OPTION EXERCISE AGREEMENT
Exhibit
10.1
OPTION EXERCISE AGREEMENT,
dated as of August 25, 2010, and effective as of July 1, 2010, between Advanced
Automation Group, LLC, a Delaware limited liability company (“Company”), Harbin
Electric, Inc., a Nevada corporation (“HRBN”), Xxxxxxx Technology, LLC, a
Michigan limited liability company (“Xxxxxxx”), and the persons listed on Schedule A (“Xxxxxxx
Personnel”).
Pursuant
to an letter agreement, dated April 9, 2007, between HRBN and Xxxxxxx, as
amended December 11, 2008, April 21, 2009, and December 7, 2009 (“Letter
Agreement”), HRBN has the right (“Option”) to require Xxxxxxx to contribute to
Company the Licensed Assets and the Customer Accounts, as defined in the Letter
Agreement (“the Contributed Assets”), in consideration for a limited liability
company interest entitling Xxxxxxx to a 49% share of Company’s profits, losses,
and distributions of its assets, in accordance with Company’s Limited Liability
Company Agreement in the form of Exhibit A.
The
parties accordingly agree as follows:
ARTICLE
I
EXERCISE
OF OPTION
1.1 Exercise. HRBN
hereby exercises the Option.
ARTICLE
II
CONTRIBUTION
BY XXXXXXX
2.1 Contribution. Xxxxxxx
hereby contributes to Company all right, title, and interest in and to all of
the Contributed Assets, free and clear of any adverse claim, covenant not to
compete or similar agreement, encumbrance, license right, lien, security
interest, transfer restriction, royalty or similar obligation, or other claim or
right of any third party (“Encumbrance”). Xxxxxxx, at its expense,
shall execute all such further documents and instruments, including assignments
of ownership or title or of any registered copyright, mask work right, patent,
trademark or service xxxx, or Internet domain name or application therefor
(“Registered IP”) included in the Contributed Assets, in form sufficient to
register same in Company’s name or the name of any Company designee, with the
United States Patent and Trademark Office or like authority of the United
States, any state, territory, or other jurisdiction of the United States, or any
foreign government, and take such further action, including payment of transfer
fees, as Company shall reasonably request from time to time to effectuate the
intentions hereof.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Xxxxxxx
and the Xxxxxxx Personnel hereby jointly and severally represent and warrant to
Company as follows:
1
3.1 Xxxxxxx’x Formation,
etc. Xxxxxxx is a limited liability company organized and in
good standing under the laws of Michigan. Xxxxxxx previously has
delivered to Company complete and accurate copies of its certificate of
formation and operating agreement, including all amendments, all of which are in
effect as of the date hereof.
3.2 Proper Proceedings,
etc. All limited liability action and other proceedings
required to be taken or conducted by or on behalf of Xxxxxxx or its members or
managers to authorize Xxxxxxx to enter and carry out this Agreement have been
duly taken or conducted, and this Agreement constitute a legal, valid and
binding obligation of Xxxxxxx and each of the Xxxxxxx Personnel, enforceable
against each in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally and to the extent that equitable
remedies, such as injunctive relief or specific performance are within the
discretion of courts of competent jurisdiction.
3.3 No
Conflict. The execution and delivery of this Agreement, and
the consummation of the transactions contemplated hereby will not conflict with,
or result in any violation of, or default or loss of a benefit under or permit
the acceleration of any obligation under Xxxxxxx’x organizational documents, any
contract, agreement, or commitment of Xxxxxxx, or any permit, concession, grant
franchise, license, judgment, order, decree, statute, law, ordinance, rule, or
regulation applicable to Xxxxxxx or to its properties, including any of the
Contributed Assets.
3.4 Government
Authorization. No consent, approval, order, or authorization
of or registration, declaration or filing with, any governmental or regulatory
authority is required in connection with the execution and delivery of this
Agreement or the consummation by Xxxxxxx or any of the Xxxxxxx Personnel of the
transactions contemplated hereby or thereby.
3.5 Xxxxxxx
Personnel. All of Xxxxxxx’x members and managers are
identified on Schedule
A, which accurately sets forth each member’s membership percentage and
each manager’s management position with Xxxxxxx. Each former Xxxxxxx
member or manager and each other technician, engineer, or other professional
currently or formerly employed by Xxxxxxx is identified on Schedule 3.5. Xxxxxxx has
previously delivered to Company complete and accurate copies, including all
amendments, of each confidentiality or intellectual property assignment
agreement signed by each such person in Xxxxxxx’x favor.
3.6 Contributed
Assets.
(a) Schedule 3.6(a) lists all of
the Contributed Assets. Company has at all times owned, and is
transferring good and marketable title to, each item of the Contributed Assets,
free and clear of any Encumbrance. The title, serial or registration
number, date of filing, expiration date, and relevant jurisdiction with respect
to each item of Registered IP is set forth on Schedule
3.6(a). Schedule 3.6(a) also
identifies each invention or unregistered mask work right or copyright included
in the Contributed Assets as to which Xxxxxxx is contemplating filing an
application for a patent or registration that has not been filed.
2
(b) Each
Person not listed on Schedule A
or Schedule 3.5
that developed in whole or part, alone or jointly with any other person,
or otherwise at any time had any ownership right, claim, or interest to or in,
any item of Contributed Asset is identified on Schedule 3.6(b), together with
each agreement between such person and Xxxxxxx with respect to such Contributed
Asset. Xxxxxxx has previously delivered to Company complete and
accurate copies, including all amendments, of each such agreement.
(c) None
of the Contributed Assets has violated, infringed, or misappropriated or is now
violating, infringing, or misappropriating any copyright, logo, mask work right,
patent, trademark, service xxxx, trade secret, or other proprietary right
belonging to any other person, and no person has made any assertion inconsistent
with the foregoing. To the knowledge of the Xxxxxxx Personnel, no
person has violated, infringed, or misappropriated or is now violating,
infringing, or misappropriating any Contributed Asset or threatened to do
so. None of the Contributed Assets is, or on account of the
transactions contemplated hereby would become, subject to any contractual
restriction on any use or disclosure thereof.
(d) None
of Xxxxxxx’x confidential information included in the Contributed Assets has
been used, divulged or appropriated for the benefit of any person, other than
Xxxxxxx or Company or to the detriment of Company. Xxxxxxx has taken
reasonable security measures to protect the secrecy, confidentiality, and value
of its confidential information.
ARTICLE
IV
INDEMNIFICATION
4.1 Xxxxxxx
and the Xxxxxxx Personnel (“Indemnitors”), jointly and severally, shall
indemnify Company and its affiliates and representatives (“Indemnitees”) from
and hold Indemnitees harmless with respect to any claim, cost, damage, expense,
liability, or loss, including attorneys’ fees and other legal costs or expenses,
arising out of any breach by any Indemnitor of any representation, warranty,
agreement, or covenant made by it or him or herein. Indemnitees shall give
prompt notice to Indemnitors of any claim or condition to which the foregoing
indemnification covenant relates. At their election, Indemnitors may
control the defense of such claim, at their expense, and Indemnitees will not
settle any such claim without the consent of Indemnitors.
ARTICLE
V
5.1 Entire
Agreement. This Agreement sets forth the entire agreement of
the parties with respect to the subject matter hereof. No provision
of this Agreement may be explained or qualified by any prior or contemporaneous
understanding, negotiation, discussion, conduct, or course of conduct, and,
except as otherwise expressly stated herein, there is no condition precedent to
the effectiveness of any provision hereof. No party has relied on any
representation, warranty, or agreement of any person in entering this Agreement,
except those expressly stated herein.
3
5.2 Counterparts; Facsimile
Signatures. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which shall constitute
one agreement. This Agreement shall become effective upon delivery to
each party of an executed counterpart or the earlier delivery to each party of
original or signature pages transmitted electronically that together (but need
not individually) bear the signatures of all other parties.
5.3 Notices. Any
notice hereunder shall be sent in writing, addressed as specified below, and
shall be deemed given: if by hand or recognized courier service, by
4:00PM on a business day, addressee’s day and time, on the date of delivery, and
otherwise on the first business day after such delivery; if by telecopier, on
the date that transmission is confirmed electronically, if by 4:00PM on a
business day, addressee’s day and time, and otherwise on the first business day
after the date of such confirmation; or five days after mailing by certified or
registered mail, return receipt requested. Notices shall be addressed
to the respective parties as follows (excluding telephone numbers, which are for
convenience only), or to such other address as a party shall specify to the
others in accordance with these notice provisions (telephone numbers are for
convenience only):
To
AEM,
ATTN:
Xxxxxx Xxxx
No. 9 Ha
Ping Xx Xx, Xxxxxx Xxx Xx Xx, Xxxxxx, Xxxxx 000000
Telecopier: 00-0000-0000-0000
Telephone:
00-0000-0000-0000
To
Xxxxxxx
ATTN:
Xxxxx Xxxx
0000 X.
Xxxxxx Xxxx, Xxxxxxxxx Xxxxx, XX 00000
Telecopier:
000-000-0000
Telephone:
000-000-0000
5.4 Amendments; Waivers;
Remedies.
(a) This
Agreement cannot be amended, except by writing signed by Company, Xxxxxxx, and a
majority of the Xxxxxxx Personnel, or terminated orally or by course of
conduct. No provision hereof can be waived, except by a writing
signed by the party against whom such waiver is to be enforced, and any such
waiver shall apply only in the particular instance in which such waiver shall
have been given.
4
(b) Neither
any failure or delay in exercising any right or remedy hereunder or in requiring
satisfaction of any condition herein nor any course of dealing shall constitute
a waiver of or prevent any party from enforcing any right or remedy or from
requiring satisfaction of any condition. No notice to or demand on a
party waives or otherwise affects any obligation of that party or impairs any
right of the party giving such notice or making such demand, including any right
to take any action without notice or demand not otherwise required by this
Agreement. No exercise of any right or remedy with respect to a
breach of this Agreement shall preclude exercise of any other right or remedy,
as appropriate to make the aggrieved party whole with respect to such breach, or
subsequent exercise of any right or remedy with respect to any other
breach.
(c) Except
as otherwise expressly provided herein, no statement herein of any right or
remedy shall impair any other right or remedy stated herein or that otherwise
may be available.
5.5 Governing
Law. This Agreement shall be governed by and construed,
interpreted, and enforced in accordance with the laws of the State of Delaware,
without regard to choice or conflict of laws principles that would result in the
application of the substantive laws of any other jurisdiction.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
5
IN
WITNESS WHEREOF, the Members have executed this Agreement, effective as of the
date first written above.
|
|
|
||
| Xxxxx Xxxx (fka: Xxxxx Xxx) | |||
|
|
|
||
| Xxxxxxxx Xxxx | |||
|
ADVANCED
ELECTRIC MOTORS, INC.
|
|||
|
|
By:
|
Xxxxxx Xxxx | |
| Title: Chairman of the Board | |||
| XXXXXXX TECHNOLOGY LLC | |||
|
|
By:
|
Xxxxx Xxxx (fka: Xxxxx Xxx) | |
| Title: Managing Director | |||
6
SCHEDULE
A
Names,
Addresses, and Percentages of the Members
With
Xxxxxxx Technology LLC
As
of July 1, 2010
|
Name,
Address, Telecopier
Number and Telephone
Number
|
Percentage
|
|
Xxxxx
Xxxx (fka: Xxxxx Xxx)
0000
X. Xxxxxx Xxxx
Xxxxxxxxx
Xxxxx, XX 00000
Telecopier:
000-000-0000
Telephone:
000-000-0000
|
100%
|
7
SCHEDULE
3.5
Former
Xxxxxxx Member or Manager and Technician, Engineer, or Other Professional
Currently or Formerly Employed by Xxxxxxx
As
of July 1, 2010
Xxxxx
Xxxx (fka: Xxxxx Xxx)
0000 X.
Xxxxxx Xxxx
Xxxxxxxxx
Xxxxx, XX 00000
Telecopier:
000-000-0000
Telephone:
000-000-0000
8
