EXCLUSIVE OPTION AGREEMENT AMONG XI’AN SOFTECH CO., LTD AND XI’AN TECHTEAM INVESTMENT HOLDING GROUP COMPANY SHENZHEN CAPITAL GROUP CO., LTD XI’AN HONGTU CAPITAL CO., LTD SHAANXI YUANXING SECIENCE AND TECHNOLOGY CO., LTD
Exhibit 10.4
AMONG
XI’AN
SOFTECH CO., LTD
AND
▇▇
▇▇▇ AND OTHER INDIVIDUALS
XI’AN
TECHTEAM INVESTMENT HOLDING GROUP COMPANY
SHENZHEN
CAPITAL GROUP CO., LTD
XI’AN
HONGTU CAPITAL CO., LTD
SHAANXI
YUANXING SECIENCE AND TECHNOLOGY CO., LTD
AND
XI’AN
KINGTONE INFORMATION TECHNOLOGY CO., LTD
December 15, 2009
This
Exclusive Option Agreement (the “Agreement) is entered into as
of December 15, 2009 among the following Parties in Xi’an.
Party A: Xi’an Softech Co.,
Ltd
Registered
Address: 3/F of District A, the Industry Office Building, No.181 of Tai Bai
Southern Road, Xi’an City, China
Legal
Representative: Wang Wan Jiao
Party B: ▇▇ ▇▇▇ and other
seventeen individuals (collectively, the “Individual Shareholders”), the
specific list of the Individual Shareholders is referred herero as Exhibit
A
Party C:Xi’an TechTeam
Investment Holding Group Company
Registered
Address: 3/F of District A, the Industry Office Building, No.181 of Tai Bai
Southern Road, Xi’an City, China
Legal
Representative: ▇▇ ▇▇▇
Party D: Shenzhen Capital
Group Co., Ltd
Registered
Address: ▇▇▇▇▇▇▇▇ ▇, ▇▇/▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.▇▇▇▇, ▇▇▇▇▇▇▇ Avenue, Futian
District, Shenzhen City
Legal
Representative: Jin Hai Tao
Party E: Xi’an Hongtu Capital
Co., Ltd
Registered
Address: 7/F of Xi’an ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.▇▇, ▇▇▇▇▇ two links, Beilin District,
Xi’an City
Legal
Representative: Xia Fu Xi
Party F: Shaanxi Yuanxing
Science and Technology Co., Ltd
Registered
Address: 18/F of Xin Ji Yuan Square, Gaoxin Road, Xi’an City
Legal
Representative: ▇▇▇▇ ▇▇ Ke
Party G: Xi’an Kingtone
Information Technology Co., Ltd
Registered
Address: 3/F of District A, the Industry Office Building, No.181 of Tai Bai
Southern Road, Xi’an City, China
Legal
Representative: ▇▇ ▇▇▇
In this
Agreement, Party A, Party B, Party C, Party D, Party E, Party F and Party G are
called collectively as the
“Parties” and each of them is called as the “Party”. Party B, Party C,
Party D, Party E and Party F are collectively called as the “All
Shareholders”.
1
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
G is a company limited by shares incorporated in Xi’an and with business license
issued by the Xi’an Administration for Industry and Commerce;
3. As of the date of this Agreement, Party
B, Party C, Party D, Party E and Party F are shareholders of Xi’an Kingtone
Information Technology Co., Ltd (hereinafter referred to as “Kingtone
Information”) and
collectively legally hold all of the equity interest of Kingtone Information, of
which Party B holds 61.6%, Party C holds 25% Party D holds 7.42%, Party E holds
3.30%, Party F holds 2.68%.
NOW, THEREFORE, the Parties
through mutual negotiations hereby enter into this Agreement according to the
following terms and conditions:
Article
1 The
Grant and Exercise of Purchase Option
1.1 Grant:
All Shareholders hereby grant Party A an irrevocable exclusive purchase option
to purchase all or part of the shares of Party G, currently owned by any of
Party B and Party C, Party D, Party E and Party F; Party G further hereby grant
Party A an irrevocable exclusive purchase option to purchase all or part of the
assets and business of Party G, in each case in accordance with Article 1.3 of
this contract (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.
1.2 Exercise
Procedures
1.2.1 Party
A shall notify All Shareholders in writing prior to exercising its option (the
“Option Notice”
hereinafter).
1.2.2 The
next day upon receipt of the Option Notice, All Shareholders and Kingtone
Information, 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, All Shareholders and Party G 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 Party G in connection with the Option
exercise.
2
1.3 Exercise
Condition: Party A may immediately exercise the option of acquiring the equity
interests in or remaining assets and business of Party G whenever Party A
considers it necessary to acquire Party G and it is doable in accordance with
PRC laws and regulations.
Article
2 Acquisition
Party A
and All Shareholders shall enter into relevant agreements regarding the price of
acquisition based on the circumstances of the exercise of option. 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.
Article
3 Representations
and Warranties
3.1 Each
party hereto represents to the other Parties that: (i) it has all the necessary
rights, powers and authorizations to enter into this Agreement and perform its
duties and obligations hereunder; (ii) All Shareholders 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 Party G for all fines, penalties, damages
or claims sustained by Party A or Party G arising out of Party B, Party C, Party
D, Party E and Party F’s violation of this section; and (iii) 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.
3.2 All
Shareholders and Party G hereto represent to Party A that: With respect to the
equity interest held by All Shareholders in Party G, (i) Party B, Party C, Party D,
Party E and Party F are legally registered shareholders of party G and have paid
Party G the full amount of their respective portions of Party G's registered
capital required under the PRC laws; (ii) except Pledge of Equity
Agreement, signed by and between All Shareholders and Party A on December
15, 2009 in Xi’an, none of Party B, Party C, Party D, Party E and Party F
has mortgaged or pledged his/her shares of Party G, and ▇▇▇ of them has granted
any security interest or borrow against his/her shares of Party G in any form;
and (iii) none of Party B, Party C, Party D, Party E and Party has sold or will
sell to any third party its equity interests in Party G.
3.3 With
respect to the assets of Party G which may be transferred to Party A at Party
A’s option hereunder, (i) Party G owns all such assets and has not mortgaged or
pledged or otherwise encumber such assets; and (ii) Party G has not sold or will
sell to any third party such assets.
3.4 Party
G hereto represents to Party A that: (i) it is a company limited by shares duly
registered and validly existing under the PRC law; and (ii) its business
operations are in compliance with applicable laws of the PRC in all material
aspects.
3
Article
4 Covenants
The
Parties further agree as follows:
4.1 Before
Party A has acquired all the equity/assets and business of Party G by exercising
the purchase option provided hereunder, Party G shall not:
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);
4.1.2 enter
into any transaction which may materially affect its assets, liability,
operation, shareholders’ equity 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.
4.2 Before
Party A has acquired all the equity/assets/business of Party G by exercising the
purchase option provided hereunder, All Shareholders shall not:
4.2.1 sell,
assign, mortgage or otherwise dispose of, or create any encumbrance on, any
of the equity held by them in Party G, except for the pledge of such shares made
according to the Pledge of Equity Agreement, signed by and between All
Shareholders and Party A on December 15, 2009 in Xi’an.
4.3 Before
Party A has acquired all the equity/assets/business of Party G by exercising the
purchase option provided hereunder, All Shareholders and/or Party G shall not
individually or collectively:
4.3.1 supplement,
alter or amend the articles of association of Party G in any manner to
the extent that such supplement, alteration or amendment may have a material
effect on Party G's assets, liability, operation, shareholders’ equity or other
legal rights;
4.3.2 cause
Party G to enter into any transaction to the extent such transaction
may have
a material effect on Party G's assets, liability, operation, shareholders’
equity or other legal rights (unless such transaction is relating to Party G's
daily operation or has been disclosed to and agreed upon by Party A in writing);
and
4
4.4 Non
Competition:
When
Party A exercises the Option, each of Party B, Party C and Party D, Party E and
Party F irrevocably and unconditionally agree and undertake to Party A that it
will not without the prior written consent of Party A:
(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, her or 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.
Article
5 Assignment
of Agreement
5.1 All
Shareholders and Party G shall not transfer their rights and obligations under
this Agreement to any third party without the prior written consent of Party
A.
5.2 Each
of Party B, Party C and Party D, Party E, Party F and Party G 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, Party C and Party D, Party
E and Party F and Party G by Party A, and no any further consent from Party B,
Party C and Party D, Party E, Party F and Party G will be required.
Article
6 Confidentiality
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:
5
6.1 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);
6.2 The
materials are required to be disclosed under the applicable laws or the rules or
provisions of stock exchange; or
6.3 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.
Article
7 Breach
of Contract
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.
Article
8 Applicable
Law and Dispute Resolution
8.1 Applicable
Law
The
execution, validity, interpretation and performance of this Agreement and the
disputes resolution under this Agreement shall be governed by the laws of
PRC.
8.2 Dispute
Resolution
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 in accordance with its rules. The
arbitration award shall be final, conclusive and binding upon both
Parties.
Article
9 Effectiveness
and Termination
9.1 This
Agreement shall be effective upon the execution hereof by all Parties hereto and
shall remain effective thereafter.
6
9.2 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.
Article
10 Miscellaneous
10.1 Amendment,
Modification and Supplement
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.
10.2 Entire
Agreement
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.
10.3 Severability
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.
10.4 Headings
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.
10.5 Language
and Copies
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
twenty-four copies for each version; each Party holds one and each original copy
has the same legal effect.
10.6 Successor
This
Agreement shall bind and benefit the successor or the transferee of each
Party.
(This
space intentionally left blank)
7
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.
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PARTY
A: Xi’an Softech Co., Ltd.
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||
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(Seal)
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||
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Legal
Representative/Authorized Representative
|
||
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(Signature):
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/s/ Wang Wan Jiao
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PARTY
B:
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||
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▇▇
▇▇▇
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||
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(Signature):
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/s/ ▇▇ ▇▇▇
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▇▇▇▇
▇▇▇ Tao
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(Signature):
|
/s/ ▇▇▇▇ ▇▇▇ ▇▇▇
|
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▇▇▇▇
▇▇▇ ▇▇▇▇
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||
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(Signature):
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/s/ Wang Wan ▇▇▇▇
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▇▇
Li
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||
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(Signature):
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/s/ Wu Li
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8
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Pu
Wei
|
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(Signature):
|
/s/ Pu ▇▇▇
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▇▇▇▇▇
▇▇ ▇▇▇
|
||
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(Signature):
|
/s/ ▇▇▇▇▇ ▇▇ Fan
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▇▇▇
▇▇▇▇
|
||
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(Signature):
|
/s/ ▇▇▇ ▇▇▇▇
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|
▇▇▇▇▇
▇▇▇
|
||
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(Signature):
|
/s/ ▇▇▇▇▇ ▇▇▇
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▇▇
▇▇▇▇ Ping
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(Signature):
|
/s/ ▇▇ ▇▇▇▇ Ping
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Qin
▇▇▇ ▇▇▇▇
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||
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(Signature):
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/s/ Qin ▇▇▇ ▇▇▇▇
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▇▇
▇▇▇▇
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||
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(Signature):
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/s/ ▇▇ ▇▇▇▇
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9
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▇▇▇▇▇
▇▇▇▇ Ming
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(Signature):
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/s/ ▇▇▇▇▇ ▇▇▇▇ Ming
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▇▇▇▇▇
▇▇▇▇ Bin
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(Signature):
|
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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▇▇▇▇
Wei
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(Signature):
|
/s/ ▇▇▇▇ ▇▇▇
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▇▇▇▇▇
▇▇▇▇
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||
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(Signature):
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/s/ ▇▇▇▇▇ ▇▇▇▇
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Xi
▇▇▇▇ ▇▇▇
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(Signature):
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/s/ Xi ▇▇▇▇ ▇▇▇
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▇▇▇▇
▇▇▇▇ ▇▇▇▇
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(Signature):
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/s/ ▇▇▇▇ ▇▇▇▇ Ying
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▇▇
▇▇▇
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(Signature):
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/s/ ▇▇ ▇▇▇
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10
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PARTY
C: Xi’an TechTeam Investment Holding Group Company
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(Seal)
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Legal
Representative/Authorized Representative
|
||
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(Signature):
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/s/ ▇▇ ▇▇▇
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PARTY
D: Shenzhen Capital Group Co., Ltd
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(Seal)
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Legal
Representative/Authorized Representative
|
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(Signature):
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/s/ Jin Hai Tao
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PARTY
E: Xi’an Hongtu Capital Co., Ltd
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(Seal)
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Legal
Representative/Authorized Representative
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(Signature):
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/s/ Xia Fu Xi
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PARTY F: Shaanxi Yuanxing Science and
Technology Co., Ltd
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(Seal)
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Legal
Representative/Authorized Representative
|
||
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(Signature):
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/s/ Li ▇▇ ▇▇▇▇
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11
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PARTY G: Xi’an Kingtone Information
Technology Co., Ltd
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(Seal)
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Legal
Representative/Authorized Representative
|
||
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(Signature):
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/s/ ▇▇ ▇▇▇
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12
Exhibit
A
List
of Individual Shareholders
|
Name
|
ID
Card Number
|
Share
Percentage
|
||
|
▇▇
▇▇▇
|
610103196511281613
|
36.61%
|
||
|
▇▇▇▇
▇▇▇ Tao
|
61010319710930165X
|
8.93%
|
||
|
Wang
Wan Jiao
|
610104198109266162
|
5.35%
|
||
|
Wu
Li
|
610111620918202
|
1.09%
|
||
|
Pu
Wei
|
610104196910302123
|
1.04%
|
||
|
▇▇▇▇▇
▇▇ Fan
|
610103196508063244
|
0.89%
|
||
|
▇▇▇
▇▇▇▇
|
610113195801080017
|
0.89%
|
||
|
▇▇▇▇▇
▇▇▇
|
610103197802122043
|
0.89%
|
||
|
▇▇
▇▇▇▇ Pin
|
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
|
0.89%
|
||
|
Qin
▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
|
0.89%
|
||
|
▇▇
▇▇▇▇
|
420500197212035246
|
0.89%
|
||
|
▇▇▇▇▇
▇▇▇▇ Ming
|
610113195303102930
|
0.89%
|
||
|
▇▇▇▇▇
▇▇▇▇ Bin
|
612325197911180016
|
0.53%
|
||
|
▇▇▇▇
▇▇▇
|
610627198201080055
|
0.38%
|
||
|
▇▇▇▇▇
▇▇▇▇
|
622101196712220017
|
0.36%
|
||
|
Xi
▇▇▇▇ ▇▇▇
|
610431197601031334
|
0.36%
|
||
|
▇▇▇▇
▇▇▇▇ Ying
|
610112750201523
|
0.36%
|
||
|
▇▇
▇▇▇
|
|
612728196803210253
|
|
0.36%
|
13