**Exhibit 10.4**

 

**Euro Tech (Far East) Limited**

**(Subscriber)**

 

**Wu Zhong Biau, Cheng Chang Jie, Huang Rong Fu**

**(Management Shareholders)**

 

**Zhejiang TianLan Limited**

**(the Company)**

 

**Share Subscription Agreement relating to the Company**

 

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**This Share Subscription Agreement** is made the 29thday of April 2007 between:

 

1.        **ZhejiangTianLan Limited**, a company incorporated in the People’s Republic ofChina and whose registered office is situate at Room 1011, 10thFloor, No.369 Wen San Road, West Lake District, Hangzhou City, ZhejiangProvince (hereinafter called ‘**the Company**’);

 

2.        **Euro Tech(Far East) Limited**, a company incorporated in the Hong Kong SpecialAdministration Region and whose registered office is situate at 18thFloor, Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong (hereinaftercalled ‘**the Subscriber**’); and

 

3.        The following persons: **Wu Zhong Biau, Cheng Chang Jie**and**Huang Rong Fu** (hereinafter called ‘**the Management Shareholders**’).

 

Whereas:

 

(A)     The Company is a companyincorporated and registered in the People’s Republic of China, with itsregistered office at Room 1011, 10th Floor, No.369 Wen SanRoad, West Lake District, Hangzhou City, Zhejiang Province.  At the date of signing of this Agreement, theregistered capital of the Company is RMB20,000,000.00, divided into 20,000,000shares of nominal value RMB1.00 each. All of the said shares have been issued and are held by the originalShareholders (including the Management Shareholders).  Details of the Company are set out inSchedule 1 hereto.

 

(B)     The Company is a corporationin the high technology business, specializing in sulphur and dust removal andtreatment of industrial waste gas.

 

(C)     The Subscriber is a companyestablished in Hong Kong, with its registered office at 18th Floor,Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong, and is a companylisted on the US NASDAQ.  It specializesin dealing with all kinds of environmental protection products and equipments.

 

(D)     For further developing thebusiness in Mainland China, the Subscriber and the Company are agreeable thatthe Subscriber shall, subject to the terms and conditions of this Agreement,invest in the Company through an increase of capital and allotment of newshares.  Each of the ManagementShareholders, as an original

 

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Shareholder of the Company,are agreeable to procure the Company to increase its capital and allot newshares to the Subscriber.

 

**1.****                     ****Interpretation**

 

        Unless otherwise specified in thisAgreement, the following expressions in this Agreement shall mean the following:

 
| “Financial  Statements” |   | Means  the financial statements of the Company and its Subsidiaries made up to the  Accounting Date and audited according to the international accounting  standards, including balance sheets and profit and loss accounts of those companies;                                                                                                                                                                                                                                   |
|-----------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| “Accounting  Date”      |   | Means  31 December 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “working  day”          |   | Means  a day when banks in the PRC are in business;                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “Completion”            |   | Means  completion of the procedures for Share Subscription in accordance with the  provisions of Clause 5;                                                                                                                                                                                                                                                                                                                                                                        |
| “Completion  Date”      |   | Means  the date of Completion, namely the first working day after the completion of  all of the remittance of the first instalment of the Subscription Price of  RMB30,000,000.00 by the Subscriber, verification of such payment and  modification of business registration, but in no event later than 14 working  days after the remittance of the first instalment of the Subscription Price  of RMB30,000,000.00 by the Subscriber to the account specified by the  Company; |
| “Before  Completion”    |   | Means  from the date of signing of this Agreement up to the Completion Date;                                                                                                                                                                                                                                                                                                                                                                                                      |
| “Conditions”            |   | Means  the conditions set out in Clause 4;                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Director(s)”           |   | Means  the director(s) of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| “Hong  Kong”            |   | Means  the Hong Kong Special Administrative Region;                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “Listing”               |   | Means  the listing of the Company on the stock market of Hong Kong or such other  place as the Shareholders may agree;                                                                                                                                                                                                                                                                                                                                                            |
| “Parties”               |   | Means  the signing parties to this Agreement, and “Party” means any one of the  Parties;                                                                                                                                                                                                                                                                                                                                                                                |
| “PRC”                   |   | Means  the People’s Republic of China, except Hong Kong;                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

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| “RMB”                                    |   | Means  the lawful currency of the PRC;                                                                                                                 |
|----------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| “Shareholder(s)”                         |   | Means  the original shareholders of the Company as at the date of this Agreement,  and after Completion, the original shareholders and the Subscriber; |
| “Shares”                                 |   | Means  the registered capital of the Company in the nominal value of RMB1.00 each;                                                                     |
| “Share  Subscription”                    |   | Means  the subscription of the New Shares;                                                                                                             |
| “New  Shares”                            |   | Means  the 5,185,186 new shares issued by the Company and subscribed by the  Subscriber on the Completion Date;                                        |
| “Subscription  Price”                    |   | Means  the price for subscribing the New Shares as set out in Clause 3;                                                                                |
| “Subsidiaries”                           |   | Means  those companies in which the Company holds more that 50% of the issues  shares, details of which are set out in Schedule 2;                     |
| “Warranties”                             |   | Means  the representations, warranties and covenants provided by the Company and  Management Shareholders, as set out in Clause 6 and Schedule 3;      |
| “Foreign  Economic and Trade Department” |   | Means  the Foreign Economic and Trade Department of Zhejiang Province;                                                                                 |
| “Foreign  Economic and Trade Bureau”     |   | Means  the Foreign Economic and Trade Bureau of Hangzhou City.                                                                                         |

 

In this Agreement (including the Recitals and Schedules), unless thecontext specifies otherwise:

 

References to Recitals, Clauses and Schedules are to the recitals,clauses and schedules of this Agreement;

 

The Recitals and Schedules are an integral part of this Agreement, andhave the same force and effect as the contents of this Agreement.

 

References to laws and regulations include the laws or regulations asmay from time to time be modified or reenacted.

 

Headings are for convenience only, and shall be disregarded whenconstruing this Agreement.

 

References to the male gender shall include the female and neuter; andreferences to the singular shall include the plural, and vice versa;

 

References to any person shall include a natural person, body corporate(wherever

 

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established),body unincorporated, partnership and all governmental agencies, or any organizationor partnership of any two of the above;

 

References to this Agreement or any other contract or document shallinclude this Agreement or other contract or document as may from time to timebe revised, modified, renewed or supplemented.

 

References to any document being “mutually agreed” shall mean a documentthe contents of which have been approved by all the Parties and confirmed byeach Party initialing on that document, and includes any document agreed inwriting by each Party as a replacement or modification of the aforesaiddocument.

 

The *ejusderm generis* rule shallnot apply to the construction of this Agreement.  Hence, expressions such as “any other”,  “including”, or “in particular” shall notlimit the interpretation of the provisions herein.

 

All warranties, representations, covenants, indemnities, deeds andagreements made by more than one person shall be regarded as having been madeby these persons jointly and severally.

 

**2.****                     ****Share Subscription**

 

The Subscriber agrees to subscribe for the New Shares of theCompany.  On Completion of the ShareSubscription, the Subscriber shall hold 20% of all of the issued capital of theCompany.

 

The Company and Management Shareholders shall ensure and procure thatafter the increase of capital and allotment of New Shares, the Company shallcomplete the procedures for registering the capital and change of Shareholdersin accordance with the requirements of the laws and regulations.

 

The Subscriber shall pay for the subscription of the New Shares in fullin accordance with the provisions of this Agreement, which shares shall afterissuance have the same rights and benefits with the Shares held by the originalShareholders save and except the provisions of Clause 7.4.

 

**3.****                     ****Subscription Price and Manner of Payment**

 

The Subscription Price for each New Share shall be RMB6.75.  The total Subscription Price payable by theSubscriber shall be RMB35,000,000.00.

 

The Subscription Price shall be paid by the first and finalinstalments:

 

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The first instalment of RMB30,000,000.00 shall be paid 3 working daysafter this Agreement and the relevant increase of capital and ShareSubscription have been approved by the Foreign Economic and Trade Department,Foreign Economic and Trade Bureau and other relevant departments (if any).

 

The final instalment of RMB5,000,000.00 shall be a conditional payment,payable on the following conditions:

 
| **Net Profit for the financial year of  2007 audited according to  international accounting standards** | ** ** | **Payment by Subscriber**                                                           |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|
| Lower than net profit for the financial year of 2006  audited according to international accounting standards                                                  |       | The  Company shall refund RMB2,000,000.00 to Subscriber and no further payment by  Subscriber |
| Above net profit for the financial year of 2006  audited according to international accounting standards but less than RMB10,000,000.00                        |       | No  further payment by Subscriber                                                             |
| Above RMB10,000,000.00 but less than RMB10,500,000.00                                                                                                          |       | Subscriber  shall pay RMB2,000,000.00                                                         |
| Above RMB10,500,000.00 but less than RMB11,500,000.00                                                                                                          |       | Subscriber  shall pay RMB2,600,000.00                                                         |
| Above RMB11,500,000.00 but less than RMB12,500,000.00                                                                                                          |       | Subscriber  shall pay RMB3,200,000.00                                                         |
| Above RMB12,500,000.00 but less than RMB13,500,000.00                                                                                                          |       | Subscriber  shall pay RMB3,800,000.00                                                         |
| Above RMB13,500,000.00 but less than RMB14,500,000.00                                                                                                          |       | Subscriber  shall pay RMB4,400,000.00                                                         |
| Above RMB14,500,000.00                                                                                                                                         |       | Subscriber  shall pay the full amount of the final instalment of RMB5,000,000.00.             |

##  

**4.****                     ****Conditions**

 

Completion of the Share Subscription shall be conditional upon fulfillmentof all but not some only of the following conditions:

 

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All consents from the original Shareholders of the Company forCompletion of the Share Subscription have been obtained;

 

All Warranties remain true and accurate at Completion; and there doesnot exist any misrepresentation and no misrepresentation occurs in any materialaspect, whether on Completion or at any time between the date of this Agreementand the Completion Date; and

 

This Agreement and the relevant increase of capital and ShareSubscription have been approved by the relevant departments.

 

The Subscriber may waive any or all of the above Conditions at any timeby written notice to the original Shareholders.

 

The original Shareholders shall use their best endeavours to fulfil theabove Conditions on the date specified by Clause 4.4.

 

If the above Conditions cannot be fulfilled on or before the CompletionDate, unless the Subscriber waive such Conditions in accordance with Clause4.2, otherwise the Subscriber shall no longer have any obligation to subscribefor the New Shares.  All payments made bythe Subscriber, including the first instalment of the Subscription Pricementioned in Clause 3.2.1, shall forthwith be repaid to the Subscriber infull.  This Agreement shall alsoterminate and be of no further effect, except the provisions of Clause 1(Interpretation); Clause 4 (Conditions); Clause 12 (Notice); Clause 13(General); Clause 15 (Governing Law); and all claims for antecedent breachwhich shall all remain in effect.

 

The agreement to waive any Condition by written notice from theSubscriber shall not mean or imply that the Subscriber does not rely on theWarranties.  The Subscriber stillproceeds with the Share Subscription in reliance on the Warranties.

 

**5.****                     ****Completion**

 

Within 3 working days after receipt of the first instalment of theSubscription Price, the Company shall issue a certificate in writing confirmingreceipt of the payment and acknowledging that the Subscriber holds 20% of theissued Shares of the Company.

 

On compliance with Clause 4, procedures for Completion shall take placeon the Complete Date at the place of registration of the Company to completeall (but not part only) of the matters prescribed in Clause 5.

 

On Completion, the original Shareholders of the Company shall procurethat:

 

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the Subscriber shall be allotted 5,185,186 New Shares issued by theCompany, which shall be 20% of the total issued capital of 25,925,926 Shares.

 

New Shares shall be issued and allotted to the Subscriber;

 

The Subscriber shall be supplied with certified copies of (i) theresolutions of the original Shareholders and Directors of the Company approvingand authorizing the increase of capital and issuance of New Shares; and (ii) informationrelating to the change of Shareholders from the Industry and Commerce Bureau;and that in accordance with Clause 7.2, a person nominated by the Subscribershall be appointed as a non-executive Director of the Company; such Directorshall not participate in the day-to-day management of the Company.

 

On Completion, the Subscriber shall deliver to the Company:

 

Documents applying for the Share Subscription;

 

A certified copy of the resolution of the board of directors of theSubscriber approving and authorizing this investment and the subscription ofthe New Shares.

 

**6.****                     ****Warranties**

 

In this Clause 6, unless the context otherwise requires, all Warrantiesprovided in respect of the Company shall be deemed to be repeated, and modifiedwhere necessary as to details, in relation to each of the Subsidiaries of theCompany.

 

The Management Shareholders warrant with the Subscriber that theFinancial Statements provided by them to the Subscriber are true and complete.(A copy of the Financial Statements is annexed hereto as Schedule 4).

 

The Company and Management Shareholders warrant that they each haveobtained all necessary approval and authorization for the signing of thisAgreement; and that once signed, this Agreement will constitute legal, valid,binding and enforceable obligations on their part.

 

The Company and Management Shareholders covenant to not directly orindirectly engage or be interested in any way in any business or activity thatcompetes or may compete with the Company’s business.

 

The Management Shareholders warrant with the Subscriber that the allthe representations, Warranties and covenants set out in Schedule 3 are trueand accurate at all times.  If anyManagement Shareholder discovers or becomes aware of any circumstances ormatter that

 

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mayreasonably cause any of the Warranties to become untrue or misrepresented orbreached, he shall notify the Subscriber immediately.

 

If any of the Warranties is found to be untrue or misrepresented in anyaspect at any time, or if any Management Shareholder breaches any of theWarranties, the Company and/or the defaulting Management Shareholder shall indemnifythe Subscriber from and against all losses that it may suffer.  The said indemnity shall not prejudice anyother right or remedy that the Subscriber may have according to this Agreementor the law.

 

**7.****                     ****Obligations Before and After Completion**

 

Before Completion, the Management Shareholders shall carry on thenormal operations of the Company and Subsidiaries, and shall consult theSubscriber and not without obtaining the prior written consent of theSubscriber carry out any dealings beyond the normal course of business of theCompany.

 

The Subscriber agrees that Beijing International Trust and InvestmentLimited may at the same price subscribe for 740,740 new Shares of the Companyat the total price of RMB5,000,000.00, which shall be 2.875% of the issuedcapital of the Company.  Provided thatsuch subscription shall not reduce the Subscriber’s shareholding in the Companyto less than 20%.  Save and except thesubscription of Shares in accordance with the aforesaid conditions by BeijingInternational Trust and Investment Limited, no other person may become aShareholder in any other manner.

 

Unless pursuant to the provisions of this Agreement, the followingmatters shall require the prior written consent of the Subscriber:

 

(A)                   allowing any other person tobecome a member of the Company or Subsidiaries, whether through subscription ortransfer;

 

(B)                     selling, pledging or dealingwith any undertakings or assets of the Company (sale of stock, borrowing orpledging with bank in the normal course of business excepted);

 

(C)                     distributing or declaringdividend out of any distributable profits after the Accounting Date;

 

(D)                    altering the Company’sconstitution;

 

(E)                      providing anywarranty, surety, promise or other guarantee for any other person;

 

(F)                      carrying outany transaction or dealing which has a material effect on the financial statusor outlook of the Company or Subsidiaries;

 

(G)                     appointing Director(s);

 

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(H)                    dismissing Director ormanagerial personnel of the Company or Subsidiaries, or revising theirremuneration or employment conditions; or

 

(I)                         winding up theCompany or Subsidiaries voluntarily.

 

After Completion, the Subscriber shall have the right to appoint anon-executive Director, who shall not participate in the day-to-day managementof the Company.  The Company shall benotified in writing of the person nominated on the signing of this Agreement, inorder that the appointment may be made when completing the procedures forCompletion set out in Clause 5.

 

After Completion, if the Company will increase its capital or take innew shareholder after the financial year of 2007 until Listing, save and exceptBeijing International Trust and Investment Limited mentioned in Clause 7.1.1above, the Subscriber shall have the absolute first right to increase itsShares at the same price so to maintain its 20% shareholding in the Company.

 

After Completion, a sum of RMB5,000,000.00 out of the distributableprofits of the Company accrued before the financial year of 2007 shall bedistributed to the Subscriber in accordance with the following conditions, withthe remaining balance to be shared between the Subscriber and originalShareholders equally.

 
| **Net Profit for the financial year of   2007 audited according to  international accounting standards** | ** ** | **Distribution of Profits**   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|
| Less  than RMB10,000,000.00                                                                                                                                          |       | No  distribution for Subscriber         |
| Above  RMB10,000,000.00 but less than RMB10,500,000.00                                                                                                               |       | Subscriber  shall have RMB166,700.00    |
| Above  RMB10,500,000.00 but less than RMB11,500,000.00                                                                                                               |       | Subscriber  shall have RMB333,400.00    |
| Above  RMB11,500,000.00 but less than RMB12,500,000.00                                                                                                               |       | Subscriber  shall have RMB500,100.00    |
| Above  RMB12,500,000.00 but less than RMB13,500,000.00                                                                                                               |       | Subscriber  shall have RMB666,800.00    |
| Above  RMB13,500,000.00 but less than RMB14,500,000.00                                                                                                               |       | Subscriber  shall have RMB833,500.00    |
| Above  RMB14,500,000.00                                                                                                                                              |       | Subscriber  shall have RMB1,000,000.00. |

 

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AfterCompletion and in the course of the normal development of the Company’sbusiness, the Subscriber covenants that if the ability of the Subscriber itselfand all the circumstances permit, the Subscriber will undertake the obligationof guaranteeing loans of not more than RMB20,000,000.00 for the Company.

 

**8.****                     ****Listing**

 

It shall be the objective of all Parties to procure the Listing of theCompany.  All Parties shall use theirbest endeavours to procure the Listing plan of the Company.

 

**9.****                     ****Confidentiality and Announcement**

 

Unless with the prior written consent of all Parties, the terms andconditions of this Agreement, the Share Subscription and all related mattersshall not be disclosed to any third party, including the public or the media(Chinese or English), save and except announcement or disclosure by the originalShareholders or the Subscriber as required by law or regulating authority.

 

All information relating to the other Parties that any Party may obtainin the course of negotiation of this Agreement and the Share Subscription shallbe kept confidential.  All Parties shallbe obliged to ensure that there will not be any disclosure, and unless with theprior written consent of the other Party, there shall not be any disclosure toany third party, except as required by law or regulating authority.

 

**10.****              ****Costs**

 

Each Party shall bear its own costs and expenses, including legalcosts, for the preparation, signing, completion and execution of thisAgreement.

 

**11.****              ****Notices**

 

All notices issued pursuant to this Agreement shall be in writing andin Chinese, and be served by hand delivery, prepaid post (by airmail if addressis overseas) or facsimile.  A notice muststate the name of the recipient and be sent according to the following addressor facsimile number, or such other address or facsimile number as a Party mayfrom time to time notify the others.

 

A notice shall be sent to the Parties as follows:

 

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| (a)    |   | To  the Management Shareholders: |
|--------|--------|----------------------------------|
|   |   |                             |
|   |   | Address:                         |   | Room 1011,  10th Floor, No.369 Wen San Road,West Lake District,Hangzhou City, |
|   |   | Zhejiang  Province               |
|   |   | Facsimile:                       |   | 0571-5677  7102 |
|   |   | Recipient:                       |   | Mr. Wu  Jung Biau |
|   |   |                             |   |   |
| (b)    |   | To  the Subscriber:              |
|   |   |                             |   |   |
|   |   | Address:                         |   | 18th  Floor, Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong |
|   |   | Facsimile:                       |   | 00852-2873  3826 |
|   |   | Recipient:                       |   | Mr. Leung  Tak Chung |
|   |   |                             |   |   |
| (c)    |   | To  the Company:                 |
|   |   |                             |   |   |
|   |   | Address:                         |   | Room 1011,  10th Floor, No.369 Wen San Road, West Lake District, Hangzhou  City, |
|   |   | Zhejiang  Province               |
|   |   | Facsimile:                       |   | 0571-5677  7102 |
|   |   | Recipient:                       |   | Mr. Cheng  Bin |

 

A notice shall be deemed to be served in the following circumstances:

 

(a)                  on delivery if by handdelivery;

(b)                 5 working days if by post;and

(c)                  on transmission with correctanswerback if by facsimile.

 

**12.****              ****General**

 

12.1    Further Assurance:   AllParties agree to carry out (or procure to be carried out) all further steps oractions, and to execute and deliver (or procure to be executed and delivered)all further documents as may reasonably be required or ought to be carried outand/or executed by or in law or for fully and effectually completing thetransactions contemplated by the terms of this Agreement.

 

12.2    Cumulative Remedies:   Allrights, powers and remedies of any Party under this Agreement are cumulativeand not mutually exclusive, and shall not prejudice any right, power or remedynot expressed herein but available in law. All such rights, powers and remedies may be exercised without limit asand when necessary.

 

12.3    Waiver:   The waiver,indulgence or delay in exercising of any right or remedy prescribed by law orthis Agreement by any Party shall not be deemed a waiver of any other right orremedy.  Any such waiver or delay shallnot constitute any waiver or modification of any other right or remedy.  Any single or partial exercise of any rightor remedy shall not

 

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preventany other or further exercise, or prevent the exercise of any other right orremedy.

 

12.4    Severance:  If anyprovision of this Agreement or part thereof shall be adjudged void orunenforceable, such provision or part thereof shall be deemed to have beensevered from this Agreement, and shall not prejudice or render the remainingprovisions or remaining part of the relevant provision void orunenforceable.  All Parties shall usetheir best endeavours to replace the void or unenforceable provision with avalid and enforceable provision with the nearest possible effect to the void orunenforceable provision.

 

12.5    Modification:  Anymodification to this Agreement shall not be regarded as valid or part of thisAgreement unless in writing and signed by all Parties.  “Modification” shall include any form ofchange, supplement, deletion or replacement.

 

12.6    Assignment:  This Agreementshall be equally binding on all Parties hereto. Any Party may not, without the prior written consent of the otherParties, assign in any way, pledge or deal with its rights and/or obligationsunder this Agreement in any other way. This Agreement is not assignable.

 

12.7    Relationship:  The Partiesto this Agreement are independent contractors. Any Party is not and may not hold out as the agent or partner of any ofthe other Parties, and no Party shall have the right to bind or cause any legalliability for any other Party.

 

12.8    Time:  Time shall be of theessence of this Agreement.

 

12.9    Survival:  Notwithstandingthe completion of the transactions contemplated by this Agreement, if anyprovision shall continue to be performed after Completion, such provision shallremain in full force and effect.

 

**13.****              ****Constitution**

 

Subject to compliance with the relevant laws of the PRC, all Partiesshall cooperate to amend the Constitution of the Company to provide for and togive force and effect to the conditions of this Agreement.

 

**14.****              ****Law and Jurisdiction**

 

This Agreement and the Schedules shall be governed by the laws of thePRC.

 

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The Parties agree that the courts of the place of registration of theCompany shall have jurisdiction over any question, dispute, lawsuit or legalproceedings caused by or arising out of this Agreement.

 

**15.****              ****Termination of Agreement**

 

Ifthis Agreement and the relevant capital increase and Share Subscription are notapproved by the Foreign Economic and Trade Bureau, Foreign Economic and TradeDepartment and other relevant departments (if any) for reasons beyond the scopeof abilities of the Company and/or the Management Shareholders, this Agreementand the relevant capital increase and Share Subscription shall terminate immediatelyon the date of non-approval.

 

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**Schedule 1**

 

**Details of the Company**

 
| 1.     |   | Name                       | :      | Zhejiang  TianLan Limited                                                                               |
|--------|--------|----------------------------|--------|---------------------------------------------------------------------------------------------------------|
|   |   |                       |   |                                                                                                    |
| 2.     |   | Date  of Incorporation     | :      | 18  May 2000                                                                                       |
|   |   |                       |   |                                                                                                    |
| 3.     |   | Place  and Type of Company | :      | Limited  Liability Company registered in the PRC                                                        |
|   |   |                       |   |                                                                                                    |
| 4.     |   | Registration  No.          | :      | 3301082100589                                                                                           |
|   |   |                       |   |                                                                                                    |
| 5.     |   | Registered  Office         | :      | Room 1011,  10th Floor, No.369 Wen San Road, West Lake District, Hangzhou  City, Zhejiang Province |
|   |   |                       |   |                                                                                                    |
| 6.     |   | Registered  Capital        | :      | RMB20,000,000.00,  divided into 20,000,000 ordinary shares  of RMB1.00 each                             |
|   |   |                       |   |                                                                                                    |
| 7.     |   | Issued  Capital            | :      |                                                                                                    |

 
| **Registered Shareholder** | ** ** | **Amount of Capital (in Ten  Thousand)** | ** ** | **Ratio of Shareholding** | ** ** |
|---------------------------------|------------|--------------------------------------------------------------|------------|-------------------------------------|------------|
| Wu Zhong Biau                   |       | 958.6                                                        |       | 47.93                               | %          |
| Wang De Ming                    |       | 377.8                                                        |       | 18.89                               | %          |
| Chen Re Hui                     |       | 196.2                                                        |       | 9.81                                | %          |
| Cheng Chang Jie                 |       | 102                                                          |       | 5.1                                 | %          |
| Wang Zhi Neng                   |       | 216                                                          |       | 10.8                                | %          |
| Wang Yi                         |       | 20                                                           |       | 1                                   | %          |
| Chi Wei Hua                     |       | 113.4                                                        |       | 5.67                                | %          |
| Huang Rong Fu                   |       | 16                                                           |       | 0.8                                 | %          |
| **Total**                       | ** ** | **2,000**                                                    | ** ** | **100**                             | **%**      |

 

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8.          Members of the Boardof Directors   :

 
| **Name**         | ** ** | **Position**              | ** ** | **Identity Card No.** | ** ** |
|------------------|------------|---------------------------|------------|---------------------------------|------------|
| Wu  Zhong Biau   |       | Managing  Director        |       | 330106660124043                 |       |
| Wang  De Ming    |       | Deputy  Managing Director |       | 330106196310280456              |       |
| Cheng  Chang Jie |       | Director                  |       | 330106651108053                 |       |
| Wang  Zhi Neng   |       | Director                  |       | 331002198207110618              |       |

 

9.          Secretary to the Board   :       Qin Bin (Identity Card No. 340103196609293019)

 

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**Schedule 2**

 

**Details of the Subsidiaries**

 

**I. Hangzhou TianLan Environmental Equipment Limited**

 
| 1.     |   | Name                       | :      | Hangzhou  TianLan Environmental Equipment Limited                                             |
|--------|--------|----------------------------|--------|-----------------------------------------------------------------------------------------------|
|   |   |                       |   |                                                                                          |
| 2.     |   | Date  of Incorporation     | :      | 1  April 2003                                                                            |
|   |   |                       |   |                                                                                          |
| 3.     |   | Place  and Type of Company | :      | Limited  Liability Company registered in the PRC                                              |
|   |   |                       |   |                                                                                          |
| 4.     |   | Registration  No.          | :      | 3301812210624                                                                                 |
|   |   |                       |   |                                                                                          |
| 5.     |   | Registered  Office         | :      | Shu  Shang Wang Village, Jin Hua Town, Shiau Shan District, Hangzhou City,  Zhejiang Province |
|   |   |                       |   |                                                                                          |
| 6.     |   | Registered  Capital        | :      | RMB500,000.00                                                                                 |
|   |   |                       |   |                                                                                          |
| 7.     |   | Issued  Capital            | :      |                                                                                          |

 
| **Registered Shareholder** | ** ** | **Amount of Capital (in Ten  Thousand)** | ** ** | **Ratio of Shareholding** | ** ** |
|---------------------------------|------------|--------------------------------------------------------------|------------|-------------------------------------|------------|
| Zhejiang TianLan Limited        |       | 25.5                                                         |       | 51                                  | %          |
| Shu Keng Zhong                  |       | 24.5                                                         |       | 49                                  | %          |
| **Total**                       | ** ** | **50**                                                       | ** ** | **100**                             | **%**      |

 

8.        Members of the Board of Directors   :

 
| **Name**        | ** ** | **Position**      | ** ** | **Identity Card No.** | ** ** |
|-----------------|------------|-------------------|------------|---------------------------------|------------|
| Cheng Chang Jie |       | Managing Director |       | 330106651108053                 |       |
| Wu Zhong Biau   |       | Director          |       | 330106660124043                 |       |
| Shu Keng Zhong  |       | Director          |       |                            |       |

 

----

 

**II. Hangzhou TianLan Works Limited**

 
| 1.     |   | Name                       | :      | Hangzhou  TianLan Works Limited                                                                         |
|--------|--------|----------------------------|--------|---------------------------------------------------------------------------------------------------------|
|   |   |                       |   |                                                                                                    |
| 2.     |   | Date  of Incorporation     | :      | 5  July 2005                                                                                       |
|   |   |                       |   |                                                                                                    |
| 3.     |   | Place  and Type of Company | :      | Limited  Liability Company registered in the PRC                                                        |
|   |   |                       |   |                                                                                                    |
| 4.     |   | Registered  No.            | :      | 3301001007053                                                                                           |
|   |   |                       |   |                                                                                                    |
| 5.     |   | Registered  Office         | :      | Room 1013,  10th Floor, No.369 Wen San Road, West Lake District, Hangzhou  City, Zhejiang Province |
|   |   |                       |   |                                                                                                    |
| 6.     |   | Registered  Capital        | :      | RMB1,000,000.00.00                                                                                      |
|   |   |                       |   |                                                                                                    |
| 7.     |   | Issued  Capital            | :      |                                                                                                    |

 
| **Registered Shareholder** | ** ** | **Amount of Capital (in Ten  Thousand)** | ** ** | **Ratio of Shareholding** | ** ** |
|---------------------------------|------------|--------------------------------------------------------------|------------|-------------------------------------|------------|
| Zhejiang TianLan Limited        |       | 90                                                           |       | 90                                  | %          |
| Cheng Chang Jie                 |       | 10                                                           |       | 10                                  | %          |
| **Total**                       | ** ** | **100**                                                      | ** ** | **100**                             | **%**      |

 

8.        Members of the Board of Directors   :

 
| **Name**         | ** ** | **Position**       | ** ** | **Identity Card No.** | ** ** |
|------------------|------------|--------------------|------------|---------------------------------|------------|
| Wu  Zhong Biau   |       | Managing  Director |       | 330106660124043                 |       |
| Wang  Kai Nan    |       | Director           |       |                            |       |
| Cheng  Chang Jie |       | Director           |       | 330106651108053                 |       |

 

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**Schedule 3**

 

TheCompany and the Management Shareholders jointly and severally represent to,warrant and covenant with the Subscriber as follows:

 
| 1.     |   | About  the Company and Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 1.1    |   | All details of the Company and the Subsidiaries set out in Schedules  1 and 2 are completely true and correct.                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 1.2    |   | The  Company and the Subsidiaries are all duly registered and incorporated in the  PRC according to law, are limited liability companies valid and subsisting,  and are independent legal entities.                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 1.3    |   | The  Company and the Subsidiaries have at all times fully observe and comply with  all laws and regulations applicable to them and their business. All  documents, records or fees required by law have been filed and paid at the  times and in accordance with the regulations prescribed by law. All consents,  permits, certificates etc. necessary for their operation have been timely  obtained in accordance with the requirements of law, and are kept valid. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 2.     |   | Financial  Status                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 2.1    |   | All  books and financial records have been prepared and kept according to proper  operating methods and accounting standards; and accurately record all  operating activities of the Company and the Subsidiaries.                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 2.2    |   | The  Financial Statements:                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | (I)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | correctly  reflect the true financial and operating status of the Company and the  Subsidiaries as at the Accounting Date, and the results of the relevant  period; |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |
|   |   | (II)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | include  the true and complete picture of all liabilities and capital commitments  undertaken by the Company and the Subsidiaries as at the Accounting Date. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 2.3    |   | All  assets of the Company and the Subsidiaries have been truly and completely  shown in the Financial Statements.                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 2.4    |   | Since  the Accounting Date:                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

----

 
|   |   | (I)                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | the  Company and the Subsidiaries have been operating in the normal course of  business, and their operation has not been suspended or altered;                                                                                                                                                                                                                          |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | (II)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | there  is no material change to the trading condition or customer relation of the  Company and the Subsidiaries as compared to the position disclosed by the  Financial Statements; nor is there any material change to their financial  conditions, financial status, outlook, asset or obligations; nor has any loss  or damage to their operation or assets occurred. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 3.     |   | Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 3.1    |   | Except as disclosed, there does not exist any agreement or  arrangement for the issuance of any share option, or the right to any third  party to subscribe for ordinary or preference shares of the Company, or any  encumbrance that may affect the New Shares.                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.     |   | Competition                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.1    |   | The  Company and the Management Shareholders covenant not to directly or  indirectly engage or be interested in any way in any business or activity  that competes or may compete with the Company’s business.                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 5.     |   | Major  Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 5.1    |   | At  the date of this Agreement or the Completion Date, there does not exist any  contract that is outside of the normal course of business, or which contains  unusual or onerous terms.                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 5.2    |   | There  does not exist any circumstances or event that may cause the major contracts  of the Company to be terminated, cancelled or not enforced.                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 6.     |   | Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 6.1    |   | The  Company or the Subsidiaries is not involved in any litigation, arbitration, administrative  or criminal legal proceedings (whether as the plaintiff, defendant or third  party). There does not exist any litigation or legal proceedings involving  the Company or the Subsidiaries that are not yet concluded; or any circumstances  or event that will cause or result in any dispute, litigation or legal  proceedings for the Company or the Subsidiaries. |

 

----

 
| 7.     |   | Tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 7.1    |   | The  tax registrations of the Company and the Subsidiaries are in compliance with  all applicable laws and regulations.                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 7.2    |   | At  all times, the Company and the Subsidiaries have reported and paid all taxes  timely and in accordance with law. There does not exist any circumstances or  activities of tax theft, non-payment of tax or tax avoidance.                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 8.     |   | Intellectual  Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 8.1    |   | The  intellectual property of the Company or the Subsidiaries, including patent  inventions, technical know-how, trade marks and copyrights etc., and whether  registered or being registered or not yet registered, are all owned by the  Company or the Subsidiaries; are legally valid and effective, and not  obtained by the licence of any third party. The patent inventions, technical  know-how, trade marks and copyrights etc. owned by the Company or the  Subsidiaries may not be assigned or used by any third party without payment. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 9.     |   | Properties  and Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 9.1    |   | Except  as disclosed in the Financial Statements, the Company does not own any other  property or asset.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 9.2    |   | All  properties and assets of the Company are the sole and absolute property of  the Company. The Company has obtained all relevant certificates of ownership  and all other necessary documents and proofs in accordance with law. Except  as disclosed, there does not exist any other charges or encumbrances.                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 9.3    |   | All  taxes and fees payable in respect of the properties and assets of the Company  have been fully paid in time in accordance with law.                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 9.4    |   | All  relevant leases for properties leased by the Company are valid and  subsisting. There does not exist any circumstances that will cause such  contracts to be terminated, cancelled or not enforced. There does not exist  any dispute, non-payment or other unfulfilled liabilities between the Company  and the owners of the relevant properties.                                                                                                                                                                                            |

 

N:YF:Eurotech:TianLan-Share Subscription Agt Eng translation (180507)

 

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