SPONSOR AGREEMENT
Exhibit 10.16
THIS SPONSOR AGREEMENT (the
“Agreement”) is
made as of February 12, 2010, by and among Sun Zone Investments Limited, a
company organized under the laws of the British Virgin Islands (“Sun Zone”), and Sze
Kit Ting (collectively with Sun Zone, the “Sellers”) and certain
holders of securities of Xxxxxxxxx Asia Acquisition Corp., a Cayman Islands
company (the “Company”), who
execute a counterpart signature page hereto (each a “Sponsor” and collectively,
the “Sponsors”). Capitalized
terms not otherwise defined in this Agreement have the same meaning as such
capitalized terms have in the Exchange Agreement (as defined
below).
The
Sellers have entered into a share exchange agreement (the “Exchange Agreement”)
with Honesty Group Holdings Limited (“Honesty Group”) and
the Company pursuant to which the Sellers agreed to sell the Company all of
their outstanding interests in Honesty Group. In connection with
entering into the Exchange Agreement, and as a condition to the execution by
Sellers of the Exchange Agreement, the Sellers have requested that the Sponsors
enter into this Agreement.
Certain
of the Sponsors, consisting of Xxxx Xxxx, Xxxxxx X. Eu, Xxxxxx Family
Irrevocable Trust, AEX Enterprises Limited, X.X. Xxxxxxxxx + Co., LLC, Xxxxxxxxx
1980 Revocable Trust, Xxxx Ventures LLC, and Marbella Capital Partners Ltd (the
“Initial
Sponsors”) have entered into a Securities Escrow Agreement (the “IPO Escrow
Agreement”), dated as of March 7, 2008, with Continental Stock Transfer
& Trust Company, as escrow agent (the “IPO Escrow Agent”),
pursuant to which the Initial Sponsors have deposited in escrow their HMAUF
Shares to be held for a period of one year following the Closing of the
transactions contemplated by the Exchange Agreement or another Business
Combination as described in the IPO Escrow Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as
follows:
I. Earn-Out.
A. Each
Sponsor agrees that the number of HMAUF Shares owned by such Sponsor and set
forth opposite such Sponsor’s name in the column captioned “Earn-Out Shares” on
Exhibit A (the “Earn-Out Shares”)
shall be forfeited and cancelled unless the First Earn-Out Milestone is met or
the Second Earn-Out Milestone is met. Each Sponsor agrees to enter
into the Escrow Agreement with the Escrow Agent, the Sellers and the Company
simultaneously with the Closing.
B. At the
Closing, each Sponsor whose HMAUF Shares are not held by the IPO Escrow Agent
shall transfer and deliver to the Escrow Agent under the Escrow Agreement such
Sponsor’s Earn-Out Shares. At the Closing, each Sponsor whose HMAUF
Shares are held by the IPO Escrow Agent shall deliver irrevocable instructions
to the IPO Escrow Agent to deliver to the Escrow Agent such Sponsor’s Earn-Out
Shares at the time such Earn-Out Shares would otherwise be delivered to such
Sponsor under the IPO Escrow Agreement. At the Closing, each Sponsor
shall deliver to the Escrow Agent all stock powers, assignments and related
documents as may be necessary to effect the transfer to the Company and
cancellation of such Sponsor’s Earn-Out Shares.
C. If the
First Earn-Out Milestone is met, each Sponsor shall be entitled to receive such
Sponsor’s Earn-Out Shares on the First Earn-Out Milestone Date. If
the First Earn-Out Milestone is not met but the Second Earn-Out Milestone is
met, each Sponsor shall be entitled to receive such Sponsor’s Earn-Out Shares on
the Second Earn-Out Milestone Date. If neither the First Earn-Out
Milestone nor the Second Earn-Out Milestone is met, all of the Earn-Out Shares
shall be forfeited to the Company and cancelled. The Earn-Out Shares
shall be released to the Sponsors or the Company at the times and in the manner
provided in the Escrow Agreement.
II. Forfeited
Shares. Each Sponsor agrees that the number of HMAUF Shares
owned by such Sponsor and set forth opposite such Sponsor’s name in the column
captioned “Forfeited Shares” on Exhibit A (the “Forfeited Shares”)
shall be forfeited and cancelled effective as of the Closing. At the
Closing, each Sponsor whose HMAUF Shares are not held by the IPO Escrow Agent
shall transfer and deliver to the Company such Sponsor’s Forfeited
Shares. Each Sponsor whose HMAUF Shares are held by the IPO Escrow
Agent shall deliver irrevocable instructions to the IPO Escrow Agent to deliver
to the Company such Sponsor’s Forfeited Shares at the time such Forfeited Shares
would otherwise be delivered to such Sponsor under the IPO Escrow
Agreement. At the Closing, each Sponsor shall deliver to the Company
all stock powers, assignments and related documents as may be necessary to
effect the transfer to the Company and cancellation of such Sponsor’s Forfeited
Shares.
III.
Lock
Up.
A. Each Sponsor agrees to not offer, sell,
contract to sell, pledge or otherwise dispose of or enter into any transaction
which is designed to, or might reasonably be expected to result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise), directly or indirectly, of or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder with respect to (collectively, a “Disposition”) any HMAUF Shares owned by such
Sponsor on the date hereof for a period commencing on the date hereof and ending
on the second anniversary of the Closing Date, inclusive, without the prior
written consent of the Company; provided,
however, that the Sponsor
may transfer: (1) any HMAUF Shares to any partner, sponsor or member of the
Sponsor if, prior to such transfer, such partner, sponsor or member agrees in
writing to be bound by the restrictions set forth herein; (2) any HMAUF Shares
to any controlled affiliate of the Sponsor if, prior to such transfer, such
affiliate agrees in writing to be bound by the restrictions set forth herein,
(3) any HMAUF Shares for estate planning purposes if, prior to such transfer,
the person receiving such Shares agrees in writing to be bound by the
restrictions set forth herein, or (4) two-thirds of the HMAUF Shares owned by
such Sponsor on the date hereof on or after the one-year anniversary of the
Closing Date, and further
provided, that the
one-third of the HMAUF Shares owned by such Sponsor that are subject to the
escrows provided for in the IPO Escrow Agreement or the Escrow Agreement shall
not be Disposed of by such Sponsor so long as such HMAUF Shares are subject to
such escrows.
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B. Each Sponsor hereby consents to the
Company issuing a stop transfer instruction to the transfer agent in accordance
with the terms of this Agreement. Any sale of HMAUF Shares in violation of this
Agreement by a Sponsor without the consent of the Company and Sellers shall
constitute a material breach of this Agreement by such
Sponsor.
C. Each Sponsor acknowledges that its
breach or impending violation of any of the provisions of this Section III may
cause irreparable damage to the Company and Sellers for which remedies at law
would be inadequate. Each Sponsor further acknowledges and agrees that the
provisions set forth herein are essential terms and conditions of this Agreement
and that the Company or Sellers may seek to enforce this Agreement by, in
addition to any rights or remedies provided under any other agreement, obtaining
a decree or order from any court of competent jurisdiction to enjoin such
impending or actual violation of any of such provisions. Such decree or order,
to the extent appropriate, shall specifically enforce the full performance of
any such provision by the Sponsors. This remedy shall be in addition to all
other remedies available to the Company or Sellers at law or equity.
IV. Consent to Warrant
Amendment. Each Sponsor that owns Sponsor Warrants agrees to
consent to the Warrant Amendment.
V. Notices. All notices
and other communications provided for herein shall be in writing and shall be
deemed to have been duly given, delivered and received if delivered personally,
if sent by facsimile, registered or certified mail (return receipt requested)
postage prepaid, or by courier guaranteeing next day delivery, in each case to
the party to whom it is directed at the addresses indicated on the signature
pages hereto (or at such other address for any party as shall be specified by
notice given in accordance with the provisions hereof, provided that notices of
a change of address shall be effective only upon receipt thereof). Notices
delivered personally shall be effective on the day so delivered, notices sent by
registered or certified mail shall be effective five days after mailing, notices
sent by facsimile shall be effective when the sender receives a receipt
acknowledging delivery, and notices sent by courier guaranteeing next day
delivery shall be effective on the earlier of the second Business Day after
timely delivery to the courier or the day of actual delivery by the
courier.
VI. Amendment and
Waiver. Except as otherwise provided herein, no modification,
amendment or waiver of any provision of this Agreement shall be effective
against the Company, Sellers or the Sponsors unless such modification, amendment
or waiver is signed by each of the parties hereto. The failure of any
party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
VII.
Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
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VIII.
Entire
Agreement. Except as otherwise expressly set forth herein,
this document and the Escrow Agreement embody the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
IX. Successors and
Assigns. Except as otherwise expressly provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company, Sellers and their respective successors and assigns and the Sponsors
and any subsequent holders of HMAUF Shares and the respective successors and
assigns of each of them.
X. Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same
Agreement.
XI. Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any conflict of laws provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
XII.
Descriptive
Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
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SIGNATURE
PAGE TO
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
| XXXXXXXXX ASIA ACQUISITION CORP. | ||
| By: |
/s/
Xxxxx Eu
|
|
| Name: Xxxxxx Eu | ||
| Title: Chairman | ||
| Address: 13/F Tower 2 | ||
|
New
World tower
00
Xxxxxx Xxxx Xxxxxxx
|
||
| Xxxx Xxxx | ||
SIGNATURE
PAGE TO
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
| SUN ZONE INVESTMENTS LIMITED | ||
| By: |
/s/
Or Tin
Man
|
|
|
Name:
Tin Man Or
Title: Owner
|
||
| Address: | ||
|
c/o
Guanke (Fujian) Electron
Technological
Industry Co. Ltd.
SGOCO
Xxxxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx Xxxx
Xxxxxx,
Xxxxx 00000
Attn: Xxxxxxxx
Or, President
|
||
| /s/ Xxxx Xxx Kit | ||
| SZE KIT TING | ||
| Address: | ||
|
Xxxx
0000, 00/X., Xxxxx X
Healthy
Gardens, Xx. 000 Xxxx’x Xxxx
Xxxxx
Xxxxx, Xxxx Xxxx
|
||
SIGNATURE
PAGE TO
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
|
/s/
Xxxxxx Eu
|
/s/
W.R. Xxxxxxxxx
|
|||
| Xxxxxx
Eu
Address
0000
Xxxxxxxxx Xxxxxx
Xxx
Xxxxxxxxx, XX 00000 XXX
|
Name:
X.X. Xxxxxxxxx + Co, LLC
Title:
x/x
Xxxxxxxx Xxxxxx, Xxxx 0, Xxx 0
Xxx
Xxxxxxxxx, XX 00000 XXX
|
|||
|
/s/
Xxxx
Xxxx
|
/s/
X.X. Xxxxxxxxx
|
|||
| Xxxx
Xxxx
Loft
2-305, 000 Xxxx Xxxxxxx Xxxx
XxXxx
Xxxxxxxx, Xxxxxxxx 000000
|
Xxxxxxxxx
1980 Revocable Trust
c/o
Xxxx Xxxxxxxxx, Pier 1, Bay 3
Xxx
Xxxxxxxxx, XX 00000 XXX
|
|||
|
/s/
Xxxxxxx X. Xxxxxx
|
/s/
Xxxxxx X. Xxxx
|
|||
| Xxxxxx
Family Irrevocable Trust
0000
Xxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000 XXX
|
Xxxx
Ventures LLC
X.X.
Xxx 000, 655 Brea Canyon Road
Walnut
|
|||
|
/s/
Xxxxxx Eu
|
/s/
Xxxx Xxxx
|
|||
| AEX
Enterprises Limited
Rm
802, AIA Tower, 000 Xxxxxxxx Xxxx
Xxxxx
Xxxxx, Xxxx Xxxx
|
Marbella
Capital Partners Ltd.
Loft
2-305, 000 Xxxx Xxxxxxx Xxxx
XxXxx
Xxxxxxxx, Xxxxxxxx 000000
|
|||
EXHIBIT
A
Sponsor
Affiliates & Beneficiaries
EXHIBIT
A
|
Sponsor
Name
|
Original
Escrow
Shares
|
Earn-Out
Shares
|
Forfeited
Shares
|
|||||||||
|
Xxxx
Xxxx
|
230,000 | 67,643 | 27,070 | |||||||||
|
Xxxxxx
Eu
|
173,275 | 50,960 | 20,394 | |||||||||
|
Xxxxxx
Family Irrevocable Trust
|
173,275 | 50,960 | 20,394 | |||||||||
|
AEX
Enterprises Limited
|
88,333 | 25,979 | 10,396 | |||||||||
|
XX
Xxxxxxxxx + Co., LLC
|
178,275 | 52,431 | 20,982 | |||||||||
|
Xxxxxxxxx
1980 Revocable Trust
|
88,333 | 25,979 | 10,396 | |||||||||
|
Xxxx
Ventures LLC
|
88,333 | 25,979 | 10,396 | |||||||||
|
Marbella
Capital Partners Ltd.
|
40,000 | 11,764 | 20,394 | |||||||||
|
TOTAL
|
1,059,875 | 311696 | 124,736 | |||||||||
