FIRST OPTION EXCLUSIVE ACQUIRING AGREEMENT
FIRST
OPTION EXCLUSIVE ACQUIRING AGREEMENT
This First Option Exclusive Acquiring
Agreement (the “Agreement”) is
executed by the following parties on 10th of April, 2009,
in the People’s Republic of China.
Party A: Sichuan Xinlong Tellurium
Industry & Technique Co., Ltd. (“Xinlong”).
Party B: Sichuan Xinju Mineral
Resources Development Co., Ltd. (the “Company”).
Party C: all those natural persons
listed on Appendix
A hereto (each individually a “Shareholder” and
collectively, the “Shareholders”).
WHERAS, Xinlong is a wholly-owned
limited liability company controlled by a foreign-owned enterprise registered in
the territory of the People’s Republic of China;
WHEREAS, the Company is a company incorporated in China, which possesses the
exploration rights to that certain land of 6.29 square kilometers in the
Dashuigou area and the mining rights of that certain tellurium and bismuth mine
of 0.0568 square kilometers in Shimian Majiagou (such exploration rights and
mining rights of the Company, collectively the “Mining
Business”);
WHEREAS, the Shareholders hold in
excess of fifty percent (50%) of the total issued equity of the Company;
and
WHEREAS, Xinlong is desirous of acquiring ownership of the Mining Business at
such time as is permissible in accordance with applicable laws.
NOW THEREFORE, in light of the
principles of equity and mutual benefit, after negotiations, the parties have
agreed as follows:
1. Exclusivity. The
Company and each of the Shareholders agree that they will not enter into any
agreement or letter of intent with any third party regarding the purchase, sale
or transfer of the Mining Business, or any part thereof, or interest therein,
for a period being the longer of (i) twenty (20) years and (ii) until such time
as there is no economic value in the Mining Business (the “Exclusivity Period”),
in each case from the date of this Agreement.
2. First Option; Acquisition of
Mining Business. In furtherance of Section 1 hereof, the
Company and each of the Shareholders agree that during the Exclusivity Period
Xinlong shall have a right of first offer to acquire the Mining Business from
the Company (or from any spin-off entity that may come into being pursuant to
Section 3
hereof) on terms and conditions to be agreed upon between the parties hereto in
good faith as and when such acquisition shall be advisable, permissible and in
the best interest of Xinlong.
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3. Change of Control;
Spin-off.
3.1 The
Company and each of the Shareholders agree that they shall not enter into any
agreement or letter of intent with any third party regarding a change of control
of the Company (“Change of Control Agreement”, or “Change of Control
Transaction”, as the case may be) during the Exclusivity Period unless the terms
of such agreement, letter of intent or transaction provide for the spin-off of
the Mining Business into a corporate entity to be controlled by the Shareholders
prior to the consummation of any such transaction.
3.2 In
the event that any Change of Control Agreement is entered into, or any Change of
Control Transaction is effected, during the Exclusivity Period the Shareholders
hereby agree that the terms of this Agreement shall be deemed to extend to them
in their capacity as shareholders of the corporate entity formed to effect the
spin-off of the Mining Business. For the avoidance of doubt Xinlong shall have
no liability if it determines not to or is unable to consummate the transactions
contemplated hereby.
4. Third Party
Transfers. Each Shareholder agrees that they shall not enter into any
agreement, arrangement or other transaction whatsoever to assign, encumber,
sell, transfer, pledge or otherwise dispose of, any of their shares in the
Company to any third party (a proposed “Transferee”) during
the Exclusivity Period, and the Company shall refuse to authorize, approve or
effect any such transfer, unless prior to the consummation of such a transaction
the Transferee agrees to be bound in full by the terms of this
Agreement.
5. Termination Fee. In
the event that the Company or the Shareholders shall breach any provision set
forth in this Agreement Xinlong shall be entitled to receive from the Company
and the Shareholders a termination fee in an amount equivalent to the economic
value of the Mining Business as determined by a independent third party
appraiser chosen by Xinlong; provided, that, such breach is not
remedied by the Company and the Shareholders to the satisfaction of Xinlong
within five business days following the occurrence of the breach.
6. Mining License. The
Company represents, warrants and undertakes to Xinlong that it shall at all
times use its best efforts to ensure that all the exploration and mining rights
of the Mining Business do not lapse and it shall take full responsibility for
obtaining the successful renewal of such rights from the relevant governmental
authority upon their expiration.
7. Miscellaneous.
7.1 Notices. Any
notice served on a party hereunder in connection with the performance of such
party’s rights and obligations hereunder shall be served in
writing. If served in person, the notification shall be deemed to be
made on its actual delivery; if sent via telex or fax, on its
dispatch. If the day of service falls on a day other than a business
day or after business hours, the immediate following business day should be
deemed the day of service of such notification. Any notices or other
communications shall be sent to the parties hereto at the following addresses in
accordance with the terms of this Section
7.1:
Party
A: Sichuan
Xinlong Telluronium & Technique Co., Ltd.
Mailing
address: Xx. 000, Xxxx Xxx
Xxxxx Xxxx, Xxxxxxxxx Xxxxxxxxx AirportEconomic Development Zone, Shuangliu,
Chengdu
Fax:
00-00-00000000
Telephone:
00-00-00000000
Receiver:
Xxxxx Xxx
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Party
B: Sichuan
Xinju Mineral Resource Development Co., Ltd.
Mailing
address: Xx. 000, Xxxx Xxx
Xxxxx Xxxx, Xxxxxxxxx Xxxxxxxxx AirportEconomic Development Zone, Shuangliu,
Chengdu
Fax:
00-00-00000000
Telephone:00-00-00000000
Receiver:Xxxx
Xxxx
Party C:
Shareholders of Sichuan Xinju Mineral Resources Development Co.,
Ltd
Mailing
address: Xx. 000, Xxxx Xxx
Xxxxx Xxxx, Xxxxxxxxx Xxxxxxxxx AirportEconomic Development Zone, Shuangliu,
Chengdu
Fax:
00-00-00000000
Telephone:00-00-00000000
Receiver:Xxxx
Xxxx
7.2 Validity;
Illegality. If any provision of this Agreement shall be deemed
illegal or unenforceable, the provision shall be deemed to be deleted from the
Agreement and null and void. All other provisions of this Agreement
shall remain valid and the provision deleted shall be treated as having no
application and shall be considered as never having formed a part of this
Agreement. The parties shall consult with each other and consent to a
mutually acceptable, legitimate and effective provision to replace any such
deleted provisions.
7.3 Non-Waiver. The
failure of any party to exercise any right, power or privilege under this
Agreement shall not be deemed a waiver of the same. Any separate
exercise of any right, power or privilege shall not exclude the exercise of any
other right, power or privilege.
7.4 Settlement and
Dispute. In the event of a dispute between the parties hereto
concerning the construction and/or performance of any provision of this
Agreement, the parties hereto shall consult to resolve the dispute in good
faith. Failing such consultation, any party hereto may submit such dispute to
the Hong Kong International Arbitration Center (“HKIAC”) in accordance
with its Arbitration Rules. The place of arbitration shall be Hong
Kong, and the arbitration shall be conducted in English. The decision
of the HKIAC shall be final and binding on the parties
hereto. Notwithstanding the foregoing, in the event of a dispute the
parties shall continue to fulfill their obligations hereunder that are not
subject to such dispute in good faith in accordance with the terms of this
Agreement.
7.5 Entire Agreement;
Amendments. All the agreements expressly referred to or contained in this
Agreement together with this Agreement constitute an entire agreement between
the parties on the subject matter therein and herein, which replace all oral and
written agreements, contracts, understandings and communications between the
parties concerning the subject matter therein and herein. Any
amendment, supplement or modification to this Agreement must be in writing and
signed by each of the parties hereto. Any amendment, supplement or
modification following due execution by the parties hereto shall become an
integral part of this Agreement and be of the same legal force and
effect.
7.6 Governing
Law. The signing of this Agreement, the validity, performance,
construction, as well as the settlement of disputes shall be governed and
construed by the laws of the People’s Republic of China.
7.7 This agreement is made in both English and Chinese. English
version shall prevail where difference arising between English version and
Chinese Version.
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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.
Party A:
Sichuan Xinlong Tellurium Industry & Technique Co. Ltd
/s/Renyi
Hou
Renyi
Hou
Party B:
Sichuan Xinju Mineral Resources Development Co., Ltd.
/s/Renyi
Hou
Renyi Hou
Party C:
Shareholders of Sichuan Xinju Mineral Resources Development Co.,
Ltd.
/s/Xxxx
Xxxx
Xxxx Xxxx
/s/Renyi
Hou
Renyi Hou
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Appendix
A
Name
roll of Party C
