Document:

DATED December 24, 2014

         

         

         

         

         

         

         

         

         

        SGOCO International (HK) Limited 

        as Seller

         

        and

         

         

        APEX Flourish Group Limited 

        as Purchaser

         

         

         

         

         

         

        ______________________________________________________

         

        AGREEMENT 

        FOR SALE AND PURCHASE

        OF ALL OF THE EQUITY OF

        Sgoco (Fujian) Electronic Co., Ltd

        ______________________________________________________

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

 

    	 

    	 

    

 

CONTENTS

 

ClausePage

 

 

	Clause	Page
	 	 	 
	1.	INTERPRETATION	1
	2.	SALE
AND PURCHASE	3
	3.	PURCHASE PRICE	3
	4.	SECURITIES	4
	5.	COMPLETION	4
	6.	WARRANTIES AND INDEMNITIES	5
	7.	FURTHER ASSURANCES	6
	8.	TERMINATION	6
	9.	FORCE MAJEURE	6
	10.	NON-COMPETITION	7
	11.	RIGHT OF FIRST REFUSAL	7
	12.	CONFIDENTIALITY	8
	13.	INCOME TAX AND EXPENSES	9
	14.	GENERAL	9
	15.	NOTICES	10
	16.	GOVERNING LAW AND JURISDICTION	10
	 	 	 
	 	 	 
	Schedule	 
	 	 	 
	1.	Particulars of the Company	12
	2.	Payment schedule	13
	3.	Seller’s Completion obligations	14
	4.	Warranties	16
	5.	Activities pending Completion	19
	 	 	 
	 	 	 
	Annex	 
	 	 	 
	A.	The Financial Statements as of November 30, 2014 (draft)	

 

 

 

    	 

    	 

    

 

AGREEMENT dated December 24, 2014

 

PARTIES

 

		1.	SGOCO INTERNATIONAL (HK) LIMITED., a company incorporated in Cayman Islands whose correspondence address is at Suite
1503, 15/F, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong (the “Seller"); and

 

		2.	APEX FLOURISH GROUP LIMITED, a company incorporated in British Virgin Islands whose correspondence
address is at Office A, 22/F, Guangdong Investment Tower, 148 Connaught Road Central, Hong Kong (the "Purchaser").

 

WHEREAS:

 

		(A)	Sgoco (Fujian) Electronic Co., Ltd (“Company”) is a private company incorporated
in Hong Kong the particulars of which are set out in Schedule 1.

 

		(B)	The Seller is the legal and beneficial owner of the entire Sale Equity (as defined below) and all
those Sale Equity constitute the entire registered share capital of the Company.

 

		(C)	The Purchaser wishes to purchase and the Seller wishes to sell, the Sale Equity subject to and
upon the terms and conditions of this Agreement.

 

AGREEMENT

 

		1.	INTERPRETATION

 

		1.1	Definitions: In this
Agreement, the following expressions shall have the following meanings except where the context otherwise requires:

 

"Accounts"

the un-audited balance sheet, as
at the Last Accounts Date, and un-audited profit and loss account for the twelve months ended on the Last Accounts Date, of the
Company.

 

"Business Day"

a day (excluding Saturdays) on
which commercial banks are generally open for banking business in China;

 

"Companies
Ordinance"

Company Law of the People’s
Republic of China, Contract Law of the People’s Republic of China and related laws and regulations;

 

"Completion"

completion of the sale and purchase
of the Sale Equity in accordance with the provisions of Clause 5;

 

 

    	-1-

    	 

    

"Completion
Date"

the date on which Completion takes
place;

 

"Director"

the director of the Company;

 

"Encumbrance"

a mortgage, charge, pledge, lien,
option, restriction, hypothecation, assignment, right to acquire or of pre-emption, third-party right or interest, other encumbrance,
priority or security interest of any kind, or any other type of preferential arrangement (including, without limitation, a title
transfer or retention arrangement) having similar effect, and any agreement or obligation to create or grant any of the aforesaid;

 

“Guarantee”

any guarantee, indemnity, surety
ship, letter of comfort or other assurance, security or right of set-off or financial or other obligation given or undertaken by
a person to secure or support or incur a financial or other obligation with respect to an obligation or liability (actual or contingent)
of any third party and whether given directly or by way of counter-indemnity to any third party who has provided a guarantee;

 

“Last Accounts
Date”

December 31, 2014;

 

“Material
Breach”

Delay of more than 60 days in paying
the Purchase Price in accordance with Clause 5.3;

 

"Purchase Price"

the total purchase price payable
by the Purchaser for all the Sale Equity pursuant to this Agreement, as set out in Clause 3.1;

 

"Records"

records and information of the
Company (including, without limitation, all accounts, books, ledgers, minutes books, registers, financial and other records of
whatsoever kind, returns and filings made or filed pursuant to Companies Ordinance or Inland Revenue Ordinance, and all other statutory
books and records);

 

“Relevant
Interests”

material interests, ownership or
rights in or related to the Company, including any equity, leases, businesses, equipments;.

 

"Sale Equity"

all shares or equity interest in
the Company to be sold by the Seller to the Purchaser pursuant to this Agreement;

 

"Warranty"

a representation, warranty and
undertaking contained in Clause 6.1 and Schedule 4 and "Warranties" means all of those statements.

    	-2-

    	 

    

  

		1.2	References: In this
Agreement, a reference to:

 

		(a)	a Clause, Recital, Schedule or an Annex is, unless the context
otherwise requires, a reference to a clause or sub-clause of, or the recital or a schedule or an annex to this Agreement; 

 

		(b)	any Ordinance, regulation or other statutory provision or enactment
is a reference to such Ordinance, regulation, statutory provision or enactment as amended, modified, consolidated, codified, re-enacted,
or extended or applied by a court of competent jurisdiction, from time to time and includes subsidiary legislation made thereunder;

 

		(c)	this Agreement (or any specific provision hereof) or any other
document shall be construed as references to this Agreement, that provision or that other document as amended, varied or modified
from time to time;

 

		(d)	“China” is to the People’s Republic
of China.

 

		(e)	"RMB" is to China dollars, the lawful currency for
the time being of China; 

 

		(f)	"Hong Kong" is to the Hong Kong Special Administrative
Region of the People’s Republic of China; 

 

		(g)	"US$" is to the United States dollars, the lawful currency for the time being of the
United States of America; and

 

		1.3	Headings: Headings in
this Agreement are for ease of reference only and shall not affect the interpretation or construction of this Agreement.

 

		1.4	Recitals, Schedules and Annexes: The Recitals, Schedules and
Annexes form part of this Agreement.

 

		1.5	Construction: Words denoting the singular include the plural
and vice versa and words denoting one gender include all genders. 

 

		2.	SALE AND PURCHASE

 

The
Seller as beneficial owner shall sell and the Purchaser shall purchase the Sale Equity on and subject to the terms and conditions
of this Agreement and free from any Encumbrance other than any Encumbrance created pursuant to this Agreement and with all rights
now and hereafter attaching thereto.

 

		3.	PURCHASE PRICE

 

		3.1	Purchase Price: The Purchase Price for all the Sale Equity
shall be equivalent to the net asset value of the Company on December 31, 2014 calculated on
the basis of Chinese accounting standards.

 

As of November 30, 2014, the net asset value of
the Company is RMB 63,352,699. Any change of the net asset value during the period till December 31, 2014 will affect the final
purchase price. The purchase price shall be paid by installments in accordance with Clause 5.3 and Schedule 2.

 

    	-3-

    	 

    

 

		3.2	Form of payment: Each of the payments due to the Seller under
this Clause 3 shall be made by way of telegraphic transfer or other means, at the time and in the manner as set out in Schedule
2. 

 

		4.	Securities

 

		4.1	In order to secure the payment of the Purchase Price and the
performance of the obligations of the Purchaser under this Agreement, the Purchaser agrees to (a) pledge 100% of the Sale Equity
back to the Seller and/or its assignee(s) (the “Pledge”), of which the terms and
conditions are prescribed in the Deed of Share Charge dated the date hereof and (b) grant to the Seller and/or its assignee(s)
a security interest in the Accounts Receivable, Cash and Advances to Suppliers in the account of the Company (the “Security
Interest”) as of the Last Accounts Date, with a total sum equals to the Purchase Price (the “Secured Amount”),
of which the Purchaser undertakes to procure the its subsidiaries to establish escrow accounts in China with and in such manner
as requested by Seller’s subsidiary, SGOCO (Shenzhen) Technology Co. Ltd., with the total sum of the escrow accounts equals
to the Secured Amount and (c)undertakes to procure the Company to liquidate its Accounts Receivable, Cash and Advances to Suppliers
to enable the Purchaser to have sufficient funds for making the payments to the Seller in whatever manner available. 

 

As part
of this Pledge and Security Interest provided by the Purchaser to the Seller, the Purchaser agrees that it will not dispose of
any material assets without the Seller’s prior written consent until full payment of the Purchase Price as set out in Clause
3.1.

 

		4.2	The Purchaser agrees to procure the Company to settle the entire balance of Accounts Payable and
Other Payables (the “Payables”) due to the Seller or its affiliates prior to June 30, 2015. The Purchaser shall assume
responsibility to pay such Payables. As of November 30, 2014, the balance of the Payables due to the Seller or its affiliates is
RMB 513,273,562. The Payables shall be paid by way of telegraphic transfer or other means, at the time and in the manner as set
out in Schedule 2.

 

		5.	COMPLETION

 

		5.1	Completion: Completion shall take place at the offices of the
Seller upon execution of this Agreement.

 

		5.2	Seller’s obligations: At or before Completion, the Seller
shall procure the satisfaction of the conditions and the delivery to the Purchaser of those documents and other items set out in
Schedule 3.

 

		5.3	Purchaser's obligations: Against due performance of the provisions
of Clause 5.2, the Purchaser shall pay the Purchase Price to the Seller by way of telegraphic transfer or other means at the time
and in the manner as set out in Schedule 2. 

 

 

    	-4-

    	 

    

 

		6.	WARRANTIES AND INDEMNITIES

 

		6.1	Warranties: Subject to the matters which are expressly provided
for under the terms of this Agreement and the Accounts, the Seller represents, warrants and undertakes to the Purchaser and its
successors in title that to the best of its knowledge and belief after reasonable investigation on its part each statement contained
in Schedule 4 is true, accurate and complete in all respects and not misleading at the date of this Agreement. The Seller acknowledges
that the Purchaser is entering into this Agreement in reliance upon each Warranty.

 

		6.2	Separate Warranties: Each Warranty is separate and independent
and without prejudice to any other Warranty and, except where expressly stated otherwise, is not limited by any provision of this
Agreement or another Warranty.

 

		6.3	Purchaser’s rights: In the event of any Relevant Breach,
the Purchaser shall, without prejudice to the Purchaser’s other rights in respect thereof, be entitled by notice given to
the Seller at any time to require the Seller to make good the resultant loss by the payment in cash to the Purchaser
of an amount equal to the amount by which in consequence of the Relevant Breach the value of the Sale Equity falls
short of the value they would have had if the relevant Warranty had been true and accurate and not misleading and otherwise had
been complied with.

 

“Relevant
Breach” means any event, matter or circumstance which, to the knowledge and belief of the
Seller after reasonable investigation on its part, is inconsistent with, contrary to or otherwise a material breach of any of the
Seller’s Warranties and includes any matter or thing which in any material respect renders any of the Seller’s Warranties
untrue or misleading.

 

		6.4	Limitation of Seller’s liability: Notwithstanding any provisions
of this Agreement to the contrary, the maximum amount of liability of the Seller in relation to any and all breaches of the Warranties
whatsoever (including the legal fees and fees of arbitrators that the Purchaser may incur) shall not exceed RMB$2 million.
In addition, the Seller shall not bear any liabilities whatsoever in relation to its obligations
under this Agreement, the Warranties or the activities or conduct or omission of the Group unless the Purchaser commences legal
proceedings against the Seller with specific references to such obligation, the Warranties or activities or conduct or omission
of the Group mentioned above within two years from the date of the Completion.

 

		6.5	Purchaser’s responsibility: The Purchaser hereby agrees
for itself, its successors and assigns to indemnify, defend and hold the Seller , their legal representatives, officers, directors,
employees, agents, successors and assigns (the “Seller Indemnified Parties”), free and harmless from any and all actions,
suits, and proceedings and from and against any and all losses, claims, damages, costs, charges, counsel fees, payments, expenses
and liabilities whatsoever which any of them may sustain or incur by reason of any matter or thing arising out of or relating to
the Responsibility and the Commitment, except in the event that such actions, suits, proceedings, losses, claims, damages, costs,
charges, counsel fees, payments, expenses and liabilities arise as results of gross negligence of the Seller Indemnified Parties
who not having acted in good faith.

 

    	-5-

    	 

    

 

		7.	Further assurances:

 

		7.1	The Seller shall execute and deliver such further documents and
perform and procure such acts and things as the Purchaser may reasonably require effectively to vest the beneficial and registered
ownership of the Sale Equity in the Purchaser free from any Encumbrances other than any
Encumbrances created pursuant to this Agreement and to give full effect to the Seller’s obligations under this Agreement.

 

		7.2	The Purchaser shall execute and deliver such further documents
and perform and procure such acts and things to give full effect to the Purchaser’s obligations under this Agreement. The
Purchaser shall procure that the Seller has full access to the Company’s accounts, including, but not limited to, the balance
sheet and profit and loss accounts, until January 31, 2015.

 

		8.	TERMINATION

 

		8.1	Seller’s right: The Seller may terminate this Agreement
in whole or in part with a full reservation of all accrued rights and remedies immediately upon written notice to the Purchaser
if (a) the Purchaser is found to be in Material Breach of Clause 5.3, or (b) the Purchaser becomes insolvent, or a petition in
bankruptcy is filed by or against the Purchaser.

 

		8.2	Purchaser’s right: The Purchaser may terminate this Agreement
if there shall be a material breach by the Seller of any representation or warranty, or any covenant or agreement contained in
this Agreement and which breach cannot be cured or has not been within twenty business days of receiving written notice of the
breach from the Purchaser.

 

		9.	Force Majeure

 

		9.1	Force Majeure : “Force Majeure" shall mean events,
such as acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign
enemies, hostilities (regardless of whether war is declared), civil war, rebellion, revolution, insurrection, military or usurped
power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout
or interruption or failure of electricity or telephone service (each a “Force Majeure Event").

 

		9.2	Effect of Force Majeure:

 

		(a)	If a party suffers a Force Majeure Event, such party shall promptly
notify the other party by written notice within 24 hours of the occurrence of the Force Majeure Event, and, so long as such condition
shall persist, such party shall not be liable for the delay in performance of, or the failure to perform, its obligations (other
than obligations for payment of amounts due as set out in Schedule 2) under this Agreement. Within fifteen days after giving notice
of the Force Majeure Event, the claiming party shall give the other party an estimate of the Force Majeure Event’s expected
duration and probable impact. The claiming party shall continue to furnish the other party with timely regular reports and updates
during the continuation of the Force Majeure Event. Each party shall immediately exercise commercially reasonable efforts to mitigate
or limit the impact of the Force Majeure Event on its operations. 

 

    	-6-

    	 

    

 

		(b)	Notwithstanding the foregoing, no party is entitled to terminate
this Agreement without the other party’s written consent as a result of the occurrence of a Force Majeure Event.

 

		(c)	If a party asserts Force Majeure as an excuse for the delay in
performance of, or the failure to perform the party's obligation, then the nonperforming party must prove that the party has fulfilled
the obligations set out in Clause 9.2 (a) and that the party substantially fulfilled all non-excused obligations under this Agreement.

 

		10.	Non-competition 

  

		10.1	During the Non-Compete Period, the Purchaser shall not (and shall
procure that none of its subsidiaries shall) induce or attempt to induce any employee of the Seller to leave their employment.

 

		10.2	The Purchaser agrees that the non-competition undertakings and
covenants set out in Clauses 10.1 and 10.2 are reasonable in nature. If a court or arbitrator of competent jurisdiction determines
that any of the non-competition undertakings and covenants set out in Clauses 10.1 and 10.2 is unreasonable in nature, the Purchaser
agrees that such court or arbitrator shall reform such undertaking and restrictive covenant so that it is enforceable to the maximum
extent permitted by law for an undertaking or restrictive covenant of that nature, and such court or arbitrator shall enforce the
undertaking or restrictive covenant to that extent. Such remedies shall not be exclusive, but rather shall be in addition to any
other remedies available at law or in equity for violation of this Agreement. 

 

		11.	Right of First Refusal

 

		11.1	For a period of five years from the Completion, the Purchaser
shall not sell, assign, transfer or otherwise voluntarily alienate or dispose of any of the Relevant Interest to a third party
without first offering to sell, assign or transfer the Relevant Interest to the Seller and/or its assignee(s). 

 

		11.2	If the Purchaser receives from a third party a valid and binding
offer to purchase any of the Relevant Interests which is acceptable to the Purchaser (the “Interest Holder”), it shall
give the Seller a written notice (the "Notice") stating: (a) the Interest Holder's bona fide intention to sell or otherwise
transfer the Relevant Interests at issue (the “Offered Relevant Interests”); (b) the name and address of each proposed
purchaser or other transferee (the "Proposed Transferee"); (c) the details of the Relevant Interests to be transferred
to each Proposed Transferee; (d) the bona fide cash price or other consideration for which the Interest Holder proposes to transfer
the Offered Relevant Interests (the "Offered Price"); and (e) that the Interest Holder acknowledges this Notice
is an offer to sell the Offered Relevant Interests to the Seller and/or its assignee(s) pursuant to the Seller's right of first
refusal at the Offered Price as provided for in this Agreement.

 

		11.3	At any time within thirty days after the date of the Notice,
the Seller and/or its assignee(s) may, by giving written notice to the Interest Holder, elect to purchase all (or, with the consent
of the Interest Holder, less than all) the Offered Relevant Interests proposed to be sold, assigned or transferred to any one or
more of the Proposed Transferees named in the Notice, at the purchase price determined as specified below.

 

    	-7-

    	 

    

 

		11.4	The purchase price for the Offered Relevant Interests purchased
under this Clause will be the Offered Price. If the Offered Price includes consideration other than cash, then the value of the
non-cash consideration, as determined in good faith by the Seller's Board of Directors, will conclusively be deemed to be the cash
equivalent value of such non-cash consideration.

 

		11.5	If all of the Offered Relevant Interests proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the Seller and/or its assignee(s) as provided in this Clause,
then the Interest Holder may sell, assign or otherwise transfer such Offered Relevant Interest to each Proposed Transferee at the
Offered Price or at a higher price, provided that (a) such sale, assign or other transfer is consummated within one hundred and
twenty days after the date of the Notice, (b) any such sale or other transfer is effected in compliance with all applicable laws,
and (c) each Proposed Transferee agrees in writing that the provisions of this Clause will continue to apply to the Offered Relevant
Interests in the hands of such Proposed Transferee. If the Offered Relevant Interests described in the Notice are not transferred
to each Proposed Transferee within such one hundred twenty day period, then a new Notice subject to the provisions of this Clause
must be given to the Seller, pursuant to which the Seller will again be offered the right of first refusal before any Relevant
Interests held by the Interest Holder may be sold or otherwise transferred.

 

		12.	CONFIDENTIALITY

 

Confidentiality:
Each party shall at all times keep confidential, treat as privileged, and not directly or indirectly make or allow to be made any
disclosure or use of any oral or written information relating to any other party or the existence or subject matter of this Agreement
(“Confidential Information”), except to the extent:

 

		(a)	required by applicable laws or regulations
or rules of any stock exchange (where the securities of a party or its holding company are listed), and after providing notice
to the other relevant party or parties of the proposed disclosure and taking into account the reasonable requirements of the other
party or parties;

 

		(b)	necessary to obtain the benefit of, or to carry out obligations
under, this Agreement, which shall include the ability to disclose Confidential Information to any government authorities, employees
or advisers who need to have it for purposes directly connected with the transactions provided for in this Agreement, provided
that the relevant disclosing party shall advise such employees or advisers of the confidential nature of the Confidential Information
and shall use all reasonable endeavors to procure that such persons keep the relevant Confidential Information strictly confidential
and shall indemnify the other relevant party in respect of all costs, claims, actions, proceedings, losses and liabilities in connection
with any unauthorized disclosure or use of the Confidential Information by such persons; or

 

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		(c)	that the information is or becomes available in the public domain
without breach by a party of its confidentiality obligations under this clause or at law.

 

Each party shall, on request
by any other party at any time, return to the other party any Confidential Information which it holds (in whatever form) in respect
of that other party.

 

		13.	INCOME TAX AND RELEVANT TAX

 

All or any income tax payable
and relevant tax expenses on the instruments of transfer and bought and sold notes relative to the sale and purchase of the Sale
Equity shall be borne by the Purchaser.

 

		14.	GENERAL

 

		14.1	No prejudice to rights/waiver: No failure to exercise, or delay
in exercising, any right or remedy under this Agreement will operate as a release or waiver of such right or remedy or any other
right or remedy, nor will any single or partial exercise of any right or remedy under this Agreement or provided by law preclude
any other or further exercise of it or the exercise of any other right or remedy or prejudice or affect any right or remedy against
others under the same liability whether joint, several or otherwise. A waiver of any breach of this Agreement or any right of remedy
under this Agreement shall not be effective, or implied, unless that waiver is in writing and is signed by the party giving the
waiver. 

 

		14.2	Status: Nothing in this Agreement is intended or shall be deemed
to constitute a partner, agency, employer-employee, variable interest entity or joint venture relationship between the parties.

 

		14.3	Entire agreement: This Agreement (together with the documents
referred to herein and the Schedules hereto) contains the entire agreement between the parties hereto relating to the transactions
contemplated herein and supersedes any previous agreement (oral or written) between the parties in relation thereto.

 

		14.4	Variations in writing: Any variation to this Agreement shall
be binding only if it is in writing and signed by or on behalf of each party.

 

		14.5	Severability: If any term in or provision of this Agreement shall
be held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, the term or provision shall to
that extent be deemed not to form part of this Agreement and the enforceability of the remainder of this Agreement shall not be
affected.

 

		14.6	Rights cumulative: The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by law. 

 

		14.7	Survival: The rights and obligations contained in this Agreement
remain in force after Completion, except to the extent that they have been fully performed or where this Agreement provides otherwise.
The rights and remedies of each party in respect of this Agreement shall not be affected by Completion.

 

		14.8	Counterparts: This Agreement may be executed in any number of
counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same document.

 

    	-9-

    	 

    

 

		15.	NOTICES

 

		15.1	Addresses: Any notice or other communication under or in connection
with this Agreement shall be in writing and shall be left at or sent by pre-paid registered post (if posted from and to an address
in Hong Kong and Macau), pre-paid registered airmail (if posted from or to an address outside Hong Kong and Macau) or facsimile
transmission to the party due to receive the notice or communication at its respective address or facsimile number set out below
or to such other address and/or number(s) as may have been last specified by such party by written notice to each of the other
parties hereto.

 

To the Seller:

 

	Address:   	Suite 1503, 15/F, Sino Plaza,
	 	255-257 Gloucester Road, Causeway Bay, Hong Kong
	Attention:	Or Tin Man	 
	Facsimile:	(852) 2838 5200	 

 

To the Purchaser:

 

	Address:   	Office A, 22/F, Guangdong Investment Tower, 148 Connaught Road Central, Hong Kong
	 	 
	Attention:	Wei Xiang

 

		15.2	Delivery: In the absence of evidence of earlier receipt, a notice
or other communication is deemed given:

 

		(a)	if delivered personally, when left at the address referred
to in Clause 15.1;

 

		(b)	if sent by mail except air mail, two days after posting;
and

 

		(c)	if sent by air mail, six days after posting;

 

		(d)	if sent by fax, on completion of its transmission.

 

In proving the giving of a
notice by mail it shall be sufficient to prove that the envelope containing such notice was properly addressed and posted.

 

		16.	GOVERNING LAW AND JURISDICTION

 

		16.1	Hong Kong law: This Agreement is governed by, and shall be construed
in accordance with, the laws of Hong Kong.

 

		16.2	Arbitration: The parties agree that they shall use their best
efforts to resolve amicably any dispute or difference arising from or in connection with this Agreement. If the parties are unable
to settle the dispute or difference within 30 days from the delivery by any party of a notice confirming the existence of the dispute,
any party may refer the dispute to arbitration in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration
Rules in force when the valid notice of arbitration is submitted in accordance with these rules. The arbitration shall be conducted
in the Chinese language. The award of the arbitration shall be final and binding on the parties, and the costs of arbitration shall
be borne by the losing party, unless otherwise determined by the relevant arbitration authority. During arbitration, except for
the matters under dispute, the parties shall continue to perform this Agreement. 

 

 

    	-10-

    	 

    

 

SCHEDULE 1

 

PARTICULARS OF THE COMPANY

 

Sgoco (Fujian) Electronic Co., Ltd

 

	Company number: 	350500400057587
	 	 
	Place of incorporation: 	Haolin District, Luoshan, Jinjiang City, Fujian Province, China
	 	 
	Date of incorporation: 	July 28, 2011
	 	 
	Registered Capital: 	USD 2,200,000  
	 	 
	Contributed Capital: 	USD 2,200,000 
	 	 
	Shareholders: 	SGOCO International (HK) Limited
	 	 
	Registered office: 	Guanke Technology Park, Luoshan, Jinjiang City,
	 	Fujian Province, China
	 	 
	Postal Code:	362200

 

 

 

    	-11-

    	 

    

 

SCHEDULE 2

 

Payment Schedule

 

		1.	The Purchase Price as set forth in Clause 3.1 and the Payables as set forth in Clause 4.2 shall
be paid by way of telegraphic transfer or other means in the manner as directed by the Seller in writing.

 

		2.	The Purchase Price shall be paid in installments according
to the following schedule:

 

 

	Payment Date	
        Amount

         

	14 days after the Completion Date	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By February 15, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By March 15, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By March 31, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By April 15, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By April 30, 2015	20% of Purchase Price and Payables or RMB116,000,000 or its equivalent
	By May 15, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	By May 31, 2015	10% of Purchase Price and Payables or RMB58,000,000 or its equivalent
	 Before June 30, 2015	The remaining amount in cash or equivalent asset

 

		3.	There shall be imposed upon the Purchaser a 2% per month liquidated damage for any late payment
computed upon the amount of any outstanding principal and accrued interest whose payment to the Seller is overdue for more than
30 days under this Agreement.

 

 

    	-12-

    	 

    

 

SCHEDULE 3

 

SELLER’S COMPLETION OBLIGATIONS

 

ACTIONS

 

The following actions:

 

		1.1	Meetings:

 

Holding of a Board of Directors’
meeting, or signing written resolutions, of the Directors of the Company at or in which resolutions shall be passed:

 

approving
the transfer of the Sale Equity to the Purchaser and the registration of the same subject to its being duly stamped and presented
for registration in accordance with the Company’s articles of association;

 

noting
the resignation of Cheng Hong as Director of Sgoco (Fujian) and approving the representative appointed by the Purchaser as Director;

 

noting the resignation of
Cheng Hong as legal representative of the Company and approving the representative appointed by the Purchaser as legal representative
in its place;

 

noting the resignation of
Deng Qing Hong as supervisor of the Company and approving the representative appointed by the Purchaser as supervisor in its place;

 

revoking
or varying all existing authorities in respect of the operation of the bank accounts of the Company as the Purchaser shall designate
in writing in advance.

 

DELIVERY
OBLIGATIONS

 

Delivery of the following documents
and things:

 

		2.1	Change of Equity Registration: The Seller is required to present the receipt issued by relevant government bureau to
the Purchaser, in respect of the application for changing the registration of the equity holder in official record. .

 

		2.2	Equity transfers: Duly prepare, execute and valid documents of transfer in relation to the Sale Equity, such transfers
to be in favor of the Purchaser, and paid the stamp duties for the transfer of equity as required by relevant laws and regulations.

 

		2.3	Resignations of Director and Supervisor: Written resignations of Cheng Hung as Director and Deng Qing Hung as Supervisor
of the Company, confirming that they have no claims against the Company or the Subsidiaries (as this case may be) in their capacity
as director or Supervisor whatsoever whether by way of compensation, remuneration, severance payments, pensions, expenses or otherwise.

 

		2.4	Corporate records:  To the extent that the same are not already in the possession of the Company or its agents all Records,
complete and up to date, and the certificates of incorporation, deeds, documents and correspondence relating to the business, affairs,
assets and liabilities (including documents of title relating to the assets of the Company).

 

    	-13-

    	 

    

 

		2.5	The Accounts

 

		2.6	Check books: All the current check book of the Company together with current bank statements of the Company in respect
of its checking account.

 

		2.7	Resolutions: Original written resolutions of the Directors of the Company referred to in paragraph 1.1 of this Schedule
3 shall have been passed.

 

 

 

    	-14-

    	 

    

 

SCHEDULE 4

 

WARRANTIES

 

 

		1.	AUTHORITY AND
                                         INFORMATION

 

		1.1	Authority: The Seller has full right, power and legal capacity to validly and duly execute and deliver, and to perform,
this Agreement and all other documents which are to be executed by it at or before Completion, and this Agreement constitutes,
and the documents which are to be executed by it at or before Completion when executed will constitute, legal, valid and binding
agreements or obligations of the Seller enforceable in accordance with their respective terms.

 

		2.	SHARES

 

		2.1	Sale Equity: The Seller is the sole legal and beneficial owner of, and has full right, power and authority to sell and
transfer the full legal and beneficial ownership of the Sale Equity free from all Encumbrances (of which there are none in existence)
and with all rights now and hereafter attaching thereto.

 

		2.2	Registered capital of the Company: The registered capital of the Company is set out in Schedule 1.

 

		2.3	No other interests: The Company does not have:

 

		(a)	any subsidiary or is or has ever been the holder or beneficial owner of, or has agreed to acquire, any share or loan capital
of any company, other than the Subsidiaries; and/or

 

		(b)	any branch, agency or place of business, or any permanent establishment.

 

		3.	ACCOUNTS AND RECORDS

 

		3.1	Accounts: The Accounts:

 

		(a)	give a true and fair view of the assets, liabilities, state of affairs and financial position of the Company at the Last Accounts
Date and its profits/loss for the financial period ended on that date;

 

		(b)	comply with the requirements of the Company Law and other relevant laws; and

 

		(c)	have been prepared in accordance with Chinese Accounting Standards.

 

		3.2	No material adverse change: There has been no material and adverse effect on the financial position, business, and results
of operations and prospects of the Company since the Last Accounts Date.

 

		3.3	Liabilities: No material liabilities have been assumed or incurred by the Company since the Last Accounts Date.

 

    	-15-

    	 

    

 

		4.	TAXATION

 

		4.1	The Company has duly filed all tax returns and paid all applicable taxes in accordance with all relevant and applicable laws,
and was not and is not involved in any dispute with any tax authority and there are no factual circumstances existing which would
result in any such dispute in the future.

 

		4.2	All information supplied by or on behalf of the Company for the purposes of taxation was when supplied and remains complete
and accurate in all material respects.

 

		5.	LEGAL STATUS AND COMPLIANCE

 

		5.1	Due incorporation: The Company has been duly incorporated and is legally subsisting under the law of Hong Kong, and
there has been no resolution, petition or order for the winding-up of the Company, nor are any such resolutions, petitions or orders
imminent or likely.

 

		5.2	No breach of laws: Neither the Company nor any of its officers, agents or employees (during the course of their duties
in relation to it), has committed, or omitted to do, any act or thing which is in contravention of any applicable laws or regulation,
giving rise to any fine, penalty, default proceedings or other liability on its part or other adverse consequences.

 

		6.	BUSINESS

 

		6.1	Since the Last Accounts Date: Since the Last Accounts Date, the business of the Company has been continued in the ordinary
and normal course and in the same manner as previously.

 

		7.	REAL PROPERTY

 

		7.1	No real property: The Company does not own any real property or lease interest in China or elsewhere.

 

		8.	AGREEMENTS

 

		8.1	Material/unusual contracts: The Company has not entered into any agreements, instruments and arrangements, whether written
or oral, as at the date of this Agreement which are material to the Company and its business, relationships and financial position
and prospects, or is otherwise a contract of an unusual or abnormal nature, or outside the ordinary and proper course of its business.

 

		9.	LITIGATION

 

		9.1	No litigation: Except for the written disclosure made to the Seller, the Company is not involved in any litigation,
arbitration, administrative or criminal or other proceedings, whether as plaintiff, defendant or otherwise; there are no such proceedings
pending or threatened, either by or against the Company; and there is no fact or circumstance which is likely to give rise to any
such proceedings involving the Company.

 

    	-16-

    	 

    

 

SCHEDULE 5

 

ACTIVITIES PENDING COMPLETION

 

Save with the Clauses expressly provided in this Agreement,
the Seller shall procure that the Company will:

 

		1.	Ordinary business: carry on its business and activities in the ordinary and usual course without interruption, in the
usual manner so as to maintain its business as a going concern, and not make any change or material decision regarding its business
(including its terms of business), affairs, assets and liabilities;

 

		2.	Acquire or dispose of assets:  not acquire for or dispose of any assets of the Company otherwise than in the ordinary
and usual course of its business;

 

		3.	Capital expenditures: not make, or agree to make, any capital expenditure;

 

		4.	Dividends: not declare, pay or make any dividend or distribution;

 

		5.	Encumbrances: not to create any Encumbrance in respect of the Company or its assets;

 

		6.	Guarantees and loans: not give, or agree to give, any Guarantee or loan of any money to any person;

 

		7.	Payments in ordinary course: not make any payment out of the Company’s bank account except where the payment is
in the ordinary and usual course of its business;

 

		8.	Onerous agreements: not to enter into any agreement, arrangement or obligation which exceeds one year in term or is
onerous or unusual in nature

 

		9.	Comply with laws and regulations: conduct its business in accordance with and in compliance with all applicable laws
and regulations;

 

		10.	Co-operation to Purchaser: give all reasonable co-operations to the Purchaser so as to ensure a smooth transition of
management and control of the Company after Completion.

 

 

    	-17-

    	 

    

 

EXECUTED AS AN AGREEMENT

 

 

	SIGNED BY	)SIGNED
	 	)
	for and on behalf of	)
	SGOCO INTERNATIONAL (HK) LIMITED	)
	in the presence of:	)

 

 

Signature of Witness:

 

Name:

 

Address:

 

 

 

 

 

	SIGNED BY	) SIGNED
	 	)
	for and on behalf of	)
	APEX FLOURISH GROUP LIMITED  	)
	in the presence of:	)

 

Signature of Witness:

 

Name:

 

Address:

 

 

    	-18-

    	 

    

 

 

		A.	The Financial Statements as of November 30, 2014 (Draft)

 

 

	
        

        INCOME STATEMENT

	(In RMB)
	 	 	11 Months ended 

November 30, 2014
	REVENUES	 	209,764,717.89
	      COST OF GOODS SOLD	 	202,053,285.01
	      Sales Taxes	 	152,744.59
	      Selling Expenses	 	1,192,468.02
	      G&A Expenses	 	2,313,600.77
	      Finance Expenses	 	-409,582.74
	      	 	 
	INCOME FROM OPERATIONS	 	4,462,202.24
	  Other income (expense), net	 	2,200,001.00
	  	 	 
	   	 	 
	INCOME BEFORE PROVISION FOR INCOME TAXES	 	6,662,203.24
	  PROVISION FOR INCOME TAXES	 	357,841.95
	NET INCOME	 	6,304,361.29

 

    	

    	 

    

 

BALANCE SHEET as of November 30, 2014

 

(In RMB)

 

	ASSETS	Nov 2014	Dec 2013	LIABILITIES AND SHAREHOLDERS' EQUITY	Nov 2014	Dec 2013
	CURRENT ASSETS:	 	 	CURRENT LIABILITIES:              	 	 
	Cash	2,514,485
	80,962,376
	Short-term
loan	25,000,000
	25,000,000

	Notes
Receivable	-	-	Notes
payable              	-	-
	Accounts
receivable, trade	219,387,269
	154,544,244
	Accounts
payable, trade             	500,472,479
	412,361,069

	Advances
to suppliers	458,491,143
	338,415,733
	Customer
deposits              	3,623,218
	4,493,927

	Interest
receivable	-	-	Salary
payable             	86,715
	345,325

	Dividends
receivable	-	-	Tax
payable          	333,598
	210,246

	Other
receivables	6,477,595
	7,252,825
	Interest
payable	-	-
	Inventories	29,349,674
	44,261,907	Dividends
payable	-	-
	     			Other
payable	124,185,224
	124,889,326

	Other
current assets			    	 	 
	Total
current assets	716,220,166	625,437,084	Other
current liabilities	 	 
	NON-CURRENT ASSETS:			Total current liabilities	653,701,235	567,299,893
	     	-	-   	NON-CURRENT
LIABILITIES:	 	 
	     	-	-	Long
term loan	-	-
	Plant
and Equipment, net	833,768
	1,149,983
	     	-	-
	   	 		Total liabilities	653,701,235
	567,299,893

	    			SHAREHOLDERS'
EQUITY:	 	 
	    	-	-	Registered
Capital	13,599,347
	13,599,347

	     	-	-	APIC
	-	-
	Goodwill	-	-	     	-	-
	    	-	-	Statutory
reserves	2,288,231
	2,288,231

	     	-	-	Retained
earnings	47,465,121
	43,399,596

	Other
non-current assets	 	 	Total shareholders' equity	63,352,699	59,287,174
	Total non-current assets	833,768	1,149,983	 	 	 
	Total Assets	717,053,934
	626,587,067
	Total liabilities and shareholders' equity 	717,053,934
	626,587,067Second Amendment to Shareholder Agreement - Combined - Morris

Execution Version

SECOND AMENDMENT TO 
SHAREHOLDER AGREEMENTS
This Second Amendment to Shareholder Agreements (this “Amendment”) is made as of May 12, 2015 among Alon Assets, Inc., a Delaware corporation and successor by merger to Alon USA Operating, Inc., a Delaware corporation (“Assets” and collectively, the “Companies”), Alon USA Energy, Inc., a Delaware corporation (“Alon Energy”), Jeff  Morris (“Morris”) and Jeff Morris / IRA (the “IRA” and together with Morris, each a “Shareholder” and together, the “Shareholders”).  
WHEREAS, each Company and each Shareholder entered into the following agreements, as appropriate: (i) Shareholder Agreement – Option Shares, dated as of July 31, 2000, between Operating and Morris, as amended by that certain Amendment to Shareholder Agreement – Option Shares, dated as of June 30, 2002, (ii) Shareholder Agreement – Option Shares, dated as of July 31, 2000, between Assets and Morris, as amended by that certain Amendment to Shareholder Agreement – Option Shares, dated as of June 30, 2002, (iii) Shareholder Agreement – Owned Shares, dated as of July 31, 2000, between Assets and the IRA, (iv) Shareholder Agreement – Owned Shares, dated as of July 31, 2000, between Operating and the IRA and (v) Amendment to Shareholder Agreements, dated June 20, 2012, between Assets, Operating, Alon Energy, Morris and the IRA (the “First Amendment” and, collectively, the “Shareholder Agreements”), which set forth the rights and obligations of such Company and the Shareholders with respect to shares of common stock of such Company to be acquired by such Shareholder pursuant to the exercise of certain stock options (the “Shareholder Agreements”); and
WHEREAS, Alon Energy, the Companies and the Shareholders have agreed to certain modifications to the Shareholder Agreements, as set forth herein; and
WHEREAS, Alon Energy, the indirect parent company of each Company, will benefit from this Amendment and acknowledges and agrees to the terms set forth herein.
NOW, THEREFORE, the parties agree as follows:
		
	1)
	The definition of “Fair Market Value” set forth in Section 1 is hereby amended and restated in its entirety as follows:

“Fair Market Value” of a share of the Company’s Capital Stock means, with respect to any purchase or sale of shares of Capital Stock owned by a Shareholder, shall be equivalent to the product of (a) the number of shares of Alon Energy Common Stock into which such share of the Company’s Capital Stock would be exchangeable in accordance with table set forth in the First Amendment, multiplied by (b) the average Daily VWAP of the Alon Energy Common Stock as calculated each day during the 15 consecutive Trading Day period ending immediately prior to the date of determination.  

“Daily VWAP” of the Alon Energy Common Stock on any Trading Day means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page ALJ.N <EQUITY> VAP (or its equivalent successor if such page is not available) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such trading day determined, using a volume-weighted average method to the extent practicable, by a nationally recognized independent investment banking firm retained for this purpose by Alon Energy).  Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to close.
“Scheduled Trading Day” shall mean any day that is scheduled to be a Trading Day. If the Alon Energy Common Stock is not so listed for trading or quotation on or by any exchange or quotation system, Scheduled Trading Day means a Business Day.
 “Trading Day” shall mean a day during which trading in the Alon Energy Common Stock generally occurs on The New York Stock Exchange or, if the Alon Energy Common Stock is not listed on The New York Stock Exchange, the principal U.S. national or regional securities exchange on which the Alon Energy Common Stock is listed, admitted for trading or quoted or, if the Alon Energy Common Stock is not so listed, admitted for trading or quoted, any Business Day.  A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for a regular full Trading Day on the relevant exchange or trading system.  For the avoidance of doubt, Trading Day shall not include any Scheduled Trading Day with a scheduled closing time earlier than the then standard closing time for a regular full Trading Day even if such earlier closing time is the scheduled closing time for such day.  
2)    Sections 4 and 5 of the Shareholder Agreements are hereby amended and restated in their entirety as follows:
“4.    Call Option of the Company.  
(a)    Initiation of Call Option.  Beginning on the first date that the Morris is no longer a director of Alon Energy or Alon USA Partners GP, LLC (the “Separation Date”), the Company will have the right to accelerate the exchange (“the “Call Right”) of any or all of the shares of the Capital Stock of the Shareholders in accordance with the terms and conditions of this Section 4.  The Company’s Call Right may be exercised at any time within one year following the Separation Date by delivering a written notice (the “Call Notice”) to the Shareholders, which will set forth the Company’s irrevocable undertaking to exchange the number of shares of Capital Stock stated in the Call Notice.  Each Shareholder agrees to tender its 

Capital Stock to the Company upon delivery of the Call Notice on the terms and conditions set forth in this Section 4.  
(b)    Exchange of Capital Stock.  The number of shares of Alon Energy Common Stock to be issued in respect of each share of Company Capital Stock being exchanged will be equal to 187.06.
(c)    Closing.  The closing of the exchange contemplated by this Section 4 will occur on the 30th day following delivery of the Call Notice (or such earlier date as may be agreed among the parties).  At such closing, the Company will deliver the appropriate number of shares of Alon Energy Common Stock to the Shareholders against delivery by the Shareholders of certificates evidencing the Capital Stock being exchanged, free and clear of all liens, claims and encumbrances (other than this Shareholder Agreement) and endorsed in good form for transfer.
5.    Put Option of the Shareholders.
(a)    Initiation of the Put Option.  After the Separation Date, the Shareholders or the Shareholders’ Representative, in the event of a Shareholder’s death, will have the right to require the Company to accelerate the exchange (the “Put Right”) of any or all of the shares of Capital Stock of the Shareholders in accordance with the terms and conditions of this Section 5.  The Shareholders’ right to require the Company to exchange the Capital Stock may be exercised at any time within one year following the Separation Date by delivering a written notice (the “Put Notice”) to the Company, which will set forth the Shareholders’ irrevocable undertaking to tender to the Company the number of shares of Capital Stock stated in the Put Notice.  The Company agrees to exchange Capital Stock upon the delivery of a Put Notice on the terms and conditions of this Section 5.
(b)    Exchange of Capital Stock.  The number of shares of Alon Energy Common Stock to be issued in respect of each share of Company Capital Stock being exchanged will be equal to 187.06.
(c)    Closing.  The closing of the purchase and sale contemplated by this Section 5 will occur on the 30th day following delivery of the Put Notice (or such earlier date as may be agreed among the parties).  At such closing, the Company will deliver the appropriate number of shares of Alon Energy Common Stock to the Shareholders against delivery by the Shareholders of certificates evidencing the Capital Stock being exchanged, free and clear of all liens, claims and encumbrances (other than this Shareholder Agreement) and endorsed in good form for transfer.

		
	3)
	The Shareholder Agreement is hereby amended to include new Sections 6(d) and (e) as follows:

“(d)    In the event that Alon Energy consolidates with, merges with or into, another Person, or any Person consolidates with, or merges with or into, Alon Energy, the Company will provide Shareholders with the right to immediately accelerate and effect the exchange of all remaining shares of Company Capital Stock into shares of Alon Energy Common Stock (the “Acceleration Right”). The Company shall deliver written notice to Shareholders (the “Pre-Merger Notice”), which written notice shall specify the terms and conditions on which the proposed transaction is to take place.  
(e)    Exercise of Acceleration Right. The Acceleration Right may be exercised by any Shareholder by delivery of a written notice to the Company within five (5) calendar days following the receipt of the Pre-Merger Notice, such written notice to state the number of shares of Capital Stock that the Shareholder proposes to exchange.  The closing of the exchanges contemplated by this Section 6(e) shall be effective immediately prior to the closing of the transaction giving rise to the Pre-Merger Notice. At such closing, the Company will deliver the shares of Alon Energy Common Stock to the Shareholders against delivery by the Shareholders of certificates evidencing the Capital Stock being exchanged, free and clear of all liens, claims and encumbrances (other than this Shareholder Agreement) and endorsed in good form for transfer.”
4)    Except as specifically modified hereby, the terms and conditions of the Shareholder Agreements shall remain in full force and effect.  Initially capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Shareholder Agreements.  

[Remainder of this page intentionally left blank]

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

	
		
	 
	ALON ASSETS, INC.
By: /s/ Paul Eisman                   
  Name:  Paul Eisman 
 Title: President and CEO

	 
	 

	 
	ALON USA ENERGY, INC.
By: /s/ Paul Eisman                   
  Name:  Paul Eisman 
 Title: President and CEO

	 
	

 /s/ Jeff Morris                      
 
  Jeff Morris

	 
	

 /s/ Jeff Morris                      
 
  Jeff Morris / IRA

	 
	AGREED TO AND ACKNOWLEDGED

By: /s/ Karen Morris             
Name:  Karen Morris

SPOUSAL CONSENT

I acknowledge that I have read the foregoing Amendment to Shareholders Agreement (the “Agreement”) between Alon USA Energy, Inc., Alon Assets, Inc. (“Assets”), my spouse and my spouse’s IRA, that I understand its provisions, that I consent thereto and that I agree to be bound by its terms.  I am aware that by its terms, among other things, my spouse and my spouse’s IRA agree to exchange their shares of the capital stock in Assets, including my community property or other interest therein (if any).  I hereby consent to such exchange, approve of the provisions of the Agreement, and agree that if I predecease my spouse, the successors of my community property or other interest (if any) in such shares will hold such shares subject to the provisions of the Agreement.

Dated:  April 30, 2015__________________        /s/ Karen Morris                                                                                    (Signature of Spouse)

                                            
Karen Morris                                                
(Printed Name)

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