Exhibit 10.1

 

DATE:                  September 29, 2006

 

CHAN ALBERT YEE TAT AND

LUMINOUS LED TECHNOLOGIES LIMITED

(as Vendors)

 

AND

 

TECH TEAM DEVELOPMENT LIMITED

(as Purchaser)

 

AND

 

MICHELLE SIU KWAN LAM AND

JOSEPH SUI KEI LAM

(as Guarantors)

 

 

 

                                          
                                                   

 

SALE AND PURCHASE AGREEMENT

FOR

49.6% INTEREST IN

LIGHTSCAPE TECHNOLOGIES (MACAU) LIMITED

 

                                          
                                                   

 

 

 

 

 

 

 

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THIS AGREEMENT is dated September 29, 2006

 

BETWEEN:

 

(1)

CHAN ALBERT YEE TAT, holder of US passport No.702014445 of Level 25, Bank of
China Tower, 1 Garden Road, Central, Hong Kong (“Albert Chan”), LUMINOUS LED
TECHNOLOGIES LIMITED, a limited company incorporated in Hong Kong and having its
registered office at Level 25, Bank of China Tower, 1 garden Road, Central, Hong
Kong (“Luminous LED”) (Both Albert Chan and Luminous are collectively referred
to as the “Vendors” and each a “Vendor”);

 

(2)

TECH TEAM DEVELOPMENMT LIMITED, a company incorporated in Hong Kong and having
its registered office at 16th Floor, Hang Seng Mongkok Building, 677 Nathan
Road, Mongkok, Kowloon, Hong Kong (the “Purchaser”); and

 

(3)

MICHELLE SIU KWAN LAM and JOSEPH SUI KEI LAM, holder of US Passport No.
701351369 and holder of Hong Kong Identity Card No. C486788(0) respectively and
whose correspondence address is at Level 25, Bank of China Tower, 1 Garden Road,
Central, Hong Kong (the “Guarantors”).

 

WHEREAS:

 

(A)

Lightscape Technologies (Macau) Limited (the “Company”) is a company
incorporated in the Macau with limited liability and has a registered share
capital of MOP 25,000. The particulars of the Company is set out in Schedule 1.

 

(B)

As at the date of this Agreement, Albert Chan is the registered owner on trust
for Luminous LED of MOP 12,400 of the registered share capital of the Company,
which is equivalent to 49.6% of the registered share capital of the Company.

 

(C)

The Vendors have agreed to sell and the Purchaser has agreed to purchase the
Sale Interest subject to and upon the terms and conditions of this Agreement.

 

(D)

The Purchaser requires Michelle Siu Kwan Lam and Joseph Sui Kei Lam, who are
related to or associated with the Vendors and who have requested the Purchaser
to enter into this Agreement, as guarantors to give such covenants, undertakings
and guarantee together with the Vendors as are set out herein as a condition to
the Purchaser’s entry into this Agreement.

 

NOW IT IS HEREBY AGREED AS FOLLOWS:

 

1.

INTERPRETATION

 

1.1

In this Agreement (including the Recitals and Schedules), unless the context
otherwise requires or permits, the following words and expressions shall have
the meanings ascribed to each of them respectively below:

                

“Business Day”

 

a day (other than Saturday and days on which a tropical cyclone warning No. 8 or
above or a “black rainstorm warning signal” is hoisted in Hong Kong at any time
between 9:00 a.m. and 5:00 p.m.) on which banks are open in Hong Kong and for
general banking business;

 

 

 

 

 

 

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“Completion”

 

completion of the sale and purchase of the Sale Interest in accordance with the
terms and conditions of this Agreement;

 

 

 

“Completion Date”

 

any date falling within three Business Days after all the conditions specified
in Clause 3.1 have been fulfilled (or waived) or such other date as the Vendors
and the Purchaser may agree in writing prior to Completion and where the context
otherwise requires, the date of which Completion takes place;

 

 

 

“Consideration Shares”

 

1,200,000 new common shares (or such number of shares as may be reduced pursuant
to Clause 4.3) of US$0.001 each in the share capital of GIS, to be issued and
allotted to the Vendors as partial Consideration of the sale of the Sale
Interest pursuant to Clause 4.3.;

 

 

 

“Encumbrance”

 

any mortgage, charge, pledge, lien (otherwise than arising by statute or
operation of law), hypothecation or other encumbrance, priority or security
interest, deferred purchase, title retention, leasing, sale-and-repurchase or
sale-and-leaseback arrangement whatsoever over or in any property, assets or
rights of whatsoever nature and includes any agreement for any of the same and
“Encumber” shall be construed accordingly;

 

 

 

“Escrow Agent”

 

Clark Wilson LLP;

 

 

 

“Escrow Agreement”

 

an escrow agreement relating to the escrow of the Consideration Shares entered
into among the Purchaser, the Vendors, and the Escrow Agent on the date of
Completion;

 

 

 

“Guarantee Net Profit”

 

HK$20,000,000;

 

 

 

“Guarantee Period”

 

The twelve month period between 1 October 2006 to 30 September 2007 (both days
inclusive);

 

 

 

“GIS”

 

Global Innovative Systems Inc., a company incorporated under the laws of the
State of Nevada, the United States and the common shares of which are quoted on
OTCBB;

 

 

 

“Group”

 

the Company and its subsidiaries and “member of the Group” shall be construed
accordingly;

 

 

 

“HK$”

 

Hong Kong dollars;

 

 

 

“Hong Kong”

 

the Hong Kong Special Administrative Region of the PRC;

 

 

 

“Independent Accountants”

 

an independent firm of accountants which is acceptable to the Purchaser,
appointed by the Vendors for the purpose of Clause 8;

 

 

 

“Macau”

 

the Macau Special Administrative Region of the PRC;

 

 

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“MOP”

 

Macau Pataca;

 

 

 

“Net Profit”

 

The aggregate net profit after taxation but before extraordinary items of the
Group;

 

 

 

“Non-U.S. Shareholder Certificate”

 

the certificate to be executed by Albert Chan in substantially the form as set
out in Schedule 4;

 

 

 

“OTCBB”

 

acronym for The OTC Bulletin Board, an electronic quotation system that displays
real-time quotes, last-sale prices, and volume information over-the-counter
securities that are not listed on The Nasdaq Stock Market or a national
securities exchange in the US;

 

 

 

“PRC”

 

the People’s Republic of China;

 

 

 

“Purchaser Warranties”

 

representations, undertakings and warranties set out in Clause 7 and Schedule 3;

 

 

 

“Sale Interest”

 

MOP 12,400 in the registered capital of the Company, which shall be equivalent
to 49.6% of the issued share capital of the Company upon Completion, to be sold
by the Vendors to the Purchaser pursuant to this Agreement;

 

 

 

“Taxation”

 

all forms of taxation including overseas taxation and all forms of profits tax,
interest tax, estate duty and stamp duty and all levies, imposts, duties,
charges, fees, deductions and withholdings whatsoever charged or imposed by any
statutory, governmental state, provincial, local government or municipal
authority whatsoever and the expression “Tax” shall be construed accordingly;

 

 

 

“this Agreement”

 

this agreement for the sale and purchase of the Sale Interest, as amended from
time to time;

 

 

 

“Vendors’ Warranties”

 

representations, undertakings and warranties set out in Clause 6 and Schedule 2;

 

 

 

“US”

 

the United States of America; and

 

 

 

“US$”

 

United States of America dollars.

 

1.2

The headings of this Agreement are inserted for convenience only and shall be
ignored in construing this Agreement. Unless the context otherwise requires,
references in this Agreement to the singular shall be deemed to include
references to the plural and vice versa; and references to one gender shall
include all genders and references to any person shall include an individual,
firm, body corporate or unincorporate.

 

1.3

References to any statute or statutory provision shall include any statute or
statutory provision which amends or replaces or has amended or replaced it and
shall include any subordinate legislation made under the relevant statute.

 

 

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1.4

References in this Agreement to Clauses and Schedules are references to clauses
of and schedules to this Agreement.

 

1.5

The Schedules and Recitals shall form part of this Agreement.

 

2.

SALE AND PURCHASE OF THE SALE INTERESTS

 

2.1

Subject to and upon the terms and conditions of this Agreement, Albert Chan as
legal owner and Luminous LED as beneficial owner shall sell and the Purchaser
shall purchase, the Sale Interest free from all Encumbrances together with all
rights now and hereafter attaching thereto including but not limited to the
right to all dividends and other distribution which may be paid, declared or
made in respect thereof at any time on or after the date of this Agreement.

 

2.2

The Vendors represent and warrant that there are no pre-emption rights and any
other restrictions on the transfer in relation to the Sale Interest, whether
conferred by the memorandum and articles of association of the Company or
otherwise.

 

2.3

The Purchaser shall not be obliged to (but may) complete the purchase of any of
the Sale Interest unless the sale and purchase of all the Sale Interest is
completed simultaneously in accordance with this Agreement.

 

3.

CONDITIONS

 

3.1

Completion is conditional upon:

 

 

(1)

the Purchaser, Woo Yuen Yu, the Guarantors and Lightscape Holdings Ltd. have
executed a cancellation deed for the sale and purchase agreement dated March 30,
2006 in respect of the sale and purchase of 6 shares of Lightscape Holdings Ltd.

 

 

(2)

all necessary approvals, consents, authorizations and licenses in relation to
the transactions contemplated under this Agreement, including but not limited to
the approval from the relevant authorities in Macau having been obtained.

 

 

(3)

GIS having received all of the regulatory, stockholder and other third party
approvals and authorizations necessary to consummate the transactions
contemplated hereunder;

 

 

(4)

no event having occurred which suggests that there has been a breach of any of
the Vendors’ Warranties that is material in the context of the sale and purchase
of the Sale Interest; and

 

 

(5)

the listing of the issued shares of GIS on OTCBB not being revoked or withdrawn,
or, if applicable, suspended for more than ten (10) consecutive Business Days
(excluding any suspension pending the clearance or issue of the announcement or
circular of GIS in relation to the transactions contemplated under this
Agreement)

 

3.2

The Vendors shall use its best endeavors to procure the fulfillment of the
conditions set out in Clauses 3.1(2), (3) and (5) and, in particular, shall
procure that all information and documents required by GIS pursuant to all
applicable rules, codes and regulations whether in connection with the
preparation of all announcement, circulars, reports, independent advice or
otherwise are duly given to the Purchaser (or GIS), the Securities and Exchange
Commission of the US and other relevant regulatory authorities. The Purchaser
shall use its reasonable endeavors to procure the fulfillment of the conditions
set out in Clauses 3.1(3).

 

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3.3

The Purchaser may at any time waive in writing any of the conditions set out in
Clauses 3.1(2), (3) and (5) on such terms as it may in its absolute discretion
consider appropriate. If any of the conditions set out in Clause 3.1 has not
been fulfilled (or, as the case may be, waived by the Purchaser) on or before
12:00 noon on the Completion Date or such other date as the Purchaser may agree,
this Agreement shall lapse and determine (other than Clauses 13, 17, 20 and 22
which shall continue to have full force and effect) and neither party hereto
shall have any obligations and liabilities hereunder save for any antecedent
breaches of the terms hereof.

 

3.4

The Vendors shall, forthwith upon the fulfillment of the conditions set out in
Clauses 3.1(5), inform the Purchaser of that fact and provide such documents as
the Purchaser may require evidencing the fulfillment of such conditions.

 

3.5

Subject to the receipt of the notification from the Vendors in accordance with
Clause 3.3, the Purchaser shall confirm in writing to the Vendors that all the
conditions set out in Clause 3.1 have either been fulfilled to the satisfaction
of the Purchaser or waived by the Purchaser, as the case may be.

 

4.

CONSIDERATION

 

4.1

The consideration for the sale and purchase of the Sale Interest shall be an
aggregate amount of MOP12,400 plus US$960,000, which shall be satisfied by
payment by the Purchaser to the Vendors of cash in the amount of MOP 12,400,
plus the allotment and issue of the Consideration Shares by GIS to the Vendors,
valued at US$0.80 per each Consideration Share.

 

4.2

The Consideration Shares shall be issued by GIS as validly authorized, fully
paid and non-assessable and delivered by the Purchaser to the Escrow Agent upon
Completion.

 

4.3

The Escrow Agent shall hold the Consideration Shares in escrow pursuant to the
Escrow Agreement and only release the Consideration Shares subject to the
following conditions:

 

 

(a)

all of the Consideration Shares shall be released to Albert Chan as the
representative of the Vendors upon the determination that the Net Profit of the
Group for Guarantee Period as shown in the audited consolidated financial
statements of the Group is not less than the Guaranteed Net Profit;

 

 

(b)

in the event that the Net Profit of the Group for the Guarantee Period is less
than the Guarantee Net Profit, the percentage of the Consideration Shares
equaling to the percentage of the shortfall from the Guarantee Net Profit shall
be released by the Escrow Agent not to the Vendors but to GIS for cancellation
and the balance of the Consideration Shares shall be released to Albert Chan as
the representative of the Vendors; and

 

 

(c)

in the event that there is no Net Profit for the Guarantee Period, all of the
Consideration Shares shall be released by the Escrow Agent not to the Vendors
but to GIS for cancellation and the Purchaser shall be absolutely released from
the obligation to pay the Consideration Shares.

 

4.4

Upon determination of the amount of the Consideration Shares to be released from
escrow, the Purchaser shall co-ordinate with the Escrow Agent to arrange, within
30

 

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days, the issuance of such number of Consideration Shares so determined in favor
of the Vendors.

 

4.5

The Consideration Shares to be issued and allotted to the Vendors for the Sale
Interest pursuant to this Agreement shall rank pari passu among themselves and
with all other common shares of GIS then in issue.

 

5.

COMPLETION

 

5.1

Upon compliance with or fulfillment of all the conditions set out in Clause 3.1,
Completion shall take place at the offices of the Purchaser or such other place
as the parties shall determine at 4:00 p.m. on the Completion Date when all the
acts and requirements set out in this Clause 5 shall be complied with (except
that any of such acts and requirements may be waived by the party not in default
of its obligations hereunder, PROVIDED THAT such waiver shall not prejudice any
of the rights which it or any other party may have under this Agreement).

 

5.2

At Completion, the Vendors and/or the Guarantors shall deliver or procure the
delivery to the Purchaser of all the following:

 

 

(1)

copy, certified by a director of the Company as true and complete and that the
resolutions therein are subsisting and have not been amended or revoked as at
the Completion Date, of the resolutions in such form to the satisfaction of the
Purchaser passed by the directors of the Company and its subsidiaries (as
appropriate) approving the following matters:

 

 

(i)

transfer of the Sale Interest to the Purchaser (or its nominee(s)) and the
registration of such transfer subject to the relevant requirement under the laws
of Macau;

 

 

(ii)

if so required by the Purchaser, accepting the resignation of Chan Albert Yee
Tat as a director of the Company and the appointment of such person in his place
as the Purchaser may nominate by not less than three Business Days’ notice
before Completion;

 

 

(2)

valid documentation as required under the relevant laws in Macau for the
transfer of the Sale Interest stipulated in the Agreement;

 

 

(3)

such other documents as may be required to give to the Purchaser good title to
the Sale Interest and to enable the Purchaser (or its nominee(s)) to become the
registered owner thereof;

 

 

(4)

a duly completed and signed Certificate of Non-U.S. Shareholder of Global
Innovative Systems Inc. in the form attached hereto as Schedule 4;

 

 

(5)

a direction to Albert Chan as trustee by Luminous LED as beneficial owner to
terminate the trust and transfer all register and beneficial ownership in the
Sale Interest to the Purchaser;

 

 

(6)

a fully executed Escrow Agreement;

 

 

(7)

a certificate issued by each of the Guarantors confirming that she/he is not
aware of any event which is in breach or inconsistent with any of the Vendors’
Warranties;

 

5.3

Against compliance and fulfillment of all acts and the requirements set out in
Clause 5.2, the Purchaser shall deliver to the Vendors:

 

 

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(1)

payment for the Initial Consideration in the sum of MOP 12,400.00;

 

 

(2)

copy, certified by a director of the Purchaser as true and complete, of the
resolutions in such form to the satisfaction of the Vendors passed by the
directors of the Purchaser approving this Agreement and other documents
necessary for the purpose of effecting this transaction and authorizing a person
or persons to execute the same (with seal, where appropriate) for and on its
behalf;

 

 

(3)

copy, certified by a director of GIS as true and complete, of the resolutions
authorizing the issue and allotment of the Consideration Shares in accordance
with the provisions of Clause 4 and enter the name of Alberta Chan (or his
nominee(s)) as holder thereof on its register of members;

 

 

(4)

a fully executed Escrow Agreement; and

 

 

(3)

a certificate issued by the Purchaser confirming that it is not aware of any
event which is in breach or inconsistent with any of the Purchaser Warranties

 

5.4

In the event that the Vendors shall fail to do anything required to be done by
them under Clauses 5.2, without prejudice to any other right or remedy available
to the Purchaser, the Purchaser may:

 

 

(1)

defer Completion to a day not more than twenty-one (21) Business Days after the
Completion Date (and so that provisions of this Clause 5.4(1) shall apply to
Completion as so deferred); or

 

 

(2)

proceed to Completion so far as practicable but without prejudice to the
Purchaser’s right to the extent that the Vendors shall not have complied with
its obligations hereunder; or

 

 

(3)

rescind this Agreement (other than Clauses 13, 17, 20 and 22 which shall
continue to have full force and effect) in which case none of the parties hereto
shall have any claim of any nature whatsoever against any of the other parties
under this Agreement (save for any rights and liabilities of the parties which
have accrued prior to rescission).

 

5.5

In the event that the Purchaser shall fail to do anything required to be done by
them under Clauses 5.3, without prejudice to any other right or remedy available
to the Vendors, the Vendors may:

 

 

(1)

defer Completion to a day not more than twenty-one (21) Business Days after the
Completion Date (and so that provisions of this Clause 5.5(1) shall apply to
Completion as so deferred); or

 

 

(2)

proceed to Completion so far as practicable but without prejudice to the
Vendors’ right to the extent that the Purchaser shall not have complied with its
obligations hereunder; or

 

 

(3)

rescind this Agreement (other than Clauses 13, 17, 20 and 22 which shall
continue to have full force and effect) in which case none of the parties hereto
shall have any claim of any nature whatsoever against any of the other parties
under this Agreement (save for any rights and liabilities of the parties which
have accrued prior to rescission).

 

 

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6.

VENDORS’ WARRANTIES AND INDEMNITIES

 

6.1

Each of the Vendors and the Guarantors hereby represents, warrants and
undertakes jointly and severally to the Purchaser and its successors and assigns
that the Vendors’ Warranties are true and accurate in all material respects on
the date of this Agreement and will continue to be so up to and including the
Completion Date with reference to the facts and circumstances from time to time
applying.

 

6.2

Each of the Vendors’ Warranties is without prejudice to any other Vendors’
Warranty and, except where expressly or otherwise stated, no provision in any
Vendors’ Warranty shall govern or limit the extent or application of any other
provision in any Vendors’ Warranty. Each of the Vendors and the Guarantors
hereby agrees that the Purchaser shall treat each of the Vendors’ Warranties as
a condition of this Agreement.

 

6.3

Each of the Vendors and the Guarantors hereby agrees jointly and severally to
fully indemnify and keeps the Purchaser and its assigns fully indemnified on
demand from and against any depletion of assets, all losses, costs and expenses
(including legal expenses) which the Purchaser and its assigns may incur or
sustain from or in consequence of any of the Vendors’ Warranties not being
correct or fully complied with. This indemnity shall be without prejudice to any
of the rights and remedies of the Purchaser and its assigns in relation to any
such breach of Vendors’ Warranties and all such rights and remedies are hereby
expressly reserved.

 

6.4

If it shall be found at any time after Completion that any of the Vendors’
Warranties is not true, correct and accurate or is not as represented, warranted
or undertaken and:

 

 

(1)

the effect thereof is that the value of some assets of the Group including,
without limitation, the value of any asset stated in the Management Accounts
being less than its value would have been had there been no such breach or the
matter warranted were as warranted; or

 

 

(2)

the Group has incurred or is under any liability or contingent liability which
would not have been incurred if such matter were as represented or warranted or
the relevant undertaking were performed; or

 

 

(3)

the effect thereof is that the amount of a liability of the Group is higher than
its amount would have been had there been no such breach or the matter warranted
were as warranted,

 

then, without prejudice to any other provisions of this Agreement, each of the
Vendors and the Guarantors shall jointly and severally indemnify the Purchaser
on demand on a full indemnity basis, and holds it harmless from and against all
liabilities, damages, costs, claims, reduction in net consolidated assets or
increase in net consolidated liabilities and all reasonable expenses which the
Purchaser may sustain, suffer, or incur as a result of any of the foregoing and
each of the Vendors and the Guarantors shall jointly and severally pay to the
Purchaser on demand the full amount of any such loss as aforesaid in immediately
available funds.

 

6.5

The Vendors’ Warranties shall survive Completion and the rights and remedies of
the Purchaser in respect of any breach of the Vendors’ Warranties shall not be
affected by Completion or by the Purchaser rescinding, or failing to rescind
this Agreement, or failing to exercise or delaying the exercise of any right or
remedy, or by any other event or matter whatsoever, except a specific and duly
authorized written waiver or release and no single or partial exercise of any
right or remedy shall preclude any further or other exercise.

 

 

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6.6

Each of the Guarantors undertakes in relation to any Vendors’ Warranty which
refers to the knowledge, awareness, information or belief of each of the
Guarantors that it/he has made due and careful enquiry into the subject matter
of that Vendors’ Warranty and that it/he does not have the knowledge, awareness,
information or belief that the subject matter of that Vendors’ Warranty may not
be correct, complete or accurate.

 

6.7

The aggregate amount of the liability of the Vendors and the Guarantors in
respect of any claim for breach of any of the Vendors’ Warranties or to
indemnify as aforesaid or shall not exceed the aggregate amount of the
consideration payable pursuant to Clause 4 (or the equivalent thereof).

 

6.8

The Purchaser shall reimburse to the Vendors and the Guarantors an amount equal
to any sum paid by any one of the Vendors or the Guarantors in respect of a
claim under the Vendors’ Warranties or to be indemnified as aforesaid which is
subsequently recovered or paid to the Purchaser or the Company by a third party.

 

7.

PURCHASER WARRANTIES

 

7.1

Subject to Clause 7.7, the Purchaser represents, warrants and undertakes to the
Vendors and the Guarantors and their respective successors and assigns that the
Purchaser Warranties are true and accurate in all material aspects on the date
of this Agreement and will continue to be so on up to and including the
Completion Date with reference to the facts and circumstances from time to time
applying.

 

7.2

The Purchaser agrees that the Vendors and the Guarantors may treat each of the
Purchaser Warranties as a condition of this Agreement.

 

7.3

The Purchaser shall indemnify and keep fully and effectively indemnified the
Vendors and the Guarantors on demand from and against all losses, costs and
expenses which may be incurred by them or any of them in connection with any
breach of any of the Purchaser Warranties or their successfully enforcing any
claim for any such breach.

 

7.4

The Purchaser shall be under no liability in respect of a breach of any of the
Purchaser Warranties or to indemnify pursuant to this Agreement unless the
Purchaser shall have received written notice from the Vendors or the Guarantors
prior to the date falling on the first anniversary of the Completion Date in
respect of the Purchaser Warranties or the indemnity as aforesaid giving full
details of the relevant claim and any such claim shall (if not previously
satisfied, settled or withdrawn) be deemed to have been waived at the expiration
of three (3) months after the first anniversary of the Completion Date unless
proceedings in respect thereof shall then have been commenced against the
Purchaser.

 

7.5

The indemnity provided for under Clause 7.4 is without prejudice to any other
rights and remedies of the Vendors or the Guarantors in relation to any breach
of any of the Purchaser Warranties and all other rights and remedies are
expressly reserved to the Vendors and the Guarantors.

 

7.6

Each of the Purchaser Warranties is without prejudice to any other Purchaser
Warranty or other agreements or indemnities entered into between the parties or
any of them and, except where expressly stated otherwise, no provision contained
in this Agreement or other agreements or indemnities shall govern or limit the
extent or application of any other provision of this Agreement or such other
agreements.

 

7.7

All of the Purchaser Warranties are deemed to be qualified by the Purchaser’s
filings with the Securities and Exchange Commission of the US published up to
the date of this Agreement.

 

 

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7.8

The Purchaser Warranties shall survive Completion insofar as the same are not
fully performed on Completion.

 

7.9

The Purchaser undertakes to allocate all business in relation to lighting
technology and lighting consultancy, other than those handled by Beijing
Illumination (Hong Kong) Limited and its group companies, to the Company or its
subsidiary provided that all supply of light sourcing equipment products and
ancillary products required for the business of the Group must first be sourced
from Beijing Illumination (Hong Kong) Limited and its group companies.

 

8.

PROFIT GUARANTEE

 

8.1

In consideration of the Purchaser’s agreement to enter into this Agreement, each
of the Vendors and the Guarantors hereby irrevocably and unconditionally
guarantees jointly and severally to the Purchaser that the Net Profit for the
Guarantee Period as shown in the audited consolidated financial statements of
the Group ending such date shall not be less than the Guaranteed Net Profit. If
the Net Profit is less than the Guaranteed Net Profit, then the Vendors and the
Guarantors shall jointly and severally pay to the Purchaser in cash within
fourteen (14) calendar days after the delivery of the audited consolidated
financial statements of the Group aforesaid an amount calculated as follows:

 

 

Amount payable to the Purchaser = (Guaranteed Net Profit – Net Profit) x 40%

 

PROVIDED THAT the aforesaid amount shall be rounded up to the nearest whole
dollar.

 

8.2

The Vendors undertake to procure that the audited consolidated financial
statements of the Group shall be prepared by the Company and audited by the
Independent Accountants in accordance with the generally acceptable accounting
practice, standards and principles of Hong Kong in respect of the twelve months
referred to in Clause 8.1, together with any notes, reports or statements
included therein or annexed thereto, a copy of which shall be delivered to the
Purchaser for review by not later than two (2) months following the balance
sheet date of the relevant period.

 

9.

COMPLIANCE WITH US SECURITIES LEGISLATION

 

9.1

The Vendors acknowledge and agree that the Consideration Shares to be issued and
allotted by GIS have not been registered under the United States Securities Act
of 1933 (as amended) (the “Securities Act”) or any other applicable securities
laws and that such securities will be issued and allotted pursuant to safe
harbor provisions relating to the prospectus and registration requirements set
forth in Regulation S of the Securities Act the availability of which is
predicated in part on the Vendors’ representations as contained herein and in
the Non-U.S. Shareholder Certificate. The Vendors agree to abide by all
applicable resale restrictions and hold periods imposed by all applicable
securities legislation. The share certificate(s) representing the Consideration
Shares issued and allotted on Completion will be endorsed with the following
legend pursuant to the Securities Act in order to reflect the fact that the
Consideration Shares will be issued and allotted to the Vendors pursuant to such
safe harbor provisions relating to the prospectus and registration requirements
of the Securities Act:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION
S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”).

 

 

11

 

 

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NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED,
MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS
DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN EACH CASE CONFIRMED BY AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER AND ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. “UNITED STATES” AND “U.S. PERSON”
ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.”

 

9.2

The Vendors agree that they may, if applicable, exchange the certificate(s)
representing the Consideration Shares by delivering such certificate(s) to GIS
duly executed and endorsed in blank (or accompanied by duly executed stock
powers duly endorsed in blank), in each case in proper form for transfer, with
signatures medallion guaranteed, and, if applicable, with all stock transfer and
any other required documentary stamps affixed thereto and with appropriate
instructions to allow the transfer agent to issue a certificate for the
Consideration Shares to the holder thereof.

 

9.3

The Vendors further acknowledge that the Consideration Shares issued pursuant to
the terms and conditions set forth in the Agreement will be issued as
“restricted securities” as defined by Rule 144 promulgated pursuant to the
Securities Act and will have such hold periods as are required under applicable
securities laws of the US and as a result may not be sold, transferred or
otherwise disposed, except pursuant to an effective registration statement under
the Securities Act, or unless, in the opinion of the GIS’s counsel, such
transfer or other disposition is made pursuant to an effective registration
statement under the Securities Act, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and in each case only in accordance with all applicable securities laws.

 

9.4

The Vendors represent that the Vendors are acquiring the Consideration Shares
for the Vendors’ own account, for investment purposes only and not with a view
to, or for sale in connection with, a distribution, as that term is used in
Section 2(11) of the Securities Act, in a manner which would require
registration under the Securities Act or any state securities laws.

 

9.5

The Vendors acknowledge that they are able to protect their interests in
connection with the acquisition of the Consideration Shares and can bear the
economic risk of investment in such securities without producing a material
adverse change in Vendors’ financial condition. The Vendors otherwise have such
knowledge and experience in financial or business matters that the Vendors are
capable of evaluating the merits and risks of the investment in the
Consideration Shares.

 

9.6

The Vendors represent, warrant and covenant that they are not acquiring the
Consideration Shares as part of a group within the meaning of Section 13(d)(3)
of the Exchange Act and the Vendors have not agreed to act with any other person
for the purpose of acquiring, holding, voting or disposing of the Consideration
Shares

 

12

 

 

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purchased hereunder for purposes of Section 13(d) under the Exchange Act, and
the Vendors are acting independently with respect to its investment in the
Consideration Shares.

 

 

10.

RESTRICTIONS ON VENDORS AND GUARANTORS

 

10.1

Each of the Vendors and the Guarantors undertakes to the Purchaser that
it/he/she shall not without the prior written consent of the Purchaser for a
period of three (3) years after Completion either solely or jointly with or on
behalf of any other person, firm, company, trust or otherwise whether as
director, shareholder, employee, partner, agent or otherwise:

 

 

(a)

carry on or be engaged or interested directly or indirectly in any capacity
(except as the owner of shares or securities listed or quoted or dealt in on any
stock exchange or securities market held by way of investment only) in any
business which shall be in competition within Hong Kong and the PRC with the
Company or any of its subsidiaries in the carrying on the business of lighting
technology and lighting consultancy;

 

 

(b)

solicit or entice or Endeavour to solicit or entice away from the Company or any
of its subsidiaries any employee, officer, manager, consultant (including
employees who are directors) of the Company or any of its subsidiaries or any
persons whose services are otherwise made available to the Company or any of its
subsidiaries on a full-time or substantially full-time basis;

 

 

(c)

deal with, canvass, solicit or approach or cause to be dealt with, canvassed or
solicited or approached for business in respect of any trade or business carried
on or service provided by the Company or any of its subsidiaries any person,
firm or company who at Completion or within two years prior to Completion was a
customer, supplier, client, representative, agent of or in the habit of dealing
under contract with the Company or any of its subsidiaries;

 

10.2

Each of the Vendors and the Guarantors further undertakes to the Purchasers
that:

 

 

(a)

it/he/she will not at any time hereafter make use of or disclose or divulge to
any person other than to officers or employees of the Company whose province it
is to know the same any information relating to the Company or any of its
subsidiaries other than any information properly available to the public or
disclosed or divulged pursuant to an order of a court of competent jurisdiction;

 

 

(b)

it/he/she will not at any time hereafter in relation to any trade, business or
company use a name including the word or symbol “Lightscape“ or its Chinese
equivalent or any similar word or symbol in such a way as to be capable of or
likely to be confused with the name of the Company or any subsidiary and shall
use all reasonable endeavors to procure that no such name shall be used by any
person, firm or company with which it is/they are connected; and

 

 

(c)

it/he/she shall not do anything which might prejudice the goodwill of the
Company or any of its subsidiaries.

 

10.3

Each and every obligation under this Clause 10 shall be treated as a separate
obligation and shall be severally enforceable as such and in the event of any
obligation or obligations being or becoming unenforceable in whole or in part
such

 

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part or parts as are unenforceable shall be deleted from this Clause 10 and any
such deletion shall not affect the enforceability of all such parts of this
Clause 10 as remain not so deleted.

 

10.4

The restrictions contained in this Clause 10 are considered reasonable by the
parties hereto but in the event that any such restriction shall be found to be
void but would be valid if some part thereof were deleted or the area of
operation or the period of application reduced such restriction shall apply with
such modification as may be necessary to make it valid and effective.

 

11.

FURTHER ASSURANCE

 

Each party shall execute, do and perform or procure to be executed, done and
performed by other necessary parties all such further acts, agreements,
assignments, assurances, deeds and documents within its powers to give effect to
this Agreement and all transactions contemplated hereunder.

 

12.

GUARANTEES

 

12.1

The Guarantors hereby irrevocably and unconditionally guarantees to the
Purchaser jointly and severally the due and punctual performance of the Vendors
of their obligations under this Agreement and undertakes to indemnify and keep
effectively indemnified the Purchaser (if necessary by payment of cash on first
demand) jointly and severally against all liabilities, losses, damages, costs
and expenses stipulated under this Agreement or otherwise which the Purchaser
may suffer or incur in connection with any default or delay on the part of the
Vendors in the performance or any such obligations.

 

12.2

The obligations and liabilities of the Guarantors shall be continuing
obligations and shall not be satisfied, discharged or affected by an
intermediate payment or any change in the constitution or control of, or the
insolvency of or any bankruptcy, winding up or analogous proceedings relating to
any of the parties to this Agreement.

 

12.3

The liability of the Guarantors hereunder shall be unaffected by any arrangement
which the Purchaser may make with the Vendors or with any other person which
(but for this provision) might operate to diminish or discharge the liability of
or otherwise provide a defence to a surety. Without prejudice to the generality
of the foregoing, the Purchaser is to be at liberty at any time and without
reference to the Guarantors to give time for payment or grant any other
indulgence and to give up, deal with, vary, exchange or abstain from perfecting
or enforcing any other securities or guarantees held by the Guarantors at any
time and to discharge any party thereto and to realize such securities or
guarantees, as the Purchaser thinks fit and to compound with, accept
compositions from and make any other arrangements with the Vendors without
affecting the liability of the Guarantors hereunder.

 

12.4

As a separate and independent stipulation, it is hereby agreed by the Guarantors
that any obligation and undertaking by the Guarantors under this Clause 12 which
may not be enforceable against the Guarantors on the footing of a guarantee,
whether by reason of any legal limitation (other than any limitation imposed by
this Agreement), disability or incapacity on or of the Vendors or any other fact
or circumstance whether or not known to the Purchaser shall nevertheless be
enforceable against the Guarantors as the sole and principal obligor in respect
thereof.

 

12.5

Without prejudice to the other provisions of this Agreement, the obligations and
undertakings expressed to be assumed by or imposed on the Guarantors under this
Agreement shall remain in force so long as the Vendors shall have any liability
or obligation to the Purchaser under this Agreement and until all such
liabilities and obligations have been discharged in full.

 

14

 

 

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12.6

Each of the Guarantors hereby waives any right to require a proceeding first
against the Vendors or any other person.

 

12.7

Each of every obligation, covenant, representation, warranty and undertaking of
the Guarantors provided herein shall be the joint and several obligations,
covenants, representations, warranties and undertakings of each of the
Guarantors and the Purchaser shall be at liberty to release, compound with or
otherwise vary or agree to vary the liability of, or to grant time or other
indulgence, or make other arrangements with any one of the Guarantors without
the consent of or notice to the others and without prejudicing, affecting the
right, remedy and power of the Purchaser, against the others.

 

12.8

The Purchaser shall use its best endeavors to obtain and maintain a listing for
all the Shares issued any stock exchange or securities market on which the
securities are listed or quoted or dealt in within 18 months following
Completion.

 

13.

CONFIDENTIALITY AND ANNOUNCEMENTS

 

13.1

Each of the parties hereto undertakes to the others that it/he will not, at any
time after the date of this Agreement, divulge or communicate to any person
other than to its professional advisers, or when required by law, or to its
respective officers or employees whose province it is to know the same any
confidential information concerning the business, accounts, finance or
contractual arrangements or other dealings, transactions or affairs of any of
the others which may be within or may come to its knowledge and it shall use its
best endeavors to prevent the publication or disclosure of any such confidential
information concerning such matters.

 

13.2

No public announcement or communication of any kind shall be made in respect of
the subject matter of this Agreement unless specifically agreed between the
parties hereto or unless an announcement is required pursuant to the applicable
law and the regulations or the requirements of the Securities and Exchange
Commission of the US or any other regulatory body or authority. Any announcement
by any party hereto required to be made pursuant to any relevant law or
regulation or the requirements of the Securities and Exchange Commission of the
US or any other regulatory body or authority shall be issued only after such
prior consultation with the other party as is reasonably practicable in the
circumstances.

 

14.

TIME AND WAIVER

 

Time shall in every respect be of the essence of this Agreement but no failure
on the part of any party hereto to exercise, and no delay on its part in
exercising any right hereunder shall operate as a waiver thereof, nor will any
single or partial exercise of any right under this Agreement preclude any other
or further exercise of it or the exercise of any other right or prejudice or
affect any right against any other parties hereto under the same liability,
whether joint, several or otherwise. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies provided by
law. The parties shall then use all reasonable endeavors to replace the invalid
or unenforceable provisions by a valid and enforceable substitute provision the
effect of which is as close as possible to the intended effect of the invalid
and unenforceable provision.

 

15.

INVALIDITY

 

If at any time any one or more of the provisions of this Agreement is or becomes
illegal, invalid or unenforceable in any respect under the laws of any relevant
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Agreement in that jurisdiction nor the legality, validity or
enforceability of

 

15

 

 

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such provision under the laws of any other jurisdictions shall in any way be
affected or impaired thereby.

 

16.

AMENDMENTS

 

This Agreement shall not be amended, supplemented or modified except by
instruments in writing signed by all parties hereto.

 

17.

NOTICES

 

17.1

Any notice claim, demand, court process, document or other communication to be
given under this Agreement (collectively “communication” in this Clause 17)
shall be in writing in the English language and may be served or given
personally or sent to the telex or facsimile numbers (if any) of the relevant
party and marked for the attention and/or copied to such other person as
specified in Clause 17.5.

 

17.2

A change of address or telex or facsimile number of the person to whom a
communication is to be addressed or copied pursuant to this Agreement shall not
be effective until five (5) days after a written notice of change has been
served in accordance with the provisions of this Clause 17 on all other parties
to this Agreement with specific reference in such notice that such change is for
the purposes of this Agreement.

 

17.3

A party may not designate a non Hong Kong address for the service of
communications to it.

 

17.4

All communications shall be served by the following means and the addressee of a
communication shall be deemed to have received the same within the time stated
adjacent to the relevant means of despatch:

 

 

Means of despatch

Time of deemed receipt

 

 

Local mail or courier

24 hours

 

 

Telex

on despatch

 

Facsimile

on despatch

 

Air courier/speedpost

3 days

 

 

Airmail

5 days

 

 

17.5

The initial addresses and facsimile numbers of the parties for the service of
communications, the person for whose attention such communications are to be
marked and the person to whom a communication is to be copied are as follows:

 

 

To the Vendors and the Guarantors:

 

Address:

Level 25, Bank of China Tower, 1 Garden Road, Central,

 

Hong Kong

 

 

Facsimile:

(852) 2251 8552

 

 

To the Purchaser:

Name:

Tech Team Development Limited

 

Address:

           16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon,
Hong Kong

 

Facsimile:

(852) 2546 6878

 

 

Attention:

Board of Directors

 

17.6

A communication served in accordance with this Clause 17 shall be deemed
sufficiently served and in proving service and/or receipt of a communication it
shall be sufficient to prove that such communication was left at the addressee’s
address or that the envelope containing such communication was properly
addressed and posted

 

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or despatched to the addressee's address or that the communication was properly
transmitted by telex, facsimile or cable to the addressee. In the case of
communication by telex, such communication shall be deemed properly transmitted
upon the receipt by the machine sending the telex the telex answerback of the
addressee; in the case of facsimile transmission, such transmission shall be
deemed properly transmitted on receipt of a report of satisfactory transmission
printed out by the sending machine.

 

17.7

Nothing in this Clause 17 shall preclude the service of communication or the
proof of such service by any mode permitted by law.

 

18.

ASSIGNMENT

 

This Agreement shall be binding upon and enure for the benefit of each party’s
successors or assigns and, none of the rights of the parties under this
Agreement may be assigned or transferred.

 

19.

ENTIRE AGREEMENT

 

This Agreement (together with any documents referred to herein) constitutes the
entire agreement between the parties hereto with respect to the matters dealt
with herein and supersedes any previous agreements, arrangements, statements,
understandings or transactions between the parties hereto in relation to the
matters hereof.

 

20.

COSTS

 

Each of the Vendors and the Purchaser shall bear his/her/its own costs and
expenses (including legal fees) incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and all documents
incidental or relating to Completion.

 

21.

COUNTERPART

 

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of parties hereto
may execute this Agreement by signing any such counterparts.

 

22.

GOVERNING LAW, JURISDICTION AND PROCESS AGENTS

 

22.1

This Agreement shall be governed by and construed in accordance with the laws of
Hong Kong.

 

22.2

The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of the courts of Hong Kong.

 

22.3

The Purchaser hereby irrevocably appoints Mr. Bondy Tan, holder of Hong Kong
Permanent Identity Card No. D 500769 (1)) and whose correspondence address is at
16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong
as its service agent to accept service or process out of the courts of the Hong
Kong in connection with this Agreement. Such appointment cannot be revoked and
the Purchaser hereby confirms that any process, writ of action or summonses out
of the courts of Hong Kong served either personally on or sent by post (postal
prepaid) to the service agent referred to in this Clause 22.3 at the then
current address of such service agent shall be and shall be deemed to be served
on the Purchaser and that the failure of the service agent to give any notice of
such service of process to the Purchaser shall not impair or affect the validity
of such service or of any judgment based thereon.

 

17

 

 

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22.4

The Vendors hereby irrevocably appoint Mr. Joseph Sui Kei Lam, one of the
Guarantors and whose correspondence address is at Level 25, Bank of China Tower,
1 Garden Road, Central, Hong Kong as their service agent to accept service or
process out of the courts of the Hong Kong in connection with this Agreement.
Such appointment cannot be revoked and the Vendors hereby confirm that any
process, writ of action or summonses out of the courts of Hong Kong served
either personally on or sent by post (postal prepaid) to the service agent
referred to in this Clause 22.4 at the then current address of such service
agent shall be and shall be deemed to be served on the Vendors and that the
failure of the service agent to give any notice of such service of process to
the Vendors shall not impair or affect the validity of such service or of any
judgment based thereon.

 

[THE BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

 

 

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SCHEDULE 1

 

DETAILS OF THE COMPANY

 

Name of Company

 

:

LIGHTSCAPE TECHNOLOGIES (MACAU) LIMITED

 

 

Date of Incorporation

 

:

February 6, 2006

 

Place of Incorporation

 

:

Macau

 

Company Number

 

:

23525 SO

 

Registered Office

 

:

 

Rua de Pequim, n 126, Centro Commercial I Tak, 5 andarE, em Macau

 

 

Existing company secretary

:

Not yet appointed

 

Registered share capital

:

MOP25,000

 

 

 

 

 

 

Existing owners:

 

 

Names of owners

 

Equity

Percentage

 

Bondy Tan holds on trust for Tech Team Investment Limited

 

MOP12,600

50.4%

 

 

 

 

Albert Chan holds on trust for Luminous LED Technologies Limited

 

MOP12,400

49.6%

 

 

 

 

Directors:

:

Bondy Tan and Albert Chan

 

 

 

 

 

Auditors

:

Not yet appointed

 

 

Financial year end

:

March 31

 

 

Principal activities

:

LED lighting effect projects

 

 

 

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SCHEDULE 2

 

VENDORS’ WARRANTIES

 

l.

Recitals

 

The matters stated in the Recitals to this Agreement are true and correct in all
material respects.

 

2.

The Vendors, the Guarantors and the Company

 

2.1

Each of the Vendors and the Guarantors has the full power to enter into and
perform this Agreement and this Agreement will, when executed, constitute
binding obligations on each of them in accordance with its terms.

 

2.2

There is no outstanding indebtedness or other liability (actual or contingent)
owing by any member of the Group to the Vendors or the Guarantors, any director
of a member of the Group or any person connected with the Vendors or the
Guarantors nor is there any indebtedness owing to a member of the Group by any
such person.

 

2.3

The entire issued share capital of the Company is as set out in Recital (A) and
the Sale Interest are issued fully paid, registered under the name of Alberta
Chan and are beneficially owned by Luminous LED free from all Encumbrances and
the same are freely transferable by the Vendors without the consent, approval,
permission, license or concurrence of any third party.

 

3.

General

 

All information contained in this Agreement or in the documents referred to
herein and therein and all other information concerning the Group and/or any
part or parts of its business operations assets and liabilities (actual or
contingent) supplied in the course of the negotiations leading to this Agreement
to the Purchaser or its agents was when given true, complete and accurate in all
material respects and there is no fact or matter which has not been disclosed
which renders any such information or documents untrue, inaccurate or misleading
in any material respect at the date of this Agreement or which if disclosed
might reasonable be expected to influence adversely the Purchaser’s decision to
purchase the Sale Interest on the terms of this Agreement.

 

20

 

 

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SCHEDULE 3

 

PURCHASER WARRANTIES

 

 

1.

The Purchaser has been duly incorporated and is validly existing under the laws
of its place of incorporation (namely, Hong Kong) and has full power, authority
and legal right to own its assets and carry on its business.

 

2.

The Consideration Shares shall, upon issue, rank pari passu among themselves and
with all other common shares of the Purchaser then in issue and are free from
all Encumbrances.

 

3.

All information contained in this Agreement or in the documents referred to
herein and therein and all other information concerning the Purchaser and/or any
part or parts of its business operations assets and liabilities (actual or
contingent) supplied in the course of the negotiations leading to this Agreement
to the Vendors or its agents was when given true, complete and accurate in all
material respects and there is no fact or matter which has not been disclosed
which renders any such information or documents untrue, inaccurate or misleading
in any material respect at the date of this Agreement or which if disclosed
might reasonable be expected to influence adversely the Vendors’ decision to
accept the Consideration Shares on the terms of this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE 4

 

CERTIFICATE OF NON-U.S. SHAREHOLDER

 

OF

 

GLOBAL INNOVATIVE SYSTEMS INC.

 

In connection with the issuance of 1,200,000 shares of common stock (“Pubco
Common Stock”) of Global Innovative Systems Inc., a Nevada corporation
(“Pubco”), to the undersigned pursuant to the Sale and Purchase Agreement dated
__ September 2006 (the “Agreement”), between the Purchaser, the undersigned and
the Guarantors (as defined in the Agreement), I hereby agree, represent and
warrant (where applicable) that:

 

1.

I am not a “U.S. Person” as such term is defined by Rule 902 of Regulation S
under the United States Securities Act of 1933, as amended (“Securities Act”)
(the definition of which includes, but is not limited to, an individual resident
in the United States of America (“U.S.”) and an estate or trust of which any
executor or administrator or trust, respectively is a U.S. Person and any
partnership or corporation organized or incorporated under the laws of the
U.S.);

 

2.

I will not, during the period commencing on the purchase date of the Pubco
Common Stock (“Purchase Date”) and ending one year after the Purchase Date (the
“Distribution Compliance Period”), offer, sell, pledge or otherwise transfer any
or all shares of the Pubco Common Stock in the U.S., its territories or
possessions, or to a U.S. Person or for the account or benefit of a U.S. Person
(other than distributors), other than in accordance with Rules 903 or 904 of
Regulation S under the Securities Act, pursuant to registration under the
Securities Act or an available exemption therefrom and, in any case, in
accordance with applicable state and foreign securities laws;

 

3.

Neither I, any of my affiliates, nor any person acting on my or their behalf has
engaged, or will engage, in any Directed Selling Efforts (as defined in
Regulation S) with respect to the Pubco Common Stock or any distribution, as
that term is used in the definition of Distributor in Regulation S under the
Securities Act, with respect to the Pubco Common Stock;

 

4.

Neither I, any of my affiliates, nor any person acting on my or their behalf has
undertaken or carried out any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the U.
S., its territories or possessions, for any of the Pubco Common Stock;

 

5.

If I offer and sell any shares of the Pubco Common Stock during the Distribution
Compliance Period, then I will do so only (a) in accordance with the provisions
of Regulation S, (b) pursuant to registration of the Pubco Common Stock under
the Securities Act, or (c) pursuant to an available exemption from the
registration requirements of the Securities Act. I will not engage in any
hedging transactions involving the shares of Pubco Common Stock unless such
hedging transaction is conducted in compliance with the Securities Act;

 

 

22

 

 

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6.

The transactions contemplated by the Agreement (a) have not been prearranged
with a purchaser located in the U.S., its territories or possessions, or who is
a U.S. person, and (b) are not part of a plan or scheme to evade the
registration provisions of the Securities Act;

 

7.

I am not part of a group that has been formed principally for the purpose of
investing in securities not registered under the Securities Act;

 

8.

I have not undertaken, and will have no obligation, to register any of the Pubco
Common Stock under the Securities Act;

 

9.

Pubco is entitled to rely on the acknowledgements, agreements, representations
and warranties and the statements and answers of me contained in the Agreement
and this Certificate, and I will hold harmless Pubco from any loss or damage
either one may suffer as a result of any such acknowledgements, agreements,
representations and/or warranties made by me not being true and correct;

 

10.

I have been advised to consult my own legal, tax and other advisors with respect
to the merits and risks of an investment in the Pubco Common Stock and, with
respect to applicable resale restrictions, am solely responsible (and Pubco is
not in any way responsible) for compliance with applicable resale restrictions;

 

11.

I acknowledge that the Pubco Common Stock is not listed on any other stock
exchange or automated dealer quotation system and no representation has been
made to me that the Pubco Common Stock will become listed on any other stock
exchange or automated dealer quotation system, except that currently certain
market makers make market in the common shares of Pubco on the OTCBB (as defined
in the Agreement);

 

12.

At the time of the origination of contact concerning the purchase of the Pubco
Common Stock, and at the date of execution and delivery of the Sale and Purchase
Agreement relating thereto, I, and any person acting on my behalf, was and am
outside the U.S., its territories and possessions when receiving and executing
the Agreement and am acquiring the Pubco Common Stocks as principal for my own
account, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in the Pubco Common Stocks;

 

13.

I acknowledge that neither the Securities Exchange Commission of the U.S. nor
any other securities commission or similar regulatory authority has reviewed or
passed on the merits of the Pubco Common Stock;

 

14.

I acknowledge that the Pubco Common Stock is not being acquired, directly or
indirectly, for the account or benefit of a U.S. Person or a person in the U.S.;

 

 

 

23

 

 

--------------------------------------------------------------------------------

 

 

 

15.

I acknowledge and agree that Pubco shall refuse to register any transfer of
Pubco Common Stocks not made in accordance with the provisions of Regulation S,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration under the Securities Act; and

 

16.

I understand and agree that the Pubco Common Stocks will bear the following
legend:

 

“NONE OF THE SHARES OF COMMON STOCK OF THE COMPANY HAVE BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS
DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH
CASE CONFIRMED BY AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AND ONLY IN
ACCORDANCE WITH APPLICABLE STATE AND PROVINCIAL SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

IN WITNESS WHEREOF, I have executed this Certificate of Non-U.S. Shareholder.

 

 

 

 

____________________

By: CHAN ALBERT YEE TAT

 

 

Date: _________________, 2006

 

 

24

 

 

--------------------------------------------------------------------------------

 

 

IN WITNESS whereof this Agreement has been duly executed by all parties hereto
the day and year first above written.

 

THE VENDORS

 

 

SIGNED, SEALED AND DELIVERED

)

 

by LUMINOUS LED TECHNOLOGIES

)

 

limited

)

/s/ signed and sealed

in the presence of:

 

 

 

 

 

SIGNED by

)

 

 

)

 

CHAN ALBERT YEE TAT

)

/s/ Chan Albert Yee Tat

 

)

 

in the presence of:

)

 

 

 

 

THE PURCHASER

 

SIGNED by

)

 

 

)

 

for and on behalf of

)

 

 

)

 

tech team DEVELOPMENT

)

/s/ signed and sealed

limited

)

 

 

)

 

in the presence of:

)

 

 

 

 

THE GUARANTORS

 

 

SIGNED, SEALED AND DELIVERED

)

 

by Michelle Siu Kwan LAM

)

/s/ Michelle Siu Kwan Lam

in the presence of:

)

 

 

 

 

SIGNED, SEALED AND DELIVERED

)

 

by Joseph Sui Kei LAM

)

/s/ Joseph Sui Kei Lam

in the presence of:

 

 

 

 

25