SHARE TRANSFER AGREEMENT BETWEEN
Exhibit
10.7
BETWEEN
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AND
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Date:
April 2, 2010
THIS
SHARE TRANSFER AGREEMENT (this "Agreement") is made on April
2, 2010 by and among ▇▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇ (the "Transferor") and the
individual listed in Schedule
A hereto (the "Transferee").
The
Transferor and the Transferee are collectively referred to as the "Parties" and
each of them as a "Party".
Whereas,
the Transferor holds 50,000 ordinary shares in Apex Smart Limited (the
"Company") and is the sole registered shareholder of the Company; the Company is
one of the registered shareholders of Delight Reward Limited, a British Virgin
Islands Company, which intends to complete a business combination with a public
shell company traded on the Over the Counter Bulletin Board (the "Listed
Company").
Whereas,
the Transferee has contributed to the wealth growth of the Transferor through
the growth of the Company, the Listed Company, Delight Reward Limited and their
PRC subsidiaries and affiliates (collectively with the Company, the "Group"). In consideration of
the Transferee' contributions and as an incentive to the Transferee to continue
his/her commitment to the Group, the Transferor has agreed to grant to the
Transferee, and the Transferee has agreed to accept from the Transferor, an
option (the "Option") to
purchase certain number of ordinary shares of the Company currently held by the
Transferor (the "Option
Shares") as set forth in Schedule A hereto, on the
terms and subject to the conditions set out in this Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1.
DEFINITIONS
1.1
Defined
Terms : In this Agreement (including the Recitals and the Schedules),
unless the context otherwise requires, the following words and expressions shall
have the following meanings:
"Acquisition" means the
transaction wherein the Listed Company will acquire 100% equity interest
(whether directly or through its subsidiaries) of the Ningbo Keyuan Plastics
Co., Ltd. 
"Alternate Exercise Price"
means the exercise price to be paid by a Transferee to the Transferor in
respect of the Option Shares issued to such Transferee as set forth opposite
his/her name in Schedule
A in the event that the Performance Targets (as defined herein) have not
been met by the Group;
"Business Day" means a day
(other than Saturdays, Sundays and public holidays) on which banks are generally
open for business in China;
"China" or "PRC" means the
People's Republic of China, and for purpose of this Agreement, excluding the
Hong Kong Special Administrative Region, the Macao Special Administrative Region
and the island of Taiwan;
"Completion Date" means
the date falling seven (7) Business Days after the service of the Exercise
Notice by the Transferee on the Transferor;
"Completion" means the
completion of the sale to and purchase by the Transferee of the Option Shares
under this Agreement;
"Distributions" means any cash
proceeds arising from or in respect of, or in exchange for, or accruing
to or in consequence of the Option Shares from the Effective Date to the
Completion Date, including without limitation the Dividends.
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"Dividends" means the dividends declared by the
Company and accrued in respect of the Option Shares (whether or not such
dividends shall have been paid and received by the Transferor);
"Effective Date" means the
date of this Agreement;
"Exercise" means the exercise by a Transferee
or his/her Nominee(s) of the Option pursuant to the terms of this
Agreement;
"Exercise Notice" means the
notice substantially in the form set out in Part I of Schedule B;
"Exercise Price" means the
exercise price to be paid by a Transferee to the Transferor in respect of the
Option Shares issued to such Transferee as set forth opposite his/her name in
Schedule A;
"Nominee" means such person nominated by a
Transferee in the Transfer Notice to be the transferee of the Option or Option
Shares;
"Option Effective Dates" have
the meaning ascribed to them in Clause 2.3;
"Performance Targets" have the
meaning ascribed to them in Clause 3;
"RMB"
means the lawful currency of China;
"Transfer Notice" means the
notice substantially in the form set out in Part II of Schedule B; "US$" or "United States Dollar" means
the lawful currency of the United States of America.
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..2. Interpretation:
Except to the extent that the context requires otherwise:
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1.2.1
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words
denoting the singular shall include the plural and vice versa; words
denoting any gender shall include all genders; words denoting persons
shall include firms and corporations and vice
versa;
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1.2.2
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any
reference to a statutory provision shall include such provision and any
regulations made in pursuance thereof as from time to time modified or
re-enacted whether before or after the date of this Agreement and (so far
as liability thereunder may exist or can arise) shall include also any
past statutory provisions or regulations (as from time to time modified or
re-enacted) which such provisions or regulations have directly or
indirectly replaced;
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1.2.3
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the
words "written"
and "in writing"
include any means of visible
reproduction;
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1.2.4
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any
reference to "Clauses",
"Recitals" and "Schedules" are to be construed as references
to clauses and recitals of and schedules to, this Agreement;
and
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1.2.5
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any
reference to a time of day is a reference to China time unless provided
otherwise.
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1.3. Headings: The
headings in this Agreement are inserted for convenience only and shall
be
ignored
in construing this Agreement.
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2.
OPTION
2.1.
Option: In
consideration of the contributions which the Transferee has made to the Group
and their continuing commitment to the Group, the Transferor hereby irrevocably
and unconditionally grants to the Transferee the Option for such Transferee to
acquire from the Transferor, at the Exercise Price or the Alternative Exercise
Price, at any time during the Exercise Period (defined below) any or all of the
Option Shares set forth opposite his/her name in Schedule
A hereto, free from all claims, liens, charges, pledges, mortgages,
trust, equities and other encumbrances, and with all rights attaching thereto on
the Completion Date.
2.2.
Vesting Schedule:
Subject to the terms and conditions hereto, the Option may be exercised,
in whole or
in part, in accordance with the following schedule:
The
Option Shares subject to the Option shall vest at the rate of one-third (1/3)
per Performance Period (as defined in Exhibit A).
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2.3.
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Exercise Period:
Once the Acquisition has been completed or abandoned pursuant to
the terms of the definitive agreement regarding the Acquisition, the
Option shall be exercisable in accordance with and on the dates set forth
in Exhibit
A (the "Option
Effective Dates"). Subject to the vesting schedule set forth in
Section 2.2 of this Agreement, the Option may be exercised by any
Transferee (or his/her Nominee on behalf of the Transferee) at any time
following the Option Effective Date ("Exercise
Period").
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2.4.
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Nominees: Each
of the Transferee may, at any time during the Exercise Period, at his/hex
sole discretion, nominate one or more person(s) (each a "Nominee")
to be the transferee(s) of whole or part of his/her Option, who
shall hold and/or exercise the transferred Option on behalf of the
Transferee.
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2.5.
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Exercise Notice:
The Option may be exercised by any Transferee or his/her
Nominee(s), in whole or in part, at any time during the Exercise Period,
by serving an Exercise Notice on the
Transferor.
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2.6.
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Exercise: The
Transferor agrees that he shall, upon receipt of the Exercise Notice and
payment of either the Exercise Price or the Alternative Exercise Price,
depending on whether the Performance Targets have been met, issue to the
Transferee(s) (or his/her Nominee(s), as the case may be) any and all of
the Option Shares specified in the Exercise Notice, free from all claims,
liens, charges, pledges, mortgages, trust, equities and other
encumbrances, and with all rights now or hereafter attaching thereto. The
Option shall be exercisable only in compliance with PRC laws and
regulations and the Transferee(s) (or his/her Nominee(s), as the case may
be) shall complete any and all approval or registration procedures
regarding the exercise of his/her Option at PRC competent authorities in
accordance with applicable PRC laws and
regulations.
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2.7.
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Transfer Notice:
In case that any Transferee transfers any or all of his/her Option
to one or more Nominee(s) in accordance with Clause 2.4 above, the
Transferee shall serve a Transfer Notice on the
Transferor.
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2.8.
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Transfer to Nominees:
The Transferor agrees that he shall, upon receipt of the Transfer
Notice, take all actions necessary to allow the Nominee(s) to be entitled
to any or all of the Options specified in the Transfer
Notice.
Upon exercise by any Nominee(s) of the transferred
Option on behalf of the Transferee, the Transferee shall serve the
Exercise Notice on the Transferor in his/her own name for the exercising
Nominee(s). Upon receipt of such Exercise Option, the Transferor shall
issue to such
Nominee(s) any and all of the relevant Option Shares in the same manlier
as specified in Clause 2.6.
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2.9.
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Payment of Exercise
Price: Upon Exercise of the Option in whole or in part, the
exercising Transferee (or his/her Nominee(s), as the case may be) shall
pay the Exercise Price to the
Transferor.
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2.10.
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The Transferor's
Obligation upon Exercise: The Transferor agrees that upon the
Exercise of any Option by any Transferee (or his/her Nominee(s)), he shall
cause and procure the number of Option Shares provided in the Exercise
Notice to be transferred to such exercising Transferee (or his/her
Nominee(s)) within seven (7) Business Days after the date of the Exercise
Notice.
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3.
PERFORMANCE
TARGET AND CONDITION PRECEDENT
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3.1.
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The
obligation of the Transferor to effect the Option and the transfer of the
Option Shares at the Exercise Price to an exercising Transferee upon
his/her Exercise of the Option shall be subject to the fulfilment of the
conditions set forth in Exhibit
A hereto (the "Performance
Targets"). In the event
that the Group does not achieve the Performance Targets specified in
Exhibit A, then the Transferee may exercise the Option at the Alternative
Exercise Price on the date at which the Option would have otherwise been
exercisable had the Performance Targets been
met.
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4.
INFORMATION,
DISTRIBUTIONS AND ADJUSTMENTS
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4.1.
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Information:
The Transferee (the "Requesting
Transferee") shall be entitled to request from the Transferor at
any time before the Completion, a copy of any information received from
the Group which may be in the possession of the Transferor and, upon such
request, the Transferor shall provide such information to the Requesting
Transferee(s).
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4.2.
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Distributions:
The Transferor agrees that the Transferee shall be entitled to all
the Distributions in respect of his/her Option Shares. In the event
that any such Distributions have been received by the Transferor for any
reason, the Transferor shall, at the request of the relevant Transferee,
pay an amount equivalent to the Distributions received by him/her to such
Transferee at the time of the Option Exercise by the
Transferee.
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4.3.
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Adjustments:
If,
prior to the Completion, the Company shall effect any adjustment in
its share capital (such as share split, share dividend, share combination
or other similar acts), then the number of Option Shares to be issued to
the Transferee upon Exercise shall be adjusted accordingly to take into
account such adjustment.
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5.
COMPLETION
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5.1.
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Time and Venue:
Completion of the sale and purchase of the Option Shares pursuant
to the Exercise shall take place at such place decided by the exercising
Transferee(s) on the Completion
Date.
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5.2.
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Business at
Completion: At Completion of each Exercise, all
(but not part only) of the following
shall be transacted:
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5.2.1
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the
exercising Transferee shall pay the Exercise Price to the Transferor in
cash;
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5.2.2
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the
Transferor shall cause the Company to within seven (7) Business Days after
the date of Exercise Notice, deliver to the exercising Transferee(or
his/her Nominee(s), same
below) the following documents and take all corporate actions necessary to
give effect to such
delivery:
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(a)
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a
share certificate or share certificates in respect of the number of the
Option Shares exercised by such exercising
Transferee;
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(b)
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a
certified true copy of the register of members of the Company updated to
show the entry of the exercising Transferee as the holder of the Option
Shares so exercised; and
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(c)
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any
other documents as the exercising Transferee may reasonably believe necessary
to give effect to the issuance of the exercised Option
Shares.
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6.
CONFIDENTIALITY
The
transaction contemplated hereunder and any information exchanged between the
Parties pursuant to this Agreement will be held in complete and strict
confidence by the concerned Parties and their respective advisors, and will not
be disclosed to any person except: (i) to the Parties' respective officers,
directors, employees, agents, representatives, advisors, counsel and consultants
that reasonably require such information and who agree to comply with the
obligation of non-disclosure pursuant to this Agreement; (ii) with the express
prior written consent of the other Party; or (iii) as may be required to comply
with any applicable law, order, regulation or ruling, or an order, request or
direction of a government agency; provided, however, that the foregoing shall
not apply to information that: (1) was known to the receiving Party prior to its
first receipt from the other Party; (2) becomes a matter of public knowledge
without the fault of the receiving Party; or (3) is lawfully received by the
Party from a third person with no restrictions on its further
dissemination.
7. TRANSFEROR'S
UNDERTAKINGS
Without
the prior written consent of the Transferee, the Transferor shall vote his
shares in the Company such that the Company and any other member of the Group
shall not, (i) issue or create any new shares, equity, registered capital,
ownership interest, or equity-linked securities, or any options or warrants that
are directly convertible into, or exercisable or exchangeable for, shares,
equity, registered capital, ownership interest, or equity-linked securities of
any member of the Group, or other similar equivalent arrangements, (ii) alter
the shareholding structure of any member of the Group, (iii) cancel or otherwise
alter the Option Shares, (iv) amend the register of members or the memorandum
and articles of association of any member of the Group, (v) liquidate or wind up
any member of the Group, or (vi) act or omit to act in such a way that would be
detrimental to the interest of the Transferee in the Option Shares. The
Transferor shall cause the Company to disclose to the Transferee true copies of
all the financial, legal and commercial documents of any member of the Group and
the resolutions of the shareholders and the board of directors.
8.
MISCELLANEOUS
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8.1
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Indulgence, Waiver
Etc: No failure on the part of any Party to exercise and no delay
on the part of such Party in exercising any right hereunder will operate
as a release or waiver thereof, nor will any single or partial exercise of
any right under this Agreement preclude any other or further exercise of
it or any other right or remedy.
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8.2.
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Effective Date and Continuing Effect
of Agreement: This Agreement shall take effect from the Effective
Date. All provisions of this Agreement shall not, so far as they have not
been performed at Completion, be in any respect extinguished or affected
by Completion or by any other event or matter whatsoever and shall
continue in full force and effect so far as they are capable of being
performed or observed, except in respect of those matters then already
performed.
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8.3.
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Successors and
Assigns: This Agreement shall be binding on and shall ensure for
the benefit of each of the Parties' successors and permitted assigns. Any
reference in this Agreement to any of the Parties shall be construed
accordingly.
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8.4.
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Further Assurance:
At any time after the date of this Agreement, each of the Parties
shall, and shall use its best endeavors to procure that any necessary
third party shall, execute such documents and do such acts and things as
any other Party may reasonably require for the purpose of giving to such
other Party the full benefit of all the provisions of this
Agreement.
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8.5.
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Remedies: No
remedy conferred by any of the provisions of this Agreement is intended to
be exclusive of any other remedy which is otherwise available at law, in
equity, by statute or otherwise, and each and every other remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law, in equity, by statute or otherwise.
The election of any one or more of such remedies by any Party shall not
constitute a waiver by such. Party of the right to pursue any other
available remedies.
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8.6.
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Severability of
Provisions: If any provision of this Agreement is held to be
illegal, invalid or unenforceable in whole or in part in any jurisdiction,
this Agreement shall, as to such jurisdiction, continue to be valid as to
its other provisions and the remainder of the affected provision; and the
legality, validity and enforceability of such provision in any other
jurisdiction shall be unaffected.
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8.7.
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Governing Law:
This Agreement shall be governed by, and construed in accordance
with, the laws
of the British Virgin
Islands.
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8.8.
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Dispute Resolution:
In the event of any dispute, claim or difference (the "Dispute") between any
Parties arising out of or in connection with this Agreement, the Dispute
shall be resolved in accordance with the
following:
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(a)
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Negotiation
between Parties; Mediations. The Parties agree to negotiate in good
faith to resolve any Dispute. If
the negotiations do not resolve the Dispute to the reasonable
satisfaction of all parties within thirty (30) days, subsection (b) below
shall apply.
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(b)
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Arbitration.
In the event the Parties are unable to settle a Dispute in
accordance with subsection (a) above, such Dispute shall be referred to
and finally settled by arbitration at Hong Kong International Arbitration
Centre in accordance with the UNCITRAL Arbitration Rules (the "UNCITRAL Rules")
then in effect, which rules are deemed to be incorporated by
reference into this subsection (b). The arbitration tribunal shall consist
of three arbitrators to be appointed according to the UNCITRAL Rules. The
language of the arbitration shall be
English.
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8.9.
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Counterparts:
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party hereto may enter into this Agreement by signing any such
counterpart.
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[SIGNATURE
PAGE(S)
FOLLOW]
6
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.
The Transferor
By: /s/
▇▇▇▇▇ ▇▇▇-▇▇▇
▇▇▇
Name: ▇▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇
The
Transferee
By: /s/ ▇▇. ▇▇▇▇▇▇▇▇
▇▇▇
Name: [ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇]
[SIGNATURE
PAGE TO INCENTIVE OPTION AGREEMENT]