INCENTIVE OPTION AGREEMENT BETWEEN Weihua Zhao AND Individual Listed in Schedule A Date: January 27, 2010
Exhibit
10.9
BETWEEN
AND
Individual
Listed in Schedule A
Date:
January 27, 2010
THIS
INCENTIVE OPTION AGREEMENT (this "Agreement") is made on January
27, 2010 by and between Xxxxxx Xxxx, a New Zealand citizen (the "Grantor") and the individuals
listed in Schedule A
hereto (a "Grantee"
individually, and the “Grantees”
collectively).
The
Grantor and the Grantees are collectively referred to as the "Parties" and each of them as a
"Party".
Whereas,
the Grantor is the sole shareholder of Crown Orient International Limited (the
“Company”), a British Virgin Islands company.
Whereas,
Dragon Path International Limited (“Dragon Path”), a British
Virgin Islands company, intends to complete a reverse merger with X.X.X. Taste
on Demand Inc., a public shell company, traded on the OTCBB market (the "Public Company"), as a result
of which Dragon Path will be a wholly-owned subsidiary of Public Company and the
Company will become the majority shareholder of the Public Company;
Whereas,
each of the Grantees has contributed to the growth of the Company and its
subsidiaries and affiliates (collectively, the “Group”) In
consideration of each Grantee’s contributions to the Group and as an incentive
to such Grantee to continue his commitment to the Group, the Grantor has agreed
to grant to each Grantee, and each Grantee has agreed to accept from the
Grantor, an incentive option (the “Option”) to purchase certain
number of ordinary shares of the Company (the "Option Shares") as set forth
in Schedule A
corresponding to his/her name hereto, on the terms and subject to the conditions
set out in this Agreement.
Whereas,
the Grantee agrees that the Grantor transfers all shares of Dragon Path owned by Grantor
to the Company or the persons designed by it, and terminates the Incentive
Option Agreement dated November 18, 2009 on Effective Date;
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:
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1.
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DEFINITIONS
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1.1
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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:
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"Business Day" means a
day (other than Saturdays, Sundays and public holidays) on which banks are
generally open for business in China;
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"China" or "PRC" means the People's
Republic of China;
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"Completion Date" means
the date falling 62 (sixty-two) days after the service of the Exercise
Notice by the Grantee on the Company;
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"Completion" means the
completion of the sale to and purchase by the Grantee of the Option Shares
under this Agreement;
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"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 Grantee);
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"Effective Date" means
the date of Securities Exchange;
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"Exercise" means the
exercise by the Grantee or his Nominee(s) of the Option pursuant to the
terms of this Agreement;
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"Exercise Notice" means
the notice substantially in the form set out in Part I of Schedule B;
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"Exercise Price" means
the exercise price to be paid by the Grantee to the Grantor in respect of
the Option Shares issued to such Grantee as set forth opposite his name in
Schedule
A;
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"Nominee" means such
person nominated by a Grantee in the Transfer Notice to be the transferee
of the Option or Option Shares;
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"Option Effective Date"
has the meaning ascribed to it in Clause 2.3;
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"Performance Target" has
the meaning ascribed to it in Clause 3;
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"RMB" means the lawful
currency of China;
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“Securities Exchange”
means the transaction, by means of one or more
agreements, among all the Company, as principal shareholder of
Dragon Path, other shareholders and the Public Company by which the
Company and the other shareholders acquired stock in the Public Company,
and the Company and the other shareholders contributed the stock of Dragon
Path to the Public Company with the result that the Company and the other
shareholders together acquired an aggregate of approximately 95% of the
outstanding common stock of the Public Company;
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Transfer Notice" means
the notice substantially in the form set out in Pa II of Schedule B;
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"US$" or "United States Dollar"
means the lawful currency of the United States of
America.
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1.2.
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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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2
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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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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
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Headings: The
headings in this Agreement are inserted for convenience only and shall be
ignored in construing this
Agreement
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2.
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OPTION
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2.1
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Option: In
consideration of the contributions which each Grantee has made to the
Group and his continuing commitment to the Group, the Grantor hereby
irrevocably and unconditionally grants to each Grantee an Option for such
Grantee to acquire from the Grantor, at the Exercise Price, at any time
during the Exercise Period (defined below), to the extent that the Option
has vested, any or all of the Option Shares set forth opposite his 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.
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2.2
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34% of
the Option Shares subject to the Option shall vest and become exercisable upon
the date of fulfillment of the 2010 Revenue (as defined below), 33% of the
Option Shares subject to the Option shall vest and become exercisable on the
date of fulfillment of the 2011 Revenue (as defined below) and 33% of the Option
Shares subject to the Option shall vest and become exercisable on the date of
fulfillment of the 2012 Revenue (as defined below).
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2.3
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Exercise
Period: The Option shall vest and become effective and exercisable
at the times commencing on the dates set forth in Section 2.2 and shall
expire five years from the date of the Option. The Option may
be exercised by a Grantee (or his Nominee on behalf of the Grantee), to
the extent that the Option shall have vested, and only to that extent, at
any time prior to five years from the date of this Option (“Exercise
Period”).
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2.4
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2.5
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2.6
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3
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2.7.
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Transfer
Notice: In case that a Grantee transfers any or all of his Option
to one or more Nominee(s) in accordance with Clause 2.4 above, such
Grantee shall serve a Transfer Notice on the
Grantor.
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2.8.
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Transfer to
Nominees: The Grantor agrees that it shall, upon receipt of the
Transfer Notice, take all actions necessary to allow the Nominee(s) to be
entitled to any or all of Option specified in the Transfer
Notice.
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Upon
exercise by any Nominee(s) of the transferred Option on behalf of a Grantee,
such Grantee shall serve the Exercise Notice on the Grantor in his own name for
the exercising Nominee(s). Upon receipt of such Exercise Option, the
Grantor shall issue to such Nominee(s) any and all of the relevant Option Shares
in the same manner 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 Grantee (or his Nominee(s), as the case may be) shall pay the
Exercise Price to the Grantor.
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2.10.
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The Grantor’s
Obligation upon Exercise: The Grantor shall be given a notice of no
less than 61 days of any Exercise and agrees that upon the Exercise of any
Option by a Grantee (or his Nominee(s)), it shall cause and procure the
number of Option Shares provided in the Exercise Notice to be issued to
such exercising Grantee (or his Nominee(s)) on the 62nd
day of the Exercise Notice.
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3.
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PERFORMANCE
TARGET AND CONDITION
PRECEDENT
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3.1.
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The
obligation of the Grantor to effect the Option and the issuance of Option
Shares to an exercising Grantee upon his Exercise of the Option shall be
subject to the fulfilment of the following conditions (the “Performance Target”) set
forth in Exhibit A
hereto.
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4.
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INFORMATION,
DISTRIBUTIONS AND ADJUSTMENTS
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4.1.
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Information:
Each Grantee (the "Requesting
Grantee") shall be entitled
to request from the Grantor at any time before the Completion, a copy of
any information received from the Grantor which may be in the possession
of the Grantor and, upon such request, the Grantor shall provide such
information to the Requesting
Grantee.
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4.2.
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Distributions:
The Grantor agrees that each Grantee shall be entitled to all the
Distributions in respect of his Option Shares. In the event
that any such Distributions have been received by the Grantor for any
reason, the Grantor shall cause the existing shareholder at the request of
a Grantee to pay an amount equivalent to the Distributions received to
such Grantee.
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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 and the Exercise
Price shall be adjusted accordingly to take into account such
adjustment.
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4
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5.
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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 Grantee
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 Grantee shall pay the Exercise Price to the Grantor by wire
transfer or such other method as shall be reasonably acceptable to
Grantor;
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5.2.2
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the
Grantor shall, and to the extent that any action on the part of other
shareholders or the directors is required, procure the then existing
shareholders and directors of the Company to, within seven (7) Business
Days after the date of Exercise Notice, deliver to the exercising Grantee
(or his 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
Grantee;
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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 Grantee 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 Grantee may reasonably believe necessary
to give effect to the issuance of the exercised Option
Shares.
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6.
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CONFIDENTIALITY
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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.
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7.
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GRANTOR’S
UNDERTAKINGS
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Without
the prior written consent of each Grantee, the Grantor shall not and shall
procure the Company 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 the Company, or other similar equivalent arrangements, (ii) alter
the shareholding structure of the Company, (iii) cancel or otherwise alter the
Option Shares, (iv) amend the register of members or the memorandum and articles
of association of the Company, (v) liquidate or wind up the Company, or (vi) act
or omit to act in such a way that would be detrimental to the interest of each
Grantee in the Option Shares. The Grantor shall disclose to each
Grantee true copies of all the financial, legal and commercial documents of the
Company and the resolutions of the shareholders and the board of
directors.
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8.
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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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6
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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”) 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 FOLLOWS)
7
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.
The
Grantor
By:
/s/ Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Xxxxxx
Xxxx
8
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.
The
Grantees
By:
/s/ LI Boping
Name: LI
Boping
By:
/s/ DING Qinfen
Name:
DING Qinfen
By:
/s/ LI Panhong
Name: LI
Panhong
9
EXHIBIT
A
PERFORMANCE
TARGETS
2010
Revenue XXX 00 xxxxxxx
0000
Xxxxxxx XXX 25 million
2012
Revenue XXX 00 xxxxxxx
XXXXXXXX
A
Grantee and Option
Shares
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Grantees
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ID
Card/Passport Number
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Number
of
Option
Shares
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Exercise
Price
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LI
Boping
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320223196212216178
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7115
ordinary shares
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USD
2.00 per share
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DING
Qinfen
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320223196301176163
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2263
ordinary shares
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USD
2.00 per share
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LI
Panhong
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320223193712276173
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622
ordinary shares
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USD
2.00 per share
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SCHEDULE
B
Part
I
Form of Exercise
Notice
To : [ ]
(the “Grantor”)
From : [ ]
(the “Grantee”)
We refer
to the Incentive Option Agreement (the "Option Agreement") dated
January 27, 2010 made between the Grantee and the Grantor. Terms
defined in the Option Agreement shall have the same meanings as used
herein.
We hereby
give you notice that we require you to sell to [
] in accordance with the terms and conditions of the Option
Agreement, the following Option Shares at the Exercise Price set out below,
subject to the terms and conditions set out in the Option Agreement. Completion
shall take place at [ ] in
[ ] at the office of
[ ]
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Grantee
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Option Shares
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Exercise Price
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Dated：
Yours
faithfully
___________________________
Party
II
Form of Transfer
Notice
To : [ ]
(the “Grantor”)
From: [ ]
(the “Grantee”)
We refer
to the Incentive Option Agreement (the "Option Agreement") dated
January 27, 2010, made between the Grantee and the Grantor. Terms defined in the
Option Agreement shall have the same meanings as used herein.
We hereby
give you notice that we will transfer to [ ] the following portion
of the Option, expressed in terms of the number of Option Shares represented by
the portion of the Option transferred in accordance with the terms and
conditions of the Option Agreement,.
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Grantee
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Nominees
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Option Shares Represented
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[ ]
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Dated
[ ]
Yours
faithfully
___________________________
Name:
Title:
For and
on behalf of
[ ]