Document:

Exclusive Purchase Option Agreement

by and among

Jiangshan Greenworld Photoelectricity Consulting Co., Ltd.

Zhejiang Joinan Lighting Co., Ltd.

 and

The Shareholders of Zhejiang Joinan Lighting Co., Ltd.

May 6, 2011

  

  

  

 

	
Exclusive Purchase Option Agreement

Exclusive Purchase Option Agreement

This Exclusive Purchase Option Agreement (the “Agreement”) is entered into on May 6, 2011 by and among the following parties.

	
(1)

	
Jiangshan Greenworld Photoelectricity Consulting Co., Ltd. (hereinafter called “Party A”), a wholly foreign owned enterprise registered in China with its registered address at 18-3, Xing Gong Seventh Road, Shangyu, Jiangshan and its legal representative named Liu Chuanling ;

	
(2)

	
Zhejiang Joinan Lighting Co., Ltd. (hereinafter called “Party B”), an enterprise duly registered in China with its registered address at 18, Xing Gong Seventh Road, Shangyu, Jiangshan and its legal representative named Zhu Jiangtu; and

	
(3)

	
All Shareholders of Zhejiang Joinan Lighting Co., Ltd. (hereinafter collectively called “Shareholders”), as follows:

	
Name of the

Shareholders

	 	
Shareholding

Ratio %

	 	 	
Contribution

	 	 	
ID Card No.

	 	
Contact

Address

	
Lixia Wang

	 	 	45	%	 	 	1,350,000	 	 	360424197404070010	 	  
	
Jiangtu Zhu

	 	 	27	%	 	 	810,000	 	 	320311196611111277	 	  
	
Huanyong Wang

	 	 	20	%	 	 	600,000	 	 	332624196308020032	 	  
	
Tianhui Liu

	 	 	8	%	 	 	240,000	 	 	362133197612023333	 	  

Party A, Party B, and Shareholders are hereinafter from time to time, collectively, referred to as the “Parties”, and each of them is hereinafter from time to time referred to as a “Party”; the individual Shareholders are hereinafter from time to time referred to as a “Shareholder”.  The equity interests in Party B held by each Shareholder or any shareholder now existing or hereafter acquired is hereinafter from time to time referred to as the “Equity Interests” or “Equity”.

WHEREAS:

	
1.

	
Party A, a wholly foreign-owned enterprise incorporated under the laws of the People’s Republic of China (the “PRC”), which engages in photoelectricity technical and enterprise management consulting;

	
2.

	
Party B, a domestic limited liability company incorporated under PRC laws and licensed by Jiangshan Administration for Industry and Commerce, engages in the business of manufacture and sales of lighting facilities and variable voltage variable frequency inverter, as well as their components, import and export goods;

 

  

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Exclusive Purchase Option Agreement

	
3.

	
As of the date of this Agreement, Party B’s registered capital is RMB 3,000,000 and the structure of the shareholdings owned by Shareholders in Party B are set forth above;

	
4.

	
To secure the performance of the obligations assumed by Party B and the Shareholders under this Agreement, the Shareholders agree to pledge all their equity in Party B to Party A, and have executed an Equity Pledge Agreement on the date of the execution date of this Agreement with respect thereto (collectively called as the “Equity Pledge Agreements” or respectively as “Individual Equity Pledge Agreement”).

NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this Agreement with respect of the exclusive purchase option right:

	
1.

	
The Grant and Exercise of Purchase Option

	
1.1

	
Each Shareholder hereby irrevocably grants to Party A an exclusive purchase right, exercisable at any time by Party A or any third party designated by Party A, to purchase all or part of such Shareholder's Equity Interests in Party B, subject to the PRC laws and regulations. In the case that Shareholders increase or reduce their Equity Interests in Party B within the term of this Agreement, the exclusive purchase option as provided above shall be automatically expanded (in the case of an increase) or reduced (in the case of a reduction) to cover all or part of the Equity Interests owned by Shareholders in Party B after such increase or reduction is completed. The Shareholders hereby agree that, without Party A's prior written consent, apart from Party A or any third party designated by Party A, no other person or entity shall have the right to purchase such Equity Interests. Each of the Shareholders shall transfer his Equity Interests in Party B to Party A or Party A's designee in accordance with his shareholding proportion of such Equity Interests at any time when Party A selects to purchase all or a portion of the Equity Interests. Party B hereby irrevocably consents to such grant by such Shareholders to Party A.

	
1.2

	
Party B hereby irrevocably grants to Party A an exclusive purchase option, exercisable at any time by Party A or any third party designated by Party A, to acquire or all or substantially all of Party B’s assets, subject to the PRC laws and regulations. Party B hereby agrees that, without Party A’s prior written consent, apart from Party A or any third party designated by Party A, no other person or entity shall have the right to purchase such assets. The Shareholders hereby irrevocably consent to such grant by Party B to Party A.

	
1.3

	
For the purpose of this Agreement, a “third party” or a “person” may be a natural person, company, partnership, enterprise, trust agency or other non-corporate entity.

	
1.4

	
To the extent permitted under the PRC laws and regulations, Party A shall determine at any time and at its own discretion to exercise such exclusive right to (i) purchase the Equity Interests as provided in Section 1.1 by a written notice to the applicable Shareholder(s) specifying the amount of equity to be purchased (hereinafter referred to as “Equity Transfer”) or (ii) purchase all or substantially all of Party B’s assets as provided in Section 1.2 (hereinafter referred to as “Assets Transfer”) by a written notice to Party B (each referred to as "Exercise Notice").

 

  

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Exclusive Purchase Option Agreement

	
1.5

	
Within thirty (30) days of the receipt of the Exercise Notice, the applicable Shareholder(s) and Party B shall execute a share/asset transfer agreement and other documents with Party A pursuant to the principles set forth in this Agreement, in such form as Party A may reasonably request (collectively, the "Transfer Documents"), necessary to effect the respective transfer of equity or assets to Party A (or any eligible party designated by Party A), and shall unconditionally assist Party A to obtain all approvals, permits, registrations, filings and other procedures necessary to effect the Equity Transfer or Assets Transfer.

	
1.6

	
The Parties agree that, unless otherwise required under the PRC laws and regulations, the transaction price for the Equity Transfer or the Assets Transfer hereunder, as applicable, shall be one dollar.

	
1.7

	
The consideration paid by Party A to the Shareholders, net of any tax paid by the Shareholders on such consideration, for the Equity Transfer (the “Consideration of Equity Transfer”) shall be the cancellation of all or a part of the Shareholders debt owing under the Loan Agreement, and such cancellation shall, in proportion to the proportion of the Shareholders’ Equity Interests purchased,  satisfy their repayment obligations under the Loan Agreement signed by and between Party A and the Shareholders on the date of the execution date of this Agreement (the “Loan Agreement”);

The consideration paid by Party A to Party B, net of any tax paid by Party B on such consideration, for the Asset Transfer (the “Consideration of Assets Transfer”) hereunder shall be allocated to the Shareholders to the largest extent as permitted by PRC laws and regulations, through an allocation proposal by which the Consideration of Assets Transfer is transferred to the Shareholders. The Shareholders shall then immediately fulfill their payment obligations under the Loan Agreement by using the allocated Consideration of Assets Transfer. Party B shall give full cooperation to such allocation;

 

And if the Consideration of Equity Transfer or Assets Transfer is more than the total principal under the Loan Agreement due to the requirement by the then applicable law or any other reasons, the excess shall be deemed as loan interest of the loan to the largest extent being permitted by PRC Laws, and be paid to Party A by the Shareholders together with loan principal. In the event there is a premium in excess of the permitted Interest as provided in the Loan Agreement between the Shareholders and Party A, the Shareholders shall unconditionally return such premium to Party A within three (3) days the Shareholders receive such payment.

 

  

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Exclusive Purchase Option Agreement

	
2.

	
Representations and Warranties

	
2.1

	
Each Party hereto represents and warrants to the other Parties that: (1) it has all the necessary rights, powers and authorizations to enter into this Agreement and perform its duties and obligations hereunder; (2) it has obtained the written consents with respect to the execution and implementation of this Agreement from each of the relevant third parties, if any; and (3) the execution or performance of this Agreement shall not violate or conflict with the terms of any other contracts or agreements to which it is a party.

	
2.2

	
Each Shareholder hereby represents and warrants to Party A that: (1) each Shareholder is the legally registered shareholder of Party B and has paid full amount of registered capital in Party B as required to be contributed by such Shareholder under the PRC laws and regulations; (2) Except for the Equity Pledge Agreement executed among the Parties, neither Shareholder has created any other mortgage, pledge, secured interests or other form of debt liabilities over the Equity Interests held by such Shareholder; and (3) neither Shareholder has transferred to any third party (and entered into any agreement in respect of)  such Equity Interests.

	
2.3

	
Party B hereto represents and warrants to Party A that: (1) it is a limited liability company duly registered and validly existing under the PRC laws and regulations; and (2) its business operations are in compliance with applicable laws and regulations of the PRC in all material respects and it has received all of the required permits and approvals which are necessary for maintaining its ordinary operations.

	
3.

	
Obligations of Party B and all Shareholders

The Parties further agree as follows:

	
3.1

	
Before Party A has acquired all the equity/assets of Party B by exercising the exclusive purchase option provided hereunder, Party B represents and warrants to Party A:

	
  

	
(a)

	
without Party A’s prior written consent, Party B shall not supplement or amend the Articles of Association or rules of Party B or its subsidiaries which are owned or controlled by Party B (the “Subsidiaries”) in any manner, nor shall it increase or decrease the registered capital or change the shareholding structure of aforesaid entities in any manner;

	
  

	
(b)

	
Party B shall prudently and effectively maintain its business operations according to good financial and business standards so as to maintain or increase the value of its assets;

	
  

	
(c)

	
Party B shall not transfer, mortgage or otherwise dispose of the lawful rights and interests to and in its and any Subsidiary’s assets or incomes, nor shall it encumber its own and any Subsidiary’s assets and income in any way that would affect Party A’s security interests unless as required for the business operation of Party B or upon prior written consent by Party A;

 

  

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Exclusive Purchase Option Agreement

	
  

	
(d)

	
Party B and any Subsidiary shall not incur or succeed to any debts or liabilities without Party A’s prior written consent;

	
  

	
(e)

	
without Party A’s prior written consent, Party B and any Subsidiary shall not enter into any material contract (exceeding RMB 1,000,000 in value);

	
  

	
(f)

	
without Party A’s prior written consent, Party B and any Subsidiary shall not provide any loans or guaranty (exceeding RMB 1,000,000 in value) to or receive borrowings (exceeding RMB 1,000,000 in value) from, any third party;

	
  

	
(g)

	
upon Party A’s request, Party B shall provide Party A with all information regarding Party B and any Subsidiary’s business operation and financial condition;

	
  

	
(h)

	
Party B shall purchase insurance from insurance companies in such amounts and categories as customary in the region among companies doing similar business and having similar assets;

	
  

	
(i)

	
without Party A’s prior written consent,  Party B and any Subsidiary shall not establish any new subsidiary, acquire or consolidate with any third party, or invest in any third party;

	
  

	
(j)

	
Party B shall promptly notify Party A of any pending or threatened lawsuit, arbitration or administrative dispute which involves Party B’s and any Subsidiary’s assets, business or incomes, and take positive measures against aforesaid lawsuits, arbitrations or administrative dispute;

	
  

	
(k)

	
without Party A’s prior written consent, Party B and any Subsidiary shall not distribute any dividends to the shareholders in any manner, and, upon Party A’s request, shall promptly distribute all distributable dividends to the shareholders of Party B;

	
  

	
(l)

	
without Party A’s prior written consent, Party B shall not commit any act or omission that would materially affect Party B’s assets, business or liabilities;

	
  

	
(m)

	
upon Party A’s request, Party B shall promptly and unconditionally transfer its assets to Party A or its designated third party as permitted by PRC laws and regulations; and

	
  

	
(n)

	
Party B shall strictly comply with the provisions of this Agreement, and efficiently perform its obligations hereunder, and shall be prohibited from committing any act or omission which may affect the validity or enforceability of this Agreement.

	
3.2

	
Before Party A has acquired all the equity/assets of Party B by exercising the exclusive purchase option provided hereunder, each Shareholder represents and warrants to Party A:

	
  

	
(a)

	
apart from relevant provisions in each of the Equity Pledge Agreements, without Party A’s prior written consent, each Shareholder shall not individually or collectively transfer, sell, pledge, mortgage or otherwise dispose of such Shareholder’s Equity Interests in Party B; nor shall any Shareholder place or allow encumbrances on such Shareholder’s Equity Interests that would affect Party A’s interest hereunder and thereunder;

 

  

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Exclusive Purchase Option Agreement

	
  

	
(b)

	
without Party A’s prior written consent, each Shareholder shall not engage in any business or operation which is in competition with Party B, any Subsidiaries and Party A, nor shall any Shareholder invest in or work for any company or entity which is in competition with Party B, any Subsidiaries and Party A;

	
  

	
(c)

	
without Party A’s prior written consent, each Shareholder shall not supplement or amend the Articles of Association or Rules of Party B in any manner, nor to increase or decrease its registered capital or change the shareholding structure in any manner;

	
  

	
(d)

	
without Party A’s prior written consent, each Shareholder shall not take action to cause a Shareholders’ meeting for the purpose of or to approve resolutions for the dissolution, liquidation and change of legal form of Party B, and any Subsidiaries;

	
  

	
(e)

	
each Shareholder shall not take action to cause a Shareholders’ meeting for the purpose of or to approve resolutions for any profit distribution proposal, or accept such distributed dividend without Party A’s written consent; upon Party A’s request, the Shareholders shall promptly approve for the profit distribution proposal, and accept such distributed dividend;

	
  

	
(f)

	
upon Party A’s request, each Shareholder shall provide Party A with all information regarding Party B’s business operation and financial condition;

	
  

	
(g)

	
each Shareholder shall not incur or succeed to any debts or liabilities which may adversely affect its Equity Interests in Party B without Party A’s prior written consent, nor shall it enter into any Equity transfer agreement or intention letter with any third party;

	
  

	
(h)

	
each Shareholder shall appoint, and appoint only, the candidates nominated by Party A to the board of directors and supervisor office of Party B, and shall not replace such candidates without Party A’s prior written consent;

	
  

	
(i)

	
each Shareholder shall guarantee that the shareholder’s meeting and directors in Party B’s board appointed by itself will not approve any establishment of new subsidiary, any acquisition of, any consolidation with, or any investment in any third party without Party A’s prior written consent;

	
  

	
(j)

	
each Shareholder shall promptly notify Party A of any pending or threatened lawsuit, arbitration or administrative dispute which involve Party B’s assets, business or incomes, and take all positive measures against aforesaid lawsuits, arbitrations or administrative dispute;

	
  

	
(k)

	
without Party A’s prior written consent, each Shareholder shall not commit any conduct that would adversely affect Party B’s assets, business or liabilities;

	
  

	
(l)

	
to the extent permitted by the PRC laws and regulations, and at any time upon Party A’s request, each Shareholder shall promptly and unconditionally transfer their Equity Interests in Party B to Party A or a third party designated by Party A, and waive their preemptive rights with respect to such transfer;

	
  

	
(m)

	
each Shareholder shall guarantee that the shareholder’s meeting and directors of Party B appointed by itself approve the necessary resolutions in respect of the Equity Transfer or Assets Transfer in this Agreement;

	
  

	
(n)

	
each Shareholder shall make every effort to cause Party B to perform the obligations of Section  3.1 of this Agreement; and

 

  

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Exclusive Purchase Option Agreement

	
  

	
(o)

	
each Shareholder shall strictly comply with the provisions of this Agreement, and efficiently perform its obligations hereunder, and shall be prohibited from committing any conduct which may affect the validity or enforceability of this Agreement.

	
3.3

	
The Shareholders shall, to the extent permitted by applicable laws, guarantee Party B's operational term (including the circumstance of change of business terms) to be extended to equal to the operational term of Party A approved by the relevant authorities (including the circumstance of change of business terms).

	
4.

	
Guaranty of this Agreement

To secure the performance of the obligations assumed by the Shareholders and Party B hereunder, the Shareholders agree to pledge all their Equity (including any increased Equity owned by the Shareholders within the term of this Agreement) in  Party B to Party A, and the Parties agree to execute Equity Pledge Agreement with respect thereto.

	
5.

	
Taxes and Fees

The Parties shall pay, in accordance with relevant PRC laws and regulations, their respective taxes arising from Equity or Assets Transfer and related registration formalities and other charges during the transactions contemplated herein. Party A shall pay the taxes and charges which shall be payable by Party B arising from Equity Transfer and related registration formalities, if the consideration of Equity Transfer is lower than, or equal to the total principal under the Loan Agreement.

	
6.

	
Assignment of Agreement

	
6.1

	
Party B and the Shareholders shall not transfer their rights and obligations under this Agreement to any third party without the prior written consent of Party A.

	
6.2

	
Each Shareholder and Party B agree that Party A shall have the right to transfer any or all of its rights and obligations under this Agreement to any third party upon five (5)–days written notice to such Shareholder(s) and Party B, without approval by such Shareholder or Party B.

	
7.

	
Events of Default

	
7.1

	
Any violation of any provision hereof, incomplete performance of any obligation provided hereunder, any misrepresentation made hereunder, material concealment or omission of any material fact or failure to perform any covenants provided hereunder by any Party shall constitute an event of default. The defaulting Party shall assume all the legal liabilities pursuant to the applicable PRC laws and regulations.

 

  

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Exclusive Purchase Option Agreement

	
7.2

	
In the event of default by Party B or Shareholders, Party A shall be entitled to exercise the pledgee’s right under the Equity Pledge Agreement in the event that  Party B and Shareholders commit an event of default and fail to redress such default within ten (10) days upon receipt of written notification from Party A.

	
8.

	
Effectiveness, Modification and Cancellation

	
8.1

	
This Agreement shall be effective upon the execution hereof by all Parties hereto and shall be terminated after the completion of Party A’s acquisition of the Shareholders’ Equity or all of the assets of Party B by exercising its exclusive purchase option provided herein.

	
8.2

	
The modification of or amendment to this Agreement shall not be effective unless a written agreement is signed by the Parties.

	
8.3

	
This Agreement shall not be terminated or canceled unless a written agreement is signed by the Parties, provided Party A may, by giving a thirty (30) days prior notice to the other Parties hereto, terminate this Agreement.

	
9.

	
Confidentiality

	
9.1

	
The negotiation, execution and articles of this Agreement and any information, documents, data and all other materials (herein “Confidential Information”) arising out of the implementation of this Agreement shall be kept in strict confidence by the Parties. Without the written approval by the other Parties, none of the Parties shall disclose any Confidential Information to any third party, but the following shall not be considered to be “Confidential Information”:

	
  

	
(a)

	
The materials that are known by the general public (but not including the materials disclosed by each party receiving the materials in breach of this Agreement); or

	
  

	
(b)

	
The materials required to be disclosed subject to the applicable laws or the rules or provisions of any stock exchange.

The materials may be disclosed by each Party to its legal or financial consultant relating to the transaction of this Agreement, provided that this legal or financial consultant shall comply with the confidentiality provisions set forth in this Section. The disclosure of the Confidential Information by staff or employed institution of any Party shall be deemed as the disclosure of such Confidential Information by such Party, and such Party shall bear the liabilities for breaching the Agreement.

	
9.2

	
If this Agreement is terminated or becomes invalid or unenforceable, the validity and enforceability of Article 9 shall not be affected or impaired.

 

  

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Exclusive Purchase Option Agreement

	
10.

	
Force Majeure

	
10.1

	
An event of Force Majeure means an event that could not be foreseen, and could not be avoided and overcome, which includes among other things, but without limitation, acts of nature (such as earthquake, flood or fire), government acts, strikes or riots;

	
10.2

	
If an event of Force Majeure occurs, any of the Parties who is prevented from performing its obligations under this Agreement by an event of Force Majeure shall notify the other Parties without delay and within fifteen (15) days of the event provide detailed information about and notarized documents evidencing the event and take all reasonable means to minimize or remove the negative effects of Force Majeure on the other Parties, and shall not assume the liabilities for breaching this Agreement.  While the Force Majeure is continuing, the Party alleging breach may suspect its performance.  The Parties shall keep on performing this Agreement after the event of Force Majeure disappears.

	
11.

	
Applicable Law and Disputes Resolution

	
11.1

	
The execution, validity, construing and performance of this Agreement and the disputes resolution under this Agreement shall be governed by the laws and regulations of the PRC.

	
11.2

	
The Parties shall strive to settle any dispute arising from or in connection with this Agreement through friendly consultation. In case no settlement can be reached through consultation within thirty (30) days after such dispute is raised, each party can submit such matter to China International Economic and Trade Arbitration Commission for arbitration in accordance with its rules. The arbitration shall take place in Beijing and the proceedings shall be conducted in English. The arbitration award shall be final, conclusive and binding upon the Parties.

	
12.

	
Miscellaneous

	
12.1

	
Entire Agreement.   The Parties acknowledge that this Agreement constitutes the entire agreement of the Parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous oral or written agreements and understandings.

	
12.2

	
Successors.  This Agreement shall bind and benefit any successors of each Party and the transferees permitted hereunder with the same rights and obligations as if such successors or transferees were the original parties hereof.

	
12.3

	
Notice.  Any notice required to be given or delivered to the Parties hereunder shall be in writing and delivered to the address as indicated below or such other address or as such party may designate, in writing, from time to time. All notices shall be deemed to have been given or delivered upon by personal delivery, fax and registered mail. It shall be deemed to be delivered upon: (1) registered air mail: five (5) business days after deposit in the mail; (2) personal delivery or delivery by fax: two (2) business days after transmission. If the notice is delivered by fax, it should be confirmed by original through registered air mail or personal delivery.

 

  

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Exclusive Purchase Option Agreement

Party A

Contact person: Liu Chuanling

Address: 18-3, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel:

Fax:

Party B

Contact person: Yang Xiaowen

Address: 18, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel: 0570-4352001

Fax:0570-4352000

The Representative designated by the Shareholders

Contact person: Liu Tianhui

Address:  18, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel:

Fax:

	
12.4

	
Severability.  If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired thereby. In such event, the Parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which effects the parties original intention to the largest extent.

 

	
12.5

	
Copies.  This Agreement is executed in six (6) copies with each of the person for signing this Agreement holding one copy, and each of the copy shall be equally valid and authentic.

 

[Signature page follows]

 

  

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Exclusive Purchase Option Agreement

IN WITNESS THEREFORE, the parties hereof have caused this Agreement to be executed and delivered as of the date first written above.

Party A 

Jiangshan Greenworld Photoelectricity Consulting Co., Ltd.

Legal Representative: Liu Chuanling

Signature & Seal: ____________________

Party B

Zhejiang Joinan Lighting Co., Ltd.

Legal Representative: Zhu Jiangtu

Signature & Seal: ______________________

Shareholders of Zhejiang Joinan Lighting Co., Ltd.

Wang Lixia: ______________________

Zhu Jiangtu: ______________________

Wang Huanyong: ______________________

Liu Tianhui: ______________________

  

11Entrusted Management Service Agreement

by and among

Zhejiang Joinan Lighting Co., Ltd.

Jiangshan Greenworld Photoelectricity Consulting Co., Ltd.

And

Shareholders of Zhejiang Joinan Lighting Co., Ltd.

May 6, 2011

 

  

  

  

 

	
Entrusted Management Service Agreement

Entrusted Management Service Agreement

This Entrusted Management Service Agreement (“this Agreement”) is entered into on May 6, 2011 among the following Parties:

	
(1)

	
Zhejiang Joinan Lighting Co., Ltd. (hereinafter called “Party A”), a limited liability company, duly incorporated in the People’s Republic of China (“PRC”) whose legal address is: 18, Xing Gong Seventh Road, Shangyu, Jiangshan;

	
(2)

	
Jiangshan Greenworld Photoelectricity Consulting Co., Ltd. (hereinafter referred to as “Party B”), a wholly foreign owned enterprise incorporated under PRC Laws, whose registered address is 18-3, Xing Gong Seventh Road, Shangyu, Jiangshan; and

	
(3)

	
The shareholders of Zhejiang Joinan Lighting Co., Ltd. (hereinafter collectively called “Shareholders”), as follows:

	
Name of the

Shareholders

	 	
Shareholding

Ratio %

	 	 	
ID Card No.

	 	
Contact

Address

	
Wang Lixia

	 	 	45	%	 	360424197404070010	 	  
	
Zhu Jiangtu

	 	 	27	%	 	320311196611111277	 	  
	
Wang Huanyong

	 	 	20	%	 	332624196308020032	 	  
	
Liu Tianhui

	 	 	8	%	 	362133197612023333	 	  

(Party A, Party B and the Shareholders are referred to collectively in this Agreement as the “Parties” or “the Parties”, and individually as “a Party” or “each Party”.)

WHEREAS:

	
(1)

	
Shareholders collectively hold 100% of equity interests of Party A;

	
(2)

	
Party A’s business is as follows: manufacture and sales of lighting facilities and variable voltage variable frequency inverter, as well as their components, import and export goods;

	
(3)

	
Party B’s business is photoelectricity technical and enterprise management consulting;

 

  

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Entrusted Management Service Agreement

	
(4)

	
Party A and Party B are both willing to enter into a long-term business cooperation relationship on an exclusive basis, whereby Party B is willing to provide Party A with exclusive technical, consulting, and other services in a comprehensive way all in relation to Party A’s manufacture and sales of lighting facilities and variable voltage variable frequency inverter, as well as their components business during the term of this Agreement by utilizing Party B’s own advantages in human resources, technology and information, and Party A is willing to accept such consulting and services provided by Party B and or Party B's designee(s), on the terms set forth herein.

NOW THEREFORE, the Parties hereby agree through friendly negotiation as follows:

 

Article 1 Definition

	
1.1  

	
“Entrusted Management Service Fee” or “Consideration” refers to the consideration as defined in Article 3.1 and paid to Party B by Party A.

	
1.2

	
“Party A’s Staff” refers to the senior management staff of Party A and Party A’s management and technical staff;

	
1.3

	
“PRC” refers to the People’s Republic of China, for the purpose of this Agreement, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Province;

	
1.4

	
“PRC Laws” refers to all PRC laws, administrative regulations and government rules in effect;

	
1.5

	
“RMB” refers to the legal currency within the PRC.

Article 2 Contents of Entrusted Management Services

	
2.1

	
Finance Management Service

	
  

	
2.1.1

	
Target:

	
achieve the scientific management of Party A’s finance system.

	
  

	
2.1.2

	
Contents of the Services

	
  

	
(a)

	
Provide the consulting services on financial analysis and economic profit analysis;

	
  

	
(b)

	
Improve the budget management and provide business guidance;

	
  

	
(c)

	
Facilitate the finance operation, coordinate the structure of credit and loans, accelerate revenue growth, and effectively control the finance risks;

	
  

	
(d)

	
Arrange the internal and outside audit services;

	
  

	
(e)

	
Pursuant to the requirement of the relevant class-evaluation system, provide an efficient management plan and consultancy services on finance management; and

	
  

	
(f)

	
Provide cost management consultancy services.

 

  

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Entrusted Management Service Agreement

	
2.2

	
Business Management Services

	 	
2.2.1  

	
Target: provide management and staff training services to Party A so as to enhance the professional management and eventually promote the achievement of Party A’s research, operations and sales.

	 	
2.2.2

	
Contents of Services: training of Party A’s staff

	
  

	
(1)

	
The training shall be conducted once every quarter within the entrusted term, and Party B shall notify Party A of the timetable, contents of training sessions and lectures on of training fifteen (15) days prior to the training. In the event that Party A’s staff can not take part in the training and Party A can not designate another employee to attend the training, Party A shall deliver a written notice five (5) days prior to such training to Party B for such absence, otherwise it shall be treated as Party A’s staff having attended training class and Party A shall pay the relevant training fees. Both Party A and Party B shall be entitled to adjust the frequency of the training according to the business operation of Party A.

	
  

	
(b)

	
Contents of Training:

	
  

	
-

	
management skills training;

	
  

	
-

	
technology training;

	
  

	
-

	
sales strategies training; and

	
  

	
-

	
promotion training.

	
2.3

	
Advertising and Promotion Services

	 	
2.3.1  

	
Target: to improve the economic benefits of Party A, ensure the healthy development of Party A, improve and promote the reputation and popularity of Party A, establish the enterprise image of Party A, and contribute to the public welfare for and on behalf of Party A.

	
  

	
2.3.2

	
Contents of Service:

	
  

	
(a)

	
Products planning

	
  

	
(b)

	
Price planning

	
  

	
(c)

	
Sales planning

	
  

	
(d)

	
Advertising planning

	
  

	
(e)

	
Marketing planning

	
  

	
(f)

	
Promotion planning

	
  

	
(g)

	
Public relation planning

	
  

	
(h)

	
Brand planning

	 	
(i)

	
Corporate image planning

 

  

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Entrusted Management Service Agreement

	
2.4

	
Human Resources Management Services

	
  

	
2.4.1

	
Target: to achieve the proper allocation of Party A’s human resources, maintain the stability of Party A’s management team, and stimulate the employees to work to increase Party A’s economic achievement.

	
  

	
2.4.2

	
Contents of Service

	
  

	
(a)

	
Recommend and nominate the candidates of senior management staff of Party A, and Party A shall only appoint such candidates nominated by Party B to the relevant positions in accordance with the requirements of such position;

	
  

	
(b)

	
Perfect the organizational structure to improve the efficiency of the management;

	
  

	
(c)

	
Establish an appropriate labor management system for Party A, including, but without limitation, employment policies, training, policies of leaves and vacations, overtime, resignation, demotion, etc.;

	
  

	
(d)

	
Improve the employees’ salary system including that for its senior management staff;

	
  

	
(e)

	
Improve and perfect the working effectiveness assessment system of the employees and the salary incentive system;

	
  

	
(f)

	
Provide training on labor management to the human resources department of Party A;

	
  

	
(g)

	
Provide consultancy services to Party A in relation to the labor and employment policies and social insurance policies; and

	
  

	
(h)

	
Assist Party A in standardizing the management of human resources and establishment of related systems.

	
2.5

	
Internal Control Services

Party B shall assist Party A to establish an internal control system and provide the proper suggestions on the following systems:

	
  

	
(1)

	
Rules for stamp usage

	
  

	
(2)

	
Rules for receipts and checks

	
  

	
(3)

	
Rules for budget management

	
  

	
(4)

	
Rules of confidentiality

	
  

	
(5)

	
Quality management system

	
  

	
(6)

	
Authorization and agency system

	
  

	
(7)

	
Management system of the subsidiaries of Party A

  

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Entrusted Management Service Agreement

Article 3 Entrusted Management Service Fee

	
3.1

	
Both Parties agree that, with respect to the services provided by Party B to Party A under this Agreement, Party A shall pay a service fee on a quarterly basis to Party B in the equivalent amount of a certain percentage (the "Entrusted Management Service Fee") of Party A’s total amount of operational income of such quarter.  Both Parties will confirm in writing the specific consideration in a separate written instrument based on further consultations following the execution of this Agreement.

	
3.2

	
Party A shall pay such service fee to Party B within fifteen (15) days upon completion of each quarter.

	
3.3

	
Party B shall be entitled to request Party A in writing to adjust the consideration in accordance with the quantity and quality of the entrusted services. The Parties shall positively negotiate with each other in respect of the Entrusted Management Service Fee, and Party A shall agree with such adjustment.

Article 4       Warranties and Undertakings by Party A

	
4.1

	
Within the term of this Agreement, Party B shall be an exclusive service provider entrusted by Party A to provide the services as set forth in Article 2 hereunder, and Party A shall not consign any other entities to provide Party A (including its branches and subsidiaries) with any services identical to or similar with those services provided in Article 2 hereunder.

	
4.2

	
Without the prior written consent from Party B, Party A shall not change its (including its branches and subsidiaries) business policies.

	
4.3

	
Without the prior written consent from Party B, Party A shall not change its (including its branches and subsidiaries) rules and policies regarding the business operation, human resource management and finance.

	
4.4

	
Without the prior written consent by Party B, Party A shall not change its internal control system.

	
4.5

	
Without the prior written consent by Party B, Party A shall not change its internal organizations.

	
4.6

	
Without the prior written consent by Party B, Party A (including its branches and subsidiaries) shall not replace any senior management staff by itself.

	
4.7

	
Party A shall promptly (no later than three (3) days after receiving Party’s written notice) provide Party B with its information regarding the business operations, management and finance (including its branches and subsidiaries), upon written notice issued by Party B.

 

  

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Entrusted Management Service Agreement

	
4.8

	
Party A shall promptly and proactively notify Party B of any matters that adversely affect Party A’s operation.

	
4.9

	
Party A shall give full cooperation to Party B, and provide assistance and convenience to Party B for its on-site services, and shall not hinder Party B in providing services as set forth in Article 2 herein.

	
4.10  

	
Party A shall promptly make full payment of the Entrusted Management Services Fee, if any, to Party B in accordance with the provisions hereunder.

	
4.11  

	
Without the prior written consent from Party B, Party A shall not take any action that would materially affect Party B’s rights and interests hereunder.

Article 5 Warrants and Undertakings by Party B

	
5.1

	
Party B shall take advantage of its capacity and resources to provide the services as stipulated in Article 2 hereunder.

	
5.2

	
Party B shall timely adjust and update the services in accordance with the actual conditions and operations of Party A.

	
5.3

	
In the event that Party B intends to provide services to any other entities engaged in similar business as Party A, it shall give prior notice to Party A and keep confidential the confidential information obtained during the course of providing services to Party A .

	
5.4

	
Party B shall consider any reasonable suggestions from Party A during the course of providing services to Party A.

Article 6 Guaranty for this Agreement

To secure the performance of the obligations assumed by Party A hereunder, Shareholders agree to pledge all their equity interests in Party A to Party B, and the Parties agree to execute the Equity Pledge Agreement with respect thereto.

Article 7 Taxes and Expenses

The Parties shall pay, in accordance with relevant PRC laws and regulations, their respective taxes and fees arising from the execution and performance of this Agreement.

 

  

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Entrusted Management Service Agreement

Article 8 Assignment of the Agreement

	
8.1

	
Party A shall not transfer part or all its rights and obligations under this Agreement to any third party without the prior written consent of Party B.

	
8.2

	
The Parties agree that Party B shall be entitled to transfer, in its sole discretion, any or all of its rights and obligations under this Agreement to any third party upon a five (5) day written notice to Party A.

Article 9 Liability of Breach

	
9.1

	
If Party A fails to duly pay the Entrusted Management Services Fee in accordance with the provisions of Article 3 hereunder, then Party A shall pay the liquidated damage per day equal to 0.03% of the unpaid Consideration which falls due; if any delay of payment amounts to ten (10) days, then Party B shall be entitled to exercise the right of pledge under the Equity Pledge Agreement.

	
9.2

	
If Party A violates its representations and warranties hereunder and fails to redress such violation within ten (10) days upon receipt of written notice from Party B, Party B shall be entitled to exercise the right of pledge under the Equity Pledge Agreement.

	
9.3

	
If Party B does not fully perform its obligations under this Agreement, or is otherwise in default of any of its representations and warranties hereunder, Party A shall be entitled to request Party B to redress its default.

Article 10 Effectiveness, Modification and Cancellation

	
10.1

	
This Agreement shall take effect on the day of execution hereof, and the valid term hereof shall expire upon the day of completion of the acquisition of the assets or the equity of Party A by Party B or its designated third party.

	
10.2

	
The modification of this Agreement shall not be effective unless a written agreement is signed by the Parties.

	
10.3

	
This Agreement shall not be terminated or canceled without written agreement of the Parties through the negotiation, provided that Party B may, by giving a ten (10)-day prior notice to the other Parties hereto, terminate this Agreement.

Article 11 Confidentiality and Intellectual Property Rights

	
11.1

	
The negotiation, execution and articles of this Agreement and any information, documents, data and all other materials (herein “Confidential Information”) arising out of the implementation of this Agreement, shall be kept in strict confidential by the Parties. Without the written approval by the other Parties, none of the Parties shall disclose any Confidential Information to any third party, but the following shall not be considered to be “Confidential Information”:

 

  

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Entrusted Management Service Agreement

	
  

	
(1)

	
The materials that are known by the general public (but not including the materials disclosed by a Party receiving the materials in breach of this Agreement);

	
  

	
(2)

	
The materials required to be disclosed subject to the applicable laws or the rules or provisions of any stock exchange.

The materials disclosed by each Party to its legal or financial consultants relating to the transactions under this Agreement, provided the legal or financial consultants shall comply with the confidentiality provisions set forth in this Section. The disclosure of the Confidential Information by staff or employed institution of any Party shall be deemed as the disclosure of Confidential Information by such Party, and such Party shall bear the liabilities for breaching the contract.

	
11.2

	
If this Agreement is terminated or becomes invalid or unenforceable, the validity and enforceability of Article 11 shall not be affected or impaired.

	
11.3

	
Party B shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of this Agreement, whether developed solely by Party B or jointly by Party A and Party B, or developed by Party B based on any intellectual property owned by Party A, or developed by Party A based on any intellectual property owned by Party B, including but not limited to copyrights, patents, patent applications, software, technical secrets, trade secrets and others (“Intellectual Property”). To the maximum extent permitted by law, in the event of any such Intellectual Property cannot be fully vested in Party B, Party A agrees upon request to transfer the same to Party B for free, or if this is not possible, hereby grants a sole and exclusive (i.e., Party A and any other third parties are all excluded for use), worldwide, royalty free license to Party B to the subject Intellectual Property.  Party A shall not, except with the written authorization of Party B, use, or permit any third party to use, any Intellectual Property of Party B.

	
11.4

	
The Parties agree that this Article 11 shall survive changes to, and rescission or termination of, this Agreement.

Article 12 Force Majeure

	
12.1

	
“Force Majeure” refers that any event that could not be foreseen, and could not be avoided and overcome, which includes among other things, but without limitation, acts of nature (such as earthquake, flood or fire), government acts, strikes or riots.

 

  

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Entrusted Management Service Agreement

	
12.2

	
If an event of Force Majeure occurs, any Party who is prevented from performing its obligations under this Agreement by an event of Force Majeure shall notify the other Party without delay and within fifteen (15) days of the event provide detailed information about and documents evidencing the event and take appropriate means to minimize or remove the negative effects of Force Majeure on the other Parties, and shall not assume the liabilities for breaching this Agreement. The other Parties may suspend their performance during the period of the event of Force Majeure. The Parties shall perform this Agreement after the event of Force Majeure disappears.

Article 13 Governing Law and Dispute Resolution

	
13.1

	
The effectiveness, interpretation, implementation and dispute-resolution related to this Agreement shall be governed under PRC Laws.

	
13.2

	
Any dispute arising out of this Agreement shall be resolved by the Parties through friendly negotiation. If the Parties could not reach an agreement within thirty (30) days since the dispute is brought forward, each Party may submit the dispute to China International Economic and Trade Arbitration Commission in Beijing for arbitration under its applicable rules. The language of arbitration proceedings shall be English. The arbitration award should be final and binding upon the Parties.

	
13.3

	
During the process of dispute-resolution, the Parties shall continue to perform other terms under this Agreement, except for provision in dispute.

Article 14 Miscellaneous

	
14.1

	
The Parties acknowledge that this Agreement constitutes the entire agreement of the Parties with respect to the subject matters therein and supersedes and replaces all prior or contemporaneous oral or written agreements and understandings.

	
14.2

	
This Agreement shall bind and benefit the successor of each Party and the transferee permitted hereunder with the same rights and obligations as if the original parties hereof.

	
14.3

	
Any notice required to be given or delivered to the Parties hereunder shall be in writing and delivered to the address as indicated below or such other address or as such party may designate, in writing, from time to time. All notices shall be deemed to have been given or delivered upon by personal delivery, fax and registered mail. It shall be deemed to be delivered upon: (1) registered air mail: five (5) business days after deposit in the mail; (2) personal delivery and fax: two (2) business days after transmission. If the notice is delivered by fax, it should be confirmed by original through registered air mail or personal delivery:

 

  

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Entrusted Management Service Agreement

Party A:

Contact person: Yang Xiaowen

Address: 18, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel: 0570-4352001

Fax: 0570-4352000

Party B:

Contact person: Liu Chuanling

Address: 18-3, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel:

Fax:

The Representative designated by the Shareholders

Contact person: Liu Chuanling

Address:  18-3, Xing Gong Seventh Road, Shangyu, Jiangshan

Tel:

Fax:

	
14.4

	
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired thereby. In such event, the Parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which effects the parties original intention to the largest extent.

	
14.5

	
This Agreement is executed in six (6) copies with each party holding one copy, and each of the copy shall be equally valid and authentic.

[Signature Page Follows]

 

  

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Entrusted Management Service Agreement

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered as of the date first written above.

Party A

Zhejiang Joinan Lighting Co., Ltd.

Legal Representative: Zhu Jiangtu

Signature & Seal: _______________________

Party B

Jiangshan Greenworld Photoelectricity Consulting Co., Ltd.

Legal Representative: Liu Chuanling

Signature & Seal: ________________________

Shareholders of Zhejiang Joinan Lighting Co., Ltd.

Wang Lixia: ______________________

Zhu Jiangtu: ______________________

Wang Huanyong: ______________________

Liu Tianhui: ______________________

 

  

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