Exhibit 10.9
OPTION AGREEMENT
BY
AND AMONG
ORIENTAL INTRA-ASIA ENTERTAINMENT (CHINA) LIMITED
SHUDONG XIA
ZHIPING ZHANG
ZHIBIN LAI
AND
WEI GAO
CONTENTS
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Clause
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Page
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1.
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GRANT OF
OPTION
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1
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2.
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EXERCISE OF
OPTION AND COMPLETION OF TRANSACTION
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1
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3.
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FULFILMENT OF
OPTION
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3
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4.
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REPRESENTATIONS
AND WARRANTIES
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4
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5.
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TAX
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7
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6.
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LIABILITIES FOR
BREACH OF CONTRACT
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7
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7.
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APPLICABLE LAW
AND SETTLEMENT OF DISPUTES
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7
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8.
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CONFIDENTIALITY
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8
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9.
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SUPPLEMENTARY
PROVISIONS
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8
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APPENDIX
A FORM OF AGREEMENT ON TRANSFER
OF EQUITY INTEREST
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12
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1. DEFINITIONS
AND INTERPRETATIONS
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13
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2. REPRESENTATIONS
AND WARRANTIES
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14
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3. ASSIGNMENT
OF EQUITY INTEREST
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14
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4. SUPPLEMENTARY
PROVISIONS
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15
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ANNEX 1 FORM OF
RESOLUTION OF SHAREHOLDERS' MEETING
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19
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ANNEX 2 FORM OF
POWER OF ATTORNEY
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20
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APPENDIX
B FORM OF WAIVER OF RIGHT OF
FIRST REFUSAL
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21
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Option Agreement
This Option
Agreement (this " Agreement ") is entered into by the
following parties on February 3, 2009 in Beijing, the
People’s Republic of China (" China "):
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Oriental
Intra-Asia Entertainment (China) Limited, a company established in
China and having its registered address at Room 1009, Tower C2,
Oriental Plaza, No. 1 Dongchangan Avenue, Dongcheng District,
Beijing China, ("Oriental");
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Shudong Xia,
whose Chinese ID number is 422125721020561, with his principal
domicile at Room 7-3-802 Xingbiaojiayuan,Wanliu, Haidian District,
Beijing, China;
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Zhiping Zhang,
whose Chinese ID number is 11010819690428187X, with his principal
domicile at Room 14-8-602, Anheyuan, Tianxiuhuayuan, Haidian
District, Beijing, China; and
Zhibin Lai,
whose Chinese ID number is 35262719731111001X, with his principal
domicile at Room 2010, No.1 Building, Bixingyuanxiaoqu,
Luozhuangxili, Zhichun Road, Haidian District, Beijing,
China
Wei Gao, whose
Chinese ID number is 110108197910135427, with her principal
domicial at Room 307, Unit 3, Building A7, Courtyard #11, Fucheng
Road, Haidian District, Beijing, China (collectively as
“Shareholders” and individually as
“Shareholder”)
(hereinafter
the parties referred to individually as a " Party " and
collectively as the " Parties ".)
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Shareholders
collectively hold 100% of the equity interest of China TransInfo
Technology Group Co., Ltd. (“Group”) (the “Equity
Interest”); and
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The Parties
agree to enter into this Agreement.
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NOW
THEREFORE , the Parties
hereby agree as follows:
Shareholders
grant to Oriental the option (the “Option”) to purchase
the Equity Interest, at the exercise price equal to the lowest
possible price permitted by the PRC laws.
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EXERCISE OF
OPTION AND COMPLETION OF TRANSACTION
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2.1.1
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Shareholders agree that, subject to compliance
with legal restrictions on foreign investment under applicable laws
of China, Oriental may exercise the Option in whole or in part to
acquire all or part of the Equity Interest, at any time after the
signing of this Agreement.
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2.1.2
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For the avoidance of doubt, Shareholders hereby
agree that Oriental may exercise the Option, without any limits on
the frequency of its exercise, until Oriental acquires all of the
Equity Interest.
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2.1.3
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Shareholders agree that Oriental may designate a
third party to exercise the Option on its behalf, provided that
Oriental shall give a 3-day prior written notice to
Shareholders.
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Shareholders agree that Oriental may assign all
or part of the Option to any third party. In the event
of any such assignment and upon written notice of such assignment
from Oriental to Shareholders, the Option may be exercised by such
third party pursuant to the terms and conditions of this Agreement.
Such third party shall be deemed to be a party to this Agreement
and shall assume Oriental's rights and obligations under this
Agreement.
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2.3.1
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If Oriental intends to exercise the Option, it
shall issue an irrevocable written notice to Shareholders no later
than 3 days prior to each Completion Date (as defined below),
specifying:
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2.3.1.1
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effectiveness date of the purchase ("
Completion Date ");
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2.3.1.2
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name of the party registering the Equity
Interest;
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2.3.1.3
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percentage of the Equity Interest to be
purchased from Shareholders;
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2.3.1.4
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method of payment; and
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2.3.1.5
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related authorization documents, such as the
document authorizing the third party to exercise the
Option.
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2.3.2
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For the avoidance of doubt, the Parties
expressly agree that Oriental has the right to exercise the Option
and to decide whether or not to register the Equity Interest in a
third party's name.
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2.4
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Appointment of Director and Senior Management
Personnel
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After the execution of this Agreement, Oriental
shall have the right to nominate persons to Group to be appointed
as directors and senior management personnel (including but not
limited to general manager, deputy general manager, financial
controller, marketing director, technology director). Each
Shareholder shall, to the extent applicable PRC law requires a
shareholder vote, vote his shares of Group to appoint the persons
nominated by Oriental to hold the positions as directors of Group,
and vote its shares to instruct the executive director of Group to
appoint the persons nominated by Oriental to hold the positions as
senior management of Group.
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Completion
of Transactions
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On the Completion Date, Oriental shall pay to
Shareholders the exercise price to purchase the Equity Interest
pursuant to Section 1.1 and Shareholders shall acknowledge the
receipt and sufficiency of the consideration.
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3.1
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Agreement on Transfer of Equity
Interest
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When signing and delivering this Agreement,
Shareholders shall at Oriental's request sign (or, in the case of
the waiver letter, use commercially reasonable efforts to procure
the execution of) and deliver one or more agreement(s) for the
transfer of equity interest as set out in the Appendix A hereto ("
Equity Transfer Agreement ") and other necessary documents,
including the waiver letter in the form of Appendix 3 ("
Ancillary Documents ") intended to cause all or part of
Equity Interest to be effectively transferred to Oriental or its
designated person. The Equity Transfer Agreement and
Ancillary Documents shall be held in the custody of
Oriental. On the Completion Date, when Oriental
exercises the Option and pays the price for the Equity Interest,
Oriental shall promptly deliver the Equity Transfer Agreement and
Ancillary Documents relating to such Equity Interest to its
designated person who shall be entitled to insert the name of the
transferee (if not already done so), date the signed Equity
Transfer Agreement and Ancillary Documents and submit the same to
the relevant authorities in order to give full effect to the
transfer of the Equity Interest.
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3.2
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Resolution of Shareholders'
Meeting
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Notwithstanding the provisions of the above
Article 3.1, at the time of the signing and delivery of this
Agreement, Shareholder shall at Oriental's request sign and deliver
one or more resolution(s) of the shareholders' meeting of Group,
substantially in the form of Annex 1 of Appendix A hereto (each
referred to as a " Resolution "). The Resolution shall
approve the following matters:
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3.2.1
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completion of the transfer of all or part of the
Equity Interest to Oriental or its designated person;
and
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3.2.2
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other reasonable matters that Oriental may
require.
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Each Resolution shall be held in the custody of
Oriental. On each Completion Date when Oriental
exercises the Option and pays the price for the Equity Interest,
Oriental or its designated person shall date the Resolution as of
the date of exercise.
4.
REPRESENTATIONS AND WARRANTIES
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4.1
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Representations and Warranties
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Shareholders represent and warrant to
Oriental:
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4.1.1
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each Shareholder has full authority to sign this
Agreement;
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4.1.2
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this Agreement constitutes a valid and binding
obligation of Shareholders, enforceable in accordance with its
terms;
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4.1.3
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the signing of this Agreement and the
performance of any of his obligations hereunder neither breaches
any laws, regulations or contracts binding upon him, nor requires
any authorization or approval from the government;
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4.1.4
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to the best of his knowledge, no Shareholder is
involved in any lawsuit, arbitration or other juridical or
administrative proceedings which may have a material and adverse
effect upon this Agreement and performance hereof;
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4.1.5
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they have disclosed to Oriental all documents
issued by any governmental authority that may have a material
adverse effect upon the performance of the obligations
hereunder;
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4.1.6
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other than the pledge of Equity Interest in
favor of Oriental (or its designated third party), the Equity
Interest held by Shareholders in Group is free of any lien,
mortgage, pledge or third party's rights;
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4.1.7
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except in favor of Oriental (or its designated
third party), the Equity Interest held by Shareholders shall remain
intact, and is free of any lien, mortgage, pledge or third party's
right, and Shareholders will not transfer, grant, pledge or
otherwise dispose of his Equity Interest;
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4.1.8
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the Option granted by Shareholders to Oriental
is an exclusive right, and the Option or any similar right will not
be granted to any third party in any way and no rights or
obligations exist that would in any way impair Oriental's rights
under this Agreement.
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Shareholders further represent and warrant to
Oriental that they collectively own 100% of the Equity Interests of
Group.
The Parties
hereby agree that as of each Completion Date, the representations
and warranties set out from Article 4.1.1 to Article 4.1.8 shall be
repeated, and shall be deemed to be given as of such Completion
Date.
Shareholders undertake to Oriental
that:
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4.2.1
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they will complete the formalities necessary for
registering Oriental and its designated person as the lawful
shareholder of Group, including but not limited to, assisting
Oriental in inserting the name of the transferee in the Equity
Transfer Agreement, dating the signed Equity Transfer Agreement and
submitting the Equity Transfer Agreement and Ancillary Documents to
the relevant industry and commerce administration department for
the purpose of amending the articles of association and updating
the shareholders' register, and other alteration
formalities.
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4.2.2
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they shall take all necessary actions to execute
all necessary documents and carry out all necessary registrations
within Shareholders' control (including registration with the
Ministry of Information Industries or its local branches) to
transfer the Equity Interest in accordance with applicable laws
upon the exercise of the Option.
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4.2.3
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they will not seek to influence the management
of Group in any manner, and without limiting the
foregoing:
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4.2.3.1
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they will not request Group to distribute
profits, funds, assets or property to Shareholders or any of their
Affiliates.
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4.2.3.2
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if they receive any dividends from Group with
respect to the Equity Interest or cash dividends, Shareholders
shall pay to Oriental an amount equal to such dividends within 7
days thereafter.
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4.2.3.3
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they will not engage in the following activities
and not approve in their capacities as shareholders (without the
prior written consent of Oriental) the engagement
of Group in any of the following activities unless the
prior written consent of Oriental is obtained:
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(a)
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to create or undertake debts that are not in the
ordinary course of business of Group, or are in the
ordinary course of the business of Group but are in
excess of US$5,000;
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(b)
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to create or undertake any mortgage, pledge or
any other type of encumbrance on any of Group's existing properties
or properties acquired in the future;
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(c)
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to acquire assets of any third party on behalf
of Group, or to execute any agreement, arrangement,
commitment or memorandum for the same;
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(d)
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to sell, lease or otherwise dispose of any
assets of Group, or to execute any agreement,
arrangement, commitment or memorandum for the same;
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(e)
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to borrow or
lend money to any third party on behalf of Group, or to
execute any agreement, arrangement, commitment or memorandum for
the same;
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(f)
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to assume any obligation, give a guarantee or
endorsement for any third party on behalf of Group or assume
responsibility in whatever form for any third party's obligation on
behalf of Group, or to execute any agreement,
arrangement, commitment or memorandum for the same;
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(g)
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to approve the annual budget and annual business
plan and any material deviations thereof;
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(h)
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to make any capital expenditure
by Group other than in the ordinary course of its
business or greater than an aggregate of US$25,000 in any 12 month
period;
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(i)
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to commit any act that may endanger the
legitimate existence or commercial interest
of Group;
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(j)
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to take any action that, according to the
effective articles of association of Group, requires a
unanimous consent of all shareholders or the executive director
of Group;
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(k)
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to cause Group to engage in any
business which is not expressly specified in its business
license;
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(l)
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when exercising his rights in the capacity as a
shareholder of Group (including but not limit
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