EARN-IN AGREEMENT
Exhibit
10.5
This
EARN-IN AGREEMENT (the “Agreement”)
is made as of Oct 22, 2009 (the “Effective
Date”), between and among (i) Xxxxx Xxxx Yan, a Hong Kong individual (the
“Seller”);
and (ii) the signatories to this Agreement indicated as “Buyers,”[Tang Xxx Xxxx, Jiang You Ru, Liu Xxxx Xxx, Xxx Xxx De,
Xxxx Bang Fu, Xxxx Xxxx An, Zhang Xxxx Xxx, Xxxx Xxxx Xxxx, Xxxx Xxxx Gang,
Jiang Qi Feng, He Xxx Xxxx, Xxx Xxxx Xxxx, Jia Xxx Xxx, Tan Xx Xxxx, Xx Xxxx
Hua, Ye Xxxx Xxxx] each an individual citizen of the People’s Republic of
China (collectively, the “Buyers”)
(each of the foregoing, a “Party” and
together, the “Parties”).
Capitalized terms not otherwise defined have the meanings assigned to them in
Appendix A to
this Agreement.
RECITALS
A.
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The
Seller is the sole shareholder of Ingenious Paragon Global Limited, a
company organized and existing under the laws of British Virgin Islands
(“Holdco”).
Holdco in turn is the sole equity holder of Forever Well Asia Pacific
Limited, a company organized and existing under the laws of Hong Kong.
Forever Well Asia Pacific Limited is the sole equity holder of Guangxi
Liuzhou Baicaotang Medicine Co. Ltd, a wholly foreign-owned company
existing under the laws of the People’s Republic of China (the “Operating
Company”). The Buyers are the former equity holders of the
Operating Company.
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B.
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After
the date of this Agreement, the Seller intends to enter into a share
exchange agreement (the “Exchange
Agreement”) with a United States-domiciled public reporting shell
company whose securities are quoted on the over-the-counter bulletin board
(the “Shell
Company”). Upon consummation of the transactions
contemplated by the Exchange Agreement (the “Exchange
Transaction”), the Shell Company will, in exchange for the issuance
of shares of the common stock of the Shell Company, acquire 100% of the
issued and outstanding capital stock of Holdco, and, indirectly, sole
ownership of the Operating Company. The Call Right described in this
Agreement will relate to shares of the capital stock of Holdco until such
time as those shares are exchanged for shares of the Shell Company, and
thereafter pari
passu to the shares of the Shell Company held by the
Seller.
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NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficient of which is acknowledged by the Parties, the Parties agree as
follows:
AGREEMENT
The
Parties to this Agreement, intending to be bound thereby, in consideration for
the mutual promises and covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
the Parties, agree as follows.
ARTICLE
I
CALL
RIGHT
1.1
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Call
Right. The Buyers will have, during the Exercise
Period, and according to the following schedule, the right and option to
purchase from the Seller, and upon the exercise of such right and option
the Seller will have the obligation to sell to the Buyers, a portion of
the Seller’s Shares identified in the Call Exercise Notice (the “Call
Right”). Any Shares not purchased at a point in the
following schedule may be purchased at any later point in the schedule.
“Seller’s
Shares” means those shares of the capital stock of the Holdco or,
upon and after the Exchange Transaction, those exchanged shares of the
Shell Company held by the Seller totaled at 22,480,000 shares of the Shell
Company’s issued and outstanding common shares, as the case may be at the
time when the Buyer exercises the Call
Right.
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(a)
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At
any time after a date which the $20M 2009 after tax net incomeis achieved
and a satisfactory audit report is issued of the result according to US
GAAP for the 2009 , but before the Expiration Date (as defined below),
each Buyer may exercise a Call Right to his or her Proportionate Share (as
defined below) of 50% of the make-good shares of the Seller’s
Shares.
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1
(b)
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At
any time after a date which the $26M 2010 make-good is achieved and a
satisfactory audit report is issued according to US GAAP for the 2010
after tax net income guaranteed to the investors in an equity financing
(the “Equity
Financing”), but before the Expiration Date (as defined below),
each Buyer may exercise a Call Right to his or her Proportionate Share (as
defined below) of 50% of the make-good shares of the Seller’s
Shares.
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As used
in this Agreement, “Proportionate
Share” means the percentage set forth next to a Buyer’s name on Exhibit C
to this Agreement.
1.2
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Call
Period. The Call Right will be exercisable by the Buyer
by delivering a Call Exercise Notice at any time during the period (the
“Exercise
Period”) commencing on the earliest date on which a Call Right may
be exercised pursuant to Section 1.1 (the “Initial
Call Date”) and ending at 6:30 p.m. (New York time) on the fifth
anniversary of the Initial Call Date (such date or the earlier expiration
of the Call Right is referred to herein as the “Expiration
Date”).
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1.3
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Exercise
Process. In order to exercise the Call Right
during the Exercise Period, the Buyer must deliver to the Seller a written
notice of such exercise substantially in the form attached hereto as Exhibit B (a
“Call
Exercise Notice”) to such address or facsimile number set forth
therein. The Call Exercise Notice will indicate the number of the Seller’s
Shares as to which the Buyer is then exercising its Call Right and the
aggregate Call Price. Provided the Call Exercise Notice is delivered in
accordance with Section
5.2 to the
Seller on or prior to 6:30 p.m. (New York time) on a Business Day, the
date of exercise (the “Exercise
Date”) of the Call Right will be the date of such delivery of such
Call Exercise Notice. In the event the Call Exercise Notice is delivered
after 6:30 p.m. (New York time) on any day or on a date which is not a
Business Day, the Exercise Date will be deemed to be the first Business
Day after the date of such delivery of such Call Exercise Notice. The
delivery of a Call Exercise Notice in accordance herewith will constitute
a binding obligation (a) on the part of the Buyer to purchase and (b) on
the part of the Seller to sell, the Seller’s Shares subject to such Call
Exercise Notice in accordance with the terms of this
Agreement.
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1.4
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Call
Price.
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(a)
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With
respect to any exercise of the Call Right, the per-share “Call
Price” will be equal to Three Hundred Thousand United State Dollars
(US$300,000) (the “Aggregate
Call Price”), divided by
22,480,000
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(b)
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The
Buyers will pre-pay the aggregate Call Price to the Seller, in the amount
of Three Hundred Thousand United States Dollars, by wire transfer of
immediately available funds or by another method notified in writing by
the Seller to the Buyers before such payment is made, concurrently with
the investment by the investors in the Equity
Financing.
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(c)
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Within
thirty (30) days after the Expiration Date, or upon written termination
and release by any Buyer of any unexercised Call Rights held by such
Buyer, Seller will refund to such Buyer the amount of the aggregate Call
Price corresponding to the Seller’s Shares as to which there is no longer
a Call Right, without interest.
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1.5
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ARTICLE
II
ENCUMBRANCES;
TRANSFERS, SET-OFF; ESCROW
2.1
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Encumbrances. Upon
exercise of the Call Right, the Seller’s Shares being purchased will be
sold, transferred and delivered to the Buyer free and clear of any claim,
pledge, charge, lien, preemptive rights, restrictions on transfers (except
as required by securities laws of the United States), proxies, voting
agreements and/or any other
Encumbrance.
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2
2.2
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Lock-up;
Transfers. Prior to the Expiration Date, the
Seller will not transfer to any other Person and will continue to own,
free and clear of any Encumbrance, except (a) as may be required by the
Exchange Agreement; and/or (b) as may be required in order to give effect
to the provisions of Section 2.5, such amount of the Seller’s Shares as
may be required from time to time to in order for the Buyer to exercise
its Call Right in full.
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2.3
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Legend. The
Seller will cause a notification to be made in the share register of
Holdco, and, upon and after the Exchange Transaction, will cause to be
placed on any share certificate representing any of the Seller’s Shares,
language in substantially the form as
follows:
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“THE
SHARES REGISTERED IN THE NAME OF [ • ] OR REPRESENTED BY THIS CERTIFICATE, AS
THE CASE MAY BE, ARE SUBJECT TO A CALL RIGHT WHICH PROHIBITS THEIR TRANSFER TO
ANY PERSON OTHER THAN THE HOLDER OF THAT RIGHT PRIOR TO THE EXERCISE OF THE
RIGHT OR ITS EXPIRATION. ANY PERSON ACCEPTING ANY INTEREST IN THE SHARES SHALL
BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF THE
EARN-IN AGREEMENT IN WHICH THAT CALL RIGHT IS SET FORTH, AND THE SHARES WILL
REMAIN SUBJECT TO THE CALL RIGHT AS PROVIDED THEREIN. A COPY OF THE EARN-IN
AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS.”
2.4
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Set-off. The
Buyer will be absolutely entitled to receive all the Seller’s Shares
subject to the exercise of a Call Right, and for the purposes of this
Agreement, the Seller hereby waives, as against the Buyer, all rights of
set-off or counterclaim that would or might otherwise be available to the
Seller.
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2.5
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Escrow
of the Seller’s Shares
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(a)
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Upon
the Exchange Transaction, the Seller will deliver to Xxxxxx & Xxxxxx,
LLP, as collateral agent (the “Collateral
Agent”), certificates representing the Seller’s Shares. The
certificates representing the Seller’s Shares (together with duly executed
stock powers in blank) will be held by the Collateral
Agent.
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(b)
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Upon
receipt of a Call Exercise Notice, the Collateral Agent will promptly
deliver the Seller’s Shares being purchased pursuant to such Call Exercise
Notice in accordance with the instructions set forth therein and in
accordance with any other lock-up, make-good or similar agreement in place
between the Buyer or the Seller and other third party. In the event that
the Collateral Agent receives notice from the Parties that the Conditions
have not been met, the Seller’s Shares will be distributed in accordance
with their instructions.
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(c)
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After
the delivery of the documents mentioned in the above paragraph (a),
neither party may wholly or partially terminate the escrow relationship
with the Collateral Agent or wholly or partially modify the terms and
conditions agreed for the escrow of the Seller’s Shares at any time before
the 35th day subsequent to the
Expiration Date, except that the Buyers effectively enforced the Call
Right.
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ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1
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Representations
and Warranties of the Seller. The Seller
represents and warrants to the Buyer,
that:
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3
(a)
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Due
Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereunder
to be carried out by it have been duly authorized by all necessary action
on the part of the Seller. This Agreement, and all agreements and
documents executed and delivered pursuant to this Agreement, constitute
valid and binding obligations of the Seller, enforceable against the
Seller in accordance with its terms, subject to applicable Bankruptcy Laws
and other laws or equitable principles of general application affecting
the rights of creditors generally.
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(b)
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No
Conflicts. Neither the execution or delivery of
this Agreement by the Seller nor the fulfillment or compliance by the
Seller with any of the terms hereof will, with or without the giving of
notice and/or the passage of time, (i) conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, (A) the organizational or charter documents of the Seller or (B)
any contract or any judgment, decree or order to which the Seller is
subject or by which the Seller is bound, or (ii) require any consent,
license, permit, authorization, approval or other action by any Person or
Governmental Body which has not yet been obtained or received. The
execution, delivery and performance of this Agreement by the Seller or
compliance with the provisions hereof by the Seller does not, and will
not, violate any provision of any Law to which the Seller is subject or by
which it is bound.
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(c)
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No
Actions. There are no lawsuits, actions or, to the
best knowledge of the Seller, investigations, claims or demands or other
proceedings pending or, to the best of the knowledge of the Seller,
threatened against the Seller that, if resolved in a manner adverse to the
Seller, would adversely affect the right or ability of the Seller to carry
out its obligations set forth in this
Agreement.
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(d)
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Title. The
Seller owns the Seller’s Shares free and clear of any Encumbrance
whatsoever, except as contemplated by this Agreement. The Seller has not
entered into nor is a party to any agreement that would cause the Seller
to not own the Seller’s Shares free and clear of any Encumbrance, except
as contemplated by this Agreement.
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3.2
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Representations
and Warranties of the Buyers. Each Buyer
represents and warrants to the Seller, as to him/herself and not as to any
other Buyer, that:
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(a)
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Due
Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereunder
to be carried out by it have been duly authorized by all necessary action
on the part of the Buyer. This Agreement, and all agreements and documents
executed and delivered pursuant to this Agreement, constitute valid and
binding obligations of the Buyer, enforceable against the Buyer in
accordance with its terms, subject to applicable Bankruptcy Laws and other
laws or equitable principles of general application affecting the rights
of creditors generally.
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(b)
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No
Conflicts. Neither the execution or delivery of this
Agreement by the Buyer nor the fulfillment or compliance by the Buyer with
any of the terms hereof will, with or without the giving of notice and/or
the passage of time, (i) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, (A) the
organizational or charter documents of the Buyer or (B) any contract or
any judgment, decree or order to which the Buyer is subject or by which
the Buyer is bound, or (ii) require any consent, license, permit,
authorization, approval or other action by any Person or Governmental Body
which has not yet been obtained or received. The execution, delivery and
performance of this Agreement by the Buyer or compliance with the
provisions hereof by the Buyer does not, and will not, violate any
provision of any Law to which the Buyer is subject or by which it is
bound.
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(c)
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No
Actions. There are no lawsuits, actions or, to the best
knowledge of the Buyer, investigations, claims or demands or other
proceedings pending or, to the best knowledge of the Buyer, threatened
against the Buyer that, if resolved in a manner adverse to the Buyer,
would adversely affect the right or ability of the Buyer to carry out its
obligations set forth in this
Agreement.
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4
ARTICLE
IV
EVENTS
OF DEFAULT AND TERMINATION
4.1
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Events of
Default. The occurrence at any time with respect to a Party (the
“Defaulting
Party”) of any of the following events will constitute an event of
default (an “Event of
Default”) with respect to such
party:
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(a)
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Failure to Pay or
Deliver. The failure by a Party to make, when due, any
payment under this Agreement or deliver the Seller’s Shares in accordance
with this Agreement, if such failure is not remedied on or before the
third Business Day after notice of such failure is given to the Defaulting
Party.
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(b)
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Breach of
Agreement. The failure by a Party to comply with or
perform any agreement, covenant or obligation (other than a failure
described in Section
4.1(a), which
will be governed by Section
4.1(a)) to be
complied with or performed by such Party in accordance with this Agreement
if such failure is not remedied on or before the tenth Business Day after
notice of such failure is given to the Defaulting
Party.
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(c)
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Bankruptcy. A
Party (1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay its
debts or fails or admits in writing its inability generally to pay its
debts as they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes or
has instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any relief under any Bankruptcy Law, or a petition is
presented for its winding-up or liquidation, and in the case of any such
proceeding or petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or bankruptcy or the
entry of an order for relief or the making of an order for its winding-up
or liquidation or (B) is not dismissed, discharged, stayed or restrained
in each case within 30 days of the institution or presentation thereof;
(5) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or substantially all
of its assets; (7) has a secured party take possession of all or
substantially all of its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or
against all or substantially all of its assets and such secured party
maintains possession, or any such process is not dismissed, discharged,
stayed or rescinded, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it that, under applicable Law, has
an analogous effect to any of the events described in clauses (1) through
(7); or (9) takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the foregoing
acts.
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4.2
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Liquidated
Damages. If
at any time an Event of Default with respect to a Party has occurred and
is continuing, the other party may claim a liquidated damage up to [·]% of
the Call Price. The Event of Default will not affect the effectiveness and
performance of this Agreement.
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5
ARTICLE
V
MISCELLANEOUS
PROVISIONS
5.1
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Further
Assurances.
Each Party will execute and/or cause to be delivered to each other Party
such instruments and other documents, and will take such other actions, as
such other Party may reasonably request (prior to, at or after the
Closing) for the purpose of carrying out or evidencing any of the
transactions contemplated by this
Agreement.
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5.2
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Notices. Any
notice or other communication required or permitted to be delivered to any
Party will be in writing and will be deemed properly delivered, given and
received upon dispatch by hand, courier or express delivery service with
receipt confirmed by signature of the addressee, to the address set forth
beneath the name of such Party below (or to such other address as such
Party may specify in a written notice given to the other
Parties):
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If
to the Seller:
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Xxxx
X, 00/X Xxxxx 0, Xxxxxx Xxxxxx, Xx.0 Powing Road, Sheungshui, N.T. Hong
Kong
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If
to the Buyers:
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Xx.
000 Xxxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, PRC
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With
Copies to:
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Xxxxxx
& Xxxxxx, LLP
000
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
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5.3
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Time of The
Essence. Time
is of the essence of this
Agreement.
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5.4
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Headings,
Gender and Usage. The headings contained in this
Agreement are for convenience of reference only, will not be deemed to be
a part of this Agreement and will not be referred to in connection with
the construction or interpretation of this Agreement. For purposes of this
Agreement: (a) the words “include” and “including” will be taken to
include the words, “without limitation;” and (b) whenever the context
requires, the singular number will include the plural, and vice versa; and
each of the masculine, feminine and neuter genders will refer to the
others.
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5.5
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Governing
Law and Language. This Agreement, including all
matters of construction, validity and performance, will in all respects be
governed by, and construed in accordance with, the laws of Hong Kong
(without giving effect to principles relating to conflict of
laws). This Agreement is written in English and the English
language will govern any interpretation of this
Agreement.
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5.6
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Venue and
Jurisdiction. If any legal proceeding or other
legal action relating to this Agreement is brought or otherwise initiated,
the venue therefore will be in Hong Kong, which will be deemed to be a
convenient forum. Each of the Parties hereby expressly and
irrevocably consents and submits to the jurisdiction of the courts in Hong
Kong.
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5.7
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Interpretation. Each
Party acknowledges that it has participated in the drafting of this
Agreement, and any applicable rule of construction to the effect that
ambiguities are to be resolved against the drafting party may not be
applied in connection with the construction or interpretation of this
Agreement.
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5.8
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Successors
and Assigns. Each of the Parties will not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other Party. The provisions hereof will inure to the
benefit of, and be binding upon, the successors and permitted assigns of
the Parties. This Agreement is binding upon, inures to the benefit of and
is enforceable by Buyers, Seller and their respective successors and
assigns.
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5.9
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Waiver.
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(a)
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No
failure on the part of any Person to exercise any power, right, privilege
or remedy under this Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy under this Agreement,
will operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy
will preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.
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6
(b)
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No
Person will be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver will not be applicable or have
any effect except in the specific instance in which it is
given.
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5.10
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Entire
Agreement; Amendment. This Agreement constitutes the
full and entire understanding and agreement between the Parties with
regard to the subject matter hereof. Any term of this Agreement may be
amended only with the written consent of each
Party.
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5.11
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Severability. In the event that
any provision of this Agreement, or the application of any such provision
to any Person or set of circumstances, will be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, will not be impaired or otherwise
affected and will continue to be valid and enforceable to the fullest
extent permitted by law.
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5.12
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Entire
Agreement. This Agreement sets forth the entire
understanding of the Parties relating to the subject matter hereof and
supersedes all prior agreements and understandings among or between any of
the parties relating to the subject matter
thereof.
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5.13
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Counterparts. This Agreement may be
executed in several counterparts, each of which will constitute an
original and all of which, when taken together, will constitute one
agreement.
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[Remainder of Page
Intentionally Left Blank]
7
In Witness Whereof, the
Parties have caused this Agreement to be executed and delivered as of the date
first set forth above.
“SELLER”
Xxxxx
Xxxx Yan,
a Hong Kong individual
By:
Xxxxxxx
Xxxxx
Name:
Xxxxx Xxxx Yan
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Acknowledged
and Agreed To:
“COLLATERAL
AGENT”
Xxxxxx
& xxxxxx, LLP
By:
Xxxxxxx
X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Managing Partner
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“BUYER”
[Tang Xxx Xxxx], an
individual citizen of the People’s Republic of China
By:
Xxxxxxx
Xxxx
Name: Tang Xxx
Xxxx
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“BUYER”
[Xxx Xxx De], an individual
citizen of the People’s Republic of China
By:
Xxx
Xxx De
Name: Xxx Xxx De
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“BUYER”
[Jiang You Ru], an
individual citizen of the People’s Republic of China
By:
Jiang
You Ru
Name: Jiang You Ru
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“BUYER”
[Wang Bang Fu], an
individual citizen of the People’s Republic of China
By:
Wang
Bang Fu
Name: Wang Bang Fu
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8
“BUYER”
[Liu Xxxx Xxx], an
individual citizen of the People’s Republic of China
By:
Liu
Xxxx Xxx
Name: Liu Xxxx Xxx
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“BUYER”
[Xxxx Xxxx An], an
individual citizen of the People’s Republic of China
By:
Xxxx
Xxxx An
Name: Xxxx Xxxx An
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“BUYER”
[Zhang Xxxx Xxx], an
individual citizen of the People’s Republic of China
By:
Zhang
Xxxx Xxx
Name: Zhang Xxxx
Xxx
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“BUYER”
[Xxxx Xxxx Jian], an
individual citizen of the People’s Republic of China
By:
Xxxx
Xxxx Xxxx
Name: Xxxx Xxxx
Jian
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“BUYER”
[Xxxx Xxxx Gang], an
individual citizen of the People’s Republic of China
By:
Xxxx
Xxxx Gang
Name: Xxxx Xxxx
Gang
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“BUYER”
[Jiang Qi Feng], an
individual citizen of the People’s Republic of China
By:
Jiang
Qi Feng
Name: Jiang Qi
Feng
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“BUYER”
[He Xxx Xxxx], an
individual citizen of the People’s Republic of China
By:
He
Xxx Xxxx
Name: He Xxx Xxxx
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“BUYER”
[Liu Xxxx Xxxx], an
individual citizen of the People’s Republic of China
By:
Liu
Xxxx Xxxx
Name: Liu Xxxx
Xxxx
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“BUYER”
[Jia Xxx Xxx], an
individual citizen of the People’s Republic of China
By:
Jia
Xxx Xxx
Name: Jia Xxx Xxx
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“BUYER”
[Tan Xx Xxxx], an
individual citizen of the People’s Republic of China
By:
Tan
Xx Xxxx
Name: Tan Xx Xxxx
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“BUYER”
[Xx Xxxx Hua], an
individual citizen of the People’s Republic of China
By:
Xx
Xxxx Hua
Name: Xx Xxxx Hua
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“BUYER”
[Ye Xxxx Xxxx], an
individual citizen of the People’s Republic of China
By:
Ye
Xxxx Xxxx
Name: Ye Xxxx Xxxx
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9
Attachments:
Exhibit A
Certain Definitions
Exhibit
B Form
of Call Exercise Notice
10
EXHIBIT
A
CERTAIN
DEFINITIONS
For
purposes of this Agreement (including this Exhibit A):
“Bankruptcy
Law” means any Law of any jurisdiction relating to bankruptcy,
insolvency, corporate reorganization, company arrangement, civil rehabilitation,
special liquidation, moratorium, readjustment of debt, appointment of a
conservator, trustee or receiver, or similar debtor relief.
“Call Exercise
Notice” is defined in Section
1.3.
“Call
Price” is defined in Section
1.4(a).
“Call
Right” is defined in Section
1.1.
“Collateral
Agent” is defined in Section
2.5(a).
“Conditions”
means Conditions 1 through 4, in the aggregate.
“Effective
Date” is defined in the Preamble.
“Encumbrance”
means any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, equity, trust, equitable interest, claim, preference,
right of possession, lease, tenancy, license, encroachment, covenant,
infringement, interference, Order, proxy, option, right of first refusal,
preemptive right, community property interest, legend, defect, impediment,
exception, reservation, limitation, impairment, imperfection of title, condition
or restriction of any nature (including any restriction on the transfer of any
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any
asset).
“Exchange
Agreement” is defined in the Recitals.
“Exchange
Transaction” is defined in the Recitals.
“Exercise
Date” is defined in Section
1.3.
“Exercise
Period” is defined in Section
1.2.
“Expiration
Date” is defined in Section
1.2.
“GAAP”
means generally accepted accounting principles consistently applied
during the relevant period.
“Governmental
Body” means any: (a) nation, principality, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; (c)
governmental or quasi-Governmental Body of any nature (including any
governmental division, subdivision, department, agency, bureau, branch, office,
commission, council, board, instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other tribunal); (d)
multi-national organization or body; or (e) individual, Entity or body
exercising, or entitled to exercise, any executive, legislative, judicial,
administrative, regulatory, police, military or taxing authority or power of any
nature.
“Holdco”
is defined in the Recitals.
“Initial Call
Date” is defined in Section
1.2.
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“Law”
means any national, federal, state, local, municipal, foreign or other law,
statute, legislation, constitution, principle of common law, resolution,
ordinance, code, edict, decree, proclamation, treaty, convention, rule,
regulation, ruling, directive, pronouncement, requirement, specification,
determination, decision, opinion or interpretation issued, enacted, adopted,
passed, approved, promulgated, made, implemented or otherwise put into effect by
or under the authority of any Governmental Body.
“Operating
Company” is defined in the Recitals.
“Party” and
“Parties” are defined in the Preamble to this Agreement.
“Person”
means an individual, a corporation, a partnership, an association, a trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.
“Seller’s
Shares” is defined in Section
1.1.
“Shell
Company” is defined in the Recitals.
“US GAAP”
means United States Generally Accepted Accounting Principles consistently
applied.
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EXHIBIT
B
FORM
OF CALL EXERCISE NOTICE
[Date]
XXXXX
XXXX YAN (the “Seller”)
Xxxx X,
00/X Xxxxx 0, Xxxxxx Xxxxxx
Xx.0 Po
Wing Road
Sheungshui,
N.T. Hong Kong
Re:
|
Earn-In
Agreement dated [ August 31, 2009 ] (the “Earn-In Agreement”), between
[Tang Xxx Xxxx,
Jiang You Ru, Liu Xxxx Xxx,
Xxx Xxx De, Xxxx Bang Fu, Xxxx Xxxx An, Zhang Xxxx Xxx, Xxxx Xxxx Xxxx,
Xxxx Xxxx Gang, Jiang Qi Feng, He Xxx Xxxx, Xxx Xxxx Xxxx, Jia Xxx Xxx,
Tan Xx Xxxx, Xx Xxxx Hua, Ye Xxxx Xxxx] (the “Buyer”) and XXXXX
XXXX YAN (the “Seller”)
|
Dear Xx.
Xxxxx
In
accordance with Section
1.3 of the
Earn-In Agreement, the Buyer hereby provides this notice of exercise of the Call
Right in the manner specified below:
(a)
|
The
Buyer hereby exercises its Call Right with respect to the Seller’s Shares
pursuant to the Earn-In Agreement.
|
(b)
|
The
Buyer will pay the sum of $____________ to the
Seller.
|
(d)
|
Pursuant
to this exercise, the Seller will deliver to _______________ the Seller’s
Shares in accordance with the instructions attached
hereto.
|
Dated:
_______________, ______
|
|
Buyer
|
13