Authorized
Representative:
Signature:
Date:
