RIGHT OF FIRST REFUSAL AGREEMENT BY AND AMONG ASIA LEADER INVESTMENTS LIMITED RAD INTERNATIONAL INVESTMENT FUND LTD. NEW CENTURY INTERNATIONAL LEASING CO., LTD. NEW CENTURY INTERNATIONAL LEASING COMPANY LIMITED AND KEVIN MA Dated: February 20, 2007
Execution
Copy
BY
AND
AMONG
ASIA
LEADER INVESTMENTS LIMITED
RAD
INTERNATIONAL INVESTMENT FUND LTD.
NEW
CENTURY INTERNATIONAL LEASING CO., LTD.
NEW
CENTURY INTERNATIONAL LEASING COMPANY LIMITED
AND
▇▇▇▇▇
▇▇
Dated:
February 20, 2007
RIGHT
OF FIRST REFUSAL
AGREEMENT
This
Right of First Refusal Agreement (this “Agreement”) is made as of February 20,
2008 by and among New Century International Leasing Co. Ltd., a wholly
foreign-owned enterprise established under the laws of the Peoples’ Republic of
China (“NCIL”), RAD International Investment Fund Limited., a company formed
under the laws of the Commonwealth of the Bahamas (“RAD”), New Century
International Leasing Company Limited, a company formed under the law of
the
Special Administrative Region of Hong Kong ((“NCIL (HK)”, and together with RAD,
the “Shareholders”), ▇▇▇▇▇ ▇▇ (“▇▇▇▇▇ ▇▇”) and Asia Leader Investments Limited,
a company formed under the laws of the Special Administrative Region of Hong
Kong (the “Company”).
RECITALS
WHEREAS:
Each of
RAD and NCIL (HK) currently owns the equity interest in NCIL indicated beside
such Shareholder’s name on Exhibit A hereto.
WHEREAS:
▇▇▇▇▇
▇▇ indirectly owns sixty-four (64%) percent of RAD through two holding
companies.
WHEREAS:
the
Company, RAD and ▇▇▇▇▇ ▇▇ are parties to a joint venture agreement dated
as of
the date hereof (the “Joint Venture Agreement”) relating to the establishment of
New Goal International Limited and it is a condition under the Joint Venture
Agreement that this Agreement be entered into contemporaneously with the
Joint
Venture Agreement and become effective as of the Contribution Date as defined
in
the Joint Venture Agreement.
NOW,
THEREFORE:
in
consideration of the mutual promises and covenants herein contained, and
other
consideration, the receipt and adequacy of which is hereby acknowledged,
the
parties hereto agree as follows:
1.
Certain Definitions.
For
purposes of this Agreement, the following terms
have
the following meanings:
A. “Convertible
Securities” means all then outstanding options, warrants, rights, convertible
notes, Preferred Stock or other securities of NCIL directly or indirectly
convertible into or exercisable for shares of NCIL.
B. “days”
means calendar days; provided that if any day falls on a weekend or a bank
holiday, the term “day” shall mean the next business day.
C. “Rights
of
First Refusal” means the rights of first refusal provided to the Company in
Section 3 of this Agreement.
D. “Seller”
means any Shareholder proposing to Transfer Seller
Shares.
2
E. “Seller
Shares” means all equity interest of NCIL owned as of the date hereof or
hereafter acquired by a Shareholder (as adjusted for any stock splits, stock
dividends, combinations, subdivisions, recapitalizations and the like.
F. “Transfer,”
“Transferring,” “Transferred,” or words of similar import, mean and include any
sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust,
gift,
transfer by bequest, devise or descent, or other transfer or disposition
of any
kind, including but not limited to transfers to receivers, levying creditors,
trustees or receivers in bankruptcy proceedings or general assignees for
the
benefit of creditors, whether voluntary or by operation of law, directly
or
indirectly.
2. Restrictions
on Transfer.
A. General.
Before a
Seller may Transfer any Seller Shares, Seller must comply with the provisions
of
Section 2(B), Section 3, and Section 4.
B. Notice
of Proposed Transfer.
Prior
to Seller Transferring any of its Seller Shares, Seller shall simultaneously
deliver to the Company a written notice (the “Transfer Notice”) in the form
attached hereto as Exhibit B, stating: (i) Seller’s bona fide intention to sell
or otherwise Transfer such Seller Shares; (ii) the identity of each proposed
purchaser or other transferee (the “Proposed Transferee”); (iii) the aggregate
number of Seller Shares proposed to be Transferred to each Proposed Transferee
(the “Offered Shares”); (iv) the bona fide cash price or, in reasonable detail,
other consideration for which Seller proposes to Transfer the Offered Shares
(the “Offered Price”); and (v) the Company’s right to exercise its Right of
First Refusal with respect to the Offered Shares.
3. Right
of First Refusal.
A. Term
of this Agreement.
The
term of Agreement shall commence on the Contribution Date (as defined in
the
Joint Venture Agreement) and expire on the date five (5) years after the
Contribution Date.
B. Exercise
by the Company.
For
a
period of thirty (30) days (the “Initial Exercise Period”) after the last date
on which the Transfer Notice is, pursuant to Section 6(A) hereof, deemed
to have
been delivered to the Company, the Company shall have the right to exercise
its
right to purchase all or any part of the Offered Shares on the terms and
conditions set forth in this Section 3. In order to exercise its right
hereunder, the Company must deliver written notice to Seller within the Initial
Exercise Period (a “ROFR Confirmation Notice”).
C. Closing;
Payment.
The
Company shall effect the purchase of all or any portion of the Offered Shares,
including the payment of the Offered Price which may be in cash or in
securities, within thirty (30) days after the delivery of the ROFR Confirmation
Notice (the “Right of First Refusal Closing”). At such Right of First Refusal
Closing, Seller shall deliver to the Company one or more certificates, properly
endorsed for transfer, representing such Offered Shares so
purchased.
D. Permitted
Sales.
In the
event the ROFR Confirmation Notice is not given by the Company within the
Initial Exercise Period, the Seller shall have thirty (30) days from the
expiration of the Initial Exercise Period to close the sale of all or any
part
of the Offered Shares at the Offered Price to the Proposed Transferee in
all
respect upon terms and conditions which are no more favorable to the Proposed
Transferee or less favorable to the Company than those set forth in the Transfer
Notice.
3
E. Further
Sale.
In each
case, any Offered Shares not purchased by the Company or the Proposed Transferee
in accordance with Section 3(D) may not be sold or otherwise disposed of
until
they are again offered to the Company under the procedures set forth in Sections
3(A), 3(B) and 3(C).
4. Conditions
to Valid Transfer.
A. Generally.
Any
attempt by any Seller to Transfer any Seller Shares in violation of any
provision of this Agreement will be void. No securities shall be transferred
by
Seller unless (i) such Transfer is made in compliance with all of the terms
of
this Agreement and all applicable securities laws and (ii) prior to such
Transfer, the transferee or transferees sign a counterpart to this Agreement
pursuant to which it or they agree to be bound by the terms of this Agreement.
NCIL may not (a) transfer on its books any shares that have been sold, gifted
or
otherwise Transferred in violation of any provisions of this Agreement or
(b) to
treat as owner of such shares, or accord the right to vote or pay dividends
to
any purchaser, donee or other transferee to whom such shares may have been
so
Transferred.
B. Consent
to Transfers.
Each
Shareholder irrevocably agrees with the Company that it shall not offer,
sell,
contract to sell, gift, exchange, assign, pledge or otherwise encumber or
dispose of any Seller Shares (or enter into any transaction which is designed
to, or might reasonably be expect to, result in the Transfer, (whether by
actual
disposition or effective economic disposition due to cash settlement or
otherwise) by such Shareholder or any affiliate of such Shareholder, directly
or
indirectly, including the establishment or increase in a put equivalent position
or liquidation or decrease in 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 the Seller without the prior written
consent of the Company.
Furthermore, ▇▇▇▇▇ irrevocably agrees with the Company that he will not directly
or indirectly, and will not permit the shareholders of RAD to directly or
indirectly, offer, sell, contract to sell, gift, exchange, assign, pledge
or
otherwise encumber or dispose of any shares of RAD or agree or effect any
change
of control of RAD (or enter into any transaction which is designed to, or
might
reasonably be expect to, result in such transfer of shares of RAD or such
control of RAD (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) without the prior written consent of
the
Company, provided that this sentence shall not be construed to prohibit ▇▇▇▇▇
▇▇
from himself purchasing shares of RAD from the existing shareholders of RAD.
Provided, however, the period required for the written consents of the Company
set forth in this Section 4(B) shall expire the earlier of: (i) the date
five
(5) years from the date hereof; and (ii) the date six (6) months after the
date
of the issuance of the financial leasing business license granted to the
WFOE
(as set forth in Section 2.6 of the Joint Venture Agreement).
5. Restrictive
Legend and Stop Transfer Orders.
A. Legend.
Each
Shareholder understands and agrees that NCIL will cause the legend set forth
below, or a legend substantially equivalent thereto, to be placed upon any
certificate(s) or other documents or instruments evidencing ownership of
Seller
Shares by such Shareholder:
4
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE SOLD,
DISPOSED OF OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH CERTAIN RIGHTS OF
FIRST
REFUSAL AS SET FORTH IN A RIGHT OF FIRST REFUSAL AGREEMENT ENTERED INTO BY
THE
HOLDER OF THESE SHARES, THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY.
A
COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
B. Stop
Transfer Instructions.
In
order to ensure compliance with the restrictions referred to herein, each
Seller
agrees that NCIL may issue appropriate “stop transfer” certificates or
instructions in the event of a Transfer in violation of any provision of
this
Agreement and that it may make appropriate notations to the same effect in
its
records.
C. No
Indirect Transfers.
▇▇▇▇▇
▇▇ shall not Transfer , directly or indirectly, any of the shares held by
him in
RAD or in NCIL (HK) and shall ensure that he controls at all times subsequent
to
the date hereof at least 64% of the outstanding voting shares of RAD, including
by preventing any dilution of such ownership percentage by voting against
any
new issuance of shares by RAD or otherwise. ▇▇▇▇▇ ▇▇ shall take no action
inconsistent with the rights granted hereunder or the Company’s exercise of such
rights.
D. Maintenance
of the Business of NCIL in the Ordinary Course.
During
the period from the date of this Agreement and continuing until the earlier
of:
(i) the date five (5) years from the date hereof; and (ii) the date six (6)
months after the date of the issuance of the financial leasing business license
granted to the WFOE (as set forth in Section 2.6 of the Joint Venture
Agreement), ▇▇▇▇▇ ▇▇ and RAD jointly and severally covenant that they shall
not
allow, cause or permit any NCIL to do, cause or permit any of the following,
without the prior written consent of the Company:
(1) Issuance
of Securities.
Issue,
deliver or sell or authorize or propose the issuance, delivery or sale of,
or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or subscriptions, rights, warrants or options
to
acquire, or other agreements or commitments of any character obligating it
to
issue any such shares or other convertible securities;
(2) Intellectual
Property.
Transfer or license to any person or entity any rights to any intellectual
property other than the license of non-exclusive rights to intellectual property
in the ordinary course of business consistent with past practice;
(3) Dispositions.
Sell,
lease, license or otherwise dispose of or encumber any of its properties
or
assets which are material, individually or in the aggregate, to its business,
taken as a whole, except in the ordinary course of business consistent with
past
practice and except in respect of real estate and securities currently-owned
by
NCIL which shall be disposed as soon as commercially practicable and the
proceeds retained in NCIL;
5
(4) Acquisitions.
Acquire
by merging or consolidating with, or by purchasing a substantial portion
of the
assets of, or by any other manner, any business or any corporation (except
for
special purpose vehicles without material assets and liabilities in connection
with the ordinary course of NCIL’s business), partnership, association or other
business organization or division thereof, or otherwise acquire any assets
which
are material, individually or in the aggregate, to its business, taken as
a
whole, or acquire any equity securities of any corporation (except for special
purpose vehicles without material assets and liabilities in connection with
the
ordinary course of NCIL’s business), partnership, association or business
organization;
(5) Accounting
Policies and Procedures.
Make
any material change to NCIL’s financial accounting methods, principles,
policies, procedures or practices, except as may be required by International
Financial Reporting Standards or Generally Accepted Accounting Principles
in the
United States;
6.
Miscellaneous Provisions.
A. Notices.
All
notices and other communications required or permitted hereunder shall be
in
writing and shall be mailed by registered or certified mail, postage prepaid,
sent by facsimile or electronic mail or otherwise delivered by hand or by
messenger addressed:
(1) if
to an
Shareholder, at the Shareholder’s address, facsimile number or electronic mail
address as shown in NCIL’s records, as may be updated in accordance with the
provisions hereof;
(2) if
to
NCIL, one copy should be sent to 2106 China World Tower A, ▇▇. ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, Attn: Chief Executive Officer, or to such other
address as NCIL shall have furnished to the Shareholders; or
(3) if
to the
Company, one copy should be sent to ▇▇▇▇ ▇▇▇▇, ▇▇/▇▇, ▇▇▇▇▇ Insurance Group
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇. Attn: Director, or to such
other address as the Company shall have furnished to the Shareholders;
or
(4) if
to
▇▇▇▇▇ ▇▇, one copy should be sent to Mr. Ma.
Each
such
notice or other communication shall for all purposes of this Agreement be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours
after
the same has been deposited in a regularly maintained receptacle for the
deposit
of the mail, addressed and mailed as aforesaid or, if sent by facsimile,
upon
confirmation of facsimile transfer or, if sent by electronic mail, upon
confirmation of delivery when directed to the electronic mail address set
forth
on Exhibit A and Exhibit B hereto.
6
B. Successors
and Assigns.
This
Agreement, and any and all rights, duties and obligations hereunder, shall
not
be assigned, transferred, delegated or sublicensed by any Shareholder without
the prior written consent of the Company. Any attempt by an Shareholder without
such permission to assign, transfer, delegate or sublicense any rights, duties
or obligations that arise under this Agreement shall be void. Subject to
the
foregoing and except as otherwise provided herein, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
C. Severability.
If any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision,
or such provision in its entirety, to the extent necessary, shall be severed
from this Agreement, and such court will replace such illegal, void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the same economic, business and
other
purposes of the illegal, void or unenforceable provision. The balance of
this
Agreement shall be enforceable in accordance with its terms.
D. Amendment.
Except
as expressly provided herein, neither this Agreement nor any term hereof
may be
amended, waived, discharged or terminated other than by a written instrument
referencing this Agreement and signed by the Company; provided, however,
that
any amendment that materially and adversely affects the Shareholders or ▇▇▇▇▇
▇▇
shall also require the consent of such Shareholders or ▇▇▇▇▇ ▇▇, as the case
may
be. Any such amendment, waiver, discharge or termination effected in accordance
with this paragraph shall be binding upon each Seller and ▇▇▇▇▇ ▇▇.
E. Continuity
of Other Restrictions.
Any
Seller Shares not purchased by the Company pursuant to its Right of First
Refusal hereunder will continue to be subject to all other restrictions imposed
upon such Seller Shares hereunder and by law, including any restrictions
imposed
under NCIL’s organizational documents, or by agreement.
7
F. Governing
Law.
This
Agreement shall be governed in all respects by the internal laws of the State
of
New York as applied to agreements entered into among New York residents to
be
performed entirely within New York, without regard to principles of conflicts
of
law that would result in the application of the law of any other
jurisdiction.
G. Obligation
of NCIL.
NCIL
agrees to use its commercially reasonable efforts to enforce the terms of
this
Agreement, to inform the Company of any breach hereof (to the extent the
Company
has knowledge hereof) and to assist the Company in the exercise of its rights
hereunder to the extent permitted by law.
H. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
enforceable against the parties that execute such counterparts, and all of
which
together shall constitute one instrument.
I. Further
Assurances.
Each
party hereto agrees to execute and deliver, by the proper exercise of its
corporate, limited liability company, partnership or other powers, all such
other and additional instruments and documents and do all such other acts
and
things as may be necessary to more fully effectuate this
Agreement.
J. Conflict
In the
event of any conflict between the terms of this Agreement and any other
agreement to which a Shareholder or Ma is a party or by which such Shareholder
or Ma is bound, the terms of this Agreement will control.
K. Attorney’s
Fees.
In the
event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right
of
such prevailing party under or with respect to this Agreement, including
without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.
8
L. Jurisdiction
of Disputes.
Any
disputes arising out of or in connection with this Agreement shall be finally
settled by arbitration under the Rules of the Hong Kong International
Arbitration Centre (the “Arbitration Centre”) by three (3) arbitrators appointed
as follows: one (1) arbitrator shall be appointed by ▇▇▇▇▇ ▇▇, one (1)
arbitrator shall be appointed by the Company, and the third arbitrator shall
be
appointed jointly by the two arbitrators appointed by ▇▇▇▇▇ ▇▇ and the Company.
If such two arbitrators fail to appoint such third arbitrator within a period
of
thirty (30) days, then such third arbitrator shall be appointed by the chairman
of the Arbitration Centre. The place of arbitration shall be in Hong Kong.
The
arbitration shall be conducted in English. The arbitration awards shall be
final
and binding upon the parties.
The
costs of the arbitration proceeding and any proceeding in court to confirm
or to
vacate any arbitration award, as applicable (including each party’s attorneys’
fees and costs), shall be borne by the unsuccessful party or, at the discretion
of the arbitrator, may be prorated between the parties in such proportion
as the
arbitrators determine to be equitable and shall be awarded as part of the
arbitrators’ award.
9
M. Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits and schedules
shall, unless otherwise provided, refer to sections and paragraphs hereof
and
exhibits and schedules attached hereto.
N. Entire
Agreement.
This
Agreement and the exhibits hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
supersedes and replaces any and all prior agreements and understandings,
whether
written or oral, between the parties concerning the subject matter of this
Agreement. No party hereto shall be liable or bound to any other party in
any
manner with regard to the subjects hereof or thereof by any warranties,
representations or covenants except as specifically set forth
herein.
O. Delays
or Omissions.
Except
as expressly provided herein, no delay or omission to exercise any right,
power
or remedy accruing to any party to this Agreement upon any breach or default
of
any other party under this Agreement shall impair any such right, power or
remedy of such non-defaulting party, nor shall it be construed to be a waiver
of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind
or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party to this Agreement,
shall be cumulative and not alternative.
P. Telecopy
Execution and Delivery.
A
facsimile, telecopy or other reproduction of this Agreement may be executed
by
one or more parties hereto and delivered by such party by facsimile or any
similar electronic transmission device pursuant to which the signature of
or on
behalf of such party can be seen. Such execution and delivery shall be
considered valid, binding and effective for all purposes. At the request
of any
party hereto, all parties hereto agree to execute and deliver an original
of
this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Right of First Refusal
Agreement on the day and year first above written.
ASIA
LEADER INVESTMENTS LIMITED
By:
/s/
▇▇▇▇▇▇▇ ▇▇
Name:
▇▇▇▇▇▇▇ ▇▇
Title:
Director
NEW
CENTURY INTERNATIONAL LEASING CO. LTD. (the PRC company)
By:
/s/
▇▇▇▇▇ ▇▇
Name:
▇▇▇▇▇ ▇▇
Title:
Director
RAD
INTERNATIONAL INVESTMENT FUND LTD.
By:
/s/
▇▇▇▇▇ ▇▇
Name:
▇▇▇▇▇ ▇▇
Title:
Director
NEW
CENTURY INTERNATIONAL LEASING CO., LTD. (the Hong Kong company)
By:
/s/
▇▇▇▇▇
▇▇
Name:
▇▇▇▇▇ ▇▇
Title:
Director
/s/
▇▇▇▇▇
▇▇
▇▇▇▇▇
▇▇
By
execution hereof, each Shareholder represents and warrants that he is the
sole
legal and beneficial owner of Seller Shares and that no other person has
any
interest in such shares.
EXHIBIT A
SHAREHOLDERS
OF NCIL
|
Name
|
Percentage
of Equity Interest in NCIL
|
|
|
RAD
|
80%
|
|
|
NCIL
(HK)
|
20%
|
2
EXHIBIT B
NOTICE
OF SHARE TRANSFER
We,
____________, wish to transfer ____________ shares (the “Seller
Shares”)
of New
Century International Leasing Co. Ltd. (the “Company”)
pursuant to a (please check one): sale ( ) other ( )
(please describe) .
We
propose to transfer Seller Shares to the following entities and
individuals:
|
1.
Proposed
Transferee #1
- [Address]
[Phone
Number]
|
[amount,
type and price of shares]
|
|
|
2.
Proposed
Transferee #2
[Address]
[Phone
Number]
|
[amount,
type and price of shares]
|
|
|
3.
Proposed
Transferee #3
[Address]
[Phone
Number]
|
[amount,
type and price of shares]
|
The
cash
consideration for Seller Shares totals $________. The fair market value of
the
non-cash consideration for Seller Shares, if any, as of the date of this
Notice
totals $________.
The
non-cash consideration consists of (please describe in reasonable detail):
Pursuant
to the Right of First Refusal Agreement, dated as of February __, 2008 we
write
to inform you of your Right of First Refusal with respect to Seller Shares.
If
you choose to do so, you may exercise these rights with respect to Seller
Shares
by returning this Notice to us, at the address below, with a copy to the
Company. If you decline your right to do so, you need not return
anything.
We
exercise my Right of First Refusal o
We
wish
to buy ________ shares .
WE
MUST RECEIVE YOUR NOTICE BY the
date 30 days after date Notice deemed to have been received by
you.
There is no extension of this deadline.
[Seller’s
Address and Name]
3