LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED

AND

NEW-METAL (H.K.) TECHNOLOGY LIMITED
 

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REGARDING

100% EQUITY INTERESTS OF
SHENZHEN GUOFA OPTOELECTRONICS CO., LTD.

EQUITY TRANSFER CONTRACT
 

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CONTENTS

ARTICLE 1 DEFINITION
    1            
ARTICLE 2 EQUITY TRANSFER
    2            
ARTICLE 3 EQUITY TRANSFER PRICE AND CLOSING
    2            
ARTICLE 4 CONDITIONS PRECEDENT
    3            
ARTICLE 5 LABOR ISSUES
    6            
ARTICLE 6 REPRESENTATIONS, COMMITMENTS AND WARRANTIES
    7            
ARTICLE 7 BREACH OF CONTRACT AND COMPENSATION
    10            
ARTICLE 8 SELL BACK OPTION
    11            
ARTICLE 9 TERMINATION
    12            
ARTICLE 10 FORCE MAJEURE EVENT
    14            
ARTICLE 11 CONFIDENTIALITY
    14            
ARTICLE 12 NON-COMPETITION
    16            
ARTICLE 13 MISCELLANEOUS
    16  

 

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This Equity Transfer Contract (the “Contract”) is entered into by and between
the following two parties on January 21, 2011 in Shenzhen.

PARTY A: NEW-METAL (H.K.) TECHNOLOGY LIMITED
Address of Registered Office: Room 701, Sino Centre, 582-592 Nathan Road,
Mongkok, Kowloon, Hong Kong

PARTY B: LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED
Address of Registered Office: 13/F., Shum Tower, 268 Des Voeux, Road Central,
Hong Kong

WHEREAS,

 
A.
Party A is a limited liability company incorporated and validly existing under
the laws of Hong Kong Special Administrative Region, the PRC (“Hong Kong”).

 
B.
Shenzhen Guofa Optoelectronics Co., Ltd. (the “Company”) is a wholly
foreign-owned enterprise incorporated and validly existing under the laws of the
PRC. The registered capital of the Company is USD 1,000,000 and Party A
currently holds 100% of the Company’s equity interests.

 
C.
Party B is a limited liability company incorporated and validly existing under
the laws of Hong Kong.

 
D.
Party A agrees to transfer 100% of the Company’s equity interests held by it to
Party B once the conditions set forth herein are satisfied; Party B agrees to
purchase the aforesaid equity interest from Party A once the conditions set
forth herein are satisfied.

 
NOW THEREFORE, the Parties hereby agree as follows:
 
Article 1     Definition

1.1
 
Party A
 
means
New-metal (H.K.) Technology Limited
1.2
 
Party B
 
means
Luck Loyal International Investment Limited
1.3
 
Company
 
means
Shenzhen Guofa Optoelectronics Co., Ltd.
1.4
 
Target Equity Interest
 
means
the 100% equity interests of the Company held by Party A proposes to be
transferred to Party B and all the rights attached thereto including titles,
profit distribution rights, assets distribution rights and all the other rights
enjoyed by the Company’s shareholder(s) according to the Company’s articles of
association and PRC laws.
1.5
 
Equity Transfer
 
means
the transfer of the Equity Interest currently held by Party A to Party B
according to this Contract.
1.6
 
Completion Date of Equity Transfer
 
means
the date on which the Company obtains its new business license.
1.7
 
PRC
 
means
the People’s Republic of China (exclusive of Hong Kong and Macao Special
Administrative Regions and Taiwan for the purpose of this Contract)
1.8
 
Equity Transfer Price
 
means
the consideration for the Equity Transfer from Party A to Party B, which shall
be the US dollars equivalent to RMB42,673,736 (RMB forty two million six hundred
seventy three thousand seven hundred and thirty six).
1.9
 
Affiliate
 
means
any entity whether or not incorporated as a legal person, (a) who owns or
actually controls shares/assets or equities of such entity; (b) whose
shares/assets or equities are owned or actually controlled by such entity; (c)
who, together with such entity, is owned or actually controlled by the same
entity; (d) directors, supervisors and officers of such entity, and close
relatives of any of the foregoing persons; and (e) who is owned or actually
controlled by any of the foregoing persons as described in (d). Close relatives
includes a spouse, lineal relatives, lineal relatives of a spouse and collateral
relatives by blood within three generations.

 
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Article 2     Equity Transfer

2.1
Upon the fulfillment of the conditions precedent set forth in Article 4.1
hereof, Party A agrees to transfer to Party B, and Party B agrees to receive
from Party A, the Target Equity Interest.

2.2
The Parties shall take every measure to procure the Company to acquire all
governmental approvals which are necessary to the Equity Transfer contemplated
hereunder and make the amendment to the registration with the Administration for
Industry and Commerce within 120 working days following the execution date of
this Contract.

 
Article 3     Equity Transfer Price and Closing

3.1
The Parties hereby agree that the Equity Transfer Price shall be the US dollars
equivalent to RMB42,673,736 (the “Equity Transfer Price”).  Party B shall pay
such Equity Transfer Price in cash in US dollars.  For the purpose of
calculation, the exchange rate of RMB to USD applicable for each installment of
the Equity Transfer Price shall be the central parity of the RMB to USD buying
rate and selling rate published by the People’s Bank of China on the payment
date of such installment.

 
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3.2
The Parties agree that the Equity Transfer Price hereunder shall be paid in
three installment:

 
First Installment: USD equivalent to RMB4,000,000 (“First Installment of the
Equity Transfer Price”), which shall be paid to the bank account designated by
Party A within 10 working days after the execution date of this Contract;
 
Second Installment: USD equivalent to RMB28,673,736 (“Second Installment of the
Equity Transfer Price”). The Second Installment of the Equity Transfer Price
shall be paid to the bank account designated by Party A within 30 working days
after the conditions precedent as set forth in Article 4.1 hereof have been
satisfied or waived by Party B, as confirmed by Party B in writing.
 
Third Installment: USD equivalent to RMB10,000,000 (“Third Installment of the
Equity Transfer Price”). The Third Installment of the Equity Transfer Price
shall be paid to the bank account designated by Party A within 30 working days
after the conditions precedent as set forth in Article 4.3 hereof have been
satisfied or waived by Party B, as confirmed by Party B in writing. The Third
Installment of the Equity Transfer Price shall be withheld as a deposit to
secure the settlement of labor issues by Party A as addressed in Article 5
hereof (“Deposit”), namely that if Party A fails to settle all the relevant
labor issues in a manner satisfactory to Party B pursuant to Article 5 hereof,
then Party B shall have a right to keep such Deposit.

3.3
The Parties agree and confirm that the Second Installment of the Equity Transfer
Price shall be adjusted at Party B’s sole discretion according to its review of
the financial due diligence results and the stock take of the Company’s fixed
assets and inventories, by means of a refund for any overpayment or additional
payment for any deficiency to/by Party B. If and when the Second Installment of
the Equity Transfer Price is adjusted pursuant to this Article 3.3, the amount
of the Equity Transfer Price shall also be adjusted accordingly.

3.4
Party A shall provide Party B with a written statement indicating that it has
received each installment, including but not limited to bank receipt, within 1
working day after receiving such installment of the Equity Transfer Price.

 
Article 4     Conditions Precedent

4.1
Party B shall purchase the Target Equity Interest hereunder and pay the Second
Installment of the Equity Transfer Price only upon the consummation of the
following conditions precedent. Party B is entitled but not obligated to waive
one or several of the following conditions:

 
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(1)
The organ of power of the Company (shareholders meeting or the board of
directors, depends on the provisions of the Company’s articles of association)
has executed all relevant resolutions and approved the execution of this
Contract and the transactions contemplated hereunder;

 
(2)
All of the governmental approvals and registrations required in connection with
this Contract, including but not limited to the reply and corresponding approval
certificate issued by the Science Industry Trade and Information Technology
Commission of Shenzhen Municipality with respect to the Equity Transfer
hereunder, and consents and permits of any third party, shall have been duly
obtained;

 
(3)
The Company has duly obtained the business license being issued by the
Administration for Industry and Commerce with respect to the Equity Transfer
hereunder, the Company’s amended articles of association has been submitted to
the Administration for Industry and Commerce for record, and copies of such
business license and amended articles of association have been delivered to
Party B; according to the aforesaid documents, Party B has been lawfully
registered as the sole owner of the Target Equity Interest;

 
(4)
Party B shall have finished its legal due diligence of the Company and shall be
satisfied with the result of such due diligence; the Company shall have finished
the relevant rectification in manners satisfactory to Party B according to the
suggestions in connection with the results of due diligence proposed by Party B;

 
(5)
Party B shall have finished its financial due diligence of the Company and shall
be satisfied with the result of such due diligence. Party B, together with Party
A, shall have completed the stock take of the Company’s inventories and fixed
assets; the Parties have adjusted the Second Installment of the Equity Transfer
Price based on the results of the financial due diligence investigation and the
stock take pursuant to Article 3.3 hereof, and confirmed the final amount of the
Second Installment of the Equity Transfer Price in writing;

 
(6)
As of the Completion Date of Equity Transfer, no changes have occurred which may
have a material adverse influence on the Company’s business, employees, assets
and financial situation;

 
(7)
As of the Completion Date of Equity Transfer, the Company’s key employees
(except for those employees who leave or terminate their labor contracts with
Party B’s prior consent) who continue to work for the Company, has not
materially breached their labor contracts, confidentiality agreements and
non-competition agreements with the Company, and such contracts or agreements
shall continue to be valid and effective;

 
(8)
As of the Completion Date of Equity Transfer, the senior managers have signed
confirmation letters of labor contracts with respect to their labor relationship
with the Company, and Party B will provide the terms and format of such
confirmation letters of labor contracts;

 
4

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(9)
As of the Completion Date of Equity Transfer, commitments and warrants made
hereunder by Party A are true, accurate and sufficient, and commitments made
hereunder by Party A have been fully completed;

 
(10)
As of the Completion Date of Equity Transfer, there shall be no existing,
pending or contingent suit or legal proceeding, adverse injunction, judgment,
order, arbitration, claim or administrative order that may lead to the following
results: (i) preventing completion of any transaction provided hereunder; (ii)
causing any transaction hereunder to be revoked after completion; (iii)
engendering material adverse influences to Party B’s shareholding in the
Company, or (iv) engendering any material adverse influences to the Company’s
rights or capability to operate its business;

 
(11)
As of the Completion Date of Equity Transfer, there are no adverse changes of
PRC laws preventing the completion of the contract objective hereunder.

4.2
Party B shall have the right to unilaterally terminate this Contract and perform
the post-termination arrangements pursuant to the provisions hereof with respect
to termination, provided that any of the conditions precedent set forth in
Article 4.1 hereof has not been consummated according to this Contract (except
for those conditions waived by Party B in writing).

4.3
Subject to the provisions in relation to the withholding of the Deposit as
contemplated in Article 3.2 hereof, the Third Installment of the Equity Transfer
Price shall be paid to the bank account designated by Party A within 30 working
days after the following conditions precedent have been satisfied or waived by
Party B, as confirmed by Party B in writing (such payment date shall be the
“Payment Date of the Third Installment”):

 

 
(1)
One year has elapsed after the Completion Date of Equity Transfer hereunder;

 
(2)
As of the Payment Date of the Third Installment, the Company’s key employees
(except for those employees who resign from the Company or terminate their labor
contracts with Party B’s prior consent) who continue to work for the Company,
has not materially breached their labor contracts, confidentiality agreements
and non-competition agreements with the Company, and such contracts or
agreements shall continue to be valid and effective;

 
(3)
As of the Payment Date of the Third Installment, commitments, representations
and warrants made hereunder by Party A are true, accurate and sufficient, and
Party A has performed or observed any of its obligations and warrants hereunder
in all substantial aspects;

 
5

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(4)
As of the Payment Date of the Third Installment, no changes, events or
circumstances have occurred or are likely to occur which may have a material
adverse influence on the Target Equity Interest, the Company’s employees,
business, financial situation and/or the transactions contemplated hereunder;

 
(5)
As of the Payment Date of the Third Installment, there shall be no existing,
pending or contingent suit or legal proceeding, adverse injunction, judgment,
order, arbitration, claim or administrative order that may lead to the following
result: (i) preventing completion of any transaction provided hereunder; (ii)
causing any transaction hereunder to be revoked after completion; (iii)
engendering material adverse influences to Party B’s ownership of the target
assets, the target business and rights of transferred employees, or (iv)
engendering any material adverse influences to the Party B’s rights or
capability to operate the target business.

Article 5     Labor Issues

5.1
As of the Completion Date of Equity Transfer, if Party B proposes any amendments
to the labor contract, confidentiality agreement, non-competition agreement and
other agreement in relation to labor relationship entered into by and between
the Company and its employees (including key employees), then Party A shall
procure and ensure the Company and its employees to re-sign such contracts and
agreements. Party B shall determine the time and manner for such re-signing.

5.2
Party A shall procure and ensure that key employees will not resign from the
Company with one year after the Completion Date of Equity Transfer.

5.3
Party A shall be responsible for any labor disputes and any settlement,
arbitration or lawsuit incurred from the Equity Transfer, bear all relevant fees
and expenses, and compensate the Company or Party B against any compensation
amount so incurred.

5.4
Party A shall unconditionally and irrevocably pay or compensate against any
payable salaries, settlement fees, compensation or litigation fees incurred from
any labor disputes between the Company and its employees with respect to their
labor relationship established before the Completion Date of Equity Transfer (no
matter that such labor disputes arise before or after the Completion Date of
Equity Transfer), or payable economic compensation, social insurance and housing
fund and other unpaid relevant fees; Party A shall unconditionally and
irrevocably compensate Party B and/or the Company against any fees (including
but not limited to attorney fees) arising from the resolution of such labor
disputes by Party B and/or the Company.

5.5
Party A shall assume all economic compensation arising from the termination of
labor contracts between the Company and its employees before the Completion Date
of Equity Transfer; Party A shall unconditionally and irrevocably pay or
compensate against any unpaid or insufficient paid social insurances, housing
fund, social security fund or welfare fees, or unpaid or un-implemented
penalties or other punishments by the competent labor administration bureau,
which occurred before the Completion Date of Equity Transfer.

 
6

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Article 6     Representations, Commitments and Warranties

6.1
Party A hereby unconditionally and irrevocably makes the following
representations, commitments and warranties to Party B, as of the Completion
Date of Equity Transfer:

 
(1)
Party A is a limited liability company duly incorporated and validly existing
under Hong Kong laws;

 
(2)
Party A shall enjoy a sole and exclusive title and disposal right to the Target
Equity Interest hereunder to be transferred to Party B; the Target Equity
Interest is free from any pledge or any other security interests, interests of
any third party, encumbrance of all kinds, and there does not exist any facts in
relation to interest of third party nor any defect in law;

 
(3)
Party A warrants that all the permits and licenses required for the Company to
continuously operate, are valid and effective as of the Completion Date of
Equity Transfer, and to Party A’s best knowledge, there exists no fact, reason
or possibility that may cause such permits or licenses to be repealed or
revoked, or unable to be renewed or extended.

 
(4)
The execution of this Contract, the exercise of the rights or performance of the
obligations pursuant to this Contract will not cause Party A to breach:

 
(a)
any laws, regulations, ordinances, judgments, rulings, arbitration awards,
administration decisions and orders that are binding or relevant to Party A;

 
(b)
any document, contract or agreement to which Party A is a party, or any
document, contract or agreement that has a binding force on Party A’s assets;

 
(c)
any articles of associations and internal regulations of Party A.

 
(5)
Party A is not involved in any litigations, arbitrations or any other possible
legal or administrative proceedings, which are existing, pending, contingent,
potential, or asserted by a third party; and to Party A’s best knowledge, no
such litigation, arbitration or any other possible legal or administrative
proceeding is about to take place.

 
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(6)
In order that:

 
(a)
Party A may legally enter into this Contract and perform its obligations
hereunder;

 
(b)
the obligations and responsibility of Party A herein are legal, valid and can be
enforced in accordance with this Contract;

 
(c)
this Contract can be adopted as evidences within the PRC territory;

on or before the execution date of this Contract, Party A has taken all the
actions, observed or satisfied all the conditions or terms required by the
applicable laws.

 
(7)
Party A’s execution and performance of this Contract are within its scope of
power and Party A have obtained necessary authorizations for such execution and
performance;

 
(8)
The statements under Sections A and B as provided in the “WHEREAS” section are
accurate, and the capital contribution in connection with the Target Equity
Interest has been made, and there is no withdrawal of such contribution or
feigned capital contribution.

 
(9)
Party A warrants that it has disclosed to Party B, all the facts that may have a
material adverse effect on Party A’s ability to fully perform its obligations
hereunder, or all the facts that may have a material adverse effect on Party B’s
willingness to enter into this Contract once disclosed to Party B, and all the
items disclosed or all the materials provided for this purpose, are
substantially true, complete and accurate, and there is no false or misleading
representations.

 
(10)
Party A represents, that the books of the Company are complete, and the
financial statements disclosed for the purpose of the Equity Transfer are made
in accordance with current Chinese laws and regulations and accounting rules.
The afore-mentioned books and financial statements are complete, true and
sufficient to reveal impartially the financial conditions of the Company upon
the expiration of those fiscal periods and its performance within such fiscal
periods. From the date of the issuance of such financial statements until the
Completion Date of Equity Transfer, there is no material adverse change to the
business or the financial conditions of the Company.

 
(11)
Party A warrants that the Company has never engaged in any acts violating PRC
laws and regulations, and has never been involved in any litigations,
arbitrations or administrative penalties, and none of the aforesaid situation is
about to take place to Party A’s best knowledge.

 
(12)
Party A warrants that since the establishment of the Company until the
Completion Date of Equity Transfer, it has observed all kinds of tax laws, has
paid all the taxes and fees explicitly required by the taxation administrations,
and has not received any overdue notices issued by the tax administrations or
any other authorities, has not been fined due to taxation issues, is not
involved in any pending investigation or dispute in connection with taxation
issues.

 
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(13)
Party A warrants that it will strictly observe relevant PRC taxation laws and
regulations and pay taxes for the Equity Transfer Price in accordance with laws
and regulations.

 
(14)
Party A represents and warrants that it will cooperate with Party B and other
institutions after entering into this Contract to ensure it and/or the Company
to complete the conditions precedent as provided under Article 4.1 of this
Contract, strictly in accordance with this Contract, and provide Party B
with relevant documents proving the completion of such conditions precedent
within 1 working day upon the completion of every condition precedent.

 
(15)
Party A represents and warrants that it will be responsible or entrust the
Company to submit relevant documents to competent authorities, apply for all the
approvals, registrations and filings in connection with the transfer of the
Target Equity Interest, so as to make sure that Party B is able to obtain all
the documents required by laws and regulations and complete the Equity Transfer
within the agreed period.

 
(16)
Party A warrants that on the Completion Date of Equity Transfer, there is no
material asset or debt not disclosed to Party B in prior.

 
(17)
Party A warrants that, upon the receipt by itself or the Company of any
acceptance, rejection, approval, reply issued by the competent authority in
connection with the transfer of Target Equity Interest or notice requiring any
modifications or supplementary materials, Party A shall timely inform Party B
and provide the copies of such documents.

 
(18)
At any time before the Completion Date of Equity Transfer (including the
Completion Date of Equity Transfer), in the event that Party A learns any
situation that may cause its representations, commitments or warrants hereunder
to be untrue or inaccurate, Party A shall immediately inform Party B in writing,
and, as reasonably requested by Party B, take necessary remedy measures.

 
(19)
This Contract shall become effective and valid binding force to Party A, upon
the execution and effectiveness of this Contract, and shall be enforceable
against Party A in accordance with the terms of this Contract. Party A
represents and warrants that it does not enjoy any exemption rights.

 
(20)
Party A will do its best to be responsible for or assist the Company in
fulfilling all requirements on signatures, approvals, registrations, amendment
to registration and filings procedures.

 
(21)
All the aforementioned representations, commitments and warranties of Party A
are true, accurate, complete, sufficient, unconditional and without reservation.

 
9

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6.2
Party B hereby unconditionally and irrevocably makes the following
representations, commitments and warranties, as of the Completion Date of Equity
Transfer:

 
(1)
Party B is a limited liability company duly incorporated and validly existing in
accordance with Hong Kong laws.

 
(2)
Party B has obtained necessary corporate authorization to sign and perform this
Contract;

 
(3)
Party B is not involved in any litigations, arbitrations or any other possible
legal or administrative proceedings materially impacting or likely to materially
impact the Equity Transfer, which are existing, pending, contingent, potential,
or asserted by a third party.

 
(4)
At any time after the execution of this Contract, Party B warrants to cooperate
with Party A and other institutions, to ensure the consummation of all the
conditions precedent under Article 4.1 hereof.

 
(5)
All the statements under Section C as provided under “WHEREAS” section are true
and accurate.

 
(6)
This Contract shall become effective and valid binding force to Party B, upon
the execution and effectiveness of this Contract, shall be enforceable against
Party B in accordance with the terms of this Contract. Party B represents and
warrants that it does not enjoy any exemption rights.

 
(7)
All the afore-mentioned representations, commitments and warranties of Party B
are true, accurate, complete, sufficient, unconditional and without reservation.

 
Article 7     Breach of Contract and Compensation
 
7.1
Failure of performance or sufficient performance of this Contract, breach of any
commitment, representations and warrants hereunder, or failure to make true,
accurate, complete covenants, statements and warranties by any Party shall
constitute a breach of this Contract.  The breaching Party shall bear all and
any liability of actual loss arising from such breach, and pay damages in full
to the Party accepting such commitment, representation or warrant, which
includes but is not limited to the whole loss, litigation and/or arbitration
fees, attorney’s fees, investigation fees, evaluation fees and notarization fees
of the non-breaching Party.  The respective breaching Parties shall bear their
own corresponding liabilities for compensation arising from their respective
breach in proportion with their respective faults in the event that both Parties
under this Contract commit breach of this Contract.  This article shall not
limit the right of the Parties to seek other legal remedies, including but not
limited to the right to demand actual performance provided by the Contract Law
of the PRC.

 
10

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7.2
Party B shall be entitled to deduct directly the compensation amount from the
Equity Transfer Price and recover any deficiency pursuant to the laws and this
Contract in the event that Party A commits a breach under this Contract.

7.3
Party A shall make indemnification to Party B for any loss incurred by any
litigation, arbitration, claim administrative proceeding or other legal
proceeding against Party B arising from or relating to the Target Equity
Interest occurring prior to the Completion Date of Equity Transfer.

7.4
Both Parties shall perform the obligations hereunder with the principles of good
faith.  Unless otherwise provided by this Contract, in the event that either
Party fails to perform, or breaches any terms, conditions, covenants,
representations or warranties hereunder, the other Party shall be entitled to be
compensated against all the losses, damages and the fees and costs arising from
the litigations or claims by the non-performing or breaching Party.

 
Article 8     Sell Back Option
 
8.1
The Parties agree that, Party B is entitled to exercise a Sell Back Option to
sell the Target Equity Interest back to Party A according to the following
provisions, provided that Party B or the Company is subject to any claims,
recourse, legal liabilities, is caused to loss the title of Target Equity
Interest, or is prevented from operating the Company’s business, due to Party
A’s material breach of this Contract (including but not limited to a violation
of the non-competition provisions applicable to Party A and its Affiliates),
malicious act and/or inaction, false statement and concealment.

 
8.2
The exercise period of the Sell Back Option is 3 years following the Completion
Date of Equity Transfer.

 
8.3
Party B has a complete and independent option to resell the Target Equity
Interest to Party A when exercising the Sell Back Option. Party A shall refund
Party B the Equity Transfer Price already paid and pay a breach penalty
calculated at an annual interest of 15% of the Equity Transfer Price already
paid within 10 days after receipt of the notice issued by Party B. When Party B
exercises the Sell Back Option, Party A agrees to execute all necessary
documents and take all necessary action according to this Contract, including
but not limited to timely executing documents required for alteration approval
and registration with the competent government authorities.

 
8.4
In the event that a circumstance prescribed in Article 8.1 occurs but Party B
does not exercise the Sell Back Option, Party B is entitled to rectify and
adjust the Equity Transfer Price contemplated hereunder, and the adjusted Equity
Transfer Price shall not exceed 70% of the original Equity Transfer Price. Party
A shall refund the margin of the Equity Transfer Price before and after such
adjustment unconditionally to Party B in the manner accepted by Party B within
10 days after receipt of written notice issued by Party B. In the event that
Party A fails to pay such margin, Party B is entitled to deduct the margin from
any fund payable to Party A.

 
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Article 9     Termination

9.1
This Contract shall terminate upon the occurrence of any following events:

 
(1)
Both Parties agree to terminate in writing through amicable negotiation.

 
(2)
The amendment to the registration with Administration for Industry and Commerce
reflecting the transaction contemplated hereunder has not been completed within
120 days as of the execution date of this Contract due to any reasons.

 
(3)
Party B reasonably requests termination of this Contract and the transaction
hereunder for reasons caused by Party A.

 
(4)
A material adverse change occurs to the assets, business, employees or finance
of the Company prior to the Completion Date of Equity Transfer, according to
which Party B reasonably deems that the Equity Transfer hereunder may not be
completed within reasonable time or the purpose of the transaction hereunder may
not be achieved.

 
(5)
In the event that any conditions precedent set forth in Article 4.1 fails to be
completed as prescribed by this Contract (unless waived by Party B), Party B
shall be entitled to terminate this Contract unilaterally.

 
(6)
In the event that either Party materially breaches any provisions hereunder or
any of its commitment, representation or warrant hereunder is false, the
non-breaching Party may give written notice to the breaching Party requesting
immediate cure and rectification of such breach.  In the event that the
breaching Party fails to take measures to cure and rectify satisfactorily to the
non-breaching Party within 60 days as of the issuance of the aforesaid written
notice by the non-breaching Party, the non-breaching Party may terminate this
Contract immediately.

 
(7)
This Contract may not be performed due to the newly-promulgated applicable laws
and regulations.

 
(8)
The occurrence of Force Majeure Event as set forth in Article 10 hereof
continuing for a period over six (6) months, which caused the impossibilities to
perform this Contract.

9.2
In the event that this Contract terminates, Party A shall, within seven (7)
working days upon the termination confirmed by both Parties in writing (under
the circumstance of Article 9.1(1)), or upon the issuance of written notice by
Party B (under the circumstances of Article 9.1(2)(3)(4)(5)), or upon the
issuance of termination notice by the non-breaching Party (under the
circumstance of Article 9.1(6)), or upon the occurrence of the events causing
termination (under the circumstance of Article 9.1(7)(8)), refund to Party B’s
designated account the Equity Transfer Price set forth in Article 3.1 (including
but not limited to the First Installment of Equity Transfer Price) and the
interests accrued thereon calculated in accordance with the benchmark loan
interest rate of the People’s Bank of China on the refunding date for the period
between the date of receipt of such amount by Party A and the date of refunding
to Party B.  However, in the event that termination of this Contract is
attributable and shall only be attributable to Party B’s faults, Party A shall
only refund the principal of such amount without any interests.

 
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9.3
In the event that this Contract terminates, either Party shall return to the
other Party any records, documents or materials delivered pursuant to this
Contract (whether the aforesaid records, documents or materials were delivered
prior to or following the signing of this Contract).

9.4
In the event that the registration with the Administration for Industry and
Commerce for the Equity Transfer has been completed when the Contract
terminates, both Parties shall jointly carry out the amendment registration
regarding the termination of this Contract in accordance with the relevant laws
and regulations, and restore the relationship between both Parties and with the
Company to the status prior to the execution of this Contract as follows: Party
A shall hold 100% equity interest of the Company; Party B shall obtain from
Party A the Equity Transfer Price set forth in Article 3.1 and the interests
accrued thereon calculated in accordance with the benchmark loan interest rate
of the People’s Bank of China on the refunding date for the period between the
date of receipt of such amount by Party A and the date of refunding to Party B
(in the event that termination of this Contract is attributable and shall only
be attributable to Party B’s faults, Party A shall only refund the principal of
such amount without any interests); in the event that the restoration of the
relationship between both Parties and with the Company to the status prior to
the execution of this Contract requires the execution of any other agreements or
documents by both Parties, both Parties shall cooperate to execute such
agreements or documents.

9.5
Any relevant fees arising from the preparation, performance or termination of
the Equity Transfer hereunder, including but not limited to the taxes and fees,
governmental charges, intermediary fees paid for the Equity Transfer, shall be
borne by the breaching Party, if any.  The aforesaid amount shall be borne by
both Parties pursuant to Article 13.2 hereunder in the event that there is no
breaching Party.

9.6
Any liabilities for breaching this Contract shall not be released upon the
termination of this Contract.

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Article 10     Force Majeure Event

10.1
“Force Majeure Event” shall mean any event that is unforeseeable and its
occurrence and consequence is unpreventable or unavoidable when executing this
Contract, as a result of which any Party is completely or partially unable to
perform any term under this Contract, including earthquake, tsunami, typhoon,
floods, wars, epidemics and other aforesaid unforeseeable, unpreventable or
unavoidable events, and also including events commonly regarded as Force Majeure
Event under international commercial practice.

10.2
The affected Party shall be released from performing its responsibility or
obligation hereunder during the continuation of the Force Majeure Event upon its
occurrence and shall not be deemed as a breach of this Contract, provided
that the affected Party shall immediately take all measures to give written
notice to the other Party, and give the documents certifying the occurrence
and/or continuation of the Force Majeure Event in accordance with the laws of
the PRC within 15 days as of the occurrence of such Force Majeure Event.
Otherwise it shall be deemed as no such Force Majeure Event occurs.

10.3
The affected Party shall make its best efforts to take all measures to mitigate
the economic losses that may be caused by the Force Majeure Event.

10.4
The Parties shall negotiate to seek reasonable and fair solution upon the
occurrence of any Force Majeure Event and make all the reasonable efforts to
mitigate the negative impact of such Force Majeure Event on the performance of
this Contract.

10.5
Neither Party shall be released from any liability by claiming the occurrence of
Force Majeure Event in the event that the Force Majeure Event occurs after such
Party’s delaying to perform any obligation hereunder by breaching this Contract.

 
Article 11     Confidentiality

11.1
Any Party has disclosed or may have to disclose to the other Party confidential
and proprietary materials regarding their respective business and financial
status and other confidential matters.  Unless otherwise provided by other
confidentiality agreements, the receiving Party of the aforesaid materials
(including written and non-written materials, hereinafter “Confidential
Materials”) shall

 
(1)
keep confidentiality of the aforesaid Confidential Materials; and

 
 
(2)
refrain from disclosing the aforesaid Confidential Materials to any person or
entity except for its own employees necessary to know the aforesaid Confidential
Materials to perform their own duties.

 
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11.2
The provisions of Article 11.1 shall not apply to the confidentiality materials
as follows:

 
(1)
materials known by the receiving Party prior to the disclosure to the receiving
Party by the disclosing Party, which can be proved by written record;

 
(2)
materials known by the public without the breach of this Contract by the
receiving Party;

 
(3)
materials obtained from any third party without any confidentiality obligation
for the Confidential Materials; or

 
(4)
materials contained in the documents published during process of completing
relevant procedures regarding the Equity Transfer.

11.3
Each Party shall ensure that its directors, senior managers and employees in
relation to this Equity Transfer, and the director, senior managers of its
Affiliates and its employees in relation to this Equity Transfer shall comply
with the same confidentiality obligation set forth in this Article 11.

11.4
The provisions in Article 11 shall not apply to the disclosure of the
Confidential Materials to the Affiliates, intermediaries and the employees and
counsels of both Parties for the purpose of the Equity Transfer, provided that
in such event, such disclosure shall be restricted to the persons or entities
necessary to know such materials to perform their own duties.

11.5
The provisions in Article 11 shall not apply to the disclosure by either Party
of the materials to any governmental authorities or relevant organs or the
public as provided by the relevant laws and regulations, or required by the
listing rules both home and abroad or the securities exchanges or securities
supervisory commissions both home and abroad, provided that the Party required
to disclose as aforesaid shall give notice to the other Party regarding such
requirement and its terms immediately prior to its disclosure.

11.6
The provisions in Article 11 shall not prevent a Party hereto from any
publication or disclosure permitted by applicable laws and regulations in
accordance with its own bona fide judgment.

 
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Article 12     Non-competition

12.1
As of the Completion Date of Equity Transfer, pursuant to this Contract, Party A
and its Affiliates shall not directly or indirectly engage in any activities
that constitute or may constitute competition with Party B or the Company, or
deprive of, impair or infringe upon or may deprives of, impair or infringe upon
the business interest or business opportunity of Party B or the Company, or
shall not obtain or own interest from such activities and shall not, directly or
indirectly in any capacity or in any way procure, solicit or cause the
employees, service providers, clients, counsels or agents establishing or to
establish relations of employment, service, counseling, agent to cease or
terminate any aforesaid relations with Party B or the Company, or cause any
aforesaid persons to waive or refuse to establish any aforesaid relationship
with Party B or the Company, or conduct any activities purporting to achieve the
aforesaid consequences.

12.2
Party A agrees and confirms that it shall compensate Party B and/or the Company
against all the losses arising from its breach of the aforesaid non-competition
obligations, including but not limited to reasonable attorney’s fees.  Any
competing activities conducted by Party A’s Affiliates shall be deemed as Party
A’s breach of this article, and Party A shall be jointly liable for such breach
by its Affiliates.

 
Article 13     Miscellaneous

13.1
Date of Effectiveness

This Contract shall become effective upon signature and sealing by the legal
representatives or authorized representatives of both Parties and approved by
the relevant approval authorities.

13.2
Fees

Unless otherwise provided by this Contract, all the legal taxes and fees arising
from the execution and performance of this Contract shall be born respectively
by both Parties as provided by the relevant laws and regulations.  In the event
that the relevant laws and regulations fail to determine the bearing party,
Party A and Party B shall each bear fifty percent (50％) of such fees, and
neither Party shall be obliged to withhold and remit the aforesaid amount for
the other Party.  Notwithstanding the aforesaid provisions, the fees arising
from the approval and registration of the Equity Transfer shall be borne by the
Company.

13.3
Applicable Laws

This Contract shall be governed by the laws of the PRC, and the laws of the PRC
shall be applicable to its execution, validity, interpretation, performance and
the resolution of any dispute arising herefrom.  In the event that the laws of
the PRC fail to provide for any designated matters with respect to this
Contract, general international commercial practice shall be referred to for
such matters.
 
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13.4
Dispute Resolutions

 
In the event that any dispute arising out of or relating to this Contract
occurs, the Parties shall attempt in the first instance to resolve such dispute
through friendly consultations.  In the event that the Parties fail to settle
such dispute through such consultation, any dispute or claim arising from this
Contract shall be submitted to China International Economic and Trade
Arbitration Commission (the “CIETAC”) South China Sub-Commission for arbitration
in accordance with the then effective and applicable arbitration rules of CIETAC
in Shenzhen.  During the proceeding of the arbitration, the provisions of this
Contract (except for the disputed matters) shall continue to be performed.

13.5
Language and Counterpart

This Contract is written and executed in Chinese in four (4) original copies
with equal legal force. Each Party shall hold one (1) copy and the Company shall
keep one (1) copy on file and the remaining copy shall be used for handling the
approval and registration procedures.

13.6
Severability

 
The invalidity of any provisions hereof determined by any competent authorities
shall not prejudice the validities of other provisions of this Contract.

13.7
Entire Agreement

This Contract constitutes the entire agreement of the Parties on the subject
matter hereof, and shall supersede all prior intentions, understandings,
agreements, other written records, oral consensus or promises reached among the
Parties with respect to this Contract.

13.8
Amendment and Supplement of this Contract

Both Parties shall make amendment and supplement to this Contract by written
agreement for any matters not provided in this Contract.  The amendment and
supplemental agreement with respect to this Contract signed and sealed by both
Parties shall constitute part of this Contract with equal legal validity.

13.9
Exercise of rights

Any omission or delay in exercising any right hereunder by either Party shall
not be deemed as a waiver of such right by such Party.  Any separate or partial
exercise of any right shall not exclude any further exercise of such right in
future circumstances.  The waivers to claim for any breach thereof shall be made
in writing, and shall only be effective upon signed by its legal representatives
or authorized representatives and affixed with its seal.
 
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13.10
Transfer of rights and obligations

Unless otherwise provided by this Contract, without prior written consent by the
other Party, neither Party shall transfer all or part of its rights or
obligations under this Contract.

13.11
Notice and Delivery

 
Unless otherwise provided by this Contract, all notices and written
communications given hereunder by either Party shall be in Chinese and be
delivered by email, courier, facsimile or express mail. The following addresses
shall be used until any change thereto noticed in writing by either Party:
 
Party A：
 
NEW-METAL (H.K.) TECHNOLOGY LIMITED
Address:
 
Room 701, Sino Centre, 582-592 Nathan Road, Mongkok, Kowloon, Hong Kong
Telephone：
 
852-22648532
Facsimile：
 
852-22648570
Attn：
 
Xie Zhongxu
     
Party B：
 
LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED
Address:
 
Sunna Motor Industry park, 2nd Fuyuan Road, Fuyong Hi-tech Park, Bao'an
District, Shenzhen
Telephone：
 
+86-755 8149 9969
Facsimile：
 
+86-755 8149 9855
Attn：
 
Li Jianrong
Email:
 
ljr1660@gmail.com

 
The date of receiving any notice or written communication shall be:

 
(1)
the time of sending out the corresponding e-mail when delivered by e-mail;

 
(2)
the exact time as indicated on the corresponding transmission record when
delivered by facsimile;

 
(3)
the third date following the delivery of such courier/express mail when
delivered by courier/express mail; or

 
(4)
the signing date of the recipient or the relevant person at the receiving
address when delivered by personal service.

 
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[Signature Pages]

IN WITNESS WHEREOF, the Parties hereto have caused their respective duly
authorized representatives to execute this Contract as of the date first above
written.

Party A: NEW-METAL (H.K.) TECHNOLOGY LIMITED

By： /s/  XIE Zhongxu                                                        
Authorized Representative： XIE Zhongxu
 

Party B: LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED

By： /s/  LI Jianrong                                                           
Authorized Representative： LI Jianrong
 
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