Exhibit 10.1

 

Dated the 11th day of December 2017

 

 

 

HO LOK SHAN

 

 

and

 

 

CHEUNG CHIK TING

 

 
and

 

 

SO WANG CHUN

(as Vendors)

 

 

and

 

 

EC TECHNOLOGY & INNOVATIONS LIMITED

(as Purchaser)

 

 

 

 

 

 

SALE AND PURCHASE AGREEMENT

in respect of 60% of the issued share capital of

3D DISCOVERY CO. LIMITED

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

Clause  Headings  Page         1.  DEFINITIONS AND INTERPRETATION  3 2.  SALE
AND PURCHASE OF SALE SHARES  5 3.  CONSIDERATION  5 4.  CONDITIONS PRECEDENT  6
5.  COMPLETION  7 6.  REPRESENTATIONS AND WARRANTIES  9 7.  GUARANTEE AND
UNDERTAKING  10 8.  FURTHER ASSURANCE  10 9.  RESTRICTIONS ON COMMUNICATION AND
ANNOUNCEMENTS  11 10.  PARTIAL INVALIDITY  11 11.  COSTS AND EXPENSES  11 12. 
ASSIGNMENT  11 13.  CONTINUING EFFECT OF AGREEMENT  11 14.  GENERAL  12 15. 
NOTICES  12 16.  COUNTERPARTS  13 17.  GOVERNING LAW  13         SCHEDULE 1
PARTICULARS OF THE COMPANY  15 SCHEDULE 2 CONSIDERATION PAYABLE TO THE VENDORS 
16 SCHEDULE 3 VENDOR WARRANTIES  17 SCHEDULE 4 PURCHASER WARRANTIES  28

 

 

 

 

THIS AGREEMENT is made on the 11th day of December 2017

 

BETWEEN

 

(1)HO LOK SHAN with Hong Kong identity card number Z934049(2) whose residential
address is situated at Flat 14, 13/F, Block F, Kornhill, Hong Shing Street, Hong
Kong ( “Mr. Ho”);

 

(2)CHEUNG CHIK TING with Hong Kong identity card number Z901480(3) whose
residential address is situated at Flat C, 29/F, Kin On Mansion, Taikoo Shing,
Hong Kong ( “Mr. Cheung”);

 

(3)SO WANG CHUN with Hong Kong identity card number Y009530(1) whose residential
address is situated at 1202, Block A, Winfield Building, No.3 Ventris Road,
Happy Valley, Hong Kong ( “Mr. So”, together with Mr. Ho and Mr. Cheung, the
“Vendors” and each a “Vendor”);

 

AND

 

(4)EC TECHNOLOGY & INNOVATIONS LIMITED, a company incorporated with limited
liability in the BVI whose registered office is situated at Corporate
Registrations Limited of Sea Meadow House, Blackburne Highway (P.O. Box 116),
Road Town, Tortola, British Virgin Islands (the “Purchaser”).

 

WHEREAS:

 

(A)As at the date of this Agreement, the Company (particulars of which are set
out in Schedule 1) has an issued share capital of HK$3,000 divided into 3,000
issued and fully paid shares. The Company is owned as to 33% by Mr. Ho, 33% by
Mr. Cheung, 33% by Mr. So and 1% by Mr. Chu Sai Yiu.

 

(B)As at the date of this Agreement, the Purchaser is a wholly owned subsidiary
of CLNT.

 

(C)The Vendors have agreed to sell, and the Purchaser has agreed to purchase,
the Sale Shares upon the terms and conditions set out in this Agreement.

 

(D) Upon Completion, the Company will be owned as to 60% by the Purchaser, 13%
by Mr. Ho, 13% by Mr. Cheung, 13% by Mr. So and 1% by Mr. Chu Sai Yiu.

 

 2 

 

 

NOW IT IS HEREBY AGREED as follows:

 

1.DEFINITIONS AND INTERPRETATION

 

1.1In this Agreement (including the Recitals and the Schedules), the following
expressions shall, unless the context otherwise requires, have the following
meanings:

 

 

“Accounts”

 

the audited consolidated financial statements of the Company comprising the
income statement for the financial year ended the Accounts Date and the balance
sheet as at the Accounts Date;

 

 

“Accounts Date”

 

31 December 2016;

 

 

“Agreement”

 

this sale and purchase agreement (including its Recitals and Schedules), as may
be amended or supplemented from time to time;

 

 

“business day”

 

a day (other than Saturday) on which banks are open in Hong Kong for general
banking business;

 

 

“BVI”

 

the British Virgin Islands;

 

 

“CLNT”

 

Cleantech Solutions International, Inc., a company incorporated in Nevada whose
shares are listed and traded on NASDAQ;

 

 

“CLNT Shares”

 

shares of common stock of CLNT, par value $0.001 per share (or of such other
securities as shall result from a subdivision, consolidation, re-classification
or re-construction of such shares from time to time);

 

 

“Company”

 

 

3D Discovery Co. Limited, a company incorporated in Hong Kong with limited
liability, particulars of which are set out in Schedule 1;

 

 

“Completion”

 

completion of the sale and purchase of the Sale Shares pursuant to Clause 5;

 

 

“Completion Date”

 

three business days following the date on which all the Conditions Precedent are
fulfilled or waived (as the case may be);

 

 

“Conditions Precedent”

 

the conditions precedent set out in Clause 4;

 

 

“Consideration”

 

has the meaning ascribed to it in Clause 3.1;

 

 

“Consideration Share(s)”

 

has the meaning ascribed to it in Clause 3.2;

 

 

“Encumbrance”

 

any option, right to acquire, right of pre-emption, mortgage, charge, pledge,
lien, hypothecation, title retention, right of set off, counterclaim, trust
arrangement or other security or any equity or restriction;

 

 

“HK$”

 

Hong Kong dollars, the lawful currency of Hong Kong;  

“Hong Kong”

 

the Hong Kong Special Administrative Region of the PRC;

 

  “Individual Guarantee”

the individual guarantee, in the form and substances reasonably satisfied by the
Purchaser, to be executed by each of the Vendors as the guarantor in favour of
the Purchaser or its nominee on the date of the Loan Agreement to guarantee the
punctual performance by the Company of its obligations under the Loan Agreement;

 

 3 

 

 

  “Inland Revenue Ordinance”

Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong);

 

  “Loan Agreement”

the loan agreement to be entered into between the Purchaser and the Company on
the Completion Date in respect of the non-interest bearing loan facility in the
aggregate principal amount of HK$2,000,000 to be issued by the Purchaser to the
Company;

 

 

“Long Stop Date”

 

15 January 2018 or such later date as may be agreed between the Vendors and the
Purchaser;

 

 

“Management Accounts”

 

the unaudited consolidated management accounts of the Company comprising the
income statement for such period after the Accounts Date and up to the
Management Accounts Date and the balance sheet as at the Management Accounts
Date;

 

 

“Management Accounts Date”

 

29 November 2017;

 

 

“NASDAQ”

 

National Association of Securities Dealers Automated Quotations, the stock
market in the USA;

 

 

“Parties”

 

parties to this Agreement and a “Party” means any one of them;

 

 

“Purchaser Warranties”

 

the representations, warranties and undertakings made by the Purchaser and
contained in Clause 6 and Schedule 4;

 

 

“Sale Shares”

 

1,800 shares in the share capital of the Company, being 60% of its entire issued
share capital as at the date of this Agreement;

 

 

“Stamp Duty Ordinance”

 

Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong);

 

 

“Taxation”

 

all forms of tax, rate, levy, duty, charge, impost, fee, deduction or
withholding of any nature now or hereafter imposed, levied, collected, withheld
or assessed by any taxing or other authority in any part of the world and
includes any interest, additional tax, penalty or other charge payable or
claimed in respect thereof;

 

  “USA”

the United States of America;

 

 

“US$”

 

United States dollars, the lawful currency of the USA;

 

 

“Vendor Warranties”

 

the representations, warranties and undertakings made by the Vendors and
contained in Clause 6 and Schedule 3;

 

 

“Warranties”

 

the Vendor Warranties and the Purchaser Warranties; and

 

  “%” per cent.

 

 4 

 

 

1.2In this Agreement:

 

(a)references to costs, charges, remuneration or expenses shall include any
value added tax, turnover tax or similar tax charged in respect thereof;

 

(b)references to any action, remedy or method of judicial proceedings for the
enforcement of rights of creditors shall include, in respect of any jurisdiction
other than Hong Kong, references to such action, remedy or method of judicial
proceedings for the enforcement of rights of creditors available or appropriate
in such jurisdiction as shall most nearly approximate thereto;

 

(c)words denoting the singular number only shall include the plural number also
and vice versa;

 

(d)words denoting one gender only shall include the other genders and the neuter
and vice versa;

 

(e)words denoting persons only shall include firms and corporations and vice
versa;

 

(f)references to any provision of any statute shall be deemed also to refer to
any modification or re-enactment thereof or any instrument, order or regulation
made thereunder or under such modification or re-enactment; and

 

(g)references to any document in the agreed form is to such document which has
been initialed by the parties for identification.

 

1.3Headings shall be ignored in construing this Agreement.

 

1.4The Recital and the Schedules are part of this Agreement and shall have
effect accordingly.

 

2.SALE AND PURCHASE OF SALE SHARES

 

Subject to the terms and conditions of this Agreement, the Vendors, as legal and
beneficial owners, shall sell the Sale Shares to the Purchaser in the respective
proportions set against their names in Schedule 2 and the Purchaser shall
purchase the same from the Vendors free from all Encumbrances and third party
rights of any kind and together with all rights now or hereafter attaching
thereto including the right to receive all dividends and distributions declared,
made or paid on or after the Completion Date.

 

3.CONSIDERATION

 

3.1The aggregate consideration (the “Consideration”) of the Sale Shares to be
paid by the Purchaser to the Vendors at Completion is HK$3,000,000, which shall
be satisfied by the allotment and issue of the Consideration Shares by CLNT.   

3.2The Purchaser shall procure CLNT to allot and issue 68,610 CLNT Shares (the
“Consideration Shares”) to the Vendors (or their nominees) in such proportion as
set out in Schedule 2 on the Completion Date.

 

 5 

 

 

4.CONDITIONS PRECEDENT

 

4.1Completion shall be conditional upon the fulfillment of the following
Conditions Precedent:

 

(a)all Vendor Warranties being true, accurate and not misleading at all material
aspects at all times between the date hereof and the Completion Date (as though
they had been made on such dates by reference to the facts and circumstances
then subsisting);

 

(b)there having been no material adverse change, or any development likely to
involve a prospective material adverse change, in the condition (financial,
operational or otherwise) or in the earnings, business affairs or business
prospects, assets or liabilities of the Company, whether or not arising in the
ordinary course of business since the date of this Agreement;

 

(c)all loans or amounts due by the Company to its shareholders, directors or any
other third party creditors having been fully waived or settled, save for the
liabilities incurred which can be reflected under the Management Accounts for
the direct generation of revenue for the Company after the date of this
Agreement and before Completion;

 

(d)the Purchaser having conducted due diligence exercise (legal and financial)
on the Company and reasonably satisfied with the results thereof;

 

(e)all fully operational software, website programming source code, web server,
related IT applications and software assets applicable to or necessary for the
business operations of the Company having been duly transferred to the Company
by means reasonably satisfactory to the Purchaser;

 

(e)NASDAQ having granted the approval for the listing of, and the permission to
deal in, the Consideration Shares, if required under NASDAQ continued listing
rules and regulations; and

 

(f)all necessary consents, approvals, permits and/or authorisations in respect
of the transactions contemplated under this Agreement having been obtained.

 

4.2All Conditions Precedent may be waived by the Parties by written consent.

 

4.3Each Party undertakes to the other Party to use its best endeavours to ensure
that the Conditions Precedent in Clause 4.1 are fulfilled as early as
practicable and in any event not later than the Long Stop Date.

 

4.4Each Party undertakes to provide all reasonable assistance to the other Party
to fulfill the Conditions Precedent in Clause 4.1 in accordance with Clause 4.3.

 

4.5If the Conditions Precedent have not been fulfilled or waived (as the case
may be) on or before the Long Stop Date, this Agreement will lapse and become
null and void and the Parties will be released from all obligations hereunder,
save for liabilities for any antecedent breaches hereof.

 

 6 

 

 

5.COMPLETION

 

5.1Completion shall take place at Loeb & Loeb LLP, 21st Floor, CCB Tower, 3
Connaught Road Central, Hong Kong at 11:00 am on the Completion Date (or at such
other place, on such other time and/or day as the Parties may agree in writing).
  

5.2At Completion, the Vendors shall:

 

(a)deliver or cause to be delivered to the Purchaser:

 

(i)evidence reasonably satisfactory to the Purchaser that the Conditions
Precedent in Clause 4.1 (which are applicable to the Vendors) of this Agreement
have been fulfilled;

 

(ii)instrument(s) of transfer and the bought and sold notes of the Sale Shares
duly executed by each of the Vendors as registered holders thereof in favour of
the Purchaser together with the related share certificate(s);

 

(iii)register of members of the Company reflecting the shareholding of the
Company after Completion;

 

(iv)(1) all statutory records and minute books (which shall be duly written up
to date as at Completion) and accounting records including an original copy of
the memorandum and articles of association or other equivalent constitutional
documents, certificate of incorporation and business registration certificates,
business licence, governmental approval letters and certificates (if any),
common seal, authorised chops, share certificate books and other statutory
records of the Company;

 

(2) all tax returns and assessments of the Company (if applicable) (receipted
where the due dates for payment fell on or before the Completion Date);

 

(3) copies of all correspondence, if any, with its lawyers, accountants, tax or
revenue departments, all other documents and correspondence, if any, relating to
the business affairs of the Company; and all title deeds, evidence of ownership
and documents relating to assets owned by the Company;

 

provided that the above shall be deemed to have been delivered if they are
located at the registered office or principal place of business of the Company;

 

(v)the draft Individual Guarantee;

 

(vi)a cheque made payable to “the Government of Hong Kong SAR” for such amount
representing the share of Hong Kong stamp duty which shall be borne by the
Vendors as transferors of the Sale Shares in accordance with the Stamp Duty
Ordinance;

 

 7 

 

 

(vii)such other documents as may be reasonably required to give good title to
the Sale Shares free from all Encumbrances and third party rights of any kind
and to enable the Purchaser to become the registered holder thereof; and

 

(viii)a certified true copy of the resolutions of the board of directors of the
Company approving the matters set out in Clause 5.2(b);

 

(b)procure that the following businesses shall be approved at a meeting of the
directors of the Company:

 

(i)the directors of the Company shall approve the transfer of the Sale Shares
and the Purchaser and/or its nominee shall be duly registered as the holder of
the Sale Shares in the register of members of the Company, subject to the
articles of association of the Company;

 

(ii)the directors of the Company shall approve the appointment of the directors
nominated by the Purchaser;

 

(iii)the directors of the Company shall resolve that the share certificate in
respect of the Sale Shares be duly issued and delivered to the Purchaser and/or
its nominee;

 

(iv)the directors of the Company shall approve the execution and performance of
the Loan Agreement; and

 

(v)the directors of the Company shall approve any of its directors to do all
such acts and things and to sign any documents reasonably required to give
effect to the transaction as contemplated under this Agreement.

 

5.3At Completion, against compliance with the provisions of Clause 5.2, the
Purchaser shall deliver or cause to be delivered the following documents:

 

(a)to each of the Vendors:

 

(i)a draft consultancy contract to be entered into between EC Manpower Limited
and each of the Vendors or their designated companies in the form and substance
reasonably satisfied by each of the Vendors; and

 

(ii)a certified copy of the resolutions passed by the board of directors of EC
Manpower Limited approving the consultancy arrangement between EC Manpower
Limited and each of the Vendors or their designated companies;

 

(b)to the Vendors:

 

(i)a certified copy of the resolutions passed by the board of directors of the
Purchaser approving (i) the execution and performance of this Agreement and (ii)
the execution and performance of the Loan Agreement;

 

 8 

 

 

(ii)evidence reasonably satisfactory to the Vendors that the Conditions
Precedent in Clause 4.1 (which are applicable to the Purchaser) of this
Agreement have been fulfilled;

 

(iii)instrument(s) of transfer and the bought and sold notes of the Sale Shares
duly executed by the Purchaser;

 

(iv)a copy of the board resolutions of CLNT approving the allotment and issue of
the Consideration Shares;      (v)the draft Loan Agreement; and

 

(vi)documents as may be reasonably required to give good title to the
Consideration Shares free from all Encumbrances and third party rights of any
kind and to enable the Vendors to become the registered holders thereof.

 

6.REPRESENTATIONS AND WARRANTIES

 

6.1The Purchaser hereby represents, warrants and undertakes to the Vendors in
the terms set out in this Clause 6 and Schedule 4.

 

6.2The Vendors hereby represent, warrant and undertake to the Purchaser in the
terms set out in this Clause 6 and Schedule 3.

 

6.3The Purchaser shall be deemed to have repeated all the Purchaser Warranties
on the basis that such Purchaser Warranties will at all times from the date of
this Agreement up to and including the Completion Date be true, complete and
accurate in all respects and such Purchaser Warranties shall have effect as if
given at Completion as well as the date of this Agreement.

 

6.4The Vendors shall be deemed to have repeated all the Vendor Warranties on the
basis that such Vendor Warranties will at all times from the date of this
Agreement up to and including the Completion Date be true, complete and accurate
in all respects and such Vendor Warranties shall have effect as if given at
Completion as well as the date of this Agreement.

 

6.5The Vendors agree and acknowledge that the Purchaser is entering into this
Agreement in reliance on the Vendor Warranties.

 

6.6The Purchaser agrees and acknowledges that the Vendors are entering into this
Agreement in reliance on the Purchaser Warranties.

 

6.7None of the Warranties shall be limited or restricted by reference to or
inference from the terms of any other Warranties or any other term of this
Agreement.

 

6.8If any Party fails to perform any of its obligations in any material respect
(including its obligation at Completion) under this Agreement or breaches any of
the terms or Warranties set out in this Agreement in any material respect prior
to Completion, then without prejudice to all and any other rights and remedies
available at any time to a non-defaulting Party (including but not limited to
the right to damages for any loss suffered by that Party), any non-defaulting
Party may by notice either require the defaulting Party to perform such
obligations or, insofar as the same is practicable, remedy such breach or to the
extent it relates to the failure of the defaulting Party to perform any of its
obligations on or prior to Completion in any material respect, treat the
defaulting Party as having repudiated this Agreement and rescind the same. The
rights conferred upon the respective Parties by the provisions of this Clause 6
are additional to and do not prejudice any other rights the respective Parties
may have. Failure to exercise any of the rights herein conferred shall not
constitute a waiver of any such rights.

 

 9 

 

 

7.GUARANTEE AND UNDERTAKING  

7.1Each of the Vendors hereby unconditionally and irrevocably guarantees to the
Purchaser that the revenue generated by the Company for each of the three (3)
financial years ending 31 December 2018, 2019 and 2020 (the “Guarantee Period”)
shall be not less than HK$1,156,125.00, HK$2,413,062.50 and HK$3,961,531.25,
respectively (the “Revenue Guarantee”). The revenue generated for the Guarantee
Period will be calculated on a yearly basis according to the generally accepted
accounting principle in Hong Kong and will be audited by an independent
professional accountant.   

7.2In the event that the Revenue Guarantee for each financial year during the
Guarantee Period is not fulfilled, the Purchaser shall have the right to claim
against the difference on a dollar-for-dollar basis (i.e. the difference between
the amount guaranteed under the Revenue Guarantee and the actual revenue
generated by the Company during the Guarantee Period) from the Vendors and the
amount will be shared equally between the Vendors, provided however that the
amount to be compensated by the Vendors (the “Compensation Amount”) shall not
exceed 50% of the Consideration under this Agreement, which shall be paid or
fulfilled on demand from the Purchaser in the following manner:   

(a)by the return of Consideration Shares (the “Returned Share(s)”) issued and
allotted to the Vendors on the Completion Date, the value of each Returned Share
will be deemed as US$5.606; or    

 

(b)in the event that all or part of the Consideration Shares are sold by the
Vendors during the Guarantee Period and the aggregate value of the Returned
Shares (i.e. the remaining Consideration Shares, if any) based on the
calculation specified in paragraph (a) above is lower than the Compensation
Amount, the net difference will be paid in cash by the Vendors.

 

7.3Each of the Vendors hereby undertakes to the Purchaser that the Vendors shall
remain as shareholders of the Company, and shall carry out the same roles and
responsibilities in the Company after Completion for a fixed term of three (3)
years or such other duration as may be determined by the board of directors of
the Company which does not exceed three (3) years.   

8.FURTHER ASSURANCE

 

Each Party undertakes to the other Party to execute or procure to be executed
all such documents and to do or procure to be done all such other acts and
things as may be reasonable and necessary to give all Parties the full benefit
of this Agreement.

 

 10 

 

 

9.RESTRICTIONS ON COMMUNICATION AND ANNOUNCEMENTS

 

9.1Each of the Parties undertakes to the other Party that it shall 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 any rule of any
relevant stock exchange body, 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 the other which may be within or may come to its
knowledge in connection with the transactions contemplated by this Agreement and
it shall use its best endeavours to prevent the publication or disclosure of any
such confidential information concerning such matters. This restriction shall
not apply to information or knowledge which is or which properly comes into the
public domain, through no fault of any of the Parties or to information or
knowledge which is already known to any of the Parties at the time of its
receipt.

 

9.2Each of the Parties undertakes that it shall not at any time (save as
required by law or any rule of any relevant stock exchange or regulatory body)
make any announcement in connection with this Agreement unless the other Party
shall have given its consent to such announcement (which consent may not be
unreasonably withheld or delayed and may be given either generally or in a
specific case or cases and may be subject to conditions). If any Party is
required by law or any rule of any relevant stock exchange or regulatory body to
make any announcement in connection with this Agreement, the other Party agrees
to supply all relevant information relating to itself that is within its
knowledge or in its possession as may be reasonably necessary or as may be
required by any exchange and regulatory body to be included in the announcement.

 

10.PARTIAL INVALIDITY

 

If, at any time, any provision of this Agreement is or becomes illegal, invalid
or unenforceable in any respect in any jurisdiction, the legality, validity and
enforceability in other jurisdictions or of the remaining provisions of this
Agreement shall not be affected or impaired thereby.

 

11.COSTS AND EXPENSES

 

Each Party shall bear its own costs of and incidental to the preparation,
negotiation and settlement of this Agreement and the transactions contemplated
hereunder (including, without limitation, legal fees and expenses, and capital
fees or stamp duty (if any) relating to this Agreement).

 

12.ASSIGNMENT

 

No Party shall assign any of its rights or obligations under this Agreement
without the written consent of the other Party.

 

13.CONTINUING EFFECT OF AGREEMENT

 

Any provision of this Agreement which is capable of being performed after
Completion but which has not been performed at or before Completion shall remain
in full force and effect notwithstanding Completion.

 

 11 

 

 

14.GENERAL

 

14.1This Agreement supersedes all and any previous agreements, arrangements or
understanding between the Parties relating to the matters referred to in this
Agreement and all such previous agreements, understanding or arrangements (if
any) shall cease and determine with effect from the date hereof and neither
Party shall have any claim in connection therewith.

 

14.2This Agreement constitutes the entire agreement between the Parties with
respect to its subject matter (no Party having relied on any representation or
warranty made by the other Party which is not contained in this Agreement). No
variation of this Agreement shall be effective unless made in writing and signed
by all Parties.

 

14.3Time shall be of the essence of this Agreement but no failure by any Party
to exercise, and no delay on its part in exercising any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right under this Agreement preclude any other or further exercise of it or the
exercise of any right or prejudice or affect any right against the other. The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.

 

14.4No delay or failure by a Party to exercise or enforce (in whole or in part)
any right provided by this Agreement or by law shall operate as a release or
waiver, or in any way limit that Party’s ability to further exercise or enforce
that, or any other, right. A waiver of any breach of any provision of this
Agreement shall not be effective, or implied, unless that waiver is in writing
and is signed by the Party against whom that waiver is claimed. In the event of
a default by either Party in the performance of its obligations under this
Agreement, the non-defaulting Party shall have the right to obtain specific
performance of the defaulting Party’s obligations. Such remedy shall be in
addition to any other remedies provided under this Agreement or at law.

 

14.5Except as expressly provided in this Agreement, a person who is not a Party
to this Agreement has no right under the Contracts (Rights of Third Parties)
Ordinance (Cap 623) to enforce any term of this Agreement but this does not
affect any right or remedy of a third party which exists or is available apart
from that Ordinance.

 

15.NOTICES

 

15.1Any notice claim, demand, court process, document or other communication to
be given under this Agreement (collectively “communication” in this Clause)
shall be in writing in the English or Chinese language and may be served or
given personally or sent to the e-mail address (if any) of the relevant Party
and marked for the attention and/or copied to such other person as specified in
Clause 15.4.

 

15.2A change of address or e-mail address of the person to whom a communication
is to be addressed or copied pursuant to this Agreement shall not be effective
until five days after a written notice of change has been served in accordance
with the provisions of this Clause 15 on the other Party with specific reference
in such notice that such change is for the purposes of this Agreement.

 

 12 

 

 

15.3All 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   E-mail  12 hours   Air courier/Speedpost  3 days   Airmail  7 days

 

15.4The initial addresses and e-mail addresses 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:

 

If to Mr. Ho:

 

  Address : 16C, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong   E-mail :
michael.ho@3ddiscoveryco.com   Attention : Michael Ho

 

If to Mr. Cheung:

 

  Address : 16C, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong   E-mail :
justin.cheung@3ddiscoveryco.com   Attention : Justin Cheung

 

If to Mr. So:

 

  Address : 16C, CNT Tower, 338 Hennessy Road, Wanchai, Hong Kong   E-mail :
edmond.so@3ddiscoveryco.com   Attention : Edmond So

 

If to the Purchaser:

 

  Address : Rooms 315 - 316, 3/F, Building W12, Hong Kong Science Park, Shatin,
N.T., Hong Kong   E-mail : parkson.yip@cleantechsolutionsinternational.com  
Attention : Parkson Yip

 

15.5A communication served in accordance with this Clause 15 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 or despatched to the addressee’s address. In the case of
communication by e-mail, such communication shall be deemed properly transmitted
upon the receipt of the sent confirmation by the e-mail account of the sender.

 

15.6Nothing in this Clause shall preclude the service of communication or the
proof of such service by any mode permitted by law.

 

16.COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and this has the
same effect as if the execution on the counterparts were on a single copy of
this Agreement.

 

17.GOVERNING LAW

 

17.1This Agreement shall be governed by and construed in accordance with the
laws of Hong Kong.

 

17.2The courts of Hong Kong have non-exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including a dispute
regarding the existence, validity or termination of this Agreement).

 

 13 

 

 

IN WITNESS whereof this Agreement has been duly executed on the date first above
written.

 

VENDORS           SIGNED by HO LOK SHAN )   in the presence of : )        
SIGNED by CHEUNG CHIK TING )   in the presence of : )         SIGNED by SO WANG
CHUN )   in the presence of : )         PURCHASER           SIGNED by LAU PING
KEE )   as authorised representative of )   EC TECHNOLOGY & INNOVATIONS LIMITED
)   in the presence of : )  

 

 

 14 

 

 

SCHEDULE 1
PARTICULARS OF THE COMPANY

 

1.

 

Company name

 

: 3D Discovery Co. Limited 2. Company number : 2206233         3. Date of
incorporation : 24 February 2015         4. Place of incorporation : Hong Kong  
      5. Address of registered office : Unit C, 16th Floor, CNT Tower, 338
Hennessy Road Wan Chai, Hong Kong         6. Issued share capital : 3,000      
  7. Shareholder (number of shares and shareholding %) :

Ho Lok Shan

(990 shares - 33%)

 

Cheung Chik Ting

(990 shares - 33%)

 

So Wang Chun

(990 shares - 33%)

 

Chu Sai Yiu

(30 shares -1%)

 

8. Directors :

So Wang Chun

 

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SCHEDULE 2
CONSIDERATION PAYABLE TO THE vENDORS

 

Name of Vendor  Sale Shares  Consideration (HK$)  Number of Consideration Shares
Ho Lok Shan   600    1,000,000    22870                   Cheung Chik Ting 
 600    1,000,000    22870                   So Wang Chun      600  
 1,000,000    22870                   Total   1800    3,000,000    68610 

 

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SCHEDULE 3
VENDOR WARRANTIES

 

1.General

 

1.1The contents of the Recitals of and Schedule 1 and Schedule 2 to this
Agreement are true and accurate.

 

1.2All information given by the Vendors or their agents or professional advisers
to the Purchaser or its employees, agents or professional advisers relating to
the business, activities, affairs, or assets or liabilities of the Company was,
when given, and is now true, accurate and complete in all respects.

 

1.3There are no material facts or circumstances, in relation to the assets,
business or financial condition of the Company which have not been exhaustively,
expressly and fairly disclosed in writing to the Purchaser or its employees,
agents or professional advisers, and which, if disclosed, might reasonably have
been expected to affect the decision of the Purchaser to enter into this
Agreement.

 

1.4The execution and performance of this Agreement will not conflict with or
result in a breach of or be a reason for the termination or variation of any
agreement or obligation to which the Company is now a party or any of the
Company or its assets are or may be bound or affected or be in violation of any
law, rule or regulation of any governmental, administrative or regulatory body
or any order, injunction or decree of any judicial, administrative, regulatory
or governmental body affecting the Company.

 

2.Organisation, Authority and Power

 

2.1The Company is a company duly incorporated and validly existing under the
laws of Hong Kong. All issued shares in the Company are duly authorised, validly
issued and fully paid up and none of such shares (where applicable) has been
issued in violation of the memorandum and articles of association of the Company
or the terms of any agreement by which the Company or its shareholders were or
are bound, if any.

 

2.2The Vendors have, on the date of this Agreement and on Completion, full and
unfettered right, power and authority to enter into this Agreement and assume
all of their obligations hereunder and no further actions or proceedings are
necessary on their part in connection with the execution, delivery and
performance by them of this Agreement.

 

2.3This Agreement constitutes valid and legally binding obligations on the part
of the Vendors enforceable in accordance with its terms.

 

2.4The Vendors are the legal and beneficial owners of the Sale Shares and is
entitled to sell and transfer the Sale Shares and pass the full legal and
beneficial ownership thereof with all rights thereto to the Purchaser or its
nominee on the terms of this Agreement. The Sale Shares are issued and fully
paid and is beneficially owned by the Vendors free from all Encumbrances. The
Sale Shares constitutes the 60% of the issued share capital of the Company.

 

 17 

 

 

3.Records and taxation

 

3.1The Company has duly made up all requisite books of account (reflecting in
accordance with generally accepted accounting principles for all the financial
transactions of the Company), minutes books, registers and records in compliance
with all applicable laws and regulatory requirements and these and all other
deeds and documents (properly stamped where necessary) belonging to or which
ought to be in its possession and its seal are in its possession.

 

3.2All the accounts, books, ledgers, financial and other records of whatsoever
kind, of the Company are in its possession, have been fully, properly and
accurately kept and completed, do not contain any material inaccuracies or
discrepancies of any kind and give and reflect a true and fair view of its
trading transactions, and its financial, contractual and trading position.

 

3.3The Company has duly complied with its obligations to account to the relevant
tax authorities and all other authorities for all amounts for which it is or may
become accountable in respect of Taxation relating to its business.

 

3.4All returns in connection with Taxation that should have been filed by the
Company have been filed correctly and on a proper basis in accordance with all
applicable laws and regulatory requirements and there are no facts known or
which would on reasonable enquiry be known to the Company or its directors which
may give rise to any dispute or to any claim for any Taxation or the deprivation
of any relief or advantage that might have been available.

 

3.5The Company is not and does not expect to be involved in any dispute in
relation to Taxation and no authority concerned has investigated or indicated
that it intends to investigate into the tax affairs of the Company nor are there
any circumstances of which the Vendors are aware which would cause any authority
to investigate into the tax affairs of the Company.

 

3.6The Company has no liability in respect of Taxation (whether actual or
contingent) nor any liability for interest, penalties or charges imposed in
relation to any Taxation arising or deemed to arise in any accounting period
ending on or before the Accounts Date that is not provided for in full in the
Accounts, and in particular, has no outstanding liability for:

 

(i)Taxation in any part of the world assessable or payable by reference to any
profit, gain, income or distribution earned, received, paid, arising or deemed
to arise on or at any time prior to the Accounts Date or in respect of any
period ending on or before the Accounts Date; or

 

(ii)purchase, value added, sales or other similar tax in any part of the world
referable to transaction effected on or before the Accounts Date,

 

that is not provided for in the Accounts.

 

3.7The amount of the provision for deferred Taxation contained in the Accounts
was computed on a full provision basis and was, at the date on which the
Accounts were prepared, adequate and fully in accordance with accountancy
practices generally accepted in Hong Kong and commonly adopted by companies
carrying on businesses similar to those carried on by the Company.

 

 18 

 

 

3.8Since the Accounts Date up to and inclusive of the Completion Date:

 

(i)the Company has not been involved in any transaction outside the ordinary
course of business which has given or may give rise to a liability to Taxation
on the Company (or would have given or might give rise to such a liability but
for the availability of any relief, allowance, deduction or credit);

 

(ii)no accounting period or year of assessment of the Company has ended;

 

(iii)no disposal has taken place or other event occurred which will or may have
the effect of crystallising a liability to Taxation which should have been
included in the provision for deferred Taxation contained in the Accounts if
such a disposal or other event had been planned or predicted at the date on
which the Accounts were drawn up;

 

(iv)no payment has been made by the Company which will not be deductible for
profits tax (or its equivalent) purposes either in computing the profits of the
Company or in computing the profits tax chargeable on the Company;

 

(v)no event has occurred with the result that the Company has or will become
liable to pay or bear a liability in respect of Taxation directly or primarily
charged against, or attributable to, another person, firm or company; and

 

(vi)the Company has not paid or become liable to pay any penalty in connection
with any Taxation or otherwise paid any Taxation after its due date for payment
or become liable to pay any Taxation the due date for payment of which has
passed or will become prospectively liable to pay any Taxation the due date for
payment of which will fall within 30 days after the date of this Agreement.

 

3.9The Company has within the time limits prescribed by the relevant legislation
duly paid all tax (including provisional tax), made all returns, given all
notices, supplied all other information required to be supplied to the Inland
Revenue Department of Hong Kong and any other relevant governmental authority
(including any governmental authority of a foreign jurisdiction) and all such
information was and remains complete and accurate in all material respects and
all such returns and notices were and remain complete and accurate in all
material respects and were made on a proper basis and do not, nor, to the best
of the knowledge, information and belief of the Vendors, having made due and
careful enquiry, are likely to, reveal any transactions which may be the subject
of any dispute with the Inland Revenue Department of Hong Kong or other relevant
authorities(including any governmental authority of a foreign jurisdiction) and
the Company is not and has not in the last three years been the subject of an
Inland Revenue Department of Hong Kong(or equivalent foreign tax authority)
investigation or field audit or other dispute regarding tax or duty recoverable
from the Company or regarding the availability of any relief from Taxation or
duty to the Company and there are no facts known to the Vendors which are likely
to cause such an investigation or audit to be instituted or such a dispute to
arise.

 

3.10The Company has duly submitted all claims and disclaimers which have been
assumed to have been made for the purpose of the Accounts.

 

3.11There are no material and/or unusual arrangements, agreements or
undertakings, between the Company and the Inland Revenue Department of Hong
Kong, or any foreign tax authorities, regarding or affecting the Taxation
treatment of the Company.

 

 19 

 

 

3.12The Company has kept sufficient records in either English or Chinese:

 

(i)of its income and expenditure to enable the assessable profits of its trade,
profession or business to be readily ascertained in compliance with and for the
period mentioned in Section 51C of the Inland Revenue Ordinance or other similar
legislation;

 

(ii)of the consideration, in money or money’s worth, payable or deemed to be
payable to it, to its order or for its benefit in respect of the right of use of
its land or buildings or land and buildings to enable the assessable value of
its land or buildings or land and buildings to be readily ascertained in
compliance with and for the period mentioned in Section 57D of the Inland
Revenue Ordinance.

 

3.13The Company has duly complied with all requirements to deduct or withhold
Taxation from any payments it has made and has accounted in full to the
appropriate authorities for all amounts so deducted or withheld.

 

4.Corporate Status

 

4.1The Company is duly incorporated, validly existing and in good standing under
the laws of Hong Kong and has all requisite corporate power and authority to own
its assets and to carry on its business as currently conducted and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its assets or the conduct
of its business requires such qualification.

 

4.2No events or omissions have occurred whereby the constitution, subsistence or
corporate status of the Company has been or is likely to be adversely affected.

 

4.3No order for the appointment of a liquidator has been made and as receiver
has been appointed over the whole or any part of the assets of the Company.

 

4.4No order has been made, or petition presented, or resolution passed for the
winding up of the Company, nor has any distress, execution or other process been
levied in respect of the Company which remains undischarged; nor is there any
unfulfilled or unsatisfied judgment or court order outstanding against the
Company.

 

4.5Save as contemplated under and this Agreement, as at the Completion Date,
there are no pre-emptive or other outstanding rights, options, warrants,
conversion rights or agreements or commitments of any character relating to the
authorised and issued, unissued or treasury shares or equity interest of the
Company and the Company has not issued any debt securities, other securities,
rights or obligations which are convertible into or exchangeable for, or giving
any person a right to subscribe for or acquire, capital or equity interest of
the Company, and no such securities or obligations evidencing such rights are
outstanding.

 

 20 

 

 

5.Accounts and Management Accounts

 

5.1The Accounts:

 

(i)have been prepared on a basis consistent with all previous balance sheets and
profit and loss accounts of the Company and in accordance with generally
accepted accounting principles, standards and practice adopted in Hong Kong;

 

(ii)are true, complete and accurate (on a yearly basis) in all material respects
and in particular have made full provision for all material liabilities or make
proper provision for (or contain a note in accordance with good accounting
practice adopted in Hong Kong respecting) all material deferred or contingent
liabilities (whether liquidated or unliquidated) at the date thereof and have
made adequate provision for bad and doubtful debts and for depreciation of the
Company’s fixed assets having regard to their original cost and estimated life;

 

(iii)give a true and fair view of the state of affairs and the financial
position of the Company as at the Accounts Date and of the results of the
Company for the financial period ended on that date;

 

(iv)are not adversely affected by any unusual items which are not disclosed in
the Accounts; and

 

(v)any slow moving, old, obsolescent or excessive stock has been written down
appropriately in the Accounts, any irrevocable work in progress has been wholly
written off and the value attributed in the Accounts to the remaining stock did
not exceed the lower of cost and net realisable value at the Accounts Date and
no part of such value is attributable to stock which is unusable or unsaleable
in the normal course of the Company’s business.

 

5.2The Company has no liability for Taxation of any kind, which has not been
provided for in the Accounts.

 

5.3Due provision has been made in the Accounts for any capital commitment
undertaken or authorised at the Accounts Date as may be appropriate and for any
bad or doubtful debt due and payable to the Company in its own right.

 

5.4The Company is a not member of any partnership or unincorporated company or
association.

 

5.5Since the Accounts Date up to and inclusive of Completion Date:

 

(i)there has been no material adverse change in the financial position or
business or prospects of the Company and the Company has entered into
transactions and incurred liabilities only in the ordinary course of business;

 

(ii)The Company has not declared, paid or made nor is proposing to declare, pay
or make any dividend or other distribution;

 

(iii)the business of the Company has been carried on in the ordinary and usual
course and in the same manner (including nature and scope) as in the past, no
fixed asset or stock has been written up nor any debt written off and no unusual
or abnormal contract has been entered into by the Company; and

 

(iv)no asset of the Company has been acquired or disposed of on capital account,
or has been agreed to be acquired or disposed of, otherwise than in the ordinary
course of business and the Company has not disposed of or parted with possession
of any of its property assets (including know how) or stock in trade or made any
payments and no contract involving expenditure by it on capital account has been
entered into by the Company and no liability has been created or has otherwise
arisen (other than in the ordinary course of business as previously carried on).

 

 21 

 

 

5.6The Management Accounts have been properly complied by the directors of the
Company on the basis which is consistent with the accounting policies
consistently applied and are accurate in all respects and show a true and fair
view of the state of affairs of the Company and of its results and profits for
the financial period ending on the Management Accounts Date and:

 

(a)depreciation of the fixed assets of the Company has been made at a rate
sufficient to write down the value of such assets to nil not later than the end
of their useful working lives;

 

(b)the Management Accounts disclose and make full provision or reserve for all
actual liabilities;

 

(c)the Management Accounts disclose and make proper provision or reserve for or
note all contingent liabilities, capital or burdensome commitments and deferred
taxation;

 

(d)the bases and policies of accounting of the Company (including depreciation)
adopted for the purpose of preparing the Management Accounts are the same as
those adopted for the purpose of preparing the audited accounts of the Company
for each of the preceding accounting periods since the date of incorporation;

 

(e)the profits and losses of the Company shown in the Management Accounts and
for the preceding accounting periods have not in any material respect been
affected by any unusual or exceptional item or by any other matter which has
rendered such profits or losses unusually high or low; and

 

(f)the accounts receivable shown in the Management Accounts have been collected
or will in aggregate realise the nominal amount thereof less any reserve for bad
and doubtful debts included in the Management Accounts and none of the amounts
shown in the Management Accounts in respect of debtors is represented by debts
which were then more than six (6) months overdue for payment and none of the
same has been released or settled for an amount less than that shown in the
Management Accounts. All such debts will be collectible in full within one
hundred and eighty (180) days of the Completion Date subject to the Company
using all reasonable endeavours to collect the same.

 

6.Business, etc.

 

6.1The Company has not given or permitted to be outstanding any powers of
attorney or authority (expressed or implied) to any party to enter into any
contracts, commitments or transactions (other than the usual authority conferred
on its directors in respect of the ordinary course of business) or pursuant to
the banking facilities granted to the Company.

 

 22 

 

 

6.2The Company has not entered into any contracts, commitments or transactions
other than on an arms-length basis nor breached or defaulted under any
contracts, commitments or transactions.

 

6.3There are no existing circumstances which indicate that as a result of the
consummation of this Agreement:

 

(i)the existing level of business of the Company may be substantially reduced;
and

 

(ii)the Company will lose the benefit of any right or privilege which it enjoys.

 

6.4Compliance with the terms of this Agreement does not and will not :

 

(i)conflict with, or result in the breach of, or constitute a default under, any
of the terms, conditions or provisions of any agreement or instrument to which
the Company is a party, or any provision of the memorandum or articles of
association or equivalent constitutive documents of the Company or any
Encumbrance, lease, contract, order, judgment, award, injunction, regulation or
other restriction or obligation of any kind or character by which or to which
any asset of the Company is bound or subject;

 

(ii)relieve any person from any obligation to the Company (whether contractual
or otherwise), or enable any person to determine any obligation, or any right or
benefit enjoyed by the Company, or to exercise any right, whether under an
agreement with, or otherwise in respect of, the Company;

 

(iii)result in the creation, imposition, crystallisation or enforcement of any
Encumbrances whatsoever on any of the assets of the Company; or

 

(iv)result in any present or future indebtedness of the Company becoming due, or
capable of being declared due and payable, prior to its stated maturity.

 

6.5The Company has, at all times, carried on its business and conducted its
affairs in all respects in accordance with its memorandum and articles of
association or equivalent constitutive documents for the time being in force and
any other documents to which it is, or has been, a party.

 

6.6The Company is empowered and duly qualified to carry on business in all
jurisdictions in which it now carries on business.

 

6.7The Company is not a party to any undertaking or assurances given to any
court or governmental agency, which is still in force.

 

6.8The Company has conducted and is conducting its business in all respects in
accordance with all applicable laws and regulations, whether of Hong Kong or
elsewhere.

 

6.9The Company is not in breach of any of the terms or conditions of any of the
licences or consents; the enforcement of this Agreement shall not, and there are
no factors that might, in any way prejudice the continuation, or renewal, of any
of them.

 

 23 

 

 

6.10The Company is not a party to any contract, transaction, arrangement or
liability which:

 

(i)is of an unusual or abnormal nature, which is outside the ordinary and proper
course of business; or

 

(ii)cannot readily be fulfilled or performed by it on time without undue, or
unusual, expenditure of money, effort or personnel.

 

6.11No notice, demand or claim of default under any agreement, instrument or
arrangement to which the Company is a party has been received by the Company and
is outstanding against it and there is nothing whereby any such agreement,
instrument or arrangement may be prematurely terminated or rescinded by any
other party.

 

6.12The Vendors are not aware of:

 

(i)any party to any agreement with, or under an obligation to, the Company who
is in default under it, being a default which would be material in the context
of the Company’s financial position; and

 

(ii)any circumstances likely to give rise to such a default.

 

6.13Insofar as the Vendors are aware, the Company has not supplied services or
products which are, or were, or will become faulty or defective, or which do not
comply in any material respect with any warranties or representations, expressly
or impliedly made by it, or with all applicable regulations and requirements.

 

7.Corporate Records and Procedures etc.

 

7.1The copy of the articles of association or the equivalent constitutive
documents of the Company delivered to the Purchaser is accurate, update and
complete in all respects.

 

7.2No alteration has been made to the memorandum or articles of association or
the equivalent constitutive documents of the Company and no resolution of any
kind of the shareholders of the Company has been passed (other than resolutions
relating to the business at annual general meetings which was not special
business) without disclosure in writing to the Purchaser.

 

7.3The Company has fully and punctually observed and complied with its
obligations under the relevant companies legislations and the relevant statutes
and all returns, particular resolutions and other documents (if any) required to
be filed have been properly and punctually filed.

 

7.4The register of members of the Company is and will at Completion be correct.
There has been no notice of any proceedings to rectify the register, and there
are no circumstances which might lead to any application for rectification of
the register, nor will there be any such circumstances at or before Completion.

 

8.Directors

 

Other than the directors set out in Schedule 1, the Company has no other
director.

 

 24 

 

 

9.Dispute, Claims and Litigation

 

9.1The Company is not engaged in any litigation or arbitration proceedings, as
plaintiff or defendant; there are no proceedings pending or threatened, either
by or against the Company; and no circumstances exist which are likely to give
rise to any litigation or arbitration.

 

9.2There is no dispute with any revenue, or other official, department or other
regulatory authority in Hong Kong or elsewhere, in relation to the affairs of
the Company, and the Company and the Vendors are not aware of any facts which
may give rise to any dispute.

 

9.3No order has been made, or petition presented, or resolution passed for the
winding up of the Company; nor has any distress, execution or other process been
levied in respect of the Company which remains undischarged; nor is there any
unfulfilled or unsatisfied judgment or court order outstanding against the
Company.

 

9.4The Company has conducted its business and dealt with its assets in all
material respects in accordance with all applicable legal and administrative
requirements in Hong Kong and any other jurisdiction.

 

9.5The Company has not committed any criminal act or material breach of contract
or statutory duty or any tortious or other unlawful act.

 

9.6No unsatisfied judgment is outstanding against the Company.

 

10.Liabilities

 

10.1The Company does not have, as at the Accounts Date, any material liabilities
or financial commitment except as disclosed in the Accounts.

 

10.2All loans and payables incurred before Completion have been either waived or
settled, save for those as agreed between the Vendors and the Purchaser.

 

11.Agents

 

11.1There are in force no powers of attorney or any special authorities given by
the Company other than those given in the ordinary course of business.

 

11.2Other than in the ordinary course of business, the Company has not ever
entered into an agreement under which any person has been given representative
or agency rights or powers.

 

12.Acquisition of the Consideration Shares

 

12.1The Vendors understand that the Consideration Shares are “restricted
securities” and have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”) or any applicable state securities law and are
acquiring the Consideration Shares as principal for their own account and not
with a view to or for distributing or reselling the Consideration Shares or any
part thereof in violation of the Securities Act, have no present intention of
distributing any of such Consideration Shares in violation of the Securities Act
and have no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Consideration Shares
in violation of the Securities Act. The Vendors understand that the
Consideration Shares may only be disposed of in compliance with the Securities
Act. In connection with any transfer of the Consideration Shares other than
pursuant to an effective registration statement, CLNT may require the transferor
thereof to provide CLNT with an opinion of counsel selected by the transferor
and reasonably acceptable to CLNT, the form and substance of which opinion shall
be reasonably satisfactory to CLNT, to the effect that such transfer does not
require registration of such transferred Consideration Shares under the
Securities Act.

 

 25 

 

 

12.2The Vendors hereby represent that they have satisfied themselves as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Consideration Shares, including (i) the legal
requirements within its jurisdiction for the acquisition of the Consideration
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Consideration Shares.
The Vendors beneficial ownership of the Consideration Shares will not violate
any applicable securities or other laws of the Vendor’s jurisdiction.   

12.3The Vendors, either alone or together with their representatives, have such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the acquisition of the
Consideration Shares, and have so evaluated the merits and risks. The Vendors
are able to bear the economic risk of the Consideration Shares and, at the
present time, are able to afford a complete loss of the Consideration Shares.   

12.4The Vendors are not, to each of their knowledge, acquiring the Consideration
Shares as a result of any advertisement, article, notice or other communication
regarding the Consideration Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.   

12.5The Vendors acknowledge that they have had the opportunity to review any and
all documents and has been afforded (i) the opportunity to ask such questions as
they have deemed necessary of, and to receive answers from, representatives of
CLNT concerning the Consideration Shares; and (ii) access to information about
CLNT and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate the transaction.
The Vendors acknowledge and agree that CLNT has not provided the Vendors with
any information or advice with respect to the Consideration Shares nor is such
information or advice necessary or desired.   

12.6Neither the Vendors nor any person acting on their behalf has engaged, nor
will engage, in any directed selling efforts to a U.S. Person (as defined in the
Securities Act) with respect to the Consideration Shares and each of the Vendors
and any person acting on their behalf has complied and will comply with the
“offering restrictions” requirements of Regulation S. The transactions
contemplated hereby have not been pre-arranged with a buyer located in the
United States or with a U.S. Person, and are not part of a plan or scheme to
evade the registration requirements of the Securities Act. Neither the Vendors
nor any person acting on 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 United States, its territories or possessions,
for any of the Consideration Shares. The Vendors agree not to cause any
advertisement of the Consideration Shares to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Consideration Shares, except such advertisements that include the
statements required by Regulation S, and only offshore and not in the U.S. or
its territories, and only in compliance with any local applicable securities
laws.

 

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12.7The Vendors understand that the Consideration Shares and any securities
issued in respect of or exchange for the Consideration Shares, may be notated
with one or all of the following legends, as applicable:

 

“THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT 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.”

 

“THESE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE
SECURITIES ACT”) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THESE SECURITIES IS
PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED
UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR
PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

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SCHEDULE 4
PURCHASER WARRANTIES

 

1.The Purchaser has, on the date of this Agreement and on Completion, full and
unfettered right, power and authority to enter into this Agreement and assume
all of its obligations hereunder and no further actions or proceedings are
necessary on its part in connection with the execution, delivery and performance
by it of this Agreement.

 

2.The Purchaser is a company duly incorporated and validly existing under the
laws of BVI.

 

3.This Agreement constitutes valid and legally binding obligations on the part
of the Purchaser enforceable in accordance with its terms.

 

4.All information given by the Purchaser or its agents or professional advisers
to the Vendor or its employees, agents or professional advisers was, when given,
and is now true, accurate and complete in all respects.

 

5.Subject to the fulfillment of the Conditions Precedent, all necessary
consents, authorisations and approvals of and all necessary registrations and
filings with any governmental or regulatory agency or body required in Hong Kong
and BVI for or in connection with this Agreement and the performance of the
terms thereof have been obtained or made or will have been obtained or made by
Completion.

 

6.All the Consideration Shares to be issued and allotted by CLNT to the Vendors
will be duly authorised, validly issued and fully paid up and none of such
shares will be issued in violation of the memorandum and articles of association
of CLNT or the terms of any agreement or laws and regulations by which CLNT or
its shareholders were or are bound, if any.

 

 

 

 

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