Document:

EX-10.4 Purchase Agreement

 

Exhibit 10.4

Purchase agreement with Win Horse Investments Limited in relation to the disposal of China Natures

Technology Inc dated April 27, 2007

(Translated version)

DATED THE 27TH DAY OF APRIL 2007

CHINA TECHNOLOGY DEVELOPMENT GROUP CORPORATION

(FORMERLY KNOWN AS TRAMFORD INTERNATIONAL LIMITED)

and

WIN HORSE INVESTMENTS LIMITED

 

SALE
AND PURCHASE AGREEMENT

relating
to shares in

CHINA
NATURES TECHNOLOGY INC.

(FORMERLY KNOWN AS FUTURE SOLUTIONS DEVELOPMENT INC.)

 

 

 

THIS AGREEMENT is executed on the 27th day of April, 2007.

BETWEEN:-

(1) CHINA TECHNOLOGY DEVELOPMENT GROUP CORPORATION (formerly known as TRAMFORD INTERNATIONAL
LIMITED), a company incorporated under the laws of British Virgin Islands with limited liability
(No. 161076) and whose registered office is situated at P.O. Box 71, Craigmuir Chambers, Road Town,
Tortola, British Virgin Islands (the “Vendor”); and

(2) WIN HORSE INVESTMENTS LIMITED, a company incorporated under the laws of British Virgin Islands
with limited liability (No. 1393429) and whose registered office is situated at AMS Trustees
Limited, Sea Meadow House, Blackburne Highway, (P.O. Box 116), Road Town, Tortola, British Virgin
Islands (the “Purchaser”).

WHEREAS:-

	(A)	 	CHINA NATURES TECHNOLOGY INC.(formerly known as FUTURE SOLUTIONS DEVELOPMENT INC.) (the
“Company”) is a company incorporated in the British Virgin Islands with limited liability
since 28 January, 2003.The particulars of the Company are set out in Schedule 1.
	 
	(B)	 	The Vendor is the registered and beneficial owner of the 161,604 shares, at par value US$0.01
per share, of the Company (100% owned equity).

	(C)	 	On 24 April 2007, the Company entered into a sale and purchase agreement with SOUTHWICK
INTERNATIONAL LIMITED (“SOUTHWICK”) (a company incorporated under the laws of British Virgin
Islands with limited liability (No. 1381230)) to sell its 100% equity interest owned in
Shenzhen Innoessen Biotech Ltd. (“Shenzhen Innoessen”) to SOUTHWICK (“SPA of Shenzhen
Innoessen”) . The particulars of Shenzhen Innoessen are set out in Schedule 3A.
	 
	(D)	 	On 24 April 2007, the Company entered into a sale and purchase agreement with SINOFIELD GROUP
LIMITED (“SINOFIELD”) (a company incorporated under the laws of British Virgin Islands with
limited liability (No. 1385327)) to sell its 100% equity interest owned in Zhangzhou Innoessen
Biotech Ltd. (“Zhangzhou Innoessen”) to SINOFIELD(“SPA of Zhangzhou Innoessen”). The
particulars of Zhangzhou Innoessen are set out in Schedule 3B.
	 
	(E)	 	The Vendor has agreed to sell to the Purchaser and the Purchaser has agreed to purchase the
SPA Sale Shares (as defined below) upon the terms and conditions contained in this Agreement.
The Vendor and the

 

 

	      	 	Purchaser understood, confirmed and agreed that the share transfer of Shenzhen Innoessen and
Zhangzhou Innoessen will be completed prior to the Completion Date (as defined below) and the
equity of Shenzhen Innoessen and Zhangzhou Innoessen will be not included in the SPA Sale
Shares.

	(F)	 	The Vendor and the Purchaser understood, confirmed and agreed that the share transfer of
Shenzhen Innoessen and Zhangzhou Innoessen will be deemed as internal restructuring of the
Vendor. The Purchaser further understood, confirmed and agreed that the consideration
regarding Shenzhen Innoessen share transfer, in amount of HK$1,900,000, and the consideration
regarding Zhangzhou Innoessen share transfer, in amount of HK$7,000,000, will be paid to the
Vendor.

AND NOW IT IS HEREBY AGREED as follows:

1.
DEFINITIONS AND INTERPRETATION

	1.1	 	In this Agreement, including recitals and schedules, unless otherwise expressed or required
by context, the following expressions shall have the respective meanings set opposite thereto
as follows:-

	 	 	 
	“SPA Sale Shares”

	 	for purpose of this Agreement, “SPA Sale Shares” means the 161,604
ordinary shares of US$0.01 each in the capital of the Company which are
beneficially owned by the Vendor.
	 
	 	 
	“Conditions precedent”

	 	Conditions precedent set out in Clause 4.
	 
	 	 
	“Vendor’s Warranties”

	 	the representations, warranties and undertakings set out in Clause 6 and
Schedule 4 made or given by the Vendor
	 
	 	 
	“PRC”

	 	the People’s Republic of China
	 
	 	 
	“Hong Kong”

	 	Hong Kong Special Administrative Region of the PRC
	 
	 	 
	“Taxation”

	 	means all forms of tax, duty, rate, levy or other imposition whenever (if
any) and by whatever authority imposed and whether in PRC, Hong Kong or
elsewhere, including (without limitation) profits tax, provisional
profits tax, interest tax, property tax, real estate tax, land use fees,
land appreciation tax, taxes on income, value added tax, withholding tax,
salaries tax, payroll tax, customs duties, excise duties, rates, stamp
duty, capital duty, estate duty and any interest, penalty or fine in
connection with any such taxation as applicable.
	 
	 	 
	“Completion”

	 	the completion of the sale and purchase of the SPA Sale Shares in
accordance with Clause 5.
	 
	 	 
	“Completion Date”

	 	date of Completion in accordance with Clause 5.1.

 

 

	 	 	 
	“Business Day”

	 	means any day, including Saturdays, on which banks in Hong Kong are
generally open for business.
	 
	 	 
	“Share(s)”

	 	share(s) of US$0.01 each in the capital of the Issuer
	 
	 	 
	“Force Majeure”

	 	means all unpredictable, uncontrollable and inevitable events occurring
subsequent to the date thereof which result in the failure of parties to
perform their obligations thereunder, including earthquake, hurricane,
flood, war illness or other cause beyond such party’s reasonable control.
	 
	 	 
	“Person(s)”

	 	includes any natural person, public body and any body of persons,
corporate or unincorporate.
	 
	 	 
	“HK$”

	 	Hong Kong Dollars, the lawful currency of Hong Kong Special
Administrative Region of the PRC
	 
	 	 
	“US$”

	 	United States Dollars, the lawful currency of the United States of America
	 
	 	 
	“Shenzhen Innoessen”

	 	Shenzhen Innoessen Biotech Ltd., a company incorporated in PRC with
limited liability on 11 November 2004, whose particulars are set out in
Schedule 3A.
	 
	 	 
	“Zhangzhou Innoessen”

	 	China Merchants Zhangzhou Development Zone Innoessen Biotech Ltd., a
company incorporated in PRC with limited liability on 22 December 2006,
whose particulars are set out in Schedule 3B.

	1.2	 	References to Clauses, Schedules and Exhibits are references to Clauses, Schedules and
Exhibits of or to this Agreement and the Schedules and Exhibits shall be deemed to form part
of this Agreement.

	1.3	 	References to the Vendor and the Purchaser shall be deemed to include its successors and
assigned beneficiaries.

	1.4	 	The headings to the Clauses of this Agreement are for ease of reference only and shall be
ignored in interpreting this Agreement.

	1.5	 	Reference to Ordinances, statutes, legislation or enactments shall be construed as a
reference to such Ordinances, statutes, legislation or enactments as may be amended or
re-enacted from time to time and for the time being in force.

2.
SALE AND PURCHASE OF THE SPA SALE SHARES

	2.1	 	Subject to the terms and conditions contained in this Agreement, the Vendor agrees to sell
and the Purchaser, in reliance on the Vendor’s Warranties and the indemnities hereunder made
or given by the Vendor, agrees to purchase the SPA Sale Shares free from all liens, charges,
encumbrances, pre-emption rights, equities and

 

 

other third party rights whatsoever and together all rights attached to the SPA Sale Shares at
the Completion Date or subsequently becoming attached to the SPA Sale Shares.

	2.2	 	Upon Completion the Purchaser shall bear, and the Vendor shall cease to bear all the rights
and obligations attached to the SPA Sale Shares.
	 
	2.3	 	In order to avoid any confusion, the Vendor and the Purchaser confirmed and agreed that the
share transfer of Shenzhen Innoessen and Zhangzhou Innoessen will be completed prior to the
Completion Date (as defined below) and the equity of Shenzhen Innoessen and Zhangzhou
Innoessen will be not included in the SPA Sale Shares. The Vendor and the Purchaser
understood, confirmed and agreed that the share transfer of Shenzhen Innoessen and Zhangzhou
Innoessen will be deemed as internal restructuring of the Vendor. The Purchaser further
understood, confirmed and agreed that the consideration regarding Shenzhen Innoessen share
transfer and the consideration regarding Zhangzhou Innoessen share transfer shall be paid to
the Vendor.

3.
CONSIDERATION

The consideration for the SPA Sale Shares shall be HK$10,000,000. The first payment in amount
of HK$1,000,000 (“the First Payment”) shall be transferred to an account assigned by the
Vendor, or settled in a manner as agreed by the Vendor and the Purchaser, within two (2)
months following the date thereof. The rest of consideration in amount of HK$9,000,000 (“the
Residual Payment”) shall be transferred to an account assigned by the Vendor, or settled in a
manner as agreed by the Vendor and the Purchaser, on the Completion Date.

4.
CONDITIONS PRECEDENT

	4.1	 	Completion of this Agreement shall be conditional upon the following conditions being
fulfilled:-
	 
	(a)	 	board resolutions of the Company, approving the share transfer contemplated in this
Agreement, the canceling of the share certificate representing the beneficial ownership of the
Vendor, and the issuance of new share certificate for the Purchaser;
	 
	(b)	 	board resolutions of the Vendor, approving the entering into and performance of this
Agreement, sale of the SPA Sale Shares and the execution of all other documents contemplated
hereunder;
	 
	(c)	 	board resolutions of the Purchaser approving the entering into and performance of this
Agreement and the execution of all other documents contemplated hereunder;
	 
	(d)	 	completion of the share transfer of Shenzhen Innoessen contemplated in the SPA of Shenzhen
Innoessen, approval of the share transfer of Shenzhen Innoessen from PRC government, and
change of records with Bureau of Administration for Industry & Commerce in PRC; and
	 
	(e)	 	completion of the share transfer of Zhangzhou Innoessen contemplated in the SPA of Zhangzhou
Innoessen,

 

 

approval of the share transfer of Zhangzhou Innoessen from PRC government, and change of
records with Bureau of Administration for Industry & Commerce in PRC.

	4.2	 	If any of the above conditions has not been fulfilled or waived within twelve (12) months (or
such later date as may be agreed between the parties) following the execution of the
Agreement, this Agreement shall terminate and the non-defaulting party shall reserve rights to
receive the First Payment.

5.
COMPLETION

	5.1	 	Subject to Clause 4.1 and the fulfillment (or waiver, as the case may be) of all conditions
precedent, the Completion of the sale and purchase of the SPA Sale Shares contemplated in the
Agreement shall take place on the fifteenth (15th) Business Day (or such other date
agreed by the parties) upon the fulfillment of all condition precedent.
	 
	5.2	 	On the Completion Date, the Vendor shall deliver the signed Instrument of Transfer of the SPA
Sale Shares and the share certificate representing beneficial ownership of the Purchaser to
the Purchaser, and the Purchaser shall transfer the Residual Payment to the Vendor (or such
other date agreed by the parties in writing).

6.
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE VENDOR

	6.1	 	The Vendor hereby unconditionally and irrevocably represents and warrants to and undertakes
with the Purchaser that the statements under Clause 6.1 and in Schedule 4 are as at the date
hereof and will be for all times up to and including the Completion Date, true and correct in
all respects and not misleading in any respect. The Vendor shall be discharged from its
respective further obligations except for its obligations set out in the Agreement.

	6.2	 	The Vendor hereby agrees to indemnify the Purchaser in respect of all their costs or
expenses which the Purchaser may incur either before or after the commencement of any action
in connection with: (a) the settlement of any claim that any of the Vendor’s Warranties are
untrue or misleading or have been breached; (b) any legal proceedings in which the Purchaser
claims that any of the Vendor’s Warranties are untrue or misleading or have been breached and
in which judgment is given for the Purchaser; or (c) the enforcement of any such settlement or
judgment. This rights of the Purchaser under Clause 6.2 shall be in addition and without
prejudice to any other rights and remedies available to it under this Agreement or otherwise,
which rights and remedies are hereby specifically reserved.

7.
WARRANTIES BY THE PURCHASER

 

 

	7.1	 	The Purchaser hereby unconditionally and irrevocably represents and warrants to and
undertakes with the Purchaser that the statements under Clause 7 are as at the date hereof and
will be for all times up to and including the Completion Date, true and correct in all
respects and not misleading in any respect. The Purchaser shall be discharged from its
respective further obligations except for its obligations set out in the Agreement.

	7.2	 	The Purchaser hereby agrees to indemnify the Vendor with one thousandth (0.1%) of the due
payment each day, in case the Purchaser fails to pay the consideration to the Vendor in a
timely manner.

	7.3	 	The Purchaser hereby agrees to return to the Vendor all the materials and information in
connection with the Agreement obtained from the Vendor upon the termination of this Agreement,
unless the materials and information have been disclosed and are deemed to be public
information.

	7.4	 	The Purchaser hereby unconditionally and irrevocably agrees to waive the rights and remedies
of the Purchaser under Clause 6.2(a) and 6.2(b), provided that the warranties under Clause 6.1
and in Schedule 4 are true and correct in all respects and not misleading in any respect
according to the Purchaser’s due diligence and best knowledge.

8.
ANNOUNCEMENTS AND CONFIDENTIALITY

	8.1	 	Neither of the parties hereto shall make any announcement or release or disclose any
information concerning this Agreement or the transaction herein referred to or disclose the
identity of the other parties hereto (save disclosure to their respective professional
advisers under a duty of confidentiality) without the prior written consent of the other Party
hereto.

	8.2	 	Save as required by any applicable law or Court order, or any governmental or regulatory
authorities (in which case such disclosure shall not be released unless the contents of which
have been approved by the other Parties), no press or other announcement shall be made in
connection with the subject matter of this Agreement by any Party without the prior written
approval of the other Party.

9.
FORCE MAJEURE

	9.1	 	Neither of parties shall be liable for any failure to perform its obligation in connection
with any force majeure and the period to perform such obligations may be extended.

	9.2	 	The party exposed to force majeure shall provide a written notice immediately and sufficient
evidence within fifteen (15) days following the occurrence of the force majeure to the
counterparty.

 

 

	9.3	 	The parties shall agree to use their respective best endeavors to mitigate the consequences
of the force majeure.

10.
GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and
the parties hereto agree to submit to the non-exclusive jurisdiction of the courts of Hong Kong

11.
MISCELLANEOUS PROVISIONS

11.1 COSTS AND EXPENSES

Each of the Parties shall bear their own legal and professional fees, costs and expenses incurred
by the Parties in the negotiation, preparation, execution and completion of this Agreement.

11.2 TAXATION

The stamp duty and all forms of tax incurred in connection with this Agreement (if any) shall be
borne by the Vendor and the Purchaser in equal shares.

11.3 NOTICE

Any notice or other communication to be given under this Agreement shall be in writing. Any
notice or other communication given or made under this Agreement shall be delivered personally or
sent by pre-paid post, facsimile or telex at the address or telex number or fax number of the
relevant party set out below (or such other address or telex number or fax number as the
addressee has by five (5) Business Days prior written notice specified to the other parties):-

To the Vendor

	 	 	 	 	 
	Name

	 	:
	 	China Technology Development Group Corporation
	 
	 	 	 	 
	Address

	 	:
	 	Room 2413-18, Shui On Centre, 8 Harbour Road, Wan
Chai, Hong Kong
	 
	 	 	 	 
	Fax Number

	 	:
	 	+852 3112 8410
	 
	 	 	 	 
	Attention

	 	:
	 	Mr. Li Alan

To the Purchaser

	 	 	 	 	 
	Name

	 	:
	 	Win Horse Investments Limited
	 
	 	 	 	 
	Address

	 	:
	 	Room A-B, 15/F, Ritz Plaza, 122 Austin Road,
Tsimshatsui, Kowloon, Hong Kong
	 
	 	 	 	 
	Fax Number

	 	:
	 	2468 2659 / 3475 4042
	 
	 	 	 	 
	Attention

	 	:
	 	Mr. Chan Wai Kong

Any such notice, demand or communication shall be deemed to have been duly served:-

 

 

(a) if given or made by hand, when delivered;

(b) if given or made by letter, two (2) Business Days after posting;

(c) if given or made by facsimile or telex, when despatched with confirmed answerback.

11.4 WAIVER

Non-performance of the rights and remedies by any Party shall not be deemed or in any way not be
construed as a waiver of any of its rights and remedies hereunder. The performance of rights and
remedies shall not be affected by the partial performance of such rights and remedies by any
Party.

11.5 INDULGENCE

The rights and remedies provided in the Agreement are cumulative and not exclusive of any rights
or remedies provided by law and shall be supplemented by the current or future rights and
remedies provided by law.

11.6 SEVERABILITY

If at any time any one or more provisions hereof is or becomes invalid, illegal, unenforceable or
incapable of performance in any respect, the validity, legality, enforceability or performance of
the remaining provisions hereof shall not thereby in any way be affected or impaired.

11.7 ASSIGNMENT

The rights and obligations under the Agreement may not be assigned or transferred by any party
without the prior written consent of the other parties.

11.8 AMENDMENT

This Agreement shall not be amended, excluding provisions under Clause 11.6, except by an
instrument in writing signed by each of the parties.

11.9 CONSEQUENCE OF THE COMPLETION

The unexecuted provision (including representations, warranties and undertakings) upon the
Completion shall remain effective subsequently.

11.10 TIME

Time shall be of the essence of this Agreement. Any time, date or period (if any) mentioned in
the Agreement may be amended by mutual written consent between the parties.

11.11 FURTHER ASSURANCE

At all times after the date hereof, the parties shall at their own expense execute all such
documents and do such acts and things as may reasonably be required for the purpose of giving
full force and effect to this Agreement.

 

 

11.12 ENTIRE AGREEMENT

This Agreement together with its Schedules constitutes the entire agreement and understanding
between the parties in connection with the subject matter of this Agreement and supersedes all
previous proposals, representations, warranties, agreements or undertakings relating thereto
whether oral, written or otherwise and (save as expressly provided or reserved herein) neither
party has relied on any such proposals, representations, warranties, agreements or undertakings.

11.13 EXEMPTION

The parties hereby confirm respectively that the share sale and purchase contemplated in the
Agreement belongs to business activities. The parties hereby irrevocably agree that neither of
the parties shall declare or defend to be exempted from the governing law.

11.14 INDEPENDENT LEGAL OPINION

All the parties herby confirm that they have obtained independent legal opinion concerning the
terms and conditions of the Agreement and that they hereby execute the Agreement to their best
knowledge of the objective, nature and consequence of the Agreement.

11.15 LANGUAGE AND COUNTERPART

This Agreement is written in English and executed in two counterparts, all of which will be
considered one and the same agreement and will become effective when two counterparts have been
signed by each of the parties and delivered to the other parties.

 

 

SCHEDULE 1

PARTICULARS OF THE COMPANY

	 	 	 	 	 	 	 
	1.

	 	Name
	 	:
	 	CHINA NATURES TECHNOLOGY INC.
	 
	 	 	 	 	 	 
	2.

	 	Company number
	 	 	 	531367
	 
	 	 	 	 	 	 
	3.

	 	Place of incorporation
	 	:
	 	British Virgin Islands
	 
	 	 	 	 	 	 
	4.

	 	Date of incorporation
	 	:
	 	28 January 2003
	 
	 	 	 	 	 	 
	5.

	 	Authorised share capital
	 	:
	 	US$50,000.00 divided into 50,000,000 shares of US$0.01 each
	 
	 	 	 	 	 	 
	6.

	 	Issued share capital
	 	:
	 	US$1,616.04 divided into 161,604 shares of US$0.01 each
	 
	 	 	 	 	 	 
	7.

	 	Shareholders
	 	 	 	China Technology Development Group Corporation: 161,604
Shares (100%)
	 
	 	 	 	 	 	 
	8.

	 	Directors
	 	:
	 	Li Alan

Lu Zhenwei

Zhang Yibing
	 
	 	 	 	 	 	 
	9.

	 	Registered Office
	 	:
	 	Trident Chambers, P.O.Box 146, Road Town, Tortola, British
Virgin Islands
	 
	 	 	 	 	 	 
	10.

	 	Subsidiaries
	 	:
	 	Zhejiang University (HangZhou) Leaf Bio-technology Co.,
Ltd. (particulars set out in Schedule 2) (71.43%)

Shenzhen Innoessen Biotech Ltd. (particulars set out in
Schedule 3A) (100%)

Zhangzhou Innoessen Biotech Ltd. (particulars set out in
Schedule 3B) (100%)

 

 

SCHEDULE 2

PARTICULARS OF THE SUBSIDIARY

	 	 	 	 	 	 	 
	1.

	 	Name
	 	:
	 	Zhejiang University (HangZhou) Leaf Bio-technology Co., Ltd.
	 
	 	 	 	 	 	 
	2.

	 	Business license number
	 	 	 	Qi He Zhe Hang Zong Zi 200102
	 
	 	 	 	 	 	 
	3.

	 	Place of incorporation
	 	:
	 	PRC
	 
	 	 	 	 	 	 
	4.

	 	Date of incorporation
	 	:
	 	14 June 2002
	 
	 	 	 	 	 	 
	5.

	 	Type of enterprise
	 	 	 	Joint Venture
	 
	 	 	 	 	 	 
	6.

	 	Registered capital
	 	:
	 	RMB 21,000,000.00
	 
	 	 	 	 	 	 
	7.

	 	Shareholders
	 	 	 	China Natures Technology Inc. (71.43%)
	 
	 	 	 	 	 	 
	8.

	 	Legal representative
	 	:
	 	Zhang Ying
	 
	 	 	 	 	 	 
	9.

	 	Registered address
	 	:
	 	Room 1309, Qianjiang Technology Mansion, 388 Wen San Road,
Gao Xin District, Hangzhou, Zhejiang Province, PRC

 

 

SCHEDULE 3A

PARTICULARS OF SHENZHEN INNOESSEN

	 	 	 	 	 	 	 
	1.

	 	Name
	 	:
	 	Shenzhen Innoessen Biotech Ltd.
	 
	 	 	 	 	 	 
	2.

	 	Business license number
	 	 	 	Qi Du Yue Shen Zong Zi 314178
	 
	 	 	 	 	 	 
	3.

	 	Place of incorporation
	 	:
	 	PRC
	 
	 	 	 	 	 	 
	4.

	 	Date of incorporation
	 	:
	 	11 November 2004
	 
	 	 	 	 	 	 
	5.

	 	Type of enterprise
	 	 	 	Wholly foreign-owned enterprise
	 
	 	 	 	 	 	 
	6.

	 	Registered capital
	 	:
	 	HK$ 1,900,000.00
	 
	 	 	 	 	 	 
	7.

	 	Shareholders on the date hereof
	 	 	 	China Natures Technology Inc. (100%)
(According to the agreement which
was entered into between the
Company and SOUTHWICK on 24 April
2007, Shenzhen Innoessen will be
sold to SOUTHWICK prior to the
Completion Date hereof.)
	 
	 	 	 	 	 	 
	8.

	 	Legal representative
	 	:
	 	Li Alan
	 
	 	 	 	 	 	 
	9.

	 	Registered address
	 	:
	 	16/F, China Merchants Development
Centre, Nan Hai Avenue, Nan Shan
District, Shenzhen, Guangdong
Province, PRC

 

 

SCHEDULE 3B

PARTICULARS OF ZHANGZHOU INNOESSEN

	 	 	 	 	 	 	 
	1.

	 	Name
	 	:
	 	China Merchants Zhangzhou Development Zone Innoessen Biotech
Ltd.
	 
	 	 	 	 	 	 
	2.

	 	Business license number
	 	 	 	Qi Du Min Zhang Fu Zi 003597
	 
	 	 	 	 	 	 
	3.

	 	Place of incorporation
	 	:
	 	PRC
	 
	 	 	 	 	 	 
	4.

	 	Date of incorporation
	 	:
	 	22 December 2006
	 
	 	 	 	 	 	 
	5.

	 	Type of enterprise
	 	 	 	Wholly foreign-owned enterprise
	 
	 	 	 	 	 	 
	6.

	 	Registered capital
	 	:
	 	HK$ 7,000,000.00
	 
	 	 	 	 	 	 
	7.

	 	Shareholders on the date hereof
	 	 	 	China Natures Technology Inc. (100%)

(According to the agreement which
was entered into between the
Company and SINOFIELD on 24 April
2007, Zhangzhou Innoessen will be
sold to SINOFIELD prior to the
Completion Date hereof.)
	 
	 	 	 	 	 	 
	8.

	 	Legal representative
	 	:
	 	Li Alan
	 
	 	 	 	 	 	 
	9.

	 	Registered address
	 	:
	 	1/F, General Plant, No.3 Tang Yang
Industry District, Zhangzhou
Development Zone, Fujian Province,
PRC

 

 

SCHEDULE 4

WARRANTIES

1. The Vendor is the sole registered and beneficial owner of the Sale Shares. The Sale Shares are
free from any liens, charges, encumbrances, claims, equities or pre-emptive or third party rights
of whatsoever nature and together with all rights and entitlements attaching thereto.

2. As at the date of this Agreement and immediately prior to Completion, the information set out in
the Recitals and Schedules to this Agreement is true, accurate and complete.

3. The Vendor has full power to enter into this Agreement and to exercise its rights and perform
its obligations hereunder and its performance of its obligations hereunder have been duly taken and
this Agreement will, when executed by each of them, be a legal, valid and binding agreement on it
and enforceable in accordance with the terms thereof.

 

 

IN WITNESS whereof this Agreement has been executed on the day and year first above written.

	 	 	 	 	 	 	 
	/s/ Alan Li	 	 
	 	 	 
	SIGNED by Li Alan

	 	 	)	 	 	 
	For and on behalf of

	 	 	)	 	 	 
	CHINA TECHNOLOGY DEVELOPMENT GROUP CORPORATION )	 	 
	in the presence of:

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Chan Wai Kong	 	 
	 	 	 
	SIGNED by Chan Wai Kong

	 	 	)	 	 	 
	For and on behalf of

	 	 	)	 	 	 
	WIN HORSE INVESTMENTS LIMITED

	 	 	)	 	 	 
	in the presence of:

	 	 	)EX-10.5 Framework Agreement

 

Exhibit 10.5

Framework Agreement with Legendsec (Beijing) Limited dated February 10, 2006

(Translated version)

PURCHASE CONTRACT

(Framework Agreement)

	 	 	 
	Purchaser:

	 	Legendsec (Beijing) Limited
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Ltd.
	 
	 	 
	Contract No.:

	 	 20030325001
	 
	 	 
	Tenure of Contract:

	 	February 10, 2006 to February 10, 2008
	 
	 	 
	Place of signing Contract:

	 	Beijing
	 
	 	 
	Date of contract:

	 	February 10, 2006

 

 

INDEX

	 	 	 
	1.

	 	Definition
	2.

	 	Preliminary
	3.

	 	Consideration
	4.

	 	Terms on Price
	5.

	 	Orders
	6.

	 	Delivery
	7.

	 	Receipt and Inspection
	8.

	 	Payment
	9.

	 	Training and Services
	10.

	 	Packing
	11.

	 	Terms on Quality
	12.

	 	Terms of Guarantee
	13.

	 	Use of Trademarks
	14.

	 	Intellectual Property
	15.

	 	Confidentiality
	16.

	 	Rescission of Agreement
	17.

	 	Defense
	18.

	 	Force Majeure
	19.

	 	Breach
	20.

	 	General
	21.

	 	Jurisdiction
	22.

	 	Disputes
	23.

	 	Tenure of Agreement

 

 

Purchase Contract Framework Agreement

This Purchase Contract Framework Agreement (the “Agreement”) is entered into between Legendsec
(Beijing) Limited (the “Purchaser”) and Beijing BHL Networks Technology Co. Ltd. (the “Supplier”)
in Beijing whereas the Purchaser will purchase the Products and Services from the Supplier in
accordance with the terms and conditions of the Agreement and the Supplier will in accordance with
the terms and conditions of the Agreement sell the Products and Services to the Purchaser.

This Agreement is entered into in Beijing and became effective.

1. Definition

	1.1	 	“The Sale and Purchase Agreement” means all the documents in writing as
defined in Clause 2 of the Definition of the Agreement
	 
	1.2	 	“Price” means the price as agreed between both parties
	 
	1.3	 	“Products” means the Products specified in the Business Contract of the
Sales and Purchase Agreement and Purchase Orders, etc.
	 
	1.4	 	“Services” means the services specified in the Business Contract of the
Sales and Purchase Agreement and Purchase Orders, etc.
	 
	1.5	 	“Business Contract” means the specifications of the Products and Services
including quality, price, overall obligation of maintenance, technical
criteria and various prescribed forms, etc., for the Products. Business
Contract is an integral part of the Sales and Purchase Agreement
	 
	1.6	 	“Orders” means the official purchase notification given by the Purchaser in
respect of the product model, quantity, price, terms of delivery, payment
terms, etc., which authorizes the Supplier to perform delivery obligation
	 
	1.7	 	“Order validation” means the written acceptance of the Orders by the Supplier
	 
	1.8	 	“Trademarks of the Purchaser” means the trademarks “( CHINESE CHARACTER )
Legendsec” , “LEGENDSEC” or any of the combinations of the latter two and
the trademarks now owned, being applied for registration or to be owned in
the future by the Purchaser
	 
	1.9	 	“Associated Companies of the Purchaser” means the entities on which the
Purchaser is capable to exercise control directly or indirectly or which is
capable to exercise control directly or indirectly on the Purchaser, or
which together with the Purchaser jointly control or materially influence an
entity, or such entity together with the Purchaser being directly or
indirectly controlled by a party, including but not limited to the
Purchaser’s parent company, subsidiary companies, the subsidiary together
with the Purchaser being controlled by the same parent company, the
Purchaser’s associated companies and associated companies
	 
	1.10	 	“Product Supporting Documents” means the ultimate user’s authorization,
product’s specification, drawings, circuit plans, manual, marketing
materials, pass certificate, maintenance warranty and certificate and
similar documentary materials

2. Preliminary

	2.1	 	The Purchase Contract means all written documents including this contract,
business agreement and related orders in force, annexure to agreements and
supplements and project Contracts, plans, notices on modifications, etc.
	 
	2.2	 	The Business Contract, orders in force and supplemental contracts, related
amendments made pursuant to the Agreement, form integral parts of the Agreement
and shall have same binding effect as of the Agreement.

 

 

	 
	2.3	 	Terms in the Agreement is applicable to the Business
Contract, orders in force and supplemental contracts, related amendments made pursuant to the Agreement, and in the event of
any inconsistency between the Agreement and the Business Contract, the terms of the Business
Contract shall prevail and subsequent documents entered into as modifications, substitution,
elaboration of the Agreement, supplements or definitions shall not be treated as
inconsistency.

3. Consideration

     The consideration shall be the Products and Services provided by the Supplier to the Purchaser
in accordance to the Purchase Contract. During the tenure of the Agreement, the Supplier shall be
obliged to supply the Products and/or Services to the Purchaser according to the orders.

4. Terms on Price

	4.1	 	The Supplier shall supply the Products and services according to the agreed terms of price.
	 
	4.2	 	Competitive pricing:If the Supplier supplies the same Products and Services to Products
parties in the same period of time and under similar contract terms, the Supplier shall
forthwith notify the Purchaser in writing.
	 
	4.3	 	Quotation: The Supplier warrants that the quotations given to the Purchaser shall be the
best prices. When sale volume increases significantly, the Purchaser shall have the right
to request the Supplier to adjust the prices accordingly. The Supplier shall quote prices
of the Products and Services to the Purchaser honestly and shall not dishonestly quote a
lower price to its research and development department and quote a higher price to its
purchasing department.

5. Orders

	5.1	 	Contract of orders: The Supplier shall in writing Contract to
Purchaser’s orders at the Purchaser’s requirements. Contract signed by
the authorized representative of the Supplier with the same stamp of
the Supplier as stamped on this Agreement or stamped or with its
specific stamp for contracts and communicated to the Purchaser by Fax
shall be accepted. The Supplier shall fully perform its obligations in
price, delivery time, quantity, destination, etc. as it confirms in
the order.
	 
	5.2	 	The Purchaser has the right to treat the order having been confirmed
by the Supplier if the Supplier does not deliver its written accepted
Contract of order to the Purchaser within the time limit to confirm
the order as specified by the Purchaser.
	 
	5.3	 	Termination of orders: For the reasons of change of market conditions
or because of unforeseen circumstances which lead to the change of the
Purchaser’s demand for the Products and Services, the Purchaser has
the right to terminate the order and as a result of the termination,
the Purchaser shall bear the responsibility to compensate the damage
and loss suffered by Supplier. However, the Supplier shall, on the day
of its receipt of the notice from the Purchaser to terminate the
order, take immediate and effective measures (including but not
limited to halt the manufacturing the Products, notify related
factories to stop supplying raw materials for the Products, disposal
of the manufactured Products to other parties at market price, etc.)
in order to minimize the damage. The Purchaser shall not be
responsible to compensate the Supplier for its damage if the Supplier
has not taken effective measures to minimize the damage. Related
matters shall be settled by negotiation of both parties.

 

 

6. Delivery

	6.1	 	Service of Delivery: Delivery of Products means the transportation of the Products
by the Supplier in accordance with the terms of the effective order to the specified
destination, the Supplier clears all procedures with the Purchaser’s designated
recipient and provides certificates and informational materials of the Products and
bears all related expenses. With prior notification to the Supplier, the Purchaser
has the right to cancel or change the delivery date, delivery destination and
recipient in the orders, which notification shall be given by a relevant
supplemental contract to be agreed by the parties.
	 
	6.2	 	The Supplier shall notify the Purchaser prior to delivery of details of the delivery.
	 
	6.3	 	The Supplier shall fully perform its obligations of delivery as specified in the
effective orders and honor deliveries timely. When the Purchaser requested for early
delivery, the Supplier shall take all necessary measures to perform the delivery
obligation and in the event that it is unable to fulfill the Purchaser’s request for
early delivery, it shall notify the Purchaser in writing of the earliest time and
quantity of delivery.
	 
	6.4	 	Inventory: The Supplier shall maintain appropriate inventory in order to satisfy the
Purchaser’s requirements.
	 
	6.5	 	Unless at the request and with the consent in writing of the Purchaser, the Supplier
shall not procure early delivery otherwise the delivery shall be treated as the
delivery not made in accordance with the time as specified for delivery and the
Purchaser has the following options:
	 
	6.5.1	 	Rejection of the delivery
	 
	6.5.2	 	If the Purchaser has accepted early delivery, the Supplier shall bear expenses on
storage incurred by the Purchaser for the period after the delivery until the time
of delivery specified in the contracts.

7. Receipt and Inspection

     The Supplier shall conduct product counting for the Products specified in the contract, check
names, quantity, packing, etc. of the product and acknowledge receipt in writing.

     The Purchaser shall be responsible for the loss and damage of the Products after the receipt
thereof is acknowledged. However, the Supplier shall be fully responsible for the loss or damage
caused as a result of the Product’s defects per se. The Supplier shall be responsible for any loss
and damage incurred prior to this. The Purchaser shall have the right of ownership of the Products
after the receipt thereof is acknowledged and the rights of ownership prior to this shall belong to
the Purchaser.

     It is not the recognition by the Purchaser that the Products or Services are accepted for the
sake of having paid the invoiced amount and recorded in the storage voucher. This only denotes the
Products or Services are in the progress of being inspected, tested or rejected until the stage
when it is successfully fitted into the Purchaser’s products. If the quality of the Products does
not match with that as in the Business Contract orders within the warranty period or terms of
inspection, the Purchaser shall have the right to return the Product which does not satisfy the
technical criteria and requirement and require the Supplier to compensate its expense for
inspection, testing and transportation, etc. or require the Supplier to repair or substitute the
Products at the written request of the Purchaser, or return the entire lot of the Products to the
Supplier.

 

 

8. Payment

     Both parties shall take steps to effect payments if the contracted Products have
been delivered to the Purchaser and pass the inspection thereof (as recognized by the Purchaser in
writing). If there is a subsequent related agreement, payments will be effected in accordance with
the subsequently agreed terms.

9. Training and Services

	9.1	 	Training:In order to help the Purchaser to provide satisfactory
Services to its customers, the Supplier shall undertake to provide
free of charge to the relevant personnel of the Purchaser with
technical training and support which are of absolute necessity until
the personnel of the Purchaser has acquired the related technique
prior to, during or after the sale of the contracted Products.
	 
	9.2	 	Maintenance period:The Supplier shall undertake within the warranty
period to provide free of charge maintenance services to the
contracted Products.
	 
	9.3	 	Services after the maintenance service: Upon expiry of the maintenance
period, the Supplier shall in accordance with the terms of the
Business Contract / order, provide maintenance services or designate a
contractor to provide such services and the Supplier shall only charge
reasonable fees for materials and labor. When the contractor or the
Purchaser has to proceed for the services, the Supplier shall provide
with the designated contractor or the Purchaser the necessary
materials, spare parts and technical support in order to ensure the
contractor or the Purchaser being able to provide such services and
when the contractor is carrying out the Services, the Supplier shall
provide relevant certification to ensure the contractor being able to
carrying out the services. If the contractor is not capable to provide
the services, the Supplier shall indemnify the Purchaser for the loss
suffered by the Purchaser.

10. Packing

     Product packing shall be in accordance with the standard as agreed by both parties or required
by the Purchaser. Unless as agreed otherwise, packing materials shall be provided by the Supplier
at its own expenses. The marks of delivery on the packing materials shall be made in accordance
with the requirements of the Purchaser and the Supplier shall guarantee to the Purchaser on the
transportation and product safety requirements.

     The Supplier shall take appropriate safety measures to pack the goods properly to prevent
moist, wetting, shock and dust and shall be responsible for any loss for its not having adequately
taken such appropriate measures.

11. Terms on Quality

11.1 Technical criteria: The Supplier shall in accordance with the requirements of the Business
Contract and/or orders provide the Purchaser with technical criteria (including general technical
criteria, technical type and category of technical criteria), quality warranty, standard of
delivery inspection, etc. The Products shall be passed by the Purchaser or an agreed inspection
authority or entity so as to become the quality passed Products in accordance with the agreed
inspection standard.

11.2 Treatment to defective Products: The Supplier shall in accordance with the requirement of the
Purchaser, repair, substitute, compensate for or return the defective Products which have been
inspected by the Purchaser or the agreed inspection authority or entity and determined the Products
being defective. On return of the Products, the amount paid for the

 

 

Products shall be returned to the Purchaser simultaneously or offset with the payables owing
to the Supplier. The Supplier shall take the above measures within 5 days upon receipt of the
Purchaser’s notification on defective Products and expenses including related expenses for defect
identification, product repair, product selection and substitution shall be borne by the Supplier.

11.3 Products supplied by the Supplier shall pass testing and inspection with a pass certificate.

12. Terms of Guarantee

The Supplier hereby represents and guarantees as follows:

	(1)	 	The Supplier has the rights of ownership and use of the Products it supplied to the
Purchaser free from demand, encumbrances or other action or threats against the
Purchaser which would affect the rights of the Purchaser on the Products.
	 
	(2)	 	Execution by the Supplier of the Agreement will not breach any of the conditions,
obligations, law, regulations or orders in respect of any related contracts.
	 
	(3)	 	There is no defect in the Products’ design (other than written designs not entirely
based on the technical criteria of the Supplier supplied by the Purchaser), materials
and manufacturing techniques and the warranties under this Agreement, technical standard
and criteria requirements are fulfilled and the product in use is safe under such
requirement.
	 
	(4)	 	The Products are able to process, provide, receive and display date data correctly and
shall be capable to exchange date data correctly with all other Products.
	 
	(5)	 	The Products are brand new without spare parts which are used or repaired and they are
imported normally.
	 
	(6)	 	The Products do not infringe intellectual property rights of Products parties.
	 
	(7)	 	The storage time limit of the Products delivered to the Purchaser has not expired.
	 
	(8)	 	The Supplier shall abide by the “Terms on price” and shall not quote prices fraudulently.
	 
	(9)	 	The Supplier shall abide by other agreed terms of standards.

13. Use of Trademarks

     Unless written consent is obtained from the other party, none of the parties hereto shall use
directly or indirectly, entirely or partially the trademarks or mark signs and shall not use its
own trademarks or mark signs together with those of the counter party or combine any part thereof
with its own trademarks or used in any of its business activities. If the trademarks and mark signs
are used with the consent of the other party, the party shall stop use and clear usage of the
trademarks and mark signs and shall bear any responsibility for loss of the other party as a result
of infringement of intellectual rights or breach of contacts.

     At the request of the Purchaser, the Supplier shall apply the Purchaser’s trademarks and mark
signs on the Products, such as on OEM products, and packing of the Products in the manner as agreed
by both parties. Other than this, the Supplier shall not use the trademarks of the Purchaser for
any purpose.

     Unless agreed otherwise or with the consent of the Purchaser, the Purchaser shall not use the
trademarks of the Supplier for any purpose.

 

 

14. Intellectual Property

14.1 Permission to Use: To enable the Purchaser to use and sell the Products with intellectual
property rights, the Supplier shall grant the Permission to Use to the Purchaser in accordance with
the terms hereto.

14.2 Spare parts provided by the Purchaser: The Supplier shall be entitled to use the spare parts
supplied by the Purchaser only for the purpose of this Agreement.

14.3 For the purpose of this Agreement, the techniques or functional designs provided by the
Purchaser for the use of the Supplier shall be restricted to be only transplanted to the contracted
Products and the ownership and intellectual property rights thereof shall belong to the Purchaser
absolutely.

15. Confidentiality

     Without the written consent of the Purchaser, the Supplier shall not disclose in
advertisements or other channels the facts that it supplies the Products to the Purchaser pursuant
to the Agreement.

     Save as the information which is obtainable through the public channel or from any Products
party, the Supplier at any time even after expiry of the Agreement, shall not disclose to any party
information from the Purchaser in relation to confidential message in connection with the Agreement
and the Purchaser’s operation and techniques information and confidential business information
during the course of the negotiation of the Agreement. The Supplier shall return all documents and
materials regarding the information to the Purchaser at the Purchaser’s request.

     There shall be no restriction for the Purchaser to disclose the information, including
brochures, plans and documents from the Supplier, unless the Supplier has requested for
non-disclosure and also attached signs of confidentiality thereto.

     The fact of the disclosure of the information as above to third parties pursuant to a
government order or legal proceeding shall be notified to the other party as soon as practicable.

     This clause shall be binding to each party despite the Agreement is modified, rescinded or
terminated.

16. Rescission of Agreement

The Purchaser shall have the right to rescind the Agreement under the following circumstances:

	(1)	 	The Supplier delays in performing its obligations under the Agreement
resulting incapability of carrying out the Agreement by the Purchaser,
or the Supplier delays in performing its obligations under the
Agreement within 10 days despite the Purchaser had urged the Supplier
to perform its obligations.
	 
	(2)	 	The court has accepted hearing of bankruptcy pursuant to the
application of the Supplier or petition by other parties.
	 
	(3)	 	The Supplier’s operating condition becomes seriously deteriorated.
	 
	(4)	 	The Supplier committed acts of distracting assets, taking away of
funds and evading payments of debts.
	 
	(5)	 	The Supplier has lost its business reputation.

 

 

     Rescission of the Agreement by the Purchaser shall not deprive the Purchaser’s right
to seek redress from the Supplier for its loss.

17. Defense

     In order to protect the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend at the costs of the Supplier, accusation or claim for compensation against the
Purchaser for the reason that the Supplier and its staff members have breached the terms of the
Agreement resulting third parties’ accusation or claim for compensation and the Supplier shall be
responsible to compensate the Purchaser including litigation costs.

     To ensure protection of the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend or jointly defend at the costs of the Supplier, claim for compensation against the
Purchaser for the reason that the Products of the Supplier have infringed the ownership,
intellectual and other rights of third parties and the Supplier shall be responsible for all
compensation, fines, legal fees and damage. When such kind of litigation or claim for compensation
is likely to happen and known to the Purchaser, the Purchaser shall notify the Supplier and when
such kind of litigation or claim for compensation has happened, the Supplier shall at its own
expense take the following steps to carry out remedy measures: (1) to ensure the Purchaser being
capable to continue using and selling the products pursuant to the Agreement; (2) to modify the
Products for the purpose of the Agreement so as not to infringe the rights of others; (3) to
substitute the rights infringing products with others which will not infringe the rights of others;
(4) the Purchaser may return the rights infringing products to the Supplier at its desire and on
return by the Purchaser the rights infringing products, the Supplier shall refund the Purchaser the
sale proceed of the Products and compensate the Purchaser for damage suffered by the Purchaser.

18. Force Majeure

     Force majeure means under subjective circumstances, the happening of incidents which at the
time of entering into the Agreement, is not foreseeable and its occurrence and consequence cannot
be overcome and avoided. For reason of force majeure, a party which is unable to perform the
contract or unable to fully perform the contract, may fully or partially be exempted from the
obligation to perform the contract. However, the party not being able to perform shall, as soon as
the occurrence of such event, notify the other party by telegraph or fax and within 15 days of such
event inform the other party of the place of event by speed courier, certifications from the
relevant government, notary office or business association, of the occurrence of the force majeure
event. When the force majeure event vanished, the event party, if it is still being able to
continue performing the contract, shall notify the other party of the force majeure event having
been vanished and it shall continue to perform the contract if the other party agrees to
continuance of the contract.

19. Breach

19.1 Guaranteed obligation: In the event that the Products provided by the Supplier do not meet
with the terms as guaranteed under the Agreement, the Purchaser may opt to require the Supplier at
the Supplier’s expense to repair, substitute, redo, accept return of, reduce or refund payment for
the Products and as a result hereof the Supplier shall compensate the Purchaser for loss. The
Purchaser has the right to offset the loss from payables owing to the Supplier.

 

 

     The Supplier shall within the time limit as notified by the Purchaser take back the
unqualified, excessive and cancelled Products (i.e. the returnable Products by the Purchaser),
failing which, the Purchaser may at the expense of the Supplier return the Products, entrust
keeping or sell off the Products to offset storage charges. The Supplier shall be responsible for
losses because of drop, damage, decrease or transformation of the Products.

     As the Supplier is aware of the Products will be used as spare parts for the manufacturing of
the Purchaser’s products, the Supplier shall be obliged to repair, substitute or compensate
Purchaser’s damage if the Products do not meet with the agreed terms of the Agreement in quality or
functionally, no matter the defects emerge at the time of the Purchaser’s products being
manufactured, in the course of being sold or when used by the ultimate user. The Purchaser has the
right to demand compensation from the Supplier if because of such defects of the Purchaser’s
products, the Purchaser has to compensate third parties for its breach of contract or infringement
of intellectual rights, the Supplier has the right to demand the Supplier to bear the
responsibility of the Purchaser’s compensation to third parties and compensate the Supplier for the
loss.

19.2 Incapability and delayed delivery: In the event of the Supplier being incapable to deliver or
has to delay delivery of the Products, it has to notify the Purchaser forthwith the facts of its
incapability to deliver or the delayed date of delivery and quantity and undertake to bear the
responsibility to the Purchaser for breach of contract.

19.3 The Supplier shall undertake to bear the responsibility to the Purchaser for breach of
contract if, in the course of its providing service to the Purchaser, it does not deliver the
repaired Products to the Purchaser’s specified destination on time.

19.4 The Supplier shall be repair or redo packing at its expense in respect of the Products’
packing specification being not as agreed. In the case that the Purchaser demands compensation for
losses instead of requests for repair or redo packing, the Supplier shall compensate the Purchaser
for the unqualified packing and the Supplier shall compensate the Purchaser for the Purchaser’s
loss as a result thereof.

19.5 If the Purchaser fails to settle the payment of purchase, the Purchaser shall pay a penalty as
agreed.

19.6 The penalty or compensation made in accordance with the terms of the Agreement shall be
settled within 10 days by offsetting directly from the contracted amount failing which the
settlement shall be treated as late payment.

20. General

20.1 Modification: Any modification to this Agreement shall be made in writing, signified and
stamped by the authorized stamp of the parties and form an integral part of the Agreement.

20.2 Assignment: Without the written consent of the other party, none of the parties shall
partially or wholly assign the Agreement to its subsidiary or any of the third parties.

20.3 Copies of Agreement: This Agreement shall be executed in quadruplicates and each party shall
keep two copies and each has the same binding effect.

20.4 The Supplier shall ensure its staff to abide by the relevant regulations of the Purchaser
while they have to perform their services in the Purchaser’s premises.

 

 

20.5 Any commercial bribery: The Supplier shall not provide monetary rewards, gifts or other
tangible or intangible benefits to practically or latently related persons or their relatives.
These acts shall be treated as commercial bribery and once discovered, other than that the
Purchaser may rescind the Agreement, it may demand the Supplier for a penalty of RMB 100,000.
However, small promotion items as gifts as a business custom in business transactions are exempted.

20.6 Partial invalidation: If any of the terms of the Agreement is adjudicated non-enforceable has
no practically adverse impact to the rights of the parties under the Agreement, other terms of the
Agreement shall continue binding.

20.7 Waiver: Any waiver under this Agreement shall be signified in writing and waiver by a party
its right to seek redress in respect of the non-performance of the responsibility or obligation of
the other party does not imply it will waive its right to seek redress in respect of other
non-performance of the responsibility or obligation of the other party.

20.8 Clauses regarding the Terms of guarantee, Breach of Agreement, Intellectual Property and
Confidentiality, Defense, Jurisdiction and Arbitration, shall continue in force even after the
termination of the Agreement.

20.9 Notification of messages: The parties shall forthwith notify the counter part in respect of
any basic changes, such as changes of address, account number and authorized persons, etc, which
will affect the co-operation of the parties and the notification of such messages shall be in
writing and transmitted by telegraph, electronic transmission, fax or email.

20.10 Successor: The Agreement is entered into for the interests of their respective successor or
assignee and shall be binding upon their respective successor or assignee.

20.11 The Agreement is for the legal base of the co-operation of the parties and whilst the
Supplier and Purchaser are individual legal persons, they shall continue their respective business
operations in jurisdictions as authorized by their respective governments and under this Agreement,
there is no creation of partnership, association, agency or trusteeship between the Supplier and
Purchaser and they do not intend to create such relationship.

20.12 According to the mode of business of the Purchaser, the business of the Purchaser mentioned
in the Agreement including execution of Business Contracts, issuing orders, payments and demand for
compensation, etc., may be carry out by the Purchaser’s associated company. The terms of this
Agreement and supplements thereto shall be applicable to the business activities of the Supplier
and the associated company of the Purchaser.

20.13 The associated company of the Purchaser may pursuant to the purchase contracts and
supplemental documents deal with the Supplier and the Supplier shall directly accept and undertake
the purchase orders from the associated company of the Purchaser. The Supplier and the associated
company of the Purchaser shall have individually have the rights and obligations derived from
Business Contracts entered into pursuant to the Agreement, between the Supplier and the associated
company of the Purchaser and the Purchaser shall not be liable for the liability of its associated
company.

20.14 This Agreement shall become effective on execution by the parties’ authorized
representative and duly stamped with the respective company’s stamp.

 

 

21. Jurisdiction

     This Agreement shall be governed by the laws of the People’s Republic of China.

22. Disputes

     If disputes arise under this Agreement, disputes shall be settled initially by friendly
negotiation failing which the disputes may be adjudicated in the law court of the place where the
Purchaser is located.

23. Tenure of Agreement

     This Agreement shall stand valid for two years from February 10, 2006 to February 10, 2008,
the commencement date of which shall be decided by both parties in writing pursuant to this
framework agreement and after execution of the Business Contract.

	 	 	 
	Purchaser:

	 	Legendsec (Beijing) Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized representative:

	 	/signed/
	 
	 	 
	Registered address:
	 	 
	 
	 	 
	Date:

	 	February 10, 2006
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized representative:

	 	/signed/
	 
	 	 
	Registered address:

	 	Room 214-216, Tai Li Min Yuan Office Building,
No. 1, Wai Guan Xie Street, Chaoyang District,
Beijing, 100011, China
	 
	 	 
	Date:

	 	February 10, 2006

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