AMENDED AND RESTATED PURCHASE OPTION AGREEMENT RECITALS
Exhibit
10.2
AMENDED
AND RESTATED PURCHASE OPTION AGREEMENT
RECITALS
This
Amended and Restated Purchase Option Agreement is entered into on May 12, 2006,
between and among between Sino Olympics Industrial Limited, a British Virgin
Islands corporation (“Optionor”), Diguang International Development Co. Ltd., a
Nevada corporation formerly known as Online Processing, Inc. (“Optionee”),
Shenzhen Diguang Electronics Co., Ltd., a PRC company (“Shenzhen Diguang”), and
Messrs. Song Yi and Song Hong (collectively the "Songs”), both residents of the
PRC. This agreement shall supercede the purchase option agreement entered on
April 21, 2006 by the same parties.
WHEREAS,
in connection with a share exchange between Optionee and Diguang International
Holdings, Ltd. and its shareholders, including Optionor, the Songs have each
entered into an employment agreement with Shenzhen Diguang that, among other
things, prohibits them from engaging in activities that are competitive with
the
business of Shenzhen Diguang; and
WHEREAS,
as a result of the share exchange, Optionee is the ultimate parent of Shenzhen
Diguang; and
WHEREAS,
Optionor, which is wholly owned by the Songs, currently owns a 32.5% equity
interest ("the Equity Interest") in North Diamond International Co., Ltd.
(“North Diamond”), a British Virgin Islands corporation, which has established a
wholly owned company in the PRC, that is about to begin the production of
backlight products, in exchange for a total contribution of $487,500 in
registered capital;
WHEREAS,
Optionor has the right to acquire an additional 32.5% interest in North Diamond
common stock from another stockholder at an exercise price of $1 per share,
which is equivalent to a total purchase price of $487,500 plus interest; and
WHEREAS,
the Songs and Optionor wish to grant to Optionee the Option (as defined in
Section 1 below) in connection with such Equity Interest and the additional
32.5% interest in North Diamond on the terms and conditions set forth
herein.
NOW,
THEREFORE, the parties, intending to be legally bound, agree as
follows:
AGREEMENT
1. Optionor
hereby grants to Optionee the option (the "Option") to purchase, on or before
May 12, 2007, all of the Equity Interest, including the option to acquire the
additional 32.5% ownership in North Diamond. Optionee may exercise the Option
after written authorization and approval is obtained from a majority of the
independent members of Optionee's board of directors. Optionor or the Songs
or
all of them shall provide those directors with such information regarding North
Diamond as the directors feel is necessary to make an informed decision on
whether to exercise the Option, subject to any confidentiality requirements
as
North Diamond may impose. The original written authorization and approval and
the original written and signed notice of Optionee's exercise of the Option
must
be delivered in person or sent by prepaid first-class certified mail, return
receipt requested, or recognized commercial courier service to the registered
address of Optionor ("Exercise Notice").
2. In
consideration for Optionor's granting of the Option to Optionee, Shenzhen
Diguang agrees to allow the Songs to devote such time and attention to the
business of North Diamond as they deem appropriate, subject to the oversight
of
the independent members of Optionee's board regarding their discharge of their
obligations to Optionee and Shenzhen Diguang. Such permission shall continue
only for as long as the Optionor is in full compliance with this
Agreement.
3.
The
purchase price (“Purchase Price”) for the Equity Interest and the additional
32.5% interest, shall be the amount paid by Optionor for the Equity Interest
and
$487,500, plus interest at the rate of 6% per annum which shall apply to both
the Equity Interest and the additional 32.5% interest, plus the assumption
of
any remaining obligation of Optionor to contribute registered capital to North
Diamond. The interest at the rate of 6% per annum shall commence on the date
of
payment made by Optionor towards its registered capital of North Diamond and
shall end on the date of the Exercise Notice. The Purchase Price shall be
payable to Optionor as follows. At the closing of the purchase and sale of
the
Equity Interest (“Closing”), Optionee shall pay the Purchase Price by wire
transfer of immediately available funds to Optionor. The Closing shall take
place at a location mutually agreed upon by Optionor and Optionee no later
than
thirty (30) days after Optionor's receipt of the Exercise Notice. Each party
shall be responsible for the costs of its own attorneys’ fees incurred in
connection with the Closing. All other costs of the purchase of the Equity
Interest hereunder shall be paid by Optionee. Upon receipt of the Purchase
Price, the Optionor shall transfer the Equity Interest free and clear of any
liens, charges, encumbrances or interests of any third party and shall execute
or cause to be executed any documents required to fully transfer the Equity
Interest. Notwithstanding any delays in the transfer of the Equity Interest
to
Optionee under the laws of the PRC or otherwise, but subject to applicable
laws
and regulations and provided that such transfer ultimately receives all required
approvals, Optionee shall, as of the Closing, be deemed the beneficial owner
of
the Equity Interest and shall have all right, title and interest to it that
are
permitted by all applicable laws and regulations, including, but not limited
to,
the right to receive Optionor’s pro rata share of profits from North Diamond.
4. Optionor
represents and warrants that as of the date of this Agreement: (a) its ownership
of the Equity Interest is in compliance with all applicable law; (b) is free
and
clear of all liens; (c) is fully transferable in the manner contemplated by
this
Agreement, both under applicable law and the terms of the relevant joint venture
agreement without the need for consent from any third party, but provided that
consent is obtained from the board of directors and shareholders of North
Diamond; (d) the foregoing representations and warranties will remain true
through the date of the Closing and, (e) it will inform Optionee that any of
the
foregoing representations or warranties is no longer true.
2
5. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. No party to this Agreement may assign the rights
under this Agreement without the prior written consent of all other parties,
which consent shall not unreasonably be withheld. Amendment(s) to this Agreement
shall be effective only if made in a writing signed by all parties.
6. Each
provision of this Agreement shall be considered severable, and if for any reason
any provision that is not essential to effectuate the basic purposes of the
Agreement is determined to be invalid and contrary to any existing or future
law, such invalidity shall not impair the operation of or affect those
provisions of this Agreement that are valid.
7. No
party shall have waived any rights under this Agreement unless the waiver is
in
writing and signed by the waiving party. The waiver by any party of any breach
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
8. This
Agreement shall be construed and enforced in accordance with the laws of the
State of California and the federal laws of the United States of America. Any
dispute or claim arising out of or in connection with this Agreement will be
finally settled by binding arbitration in Hong Kong in accordance with the
rules
of the Hong Kong International Arbitration Centre by one arbitrator appointed
in
accordance with said rules. The parties shall split the cost of the arbitration
filing and hearing fees and the cost of the arbitrator. The arbitrator will
award attorneys fees to the prevailing party. The arbitrator shall apply the
law
of the State of California, without reference to rules of conflicts of law
or
rules of statutory arbitration, to the resolution of any dispute. Judgement
on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may apply
to
any court of competent jurisdiction for preliminary or interim equitable relief,
or to compel arbitration in accordance with this paragraph, without breach
of
this arbitration provision.
9. This
Agreement shall terminate if (i) Optionee fails to exercise the Option pursuant
to this Agreement prior to May 12, 2007, or (ii)the Closing does not occur
within 30 days of receipt of the Exercise Notice as described in Section 3
above
if Optionor has taken all measures required of it to close and the failure
to
close results solely from the acts or failure to act of the
Optionee.
3
10. This
Agreement may be executed in counterparts by the parties, and it shall take
effect upon the mutual exchange of faxed signature pages of the Agreement from
each party to the other, which exchange will be followed by an exchange of
executed originals of the Agreement no later than five days after the date
of
this Agreement.
[Signature
Page Follows]
The
parties have executed and delivered this Agreement as of the date first written
above.
By:
/s/
Song
Xxxx
Xxxx
Hong,
Chief Operating Officer
Shenzhen
Diguang Electronics, Co., Ltd.
By:
/s/
Song
Xx
Xxxx
Yi,
Chief Executive Officer
Sino
Olympics Industrial Limited
By:
/s/
Song
Xx
Xxxx
Yi,
Chief Executive Officer
Song
Yi
/s/
Song
Xx
Xxxx
Hong
/s/
Song Hong
4
