Share Purchase Agreement
Exhibit
10.2
Between:
WINNING
INTERNATIONAL DEVELOPMENT LIMITED, a corporation duly formed under the British
laws with its legal address at Palm Grove House, X.X.Xxx 438, Road Town,
Tortola, British Virgin Islands (the “Seller”);
And:
Wonder
Auto Limited, corporation duly formed under the British laws with its legal
address at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands (the “Purchaser”,
and
together with the Seller,
the
“Parties”);
WHEREAS,
the Seller
holds
50% of the total shares of Jinzhou Xxxx Xxx Precision Co. Ltd. (the
“Xxxx
Xxx”),
which
is engaged on manufacturing, marketing, developing, selling, supplying and
distributing regulator, rectifiers, and related products for automotive
alternators within the territory of the People’s Republic of China;
WHEREAS,
the Seller,
Xx.
Xxxxx Xxxx, a Korean natural person, and Ms. Zhenshu Xxx, a Korean natural
person have signed all the necessary articles of association and agreements
for
implementing the business objectives and business scopes of Xxxx Xxx. These
necessary articles of association and agreements and other related agreements
and documents shall be collectively referred to as the “Xxxx
Xxx Corporation Documents”;
WHEREAS,
Xxxx
Xxx
has
received all approvals necessary for its establishment and operation from the
relevant governmental authorities of the PRC, including its business
license;
WHEREAS,
according to the seventeenth (17) provision of the Articles of Association,
the
Board of Xxxx
Xxx
is the
supreme authority in Xxxx
Xxx and
responsible for decision-making for all important issues in various activities,
businesses, and operations of Xxxx
Xxx;
WHEREAS,
the Board members of Xxxx
Xxx
have
unanimously adopted a resolution at August 23, 2006, which agreed and approved
the Seller
to
transfer its 50% shares in Xxxx
Xxx
and all
its rights and obligations stipulated in the Xxxx
Xxx Corporation Documents
(collectively referred to as the “Seller’s
Rights and Interests”)
to the
Purchaser,
and
agreed and approved to make relevant amendments to the Xxxx
Xxx Corporation Documents.
The
Board has agreed to do all such things and to sign all such documents as may
be
necessary and proper to give effect to such resolutions;
5
Adhering
to the principle of equality and mutual benefit and through friendly
consultations, the Parties
have
signed this Agreement as follows at Jinzhou City, Liaoning Province of PRC
at
this 23rd
date of
August 2006 (the “Signing
Date”)
:
Article
1 Share Transfer
1.1 |
The
Seller
hereby
agrees to sell and the Purchaser
agrees
to buy the Seller’s
Rights and Interests in
accordance with stipulations of this
Agreement.
|
1.2 |
The
Purchaser
hereby
agrees to undertake all the responsibilities and obligations related
with
the Seller
Rights and Interests
and under the Xxxx
Xxx Corporation Documents in
accordance with stipulations of this
Agreement.
|
Article
2 Purchase Price and Payments Terms
2.1. |
The
Seller
hereby
agrees to pay a sum of 4.85 Million U.S. Dollars (US$4,850,000) (the
“Purchase
Price”)
in exchange for the Seller’s
Rights and Interests as
specified in this Agreement.
|
2.2 |
Within
one (1) month from the signing date of this Agreement, the Purchaser
shall
deposit US$2.43 million (US$2,430,000) as the first payment of the
Purchase
Price to
the designated bank account of the Seller.
|
2.3 |
The
Parties
hereby
agree that the Purchaser
shall
deposit the remaining Purchase
Price US$2.42
million (US$2,420,000) to the designated bank account of the Seller
within
5 days after the confirmation by the Purchaser
that
Xxxx Xxx attains a net income of no less than RMB13 million ($13,000,000)
for the fiscal year 2006, provided,
however,
that if Xxxx Xxx’x 2006 net income for the fiscal year of 2006 is less
than XXX 00 million ($13,000,000), the Purchaser
is
entitled to deduct the Purchase
Price proportionally
with the amount of unfulfilled
profit
|
2.4 |
Within
three (3) business days after the first payment by the Purchaser
as
stipulated in Clause 2.2 above, the Parties
shall:
|
2.4.1 |
Prepare,
execute and file all necessary or required documents to the relevant
governmental authorities of the PRC for the alternation of
shareholding.
|
2.4.2 |
The
Seller
shall
provide the Purchaser
with
all documents and cooperation necessary or required in order to let
the
purchaser takeover the Seller’s
Rights and Interests when
this Agreement
is
signed.
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2.5 |
The
Seller
agrees
that after signing of this Agreement,
the Purchaser
shall
become the owner of the 50% interest in Xxxx
Xxx and
participate in the management and operation of Xxxx
Xxx immediately.
|
2.6 |
From
the Signing
Date of
this Agreement,
the Seller
shall
no longer retain any rights and interests in Xxxx
Xxx,
including its former power in Xxxx
Xxx, and
the Purchaser
shall
have all the rights as a shareholder with respect to the 50% of the
total
shares of Xxxx
Xxx covered
by this Agreement.
|
Article
3 Disposition of the Distributable Profit Accrued Before Signing of This
Agreement
After
this Agreement
becomes
effective on the Signing
Date,
all the
distributable profit of Xxxx
Xxx
in 2005
shall be disposed as follows:
3.1 |
All
the distributable profit of Xxxx
Xxx in
2005 shall be owned by the shareholders in Xxxx
Xxx before
the Signing
Date of
this Agreement.
|
3.2 |
All
the distributable profit of Xxxx
Xxx in
2005 shall be distributed under the condition without any shortages
of
Xxxx Xxx’x working capital.
|
Article
4 Liabilities
4.1 |
From
the Signing
Date of
this Agreement, the Seller
shall
not be responsible for any liabilities of Xxxx
Xxx whether
arising before, on or after the consummation of the transactions
contemplated by this Agreement. In case this Agreement is not effected,
the Seller
shall
resume the relevant liabilities of Xxxx
Xxx.
|
Article
5 Board of Xxxx Xxx
5.1 |
From
the Signing
Date of
this Agreement, whereat the dispatched director of the Seller
shall
resign; The Seller
covenants
that it will cause three (3) of the Purchaser’s
designees to be appointed to the board of the directors of Xxxx
Xxx and
such appointments shall become effective upon the resignation of
the
directors designated by the Seller.
|
Article
6 Confirmation of Profit and Loss
6.1 |
The
Parties
hereby
confirm that they intend that the Purchase
Price represents
the fair value of the Seller’s
Rights and Interests.
Consequently, the interests of the Parties’
in
the course of the share transfer in this Agreement are
fair.
|
7
Article
7 Responsibilities of the Parties
7.1 |
From
the Signing Date of this Agreement, the Parties
shall
take appropriate commercial measures to avoid any adverse consequences
of
the share transfer in this Agreement on the employees and the customers
of
Xxxx
Xxx.
|
7.2 |
From
the Signing
Date of
this Agreement, the Parties
shall
properly exercise their obligations as shareholders in light of their
pre-existing ownership, and warrant that its designated directors
shall
comply with the terms of this
Agreement.
|
7.3 |
The
Purchaser
covenants
and agrees that:
|
7.3.1 |
Undertaking
all responsibilities and obligations relating to, in connection with
or in
respect of the Seller
Rights and Interests under
the Xxxx
Xxx Corporation Documents and
promise to observe and perform.
|
7.3.2 |
Carrying
on and conducting Xxxx
Xxx’x
business in a proper and efficient manner so as to preserve and protect
Xxxx
Xxx’x
properties and assets, its business and its earnings, incomes, rents,
issues and profits.
|
Article
8 Amendment
8.1 |
Any
amendments to this Agreement shall be put forward in writing between
the
Parties.
|
Article
9 Termination
9.1 |
This
Agreement can be terminated by written agreement between the Parties.
|
9.2 |
If
one party commits a breach or delays performance of any of its obligation
under this Agreement and fails to remedy such breach or performance
delay
within thirty (30) days after receiving a written notice of such
breach or
performance delay from the non-breaching or non-delaying party, the
non-
breaching or non-delaying party may terminate this
Agreement.
|
9.3 |
If
one party makes this Agreement impossible to perform, the other party
may
terminate this Agreement.
|
Article
10 Remedies
10.1 |
If
one party commits a beach or does not perform its duties or obligations
under this Agreement for any reason, such breaching or non-performing
party shall be responsible for the breach or non-performance of its
duties
or
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8
obligations
and shall compensate all losses suffered by the non-breaching party
as a
result thereof.
|
10.2 |
In
the event the Purchaser
fails
to perform its obligations set forth in Clause 2.2 of this Agreement
and
such non-performance lasts up fifteen (15) calendar days, the Seller
may
unilaterally terminate this Agreement, and if this Agreement is so
terminated by the Seller,
the Purchaser
shall
compensate the Seller
in
the amount equal to ten percent (10%) of the Purchase
Price.
|
Article
11 Force Majeure
11.1 |
If
performance of this Agreement in whole or in part is prevented, restricted
or interfered with by reason of an earthquake, storm, flood, fire,
war,
strike or any other cause beyond the reasonable control of the Parties
(each a “Force Majeure condition”), the party suffering from the force
majeure shall inform the other party in facsimile. The suffering
party
shall provide to the other party a valid evidentiary document setting
forth in detail the Force Majeure Condition, its expected duration
and the
consequences, which should be effective and proved by the notarization
agency in the place where the force majeure took place within fifteen
(15)
days after the incident. If the duration of the force majeure lasted
for
three (3) months, the Parties
shall
thereafter consult with each other so as to avoid or minimize the
loss
caused by the force majeure and possibility of terminating this agreement.
If the Parties
cannot
agree on a mutually satisfying solution within three (3) months of
such
consultation, either party may send a thirty (30) days intent written
notice to the other party to take a vote about whether terminate
this
Agreement or not.
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Article
12 Dispute Resolution
12.1 |
All
disputes between the Parties
arising
out of or in connection with this Agreement shall be settled between
the
Parties
by
discussion and mutual accord. If a mutual accord cannot be reached
between
the Parties
within
thirty (30) days of the receipt of the written notice by one of the
Parties
of
the dispute to the other party, either party may submit the dispute
to
arbitration to the International Chamber of Commerce in Stockholm,
Sweden
for final resolution in accordance with its arbitration rules. The
judgment of the arbitration panel shall be final and binding upon
the
Parties
and
both Parties
agree
to abide by such judgment of the arbitration panel. The arbitration
fees
shall be borne by the losing party.
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9
Article
13 Waiver
13.1 |
Any
act of non-performance or delay on the performance of any rights,
damages
for breach, termination and any other rights under this Agreement
shall
not be deemed an act of waiver. The exclusive or partial performance
of
any rights, compensation, damages for breach and any other rights
under
this Agreement shall not affect the performance of these and other
rights.
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Article
14 Miscellaneous
14.1 |
This
Agreement shall become effective as of the Signing
Date.
|
14.1 |
This
Agreement is written and executed in Chinese and English, and the
two
versions written in Chinese and in English with equal legal
effect.
|
14.2 |
In
case any one or more of the provisions of this Agreement is held
invalid,
illegal or unenforceable in whole or in part, the validity, legality
and
enforceability of the remaining provisions or the remaining applications
shall not be affected or impaired.
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14.3 |
The
preamble forms are an integral part of this Agreement.
|
14.4 |
This
Agreement shall be executed in seven (7) copies. The Seller
and
the Purchaser
shall each keep two (2) copies, and the Xxxx
Xxx
shall keep three (3) copies for purposes of going through relevant
shareholder alternation
formalities.
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10
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
The
Seller:
WINNING
INTERNATIONAL DEVELOPMENT LIMITED
Representative’s Signature:
/s/ Xuhui Xie
The
Purchaser:
WONDER
AUTO LIMITED
Representative’s
Signature:
/s/
Xxxxxxx Xxxx
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