Document:

lidhairexh10_13.htm

Exhibit 10.13

 

SHELL REFERRAL AGREEMENT

This Shell Referrer Agreement ("Agreement"), dated August 15, 2009, is made by and between:

	 	
Kang Xiulan

7 Zu, Songlin Cun, Wu Gong Zhen

Wu Gong Xian, Shaanxi Province

	
("Referrer")

	
  
	
and

	 	
China Children Pharmaceutical Inc., a Hong Kong Corporation
Rooms 2201-03 22/F World Wide House,
19 Des Voeux Road Central, HK

	
(“Principal”)

 

 

WHEREAS, Principal is interested in acquiring control of or merging with said public shell.

NOW, THEREFORE, in consideration for those services Referrer provides to Principal, the parties agree as follows:

 

1.    INDEPENDENT CONTRACTOR:

Nothing in this agreement shall be construed to create the relationship of employer and employee, joint venture, or partnership, between parties hereto. Referrer shall be deemed at all times to be an Independent Contractor.

 

2.    UNIQUE SERVICES PROVIDED:

The scope of this agreement is limited and unique to the Referrer to perform for the Principal such services.

 

a)     To provide the Principal certain information regarding an over-the-counter bulletin board (“OTCBB”) public shell so that Principal may complete necessary ‘due diligence’ for a potential acquisition of or merger with such shell. Specifically and at minimum, the Referrer shall provide the publicly-traded
ticker symbol and contact information for the current majority shareholder, and officer(s) and director(s).

 

3.    COMPENSATION:

Principal agrees to pay Referrer, as his fee and as consideration for services provided, 250,000 warrants with registration rights with a $3.00 exercise price with piggy-back warrants attached with a $5.00 exercise price (TWO HUNDRED FIFTY THOUSAND WARRANTS WITH REGISTRATION RIGHTS) total warrants issuable at the closing of the acquisition
or merger.

Principal also agrees to deposit the total cash payment due under this agreement with their attorney in trust on or before the Principal and the OTCBB shell company enter into a definitive merger, acquisition or similar agreement with the funds to be released to the Referrer in full at the closing date specified in the merger or acquisition
agreement.

  

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TERM:

Referrer shall begin services for the Principal on August 15, 2009. Services will continue in perpetuity unless terminated as a result of the Principal, his agents, his clients, or his nominees merging with the referred OCTBB company to the Principal by the Referrer and completing the payment of compensation as agreed.

 

4.    ASSIGNMENT:

Both parties shall not be entitled to assign or transfer this agreement without prior consent from the other party in writing.

5.    LIMITATIONS:

Principal will only be responsible to compensate Referrer in the event that the Principal, his agents, his clients, or his nominees, executes an agreement to merge with a specific OTCBB company referred to the Principal by the Referrer. Referrer holds no obligations to the Principal other than to have provided the unique services one (1)
time.

7.     GOVERNING LAW:

This Agreement shall be governed by the interpreted in accordance with the laws of the State of Washington without reference to its conflicts of laws rules or principles. Each of the parties consents to the exclusive jurisdiction of the superior courts of the Laws of Hong Kong in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non convenes, to the bringing of any such proceeding in such jurisdictions.

 

8.     INDIVIDUAL AGREEMENT:

This Agreement is separate and unique from any past, present, or future agreements entered between the Referrer and Principal. Both parties agree that their signatures below represent their true identity as provided in government-issued identification documents.

 

9. NON-DISCLOSURE and CONFIDENTIALITY:

BASIS FOR CONFIDENTIAL TREATMENT: It is recognized that such information passed in-between parties has substantial competitive value so long as it is withheld from public dissemination, and this value will be impaired or destroyed on publication or disclosure to others. Accordingly, all information exchanged under this Agreement shall be
considered to be proprietary information. During the term of this Agreement, each receiving party will make all reasonable efforts to protect the information disclosed, or exchanged, relative to the subject matter specified below. In no event shall either party, without the prior written approval of the other party, (a) make such information or documents available to any third party, or (b) disclose or identify the source of any of the information disclosed in confidence.

 

  

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Signatures:

	
REFERRER:

 

Kang Xiulan

 

 

Signature:                                                    

Name:  Kang Xiulan

 

Address:

 

Date:   August 15, 2009                             

 

 

 

	
PRINCIPAL:

 

China Children Pharmaceutical, Inc.

 

 

Signature:                                                    

Name:  Jun Xia

 

Address:

 

Date:   August 15, 2009                             

 

 

 

 

  

3 | PageUnassociated Document

    

    Exhibit
10.1

    (Unofficial
Summary Translation)

    Agreement

     

    Regarding
to

     

    Equity
Acquisition of Xi’an Simo Motor Incorporation (Group)

     

    Among

     

    Harbin
Tech Full Electric Co. Ltd.

     

    And

     

    Xi’an
Simo Electric Co. Ltd.

     

    Shaanxi
Electric Machinery Association

     

    

     

    

     

    

     

    Dated:
October 2, 2009

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    AGREEMENT

     

    This
equity acquisition agreement (this “Agreement”) is made and entered into as of
October 2, 2009 at Xi’an City, People’s Republic of China by and among Harbin
Tech Full Electric Co. Ltd.,(“Party A”), and Xi’an Simo Electric Co. Ltd. and
Shaanxi Electric Machinery Association (each as “Party B1” and “Party B2”, and
collectively as “Party
Bs”).

    RECITALS

    WHEREAS,
Party A and Party Bs are both legal person duly incorporated and validly
existing according to PRC laws;

    

    WHEREAS,
Party B1 and Party B2 are legitimate shareholders of Xi’an Simo Motor
Incorporation (Group) (“Simo Motor”), of which Party B1 owns 99.94% shares and
Party B2 owns 0.06% shares;

    

    WHEREAS,
Simo Motor is a stock limited liability company, with registered address at
No.159 Ming Guang Road, Economy and Technology Development Zone, Xi’an,
China, of which the legal representative is Yang Yuncheng and the registered
capital as well as the contributed capital is RMB 165 million. The business
scope of Simo Motor covers: developing, manufacturing, selling and repairing
electric motor and other electric machinery, and equipment; processing and
manufacturing mold, hardware instruments and home appliances; selling packaging
equipment, automobile components, metallic materials, construction and building
materials, decoration materials and water-heating equipment;

    

    WHEREAS,
Party B1 and Party B2 desire to sell to Party A, and Party A desires to purchase
from Party B1 and Party B2, the 100% of the outstanding shares of Simo Motor
held by Party B1 and Party B2 and all the corresponding assets of Simo Motor
upon the terms and subject to conditions of this Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    NOW,
THEREFORE, regarding to transfer of all the shares and all of the corresponding
assets of Simo Motor, after equal negotiation, Party A and Party Bs agree on the
following:

    

    
      Article
1  DEFINITIONS

       

    

    
      	
              1.1.  

            	
              As
      used in this Agreement, the following terms shall have the meanings
      defined below:

            

    

    

    “Acquisition Equity” shall
mean the 100% shares of Simo Motor held by Party B1 and Party B2.

    

    “Assets Corresponding to Acquisition
Equity” shall mean all of the assets and rights (including all the
credits, debts or obligations) of Simo Motor corresponding to the 100% shares of
Simo Motor, including but not limited to all of the manufacturing equipments,
real-estates, land use right, stocks, raw material, automobiles, intellectual
property, receivables, other receivables, payables, business contracts and
external investments owned by Simo Motor and so on, unless otherwise provided by
this Agreement.

    

    “Acquisition Consideration”
shall mean all the consideration to be paid by Party A for this
acquisition.

    

    “Closing Date” shall mean the
consummation day of this acquisition on which Party A and Party Bs complete all
the legal procedures of the transfer of Acquisition Equity (including but not
limited to the registration of share transfer of Simo Motor with the competent
Industrial and Commercial Bureau) under Article 2.3 hereof.

    

    “Force Majeure” shall mean all
events which are unforeseen, unavoidable and insurmountable for its occurrence
and consequence, which arise after the effectiveness of this Agreement, which
are reasonably outside the control of any Party, which prevent total or partial
performance of the Agreement by any Party and which can not be cured by measures
which might reasonably be taken in the ordinary course of business by any Party.
Such events shall include but not limited to earthquakes, typhoons, fire, flood,
war, epidemics, civil disturbances, tsunami, lightning, and any other similar
events.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    “PRC Laws and Regulations”
shall mean PRC laws, regulations and rules which are officially promulgated,
published, publicly available and already implemented.

    

    “PRC” shall mean the People’s
Republic of China, which for the purposes of this Agreement shall not include
the territories of (a) the Hong Kong Special Administrative Region, China, (b)
the Macau Special Administrative Region, China, or (c) Taiwan,
China.

    

    “RMB” means the lawful
currency of the People’s Republic of China.

    

    
      	
              1.2.  

            	
              Titles
      and headings to sections herein are inserted for convenience of reference
      only, and are not intended to be a part of or to affect the meaning or
      interpretation of this Agreement.

            

    

     

     

    
      Article
2  PURCHASE
AND SALE OF Acquisition Equity and Assets Corresponding to Acquisition
Equity

       

       

    

    
      	
              2.1  

            	
              On
      the Closing Date, upon the terms and subject to the conditions set forth
      herein, Party Bs shall sell and deliver to Party A, and Party A shall
      purchase and acquire from Party Bs, all of the Acquisition Equity and
      Assets Corresponding to Acquisition Equity. Party B1 and Party B2
      respectively give up the preemptive right on shares of Simo Motor for each
      other.

            

    

     

    
      	
              2.2  

            	
              Acquisition
      Consideration and Payment

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              2.2.1  

            	
              The
      total Acquisition Consideration shall be no more than eight (8) times of
      the audited total net profit that Simo Motor generated in 2008. Party A
      will conduct verification on the assets and capital of Simo Motor within 6
      months from the Closing Date. In the event the net assets of Simo Motor
      confirmed based on such verification on the same day is less than that
      confirmed by audit report, the difference shall be deducted from the total
      Acquisition Consideration.   All the debts payable and owed
      by Simo Motor to Party B1 confirmed in audit report of Simo Motor are
      already included in such Acquisition
  consideration.

            

    

    

    
      	
              2.2.2  

            	
              Party
      A shall make the payment amounted to equivalent to six (6) times of the
      audited total net profit that Simo Motor generated in 2008 as the first
      installment of Acquisition Consideration to the bank account mutually
      appointed by parties hereof within [10] working days after the
      effectiveness of this Agreement, and the remaining amount of Acquisition
      Consideration shall be confirmed upon verification on assets and capital
      and be paid to Party Bs by Party A within seven months from the Closing
      Date. Party Bs jointly acknowledge that the payment of Acquisition
      Consideration to the appointed bank account made by Party A or its
      assigned affiliate according to this Agreement shall be deemed as payment
      of Acquisition Consideration to Party Bs by Party
  A.

            

    

    

    
      	
              2.3  

            	
              The
      delivery of the Acquisition Equity and the transfer of the corresponding
      rights and obligations contemplated by this Agreement shall take place on
      the Closing Date, on which (1) Party B1 and Party B2 shall deliver to
      Party A all the documents and instruments reasonably requested by Party A
      and with respect to all the Acquisition Equity required to be delivered by
      Party B1 and Party B2 pursuant to this Agreement; and (2) the registration
      of the entire share transfer of Simo Motor held by Party B1 and Party B2
      to Party A with the competent Industrial and Commercial
      Bureau.

            

    

    

    
      	
              2.4  

            	
              The parties hereof agree that:
      unless there is
      a delay resulting from reasons uncontrollable by
      Party Bs, Party Bs shall complete the registration of the entire share transfer of Simo Motor with
      the competent Industrial and Commercial Bureau within 15 working days
      immediately after the payment of the first installment
      of Acquisition Consideration
      made by Party A, otherwise Party Bs shall pay Party A 0.01% of Acquisition Consideration as
      penalty for each one day delayed, and in the event of delay more than [90]
      days, Party A shall be entitled to terminate this Agreement unilaterally and Party Bs shall refund the
      Acquisition
      Consideration paid by
      Party A within 5 working days after termination of this Agreement raised
      by Party A.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              2.5  

            	
              Upon
      consummation of this acquisition, if any costs listed below are
      discovered, these costs shall be assumed by Party B1 and unrelated to
      Party A or Simo Motor: (1) any costs incurred as a result of the prior
      reformation of Xi’an Motor Plant and the formation of Xi’an Simo Motor
      Co., Ltd. (the former Simo Motor); (2) any costs associated with the sort
      out of shares held by employees of Xi’an Simo Motor Co., Ltd. or Simo
      Motor ; (3) the payment of employment insurance and overtime pay of Simo
      Motor, including those expenses resulted from reformation of state-owned
      enterprises, which owed for periods prior to this acquisition; and (4) any
      other debts, expenses, liabilities or economic obligations arising from
      the reformation of Xi’an Motor Plant which should have been undertaken by
      Simo Motor (The costs exclude  those credits and liabilities
      arising from normal operation of Simo Motor prior to the reformation and
      accounted in the balance sheet of Simo Motor). The parties acknowledge
      that the foregoing factors and all the liabilities assumed by Party B1 as
      a result therefrom have been already fully considered and reflected in the
      Acquisition Consideration.

            

    

    

    
      	
              2.6  

            	
              During
      the course of and/or upon the consummation of acquisition contemplated by
      this Agreement, Party Bs and the shareholders of Party Bs shall be liable
      for the debts of Simo Motor or its subsidiaries inconsistent with the
      representations and warranties made by Party Bs hereof, any claims or
      obligation of Simo Motor and its subsidiaries to a third party, arising
      from contractual liabilities, tort or any other reasons and existing prior
      to the Closing Date and not expressly disclosed to Party A by Party
      Bs.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              2.7  

            	
              Upon
      the consummation of this acquisition, the employment contract entered into
      by Simo Motor and its employees which are undue will remain valid, and the
      amendment, cancellation, termination and renewal of employment contract
      will be made by Simo Motor in accordance with related provisions of
      <Labor Law>, <Employment Contract
  Law>.

            

    

    

     

    
      	
              2.8  

            	
              Party
      A and Party Bs shall bear respectively all and any taxes imposed in
      relation to the transactions contemplated under this Agreement in
      accordance with the PRC Laws and
Regulations.

            

    

     

    

    
      Article
3  REPRESENTATIONS
AND WARRANTIE

    

     

    

    
      	
              3.1  

            	
              Party
      B1 and Party B2 jointly and severally, hereby represent and warrant
      to  Party A, as of the Closing Date as
  follows:

            

    

    

    

    
      	
              3.1.1  

            	
              As
      of the Closing Date, (i) 100% shares of Simo Motor, and (ii) all of the
      shares of subsidiaries of Simo Motor held by Simo Motor are each free and
      clear of any mortgages, liens, claims, charges, pledges or other
      encumbrances of any nature
whatsoever.

            

    

    

    
      	
              3.1.2  

            	
              Up
      to and as of the transfer of shares of Simo Motor to Party A by Party B1
      and Party B2, Simo Motor and its subsidiaries shall duly own assets or
      rights and interests disclosed to Party
A.

            

    

    

    
      	
              3.1.3  

            	
              Party
      Bs shall be responsible to Party A for the debts, contingent debts and any
      claims or liabilities relating to Simo Motor, which is not disclosed in
      the formal acquisition agreement.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              3.1.4  

            	
              As
      of the execution of this Agreement, Party Bs have obtained all the
      permits, approvals and filings (if applicable) as required by PRC Laws and
      Regulations with respect to the sale of 100% shares of Simo Motor and the
      transfer of Assets Corresponding to Acquisition
  Equity.

            

    

    

    
      	
              3.1.5  

            	
              Simo
      Motor (i) has been duly organized, is validly existing and is in good
      standing as a stock limited liability company, and has been duly approved
      or registered by competent PRC competent authorities, (ii) has all power
      and authority required to carry on its business and to own, lease and
      operate its properties and assets, (iii) has obtained and remained valid
      in full force permits and approvals by competent governmental authorities,
      which are presently required or necessary to carry on its business and to
      operate its properties.  Simo Motor has not received any notice
      from any governmental authority that calls into question the full force
      and validity of any existing permit or
approval.

            

    

    

    
      	
              3.1.6  

            	
              The
      shares of Simo Motor held by Party B1 and Party B2 constitute all of the
      issued and outstanding shares of Simo Motor, are validly issued in
      accordance with PRC Laws and Regulations and fully paid, and were not
      issued in violation of any preemptive or other similar
      right.  No other person or entity has any right or option of any
      nature to acquire any additional shares of Simo
  Motor.

            

    

    

    
      	
              3.1.7  

            	
              All
      of the shares of Simo Motor held by Party B1 and Party B2 are not subject
      to any rescission right or put right nor does any entity or person have
      the right to require Simo Motor to repurchase such
  shares.

            

    

    

    
      	
              3.1.8  

            	
              Party
      B1 and Party B2 have valid and full title to all of the shares of Simo
      Motor.

            

    

    

    
      	
              3.1.9  

            	
              Unless
      disclosed to Party A, Simo Motor has no other wholly-owned or partly owned
      subsidiaries, and does not own, directly or indirectly, any interest or
      investment in any corporation, partnership, limited liability company,
      joint venture or trust.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              3.1.10  

            	
              Simo
      Motor and Party Bs are and have been in compliance with PRC Laws and
      Regulations applicable to them or any of their respective properties,
      assets or businesses.

            

    

    

    
      	
              3.1.11  

            	
              All
      the documents and materials in connection with Simo Motor as well as its
      subsidiaries and Party Bs delivered and to be delivered to Party A by
      Party Bs, including but not limited to meeting minutes, resolutions of
      shareholders meeting and board meeting, financial statements, account
      books and other documents in connection with Simo Motor as well as its
      subsidiaries and Party Bs, accurately reflect in all material respects of
      all corporate actions and other actions taken by Simo Motor
      and  its subsidiaries as well as fairly present in all material
      respects the financial position and the results of operations of Simo
      Motor and its subsidiaries as of the respective dates thereof and for the
      respective periods then ended.

            

    

    

    
      	
              3.1.12  

            	
              To
      the knowledge of Party Bs, there are no action, proceeding, claim, suit,
      demand, arbitration, opposition, challenge, hearing, notice of violation
      or deficiency or investigation, domestic or foreign, pending or,
      threatened, that relate, directly or indirectly, to this Agreement or that
      apply to Simo Motor and its subsidiaries or Party Bs, their respective
      assets, properties or business or to the Assets Corresponding to
      Acquisition Equity.

            

    

    

    
      	
              3.1.13  

            	
              To
      the knowledge of Party Bs, there is no event that is reasonably likely to
      occur in the foreseeable future, which if it were to occur, could have a
      material adverse change to Simo Motor and its subsidiaries or Party Bs or
      its respective assets, properties or business or to the Assets
      Corresponding to Acquisition
Equity.

            

    

    

    
      	
              3.1.14  

            	
              Except
      with the prior written consent of Party A, during the period from the
      execution date to the Closing Date of this Agreement, the businesses and
      ordinary operation of Simo Motor and its subsidiaries shall be conducted
      under the supervision of Party A; Party Bs agree to cause Simo Motor and
      its subsidiaries to make all commercially reasonable efforts consistent
      therewith to preserve the intactness of Simo Motor’s and its subsidiaries’
      material properties, assets and business organizations. Unless otherwise
      specified in this Agreement, without the prior written consent of Party A,
      Party Bs shall cause Simo Motor and its subsidiaries not
    to:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              (1)  

            	
              amend
      any of its organizational documents such as articles of association or
      internal rules and policies;

            

    

    
      	
              (2)  

            	
              liquidate,
      dissolve, recapitalize or otherwise wind up its
  business;

            

    

    
      	
              (3)  

            	
              make
      any other changes in the capital structure of Simo Motor and its
      subsidiaries;

            

    

    
      	
              (4)  

            	
              other
      than in the ordinary course of business and consistent with past practice,
      sell, assign, dispose of, lease, pledge, or encumber, or authorize the
      sell, assign, dispose of, lease, pledge, or encumber of, properties or
      assets of Simo Motor and its
subsidiaries;

            

    

    
      	
              (5)  

            	
              incur
      any indebtedness or issue any debt securities or assume or guarantee the
      obligations of any other entities;

            

    

    
      	
              (6)  

            	
              cancel
      any indebtedness owed to Simo Motor and its subsidiaries by any third
      party;

            

    

    
      	
              (7)  

            	
              enter
      into or renew, amend or extend any contracts, agreements or binding
      documents other than those of ordinary
  operation;

            

    

    
      	
              (8)  

            	
              agree
      in writing to take any of the foregoing
actions.

            

    

    

    
      	
              3.1.15  

            	
              Party
      Bs shall provide prompt written notice to Party A of any change in any of
      the information contained in the representations and warranties made by
      Party Bs in Article 3 and shall promptly furnish any information which
      Party A may reasonably request in relation to such
  change.

            

    

    

    
      	
              3.1.16  

            	
              Party
      B1 and Party B2 agree to jointly and severally undertake and perform all
      the obligations of Party Bs under this
  agreement.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              3.2  

            	
              All
      disclosures furnished and representations and warranties made herein by
      Party Bs to Party A regarding to the transactions contemplated under this
      Agreement are true and do not contain any untrue or misleading statement
      of a material fact or omit to state any material
  fact.

            

    

    

    
      	
              3.3  

            	
              Party
      A represents and warrants to Party Bs as of the Closing Date as
      follows:

            

    

    

    
      	
              3.3.1  

            	
              Party
      A has been duly organized and validly exists as a limited liability
      company under the PRC Laws and
Regulations.

            

    

    

    
      	
              3.3.2  

            	
              Party
      A will pay Party Bs the Acquisition Consideration pursuant to the
      provisions of this Agreement.

            

    

    

    
      	
              3.4  

            	
              Each
      party hereby represents and warrant to the other parties as of the Closing
      Date as follows:

            

    

    

    
      	
              3.4.1  

            	
              It
      has all requisite corporate power and authority to execute and perform its
      obligations under this Agreement and to consummate the transactions
      contemplated hereby.

            

    

    

    
      	
              3.4.2  

            	
              This
      Agreement constitutes a legal, valid and binding obligation of it,
      enforceable against it in accordance with its
  terms.

            

    

    

    
      	
              3.4.3  

            	
              The
      execution by it of this Agreement and the consummation by it of the
      transactions contemplated do not and will not (i) violate, conflict with
      or result in the breach of any PRC Law and Regulations applicable to it or
      any of its properties or assets, or (ii) result in a breach of or the
      termination of any contract or agreement which it or its property or
      assets are bound.

            

    

    

    
      	
              3.4.4  

            	
              Upon
      the terms and subject to the conditions of this Agreement, each of the
      Parties shall use its reasonable best efforts to take all actions to
      consummate the transactions contemplated by this Agreement as promptly as
      practicable, including but not limited to the prompt preparation and
      filing of all forms, registrations and notices and use its reasonable best
      efforts as necessary to obtain any requisite approvals, consents by any
      governmental authority.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              3.4.5  

            	
              Each
      party shall promptly inform the other parties of any communication from
      any governmental authority regarding to the transactions contemplated by
      this Agreement. If any party receives a request for additional information
      or documentary material from any such governmental authority with respect
      to the transactions contemplated by this Agreement, then such party shall
      endeavor in good faith to make an appropriate response as soon as
      reasonably practicable after consultation with the other
      parties.

            

    

     

     

    
      Article
4  TERMINATION

       

    

     

    
      	
              4.1  

            	
              This
      Agreement may be terminated in the following
  way:

            

    

    

    
      	
              4.1.1  

            	
              by
      mutual written consent of Party A and Party
Bs;

            

    

    

    
      
        	
                4.1.2

              	
                by
      Party A unilateral if:

              

      

    

    

    
      	
              (1)  

            	
              a
      governmental authority shall have issued an order, decree or regulation or
      taken any other action, in each case permanently restraining or otherwise
      prohibiting the transactions contemplated by this Agreement;
      or

            

    

    
      	
              (2)  

            	
              in
      accordance with provision under Article 2.4 of this Agreement;
      or

            

    

    
      	
              (3)  

            	
              there
      is a default or breach by any of Party Bs with respect to the due and
      timely performance of any of its obligations contained herein, or if the
      representations or warranties of any of Party B’s contained in this
      Agreement shall have become inaccurate and has not been cured within
      twenty (20) calendar days after written notice by Party A to such
      breaching party.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              4.2  

            	
              In
      the event of the termination of this Agreement pursuant to Article 4
      hereof, this Agreement shall forthwith become void and have no effect.
      Nothing contained in this Article shall relieve any party from liability
      for any breach of this Agreement.

            

    

     

     

    
      Article
5  NON-COMPETITON

    

     

    

    
      	
              5.1  

            	
              After
      consummating transfer of Acquisition Equity, Party Bs or its shareholders
      shall not engage in any business which is in competition with the business
      currently engaged by Simo Motor within three years from the completion of
      this acquisition.

            

    

     

    

    
      Article
6  SURVIVAL
& INDEMNIFICATION

    

     

    

    
      	
              6.1  

            	
              Subject
      to the provisions of this Agreement, the representations and warranties of
      Party Bs in Article 3 shall survive the Closing Date and remain in full
      force and effect after the Closing
Date.

            

    

    

    
      	
              6.2  

            	
              Party
      Bs agree to indemnify, defend and hold harmless Party A and its successors
      and assignees and Simo Motor from and against all losses and damages which
      any such party may actually incur or suffer as a result of or in
      connection with any breach of any representation or warranty made by Party
      B1 or Party B2 under this Agreement or the failure to perform any covenant
      or agreement set forth in this Agreement to be performed by Party B1 or
      Party B2.

            

    

     

     

    
      Article
7  FORCE
MAJEURE

    

     

    

    
      	
              7.1  

            	
              In
      the event of occurrence of Force Majeure, the obligations of the parties
      under this Agreement shall be suspended during the period of Force
      Majeure, and the relevant performance period shall be automatically
      extended by a time period which is equivalent to the actual duration of
      the Force Majeure.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              7.2  

            	
              The
      Party claiming Force Majeure shall notify the other parties in writing
      without delay, and within fifteen (15) days thereafter provide information
      concerning and documents validly evidencing the occurrence and the time of
      occurrence of the Force Majeure. The party claiming Force Majeure shall
      take all reasonable actions to minimize the effects of the Force Majeure
      as soon as practicable.

            

    

    

    
      	
              7.3  

            	
              In
      the event of occurrence of Force Majeure, the parties shall consult with
      each other without delay so as to work out an equitable resolution and
      shall use their best endeavours to minimize the effects of the Force
      Majeure.

            

    

     

     

    
      Article
8  Resolution
of Disputes

    

     

    

    
      	
              8.1  

            	
              In
      the event of any dispute, controversy or claim arising out of or relating
      to this Agreement, including but not limited to any questions regarding
      the breach, termination or invalidity hereof (“Dispute”), the Parties
      shall attempt in the first instance to resolve such Dispute through
      friendly consultations. Such consultations shall commence promptly after a
      party has advised the other parties in writing of the existing
      Dispute.

            

    

    

    
      	
              8.2  

            	
              If
      the Dispute has not been resolved within thirty (30) days from the date on
      which one party advised the other Parties of the first time in writing of
      the existence of a Dispute, any party may submit the Dispute to the China
      International Economic and Trade Arbitration Commission (”CIETAC”) in
      accordance with this Article for arbitration in Beijing in accordance with
      the CIETAC’s rules of arbitration then
  applicable.

            

    

    

    
      	
              8.3  

            	
              The
      arbitral award shall be final and binding upon the
      Parties.  Except for the specific matters in dispute which are
      then currently being arbitrated, the Parties shall continue to perform
      their obligations under this
Agreement.

            

    

    

    
      	
              8.4  

            	
              The
      costs of arbitration shall be borne by the losing party, unless otherwise
      determined by the arbitration
award.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      Article
9  MISCELLANEOUS

    

     

    

    
      	
              9.1  

            	
              Waiver

            

    

    

    
      	
               
      

            	
              No
      failure or delay of any party to exercise a right under this Agreement
      shall be deemed a waiver of such right. The single or partial exercise of
      a right shall not prevent the exercise of the same right in the
      future.

            

    

    

    
      	
              9.2  

            	
              Notice

            

    

    

    
      	
               
      

            	
              All
      notices and other communications required or permitted hereunder will be
      in writing and, unless otherwise provided in this Agreement, will be
      deemed to have been duly given when delivered in person or when dispatched
      by electronic facsimile transfer (confirmed in writing by mail
      simultaneously dispatched) or two (2) days after having been dispatched by
      courier to the appropriate party at the address specified
      below:

            

    

    

    
      	
               
      

            	
              If
      to Party A, to No.9 Ha Ping Xi Lu, Ha Ping Lu Ji Zhong Qu Harbin Kai Fa
      Qu, Harbin, China 150060

            

    

    Attention:
Tianfu Yang

    

    
      	
               
      

            	
              If
      to Party B1, to N0.159, Ming Guang Road, Economy and Technology
      Development Zone, Xi’an

            

    

    Attention:
Yuncheng Yang

    

    
      	
               
      

            	
              If
      to Party B2, to N0.159, Ming Guang Road, Economy and Technology
      Development Zone, Xi’an

            

    

    Attention:
Yuncheng Yang

    

    
      	
               
      

            	
              or
      to such other address or addresses as any such party may from time to time
      designate as to itself by like
notice.

            

    

    

    
      	
              9.3  

            	
              Assignment

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    No party
shall assign any of its rights or obligations hereunder to any third party
without the prior written consent of the other Parties.

    

     

    
      	
              9.4  

            	
              Invalidity

            

    

    

    The
invalidity of a provision of this Agreement shall not affect the validity of any
other provision of this Agreement.

    

    
      	
              9.5  

            	
              Language
      and Execution in Counterparts

            

    

    

    This
Agreement is made in Chinese in quadruplicate originals with equal weight, and
each Party shall keep one original with one original for Simo
motor.

    

    
      	
              9.6  

            	
              Amendments

            

    

    

    This
Agreement may be changed, amended or modified only by means of written agreement
executed by the duly authorized representatives of the parties or their
permitted successors or assignees.

    

     

    
      	
              9.7  

            	
              Applicable
      Law

            

    

    

    The
conclusion, validity, interpretation, implementation of this Agreement and the
resolution of disputes hereunder, shall be governed by PRC Laws and
Regulations.

    

     

    
      	
              9.8  

            	
              Effectiveness

            

    

    

     

    This
Agreement shall take effect when it is executed by the Parties.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their respective duly authorized representative on the date first set forth
above.

    

    

    (No text
below)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (This is
the page for execution of Agreement Regarding to Equity Acquisition of Xi’an
Simo Motor Incorporation (Group) Among Harbin Tech Full Electric Co. Ltd. And
Xi’an Simo Electric Co. Ltd. Shaanxi Electric Machinery
Association)

    

    

    

    

    Party
A: Harbin Tech Full Electric Co. Ltd.

    Legal
Representative / Authorized Representative:

    

    

    

    

    

    Party
B1: Xi’an Simo Electric Co. Ltd.

    Legal
Representative / Authorized Representative:

    

    

    

    

    Party
B2: Shaanxi Electric Machinery Association

    Legal
Representative / Authorized Representative:

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