EXCLUSIVE OPTION AGREEMENT
AMONG
DALIAN DIVERSIFIED PRODUCT INSPECTIONS BIMETALLIC CABLE CO., LTD.
AND
DALIAN FUSHI ENTERPRISE GROUP CO., LTD.
YANG XXX
XXXX XI XXXX
XX XXXX XXX
DALIAN FUSHI BIMETALLIC MANUFACTURING CO., LTD.
DECEMBER 13, 2005
DALIAN, CHINA
EXCLUSIVE OPTION AGREEMENT
This Exclusive Option Agreement (the "Agreement") is entered into as of December
7th, 2005 between the following parties in Dalian.
Party A: Dalian Diversified Product Inspections Bimetallic Cable Co., Ltd.
Registered Address: Xx.00 Xxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Dalian.
Legal Representative: Xx Xx
Party B: Dalian Fushi Enterprise Group Co., Ltd.
Registered Address: Xx. 000, Xxxx Xxxx, Xxxxxxx district, Dalian
Legal Representative: Xx Xx
Party C: Xxxx Xxx
A citizen of PRC, Identity Card Number:210105681115317
Party D: Yang Xi Shan
A citizen of PRC, Identity Card Number:211202391010301
Party E: Xu Xxxx Xxx
A citizen of PRC, Identity Card Number:210221571122078
Party F: Dalian Fushi Bimetallic Manufacturing Co., Ltd.
Registered Address: No. 999 Wuyi Road, Jinzhou District, Dalian
Legal Representative: Xx Xx
In this Agreement, Party A, Party B, Party C, Party D, Party E and Party F are
called collectively as the "Parties" and each of them is called as the "Party".
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 B is a liability limited company incorporated in Dalian and with
business license issued by the Dalian Municipal Administration of Industry
and Commerce;
3. As of the date of this Agreement Party B, Party C, Party D, and Party E
are shareholders of Party F and collectively legally hold all of the
equity interest of Dalian Fushi Company, of which Party B holds 87.73%,
Party C holds 10%, Party D holds 1.64% and Party E holds 0.63%
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NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this
Agreement according to the following terms and conditions:
1. THE GRANT AND EXERCISE OF PURCHASE OPTION
Grant: Each Party B, C, D, E hereby grants Party A an irrevocable
exclusive purchase option. Party A has right to purchase all or part of the
shares of Party F currently owned by any of Party B, C, D and E, or to purchase
all or part of the assets of Party F, in each case in accordance with Article
1.3 of this contract. This purchase option is 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.
Exercise Procedures:
Party A shall notify Parties B, C, D, and E in writing prior to exercising
its option (the "Option Notice" hereinafter).
The next day upon receipt of the Option Notice, Parties B, C, D, E and F,
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 transfer
in connection with the Option exercise so that the shares or assets transfer can
be transferred, in whole or in part.
Upon the completion of the compilation of all the Transfer Documents and
the Transfer Documents being confirmed by Party A, Parties B, C, D, E and F
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 of Party F in connection with the
Option exercise.
Exercise Condition: Party A may exercise the option of acquiring the
equity interests in or remaining assets of Party F, upon the satisfaction of the
following condition:
The PRC government has issued a national regulation to allow acquisition of PRC
companies using shares in off-shore companies as consideration; or at any time
upon which Party A believes there's a necessity and possibility for the exercise
of the Option
2. Price of Option
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The option price shall be determined using one of the following methods:
2.1 If a national regulation has been issued to allow acquisition of PRC
companies using shares of off-shore companies as consideration, Party A may
immediately exercise the Option and the consideration for such exercise shall be
the shares in Parallel Technologies, Inc. the US holding company for Party A,
which shares have already been received by the shareholders of Party F (i.e.
each Party B, C, D and E). Under this circumstance, Party A is not required to
pay any other consideration for acquisition of Party F;
2.2 If a national regulation has not been issued to allow acquisition of
PRC companies using shares of off-shore companies as consideration at the time
when Party A exercises the Option, the purchase price for the remaining assets
of Party F shall be the appraisal price of such assets. Any consideration
obtained by Party F or its shareholders shall be 1) be returned all such
consideration to Party A for operation in accordance with the Entrusted
Management Agreement, or 2) be paid back to Party A in any other ways, and 3) to
the extent necessary, the shareholders of Party F shall execute any related
agreements or letters of undertaking that is necessary to pay back such
consideration. 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.
3. REPRESENTATIONS AND WARRANTIES
3.1 Each party hereto represents to the other parties that: (1) it has
all the necessary rights, powers and authorizations to enter into
this Agreement and perform its duties and obligations hereunder; and
(2) the execution or performance of this Agreement shall not violate
any significant contract or agreement to which it is a party or by
which it or its assets are bounded.
3.2 Party B, Party C, Party D, and Party E hereto represent to Party A
that: (1) they are legally registered shareholders of party F and
have paid Party F the full amount of their respective portions of
Party F's registered capital required under the PRC laws; (2) none
of Party B, Party C, Party D, or Party E has mortgaged or pledged
his shares of Party F, nor has either of them granted any security
interest or borrow against his shares of Party F in any form; and
(3) none of Party B, Party C, Party D, or Party E has sold or will
sell to any third party its equity interests in Party F.
3.3 Party F hereto represents to Party A that: (1) it is a limited
liability company duly registered and validly existing under the PRC
law; and (2) its business operations are in compliance with
applicable laws of the PRC in all material aspects.
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4. COVENANTS
The Parties further agree as follows:
4.1 Before Party A has acquired all the equity/assets of Party F by
exercising the purchase option provided hereunder, Party F 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 of Party F by
exercising the purchase option provided hereunder, Party B, Party C,
Party D, Party E and/or Party F shall not individually or
collectively:
4.2.1 supplement, alter or amend the articles of association of
Party F in any manner to the extent that such supplement,
alteration or amendment may have a material effect on Party
F's assets, liability, operation, shareholders' equity or
other legal rights;
4.2.2 cause Party F to enter into any transaction to the extent such
transaction may have a material effect on Party F's assets,
liability, operation, shareholders' equity or other legal
rights (unless such transaction is relating to Party F's daily
operation or has been disclosed to and agreed upon by Party A
in writing); and
4.3 Party B, Party C, Party D, and Party E shall entrust Party F to
Party A management in accordance with Entrusted Management
Agreement.
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5. ASSIGNMENT OF AGREEMENT
5.1 Party B, Party C, Party D, Party E and Party F shall not transfer
their rights and obligations under this Agreement to any third party
without the prior written consent of the Party A.
5.2 Each of Party B, Party C, Party D, Party E and Party F 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, Party D, Party E and Party F by Party A,
and no any further consent from Party B, Party C , Party D , Party E
and Party F will be required.
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:
a. 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);
b. The materials are required to be disclosed under the
applicable laws or the rules or provisions of stock exchange;
or
c. 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.
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.
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8. APPLICABLE LAW AND DISPUTE RESOLUTION
8.1 Applicable Law
he execution, validity, interpretation and performance of this
Agreement and he 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 (the "CIETAC") in accordance with
its rules. The arbitration shall take place in Beijing. The
arbitration award shall be final, conclusive and binding upon both
parties.
9. EFFECTIVENESS AND TERMINATION
9.1 This Agreement shall be effective upon the execution hereof by all
Parties hereto and shall remain effective thereafter.
9.2 This Agreement may not be terminated without the unanimous consent
of all the Parties except that Party A may, by giving a thirty (30)
days prior notice to the other Parties hereto, terminate this
Agreement.
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
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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 executed in Chinese in six (6) copies; 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.
IN WITNESS THEREFORE, 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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[No Text Below, Signature Page Only]
PARTY A: Dalian Diversified Product Inspections
Bimetallic Cable Co., Ltd. (Seal)
Legal Representative/Authorized Representative(Signature):
PARTY B: Dalian Fushi Enterprise Group Co., Ltd. (Seal)
Legal Representative/Authorized Representative(Signature):
PARTY C: Xxxx Xxx
Signature:
PARTY D: Yang Xi Shan
Signature:
PARTY E: Xu Xxxx Xxx
Signature:
PARTY F: Dalian Fushi Bimetallic Manufacturing Co., Ltd(Seal).
Legal Representative/Authorized Representative(Signature):
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