Document:

ex_109482.htm

Exhibit 10.28

 

 

AMENDED AND RESTATED NOTE

 

	Date of Note:	As of November 30, 2017
	 	 
	Amount of Note:	$10,387,500.00
	 	 
	Maturity Date: 	December 1, 2022
	 	 
	Interest Rate: 	3.9148% per annum.

  

FOR VALUE RECEIVED, each of the undersigned, jointly and severally, (the "Maker"), having an address as indicated under its name, hereby promises to pay on the Maturity Date to the order of HSBC Bank USA, National Association (the "Bank") at its offices at 534 Broad Hollow Road, Melville, New York 11747 or at such other place as the holder hereof may from time to time designate in writing, in immediately available New York funds, the Amount of Note together with interest on the Amount of Note at the Interest Rate (computed on an actual/360 day basis, i.e., interest for each day during which any of the Amount of Note is outstanding shall be computed at the Interest Rate divided by 360) by payment of interest only on the first day of the first month following the date hereof, and thereafter successive equal monthly installments of principal and interest in the amount of $62,777.60 commencing on January 1, 2018 and on the first day of each month thereafter until the Maturity Date, at which time any unpaid balance of the Amount of Note shall be due and payable with all accrued but unpaid interest. Each of said payments shall be applied first to payment of accrued interest on the unpaid balance of the Amount of Note and the balance thereof to the reduction of said Amount of Note. A late payment of 5% of any principal or interest payment made more than 10 days after the due date thereof shall be due with any such late payment. The Bank may charge any account of the Maker for such payments.

 

This Note is secured by a Fee and Leasehold Mortgage and Security Agreement of even date herewith (the "Mortgage") made by the Maker to the Bank encumbering, among other things, the property located as indicated below and more particularly described in the Mortgage; all of the covenants, conditions and agreements of the Mortgage being made a part hereof by this reference.

 

It is expressly agreed that, upon the failure of the Maker timely to make any payment due hereunder after any applicable grace period or upon the happening of any "Event of Default" under the Mortgage, the principal sum hereof, or so much thereof as may be outstanding, together with accrued interest and all other expenses, payable by Maker under the Mortgage, including, but not limited to reasonable attorneys' fees for legal services incurred by the holder hereof in collecting or enforcing payment hereof whether or not suit is brought, and if suit is brought, then through all appellate actions, shall immediately become due and payable at the option of the holder of the Note, notwithstanding the Maturity Date set forth herein.  Upon the stated or accelerated maturity of this Note, the Maker agrees that this Note shall bear interest at a per annum rate of 3% in excess of the Interest Rate until the principal is fully paid.

 

Notwithstanding anything to the contrary contained in this Note, the rate of interest payable on this Note shall never exceed the maximum rate of interest permitted under applicable law.  If at any time the rate of interest otherwise prescribed herein shall exceed such maximum rate, and such prescribed rate is thereafter below such maximum rate, the prescribed rate shall be increased to the maximum rate for such period of time as is required so that the total amount of interest received by the Bank is that which would have been received by the Bank, except for the operation of the first sentence hereof.

 

1

 

 

This Note may be prepaid in whole or in minimum amounts of $100,000.00 or integral multiples thereof (or the balance of the Note, if less than $100,000), at any time upon at least ten days' notice, provided however, in the event the Maker prepays all or any portion of the indebtedness evidenced by the Note, whether as a result of acceleration or otherwise, the Maker will pay the Bank, on the same date the prepayment is made, a break funding charge to cover loss, cost and expense attributable to such an event. Such loss, cost or expense to the Bank shall be deemed to include but not be limited to an amount determined by the Bank as follows:

 

(A)     calculate the Bank’s remaining interest cost based on (i) the most current Bank funding rate assigned upon origination, last repricing date, or last prepayment date, times (ii) the principal amount of the prepayment amortized accordingly, times (iii) the remaining period of time until the earlier of this Note’s expiration or next repricing date, dayweighted accordingly.

 

(B)      calculate the Bank’s implied reinvestment rate based on (i) the US LIBOR/SWAP rate as of the date of prepayment for the shorter of this Note’s expiration date or next repricing date, times (ii), the principal amount of the prepayment amortized accordingly, times (iii) the remaining period of time until the earlier of this Note’s expiration or next repricing date, dayweighted accordingly.

 

(C)     if (B) is equal to or greater than (A), the break funding charge is zero ($0). If (A) exceeds (B), the break funding charge will be calculated using the Bank’s discounted cash flow formula to determine the present value (the break funding charge) of the excess of (A) less (B).

 

Each prepayment shall be made together with interest accrued thereon to and including the date of prepayment and shall be applied to the last maturing monthly installments of principal in inverse order of their respective maturities.

 

The Maker agrees that it shall be bound by any agreement extending the time or modifying the above terms of payment, made by the Bank and the owner or owners of the property affected by the Mortgage, whether with or without notice to the Maker, and the Maker shall continue to be liable to pay the amount due hereunder, but with interest at a rate no greater than the Interest Rate, according to the terms of any such agreement of extension or modification.

 

This Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

Should the indebtedness represented by this Note or any part thereof be collected at law or in equity, or in bankruptcy, receivership or any other court proceedings (whether at the trial or appellate level), or should this Note be placed in the hands of attorneys for collection upon default, the Maker agrees to pay, in addition to the principal, premium and interest due and payable hereon, all costs of collection or attempting to collect this Note, including reasonable attorneys' fees and expenses.

 

Time is of the essence as to all dates set forth herein, provided, however, that whenever any payment to be made under this Note shall be stated to be due on a Saturday, Sunday or a public holiday or the equivalent for banks generally under the laws of the State of New York (any other day being a "Business Day"), such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.

 

All parties to this Note, whether Maker, principal, surety, guarantor, or endorser, hereby waive presentment for payment, demand, protest, notice of protest and notice of dishonor.

 

2

 

 

Any notice, demand or request relating to any matter set forth herein shall be in writing and shall be deemed effective when mailed, postage prepaid, by registered or certified mail, return receipt requested, to any party hereto at its address stated herein or at such other address of which it shall have notified the party giving such notice in writing as aforesaid.

 

The Maker hereby waives, to the extent permitted by law, the right to trial by jury in any action, proceeding or counterclaim related to this Note.

 

This Note is to be construed and enforced in accordance with the laws of the State of New York.

 

The Maker’s right to request refinancing of this Note and the Bank’s obligation in this regard shall be governed by the terms set forth in Exhibit A attached hereto which is incorporated herein by reference.

 

This Note amends, restates, replaces and corrects that certain Note in the amount of $10,387,500.00 dated November 30, 2017 made by Maker in favor of the Bank (the “Original Note”), and payments made on the Original Note to date shall be retroactively applied to principal and interest as provided herein, with any shortfall to be paid by Maker to the Bank simultaneously herewith. Maker hereby authorizes the Bank to debit its account maintained with the Bank in payment of such shortfall.

 

555 N Research Corporation

 

By:________________________________

Glen Charles

Chief Financial Officer

 

 

 

	
			Location of Property:

			555 North Research Place,

			Central Islip, New York

				
			Address of Maker:

			555 North Research Place,

			Central Islip, New York

			

 

3

 

 

EXHIBIT A

 

 

I.     Refinance Request.

 

               (i)     Conditions Precedent.     The Maker shall have the right to request (the “Refinance Request”) a refinance of this Note on the Maturity Date with a loan equal to the principal amount to be outstanding under this Note as of the Maturity Date (the “Refinance Loan”), and the Bank will approve the Refinance Request subject to the following:

 

(A)     The Maker shall have provided the Bank with its irrevocable Refinance Request notice (the “Refinance Request Notice”) not more than one hundred twenty (120) days prior or less than sixty (60) days prior to the Maturity Date.

 

(B)      As of the Maturity Date, the following conditions to the closing of the Refinance Loan shall be satisfied:

 

(1)     Certification. The Maker shall have certified to the Bank that Maker has no claims, causes of action, or demands against the Bank or defenses or offsets to the payment of the Loan or any other amounts due under the Loan Documents (as defined in the Mortgage) as of such date, and that all representations and warranties set forth in the Mortgage remain true and correct as of the making of the Refinancing Loan.

 

(2)     Default. No “Event of Default” then exists under the Loan Documents or will exist under the Loan Documents by reason of the making of the Refinance Loan, or any event, circumstance or action, which with the giving of notice, passage of time or both would give rise to an Event of Default, shall have occurred and be continuing.

 

(3)     Expenses. The Maker shall have paid all reasonable expenses incurred by the Bank in connection with the review and approval of the Refinance Request and Refinance Loan, including all reasonable fees and expenses of counsel for the Bank.

 

(4)     Insurance. The Bank shall have received proof that Maker has obtained all insurance under the Mortgage.

 

(5)     Status. No Material Adverse Effect shall have occurred. The term “Material Adverse Effect” shall mean any event, circumstance, fact, condition, development, or occurrence that has had or could be expected to have any material and adverse effect on (1) the business, condition (financial or otherwise), operations, prospects, liabilities, capitalization, liquidity, or any assets of the Maker or the Guarantor(as defined in the Mortgage), as the case may be, taken as a whole; (2) the ability of the Maker or the Guarantor, as the case may be, to pay the Loan and perform the obligations under the Loan Documents for which such respective party is responsible, in strict accordance with the terms and provisions therefor; (3) the validity, enforceability, or binding effect of any provision of the Loan Documents; or (4) the value of the Premises.

 

(6)     Sublease.     The Bank shall have reviewed and approved the Sublease (as defined in the Mortgage).

 

4

 

 

(7)      Covenant Compliance     The Maker shall be in full compliance with the covenants set forth in Section 1.11(e) and 1.11(g) of the Mortgage.

 

(8)     Other. Maker shall have delivered to the Bank such other documents and certificates as the Bank may reasonably request in connection with the Refinance Loan, including without limitation, any reaffirmations, resolutions and other corporate documents as may be required of the Maker and Guarantor (as defined in the Mortgage) by the Bank.

 

               (ii)     Interest and Amortization on the Refinance Loan.     If the Maker timely provides the Refinance Request Notice and has satisfied the conditions set forth in Paragraph I (i) above, the Bank agrees that it will make the Refinance Loan which will be effected through an amended and restated note to be executed by the Maker (the “Refinance Loan Note”) to be secured by the Mortgage. The Refinance Loan Note shall bear interest at a fixed rate calculated to 175 basis points plus the 5 Year LIBOR Swap rate (or if not then available, a rate based on a comparable index as determined by the Bank) in effect on the date of the Refinance Loan, payable monthly in arrears on the first day of each month computed on an actual/360 day basis. The Refinance Loan Note shall mature five (5) years from the date of the closing of the Refinance Loan (the “Refinance Loan Maturity Date”). During the term of the Refinance Loan, the Maker shall pay equal monthly installments of principal and interest payments based on a fifteen (15) year mortgage style amortization schedule, with the entire unpaid principal balance together with interest thereon being due and payable on the Refinance Loan Maturity Date. 

 

(iii)     Prepayment. The Refinance Loan Note may be prepaid in whole or in minimum amounts of $100,000.00 or integral multiples thereof (or the balance of the Note, if less than $100,000), at any time upon at least ten days' notice, provided however, in the event the Maker prepays all or any portion of the indebtedness evidenced by the Note, whether as a result of acceleration or otherwise, the Maker will pay the Bank, on the same date the prepayment is made, a break funding charge to cover loss, cost and expense attributable to such an event. Such loss, cost or expense to the Bank shall be deemed to include but not be limited to an amount determined by the Bank as follows:

 

(A)     calculate the Bank’s remaining interest cost based on (i) the most current Bank funding rate assigned upon origination, last repricing date, or last prepayment date, times (ii) the principal amount of the prepayment amortized accordingly, times (iii) the remaining period of time until the earlier of this Note’s expiration or next repricing date, dayweighted accordingly.

 

(B)      calculate the Bank’s implied reinvestment rate based on (i) the US LIBOR/SWAP rate as of the date of prepayment for the shorter of this Note’s expiration date or next repricing date, times (ii), the principal amount of the prepayment amortized accordingly, times (iii) the remaining period of time until the earlier of this Note’s expiration or next repricing date, dayweighted accordingly.

 

(C)     if (B) is equal to or greater than (A), the break funding charge is zero ($0). If (A) exceeds (B), the break funding charge will be calculated using the Bank’s discounted cash flow formula to determine the present value (the break funding charge) of the excess of (A) less (B).

 

Each prepayment shall be made together with interest accrued thereon to and including the date of prepayment and shall be applied to the last maturing monthly installments of principal in inverse order of their respective maturities.

 

 

 

5Blueprint

 

Exhibit 10.1

 

EQUITY TRANSFER AGREEMENT

 

THIS
EQUITY TRANSFER AGREEMENT (the “Agreement”) is made by and between
Ms. JIN, Lijuan, a natural
person of Chinese nationality (the “Purchaser”), and Euro Tech (Far East) Limited, a company
duly established and validly existing under the laws of Hong Kong,
China (the “Seller”) as of this 5th day of
March, 2018.

 

Party
A: JIN, Lijuan

ID Card
No.: 330721197606291825

Domicile: No.1566,
South Ba Yi Street, Sanjiang Sub-district, Wucheng District,
Jinhua, Zhejiang

 

Party
B: Euro Tech (Far East) Limited

Contact
Address: Room D, 18/F, Gee Chang Hong Centre, 65 Wong Chuk Hang
Road, Hong Kong

Legal
Representative: Mr. LEUNG, Tak Chung

 

RECITALS

 

(A) 

Zhejiang Jiahuan
Electronics Co., Ltd. (hereinafter referred to as the
“Target
Company”) is a limited liability company duly
established and validly existing under the laws of China. The
current registered/paid-up capital of the Target Company amounts to
RMB80,000,000, among which Mr. XING, Hanke (Party A’s lawful
husband) committed and paid RMB64,000,000 and thus held 80% equity
interest in the Target Company, and Party B committed/paid
RMB16,000,000 and held 20% equities of the Target
Company;

 

(B) 

Party A is a
natural person of Chinese nationality and has full civil rights and
capacity;

 

(C) 

Party B is a
company duly established and validly existing under the laws of
Hong Kong, China; and

 

(D) 

Subject to terms
and conditions of this Agreement, Party B desires to sell, and
Party A wishes to purchase, the 20% equities of the Target Company
owned by Party B.

 

NOW,
THEREFORE, according to provisions of the Contract Law of the People’s Republic of
China, the Company Law of
the People’s Republic of China and other relevant
laws, and based on principles of equality and free will, the
Parties hereby enter into the following agreement in respect of the
equities of the Target after friendly negotiation:

 

Chapter
1

Definition

 

1.1 

In this Agreement,
unless otherwise specified herein or required by the context, the
following words and terms shall have the meaning set out
below:

 

(1) 

“Agreement” means this Equity
Transfer Agreement, including any amendment, supplement or deletion
made in writing upon mutual agreement between the Parties in
writing and relevant attachments;

 

(2) 

“Business Day” means a day other
than a Saturday, Sunday and statutory or public holidays in
Mainland, China or Hong Kong;

 

(3) 

“Closing Date” means the day when
the Target Company completes registration change with competent
registration authority in respect of the equity transfer
contemplated hereunder and receives its renewed Business License
from such competent registration authority;

 

(4) 

Any reference to a
“year”,
“month” or
“day” shall
refer to a calendar year, calendar month or calendar day, unless
otherwise specified herein;

 

(5) 

“Governmental Authority” means any
court, tribunal, administrative authority or commission or agencies
or bodies of other governmental or regulatory authorities within
China;

 

(6) 

“China” means the People’s
Republic of China (for purpose of this Agreement only, excluding
Hong Kong SAR, Macau SAR and Taiwan);

 

(7) 

“Transfer Price” means the price
payable to Party B by Party A for purchase of the 20% equities of
the Target Company from Party B on terms and conditions of this
Agreement; and

 

(8) 

“Equities” means the 20% equities
of the Target Company, which is held by Party B and to be
transferred to and acquired by Party A from Party B on terms and
conditions of this Agreement.

 

1.2 

Headings of this
Agreement and each section and chapter hereof are for convenience
of reference only and shall not affect the interpretation or
construction of any terms of this Agreement.

 

Chapter
2

Equity
Transfer and Transfer Price

 

2.1 

Upon consultation
and mutual agreement between Party A and Party B, Party B will sell
to Party A, and Party A will purchase from Party B, the 20%
equities of the Target Company held by Party B (including
entitlement to dividends and other relevant rights and interests
to/in the undistributed profits attributable to such equities as of
the Closing Date) on terms and conditions of this Agreement (the
“Equity
Transfer”).

 

 

1

 

 

 

2.2 

Upon consultation,
Party A and Party B confirm that the Transfer Price for the Equity
Transfer shall be Renminbi Thirty-One Million Three Hundred Twelve
Thousand and Five Hundred Yuan (RMB 31,312,500), inclusive of tax.
When Party A pays Party B the price for the Equity Transfer, any
taxes which are levied in the Mainland, China in connection with
the Equity Transfer and paid or withheld by Party A for Party B,
shall be deducted from the Transfer Price (the exact amount of such
taxes paid or withheld by Party A for Party B shall be subject to
the amount specified in the relevant documents issued by competent
tax authority of the Mainland, China).

 

2.3 

Party A shall pay
Party B the Transfer Price within the period specified by this
Agreement. Party A shall, within fifteen (15) Business Days from
the Closing Date, pay the Transfer Price in USD (to be converted as
per the middle rate announced by the People’s Bank of China
on the day immediately preceding to the payment date) into the bank
account designated by Party B.

 

2.4 

Details of the bank
account designated by Party B are set out below:

 

2.4.1 

Party B’s USD
account:

Account holder:
Euro Tech (Far East) Limited

Bank name: Standard
Chartered Bank Hong Kong, Central Branch

Account number:
447-102-95882 (USD account)

 

Chapter
3

Security
for Payment of Transfer Price

 

3.1 

In order to secure
Party A’s performance of her payment obligation to Party B in
respect of the Transfer Price hereunder, Party A agrees to provide
Party B with the following guarantees:

 

3.1.1 

Deposit

 

Party A
agrees that it will, within two (2) Business Days following the
effectiveness of this Agreement, pay RMB 1,000,000 (Renminbi One
Million Yuan) into the following bank account of Party B as
deposit:

 

Account holder:
Euro Tech Trading (Shanghai) Ltd.

Bank name: HSBC
Bank (China) Company Limited, Shanghai Branch

Account number:
404016-088000997-001

 

If
Party A fails to pay the Transfer Price in full within the period
agreed in this Agreement, Party B shall have the right to receive
the foresaid RMB 1,000,000 deposit immediately; or, if Party A pays
Party B the Transfer Price in full within the specified period set
out in this Agreement, Party B shall return the RMB 1,000,000
deposit (bearing no interest) to Party A’s bank account
within seven (7) Business Days following its receipt of the full
Transfer Price.

 

 

2

 

 

3.1.2 

Equity
Pledge

 

Party A
agrees that Mr. XING, Hanke will pledge the 20% equities of the
Target Company owned by him as security for Party A’s
performance of her payment obligation hereunder, and that Mr. XING,
Hanke will enter into a separate Equity Pledge Contract with Party
B and apply for registration of equity pledge with Jinhua Municipal
Bureau of Market Supervision and Administration. If Party A fails
to perform her obligations as agreed herein, Party B shall have
priority in receiving payment in accordance with laws by way of
disposition, auction or sale of such pledged equities.

 

3.1.3 

Guarantee

 

Party A
agrees that Mr. XING, Hanke and the Target Company shall be jointly
and severally liable for guaranteeing Party A’s performance
of her payment obligation hereunder, and Mr. XING, Hanke and the
Target Company will issue a separate letter of commitment to Party
B to undertake such joint and several guarantee
liability.

 

3.2 

Party A undertakes
that it is her unilateral, absolute and unconditional obligation to
pay the Transfer Price after the Closing Date, and that Party A
waives any and all her rights of set-off or defense against Party B
in respect of payment of the Transfer Price.

 

Chapter
4

Preconditions

 

4.1 

Party A and Party B
agree that both the closing of the Equities and payment of the
Transfer Price shall be subject to the full satisfaction of all of
the following conditions:

 

4.1.1 

this Agreement
shall have been signed by the parties hereto and become effective,
and it shall have been unanimously approved on a
shareholders’ meeting of the Target Company;

 

4.1.2 

Party A shall have
paid the RMB 1,000,000 deposit to Party B as agreed in Chapter 3 of
this Agreement;

 

4.1.3 

the relevant Equity
Pledge Contract shall have been duly executed and come into effect
as agreed in Chapter 3 of this Agreement, and registration shall
have been completed in respect of the equity pledge
thereunder;

 

4.1.4 

Mr. XING, Hanke and
the Target Company shall have issued a letter of commitment to
Party B as agreed in Chapter 3 hereof to undertake relevant joint
and several guarantee liability; and

 

 

3

 

 

4.1.5 

all necessary
approvals, consents and permits necessary to consummate the Equity
Transfer contemplated hereunder shall have been obtained, including
but not limited to the Receipt for Filing of Registration Change by
Foreign-Invested Enterprise, tax certificate and other documents
obtained by the Target Company in accordance with Chinese
laws.

 

Chapter
5

Formalities
for Governmental Approval and Registration

 

5.1 

Party A and Party B
agree that the parties hereto shall make their best efforts to
complete all formalities to obtain all approval and registration,
which may be necessary to effect the transaction contemplated
hereunder (the “Required
Formalities”), as soon as possible after this
Agreement has come into effect upon execution by the parties and
all security measures set forth in Chapter 3 have been duly
completed, including signing and delivering all necessary documents
required for completion of relevant formalities, and facilitating
the closing of the Equities and payment of the Transfer Price.
Neither party may prevent or obstruct the closing of the Equities
or payment of the Transfer Price by any act or
omission.

 

5.2 

Party A and Party B
undertake that, in order to complete the Required Formalities with
relevant governmental authorities in respect of the Equity
Transfer, the parties hereto may enter into further legal documents
as may be necessary for handling relevant formalities. Unless
otherwise specified in such further legal documents, rights and
obligations of Party A and Party B shall be subject to terms of
this Agreement.

 

5.3 

Party A shall,
pursuant to laws and regulations of the Mainland, China, submit an
application to and withhold all taxes to be levied by the relevant
tax authority of the Mainland, China in respect of the Equity
Transfer, and shall obtain corresponding tax payment certificate
from such tax authority. Also, Party A shall, in accordance with
laws and regulations of the Mainland, China, apply for handling the
procedures for “tax filing for outbound payment under service
trade and other items” and review of payment via foreign
exchange, and pay the Transfer Price agreed hereunder in accordance
with applicable laws and regulations.

 

5.4 

The Target Company
shall, as an applicant, complete certain Required Procedures in
respect of the Equity Transfer, including but not limited to
application for filing of registration change of foreign-invested
enterprise, application for registration of change in shareholders,
and change of foreign exchange registration. Party A undertakes to
cause the Target Company to complete all Required Procedures
necessary for the Equity Transfer as soon as possible, and to cause
the closing of the Equities and payment of the Transfer Price to be
completed as soon as possible. If the Target Company breaches this
Agreement and fails to complete relevant procedures in time,
resulting in any delay in the closing of the Equities or payment of
Transfer Price, it shall be deemed as a breach of agreement on the
part of Party A.

 

 

4

 

 

5.5 

A notice shall be
timely given to Party B as specified in this Agreement if Party B
is required to execute or deliver any document or material
necessary for the completion of any Required Procedure with
relevant governmental authority by Party A or the Target Company.
Upon receipt of such notice, Party B shall timely provide Party A
or the Target Company with the required document necessary for
completion of relevant Required Procedures. Where Party A obtains
tax payment certificate from competent tax authority, and/or the
Target Company receives its renewed business license, a notice
shall be sent to Party B in accordance with the terms of this
Agreement, and a photocopy of such tax certificate and/or new
business license shall also be delivered to Party B.

 

Chapter
6

Representations,
Warranties and Undertakings

 

6.1 

Party A hereby
unconditionally and irrevocably represents, warrants and undertakes
to Party B that:

 

6.1.1 

Party A is a
natural person with Chinese citizenship, and she has full civil
capacity and rights to execute this Agreement and to exercise her
rights and perform her obligations hereunder;

 

6.1.2 

her execution and
performance of this Agreement will not violate or breach any laws
or regulations which she must comply with;

 

6.1.3 

prior to the
execution of this Agreement, Party A has not, as a signing party,
entered into any document or agreement, which may restrict or
prohibit her from signing or performing this
Agreement;

 

6.1.4 

Party A has
obtained all due authorizations, permits and approvals to be
obtained in respect of the execution and performance of this
Agreement and consummation of the Equity Transfer
hereunder;

 

6.1.5 

this Agreement
constitutes valid and binding obligations of Party A, enforceable
against her in accordance with its terms, and that all
representations and warranties made by her in this Agreement are
true, accurate and complete; and

 

6.1.6 

the money which she
uses to pay the deposit and the Transfer Price hereunder comes from
lawful sources, and no claim will be made against Party B by any
third party or governmental authority due to Party B’s
receipt of such deposit and/or Transfer Price.

 

6.2 

Party B hereby
unconditionally and irrevocably represents, warrants and undertakes
to Party A that:

 

 

5

 

 

6.2.1 

Party B is an
independent legal person duly established and validly existing
under the laws of Hong Kong, and it has full civil capacity and
rights to execute this Agreement and to exercise its rights and
perform its obligations hereunder;

 

6.2.2 

the execution and
performance of this Agreement by Party B will not violate or breach
any laws or regulations which it must comply with, or be in
conflict with any document or constitutional provisions on which
Party B’s incorporation is based, and/or by which Party B is
validly bound;

 

6.2.3 

prior to execution
of this Agreement, Party B has not, as a signing party, entered
into any document or agreement, which may restrict or prohibit it
from signing or performing this Agreement;

 

6.2.4 

it has obtained all
due authorizations, permits and approvals to be obtained in respect
of the execution and performance of this Agreement and consummation
of the Equity Transfer hereunder;

 

6.2.5 

this Agreement
constitutes valid and binding obligations of Party B, enforceable
against Party B in accordance with its terms, and that all
representations and warranties made by Party B in this Agreement
are true, accurate and complete; and

 

6.2.6 

it has sufficient
and full rights in/to the Equities, free of any pledge, lien or
other third-party interests.

 

Chapter
7

Liability
for Breach of Agreement

 

7.1 

If Party A fails to
pay the RMB1,000,000 deposit set out in Chapter 3 hereof to Party B
within five (5) Business Days following the execution of this
Agreement, Party B shall be entitled to terminate this Agreement by
written notice to Party A.

 

7.2 

If the Equity
Pledge Contract to be executed under Chapter 3 of this Agreement
has been terminated or declared invalid pursuant to its terms or
applicable laws and regulations, or if Mr. XING, Hanke fails to
apply for registration of equity pledge with competent market
supervision and administration authority, or if such registration
is rejected by relevant market supervision and administration
authority, Party B shall have the right to terminate this Agreement
by written notice to Party A.

 

7.3 

If, after execution
of this Agreement, the Equities has been transferred to and
registered in the name of Party A, but Party A fails to pay all the
Transfer Price in full within fifteen (15) Business Days of the
Closing Date (the “Payment
Period”), Party B shall have the right to make either
of the following options in respect of this Agreement:

 

 

6

 

 

 

7.3.1 

Party B may request
to terminate this Agreement. After Party B sends a notice to Party
A for termination of this Agreement, this Agreement shall be
terminated upon Party A’s receipt of such termination notice.
Meanwhile, Party A shall, within fifteen (15) Business Days
following receipt of such termination notice, return the Equities
to Party B free of charge and bear all taxes arising therefrom, and
Party B shall have the right to keep the deposit paid by Party A.
Party A shall notify the Target Company immediately after receipt
of the termination notice from Party B and cause the Target Company
to complete registration change in respect of its equities as soon
as possible, and shall return the Equities. If Party A fails to
return the Equities on time, Party A shall pay liquidated damages
to Party B at 0.05% of the Transfer Price (amounting to RMB
31,312,500) for each day so delayed; or

 

7.3.2 

Party B may request
Party A to continue to perform this Agreement. From expiration of
the Payment Period, Party A shall pay liquidated damages to Party B
at 0.05%/day of the delayed sum for each day delayed until the day
when Party B actually receives the Transfer Price in
full.

 

7.4 

If either party
hereto fails to duly and fully perform any or all of its
obligations and/or responsibilities hereunder in accordance with
the terms hereof, it shall be deemed as a breach of Agreement by
such party. The breaching party shall be liable for indemnifying
the non-breaching party against all monetary losses suffered by the
non-breaching party as well as all expenses incurred by it for
claiming its rights, including but not limited to reasonable
attorney fee (determined by reference to the guide price of the
government), investigation fee and travel expense. The non-breach
party’s right to claim indemnification against the breaching
party shall not be affected by any termination of this
Agreement.

 

Chapter
8

Confidentiality

 

8.1 

Except for
disclosures permitted under Section 8.2 hereof, Party A and Party B
shall keep information in connection with the following which they
may receive or obtain for execution and performance of this
Agreement in strict secret:

 

8.1.1 

terms of this
Agreement;

 

8.1.2 

negotiations in
relation to this Agreement;

 

8.1.3 

the Transfer Price
agreed herein; and

 

8.1.4 

business
information of the other party.

 

 

7

 

 

8.2 

The parties hereto
may disclose the information referred in Section 8.1 hereof only
if:

 

8.2.1 

such disclosure is
required by laws;

 

8.2.2 

the disclosure is
required by any competent governmental authority, regulatory
authority or securities exchange;

 

8.2.3 

the disclosure (if
any) is made to such party’s professional advisor (including
but not limited to lawyer), provided that such party and its
professional advisor shall jointly and severally undertake the
obligation of confidentiality;

 

8.2.4 

the relevant
information enters into public domain without such party’s
fault; or

 

8.2.5 

prior written
consent of the parties hereto is obtained for such
disclosure.

 

8.3 

Even if the Equity
Transfer contemplated hereunder is not effected for any reason,
this Section shall be binding upon the parties hereto.

 

8.4 

This Section shall
survive after the termination or consummation of this Agreement
without time limit.

 

Chapter
9

Dispute
Resolution

 

9.1 

The execution,
validity, interpretation, performance, implementation and dispute
resolution of this Agreement shall be governed by and construed in
accordance with the laws of China.

 

9.2 

Any dispute arising
out of or in connection with this Agreement shall be settled by the
parties hereto through friendly negotiation. If no agreement can be
reached through such negotiation, either party may submit the
dispute to Shanghai International Economic and Trade Arbitration
Commission (Shanghai International Arbitration Center) for
arbitration in Shanghai in accordance with its arbitration rules
then in effect. The arbitration award shall be final and binding
upon the parties. If either party does not fulfill such final
award, the other party may submit an application to competent
people’s court for enforcement of such arbitration
award.

 

Chapter
10

Miscellaneous

 

10.1 

This Agreement
shall be established and become effective on the day it is signed
by Party A and the legal/authorized representative of Party B and
sealed with Party B’s common seal.

 

10.2 

All notices in connection with this Agreement
shall be in writing and delivered or sent by personal delivery or
courier service, registered mail or email (electronic message) to
the address set out below (or such other address as a party
may specify by written notice to the other party), provided that a
notice sent by letter shall be deemed to have been duly served only
when it is received by the relevant addressee:

 

 

8

 

 

If to Party A:

 

Attn:
JIN, Lijuan

Address: 333 North
Xianhua Road, Development Zone, Jinhua, Zhejiang
Province

Tel:
139 5799 3434

Email:
pencail@163.com

 

If
to Party B:

 

Attn:
Jerry Wong

Address: Room D,
18/F, Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong
Kong

Tel:
(852) 2814 0311

Email:
jerrywong.hk@euro-tech.com

 

10.3 

This Agreement
shall be executed in eight (8) counterparts. Party A and Party B
shall respectively hold two (2) counterparts of this Agreement,
while the remaining four (4) counterparts shall be submitted to the
Target Company and relevant governmental authorities.

 

10.4 

Unless otherwise
specified, no failure or delay by either party in exercising any
right under this Agreement or any other contracts or agreement in
connection with this Agreement shall be treated as a waiver
thereof, nor shall any single or partial exercise thereof preclude
the exercise of any other right.

 

10.5 

Without the consent
of both parties hereto, neither this Agreement nor any rights,
obligations or responsibilities hereunder shall be
transferred.

 

10.6 

The invalidity of
any term of this Agreement shall not affect the validity of the
remaining terms of this Agreement.

 

10.7 

No oral amendment
or supplement may be made to this Agreement, and this Agreement may
only be amended or supplemented by written instrument duly signed
by the parties hereto. Any supplement to this Agreement shall be
deemed as an integral part hereof and shall have the same legal
effect as that of this Agreement.

 

10.8 

The following
documents are exhibits to this Agreement:

 

(1) 

the Equity Pledge
Contract executed between Mr. XING, Hanke and Party B;

 

(2) 

the Letter of
Commitment issued by Mr. XING, Hanke and the Target Company to
Party B; and

 

(3) 

a resolution of
shareholders’ meeting approving the Equity Transfer and
signed by Mr. XING, Hanke and Party B.

 

 

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK)

 

 

9

 

(Signature Page to the Equity Transfer Agreement)

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

 

 

PARTY A:

 

	
SIGNED
by

	
 )

	
 

	
 )

	
JIN, Lijuan

	
 )

	
 

	
 

	
PARTY
B:

	
 

	
SEALED with the
COMMON SEAL of

	
 )

	
Euro Tech (Far East)
Limited

	
 )

	
and SIGNED
by

	
 )

	
  

	
 )

	
in the capacity
of

	
 )

	
legal/authorized
representative of Party B

	
 )

	
  

	
 

	
  

	
 

 

 

 

 

 

10

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