Exhibit 10.4


 


STOCK
PURCHASE OPTION AGREEMENT


 


This Stock Purchase Option
Agreement (the "Agreement") is made and entered into as of March 3, 2015 ("Effective Date"), by and between
Dr. Jianguo Dai (“Seller”), who owns 45.5% of equity interests (such portion of equity interests, the “Equity
Interests”) of Dongguan Light Power New Energy S&T Co, a private limited liability company organized under the laws of
the People’s Republic of China (“DGL”), CGN Nanotech Limited (the "Buyer"), a Hong Kong company, and
CGN Nanotech, Inc. (the “Parent”), a Nevada corporation and the parent of the Buyer, which owns 100% equity interests
of the Buyer. Sellers and Buyer are sometimes together referred to in this Agreement as the "Parties" and individually
as a "Party."


 


RECITALS


 


WHEREAS, Jianguo
Dai is a registered owner of DGL, who owns 45.5% of the equity interests of DGL.


 


WHEREAS, DGL
is the exclusive supplier of nanotechnology lighting products to the Buyer, and its subsidiaries pursuant to the Global Sales
& Distribution Agreement by and between the Buyer and DGL, dated as of November 12, 2014;


 


WHEREAS, the
Buyer is a wholly-owned subsidiary of Parent, which owns 33,250 ordinary CGN Stock of the Buyer, constituting 100% of equity interests
of Buyer;


 


WHEREAS, Seller has
agreed to offer Buyer and Buyer desires to accept an exclusive option to purchase the Equity Interests upon the terms and conditions
and for the consideration set forth in this Agreement


  


NOW, THEREFORE,
in consideration of the covenants, premises and agreements herein contained, the sufficiency and adequacy of which is hereby acknowledged
by each of the Parties, the Parties hereto agree as follows:


 


1.            Incorporation
of Recitals. The Recitals set forth above are material and by this reference are incorporated herein and made a part of this
Agreement.


 


2.            Definitions.


 


"Affiliate" shall have the meaning
ascribed to it in the Securities Act of 1933, as amended (“Securities Act”).


 


“Corporate Records” shall have
the meaning as used in Section 6(j) hereof.


 


“Encumbrances” has the meaning
ascribed thereto in Section 5(c).


 



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"Exercise Financial Statements" has
the meaning ascribed thereto in Section 9.3.


 


“Exercise Period" shall mean the
period commencing on the Date of this Agreement and continuing until 5:00 p.m. (New York time) on July 31, 2016 or such later date
as contemplated by Section 9.3.


 


"Exercise Price" has the meaning
ascribed thereto in Section 3.2.


 


“GAAP” means generally accepted
accounting principles in the United States.


 


“Governmental Authority” means
the United States, any state or municipality, the government of any foreign country, any subdivision of any of the foregoing, or
any authority, department, commission, board, bureau, agency, court, or instrumentality of any of the foregoing.


 


“Indemnification” has the meaning
ascribed thereto in Section 10.5.


 


“Indemnified Party” has the meaning
ascribed thereto in Section 10.5.


 


“Knowledge” means the actual knowledge
of such Person or its Affiliates.


 


"Laws" means applicable laws (including,
without limitation, common law), statutes, by-laws, published rules, regulations, orders, decisions, treaties, decrees, judgments,
awards or securities or commodities related policies, in each case, of any Governmental Authority.


 


“Lien” means any mortgage, lien,
pledge, security interest, easement, conditional sale or other title retention agreement, or other encumbrance of any kind.


 


"Material Adverse Change" means any
change or effect (or any condition, event or development involving a prospective change or effect) in the affairs, business, operations,
results of operations, assets, capitalization, financial condition, licenses, permits, concessions, rights, liabilities, prospects
or privileges, whether contractual or otherwise (in this definition collectively referred to as "business"), of DGL or
Buyer and their respective Subsidiaries including, without limitation, any regulatory restrictions, limitations on the business
or any breaches of material agreements including, without limitation, this Agreement or Laws which is or could reasonably be expected
to be materially adverse to the business of DGL or Buyer and the Subsidiaries considered as a whole, or to the value of the Equity
Interests to Buyer other than such changes or effects that are the direct result of events outside of the control of Sellers and/or
any of its Affiliates provided that Sellers and/or its Affiliates, as applicable, have made reasonable commercial efforts to prevent
such changes or effects and, for greater certainty, shall exclude without limitation, such changes or effects resulting directly
from general economic conditions or from financial, currency exchange rate and general securities or commodity market conditions
(including, without limitation, commodity price fluctuations) that are outside the control of Seller and/or any of its Affiliates.


  



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“Material Adverse Effect” means
any effect resulting from Material Adverse Change.


 


“Minute Books” shall have the meaning
as used in Section 7(j) hereof.


 


"Option Closing" means the closing
of the purchase and sale of the Equity Interests upon the exercise of the Option.


 


"Option Closing Date" means the date
on which the Option Closing occurs, such date being no later than July 31, 2016 unless otherwise agreed by the Parties.


 


“Option Exercise Notice” has the
meaning ascribed thereto in Section 3.2.


 


"Parties" and "Party" have
the respective meanings ascribed to them in the introductory paragraph of this Agreement.


 


“PCAOB” means the Public Company
Accounting Oversight Board, as regulated by the U.S. Securities and Exchange Commission (“SEC”).


 


"Person" means any individual, sole
proprietorship, partnership, incorporated association, unincorporated syndicate, unincorporated organization, trust, company, corporation,
Governmental Authority, and a natural person in such person's capacity as trustee, executor, administrator or other legal representative.


 


“Returns” shall have the meaning
as used in Section 6(i) hereof.


 


“Securities Act” means the Securities
Act of 1933, as amended.


 


"Subsidiary" or “Subsidiaries”
shall have the meaning ascribed to it in the Securities Act, and in the case of the Parent, specifically includes CGN Nanotech
Limited, a Hong Kong company (“CGN HK”) and CGN Nanotech Holding Limited, an Anguilla company (“CGN Anguilla”).


 


“Tax” or “Taxes” means
any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use,
occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes,
assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such
amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including
any liability of a predecessor entity for any such amounts.


 



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3.            Option.


 


3.1           Grant
of Option to Purchase Equity Interests. Subject to the terms and conditions of this Agreement, Seller hereby grants to Buyer
the exclusive irrevocable right to purchase from Seller or to obtain control over (either through contractual arrangements or other
means), all of the Equity Interests, exercisable during the Exercise Period, effective as of the date of the Agreement (the “Option”),
and the Option is in Buyer’s sole discretion to exercise provided that all the Closing Conditions have been fulfilled.


 


3.2           Exercise
of Option; Exercise Price. In order to exercise the Option, Buyer must provide an irrevocable, written notice during the Exercise
Period to Seller of Buyer's exercise of the Option (the “Option Exercise Notice”) and purchase or to obtain control
over (either through contractual arrangements or other means) all of the Equity Interests for the Exercise Price as soon as practicable
thereafter. As consideration for the purchase of the Equity Interests hereunder, Buyer hereby agrees to cause to be issued and
delivered to Seller a number of common stock of Parent (“CGN Stock”) based on the fair value of DGL, which shall be
determined by an independent third party appraiser selected by Buyer and subject to Seller’s consent, which shall not be
unreasonably withheld, as of the date of exercise (the "Exercise Price").


 


3.3           Option
Closing.


 


	3.3.1	Upon the exercise of the Option, subject to the terms and conditions contained in this Agreement, Buyer shall purchase or to obtain
control over (either through contractual arrangements or other means) all of the Equity Interest from the Seller and the Seller
shall sell all of his Equity Interest to Buyer, free and clear of any and all Encumbrances and the Option Closing shall occur
as soon as practicable subject to the satisfaction of all of the following conditions (“Closing Conditions”):




 


		A.	The results of a due diligence investigation of DGL is to
the satisfaction of the Buyer,



		B.	DGL has no liabilities in any form, including but not limited to any
outstanding loans, notes, debts, liens or any other means of liabilities (excluding
liabilities accrued in the ordinary course of business consistent with past practice but  including any and all liabilities
or obligations incurred by DGL and its Subsidiaries in connection with the transactions contemplated by this Agreement),



		C.	DGL has obtained all necessary governmental approvals and/or
permits to conduct its business.



		D.	The Option Closing shall be no later than July 31, 2016.



 


	3.3.2	The Option Closing shall not occur unless all Closing Conditions have been met. The obligations of Buyer to consummate the transactions
contemplated by this Agreement with respect to the Option Closing are subject to the satisfaction of the following conditions:






 


(a)The representations and warranties
of Seller herein contained shall be true as of the Option Closing;


 



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(b)All obligations, covenants
and agreements of Seller contained in this Agreement to be performed prior to or at Option Closing shall have been performed or
complied with by Seller;


 


(c) All of the deliveries contemplated
by Section 4.2(a) shall have been delivered to Buyer;


 


(d) No Material Adverse Change
shall have occurred on or after January 31, 2015;


 


(e)Without limitation to the
foregoing, there shall be no litigation or proceedings pending against Seller, DGL or any of its Subsidiaries wherein an unfavorable
result would:


 


(i)     prevent consummation
of the transactions contemplated by this Agreement;


 


(ii)     cause any of the transactions
contemplated by this Agreement to be rescinded following consummation;


 


(iii)    materially affect adversely
the rights of DGL or the DGL Subsidiaries to own their respective assets and to operate' their respective businesses (and no injunction,
judgment, artier, decree or ruling to such effect shall be in effect).


 


4.            Option
Closing.


 


4.1           Place
and Time of Closing.


 


(a)           The
Parties shall proceed diligently to complete all outstanding matters to be completed prior to the Option Closing, with a view to
completing the Option Closing as soon as is reasonably possible. The Option Closing shall take place at the mutually agreed place
on the Option Closing Date, or at such other time and place as Seller and Buyer mutually agreed upon, orally or in writing.


 


4.2           Deliveries
at the Option Closing.


 


(a)           At
the Option Closing, Seller shall deliver to Buyer:


  


	 	(i)	all such evidence and confirmation as may be reasonably required by Buyer confirming that DGL and its Subsidiaries has paid any and all liabilities as contemplated by Section 10.4;


 


	 	(ii)	all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Buyer to complete the transactions provided for in this Agreement.


 



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(b)           At
the Option Closing, Buyer shall deliver to Seller:


 


	 	(i)	an original certificate representing the number of CGN Stock of CGN Stock equal to the Exercise Price;


 


	 	(ii)	all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Seller to complete the transactions provided for in this Agreement.


 


(c)           Upon the Option Closing, and in no later
than 10 days following the Option Closing Date, Seller shall deliver or cause DGL to deliver to Buyer the following:


 


	 	(i)	 executed copies of the updated articles of DGL, resolutions of the board of directors, resolutions of shareholders and any
other related corporate approval documents, which approve and reflect Buyer’s ownership in the Equity Interests;




 


	 	(ii)	the updated shareholders’ registry of DGL;




 


	 	(iii)	the updated registration document duly approved by the local industrial and commercial bureau to reflect that Buyer is a shareholder
of the Equity Interests of DGL; and




 


	 	(iv)	the authentic DGL corporate seal.




  


5.           
Representations and Warranties of Seller with respect to the Equity Interests. The Seller hereby represents and warrants
to Buyer that:


 


 (a)           Citizenship.
Seller is a non-U.S. Person (as defined below) as of the date hereof:


 


(A) Any natural person
resident in the United States;


 


(B) Any partnership
or corporation organized or incorporated under the laws of the United States;


 


(C) Any estate of which
any executor or administrator is a U.S. person;


 


(D) Any trust of which
any trustee is a U.S. person;


 


(E) Any agency or branch
of a foreign entity located in the United States;


 



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(F) Any non-discretionary
account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person;


 


(G) Any discretionary
account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if
an individual) resident of the United States; or


 


(H) Any partnership
or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally
for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned,
by accredited Sellers (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates
or trusts.


 


“United States”
or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and
the District of Columbia.


 


(ii)The Seller understands
that no action has been or will be taken in any jurisdiction by the Parent that would permit a public offering of the CGN Stock
in any country or jurisdiction where action for that purpose is required.


 


(iii)The Seller (i)
as of the execution date of this Agreement is not located within the United States, and (ii) is not purchasing the CGN Stock for
the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements
of the 1933 Act or in a transaction not subject thereto.


 


(iv)The Seller will
not resell the CGN Stock except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto),
pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not
to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act.


 


(v)The Seller will
not engage in hedging transactions with regard to CGN Stock of the Parent prior to the expiration of the distribution compliance
period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance
with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under
the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities
are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available.


 


(vi)No form of “directed
selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising
in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United
States be made by the Seller or any of their representatives in connection with the offer and sale of the Purchased CGN Stock.


 



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(b)           Capacity of Seller;
Authorization; Execution of Agreements. Seller has all requisite power, authority and capacity to enter into this Agreement
and to perform the transactions and obligations to be performed by it hereunder.  The execution and delivery of this
Agreement by the Seller, and the performance by the Seller of the transactions and obligations contemplated hereby, including,
without limitation, the grant of the Option and sale of the Equity Interests to Buyer hereunder, have been duly authorized.  This
Agreement constitutes a valid and legally binding agreement of Seller, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the People’s Republic
of China, affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise
by courts of equity powers or their application of principles of public policy.


 


(c)           Title
to Equity Interests.  Seller shall be the record and beneficial owner of the respective amount of Equity Interests
as set forth on Exhibit A and will have sole managerial and dispositive authority with respect to the Equity Interests as of the
Option Closing Date.  Seller has not and will not grant any person a proxy with respect to the Equity Interests that
has not expired or been validly withdrawn.  The sale and delivery by Seller of the Equity Interests to Buyer pursuant
to this Agreement will vest in the Buyer legal and valid title to the Equity Interests, free and clear of all Liens, security interests,
adverse claims or other encumbrances of any character whatsoever, other than encumbrances created by Buyer and restrictions on
the resale of the Equity Interests under applicable securities laws (“Encumbrances”).


 


(d)           Brokers,
Finders, and Agents.   Seller is not, directly or indirectly, obligated to anyone acting as broker, finder or in
any other similar capacity in connection with this Agreement or the transactions contemplated hereby.  No Person has
or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or
valid claim against DGL, Seller or Buyer for any commission, fee or other compensation as a finder or broker in connection with
the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises
of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the
transactions contemplated by this Agreement, as a result of any agreement or arrangement made by the Seller.


 


6.         
  Representations and Warranties of Seller with respect to DGL. To the best of its knowledge and in reliance on
the representations and warranties made by DGL to Seller in the Purchase Agreement, Seller represents and warrants to Buyer, with
respect to DGL, that:


 


(a)           Organization
and Standing.  DGL is duly incorporated and validly existing under the laws of the People’s of Republic of
China, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business
as it is presently being conducted.  As of the Option Closing Date, DGL does not own any equity interest, directly or
indirectly, in any other Person or business enterprise.  DGL is qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets,
properties, financial condition, results of operations or business.  As of the Option Closing Date, no corporate proceedings
on the part of DGL or its Subsidiaries are necessary to authorize this Agreement or to consummate the transactions contemplated
hereby.


 



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(b)           Capitalization.  At
the date of this Agreement, a total of three individual shareholders, including the Seller, collectively owned 100% of the outstanding
equity interests of DGL, which were duly and validly authorized and issued, fully paid and non-assessable. There are (x) no
outstanding options, offers, warrants, conversion rights, contracts or other rights to subscribe for or to purchase from DGL, or
agreements obligating DGL to issue, transfer, or sell (whether formal or informal, written or oral, firm or contingent), any equity
interest or other securities of DGL (whether debt, equity, or a combination thereof) or obligating DGL to grant, extend, or enter
into any such agreement and (y) no agreements or other understandings (whether formal or informal, written or oral, firm or contingent)
which require or may require DGL to repurchase any of its Common Stock.  There are no preemptive or similar rights granted
by DGL with respect to DGL’s equity interests.  There are no anti-dilution or price adjustment provisions contained
in any security issued by DGL.  DGL is not a party to any registration rights agreements, voting agreements, voting trusts,
proxies or any other agreements, instruments or understandings with respect to the voting of any equity interests of DGL, or any
agreement with respect to the transferability, purchase or redemption of any equity interests of DGL.  Neither the grant
of the Option nor sale of the Equity Interests to Buyer obligate DGL to issue any equity interest or other securities to any person
(other than Buyer) and will not result in a right of any holder of DGL securities, by agreement with DGL, to adjust the exercise,
conversion, exchange or reset price under such securities.  The Seller shall cause DGL not to issue, or resolve or agree
to issue, any securities to any party, other than Buyer, prior to the Option Closing.  The Equity Interests represent
45.5% of the outstanding capital of DGL, on a fully-diluted basis.


 


(c)           Status
of the Equity Interests.  The Equity Interests (i) have been duly authorized, validly issued, fully paid and
are non-assessable, and will be such at the Option Closing, (ii) were issued in compliance with all applicable securities
laws, and will be in compliance with such laws at the Option Closing, (iii) subject to restrictions under this Agreement,
and applicable securities laws, have the rights and preferences set forth in the Articles of Incorporation (“DGL Charter”),
as amended, and will have such rights and preferences at the Option Closing, and (iv) are free and clear of all Encumbrances
and will be free and clear of all Encumbrances at the Option Closing (other than Encumbrances created by Buyer and restrictions
on the resale of the Equity Interests under applicable securities laws).


 



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(d)           Conflicts;
Defaults.  The execution and delivery of this Agreement by the Seller and the performance by the Seller of the transactions
and obligations contemplated hereby and thereby to be performed by it do not (i) violate, conflict with, or constitute a default
under any of the terms or provisions of, the DGL Charter, as amended, or any provisions of, or result in the acceleration of any
obligation under, any contract, note, debt instrument, security agreement or other instrument to which DGL is a party or by which
DGL, or any of DGL’s assets, is bound; (ii) result in the creation or imposition of any Encumbrances or claims upon
DGL’s assets or upon any of the CGN Stock of capital stock of DGL; (iii) constitute a violation of any law, statute, judgment,
decree, order, rule, or regulation of a Governmental Authority applicable to DGL; or (iv) constitute an event which, after notice
or lapse of time or both, would result in any of the foregoing.


 


(e)           Absence
of Litigation.  There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or threatened in writing against or affecting DGL.


 


(f)           Brokers,
Finders, and Agents.  DGL is not, directly or indirectly, obligated to anyone acting as broker, finder or in any
other similar capacity in connection with this Agreement or the transactions contemplated hereby.  No Person has or,
immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid
claim against DGL, the Seller or Buyer for any commission, fee or other compensation as a finder or broker in connection with the
transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises
of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the
transactions contemplated by this Agreement, as a result of any agreement or arrangement made by DGL.


 


(g)           Absence
of Liabilities.  Neither DGL nor its Subsidiaries has any liabilities or obligations of any kind or nature, except
as set forth on Schedule 7(g) hereto, as may be updated and supplemented by the Seller at any time prior to the Option Closing.


 


(h)           No
Agreements.  Except as set forth on Schedule 7(h) hereto, DGL is not a party to any agreement, commitment or instrument,
whether oral or written, which imposes any obligations or liabilities on DGL after the Option Closing.


 


(i)        
   Taxes.


 


(i)           DGL
has timely filed all state, local and foreign returns, estimates, information statements and reports relating to Taxes (“Returns”)
required to be filed by DGL with any Tax authority prior to the date hereof, except such Returns which are not material to DGL.  All
such Returns are true, correct and complete and DGL has no basis to believe that any audit of the Returns would cause a Material
Adverse Effect upon DGL or its financial condition.  DGL has paid all Taxes shown to be due on such Returns.


 



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(ii)           All
Taxes that DGL is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to
the proper governmental authorities to the extent due and payable.


 


(iii)          DGL
has no material Tax deficiency outstanding, proposed or assessed against DGL, and DGL has not executed any unexpired waiver of
any statute of limitations on or extending the period for the assessment or collection of any Tax.


 


(iv)          No
audit or other examination of any Returns of DGL by any Tax authority is known by DGL to be presently in progress, nor has DGL
been notified of any request for such an audit or other examination.


  


(v)           No
adjustment relating to any Returns filed by DGL has been proposed in writing, formally or informally, by any Tax authority to DGL
or any representative thereof.


 


(vi)         
DGL has no liability for any Taxes for its current fiscal year, whether or not such Taxes are currently due and payable.


 


(j)           
Corporate Records.  All records and documents relating to DGL known to the Sellers, including, but not limited
to, the books, shareholder lists, government filings, Tax Returns, consent decrees, orders, and correspondence, financial information
and records (including any electronic files containing any financial information and records), and other documents used in or associated
with DGL (the “Corporate Records”) are true, complete and accurate in all material respects.  The minute
books of DGL known to the Seller contain true, complete and accurate records of all meetings and consents in lieu of meetings of
the Board of Directors of DGL (and any committees thereof), similar governing bodies and shareholders (the “Minute Books”).  The
Corporate Records and Minute Books, to the extent such documents have not been previously delivered to Buyer, will be delivered
to Buyer at the Option Closing.


 


7.            Representations
and Warranties of Buyer. Buyer hereby represents and warrants to Seller that:


 


(a)           Organization
and Standing.  Buyer is duly incorporated and validly existing under the laws of Hong Kong Special Administrative
Region, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business
as it is presently being conducted.


 


(b)          Capacity
of Buyer; Authorization; Execution of Agreements.  Buyer has all requisite power, authority and capacity to enter
into this Agreement and to perform the transactions and obligations to be performed by it hereunder.  The execution and
delivery of this Agreement by Buyer, and the performance by Buyer of the transactions and obligations contemplated hereby, including,
without limitation, the purchase of the Equity Interests from the Seller hereunder, have been duly authorized by all requisite
corporate action of Buyer.  This Agreement constitutes a valid and legally binding agreement of Buyer, enforceable in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies
in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public
policy.


 



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8.            Representations
and Warranties of Parent. Parent hereby represents and warrants to Seller that:


 


(a)           Organization
and Standing.  Parent is duly incorporated and validly existing under the laws of the State of Nevada, and has all
requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently
being conducted.


 


(b)         
Capitalization of Parent. At the date of this Agreement, the
authorized capital stock of Parent consists of (a) 600,000,000 CGN Stock of common stock (“Common Stock”), par value
$.0001 per share, of which 109,692,700 CGN Stock shall be issued and outstanding, all of which are duly authorized, validly issued
and fully paid, and (b) 200,000,000 CGN Stock of preferred stock, par value $.0001 per share, none of which are issued and outstanding.
All of the CGN Stock to be issued pursuant to this Agreement have been duly authorized and will be validly issued, fully paid and
non-assessable and no personal liability will attach to the ownership thereof. As of the Option Closing Date, there are, no outstanding
options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any CGN Stock of capital stock or any un-issued or treasury CGN Stock of capital stock of Parent. The outstanding
CGN Stock are all duly and validly authorized and issued, fully paid and non-assessable.  


 


(c)           Capacity of Parent; Authorization;
Execution of Agreements.  Parent has all requisite power, authority and capacity to enter into this Agreement and
to perform the transactions and obligations to be performed by it hereunder.  The execution and delivery of this Agreement
by Parent, and the performance by Parent of the transactions and obligations contemplated hereby, including, without limitation,
the issuance of a number of CGN Stock of Common Stock to each of the Seller hereunder, have been duly authorized by all requisite
corporate action of Parent.  This Agreement constitutes a valid and legally binding agreement of Parent, enforceable
in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies
in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public
policy. 


 



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9.            Covenants of the Parties.


 


9.1.          Access
to Information; Notification of Certain Matters.


 


(a)           From
the date hereof to the Option Closing and subject to applicable law, Seller shall (i) give to Buyer or its counsel reasonable access
to the books and records of DGL and its Subsidiaries, and (ii) furnish or make available to Buyer and its counsel such financial
and operating data and other information about DGL and its Subsidiaries as such Persons may reasonably request.


 


(b)           Each
party hereto shall give notice to each other party hereto, as promptly as practicable after the event giving rise to the requirement
of such notice, of:


 


(i)           
any communication received by such party from, or given by such party to, any Governmental Authority in connection with any of
the transactions contemplated hereby;


 


(ii)           any
notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement; and


 


(iii)          any
actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving
or otherwise affecting such party or any of its Affiliates that, if pending on the date of this Agreement, would have been required
to have been disclosed, or that relate to the consummation of the transactions contemplated by this Agreement; provided, however,
that the delivery of any notice pursuant to this Section 10.1(b)(iii) shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.


  


9.2           Interim
Operations of DGL.  During the period from the date of this Agreement to the Option Closing, the Seller shall cause
DGL to conduct their business only in the ordinary course of business consistent with past practice, except to the extent otherwise
necessary to comply with the provisions hereof and with applicable laws and regulations.  Additionally, during the period
from the date of this Agreement to the Option Closing, except as required hereby in connection with this Agreement, the Seller
shall not permit DGL to do any of the following without the prior consent of the Buyer: (i) amend or otherwise change its Charter,
(ii) issue, sell or authorize for issuance or sale (including, but not limited to, by way of stock split or dividend), any equity
interests or any class of its securities of DGL or enter into any agreements or commitments of any character obligating it to issue
such securities, other than in connection with the exercise of outstanding warrants or outstanding stock options granted to directors,
officers or employees of DGL and its Subsidiaries prior to the date of this Agreement; (iii) declare, set aside, make or pay any
dividend or other distribution (whether in cash, stock or property) with respect to its common stock, (iv) redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock, (v) enter into any material contract or agreement or material
transaction or make any material capital expenditure other than those relating to the transactions contemplated by this Agreement,
(vi) create, incur, assume, maintain or permit to exist any indebtedness except as otherwise incurred in the ordinary course of
business, consistent with past practice, (vii) pay, discharge or satisfy claims or liabilities (absolute, accrued, contingent or
otherwise) other than in the ordinary course of business consistent with past practice, (viii) cancel any material debts or waive
any material claims or rights, (ix) make any loans, advances or capital contributions to, or investments in financial instruments
of any Person, (x) assume, guarantee, endorse or otherwise become responsible for the liabilities or other commitments of any other
Person, (xi) alter in any material way the manner of keeping the books, accounts or records of DGL or the accounting practices
therein reflected, (xii) enter into any indemnification, contribution or similar contract pursuant to which DGL and its Subsidiaries
may be required to indemnify any other Person or make contributions to any other Person, (xiii) amend or terminate any existing
contracts in any manner that would result in any material liability to DGL and its Subsidiaries for or on account of such amendment
or termination, or (xiv) or change any existing or adopt any new tax accounting principle, method of accounting or tax election
except as provided herein or agreed to in writing by Buyer.


 



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9.3           Payment
of Liabilities.  Prior to or at the Option Closing, Seller shall pay, or shall cause DGL to pay, in full any liabilities
or obligations incurred by DGL and remaining outstanding at the Option Closing Date, excluding liabilities accrued in the ordinary
course of business consistent with past practice and including any and all liabilities or obligations incurred by DGL in connection
with the transactions contemplated by this Agreement.


 


9.4           Indemnification.  Seller
hereby agrees to indemnify and hold harmless Buyer (the “Indemnified Party”) from and against any and all liabilities,
obligations, claims, losses, expenses, damages, actions, liens and deficiencies (including reasonable attorneys’ fees) which
exist, or which may be imposed on, incurred by or asserted against the Indemnified Party due to or arising out of any breach or
inaccuracy of any representation, warranty, covenant, agreement or obligation of Seller hereunder or in any other certificate,
instrument or document contemplated hereby or thereby (“Damages”), for a period of twenty (24) months from the Option
Closing Date (the “Indemnification,” and the period herein is referred to as the “Indemnification Period”).  Seller
shall not be obligated to make any payment for Indemnification in respect of any claims for Damages that are made by the Indemnified
Party after the expiration of the Indemnification Period; provided, however, that the obligations of Seller under the Indemnification
shall remain in full force and effect in respect of any claims for Damages which are made prior to, and remain pending at, the
expiration of the Indemnification Period. The indemnification provided by this Section 10.4 shall be the sole pecuniary remedy
of the Indemnified Party for any Damages; provided, however, that no remedies of the Indemnified Party for any breach by Seller
of the representations and warranties contained in Section 6 shall be limited in any way by this Section 10.4


 


9.5        DGL
Capital Structure. Buyer hereby acknowledges and agrees to the capital structure of DGL as of the date of this Agreement as
set forth on Exhibit A hereto.


 



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9.6         Registration
of Transfer of Equity Interests.  Seller hereby undertakes to execute and deliver such instruments, documents or
other writings, and to take such actions as may be necessary or desirable to effectuate the registration of the transfer of the
Equity Interests to Buyer under the laws of the People’s Republic of China not later than five (5) business days after the
Option Closing Date.


 


10.          Survival.
The warranties, representations, and covenants of each of the Parties to this Agreement shall survive the consummation of the purchase
and sale of the Equity Interests herein described for twenty four (24) months.


 


11.           Termination.


 


11.1         This
Agreement may be terminated at any time prior to the Closing:


 


(a)           by
mutual written agreement of Buyer and Seller;


 


(b)           by
either Buyer or Seller, if


 


	 	(i)	the transactions contemplated by this Agreement shall not have been consummated by July 31, 2016; provided, however, that the right to terminate this Agreement under this Section 12.1(b)(i) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of, or has resulted in, the failure of the transactions to occur on or before July 31, 2016; or


 


	 	(ii)	a judgment, injunction, order or decree of any Governmental Authority having competent jurisdiction enjoining either Seller or Buyer from consummating the transactions contemplated by this Agreement is entered and such judgment, injunction, judgment or order shall have become final and non-appealable and, prior to such termination, the Parties shall have used their respective commercially reasonable efforts to resist, resolve or lift, as applicable, such judgment, injunction, order or decree; provided, however, that the right to terminate this Agreement under this Section 12.1(b)(ii) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of such judgment, injunction, order or decree.


 


(c)           by
Buyer, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Seller set forth
in this Agreement shall have occurred which would cause the conditions set forth in Section 5.1 not to be satisfied, and such breach
or failure to perform has not been cured within thirty (30) days after notice of such breach or failure to perform has been given
by Buyer to Seller.


 



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11.2         Effect
of Termination.  If this Agreement is terminated pursuant to Section 11.1, except as set forth in Section 11.3 hereof,
there shall be no liability or obligation on the part of Buyer or Seller, or any of their respective officers, directors, shareholders,
agents or Affiliates, except that (i) the provisions of this Section 11.2, Section 11.3 and Section 13 of this Agreement shall
remain in full force and effect and survive any termination of this Agreement and (ii) notwithstanding anything to the contrary
contained in this Agreement, no parties shall be relieved of or released from any liabilities or damages arising out of its material
breach of or material failure to perform its obligations under this Agreement.  


 


11.3         Expenses.  Whether
or not the transactions contemplated by this Agreement are consummated, all fees and expenses of any party hereto incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses.


 


12.           Miscellaneous
Provisions.


 


(a)           Waivers
and Amendments.  This Agreement may be amended or modified in whole or in part only by a writing which makes reference
to this Agreement executed by all of the parties hereto.  The obligations of any party hereunder may be waived (either
generally or in a particular instance and either retroactively or prospectively) only with the written consent of the party claimed
to have given the waiver; provided, however, that any waiver by any party of any violation of, breach of, or default under any
provision of this Agreement or any other agreement provided for herein shall not be construed as, or constitute, a continuing waiver
of such provision, or waiver of any other violation of, breach of or default under any other provision of this Agreement or any
other agreement provided for herein.


 


(b)           Notices. Any
notice, request or other communication required or permitted hereunder shall be in writing and be deemed to have been duly given
(a) when personally delivered or sent by facsimile transmission (the receipt of which is confirmed in writing), (b) one Business
Day after being sent by a nationally recognized overnight courier service or (c) five Business Days after being sent by registered
or certified mail, return receipt requested, postage prepaid, and if intended for either Party shall be addressed to the address
provided below each Party's name on the signature page of this Agreement. Any Party, by written notice to the other Party, may
change the address for notices to be delivered.


 


(c)           Successors
and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that Seller may not assign or transfer its rights hereunder without the prior
written consent of Buyer, and Buyer may not assign or transfer its rights under this Agreement without the consent of Seller.


 



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(d)          Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions of this Agreement shall continue in full force and effect without being impaired or invalidated in any way and shall
be construed in accordance with the purposes and intent of this Agreement.


 


(e)           Entire
Agreement. This Agreement contains the entire agreement of the Parties, and supersedes any prior written or oral agreements
between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings,
oral or written, between and among the Parties, relating to the subject matter contained in this Agreement, which are not fully
expressed herein.


 


(f)           Counterparts;
Facsimile and Electronic Signatures.  This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of which together will constitute one and the same instrument.  The signature
pages hereto in facsimile copy or other electronic means, including e-mail attachment, shall be deemed an original for all purposes.


 


(g)          Governing
Law and Submission to Jurisdiction.  This Agreement shall in all respects be governed by and construed in accordance
with the internal substantive laws of Hong Kong Special Administrative Region without giving effect to the principles of conflicts
of law thereof.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating
to this Agreement brought by any other party or its successors or assigns shall be brought and determined in Hong Kong courts,
and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect
to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this
Agreement and the transactions contemplated hereby.  Each of the parties agrees not to commence any action, suit or proceeding
relating thereto except in the courts described above, other than actions in any court of competent jurisdiction to enforce any
judgment, decree or award rendered by any such court in Hong Kong as described herein.  Each of the parties hereby irrevocably
and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action
or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not
personally subject to the jurisdiction of the courts in Hong Kong as described herein for any reason, (b) that it or its property
is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service
of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c)
that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.


 


(h)          Schedules.  The
schedules and exhibits attached to this Agreement are incorporated herein and shall be part of this Agreement for all purposes.


 



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(i)           Public
Announcements.  The parties shall consult with each other before issuing, and provide each other a reasonable opportunity
to review and comment upon, any press release or public statement including necessary Parent’s filings with the SEC with
respect to this Agreement and the transactions contemplated hereby and, except as may be required by applicable law, will not issue
any such press release or make any such public statement prior to such consultation.





 


[Signature Page Follows]


 



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IN WITNESS WHEREOF,
the undersigned have executed this Agreement as of the Effective Date.


 





	SELLER	 	 
	 	 	 
	Name:	/s/ Jianguo Dai 	 
	 	Jianguo Dai 	 
	 	 	 
	Address:	10 Cun Min Zu, San Xing Cun, 	 
	 	Niu Bi Tan Zhen,	 
	 	Dingcheng District,	 
	 	Changde City, Hunan Province, China  	 
	 	 	 
	PARENT   	 
	 	 
	CGN Nanotech, Inc.	 
	 	 	 
	By:	/s/ Loke Che Chan, Gilbert	 
	Name:	Loke Che Chan, Gilbert	 
	Title:	Chief Financial Officer & Director	 
	 	 	 
	Address:	Suite 2201, 22/F, 50 	 
	 	Malaysia
Building,	 
	 	Gloucester Road,	 
	 	Wanchai, Hong Kong	 







 


[Signature Page Continues]


 






    	19



    	 



    

 


	
        

        BUYER

         

        CGN Nanotech Limited
	 
	 	
         
	 
	By:	/s/ Loke Che Chan, Gilbert	 
	Name:	Loke Che Chan, Gilbert	 
	Title:	Chief Financial Officer & Director	 
	 	 	 
	Address:	
        Suite 2201, 22/F,

        Malaysia Building,

        50 Gloucester Road,

        Wanchai, Hong Kong
	 


 



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EXHIBIT A


 


DGL Capital Structure


   


	SHAREHOLDER	PERCENTAGE OF EQUITY INTERESTS
	 	 
	Dai Jian Guo 	45.5%
	 	 
	Luo Shi Jing	35.5%
	 	 
	She Xie Hong	19.0%




 


 


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