Document:

Unassociated Document

    
      LUCK
LOYAL INTERNATIONAL INVESTMENT LIMITED

      

      AND

      

      NEW-METAL
(H.K.) TECHNOLOGY LIMITED

       

      
        

      

       

      REGARDING

      

      100%
EQUITY INTERESTS OF

      SHENZHEN
GUOFA OPTOELECTRONICS CO., LTD.

      

      EQUITY
TRANSFER CONTRACT

       

      
        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      CONTENTS

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              ARTICLE
      1 DEFINITION

                                            	 	 	1	 
	 	 	 	 	 
	
                                              ARTICLE
      2 EQUITY TRANSFER

                                            	 	 	2	 
	 	 	 	 	 
	
                                              ARTICLE
      3 EQUITY TRANSFER PRICE AND CLOSING

                                            	 	 	2	 
	 	 	 	 	 
	
                                              ARTICLE
      4 CONDITIONS PRECEDENT

                                            	 	 	3	 
	 	 	 	 	 
	
                                              ARTICLE
      5 LABOR ISSUES

                                            	 	 	6	 
	 	 	 	 	 
	
                                              ARTICLE
      6 REPRESENTATIONS, COMMITMENTS AND WARRANTIES

                                            	 	 	7	 
	 	 	 	 	 
	
                                              ARTICLE
      7 BREACH OF CONTRACT AND COMPENSATION

                                            	 	 	10	 
	 	 	 	 	 
	
                                              ARTICLE
      8 SELL BACK OPTION

                                            	 	 	11	 
	 	 	 	 	 
	
                                              ARTICLE
      9 TERMINATION

                                            	 	 	12	 
	 	 	 	 	 
	
                                              ARTICLE
      10 FORCE MAJEURE EVENT

                                            	 	 	14	 
	 	 	 	 	 
	
                                              ARTICLE
      11 CONFIDENTIALITY

                                            	 	 	14	 
	 	 	 	 	 
	
                                              ARTICLE
      12 NON-COMPETITION

                                            	 	 	16	 
	 	 	 	 	 
	
                                              ARTICLE
      13 MISCELLANEOUS

                                            	 	 	16	 

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

    

    This
Equity Transfer Contract (the “Contract”) is entered into by and between the
following two parties on January 21, 2011 in Shenzhen.

    

    PARTY A:
NEW-METAL (H.K.) TECHNOLOGY LIMITED

    Address
of Registered Office: Room 701, Sino Centre, 582-592 Nathan Road, Mongkok,
Kowloon, Hong Kong

    

    PARTY B:
LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED

    Address
of Registered Office: 13/F., Shum Tower, 268 Des Voeux, Road Central, Hong
Kong

    

    WHEREAS,

    

    
      	
               
      

            	
              A.

            	
              Party
      A is a limited liability company incorporated and validly existing under
      the laws of Hong Kong Special Administrative Region, the PRC (“Hong
      Kong”).

            

    

    

    
      	
               
      

            	
              B.

            	
              Shenzhen
      Guofa Optoelectronics Co., Ltd. (the “Company”) is a wholly foreign-owned
      enterprise incorporated and validly existing under the laws of the PRC.
      The registered capital of the Company is USD 1,000,000 and Party A
      currently holds 100% of the Company’s equity
  interests.

            

    

    

    
      	
               
      

            	
              C.

            	
              Party
      B is a limited liability company incorporated and validly existing under
      the laws of Hong Kong.

            

    

    

    
      	
               
      

            	
              D.

            	
              Party
      A agrees to transfer 100% of the Company’s equity interests held by it to
      Party B once the conditions set forth herein are satisfied; Party B agrees
      to purchase the aforesaid equity interest from Party A once the conditions
      set forth herein are satisfied.

            

    

     

    NOW
THEREFORE, the Parties hereby agree as follows:

     

    
      Article
1     Definition

    

    

    
      
        
          
            	
                    1.1

                  	 	
                    Party
      A

                  	 	
                    means

                  	
                    New-metal
      (H.K.) Technology Limited

                  
	
                    1.2

                  	 	
                    Party
      B

                  	 	
                    means

                  	
                    Luck
      Loyal International Investment Limited

                  
	
                    1.3

                  	 	
                    Company

                  	 	
                    means

                  	
                    Shenzhen
      Guofa Optoelectronics Co., Ltd.

                  
	
                    1.4

                  	 	
                    Target
      Equity Interest

                  	 	
                    means

                  	
                    the
      100% equity interests of the Company held by Party A proposes to be
      transferred to Party B and all the rights attached thereto including
      titles, profit distribution rights, assets distribution rights and all the
      other rights enjoyed by the Company’s shareholder(s) according to the
      Company’s articles of association and PRC laws.

                  
	
                    1.5

                  	 	
                    Equity
      Transfer

                  	 	
                    means

                  	
                    the
      transfer of the Equity Interest currently held by Party A to Party B
      according to this Contract.

                  
	
                    1.6

                  	 	
                    Completion
      Date of Equity Transfer

                  	 	
                    means

                  	
                    the
      date on which the Company obtains its new business
  license.

                  
	
                    1.7

                  	 	
                    PRC

                  	 	
                    means

                  	
                    the
      People’s Republic of China (exclusive of Hong Kong and Macao Special
      Administrative Regions and Taiwan for the purpose of this
      Contract)

                  
	
                    1.8

                  	 	
                    Equity
      Transfer Price

                  	 	
                    means

                  	
                    the
      consideration for the Equity Transfer from Party A to Party B, which shall
      be the US dollars equivalent to RMB42,673,736 (RMB forty two million six
      hundred seventy three thousand seven hundred and thirty
    six).

                  
	
                    1.9

                  	 	
                    Affiliate

                  	 	
                    means

                  	
                    any
      entity whether or not incorporated as a legal person, (a) who owns or
      actually controls shares/assets or equities of such entity; (b) whose
      shares/assets or equities are owned or actually controlled by such entity;
      (c) who, together with such entity, is owned or actually controlled by the
      same entity; (d) directors, supervisors and officers of such entity, and
      close relatives of any of the foregoing persons; and (e) who is owned or
      actually controlled by any of the foregoing persons as described in (d).
      Close relatives includes a spouse, lineal relatives, lineal relatives of a
      spouse and collateral relatives by blood within three
      generations.

                  

          

        

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

         

      

    

    
      Article
2     Equity
Transfer

    

    

    
      	
              2.1

            	
              Upon
      the fulfillment of the conditions precedent set forth in Article 4.1
      hereof, Party A agrees to transfer to Party B, and Party B agrees to
      receive from Party A, the Target Equity
  Interest.

            

    

    

    
      	
              2.2

            	
              The
      Parties shall take every measure to procure the Company to acquire all
      governmental approvals which are necessary to the Equity Transfer
      contemplated hereunder and make the amendment to the registration with the
      Administration for Industry and Commerce within 120 working days following
      the execution date of this
Contract.

            

    

     

    
      Article
3     Equity
Transfer Price and Closing

    

    

    
      	
              3.1

            	
              The
      Parties hereby agree that the Equity Transfer Price shall be the US
      dollars equivalent to RMB42,673,736 (the “Equity Transfer
      Price”).  Party B shall pay such Equity Transfer Price in cash
      in US dollars.  For the purpose of calculation, the exchange
      rate of RMB to USD applicable for each installment of the Equity Transfer
      Price shall be the central parity of the RMB to USD buying rate and
      selling rate published by the People’s Bank of China on the payment date
      of such installment.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              3.2

            	
              The
      Parties agree that the Equity Transfer Price hereunder shall be paid in
      three installment:

            

    

     

    First
Installment: USD equivalent to RMB4,000,000 (“First Installment of the Equity
Transfer Price”), which shall be paid to the bank account designated by Party A
within 10 working days after the execution date of this Contract;

     

    Second
Installment: USD equivalent to RMB28,673,736 (“Second Installment of the Equity
Transfer Price”). The Second Installment of the Equity Transfer Price shall be
paid to the bank account designated by Party A within 30 working days after the
conditions precedent as set forth in Article 4.1 hereof have been satisfied or
waived by Party B, as confirmed by Party B in writing.

     

    Third
Installment: USD equivalent to RMB10,000,000 (“Third Installment of the Equity
Transfer Price”). The Third Installment of the Equity Transfer Price shall be
paid to the bank account designated by Party A within 30 working days after the
conditions precedent as set forth in Article 4.3 hereof have been satisfied or
waived by Party B, as confirmed by Party B in writing. The Third Installment of
the Equity Transfer Price shall be withheld as a deposit to secure the
settlement of labor issues by Party A as addressed in Article 5 hereof
(“Deposit”), namely that if Party A fails to settle all the relevant labor
issues in a manner satisfactory to Party B pursuant to Article 5 hereof, then
Party B shall have a right to keep such Deposit.

    

    
      	
              3.3

            	
              The
      Parties agree and confirm that the Second Installment of the Equity
      Transfer Price shall be adjusted at Party B’s sole discretion according to
      its review of the financial due diligence results and the stock take of
      the Company’s fixed assets and inventories, by means of a refund for any
      overpayment or additional payment for any deficiency to/by Party B. If and
      when the Second Installment of the Equity Transfer Price is adjusted
      pursuant to this Article 3.3, the amount of the Equity Transfer Price
      shall also be adjusted accordingly.

            

    

    

    
      	
              3.4

            	
              Party
      A shall provide Party B with a written statement indicating that it has
      received each installment, including but not limited to bank receipt,
      within 1 working day after receiving such installment of the Equity
      Transfer Price.

            

    

     

    
      Article
4     Conditions
Precedent

    

    

    
      	
              4.1

            	
              Party
      B shall purchase the Target Equity Interest hereunder and pay the Second
      Installment of the Equity Transfer Price only upon the consummation of the
      following conditions precedent. Party B is entitled but not obligated to
      waive one or several of the following
  conditions:

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (1)

            	
              The
      organ of power of the Company (shareholders meeting or the board of
      directors, depends on the provisions of the Company’s articles of
      association) has executed all relevant resolutions and approved the
      execution of this Contract and the transactions contemplated
      hereunder;

            

    

    

    
      	
               
      

            	
              (2)

            	
              All
      of the governmental approvals and registrations required in connection
      with this Contract, including but not limited to the reply and
      corresponding approval certificate issued by the Science Industry Trade
      and Information Technology Commission of Shenzhen Municipality with
      respect to the Equity Transfer hereunder, and consents and permits of any
      third party, shall have been duly
obtained;

            

    

    

    
      	
               
      

            	
              (3)

            	
              The
      Company has duly obtained the business license being issued by the
      Administration for Industry and Commerce with respect to the Equity
      Transfer hereunder, the Company’s amended articles of association has been
      submitted to the Administration for Industry and Commerce for record, and
      copies of such business license and amended articles of association have
      been delivered to Party B; according to the aforesaid documents, Party B
      has been lawfully registered as the sole owner of the Target Equity
      Interest;

            

    

    

    
      	
               
      

            	
              (4)

            	
              Party
      B shall have finished its legal due diligence of the Company and shall be
      satisfied with the result of such due diligence; the Company shall have
      finished the relevant rectification in manners satisfactory to Party B
      according to the suggestions in connection with the results of due
      diligence proposed by Party B;

            

    

    

    
      	
               
      

            	
              (5)

            	
              Party
      B shall have finished its financial due diligence of the Company and shall
      be satisfied with the result of such due diligence. Party B, together with
      Party A, shall have completed the stock take of the Company’s inventories
      and fixed assets; the Parties have adjusted the Second Installment of the
      Equity Transfer Price based on the results of the financial due diligence
      investigation and the stock take pursuant to Article 3.3 hereof, and
      confirmed the final amount of the Second Installment of the Equity
      Transfer Price in writing;

            

    

    

    
      	
               
      

            	
              (6)

            	
              As
      of the Completion Date of Equity Transfer, no changes have occurred which
      may have a material adverse influence on the Company’s business,
      employees, assets and financial
situation;

            

    

    

    
      	
               
      

            	
              (7)

            	
              As
      of the Completion Date of Equity Transfer, the Company’s key employees
      (except for those employees who leave or terminate their labor contracts
      with Party B’s prior consent) who continue to work for the Company, has
      not materially breached their labor contracts, confidentiality agreements
      and non-competition agreements with the Company, and such contracts or
      agreements shall continue to be valid and
  effective;

            

    

    

    
      	
               
      

            	
              (8)

            	
              As
      of the Completion Date of Equity Transfer, the senior managers have signed
      confirmation letters of labor contracts with respect to their labor
      relationship with the Company, and Party B will provide the terms and
      format of such confirmation letters of labor
  contracts;

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (9)

            	
              As
      of the Completion Date of Equity Transfer, commitments and warrants made
      hereunder by Party A are true, accurate and sufficient, and commitments
      made hereunder by Party A have been fully
  completed;

            

    

    

    
      	
               
      

            	
              (10)

            	
              As
      of the Completion Date of Equity Transfer, there shall be no existing,
      pending or contingent suit or legal proceeding, adverse injunction,
      judgment, order, arbitration, claim or administrative order that may lead
      to the following results: (i) preventing completion of any transaction
      provided hereunder; (ii) causing any transaction hereunder to be revoked
      after completion; (iii) engendering material adverse influences to Party
      B’s shareholding in the Company, or (iv) engendering any material adverse
      influences to the Company’s rights or capability to operate its
      business;

            

    

    

    
      	
               
      

            	
              (11)

            	
              As
      of the Completion Date of Equity Transfer, there are no adverse changes of
      PRC laws preventing the completion of the contract objective
      hereunder.

            

    

    

    
      	
              4.2

            	
              Party
      B shall have the right to unilaterally terminate this Contract and perform
      the post-termination arrangements pursuant to the provisions hereof with
      respect to termination, provided that any of the conditions precedent set
      forth in Article 4.1 hereof has not been consummated according to this
      Contract (except for those conditions waived by Party B in
      writing).

            

    

    

    
      	
              4.3

            	
              Subject
      to the provisions in relation to the withholding of the Deposit as
      contemplated in Article 3.2 hereof, the Third Installment of the Equity
      Transfer Price shall be paid to the bank account designated by Party A
      within 30 working days after the following conditions precedent have been
      satisfied or waived by Party B, as confirmed by Party B in writing (such
      payment date shall be the “Payment Date of the Third
      Installment”):

            

    

     

    

    
      	
               
      

            	
              (1)

            	
              One
      year has elapsed after the Completion Date of Equity Transfer
      hereunder;

            

    

    

    
      	
               
      

            	
              (2)

            	
              As
      of the Payment Date of the Third Installment, the Company’s key employees
      (except for those employees who resign from the Company or terminate their
      labor contracts with Party B’s prior consent) who continue to work for the
      Company, has not materially breached their labor contracts,
      confidentiality agreements and non-competition agreements with the
      Company, and such contracts or agreements shall continue to be valid and
      effective;

            

    

    

    
      	
               
      

            	
              (3)

            	
              As
      of the Payment Date of the Third Installment, commitments, representations
      and warrants made hereunder by Party A are true, accurate and sufficient,
      and Party A has performed or observed any of its obligations and warrants
      hereunder in all substantial
aspects;

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (4)

            	
              As
      of the Payment Date of the Third Installment, no changes, events or
      circumstances have occurred or are likely to occur which may have a
      material adverse influence on the Target Equity Interest, the Company’s
      employees, business, financial situation and/or the transactions
      contemplated hereunder;

            

    

    

    
      	
               
      

            	
              (5)

            	
              As
      of the Payment Date of the Third Installment, there shall be no existing,
      pending or contingent suit or legal proceeding, adverse injunction,
      judgment, order, arbitration, claim or administrative order that may lead
      to the following result: (i) preventing completion of any transaction
      provided hereunder; (ii) causing any transaction hereunder to be revoked
      after completion; (iii) engendering material adverse influences to Party
      B’s ownership of the target assets, the target business and rights of
      transferred employees, or (iv) engendering any material adverse influences
      to the Party B’s rights or capability to operate the target
      business.

            

    

    

    
      Article
5     Labor
Issues

    

    

    
      	
              5.1

            	
              As
      of the Completion Date of Equity Transfer, if Party B proposes any
      amendments to the labor contract, confidentiality agreement,
      non-competition agreement and other agreement in relation to labor
      relationship entered into by and between the Company and its employees
      (including key employees), then Party A shall procure and ensure the
      Company and its employees to re-sign such contracts and agreements. Party
      B shall determine the time and manner for such
  re-signing.

            

    

    

    
      	
              5.2

            	
              Party
      A shall procure and ensure that key employees will not resign from the
      Company with one year after the Completion Date of Equity
      Transfer.

            

    

    

    
      	
              5.3

            	
              Party
      A shall be responsible for any labor disputes and any settlement,
      arbitration or lawsuit incurred from the Equity Transfer, bear all
      relevant fees and expenses, and compensate the Company or Party B against
      any compensation amount so
incurred.

            

    

    

    
      	
              5.4

            	
              Party
      A shall unconditionally and irrevocably pay or compensate against any
      payable salaries, settlement fees, compensation or litigation fees
      incurred from any labor disputes between the Company and its employees
      with respect to their labor relationship established before the Completion
      Date of Equity Transfer (no matter that such labor disputes arise before
      or after the Completion Date of Equity Transfer), or payable economic
      compensation, social insurance and housing fund and other unpaid relevant
      fees; Party A shall unconditionally and irrevocably compensate Party B
      and/or the Company against any fees (including but not limited to attorney
      fees) arising from the resolution of such labor disputes by Party B and/or
      the Company.

            

    

    

    
      	
              5.5

            	
              Party
      A shall assume all economic compensation arising from the termination of
      labor contracts between the Company and its employees before the
      Completion Date of Equity Transfer; Party A shall unconditionally and
      irrevocably pay or compensate against any unpaid or insufficient paid
      social insurances, housing fund, social security fund or welfare fees, or
      unpaid or un-implemented penalties or other punishments by the competent
      labor administration bureau, which occurred before the Completion Date of
      Equity Transfer.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      Article
6     Representations,
Commitments and Warranties

    

    

    
      	
              6.1

            	
              Party
      A hereby unconditionally and irrevocably makes the following
      representations, commitments and warranties to Party B, as of the
      Completion Date of Equity Transfer:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Party
      A is a limited liability company duly incorporated and validly existing
      under Hong Kong laws;

            

    

    

    
      	
               
      

            	
              (2)

            	
              Party
      A shall enjoy a sole and exclusive title and disposal right to the Target
      Equity Interest hereunder to be transferred to Party B; the Target Equity
      Interest is free from any pledge or any other security interests,
      interests of any third party, encumbrance of all kinds, and there does not
      exist any facts in relation to interest of third party nor any defect in
      law;

            

    

    

    
      	
               
      

            	
              (3)

            	
              Party
      A warrants that all the permits and licenses required for the Company to
      continuously operate, are valid and effective as of the Completion Date of
      Equity Transfer, and to Party A’s best knowledge, there exists no fact,
      reason or possibility that may cause such permits or licenses to be
      repealed or revoked, or unable to be renewed or
  extended.

            

    

    

    
      	
               
      

            	
              (4)

            	
              The
      execution of this Contract, the exercise of the rights or performance of
      the obligations pursuant to this Contract will not cause Party A to
      breach:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      laws, regulations, ordinances, judgments, rulings, arbitration awards,
      administration decisions and orders that are binding or relevant to Party
      A;

            

    

    

    
      	
               
      

            	
              (b)

            	
              any
      document, contract or agreement to which Party A is a party, or any
      document, contract or agreement that has a binding force on Party A’s
      assets;

            

    

    

    
      	
               
      

            	
              (c)

            	
              any
      articles of associations and internal regulations of Party
    A.

            

    

    

    
      	
               
      

            	
              (5)

            	
              Party
      A is not involved in any litigations, arbitrations or any other possible
      legal or administrative proceedings, which are existing, pending,
      contingent, potential, or asserted by a third party; and to Party A’s best
      knowledge, no such litigation, arbitration or any other possible legal or
      administrative proceeding is about to take
  place.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (6)

            	
              In
      order that:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Party
      A may legally enter into this Contract and perform its obligations
      hereunder;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      obligations and responsibility of Party A herein are legal, valid and can
      be enforced in accordance with this
Contract;

            

    

    

    
      	
               
      

            	
              (c)

            	
              this
      Contract can be adopted as evidences within the PRC
    territory;

            

    

    

    on or
before the execution date of this Contract, Party A has taken all the actions,
observed or satisfied all the conditions or terms required by the applicable
laws.

    

    
      	
               
      

            	
              (7)

            	
              Party
      A’s execution and performance of this Contract are within its scope of
      power and Party A have obtained necessary authorizations for such
      execution and performance;

            

    

    

    
      	
               
      

            	
              (8)

            	
              The
      statements under Sections A and B as provided in the “WHEREAS” section are
      accurate, and the capital contribution in connection with the Target
      Equity Interest has been made, and there is no withdrawal of such
      contribution or feigned capital
contribution.

            

    

    

    
      	
               
      

            	
              (9)

            	
              Party
      A warrants that it has disclosed to Party B, all the facts that may have a
      material adverse effect on Party A’s ability to fully perform its
      obligations hereunder, or all the facts that may have a material adverse
      effect on Party B’s willingness to enter into this Contract once disclosed
      to Party B, and all the items disclosed or all the materials provided for
      this purpose, are substantially true, complete and accurate, and there is
      no false or misleading
representations.

            

    

    

    
      	
               
      

            	
              (10)

            	
              Party
      A represents, that the books of the Company are complete, and the
      financial statements disclosed for the purpose of the Equity Transfer are
      made in accordance with current Chinese laws and regulations and
      accounting rules. The afore-mentioned books and financial statements are
      complete, true and sufficient to reveal impartially the financial
      conditions of the Company upon the expiration of those fiscal periods and
      its performance within such fiscal periods. From the date of the issuance
      of such financial statements until the Completion Date of Equity Transfer,
      there is no material adverse change to the business or the financial
      conditions of the Company.

            

    

    

    
      	
               
      

            	
              (11)

            	
              Party
      A warrants that the Company has never engaged in any acts violating PRC
      laws and regulations, and has never been involved in any litigations,
      arbitrations or administrative penalties, and none of the aforesaid
      situation is about to take place to Party A’s best
    knowledge.

            

    

    

    
      	
               
      

            	
              (12)

            	
              Party
      A warrants that since the establishment of the Company until the
      Completion Date of Equity Transfer, it has observed all kinds of tax laws,
      has paid all the taxes and fees explicitly required by the taxation
      administrations, and has not received any overdue notices issued by the
      tax administrations or any other authorities, has not been fined due to
      taxation issues, is not involved in any pending investigation or dispute
      in connection with taxation issues.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (13)

            	
              Party
      A warrants that it will strictly observe relevant PRC taxation laws and
      regulations and pay taxes for the Equity Transfer Price in accordance with
      laws and regulations.

            

    

    

    
      	
               
      

            	
              (14)

            	
              Party
      A represents and warrants that it will cooperate with Party B and other
      institutions after entering into this Contract to ensure it and/or the
      Company to complete the conditions precedent as provided under Article 4.1
      of this Contract, strictly in accordance with this Contract, and provide
      Party B with relevant documents proving the completion of such
      conditions precedent within 1 working day upon the completion of every
      condition precedent.

            

    

    

    
      	
               
      

            	
              (15)

            	
              Party
      A represents and warrants that it will be responsible or entrust the
      Company to submit relevant documents to competent authorities, apply for
      all the approvals, registrations and filings in connection with the
      transfer of the Target Equity Interest, so as to make sure that Party B is
      able to obtain all the documents required by laws and regulations and
      complete the Equity Transfer within the agreed
  period.

            

    

    

    
      	
               
      

            	
              (16)

            	
              Party
      A warrants that on the Completion Date of Equity Transfer, there is no
      material asset or debt not disclosed to Party B in
  prior.

            

    

    

    
      	
               
      

            	
              (17)

            	
              Party
      A warrants that, upon the receipt by itself or the Company of any
      acceptance, rejection, approval, reply issued by the competent authority
      in connection with the transfer of Target Equity Interest or notice
      requiring any modifications or supplementary materials, Party A shall
      timely inform Party B and provide the copies of such
      documents.

            

    

    

    
      	
               
      

            	
              (18)

            	
              At
      any time before the Completion Date of Equity Transfer (including the
      Completion Date of Equity Transfer), in the event that Party A learns any
      situation that may cause its representations, commitments or warrants
      hereunder to be untrue or inaccurate, Party A shall immediately inform
      Party B in writing, and, as reasonably requested by Party B, take
      necessary remedy measures.

            

    

    

    
      	
               
      

            	
              (19)

            	
              This
      Contract shall become effective and valid binding force to Party A, upon
      the execution and effectiveness of this Contract, and shall be enforceable
      against Party A in accordance with the terms of this Contract. Party A
      represents and warrants that it does not enjoy any exemption
      rights.

            

    

    

    
      	
               
      

            	
              (20)

            	
              Party
      A will do its best to be responsible for or assist the Company in
      fulfilling all requirements on signatures, approvals, registrations,
      amendment to registration and filings
  procedures.

            

    

    

    
      	
               
      

            	
              (21)

            	
              All
      the aforementioned representations, commitments and warranties of Party A
      are true, accurate, complete, sufficient, unconditional and without
      reservation.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              6.2

            	
              Party
      B hereby unconditionally and irrevocably makes the following
      representations, commitments and warranties, as of the Completion Date of
      Equity Transfer:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Party
      B is a limited liability company duly incorporated and validly existing in
      accordance with Hong Kong laws.

            

    

    

    
      	
               
      

            	
              (2)

            	
              Party
      B has obtained necessary corporate authorization to sign and perform this
      Contract;

            

    

    

    
      	
               
      

            	
              (3)

            	
              Party
      B is not involved in any litigations, arbitrations or any other possible
      legal or administrative proceedings materially impacting or likely to
      materially impact the Equity Transfer, which are existing, pending,
      contingent, potential, or asserted by a third
  party.

            

    

    

    
      	
               
      

            	
              (4)

            	
              At
      any time after the execution of this Contract, Party B warrants to
      cooperate with Party A and other institutions, to ensure the consummation
      of all the conditions precedent under Article 4.1
  hereof.

            

    

    

    
      	
               
      

            	
              (5)

            	
              All
      the statements under Section C as provided under “WHEREAS” section are
      true and accurate.

            

    

    

    
      	
               
      

            	
              (6)

            	
              This
      Contract shall become effective and valid binding force to Party B, upon
      the execution and effectiveness of this Contract, shall be enforceable
      against Party B in accordance with the terms of this Contract. Party B
      represents and warrants that it does not enjoy any exemption
      rights.

            

    

    

    
      	
               
      

            	
              (7)

            	
              All
      the afore-mentioned representations, commitments and warranties of Party B
      are true, accurate, complete, sufficient, unconditional and without
      reservation.

            

    

     

    
      Article
7     Breach
of Contract and Compensation

       

    

    
      	
              7.1

            	
              Failure
      of performance or sufficient performance of this Contract, breach of any
      commitment, representations and warrants hereunder, or failure to make
      true, accurate, complete covenants, statements and warranties by any Party
      shall constitute a breach of this Contract.  The breaching Party
      shall bear all and any liability of actual loss arising from such breach,
      and pay damages in full to the Party accepting such commitment,
      representation or warrant, which includes but is not limited to the whole
      loss, litigation and/or arbitration fees, attorney’s fees, investigation
      fees, evaluation fees and notarization fees of the non-breaching
      Party.  The respective breaching Parties shall bear their own
      corresponding liabilities for compensation arising from their respective
      breach in proportion with their respective faults in the event that both
      Parties under this Contract commit breach of this
      Contract.  This article shall not limit the right of the Parties
      to seek other legal remedies, including but not limited to the right to
      demand actual performance provided by the Contract Law of the
      PRC.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              7.2

            	
              Party
      B shall be entitled to deduct directly the compensation amount from the
      Equity Transfer Price and recover any deficiency pursuant to the laws and
      this Contract in the event that Party A commits a breach under this
      Contract.

            

    

    

    
      	
              7.3

            	
              Party
      A shall make indemnification to Party B for any loss incurred by any
      litigation, arbitration, claim administrative proceeding or other legal
      proceeding against Party B arising from or relating to the Target Equity
      Interest occurring prior to the Completion Date of Equity
      Transfer.

            

    

    

    
      	
              7.4

            	
              Both
      Parties shall perform the obligations hereunder with the principles of
      good faith.  Unless otherwise provided by this Contract, in the
      event that either Party fails to perform, or breaches any terms,
      conditions, covenants, representations or warranties hereunder, the other
      Party shall be entitled to be compensated against all the losses, damages
      and the fees and costs arising from the litigations or claims by the
      non-performing or breaching Party.

            

    

     

    
      Article
8     Sell
Back Option

       

    

    
      	
              8.1

            	
              The
      Parties agree that, Party B is entitled to exercise a Sell Back Option to
      sell the Target Equity Interest back to Party A according to the following
      provisions, provided that Party B or the Company is subject to any claims,
      recourse, legal liabilities, is caused to loss the title of Target Equity
      Interest, or is prevented from operating the Company’s business, due to
      Party A’s material breach of this Contract (including but not limited to a
      violation of the non-competition provisions applicable to Party A and its
      Affiliates), malicious act and/or inaction, false statement and
      concealment.

            

    

     

    
      	
              8.2

            	
              The
      exercise period of the Sell Back Option is 3 years following the
      Completion Date of Equity Transfer.

            

    

     

    
      	
              8.3

            	
              Party
      B has a complete and independent option to resell the Target Equity
      Interest to Party A when exercising the Sell Back Option. Party A shall
      refund Party B the Equity Transfer Price already paid and pay a breach
      penalty calculated at an annual interest of 15% of the Equity Transfer
      Price already paid within 10 days after receipt of the notice issued by
      Party B. When Party B exercises the Sell Back Option, Party A agrees to
      execute all necessary documents and take all necessary action according to
      this Contract, including but not limited to timely executing documents
      required for alteration approval and registration with the competent
      government authorities.

            

    

     

    
      	
              8.4

            	
              In
      the event that a circumstance prescribed in Article 8.1 occurs but Party B
      does not exercise the Sell Back Option, Party B is entitled to rectify and
      adjust the Equity Transfer Price contemplated hereunder, and the adjusted
      Equity Transfer Price shall not exceed 70% of the original Equity Transfer
      Price. Party A shall refund the margin of the Equity Transfer Price before
      and after such adjustment unconditionally to Party B in the manner
      accepted by Party B within 10 days after receipt of written notice issued
      by Party B. In the event that Party A fails to pay such margin, Party B is
      entitled to deduct the margin from any fund payable to Party
      A.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      Article
9     Termination

    

    

    
      	
              9.1

            	
              This
      Contract shall terminate upon the occurrence of any following
      events:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Both
      Parties agree to terminate in writing through amicable
      negotiation.

            

    

    

    
      	
               
      

            	
              (2)

            	
              The
      amendment to the registration with Administration for Industry and
      Commerce reflecting the transaction contemplated hereunder has not been
      completed within 120 days as of the execution date of this Contract due to
      any reasons.

            

    

    

    
      	
               
      

            	
              (3)

            	
              Party
      B reasonably requests termination of this Contract and the transaction
      hereunder for reasons caused by Party
A.

            

    

    

    
      	
               
      

            	
              (4)

            	
              A
      material adverse change occurs to the assets, business, employees or
      finance of the Company prior to the Completion Date of Equity Transfer,
      according to which Party B reasonably deems that the Equity Transfer
      hereunder may not be completed within reasonable time or the purpose of
      the transaction hereunder may not be
achieved.

            

    

    

    
      	
               
      

            	
              (5)

            	
              In
      the event that any conditions precedent set forth in Article 4.1 fails to
      be completed as prescribed by this Contract (unless waived by Party B),
      Party B shall be entitled to terminate this Contract
      unilaterally.

            

    

    

    
      	
               
      

            	
              (6)

            	
              In
      the event that either Party materially breaches any provisions hereunder
      or any of its commitment, representation or warrant hereunder is false,
      the non-breaching Party may give written notice to the breaching Party
      requesting immediate cure and rectification of such breach.  In
      the event that the breaching Party fails to take measures to cure and
      rectify satisfactorily to the non-breaching Party within 60 days as of the
      issuance of the aforesaid written notice by the non-breaching Party, the
      non-breaching Party may terminate this Contract
    immediately.

            

    

    

    
      	
               
      

            	
              (7)

            	
              This
      Contract may not be performed due to the newly-promulgated applicable laws
      and regulations.

            

    

    

    
      	
               
      

            	
              (8)

            	
              The
      occurrence of Force Majeure Event as set forth in Article 10 hereof
      continuing for a period over six (6) months, which caused the
      impossibilities to perform this
Contract.

            

    

    

    
      	
              9.2

            	
              In
      the event that this Contract terminates, Party A shall, within seven (7)
      working days upon the termination confirmed by both Parties in writing
      (under the circumstance of Article 9.1(1)), or upon the issuance of
      written notice by Party B (under the circumstances of Article
      9.1(2)(3)(4)(5)), or upon the issuance of termination notice by the
      non-breaching Party (under the circumstance of Article 9.1(6)), or upon
      the occurrence of the events causing termination (under the circumstance
      of Article 9.1(7)(8)), refund to Party B’s designated account the Equity
      Transfer Price set forth in Article 3.1 (including but not limited to the
      First Installment of Equity Transfer Price) and the interests accrued
      thereon calculated in accordance with the benchmark loan interest rate of
      the People’s Bank of China on the refunding date for the period between
      the date of receipt of such amount by Party A and the date of refunding to
      Party B.  However, in the event that termination of this
      Contract is attributable and shall only be attributable to Party B’s
      faults, Party A shall only refund the principal of such amount without any
      interests.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              9.3

            	
              In
      the event that this Contract terminates, either Party shall return to the
      other Party any records, documents or materials delivered pursuant to this
      Contract (whether the aforesaid records, documents or materials were
      delivered prior to or following the signing of this
    Contract).

            

    

    

    
      	
              9.4

            	
              In
      the event that the registration with the Administration for Industry and
      Commerce for the Equity Transfer has been completed when the Contract
      terminates, both Parties shall jointly carry out the amendment
      registration regarding the termination of this Contract in accordance with
      the relevant laws and regulations, and restore the relationship between
      both Parties and with the Company to the status prior to the execution of
      this Contract as follows: Party A shall hold 100% equity interest of the
      Company; Party B shall obtain from Party A the Equity Transfer Price set
      forth in Article 3.1 and the interests accrued thereon calculated in
      accordance with the benchmark loan interest rate of the People’s Bank of
      China on the refunding date for the period between the date of receipt of
      such amount by Party A and the date of refunding to Party B (in the event
      that termination of this Contract is attributable and shall only be
      attributable to Party B’s faults, Party A shall only refund the principal
      of such amount without any interests); in the event that the restoration
      of the relationship between both Parties and with the Company to the
      status prior to the execution of this Contract requires the execution of
      any other agreements or documents by both Parties, both Parties shall
      cooperate to execute such agreements or
  documents.

            

    

    

    
      	
              9.5

            	
              Any
      relevant fees arising from the preparation, performance or termination of
      the Equity Transfer hereunder, including but not limited to the taxes and
      fees, governmental charges, intermediary fees paid for the Equity
      Transfer, shall be borne by the breaching Party, if any.  The
      aforesaid amount shall be borne by both Parties pursuant to Article 13.2
      hereunder in the event that there is no breaching
  Party.

            

    

    

    
      	
              9.6

            	
              Any
      liabilities for breaching this Contract shall not be released upon the
      termination of this Contract.

            

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    
      Article
10     Force
Majeure Event

    

    

    
      	
              10.1

            	
              “Force
      Majeure Event” shall mean any event that is unforeseeable and its
      occurrence and consequence is unpreventable or unavoidable when executing
      this Contract, as a result of which any Party is completely or partially
      unable to perform any term under this Contract, including earthquake,
      tsunami, typhoon, floods, wars, epidemics and other aforesaid
      unforeseeable, unpreventable or unavoidable events, and also including
      events commonly regarded as Force Majeure Event under international
      commercial practice.

            

    

    

    
      	
              10.2

            	
              The
      affected Party shall be released from performing its responsibility or
      obligation hereunder during the continuation of the Force Majeure Event
      upon its occurrence and shall not be deemed as a breach of this Contract,
      provided that the affected Party shall immediately take all measures
      to give written notice to the other Party, and give the documents
      certifying the occurrence and/or continuation of the Force Majeure Event
      in accordance with the laws of the PRC within 15 days as of the occurrence
      of such Force Majeure Event. Otherwise it shall be deemed as no such Force
      Majeure Event occurs.

            

    

    

    
      	
              10.3

            	
              The
      affected Party shall make its best efforts to take all measures to
      mitigate the economic losses that may be caused by the Force Majeure
      Event.

            

    

    

    
      	
              10.4

            	
              The
      Parties shall negotiate to seek reasonable and fair solution upon the
      occurrence of any Force Majeure Event and make all the reasonable efforts
      to mitigate the negative impact of such Force Majeure Event on the
      performance of this Contract.

            

    

    

    
      	
              10.5

            	
              Neither
      Party shall be released from any liability by claiming the occurrence of
      Force Majeure Event in the event that the Force Majeure Event occurs after
      such Party’s delaying to perform any obligation hereunder by breaching
      this Contract.

            

    

     

    Article
11     Confidentiality

    

    
      	
              11.1

            	
              Any
      Party has disclosed or may have to disclose to the other Party
      confidential and proprietary materials regarding their respective business
      and financial status and other confidential matters.  Unless
      otherwise provided by other confidentiality agreements, the receiving
      Party of the aforesaid materials (including written and non-written
      materials, hereinafter “Confidential Materials”)
  shall

            

    

    

    
      	
               
      

            	
              (1)

            	
              keep
      confidentiality of the aforesaid Confidential Materials;
    and

            

    

     

    
      	
               
      

            	
              (2)

            	
              refrain
      from disclosing the aforesaid Confidential Materials to any person or
      entity except for its own employees necessary to know the aforesaid
      Confidential Materials to perform their own
  duties.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              11.2

            	
              The
      provisions of Article 11.1 shall not apply to the confidentiality
      materials as follows:

            

    

    

    
      	
               
      

            	
              (1)

            	
              materials
      known by the receiving Party prior to the disclosure to the receiving
      Party by the disclosing Party, which can be proved by written
      record;

            

    

    

    
      	
               
      

            	
              (2)

            	
              materials
      known by the public without the breach of this Contract by the receiving
      Party;

            

    

    

    
      	
               
      

            	
              (3)

            	
              materials
      obtained from any third party without any confidentiality obligation for
      the Confidential Materials; or

            

    

    

    
      	
               
      

            	
              (4)

            	
              materials
      contained in the documents published during process of completing relevant
      procedures regarding the Equity
Transfer.

            

    

    

    
      	
              11.3

            	
              Each
      Party shall ensure that its directors, senior managers and employees in
      relation to this Equity Transfer, and the director, senior managers of its
      Affiliates and its employees in relation to this Equity Transfer shall
      comply with the same confidentiality obligation set forth in this Article
      11.

            

    

    

    
      	
              11.4

            	
              The
      provisions in Article 11 shall not apply to the disclosure of the
      Confidential Materials to the Affiliates, intermediaries and the employees
      and counsels of both Parties for the purpose of the Equity Transfer,
      provided that in such event, such disclosure shall be restricted to the
      persons or entities necessary to know such materials to perform their own
      duties.

            

    

    

    
      	
              11.5

            	
              The
      provisions in Article 11 shall not apply to the disclosure by either Party
      of the materials to any governmental authorities or relevant organs or the
      public as provided by the relevant laws and regulations, or required by
      the listing rules both home and abroad or the securities exchanges or
      securities supervisory commissions both home and abroad, provided
      that the Party required to disclose as aforesaid shall give notice to
      the other Party regarding such requirement and its terms immediately prior
      to its disclosure.

            

    

    

    
      	
              11.6

            	
              The
      provisions in Article 11 shall not prevent a Party hereto from any
      publication or disclosure permitted by applicable laws and regulations in
      accordance with its own bona fide
judgment.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      Article
12     Non-competition

    

    

    
      	
              12.1

            	
              As
      of the Completion Date of Equity Transfer, pursuant to this Contract,
      Party A and its Affiliates shall not directly or indirectly engage in any
      activities that constitute or may constitute competition with Party B or
      the Company, or deprive of, impair or infringe upon or may deprives of,
      impair or infringe upon the business interest or business opportunity of
      Party B or the Company, or shall not obtain or own interest from such
      activities and shall not, directly or indirectly in any capacity or in any
      way procure, solicit or cause the employees, service providers, clients,
      counsels or agents establishing or to establish relations of employment,
      service, counseling, agent to cease or terminate any aforesaid relations
      with Party B or the Company, or cause any aforesaid persons to waive or
      refuse to establish any aforesaid relationship with Party B or the
      Company, or conduct any activities purporting to achieve the aforesaid
      consequences.

            

    

    

    
      	
              12.2

            	
              Party
      A agrees and confirms that it shall compensate Party B and/or the Company
      against all the losses arising from its breach of the aforesaid
      non-competition obligations, including but not limited to reasonable
      attorney’s fees.  Any competing activities conducted by Party
      A’s Affiliates shall be deemed as Party A’s breach of this article, and
      Party A shall be jointly liable for such breach by its
      Affiliates.

            

    

     

    Article
13     Miscellaneous

    

    
      	
              13.1

            	
              Date
      of Effectiveness

            

    

    

    This
Contract shall become effective upon signature and sealing by the legal
representatives or authorized representatives of both Parties and approved by
the relevant approval authorities.

    

    
      	
              13.2

            	
              Fees

            

    

    

    Unless
otherwise provided by this Contract, all the legal taxes and fees arising from
the execution and performance of this Contract shall be born respectively by
both Parties as provided by the relevant laws and regulations.  In the
event that the relevant laws and regulations fail to determine the bearing
party, Party A and Party B shall each bear fifty percent (50%) of such fees,
and neither Party shall be obliged to withhold and remit the aforesaid amount
for the other Party.  Notwithstanding the aforesaid provisions, the
fees arising from the approval and registration of the Equity Transfer shall be
borne by the Company.

    

    
      	
              13.3

            	
              Applicable
      Laws

            

    

    

    This
Contract shall be governed by the laws of the PRC, and the laws of the PRC shall
be applicable to its execution, validity, interpretation, performance and the
resolution of any dispute arising herefrom.  In the event that the
laws of the PRC fail to provide for any designated matters with respect to this
Contract,
general international commercial practice shall be referred to for such
matters.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              13.4

            	
              Dispute
      Resolutions

            

    

     

    In the
event that any dispute arising out of or relating to this Contract occurs, the
Parties shall attempt in the first instance to resolve such dispute through
friendly consultations.  In the event that the Parties fail to settle
such dispute through such consultation, any dispute or claim arising from this
Contract shall be submitted to China International Economic and Trade
Arbitration Commission (the “CIETAC”) South China Sub-Commission for arbitration
in accordance with the then effective and applicable arbitration rules of CIETAC
in Shenzhen.  During the proceeding of the arbitration, the provisions
of this Contract (except for the disputed matters) shall continue to be
performed.

    

    
      	
              13.5

            	
              Language
      and Counterpart

            

    

    

    This
Contract is written and executed in Chinese in four (4) original copies with
equal legal force. Each Party shall hold one (1) copy and the Company shall keep
one (1) copy on file and the remaining copy shall be used for handling the
approval and registration procedures.

    

    
      	
              13.6

            	
              Severability

            

    

     

    The
invalidity of any provisions hereof determined by any competent authorities
shall not prejudice the validities of other provisions of this
Contract.

    

    
      	
              13.7

            	
              Entire
      Agreement

            

    

    

    This
Contract constitutes the entire agreement of the Parties on the subject matter
hereof, and shall supersede all prior intentions, understandings, agreements,
other written records, oral consensus or promises reached among the Parties with
respect to this Contract.

    

    
      	
              13.8

            	
              Amendment
      and Supplement of this Contract

            

    

    

    Both
Parties shall make amendment and supplement to this Contract by written
agreement for any matters not provided in this Contract.  The
amendment and supplemental agreement with respect to this Contract signed and
sealed by both Parties shall constitute part of this Contract with equal legal
validity.

    

    
      	
              13.9

            	
              Exercise
      of rights

            

    

    

    Any
omission or delay in exercising any right hereunder by either Party shall not be
deemed as a waiver of such right by such Party.  Any separate or
partial exercise of any right shall not exclude any further exercise of such
right in future circumstances.  The waivers to claim for any breach
thereof shall be made in writing, and shall only be effective upon signed by its
legal representatives or authorized representatives and affixed with its
seal.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              13.10

            	
              Transfer
      of rights and obligations

            

    

    

    Unless
otherwise provided by this Contract, without prior written consent by the other
Party, neither Party shall transfer all or part of its rights or obligations
under this Contract.

    

    
      	
              13.11

            	
              Notice
      and Delivery

            

    

     

    Unless
otherwise provided by this Contract, all notices and written
communications given hereunder by either Party shall be in Chinese and be
delivered by email, courier, facsimile or express mail. The following addresses
shall be used until any change thereto noticed in writing by either
Party:

     

    
      
        
          
            	
                    Party
      A:

                  	 	
                    NEW-METAL
      (H.K.) TECHNOLOGY LIMITED

                  
	
                    Address:

                  	 	
                    Room
      701, Sino Centre, 582-592 Nathan Road, Mongkok, Kowloon, Hong
      Kong

                  
	
                    Telephone:

                  	 	
                    852-22648532

                  
	
                    Facsimile:

                  	 	
                    852-22648570

                  
	
                    Attn:

                  	 	
                    Xie
      Zhongxu

                  
	 
      	 	 
      
	
                    Party
      B:

                  	 	
                    LUCK
      LOYAL INTERNATIONAL INVESTMENT LIMITED

                  
	
                    Address:

                  	 	
                    Sunna
      Motor Industry park, 2nd Fuyuan Road, Fuyong Hi-tech Park, Bao'an
      District, Shenzhen

                  
	
                    Telephone:

                  	 	
                    +86-755
      8149 9969

                  
	
                    Facsimile:

                  	 	
                    +86-755
      8149 9855

                  
	
                    Attn:

                  	 	
                    Li
      Jianrong

                  
	
                    Email:

                  	 	
                    ljr1660@gmail.com

                  

          

        

      

    

     

    The date
of receiving any notice or written communication shall be:

    

    
      	
               
      

            	
              (1)

            	
              the
      time of sending out the corresponding e-mail when delivered by
      e-mail;

            

    

    

    
      	
               
      

            	
              (2)

            	
              the
      exact time as indicated on the corresponding transmission record when
      delivered by facsimile;

            

    

    

    
      	
               
      

            	
              (3)

            	
              the
      third date following the delivery of such courier/express mail when
      delivered by courier/express mail;
or

            

    

    

    
      	
               
      

            	
              (4)

            	
              the
      signing date of the recipient or the relevant person at the receiving
      address when delivered by personal
service.

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    [Signature
Pages]

    

    IN
WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized
representatives to execute this Contract as of the date first above
written.

    

    

    Party A:
NEW-METAL (H.K.) TECHNOLOGY LIMITED

    

    

    By: /s/  XIE
Zhongxu                                                        

    Authorized
Representative: XIE
Zhongxu

     

    

    Party B:
LUCK LOYAL INTERNATIONAL INVESTMENT LIMITED

    

    

    By: /s/  LI
Jianrong                                                           

    Authorized
Representative: LI
Jianrong

     

    
      
        
        

      

      
        19Unassociated Document

    
      EMPLOYMENT
AGREEMENT

       

      THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made
and entered into by and between China Electric Motor, Inc. (“Company”), a Delaware
corporation, and Dehe Wang (“Employee”), effective
on the date indicated below. (Company and Employee are sometimes referred to
herein as “Party” or
collectively as the “Parties.”)

       

      RECITALS

       

      WHEREAS,
the Company wishes to employ Employee and the Employee has agreed to supply his
service in the capacity of Chief Technology Officer with duties encompassing the
operations of the Company and the Company’s subsidiaries, on the terms and
conditions set out in this Agreement.

       

      NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and the continued employment of Employee by the Company under this
Agreement, the Parties agree as follows:

       

      ARTICLE
1

      

      EMPLOYMENT

      

      Company
hereby employs Employee and Employee hereby accepts employment from Company,
effective as of January 21, 2011 (the “Effective
Date”).  Employee agrees to perform the services and to comply
faithfully with his obligations of employment, under the terms and conditions
specified in this Agreement, and pursuant to the policies and procedures of the
Company that may be issued from time to time.

       

      ARTICLE
2

       

      TERM

       

      Section 2.1    
Initial
Term and Renewal.  The initial term of this Agreement shall be
for a period of  thirty-six ( 36 ) months commencing on the Effective
Date (the “Initial
Term”), unless terminated earlier pursuant to the provisions of Article 5
of this Agreement. This Agreement shall automatically renew for an additional
one (1) year period of employment on the expiration date of the Initial Term
(each, a “Subsequent
Term”), and on each successive anniversary date thereafter (each such
date, an “Expiration
Date”), unless either party gives written notice to the other party at
least ninety (90) days prior to any Expiration Date that the Agreement is not
being renewed and shall terminate on that Expiration Date, unless terminated
earlier pursuant to the provisions of Article 5 of this
Agreement.  The Initial Term and each successive one year period
thereafter during which Employee shall perform services pursuant to this
Agreement shall be referred to herein as the “Term.”

       

      
        
          
          

        

        
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      ARTICLE
3

       

      COMPENSATION
AND BENEFITS

       

      Section 3.1    
Base
Salary.  For
all of the services to be rendered by Employee hereunder, Company shall pay to
Employee an monthly base salary of RMB 25,000 (“Salary”), beginning
on the Effective Date of this Agreement.  Any base Salary payable
hereunder shall be paid in accordance with the Company’s regular payroll
practices, as in effect from time to time, and shall be subject to standard
payroll deductions and withholdings as required by applicable law.

       

      Section 3.2    
Adjustment
to Salary.  Employee’s Salary may be changed from time to time
by mutual agreement of the Employee and the Company.  Any such
agreement shall be evidenced by a written amendment of this Agreement and signed
by both Parties.

       

      Section 3.3    
Stock
Grant.  Within five (5)
business days after the approval of an equity incentive plan (the “Plan”) by the
Company’s stockholders, the Company agrees to grant to Employee Fifty Thousand (
50,000 ) shares of Common Stock of the Company (the “Shares”) pursuant to
the Plan.  That shares will vest as follows: Twenty-Five Thousand
(25,000) Shares will vest immediately upon the date of grant; and an additional
Twenty-Five Thousand (25,000) shares of Common Stock pursuant to the Plan on the
third anniversary of the effective date of the Agreement. Additional terms and
conditions of the Shares shall be determined by the Company’s Board of Directors
in accordance with the Plan at the time of the grant and set forth in a stock
grant agreement to be executed by the Company and the Employee.

       

      Section 3.4    
Medical
and Dental Benefits.  Company shall reimburse Employee for
standard corporate-style healthcare insurance coverage.

       

      Section 3.5    
Company
Paid Holidays.  Employee will be eligible for all Company paid
holidays that are provided to employees of the Company.

       

      Section 3.6    
Paid
Leave.  Employee shall be
entitled to accrue seven ( 7 ) days of paid leave (vacation, sick, and personal)
each year, with a total maximum accrual of thirty (30) days.  Employee
may only take a maximum of seven ( 7 ) consecutive work days for paid
vacation.  In exercising paid leave, Employee shall take into
consideration his duties and shall take leave at times mutually agreeable to
Employee and the Company.

       

      Section 3.7    
Reimbursement
of Expenses.  Employee shall be reimbursed for reasonable
travel, hotel, entertainment, and other business related expenses. All
reimbursement of expenses are subject to the Company’s policies in effect at the
time on pre-approval of certain business expenses and reimbursement procedures.
Employee shall produce satisfactory supporting vouchers, receipts, and other
documentation in connection with such expenses before such reimbursement is made
in accordance with applicable Company policy.

       

      ARTICLE
4

       

      DUTIES
AND RESPONSIBILITIES

       

      Section 4.1    
Duties of
Employee.  Employee agrees to serve as Chief Technology
Officer, and will report to the Chief Executive Officer and the Company’s Board
of Directors.  Employee shall perform the duties and functions and
have the responsibilities commensurate with such position as may be assigned
from time to time.  Employee’s duties as Chief Technology
Officer  shall encompass the operations of the Company and the
Company’s subsidiaries.  Employee shall use his best skills and
ability, consistent with sound business practices, to faithfully and diligently
perform his duties and responsibilities hereunder.  Employee shall
devote his full working time and attention to the business of the Company and
its related entities.

       

      
        
          
          

        

        
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      During
his employment with Company, Employee shall not (i) engage in any other
employment or business opportunity outside of his employment with the Company
that may interfere with his ability to perform his duties under this
Agreement, without
the express written authorization of the Company; or (ii) engage, directly or
indirectly, in any other employment, business, commercial, or professional
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with, or that might create a conflict of interest with, the business
of Company or Company’s related entities or affiliates.

      

      Section 4.2    
Compliance
with Law.  Employee agrees to comply with any and all
governmental laws, regulations, and policies in connection with his actions as
an employee of the Company.  Employee shall conduct himself in
accordance with the highest business standards as are reasonably and customarily
expected of such position.  Employee agrees to fully cooperate and
participate in any investigation conducted by the Company relating to its
interests or as may be required by applicable law.

      

      Section 4.3    
Policies
and Procedures.  Employee agrees to abide by all Company
policies and procedures.  Company may issue policies, rules,
regulations, guidelines, procedures or other informational material, whether in
the form of handbooks, memoranda, or otherwise, relating to its employees and
Employee agrees to comply with all such policies applicable to
Employee.

      

      Section 4.4    
Confidential
Information and Trade Secrets.  Employee acknowledges that, as
a condition of his employment hereunder, Employee agrees to execute and abide by
the Company’s confidentiality, non-disclosure, invention assignment, and similar
agreements that are presented to Employee to protect the Company’s trade secret,
proprietary and business interests.  Employee hereby acknowledges and
agrees that such agreements shall survive termination of employment and this
Agreement and shall remain in force following such termination regardless of the
reason for the termination.

       

      ARTICLE
5

      

      TERMINATION

       

      Employee’s
employment relationship with the Company will terminate upon the occurrence of
one of the following defined events, which shall effect a termination of this
Agreement on the effective date of any such termination of employment (the
“Termination
Date”):

       

      
        
          
          

        

        
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      Section 5.1    
The
Employee’s Right to Terminate.  The Employee may terminate his
obligations under this Agreement during the Term:

       

      (i)           Termination by Employee for
Convenience:  at any time upon providing thirty (30) day notice
in writing to the Company; or

       

      (ii)          Good
Reason:  for “Good Reason.” “Good Reason” means any of the
following, without the Employee’s written consent: (a) upon a material breach or
default of any term of this Agreement by the Company, or (b) any material
reduction in the Employee’s duties, position, authority or responsibilities with
the Company relative to the duties, position, authority or responsibilities in
effect immediately prior to such reduction; provided that Company has not cured
or remedied such Good Reason within fifteen (15) days after written notice of
the Good Reason from the Employee.

       

      Section 5.2    
The
Company’s Right to Terminate for “Cause”.  The Company may
immediately terminate the Employee’s employment for “Cause” under this Agreement
at any time during the Term upon the occurrence of any of the following
events:

       

      (i)           Employee
commits an act or acts of dishonesty, fraud, embezzlement, or misappropriation
of funds or proprietary information in connection with his employment duties or
responsibilities; or

       

      (ii)         Employee’s
conviction of, or plea of nolo contendere to, a felony or a crime involving
moral turpitude (other than minor traffic violations); or

       

      (iii)         Employee
materially breaches his obligations under this Agreement, including failure to
perform his job duties satisfactorily or failure to follow Company policies or
any directive of the Company, if such failure or refusal is not cured by
Employee within ten (10) days after receiving written notice of such from the
Company; or

       

      (iv)         Employee’s
willful or gross misconduct in connection with his employment
duties.

      

      Section 5.3    
Company’s
Right to Terminate Without Cause. The Company may terminate the
Employee’s employment under this Agreement at any time during the Term at the
discretion of the Company, without Cause, after the Employee has received thirty
(30) days prior written notice from the Company.

      

      Section 5.4    
Death or
Disability.  The Employee’s employment under this Agreement
shall also terminate upon the occurrence of the following:

       

      (i)           the
Employee’s employment under this Agreement shall automatically terminate upon
the occurrence of the death of the Employee during the Term of this Agreement;
or

       

      (ii)           notice
of termination from the Company after the Employee has become permanently
disabled, or disabled for a period exceeding 180 consecutive days or 180 days
calculated on a cumulative basis over any one year period during the Term of
this Agreement, such that Employee is no longer able to perform the essential
functions of his job even with reasonable accommodation pursuant to applicable
law.

       

      
        
          
          

        

        
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      Section 5.5    
Compensation
Due to the Employee on Termination. In the event of the
termination of the Employee’s employment under this Agreement pursuant to any
provision as set forth above, the Company shall pay to the Employee on the date
of termination only the amount of Salary pursuant to Section 3.1 of this
Agreement that is earned but unpaid as of the date of termination, as well as
any accrued but unused Paid Leave, and any unreimbursed business expenses
incurred as of the termination date pursuant to Section 3.7 of this Agreement,
but Employee shall not be entitled to receive any other payments, compensation
or benefits from the Company under this Agreement, except as expressly set forth
below:

       

      (i)           In
the event of the termination of the Employee’s employment under this Agreement
pursuant Section 5.1(ii) (Good Reason) above, the Company shall pay to the
Employee a severance payment in an amount equal to three (3) months of the
Employee’s annual Salary at the time of termination pursuant to Section 3.1 of
this Agreement, less applicable statutory deductions and withholdings, to be
paid, at the Company’s discretion, in a lump sum  or such regular
intervals over the 3 month period as shall be determined by the Company,
provided that Employee signs a standard release of all claims as presented by
the Company.

       

      (ii)           In
the event of the termination of the Employee’s employment under this Agreement
pursuant Section 5.3 (Company’s Right to Terminate Without Cause) above, the
Company shall pay to the Employee a severance payment in an amount equal to the
Employee’s annual Salary at the time of termination pursuant to Section 3.1 of
this Agreement for remainder of the Initial Term or any Subsequent Term, as
applicable, less applicable statutory deductions and withholdings, to be paid,
at the Company’s discretion, in a lump sum or such regular intervals over the
period as shall be determined by the Company, provided that Employee signs a
standard release of all claims as presented by the Company.

      

      Section 5.6    
Payment
in Lieu of Notice.  Company reserves
the right (but is not obligated) to make a payment in lieu of any notice of
termination of employment which Company or Employee is required to
give.

       

      Section 5.7    
Return of
Company Property.  Upon the termination of employment for any
reason, Employee shall promptly return to Company any and all equipment or
property owned by Company including, but not limited to, any and all client
materials, copies of documents and photographs, models, prototypes, tools, and
supplies, as well as inventory, records, documents, manuals, reports, customer
lists, operations manuals, and any other written information, records, or books
relating in any manner whatsoever to the business of Company, whether prepared
by Company or otherwise coming into Employee’s possession.

       

      ARTICLE
6

       

      MISCELLANEOUS

       

      Section 6.1    
Notices.  Any
notice given under this Agreement shall be sufficient if given in writing and
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, to the Company at its principal place of business or
to Employee at his last known residence address.

       

      
        
          
          

        

        
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      Section 6.2    
Governing
Law.  This Agreement shall be interpreted, construed, and
governed under and according to the laws of the State
of                              .

       

      Section 6.3    
Change,
Modification, Waiver.  No change or modification of this
Agreement shall be valid unless it is in writing and signed by each of the
Parties hereto.  No waiver of any provision of this Agreement shall be
valid unless it is in writing and signed by the Party against whom the waiver is
sought to be enforced.  The failure of a Party of insist upon strict
performance of any provision of this Agreement in any one or more instances
shall not be construed as a waiver or relinquishment of the right to insist upon
strict compliance with such provision in the future.

       

      Section 6.4    
Entire
Agreement.  This Agreement constitutes the entire, final and
complete and exclusive agreement between the Parties regarding the subject
matter hereof and supersedes all previous agreements or representations, whether
written, oral or implied, with respect to employment by the Company provided,
however, the Employee shall remain bound by any confidentiality, nondisclosure,
and invention assignment agreement(s) previously executed in favor of the
Company, to the extent such ancillary agreements exist.  There are no
terms, promises, representations, agreements, or understandings between the
Parties relating to the subject matter of this Agreement, which are not fully
expressed herein.

       

      Section 6.5    
Assignability.  This
Agreement is personal in nature, and neither this Agreement nor any part of any
obligation herein shall be assignable by Employee.  The Company shall
be entitled to assign this Agreement to any affiliate or successor of the
Company that assumes the ownership or control of the business of the Company,
and the Agreement shall inure to the benefit of any such successor or
assign.

       

      Section 6.6    
Legal
Construction.  If any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.  In addition, if any court of competent jurisdiction
determines that any of the provisions set forth herein are unenforceable because
of the duration or geographic scope of such provision, such court shall have the
power to reduce the duration or scope of such provision as the case may be, to
the extent necessary to render such provision enforceable.

       

      Section 6.7    
Paragraph
Headings.  The paragraph headings used in this Agreement are
included solely for convenience and shall not affect or be used in connection
with the interpretation of this Agreement.

       

      Section 6.8    
Legal
Fees and Costs.  Except as otherwise provided herein, in the
event that any Party hereto shall institute any litigation or other proceeding
in order to construe or enforce this Agreement, the prevailing Party therein
shall be entitled to recover its reasonable attorney’s fees and costs incurred
in connection therewith.

       

      Section 6.9    
Interpretation.  This
Agreement has been negotiated at arm’s length and between and among parties
sophisticated and knowledgeable in the matters dealt with in this
Agreement.  Accordingly, none of the Parties shall be presumptively
entitled to have any provisions of the Agreement construed against any of the
other Parties in accordance with any rule of law, legal decision, or doctrine,
such as the doctrine of contra
proferentem, that would require interpretation of any ambiguities in this
Agreement against the party that has drafted it.

       

      [SIGNATURES
ON FOLLOWING PAGE]

       

      
        
          
          

        

        
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      WHEREFORE,
the parties hereto have executed this Agreement on the dates indicated below, to
be effective as of the Effective Date, regardless of the dates actually
signed.

       

       

      
        
          
            
              
                	Dated:  January 21,
      2011	CHINA ELECTRIC MOTOR,
      INC.	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/
      Yue Wang	 
	 	 	Name:   Yue
      Wang	 
	 	 	Title:   Chief
      Executive Officer	 

              

            

          

        

      

       

      
         

        
          
            
              
                
                  
                    
                      	Dated:  January 21,
      2011	EMPLOYEE NAME:	 
	 	 	 	 
	
                               

                            	/s/
      Dehe Wang	 

                    

                  

                

              

            

          

        

         

      

      
        
          
          

        

        
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