Document:

Unassociated Document

    Exhibit
10.7

    AMENDED AND RESTATED CALL
OPTION AGREEMENT

    

    

    This
AMENDED AND RESTATED CALL
OPTION AGREEMENT (this “Agreement”) is made and entered into as of May
12, 2010 (“Execution
Date”) between

    

    The “Grantees” set forth in Schedule
A

     

    Address:

    Dongshifangtai
Wenquan Management Zone,

    Liaoning
Province, Haichen City, 114226 P. R. China; and

    

    The “Grantor”

    

    Sherry
Li

    

    Address:

    87 Dennis
Street,

    Garden
City Park, NY 11040 USA; and

    

    and is
intended to amend, restate and replace, in its entirety, the original Call
Option Agreement by and between the Grantees and Grantor effective as of the
date of.

    

    Grantor
and Grantees are also referred to herein together as the “Parties” and
individually as a “Party”.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    RECITALS

    

    WHEREAS, the Grantor owns
18,000,000 shares, par value $0.001, of the issued and outstanding common stock
(the “Common Stock”) of China For-Gen Corp., a company incorporated in the State
of Delaware (the “Company”);

    

    WHEREAS, the Grantees agree
that the Grantor transfer all shares of Common Stock owned by Grantor to the
Grantees or the persons designated by Grantees;

    

    WHEREAS, the Grantor has
agreed to grant to the Grantees, and the Grantees have agreed to accept from the
Grantor, an incentive option (the “Option”) to purchase a certain number of
shares of Common Stock (the “Option Shares”) as set forth in Schedule
A to 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:

    

    AGREEMENT

    

    
      	
              1. 

            	
              DEFINITIONS;
      INTERPRETATION

            

    

    

    
      	
              1.1.

            	
              Terms
      defined in this Agreement. The following terms when used in this Agreement
      shall have the following
definitions:

            

    

    

    “Bankruptcy Law” means any Law
of any jurisdiction relating to bankruptcy, insolvency, corporate
reorganization, company arrangement, civil rehabilitation, special liquidation,
moratorium, readjustment of debt, appointment of a conservator, trustee or
receiver, or similar debtor relief.

    

    “Business Day” means any day
on which commercial banks are required to be open in the United
States.

     

    “Call Right” means the right
and option granted to Grantees to purchase Common Stock from the Grantor during
the Exercise Period.

     

    “Completion Date” means the
date within three (3) days after the service of the Exercise Notice by the
Grantees on the Company.

     

    “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 date hereof to the Expiration Date,
including without limitation, the Dividends.

     

    “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 Grantees or his
Nominee(s).

     

    “Exercise Date” means the date
for the Grantees or his Nominee(s) to exercise the Option pursuant to the terms
of this Agreement.

     

    “Exercise Price” means the
exercise price to be paid by the Grantees to the Grantor of $0.0001 per Option
Share.

     

    “Exercise Notice” means the
notice substantially in the form set out in Schedule
B.

     

    “Expiration Date” means 6:30
p.m. (New York time) on the fifth anniversary date therefrom.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Government Authority” means
any: (a) nation, principality, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or quasi
governmental authority of any nature (including any governmental division,
subdivision, department, agency, bureau, branch, office, commission, council,
board, instrumentality, officer, official, representative, organization, unit,
body or Person and any court or other tribunal); or (d) individual, Person or
body exercising, or entitled to exercise, any executive, legislative, judicial,
administrative, regulatory, police, military or taxing authority or power of any
nature.

     

    “Law” means any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, order, edict, decree,
proclamation, treaty, convention, rule, regulation, permit, ruling, directive,
pronouncement, requirement (licensing or otherwise), specification,
determination, decision, opinion or interpretation that is, has been or may in
the future be issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Government Authority.

     

    “Nominee” means such person
nominated by the Grantees in the Transfer Notice to be the transferee of the
Call Right or the Option Shares;

     

    “Person” means any individual,
firm, company, corporation, limited liability company, unincorporated
association, partnership, trust, joint venture, governmental authority or other
entity, and shall include any successor (by merger or otherwise) of such
entity.

     

    “Transfer Notice” means the
notice substantially in the form set out in Schedule
C.

     

    1.2.           Interpretation.

     

    (a)           Certain Terms. The
words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement
as a whole and any particular provision of this Agreement. The term “including”
is not limited and means “including without limitation.”

     

    (b)           Section References: Titles
and Subtitles. Unless otherwise noted, all references to Sections herein
are to Sections of this Agreement. The titles, captions and headings of this
Agreement are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this
Agreement.

     

    (c)            Reference to Entities,
Agreements. Statutes. Unless otherwise expressly provided herein,
(i)
references to a Person include its successors and permitted assigns, (ii)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements
and other modifications thereto or supplements thereof and (iii) references to
any statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such statute or regulation.

     

    2.            CALL
RIGHT AND VOTING TRUST

     

    2.1.           Call Right. The
Grantees shall have, during the Exercise Period (as defined below), the right
and option to purchase from the Grantor, and upon the exercise of such right and
option the Grantor shall have the obligation to sell to the Grantee or his
Nominee(s), the Option Shares identified in the Call Exercise Notice (the “Call
Right”) pursuant to the terms hereof. Grantees or Nominee(s) shall be permitted
to purchase, and Grantor shall be obligated to sell, the following number of
Option Shares upon the attainment of the following conditions:

     

    50% of
the Option Shares shall vest and become exercisable on December 31, 2010; 50% of
the Option Shares shall vest and become exercisable on December 31,
2011.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
anything in this Agreement, in case that the Grantor violates any provision of
this Agreement, the Grantees shall receive an irrevocable Call Right to any and
all of the Option Shares then held by the Grantor, The Grantees shall be
entitled to exercise such Call Right immediately and the Grantor shall transfer
to the Grantees or his Nominee(s) all of the Option Shares immediately upon the
Grantees’ or his Nominee(s)’s exercise of such Call Right.

     

    2.2.
Call Period.
The Call Right shall be exercisable by Grantees, by delivering a Call Exercise
Notice at any time during the Exercise Period commencing on the date hereof and
ending at 6:30 p.m. (New York time) on the fifth anniversary date therefrom
(such date or the earlier expiration of the Call Right is referred to herein as
the “Expiration
Date”).

     

    2.3.
Nominees: Each Grantee
may, at any time during the Exercise Period, at his sole discretion, nominate
one or more person(s) (each a “Nominee”) to be the transferee(s) of whole or
part of his Call Right, who shall hold and/or exercise the transferred Call
Right on behalf of such Grantee.

    

    2.4.
Exercise Process.
In order to exercise the Call Right during the Exercise Period, each
Grantee or his Nominee(s) shall deliver to the Grantor, a written notice of such
exercise substantially in the form attached hereto as Schedule
B (a “Call Exercise Notice”) to such
address or facsimile number as set forth therein. The Call Exercise Notice shall
indicate the number of the Option Shares as to which the Grantee or his
Nominee(s) is/are then exercising his/her Call Right and the aggregate Call
Price. Provided the Call Exercise Notice is delivered in accordance with Section
5 to the Grantor on or before 6:30 p.m. (New York time) on a Business Day, the
date of exercise (the “Exercise
Date”) of the Call Right shall be the date of such delivery of such Call
Exercise Notice. In the event the Call Exercise Notice is delivered after 6:30
p.m. (New York time) on a Business Day or on a day which is not a Business Day,
the Exercise Date shall be deemed to be the first Business Day after the date of
such delivery of such Call Exercise Notice. The delivery of a Call Exercise
Notice in accordance herewith shall constitute a binding obligation (a) on the
part of the Grantee or his Nominee(s) to purchase, and (b) on the part of the
Grantor to sell, the Option Shares subject to such Call Exercise Notice in
accordance with the terms of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    2.5.
Call Price. If
the Call Right is exercised pursuant to this Section 2, as payment for the
Option Shares being purchased by the Grantees or Nominee(s) pursuant to the Call
Right, such Grantees or Nominee(s) shall pay the aggregate Call Price to the
Grantor within fifteen (15) Business Days of the Exercise Date.

     

    2.6  Transfer Notice: In
case any Grantee transfers any or all of his Call Right to one or more Nominees
in accordance with Section 2.3 above, the Grantee shall provide a Transfer
Notice to the Grantor.

     

    2.7 Voting Trust: The
Grantor hereby agrees to irrevocably appoint each Grantee with the exclusive
right to exercise, on his/her behalf, all of his/her voting rights with respect
to the Option Shares in accordance with the relevant laws and Articles of
Association of the Company. The Grantees shall have right to vote their
respective Option Shares on behalf of the Grantor before all Option Shares are
transferred to the Grantees. The Grantees hereby agree to accept such
authorization.

     

    2.8 Adjustment: If, prior
to the Completion Date, the Company shall effect any adjustment in its share
capital (such as a 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 such adjustment into account.

    

    
      	
              3. 

            	
              ENCUMBRANCES;
      TRANSFERS, SET-OFF AND WITHHOLDINGS

            

    

     

    3.1.
Encumbrances.
Upon exercise of the Call Right, the Option Shares being purchased shall be
sold, transferred and delivered to the Grantees free and clear of any claim,
pledge, charge, lien, preemptive rights, restrictions on transfers (except as
required by securities laws of the United States), proxies, voting agreements
and any other encumbrance whatsoever.

     

    3.2 Transfers. Prior to
the Expiration Date, the Grantor shall continue to own, free and clear of any
hypothecation, pledge, mortgage or other encumbrance, except pursuant to this
Agreement and for the benefit of the Grantees, such number of Option Shares as
may be required from time to time in order for the Grantees to exercise their
Call Rights in full.

     

    3.3.
Set-off. The
Grantees shall be entitled to receive all of the Option Shares subject to the
exercise of a Call Right, and for the purposes of this Agreement, Grantor hereby
waives, as against the Grantees or any of their Nominee(s), all rights of
set-off or counterclaim that would or might otherwise be available to the
Grantor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.4           Escrow of the Option
Shares.

     

    (a)          Upon
execution of this Agreement, the Grantor shall deliver to Grantee the stock
certificates representing the Option Shares. The stock certificates representing
the Option Shares (together with duly executed stock powers in blank) shall be
held by Grantee.

    

    (b)          Upon
receipt of a Call Exercise Notice, the Grantee shall promptly deliver the Option
Shares being purchased pursuant to such Call Exercise Notice in accordance with
the instructions set forth therein.

    

    
      	
              4. 

            	
              REPRESENTATIONS,
      WARRANTIES AND COVENANTS.

            

    

     

    4.1.             Representations and
Warranties by the Grantor. The Grantor represents and warrants to the
Grantees that:

     

    (a)          Valid and Binding
Obligations. This Agreement, and all agreements and documents executed
and delivered pursuant to this Agreement, constitute valid and binding
obligations of the Grantor, enforceable against such Grantor in accordance with
its terms, subject to applicable Bankruptcy Laws and other laws or equitable
principles of general application affecting the rights of creditors
generally.

    

    (b)           No Conflicts. Neither
the execution or delivery of this Agreement by the Grantor nor the fulfillment
or compliance by the Grantor with any of the terms hereof shall, with or without
the giving of notice and/or the passage of time, (i) conflict with, or result in
a breach of the temrs, conditions or provisions of, or constitute a default
under, any contract or any judgment, decree or order to which Grantor is subject
or by which the Grantor is bound, or (ii) require any consent, license, permit,
authorization, approval or other action by any Person or Government Authority
which has not yet been obtained or received. The execution, delivery and
performance of this Agreement by the Grantor or compliance with the provisions
hereof by the Grantor do not, and shall not, violate any provision of any Law to
which the Grantor is subject or by which it is bound.

     

    (c)          No Actions. There are
no lawsuits, actions or investigations, or to the best knowledge of the Grantor,
claims or demands from any other third party, or other proceedings pending or,
to the best of the knowledge of the Grantor, threatened against the Grantor
which, if resolved in a manner adverse to the Grantor, would adversely affect
the right or ability of the Grantor to carry out its obligations set forth in
this Agreement (the “Actions”) as of the execution of this Agreement. The
Grantor further warrants and covenants that such actions will not occur after
the execution of this Agreement.

    

    (d)           Title. The Grantor
owns the Option Shares free and clear of any claim, pledge, charge, lien,
preemptive rights, restrictions on transfers, proxies, voting agreements and any
other encumbrance whatsoever, except as contemplated by this Agreement. The
Grantor has not entered into or is a party to any agreement that would cause the
Grantor to not own such Option Shares free and clear of any encumbrance, except
as contemplated by this Agreement

     

    (e)           Exercise of Rights.
Without first obtaining written instruction from the Grantees, the Grantor will
not exercise any rights in connection with the Option Shares to which the
Grantor is entitled as of the date of this Agreement, including but not limited
to voting rights, share transfer right, dividends rights, preemptive right or
any rights in connection with pledge, proxy, charge, lien. The Grantor further
warrants and covenants that it will, unconditionally and immediately, exercise
any rights in connection with the Option Shares in compliance with the Grantees’
written instruction upon its receipt of such written instruction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.2            Representations and
Warranties bv Grantees. Each of Grantees represents and warrants to the
Grantor that:

     

    (a)          Valid and Binding
Obligations. This Agreement, and all agreements and documents executed
and delivered pursuant to this Agreement, constitute valid and binding
obligations of the Grantees, enforceable against the Grantees in accordance with
its terms, subject to applicable Bankruptcy Laws and other laws or equitable
principles of general application affecting the rights of creditors
generally.

     

    (b)          No Conflicts. Neither
the execution nor delivery of this Agreement by the Grantees nor the fulfillment
or compliance by the Grantees with any of the terms hereof shall, with or
without the giving of notice and/or the passage of time, (i) conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, any contract or any judgment, decree or order to which Grantees
are subject or by which Grantees are bound, or (ii) require any consent,
license, permit, authorization, approval or other action by any Person or
Government Authority which has not yet been obtained or received. The execution,
delivery and performance of this Agreement by the Grantees or compliance with
the provisions hereof by the Grantees do not, and shall not, violate any
provision of any Law to which Grantees are subject or by which they are
bound.

     

    (c)          No Actions. There are
no lawsuits, actions (or to the best knowledge of the Grantees, investigations),
claims or demands or other proceedings pending or, to the best of the knowledge
of the Grantees, threatened against the Grantees which, if resolved in a manner
adverse to the Grantees, would adversely affect the right or ability of the
Grantees to carry out his obligations set forth in this Agreement.

     

     4.3          Covenants.

     

    (a)          Other
than the proposed recapitalization of the Company and the initial public
offering contemplated by the Company as of the date hereof, without the prior
written consent of the Grantees, the Grantor shall vote the Option Shares such
that the Company 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 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 charter or the by-laws of
the Company, (v) liquidate or wind up the Company, (vi) sell, transfer, assign,
hypothecate or otherwise reduce the value of any assets held by the Company,
including but without limitation, any and all shares in the Company or (vi) act
or omit to act in such a way that would be detrimental to the interest of the
Grantees in the Option Shares, (vii) transfer, assign, pledge, hypothecate or
vest any option on his shares in the Company to any third party. The Grantor
shall cause the Company to disclose to the Grantees true copies of all the
financial, legal and commercial documents of the Company, the resolutions of the
shareholders and the board of directors.

     

    (b)           The
Grantor agrees that each Grantee or his Nominee(s) shall be entitled to all the
Distributions in respect of the Option Shares. In the event that any such
Distributions has been received by the Grantor for any reason, the Grantor
shall, at the request of the Grantees, pay an amount equivalent to the
Distributions received by him to the Grantees or their Nominee(s) at the time of
the exercise of the Call Right by the Grantees or their Nominee(s).

     

    (c)          The
transactions 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)          If
at any time: (i) the Grantor fails to deliver the Option Shares in accordance
with this Agreement, if such failure is not remedied on or before the third
Business Day after notice of such failure is given to the Grantor by any
Grantee; (ii) the Grantor fails to comply with or perform any agreement,
covenant or obligation to be complied with or performed by the Grantor in
accordance with this Agreement if such failure is not remedied on or before the
third Business Day after notice of such failure is given to the Grantor by any
Grantee; or (iii) the Grantor (1) becomes insolvent or is unable to pay his
debts or fails or admits in writing his inability ,generally to pay his debts as
they become due; (2) makes a general assignment, arrangement or composition with
or for the benefit of his creditors; (3) institutes or has instituted against
him a proceeding seeking a judgment of insolvency or bankruptcy or any relief
under any Bankruptcy Law, (4) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for him or for all or substantially all his assets;
(5) has a secured party that takes possession of all or substantially all his
assets or has a distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or substantially all his
assets, (6) causes or is subject to any event with respect to him which, under
the applicable Law, has an analogous effect to any of the events described in
clauses (1) through (5); or (7) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts, then the Call Right shall become immediately exercisable in respect of all
of the Option Shares.

    

    
      
        	
                5.

              	
                COMPLETION

              

      

    

    

    5.1  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 each Grantee on the
Completion Date and reasonably acceptable to the Grantor.  The Parties
agree that New York is a reasonable place for the completion of the
sale.

    

    5.2. Business at
Completion. On the Completion Date, all (but not part only) of the
following shall be transacted:

    

    (a) the
exercising Grantees shall pay the Exercise Price to the Grantor by wire transfer
or such other method as shall be reasonably acceptable to Grantor;

    

    (b) the
Grantor shall, and to the extent that any action on the part of any other
shareholder or director of the Company is required, procure the then existing
shareholders and directors of the Company to, within three (3) business days
after the date of Exercise Notice, deliver to the exercising Grantees (or their
Nominee(s)) and take all corporate actions necessary to give effect to the
delivery of a share certificate or share certificates in respect of the number
of Option Shares exercised by the Grantees;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                6.

              	
                MISCELLANEOUS.

              

      

    

     

    6.1.
Governing Law;
Jurisdiction. This Agreement shall be construed according to, and the
rights of the Parties shall be governed by, the laws of the State of New York,
without reference to any conflict of laws principle that would cause the
application of the laws of any jurisdiction other than New York. Each Party
hereby irrevocably submits to the exclusive jurisdiction of the federal and
state courts sitting in the City of New York, for the adjudication of any
dispute hereunder or in connection herewith, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that such, suit, action or proceeding is brought in
an inconvenient forum, or that the venue of such suit, action or proceeding is
improper.

     

    6.2.
Successors and
Assigns. No Party may assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other Party. The provisions
hereof shall inure to the benefit of, and be binding upon, the successors and
permitted assigns of the Parties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.3.
Entire Agreement
Amendment. This Agreement constitutes the full and entire understanding
and agreement between and among the Parties with regard to the subject matter
hereof. Any term of this Agreement may be amended only with the written consent
of each Party.

     

    5.4.
Notices and Other
Communications. Any and all notices, requests, demands and other
communications required or otherwise contemplated to be made under this
Agreement shall be in writing and shall be provided by one or more of the
following means and shall be deemed to have been duly given (a) if delivered
personally, when received, (b) if transmitted by facsimile, on the date of
transmission with receipt of a transmittal confirmation, or (c) if by an
internationally recognized overnight courier service, one Business Day after
deposit with such courier service. All such notices, requests, demands and other
communications shall be addressed to such address or facsimile number as a party
may have specified to the other parties in writing delivered in accordance with
this Section 6.4.

     

    5.5.
Delays or
Omissions. No delay or omission to exercise any right, power or remedy
accruing to any Person hereunder, upon any breach or default under this
Agreement, shall impair any such right, power or remedy nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Person hereunder
of any breach or default under this Agreement, or any waiver on the part of any
Person of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing and
signed by the waiving or consenting Person.

     

    5.6.
Severability.
If any provision of this Agreement is found to be invalid or unenforceable, then
such provision shall be construed, to the extent feasible, so as to render the
provision enforceable and to provide for the consummation of the transactions
contemplated hereby on substantially the same terms as originally set forth
herein, and if no feasible interpretation would save such provision, it shall be
severed from the remainder of this Agreement, which shall remain in full force
and effect unless the severed provision is essential to the rights or benefits
intended by the Parties. In such event, the Parties shall use best efforts to
negotiate, in good faith, a substitute, valid and enforceable provision or
agreement which most nearly affects the Parties’ intent in entering into this
Agreement.

     

    5.7  Construction. The
language used in this Agreement will be deemed to be the language chosen by the
Parties
to express their mutual intent and no rules of strict construction will be
applied against any Party.

     

    5.8.
Further
Assurances. The Parties shall perform such acts, execute and deliver such
instruments and documents and do all other such things as may be reasonably
necessary to effect the transactions contemplated hereby.

     

    5.9.
Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
Execution and delivery of this Agreement by exchange of facsimile copies bearing
the facsimile signature of a Party shall constitute a valid and binding
execution and delivery of this Agreement by such Party.

     

     

    [Remainder
of the Page Intentionally Left Blank]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.

     

     

    

     

    
      	 	

              Grantor:

              

              

              ___________________________

              

              

              

              Grantees:

              

              

              

              

              ___________________________

            

    

     

     

    Acknowledged
and agreed to:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

    

    Grantees and Option
Shares

     

    
      	
              Grantees

               

            	
              Number
      of

              Option
      Shares

            	
              Exercise
      Price

               

            
	
              WANG
      Baoquan

            	
              5,184,000
      shares

            	
              USD
      $0.0001 per share

            
	
              XU
      Gang

            	
              4,399,950
      shares

            	
              USD
      $0.0001 per share

            
	
              FANG
      Jun

            	
              3,596,850
      shares

            	
              USD
      $0.0001 per share

            
	
              WU
      Lanfeng

            	
              1,219,200
      shares

            	
              USD
      $0.0001 per share

            
	
              YU
      Jia

            	
              3,600,000
      shares

            	
              USD
      $0.0001 per share

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
B

    

    Form of Exercise
Notice

    

    [____________](the
“Grantor”)

    [____________]

    [____________]

    Attention;
[_______]

    

    

    Re:           Call
Option Agreement dated _______________(the “Call Option
Agreement”) between
[             
] (“Grantees”)
and
[                
](“Grantor”)

    

    Dear
Sir:

    

    In
accordance with Section 2.3 of the Call Option Agreement, the undersigned
Grantee hereby provides this notice of exercise of the Call Right in the manner
specified below:

    

    
      	
               
      

            	
              (a)
      The Grantee hereby exercises its Call Rights with respect to Option Shares
      pursuant to the Call Option
Agreement.

            

    

    

    
      	
               
      

            	
              (b)
      The Grantee intends to buy
      [        ] Option Shares and shall
      pay the sum of $____________to the
Grantor.

            

    

    

    Dated:
_______________

    

    

    ______________________

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
C

    

    Form of Transfer
Notice

     

    

     

    
      	To  	:	 [           ]
      (the “Grantor”)
	From  	:	 [           ]
      (the “Grantees”)

    

     

    I, the undersigned, refer to the Call
Option Agreement (the “Call Option Agreement”) as amended on May 12, 2010 made
between Grantees and Grantor. Terms defined in the Call Option Agreement shall
have the same meanings as used herein.

    

    I hereby
give you notice that I will transfer to ______________ the following portion of
the Call Right, expressed in terms of the number of Option Shares represented by
the portion of the Call Right transferred in accordance with the terms and
conditions of the Call Option Agreement.

    

    Nominees                                           Option Shares to be
Transferred

    

    

    

    

    

    Dated
[           ]

    Yours
faithfully,

    

    

    

    _____________________________

    Sherry
Li

    [Grantor]a6289313ex10-1.htm

Exhibit 10.1        

Valpey-Fisher Corporation Key Employee Bonus Plan For

Fiscal Year 2010

Purpose of Plan

To provide an incentive to those employees who have a major impact on the success, growth and profitability of the company.

Eligibility

Must be a full time employee and be in continued employment of the Company for the entire fiscal year, unless a waiver of this provision is approved in advance of hiring by the Compensation Committee. In the event the Company is sold before the end of the year, the bonuses earned through the sale date would be prorated.

Participants

The plan participants will include the CEO and the Management Staff.

Bonus Pool

The 2010 bonus pool is based on achieving certain adjusted operating profit amounts listed below.  Adjusted operating profit is defined as operating profit before the bonus amount and excluding the effects of SFAS 123R and other income or expense amounts determined by the Compensation Committee.

	 	
Adjusted Operating Profit

	  	
Cumulative Bonus Amount

	 
	 	  	  	  	 
	 	
   224,000

	  	
100,000

	 
	 	
   500,000

	  	
150,000

	 
	 	
   750,000

	  	
200,000

	 
	 	
1,000,000

	  	
275,000

	 
	 	
1,250,000

	  	
325,000

	 
	 	
1,500,000

	  	
375,000

	 
	 	
1,750,000

2,000,000

	  	
425,000

475,000

	 
	 	
2,500,000

	  	
575,000

	 

 For adjusted operating profit amounts between the listed amounts, the bonus amount will be prorated.

For adjusted operating profit in excess of $2,500,000 the Board of Directors will determine the bonus amount.

The bonus amount may include a profit sharing contribution for the year ended December 31, 2010 as determined by the Board of Directors and would be limited to a maximum of 10% of the total bonus payout.

Bonus Payout

Each plan participant will have up to four individual objectives based on their particular area of responsibilities.  An individual objective can make up to 50% of the individual’s bonus.  The CEO will decide the weights of the individual objective as part of the total payout.   In the case of the CEO the Compensation Committee will decide.

A plan participant’s bonus amount will range from 0% to 100% of base salary.

The Compensation Committee will recommend the bonus payout amount for the CEO to the Board of Directors for its approval. The CEO will recommend the distribution payout for the remaining participants, which will then be reviewed by the Compensation Committee before making recommendations to the Board of Directors for its approval.

 

 

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