EXCLUSIVE OPTION AGREEMENT BETWEEN GUANGZHOU FLOURISHING BLESSING HENG SENG AGRICULTURAL TECHNOLOGY LIMITED AND CHEN ZHISHENG Foshan Nanhai Ke Da Heng Sheng Aquatic Co., Ltd. December 2009 GUANGZHOU, CHINA
BETWEEN
GUANGZHOU
FLOURISHING BLESSING XXXX XXXX
AGRICULTURAL
TECHNOLOGY LIMITED
AND
XXXX
XXXXXXXX
Foshan
Nanhai Xx Xx Xxxx Sheng Aquatic Co., Ltd.
December
2009
GUANGZHOU,
CHINA
This
Exclusive Option Agreement (the “Agreement”) is entered into as
of 26 December 2009 between the following Parties in Guangzhou.
Party A: Guangzhou Flourishing
Blessing Xxxx Xxxx Agricultural Technology Limited
Registered
Address: 17 of 301, Xx. 000, Xxxxxxxx Xxxx, Xxxxxxxx and Technology Development
District, Guangzhou City, Guangdong Province, China
Legal
Representative: Xxx Xxxx
Party B: XXXX
Xxxxxxxx
A citizen
of PRC, Identity Card Number: 440622196305103634
Party
C: Foshan Nanhai Xx Xx Xxxx Sheng Aquatic
Co., Ltd.
Registered
Address: East of Xxxx Xxxx, Wan Xxxx Xxxx, Heshun Town, Nanhai District, Foshan
City, Guangdong Province, China
Legal
Representative: XXXX Xxxxxxxx
In this
Agreement, Party A, Party B, Party C are called collectively as the “Parties”
and each of them is called as the “Party”.
WHEREAS:
1. Party
A is a wholly foreign-owned enterprise incorporated under the laws of the
People’s Republic of China (the “PRC”);
2. Party
C is a limited liability company and with business license issued by the Foshan
Administration for Industry and Commerce;
3. As
of the date of this Agreement Party B is the sole shareholder of Foshan Nanhai
Xx Xx Xxxx Sheng Aquatic Co., Ltd. (hereinafter referred to as “Opco”) and legally holds all
of the shares interest of Opco.
NOW,
THEREFORE, the Parties through mutual negotiations hereby enter into this
Agreement according to the following terms and conditions:
1
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1.
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THE
GRANT AND EXERCISE OF PURCHASE
OPTION
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1.1
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Grant:
Party B hereby grants Party A an irrevocable exclusive purchase option to
purchase all or part of the shares of Opco, currently owned by any of
Party B; Opco further hereby grants Party A an irrevocable exclusive
purchase option to purchase all or part of the assets and business of
Opco, in each case in accordance with Article 1.3 of this Agreement (the
“Option”). The
aforesaid purchase options are irrevocable and shall be exercised only by
Party A (or the qualified persons appointed by Party A). The term “person”
used herein shall include any entity, corporation, partnership, joint
venture and non-corporate
organizations.
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1.2
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Exercise
Procedures:
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1.2.1 Party
A shall notify Party B in writing prior to exercising its option (the “Option Notice”
hereinafter).
1.2.2 The
next day upon receipt of the Option Notice, Party B and Opco, together with
party A (or the qualified person appointed by Party A), shall promptly compile a
whole set of documents (the “Transfer Documents”) to be
submitted to the government bodies for approving the shares or assets and
business transfer in connection with the Option exercise so that the shares or
assets and business transfer can be transferred, in whole or in
part.
1.2.3 Upon
the completion of the compilation of all the Transfer Documents and the Transfer
Documents being confirmed by Party A, Party B and Opco shall promptly and
unconditionally obtain, together with Party A (or the qualified person appointed
by Party A), all approvals, permissions, registrations, documents and other
necessary approvals to effectuate the transfer of the shares and remaining
assets and business of Opco in connection with the Option exercise.
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1.3
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Exercise
Condition: Party A may immediately exercise the option of acquiring the
shares or remaining assets and business of Opco whenever Party A considers
it necessary to acquire Opco and it is doable in accordance with PRC laws
and regulations.
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2.
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PRICE
OF ACQUISITION
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2.1
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Party
A and Party B shall enter into relevant agreements regarding the price of
acquisition based on the circumstances of the exercise of option, and the
consideration shall be refunded to Party A or Opco at no consideration in
an appropriate manner decided by Party
A.
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2.2
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Party
A has the discretion to decide the time and arrangement of the
acquisition, provided that the acquisition will not violate any PRC laws
or regulations then in
effect.
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2
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3.
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REPRESENTATIONS
AND WARRANTIES
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3.1
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Each
party hereto represents to the other Parties that: (1) it has all the
necessary rights, powers and authorizations to enter into this Agreement
and perform its duties and obligations hereunder; (2) Party B warrant,
represent and guarantee that this Agreement, the Restructuring Exercise or
the Listing shall be in compliance with any and all applicable PRC laws
and shall indemnify, defend and hold harmless Party A and Opco for all
fines, penalties, damages or claims sustained by Party A or Opco arising
out of Party B’s violation of this section; and (3) the execution or
performance of this Agreement shall not violate any contract or agreement
to which it is a party or by which it or its assets are
bounded.
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3.2
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Party
B and Opco hereto represent to Party A that: With respect to the shares
interest held by Party B in Opco, (1) Party B are legally registered
shareholders of Opco and have paid Opco the full amount of their
respective portions of Opco's registered capital required under the PRC
laws; (2) except Pledge of Shares Agreement, signed by and between Party B
and Party A on 26 December 2009 in Guangzhou, none of Party B, has
mortgaged or pledged his shares of Opco, nor has either of them granted
any security interest or borrow against his shares of Opco in any form;
and (3) none of Party B has sold or will sell to any third party its
shares in Opco.
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With
respect to the assets of Opco which may be transferred to Party A at Party A’s
option hereunder, (1) Opco owns all such assets and has not mortgaged or pledged
or otherwise encumber such assets; and (2) Opco has not sold or will sell to any
third party such assets.
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3.3
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Opco
hereto represents to Party A that: (1) it is a limited liability company
duly registered and validly existing under the PRC law; and (2) its
business operations are in compliance with applicable laws of the PRC in
all material aspects.
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4.
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COVENANTS
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The
Parties further agree as follows:
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4.1
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Before
Party A has acquired all the shares/assets and business of Opco by
exercising the purchase option provided hereunder, Opco shall
not:
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4.1.1 sell,
assign, mortgage or otherwise dispose of, or create any encumbrance on, any of
its assets, operations or any legal or beneficiary interests with respect to its
revenues (unless such sale, assignment, mortgage, disposal or encumbrance is
relating to its daily operation or has been disclosed to and agreed upon by
Party A in writing);
3
4.1.2 enter
into any transaction which may materially affect its assets, liability,
operation, shareholders’ shares or other legal rights (unless such transaction
is relating to its daily operation or has been disclosed to and agreed upon by
Party A in writing); and
4.1.3 distribute
any dividend to its shareholders in any manner.
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4.2
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Before
Party A has acquired all the shares/assets/business of Opco by exercising
the purchase option provided hereunder, Party B and Party C shall
not:
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4.2.1 sell,
assign, mortgage or otherwise dispose of, or create any encumbrance on, any of
the shares held by them in Opco, except for the pledge of such shares made
according to the Shares Pledge Agreement, signed by and between Party B and
Party A on 26 December 2009 in Guangzhou.
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4.3
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Before
Party A has acquired all the shares/assets/business of Opco by exercising
the purchase option provided hereunder, Party B and/or Opco shall not
individually or collectively:
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4.3.1 supplement,
alter or amend the articles of association of Opco in any manner to the extent
that such supplement, alteration or amendment may have a material effect on
Opco's assets, liability, operation, shareholders’ shares or other legal
rights;
4.3.2 cause
Opco to enter into any transaction to the extent such transaction may have a
material effect on Opco's assets, liability, operation, shareholders’ shares or
other legal rights (unless such transaction is relating to Opco's daily
operation or has been disclosed to and agreed upon by Party A in writing);
and
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4.4
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Party
B shall entrust Party A to manage Opco in accordance with Entrusted
Management Agreement, signed by and between Party B, Opco and Party A on
26 December 2009 in
Guangzhou.
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4.5
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Non
Competition:
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When
Party A exercises the Option, each of Party B and Opco irrevocably and
unconditionally agree and undertake to Party A that it will not without the
prior written consent of Party A:-
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a. be
directly or indirectly engaged or concerned (whether as an employee, agent,
independent contractor, consultant, advisor or otherwise) in the conduct of any
business competing with Party A’s Business (the “Business”);
b. carry
on for his/its own account either alone or in partnership or be concerned as a
director or shareholder in any company engaged in any business competing with
the Business;
c. assist
any person, firm or company with technical advice or assistance in relation to
any business competing with the Business;
d. solicit
or entice away or attempt to solicit or entice away the custom of any person,
firm, company or organization who shall at any time have been a customer,
client, distributor or agent of Party A or in the habit of dealing with Party
A;
e. solicit
or entice away or attempt to solicit or entice away from Party A any person who
is an officer, manager or employee of Party A whether or not such person would
commit a breach of his contract of employment by reason of leaving Party
A;
f. in
relation to any trade, business or company, use any name in such a way as to be
capable of or likely to be confused with the name of Party A and shall use all
reasonable endeavors to procure that no such name shall be used by any other
person, firm or company;
g.
otherwise be interested, directly or indirectly, in any business competing with
the Business.
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5.
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ASSIGNMENT
OF AGREEMENT
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5.1
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Party
B and Opco shall not transfer their rights and obligations under this
Agreement to any third party without the prior written consent of Party
A.
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5.2
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Each
of Party B and Opco hereby agrees that Party A shall have the right to
transfer all of its rights and obligation under this Agreement to any
third party whenever it desires. Any such transfer shall only be subject
to a written notice sent to Party B and Opco by Party A, and no any
further consent from Party B and Opco will be
required.
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5
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6.
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CONFIDENTIALITY
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The
Parties acknowledge and confirm that any oral or written materials exchanged by
the Parties in connection with this Agreement are confidential. The Parties
shall maintain the secrecy and confidentiality of all such materials. Without
the written approval by the other Parties, any Party shall not disclose to any
third party any relevant materials, but the following circumstances shall be
excluded:
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6.1
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The
materials is known or will be known by the public (except for any
materials disclosed to the public by the Party who receives such
materials);
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6.2
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The
materials are required to be disclosed under the applicable laws or the
rules or provisions of stock exchange;
or
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6.3
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The
materials disclosed by each Party to its legal or financial consultant
relate to the transaction contemplated under this Agreement, and such
legal or financial consultant shall comply with the confidentiality set
forth in this Section. The disclosure of the confidential materials by an
employee of any Party shall be deemed disclosure of such materials by such
Party, and such Party shall be liable for breaching the contract. This
Article 6 shall survive this Agreement even if this Agreement is invalid,
amended, revoked, terminated or unenforceable by any
reason.
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7.
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BREACH
OF CONTRACT
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Any
violation of any provision hereof, any incomplete or mistaken performance of any
obligation provided hereunder, any misrepresentation made hereunder, any
material nondisclosure or omission of any material fact, or any failure to
perform any covenants provided hereunder by any Party shall constitute a breach
of this Agreement. The breaching Party shall be liable for any such breach
pursuant to the applicable laws.
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8.
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APPLICABLE
LAW AND DISPUTE RESOLUTION
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8.1
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Applicable
Law
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The
execution, validity, interpretation and performance of this Agreement and the
disputes resolution under this Agreement shall be governed by the laws of
PRC.
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8.2
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Dispute
Resolution
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The
Parties shall strive to settle any dispute arising from the interpretation or
performance of this Agreement through friendly consultation. In case no
settlement can be reached through consultation within thirty (30) days after
such dispute is raised, each party can submit such matter to China International
Economic and Trade Arbitration Commission (the “CIETAC”) in Beijing in
accordance with its rules. The arbitration shall take place in Beijing. The
arbitration award shall be final, conclusive and binding upon both
Parties.
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9.
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EFFECTIVENESS
AND TERMINATION
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9.1
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This
Agreement shall be effective upon the execution hereof by all Parties
hereto and shall remain effective
thereafter.
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9.2
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This
Agreement may not be terminated without the unanimous consent of all the
Parties except that Party A may, by giving thirty days prior notice to the
other Parties hereto, terminate this
Agreement.
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10.
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MISCELLANEOUS
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10.1
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Amendment,
Modification and Supplement
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Any
amendment and supplement to this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed an integral part of this Agreement and shall have the same legal effect
as this Agreement.
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10.2
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Entire
Agreement
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The
Parties acknowledge that this Agreement constitutes the entire agreement of the
Parties with respect to the subject matters therein and supersedes and replaces
all prior or contemporaneous agreements and understandings in oral or written
form.
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10.3
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Severability
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If any
provision of this Agreement is adjudicated to be invalid or non-enforceable
according to relevant PRC laws of the PRC, such a provision shall be deemed
invalid only to the extent the PRC laws are applicable in China, and the
validity, legality and enforceability of the other provisions hereof shall not
be affected or impaired in any way. The Parties shall, through consultation
based on the principal of fairness, replace such invalid, illegal or
non-enforceable provision with valid provision so that any substituted provision
may bring the similar economic effects as those intended by the invalid, illegal
or non-enforceable provision.
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10.4
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Headings
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The
headings contained in this Agreement are for the convenience of reference only
and shall not in any other way affect the interpretation, explanation or the
meaning of the provisions of this Agreement.
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10.5
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Language
and Copies
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This
Agreement is written in Chinese and English and both the English version and
Chinese version shall have the same effect. This Agreement is executed in 3
copies for each version; each Party holds one and each original copy has the
same legal effect.
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10.6
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Successor
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This
Agreement shall bind and benefit the successor or the transferee of each
Party.
(The page
is intentionally left blank)
8
IN
WITNESS HEREOF, the Parties hereof have caused this Agreement to be executed by
their duly authorized representatives as of the date first written
above.
PARTY
A: Guangzhou Flourishing Blessing Xxxx Xxxx Agricultural Technology
Limited
(seal)
Legal
Representative/Authorized Representative (Signature):
PARTY
B: XXXX Xxxxxxxx
Signature:
PARTY
C: Foshan Nanhai Xx Xx Xxxx Sheng Aquatic Co., Ltd.
(seal)
Legal
Representative/Authorized Representative (Signature):
9
