Document:

Exhibit
10.19

 

Exclusive Sales Agreement

 

This Exclusive Sales Agreement (“Agreement”)
is made on this 31st day of August, 2009, between Power Hydraulics LLC, located at 1632 Broad Street,
Lake Charles, LA 70601, United States, “Power Hydraulics”) and Tianjin New Highland Science and Technology
Development Company, Ltd (“Tianjin New Highland”), located at No. 86 ATNHe Road, DaGang, TianJin 300270,
China, People’s Republic of China.

 

Whereas, Power Hydraulics has certain rights
to patents (US Patent Numbers 5,413,184,
5,853,056 and 6,125,949) and is the owner or licensee of certain lateral
hydraulic jet drilling technology and
is the manufacturer of relevant equipments developed for usage with said
patents and protected intellectual technology.

 

Whereas, Tianjin New Highland desires to obtain an exclusive authorization
to purchase and use lateral hydraulic jet drilling equipment
manufactured by Power Hydraulics within the territory of the People’s Republic
of China

 

Whereas, the parties wish to enter into this
exclusive sale agreement within the territory of the People’s Republic of
China.

 

Now, therefore, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
agreed to, both parties hereto agree to the following terms and conditions:

 

I.         Definition.

 

The definition of “Exclusive Sale” or “Exclusive
Purchase’ shall mean for purposes hereof that Tianjin New Highland shall be the
only party which can purchase or use any of Power Hydraulics’ radial jetting
products (“Power Hydraulics’ Products”) from
Power Hydraulics within the territory of the People’s Republic of Chinn

 

II.        Appointment and Territories.

 

1.         Power Hydraulics hereby authorizes Tianjin New Highland to purchase, and Tianjin New Highland agrees to
be the exclusive purchaser of Power Hydraulics Products within the territory of
the People’s Republic of China Tianjin New Highland has agreed to exclusively
purchase radial jetting products from Power Hydraulics.

 

2.         Tianjin New Highland’s right of exclusive purchase shall remain in
force permanently after the date of this Agreement, unless terminated by one of the Parties, in which case the
Party who declares termination must inform the other Party by written notice at
least three (3) months prior to formal termination

 

III.       Products.  Tianjin New
Highland shall purchase Power Hydraulics Products under written purchase orders or manufacturing agreements (hereafter
referred to as “Purchase Documents”), in which description(s), specification(s), package(s) and quantities
are shown Tianjin New Highland’s Purchase Document shall be in writing and
signed by authorized personnel and may be sent to Power Hydraulics by facsimile or e-mail Power Hydraulics 

 

 

shall confirm
receipt, agree to the specification and terms, and notify Tianjin New Highland
after receiving Tianjin New Highland’s
Purchase Documents that Power Hydraulics accepts the  Purchase Documents. 
No manufacture or shipments
or goods by Power Hydraulics shall be made until Power Hydraulics has confirmed
Purchase Documents covering said manufacture or shipment.

 

IV.      Price.  The
price of all products, services and training will be mutually agreed upon
between Power Hydraulics and Tianjin New Highland prior to the signing or
acceptance of any purchase Documents.

 

V.        Delivery Time, Port of
Loading and Port of
Destination.   The delivery time to the port, the port of loading and the port of destination will be mutually agreed upon m a
purchase order or manufacturing contract. 
Unless otherwise stated in purchase documents, Power Hydraulics Products
are FOB Lake Charles.

 

VI.      Payment Terms.  The payment
terms will be mutually agreed upon in a written purchase docurrient.

 

VII.     Power Hydraulics’ Rights and Obligations.

 

1.         Power Hydraulics has the right to demand that Tianjin New Highland
make payments in accordance with Purchase Documents, and if payment is not
received within thirty (90) days of an agreed upon payment schedule, Power
Hydraulics, at its sole discretion, may declare Tianjin New Highland in default and terminate this Purchase
Document, upon written notice.

 

2.         Power Hydraulics shall guarantee that the quality of Power Hydraulics
Products meets the mutually agreed upon specifications (“Good Quality”)
detailed in a purchase document, and shall provide Tianjin New Highland with
products according to the mutually agreed upon times and quantities specified
in the purchase document submitted by Tianjin New Highland to, and accepted by,
Power Hydraulics.

 

3.         Power Hydraulics shall provide Tianjin New Highland timely technical
support that goes with the Power Hydraulics Products according to the Purchase
Documents and manufacturer’s warranty.

 

VIII.    Tianjin New Highland’s Rights and Obligations.

 

1.         Tianjin New Highland is the exclusive purchaser and shall have the
exclusive rights in the People’s Republic of China for the purchase and use of
Power Hydraulics Products.

 

2.         Tianjin New Highland has the right to request Power Hydraulics to
provide Power Hydraulics Products in a timely
manner in sufficient quantities and of Good Quality and timely technical
support for the Power Hydraulics Products in a manner generally accepted
in the industry.

 

3.         Tianjin New Highland has a right, before payment or acceptance, to
inspect product, shipped by Power Hydraulics at any reasonable place and time
and in any reasonable manner.  When Power
Hydraulics is required or authorized to send the products to 

 

2

 

Tianjin New Highland, the
inspection may be after their arrival.  Expenses of inspection may be borne by
Tianjin New Highland but shall
be recovered from Power Hydraulics if the
goods do not conform to the Purchase Documents and are rejected.

 

4.         If the
goods or the tender of delivery by Power Hydraulics fail in any material
respect  to conform to the Purchase
Documents, Tianjin New Highland may

 

(a)      reject the whole; or

 

(b)      accept the whole, or

 

(c)      accept any commercial unit or units and reject the rest

 

5.         Tianjin New Highland is solely responsible for providing the fully detailed requirements for China-specific specifications to
Power Hydraulic Products so products shall comply with the import laws of the
People’s Republic of China, however, in the event of refusal of entry into the
People’s Republic of China and/or required re-export of Power Hydraulics
products subject to this agreement, due to non-compliance on the part of Power
Hydraulics with the specifications provided to them by Tianjin New Highland
causing customs or other relevant agencies of the People’s Republic of China
prevent entry, Power Hydraulics shall arrange for and pay for the said
re-export.  Power Hydraulics shall also
compensate Tianjin New Highland for any ordinary and reasonable costs or fees associated with such non-compliance incurred
by Tianjin New Highland, including any consequential damages suffered by
Tianjin New Highland due to its inability to use the Power Hydraulics Products
within the known operating limitations. 
In any case, the total compensation shall not to exceed $100,000.00 per
purchase document.

 

6.         Tianjin New Highland shall make payment to Power Hydraulics according to every purchase document and
fulfill its obligations under this Agreement.

 

IX.      Default

 

Any material breach
by either Party shall he regarded as a default. 
The breaching Party may be responsible for all ordinary or reasonable
damages and loses arising from its default.

 

X.        Governing Law
and Dispute Resolution

 

All terms and
conditions of this Agreement shall be governed by the laws of the State of
Louisiana, the United States of America. 
Any dispute arising from or in connection with this Agreement shall be
settled by arbitration in Lake Charles, Louisiana or any other mutually agreed
upon location or jurisdiction.  The
arbitration shall be final and binding on the Parties.

 

Each Party to the
admiration shall cooperate with each other Party to the arbitration in making
full disclosure of and providing complete access to all information and
documents requested by such other Party in connection with such arbitral
proceedings, subject only to any confidentiality obligations binding on such
Party.  During the course of the arbitral
panel’s adjudication of the Dispute, this Agreement shall continue to be
performed except with respect to the part in dispute and under adjudication.

 

3

 

XI.      Language and Explanation of the Agreement

 

This
Agreement shall be executed in English and translated into Chinese, but the
English version shall prevail over the Chinese version with regard to the interpretation
of this contract.

 

XII.     Other Terms

 

1.         Each
Party agrees not to disclose any Confidential Information of the other Party
and to maintain such Confidential Information in strictest confidence, to take
all reasonable precautions to prevent its unauthorized dissemination and to
refrain from sharing any or all of the information with any third party for any
reason whatsoever except as required by court order, both during and after the
termination of this Agreement.  Without
limiting the scope of this duty, each Party agrees to limit its internal
distribution of the Confidential Information of the other party only on a “need
to know” basis and solely in connection with the performance of this Agreement,
and to take steps to ensure that the dissemination is so limited.

 

2.         This
Agreement shall come into effect from the date that both parties sign.

 

3.         This
Agreement shall be in duplicate to be held by each Party.  Each copy shall have equal legal effect.

 

4

 

The Parties hereto execute this Agreement as
of the date set forth above.

 

 

Power Hydraulics, LLC

 

 

	
  /s/Daniel J. Jacobson

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Daniel J.
  Jacobson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position:
  Director

  	
   

  

 

5

 

Tianjin New Highland Science and Technology Development Company, Limited

 

 

	
  /s/ Guoqiang Xin

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Guoqiang Xin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position: CEO

  	
   

  

 

6Exhibit 10.22

 

Date: May 6, 2009

 

PREMIUM SINO FINANCE
LIMITED

 

And

 

WISE WORLDWIDE LIMITED

 

And

 

ERNEST KA-KUI CHEUNG

 

 

EQUITY TRANSFER AGREEMENT

 

 

1

 

Table of
Contents

 

	
  1. Definition:

  	
  1

  
	
  2. Equity Assignment

  	
  3

  
	
  3. Consideration for the Equity for Assignment and
  Payment Method

  	
  4

  
	
  4. Representations, Warranties and Undertakings of
  the Seller

  	
  4

  
	
  5. Representations, Warranties and Undertakings of
  the Buyer

  	
  5

  
	
  6. Equity Assignment Completion Date

  	
  5

  
	
  7. Confidentiality

  	
  6

  
	
  8. Outstanding Issues of This Agreement

  	
  6

  
	
  9. Liabilities for Breach of Agreement

  	
  6

  
	
  10. Resolution of Disputes

  	
  6

  
	
  11. Governing Law

  	
  7

  
	
  12. Rights of the Agreement

  	
  7

  
	
  13. Force Majeure

  	
  7

  
	
  14. Miscellaneous

  	
  7

  
	
  Annex I

  	
  10

  
	
  Annex II

  	
  11

  

 

2

 

Equity
Assignment Agreement

 

This Agreement is entered into by the following
parties as of May 6, 2009 in Hong Kong:

 

(1)   Premium Sino Finance Limited (hereinafter referred to
as the “First Buyer”), a limited liability company incorporated in British
Virgin Islands whose domicile is at No. 58 Diqiucun, Dagang District,
Tianjin City;

(2)   Wise Worldwide Limited (hereinafter referred to as the
“Second Buyer”), a limited liability company incorporated in British Virgin Islands
whose registered address is at OMC Chambers, P.O. Box 3152, Road Town,
Tortola, British Virgin Islands; and

(3)   Ernest Ka-Kui Cheung (hereinafter referred to as the
“Seller”) whose Hong Kong Identification Card Number is A904163(2) and
whose domicile is at 20D Primrose Mansion, Taikooshing, Hong Kong.

 

WHEREAS:

 

(I)            International Petroleum Services Corporation Limited
(hereinafter referred to as the “International Petroleum”), is a limited
liability company incorporated as of September 10, 2007 according to the
law of Hong Kong; and as of the date on which this Agreement is executed, the
Target Company holds a total of 255,000 shares of International Petroleum with
a face value of HK$1 per share, accounting for 100% of the outstanding shares
of International Petroleum;

(II)           Superport Limited (hereinafter referred to as the
“Superport”) is a limited liability company incorporated according to the law
of British Virgin Islands; and as of the date on which this Agreement is
executed, the Seller holds 100% of the shares of Superport; and

(III)         Tianjin New Highland Science Development
Co., Ltd. (“New Highland”) is a limited liability company incorporated in
Tianjin, China according to the law of the People’s Republic of China and
mainly engaging in the development and application of technical services of oil
and gas field development and oil exploitation; and International Petroleum
holds 100% of the shares of New Highland.

 

WHEREAS:

 

The Seller desires to assign all of its equity in
Superport to the Buyers according to the terms and conditions set forth in this
Agreement, and the Buyers agree to receive all the equity of Superport
according to such terms and conditions,

 

THEREFORE, all the parties hereby agree as below:

 

1. Definition:

 

1.1 In this Agreement, unless defined otherwise, the
following terms shall be defined as below:

 

1

 

	
  “Accounting Date”:

  	
   

  	
  September 30, 2009.

  
	
  “Target Equity”:

  	
   

  	
  All of the outstanding shares of Superport, i.e.,
  10,000 shares. If Superport issues additional shares to its shareholder
  before the Transaction Completion Date to capitalize all or part of the loans
  extended from the shareholder, the outstanding shares of Superport shall also
  include the additional shares issued for the aforementioned capitalization.

  
	
  “Target Company”:

  	
   

  	
  International Petroleum Services Corporation
  Limited.

  
	
  “Group”:

  	
   

  	
  The Target Company, New Highland and their branches
  (Please refer to Annex I of this Agreement for the overview and the
  organizational structure of the Group)

  
	
  “Affiliates”:

  	
   

  	
  New Highland and its branches.

  
	
  “Business Day”:

  	
   

  	
  Any day on which banks in Hong Kong open for
  business (Saturdays and Sundays excluded).

  
	
  “Transaction Completion”:

  	
   

  	
  Completing the transaction of the Target Equity to
  be assigned according to Article 5 hereof.

  
	
  “Transaction Completion Date”:

  	
   

  	
  The third Business Day after the preconditions are
  satisfied or exempted.

  
	
  “Transition Period”:

  	
   

  	
  The period from the date on which this Agreement is
  executed to the Transaction Completion Date or another date agreed by all
  parties.

  
	
  “China”:

  	
   

  	
  The People’s Republic of China. For the purpose of
  this Agreement, China does not include Hong Kong, Macau special
  administrative regions or Taiwan Province.

  
	
  “Hong Kong”:

  	
   

  	
  Hong Kong Special Administrative Region of the
  People’s Republic of China.

  
	
  “Management Accounts”

  	
   

  	
  The un-audited balance sheet, profit and loss
  accounts of each member of the Group and the un-audited consolidated
  financial reports.

  
	
  “Audited Accounts”:

  	
   

  	
  Accounting statements issued
  by each member of the Group and audited by the accountant designated by the
  Buyers, including the balance sheets as of the Accounting Date.

  
	
  “All Parties”:

  	
   

  	
  All parties of this
  Agreement, while “a Party” refers to any party thereof.

  
	
  “Tax”:

  	
   

  	
  For China and any other
  region, any tax, levy, duty, charge, payment or tax lien (including any
  related penalty, fine, surcharge and interest).

  
	
  “Warranty”:

  	
   

  	
  The representations, guarantees and/or undertakings
  given by the Seller for the purpose of this Agreement (including but not
  limited to the warranties set forth in Annex II).

  

 

1.2 All the agreements and other documents mentioned
herein shall refer to the related agreements or documents, as well as their
contents revised, supplemented, replaced or succeeded by other agreements from
time to time according to related agreements or documents.

 

1.3 Unless otherwise stated, all the articles and
annexes mentioned herein shall refer to the 

 

2

 

articles and annexes of this Agreement; a section
mentioned herein shall refer to the section contained in the article under
which the section is set forth; and a paragraph mentioned herein shall refer to
the paragraph contained in the section under which the paragraph is set forth.

 

1.4 Each party mentioned herein shall include its
successor(s) and representative(s).

 

1.5 Any Warranty, liability or statement in this
Agreement given, assumed or made by more than one person is deemed as jointly
and separately given, assumed or made by such persons.

 

1.6 The title of any article or annex is only for the
convenience of reading and shall be disregarded in the interpretation of this
Agreement.

 

1.7 All the singular forms shall include their
corresponding plural forms; and the reference to any word shall include its
masculine, feminine and neutral forms.

 

1.8 The reference of any “person” shall include the
corporate entity, non-corporate organization and partnership regardless of
whether the person has the status of an independent legal person.

 

1.9 The reference of “in writing” or “written” shall
include any means to produce or reproduce a text in a form by which the text is
made readable and do not fade.

 

1.10 The reference of “confirmed” shall be the status
of a document by which both the Seller and the Buyers have approved and
executed for confirmation.

 

1.11 When this Agreement is interpreted,

 

(a) The articles falling into the same category
normally are not applicable to any expression led by the word “other” and will
not be interpreted in a restrictive manner, even if a sentence of such articles
is stated prior to a type of actions or events; and

(b) Common expressions are not interpreted in a
restrictive manner.

 

2. Equity Assignment

 

2.1 According to the provisions of this Agreement, the
Seller agrees to assign the equity for the assignment held by the Seller to the
Buyers as of the Equity Assignment Completion Date, as defined below, provided
by this Agreement. Among others, the First Buyer shall be assigned with 90% of
the equity of the Target Company, while the Second Buyer shall be assigned with
10% of the equity of the Target Company.

 

2.2 The Buyers agree to accept the equity assigned by
the Seller according to the provisions of this Agreement.

 

2.3 As of the Equity Assignment Completion Date
provided by this Agreement, the Buyers will 

 

3

 

become the legal owners of the equity for assignment
according to this Agreement, enjoy and assume all the rights and obligations
relating to the equity for assignment pro rata respectively, while the Seller
will no longer enjoy any rights relating to the equity for assignment, nor
assume and obligations or liabilities relating to the equity for assignment
unless otherwise stated by this Agreement.

 

3. Consideration for the Equity for
Assignment and Payment Method

 

3.1 The Buyers and the Seller hereby confirm that the
consideration for the equity to be assigned from the Seller to the Buyers as
stated in this Agreement (hereinafter referred to as the “Consideration for the
Equity for Assignment”) shall be paid in cash by the Buyers to the Seller. As
per the confirmation of All the Parties of this Agreement after negotiations,
the Consideration for the Equity for Assignment is HK$50,000,000, of which 90%,
or HK$45 million, shall be paid by the First Buyer, and 10%, or HK$5 million,
shall be paid by the Second Buyer.

 

3.2 After this equity assignment is completed, the
Seller will no longer own any equity of the Target Company, which will become
an independent company 90% owned by the First Buyer and 10% owned by the Second
Buyer.

 

3.3 All the Parties of this Agreement agree that the
aforementioned Consideration for the Equity for Assignment shall be paid by the
Buyers within three (3) days of the Equity Assignment Completion Date to
the Seller or the company designated by the Seller

 

4. Representations, Warranties and
Undertakings of the Seller

 

The Seller hereby represents, warrants and undertakes
to Party B that:

 

4.1 The Seller has all the rights, powers and
capacities necessary for executing and implementing all the obligations and
liabilities under this Agreement, which will be statutorily and effectively
binding to Party A upon execution;

 

4.2 The Seller has the lawful and full ownership over
the equity for assignment, has the right to execute this Agreement and dispose
all or any part of the equity for assignment; such equity and any rights
relating to such equity are not subject to any preferential right or any other
similar right; the Buyers will enjoy all the legal rights after the Equity
Assignment Completion Date as the owners of the equity for assignment and can
assign and dispose such equity according to the law and will not be subject to
any guarantee or pledge, or any right of any other third party except for the
Articles of Association of the company and the Chinese law.

 

4.3 The Seller has already disclosed to the Buyers all
the facts relating to the company that will affect the execution of this
Agreement or changing the original meaning of any articles of this 

 

4

 

Agreement once being disclosed; and

 

4.4 The Seller will jointly and appropriately settle
with the Buyers any outstanding issue in the course of the assignment of the
properties stated in this Agreement according to related laws and in line with
the spirits of related policies.

 

5. Representations, Warranties and
Undertakings of the Buyer

 

The Buyers hereby represent, warrant and undertake to
the Seller that:

 

5.1 The Buyers have adequate rights to engage in the
equity assignment stated in this Agreement and have already obtained all the
legal rights and authorities to execute and implement this Agreement; once
being executed, this Agreement will be statutorily and effectively binding to Party
B;

 

5.2 The Buyers will strictly comply with the
provisions of this Agreement, and duly pay the Consideration for the Equity for
Assignment to the Seller in full; and

 

5.3 The Buyers will jointly and appropriately settle
with the Seller any pending issue in the course of the assignment of the
properties stated in this Agreement according to related Chinese laws and in
line with the spirits of related policies.

 

6. Equity Assignment Completion Date

 

The assignment of the equity for assignment stated in this
Agreement shall be completed on the date on which all the following conditions
are met and which is the Equity Assignment Completion Date:

 

6.1 This Agreement has been legally and officially
executed by All Parties of this Agreement or their authorized representatives;

 

6.2 This Agreement has been officially approved by the
shareholders’ meeting of the Target Company, including:

 

(a) Approving the arrangements for this Agreement
and related issues; and

 

(b) Fully authorizing and enjoining the directors
of the company to actively apply to competent authorities and proceed with the
issues relating to the change of the equity assignment under this Agreement.

 

5

 

7. Confidentiality

 

Unless otherwise provided by any law or regulation of
China or Hong Kong, any articles of association, or any law or regulation of
the jurisdictions of the domiciles of the Buyers or otherwise agreed in writing
among All Parties of this Agreement, any party shall not disclose any content
relating to this Agreement to any party other than the parties of this
Agreement without the consent of other parties of this Agreement before the
equity assignment stated in this Agreement is completed.

 

8. Outstanding Issues of This
Agreement

 

All Parties of this Agreement agree that, after this
Agreement is executed, they will negotiate all the outstanding issues of this
Agreement and, before the Equity Assignment Completion Date, reach a
supplementary agreement, which will form an integral part of this Agreement.

 

9. Liabilities for Breach of
Agreement

 

Any of its representation, Warranty or undertaking in
this Agreement or any article of this Agreement violated by any party
constitutes a breach of agreement. The defaulting party shall comprehensively
indemnify the observant party for its losses in full, including but not limited
to the costs and expenses directly or indirectly incurred by the breach of
agreement of the defaulting party to the observant party (including but not
limited to the litigation costs, arbitration costs and lawyer’s fees reasonably
paid therefor by the observant party).

 

10. Resolution of Disputes

 

10.1 Any dispute arising from or relating to this
Agreement shall be resolved among All Parties of this Agreement through friendly
negotiations and shall be brought for arbitration in case such dispute cannot
be resolved through friendly negotiations among All Parties of this Agreement
within thirty (30) days of the occurrence of the dispute.

 

10.2 Any dispute arising from or relating to this
Agreement shall be brought to the China International Economic and Trade
Arbitration Commission and arbitrated according to the arbitration
rules of the commission effective at the time. The award is final and
binding to All Parties of this Agreement. The venue of the arbitration is in
Beijing City of China.

 

10.3 According to related laws, any article of this
Agreement arbitrated as invalid by an arbitral tribunal does not affect the
validity and implementation of other articles hereof.

 

6

 

11. Governing Law

 

The execution, validity, interpretation,
implementation and dispute resolution of this Agreement are governed by the
related laws of Hong Kong.

 

12. Rights of the Agreement

 

Without the consent of the other party of this
Agreement in writing, any party shall not assign the rights that the party
enjoys under this Agreement. Both successors of All Parties of this Agreement
and the approved assignees shall be bound by this Agreement.

 

13. Force Majeure

 

13.1 “Force Majeure” refers to any event that cannot
be reasonably controlled, foreseen or avoided, even if foreseen, by All parties
of this Agreement and that impedes, affect or delay any party’s implementation
of all or part of its obligations. Such events include but are not limited to
earthquakes, typhoons, floods, fires, other natural disasters, wars, riots,
strikes or any other similar event.

 

13.2 In case of any Force Majeure event, the party
suffering the event shall immediately advise the other parties with its fastest
method, provide a testimonial explaining the details of the related event and
the reasons for failing to implement, or partially failing to implement, or
delaying the implementation of this Agreement. Then, All Parties of this Agreement
shall negotiate to decide whether to delay the implementation of or to
terminate this Agreement.

 

14. Miscellaneous

 

14.1 Notice

 

All notices, consents, requests, instructions and
other communications provided by this Agreement shall be in written form. Such
notices, consents, requests, instructions and other communications shall be
deemed as having been effectively sent out, made and delivered (a) when
delivered by a specific person, (b) forty-eight (48) hours after being
sent out in a confirmed or registered mail with the postage prepaid. Besides,
the following addresses shall be used before any other address is designated:

 

In case the communication is addressed to the First
Buyer — Premium
Sino Finance Limited

 

Address: No. 58
Diqiucun, Dagang District, Tianjin City

 

7

 

Attention to: Liu
Qingzeng

Tel. no.: (86) 136 6216
4418

Fax no.: (86 22) 6331
2003

 

In case the
communication is addressed to the Second Buyer — Wise Worldwide Limited

Address: Flat A, Block
1, 32/F, Victoria Centre, 15 Watson Road, North Point, Hong Kong

Attention to: Xu Bin

Tel. no.: (852) 9166
2000

Fax no.: (852) 2510
0997

 

In case the
communication is addressed to the Seller — Ernest Ka-Kui Cheung

Address: 20D Primrose
Mansion, Taikooshing, Hong Kong

Tel. no.: (852) 5134
5047

 

The Buyers and the
Seller agree and confirm that, if the Seller sends a notice to either Buyer
according to the provisions of this Agreement, the Seller will be deemed as
having sent the same notice to the other Buyer.

 

14.2 All Agreements and
Texts

 

This Agreement provides
that all the agreements between the Seller and the Buyers relating to the
transaction contemplated by this Agreement supersede any and all prior oral and
written agreements and understandings among All Parties relating to the
transaction contemplated by this Agreement.

 

14.3 Revision

 

This Agreement can only
be revised or amended by official legal written documents executed between the
Seller and the Buyers.

 

14.4 Assignment

 

The Seller hereby
agrees that the Buyers can assign their rights and obligations under this
Agreement to another company designated by the Buyers provided that the Buyers
shall always have the obligation to urge the company to complete its purchase
of the Target Equity in the manner contemplated by this Agreement. Unless
inconsistent with any content or express provision of this Agreement, it is the
obligation and liability of the Seller to quote all the obligations and
liabilities to the Seller.

 

14.5 Costs and Taxes

 

The Buyers and the
Seller agree to bear their stamp duties payable respectively for the assignment
of the Target Equity. Besides, in addition to the range provided by this
Agreement, All Parties shall pay their own taxes and legal, accounting,
financial advisors’, valuators’, 

 

8

 

technical experts’ and
other similar fees incurred by the transaction contemplated by this Agreement
respectively.

 

14.6 Announcement and
Secrecy

 

All Parties of this
Agreement agree to keep the contents of this Agreement in secret. All the
notifications to third parties and all other disclosures and publicity relating
to the issues contemplated by this Agreement shall be jointly planned,
coordinated and carried out by both the Seller and the Buyers except for the
information required to be disclosed to any Chinese regulator, Hong Kong
Exchanges and Clearing Limited or any other governmental agency or professional
advisor. Without the prior consent by the other parties in writing, any party
shall not unilaterally disclose any such information or launch any publicity.
All Parties agree to appropriately cooperate with the other parties and to
comply with all applicable laws.

 

14.7 No Waiver

 

Any failure or delay of
exercising any power, right or privilege under this Agreement by any party of
this Agreement does not constitute any waiver of such power, right or
privilege. Any separate or partial exercise of such power, right or privilege
does not exclude the exercise or the further exercise of such power, right or
privilege or any other power, right or privilege.

 

14.8 Severability

 

If any article of this
Agreement is deemed as invalid or unenforceable, unless such invalidity or
unenforceability violates, in nature, the significance of the general intent or
remnant part of this Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of any other article of this Agreement in
any way except for the case in which the article having been determined as
invalid or unenforceable constitutes an integral part of this Agreement or
cannot be expressly severed from this Agreement. Such invalidity or
unenforceability shall not affect the valid or enforceable application of any
other article, each of which is deemed as valid, enforceable, or having been
implemented, made or applied in a way and within the entire range permitted by
the law.

 

14.9 Text

 

This Agreement is in
Chinese and is executed by All Parties in as many copies as required. Any copy
executed in such a way is deemed as an original and binding to All Parties.

 

14.10 Legal Opinions to
the Seller

 

The Seller confirms
that it has already consulted the professional opinions of its counsel
regarding this Agreement.

 

9

 

 

Annex I

 

Basic Information of All
Members & Existing Shareholding Structure Chart of the Group

 

 

10

 

Annex II

 

Warranty

 

The Seller hereby individually and jointly warrants,
represents and undertakes to the Buyers that all the information contained in
Annex I and the following issues are truthful. Such warrant, representation and
undertaking will be continuously made as of the date on which this Equity
Assignment Agreement is executed. For the purpose of this Annex, unless
otherwise indicated, the word “Group” refers to all members shown in the
Structure Chart of Annex I, and “Company” refers to the Target Company.

 

1. Assignment of Target Equity

 

(1) The Target Equity accounts for 100%
outstanding shares of the Target Company and has been paid up in full. The
Seller is the legal and beneficial owner of the Target Equity.

 

(2) The Seller is the sole beneficial owner
listed in the Target Equity breakdown and has the right to dispose all the
equity that the Seller holds, including selling and assigning the complete
legal and beneficial ownership of all the Target Equity that the Seller holds
to the Buyers.

 

(3) The Target Equity is not subject to any
subscription right, purchase right, mortgage, charge, pledge, lien or any other
form of hypothecation, pledge or encumbrance, or subject to such encumbrances.
No agreement or undertaking on providing or setting up the aforementioned
encumbrances has been made. Any related person that can enjoy any right that is
not waived or satisfied hereinabove has not made any claim for such right.

 

(4) The Equity in New Highland held by the
company is not connected with any subscription right, purchase right, mortgage,
charge, pledge, lien or any other form of hypothecation, pledge or encumbrance,
or subject to such encumbrances. No agreement or undertaking on providing or
setting up the aforementioned encumbrances has been made.

 

(5) The changes of New Highland since its
incorporation have gone through related legal procedures provided by the
effective Chinese laws and regulations at the time. All the governmental
approvals, permits and confirmations that shall be obtained have been acquired
and are lawful and valid.

 

(6) The equity of New Highland held by the
company has gone through related legal procedures provided by the effective
Chinese laws and regulations at the time. All the governmental approvals,
permits and confirmations that shall be obtained have been acquired and are
lawful and valid. The cooperation agreement is lawful and valid in all aspects.

 

(7) The amount of the target shareholder loan
equals the amount of all the loans owed by the 

 

11

 

Target Company to the Seller as of the date on which this Agreement is
executed. The target shareholder loan bears no interest and is not subject to
any pledge, priority or encumbrance in any form.

 

2. Seller

 

(1) The Seller has the disposing capacity to
execute and implement the transaction under this Agreement and fulfill the obligations
under such transaction. The Seller has obtained the approval of its
shareholders and board of directors to execute and implement the transaction
under this Agreement and fulfill the obligations under such transaction.

 

(2) The obligations provided in this Agreement
that shall be borne by the Seller are lawful, valid and binding. The Seller
shall implement and fulfill its obligations under this Agreement according to
its terms and conditions.

 

(3) The execution and implementation of this
Agreement by the Seller do not breach any related law, rule, agreement or
regulation or any obligation, either contractual or in any other nature, that
is binding to the Seller or any of its assets.

 

(4) Prior to this transaction, the Seller is an
independent third party other than the Buyers and their associates. In this
transaction, the Seller has not obtained or strengthened its control over the
Buyers through active cooperation with any other seller, and prior to this
transaction, the Seller has not engaged in any other transaction with the
Buyers, either directly or indirectly.

 

3. Accurate and Adequate Documentation

 

(1) The articles of association of the Group
delivered by the Seller to the Buyers are thorough and accurate. All the
meeting resolutions and other documents are attached to the related articles of
association according to the provisions of the law and thoroughly set forth the
rights and restrictions given to the company regarding all sorts of equities.

 

(2) The accounts, books, classified accounts,
financial and any other type of records are appropriately saved according to
common business practices and are kept and managed by the company. All the
transaction materials relating to the business of the company are also
appropriately and correctly recorded in related documents. As of the date on
which this Agreement is executed, the information stated or reflected in any
related account, book, classified account, financial and any other type of
records have not had any serious error of any nature or discrepancy in
meanings, and can truthfully and fairly reflect the financial, contractual and
business status of the company.

 

(3) All the information contained in this
Agreement, including the recital, and all the documents, materials and
information provided by the Sellers to the Buyers are truthful and accurate and
are not misleading in all aspects and at any time.

 

12

 

(4) All the information in writing provided by
the Seller, the senior staff and employees of the Group, the professional
consultants of the Seller and the counsel of the company in the course of
negotiation before the execution of this Agreement are truthful and accurate at
the time of being provided, i.e., as of the date on which this Agreement is
executed.

 

4. Incorporation, Approval and License

 

(1) The Group is a limited company legally
incorporated and registered and effectively existing in Hong and/or China. To
engage in its related business, the Group has all the powers and authorities
required for possessing all the assets of the Group, and all the certificates
and approvals necessary for engaging in such business.

 

(2) The Group has gone through all the necessary
filings and registrations at local registration authorities or industrial and
commercial administrations.

 

(3) The Group is the legal owner of all licenses
and certificates, which shall not be attached with any pledge, lien, creditor’s
right, equity or any other form of rights or claims for rights. According to
the knowledge of the Seller, such licenses and certificates of the Group have
not been challenged or objected by any administrative authority or any third
party.

 

(4) The business agreements executed reached
between Beijing Along  and Beijing China Power Information Technology
Co., Ltd. of China Electric Power Research Institute  and other parties are in line with the
provisions of all related Chinese laws, regulations and regulatory documents in
all aspects at the time at of the execution and the completion of the execution
of this Agreement and are legal, valid and can continue being implemented.

 

(5) There exists no fact or issue that might have
any serious negative impact on the Group’s operation of its business or
maintenance of its licenses and certificates.

 

(6) The licenses and certificates of the Group
are valid, viable and will not be cancelled.

 

(7) The existing performance of the Group is
still in line with the rules and indicators set by licenses and
certificates. Moreover, if the group needs to re-apply for such licenses and
certificates at present or in the future, the Group can still obtain such
licenses and certificates.

 

(8) There exists no fact or issue that will or
might have any serious negative impact on the Group’s passing all the review
and approval formalities to receive and maintain related licenses and
certificates after the equity assignment.

 

(9) New Highland has legally acquired and
possesses such certificates as New and Hi-tech Enterprise Permit under the name
of New Highland according to the related Chinese laws and 

 

13

 

regulations. All taxes and charges for New Highland to
acquire the aforementioned certificates have been paid in full and in due
course. At its own discretion, New Highland can engage in its business within
the business scope thereof without any restriction or third party right and
interest. Upon the expiry of such certificates, the extension and renewal will
not face any legal obstacle.

 

5. Compliance with the Law

 

(1) the Group complies with the law in terms of
all key issues, including (a) the articles of association and other
documents of incorporation of the Group, including all the resolutions that
have been passed or are announced of having been passed, (b) the documents
that have to be approved by competent Chinese governmental agencies or
registration authorities or filed with other applicable regulators as provided
by related applicable laws, (c) the distribution of interests, dividends
and other distributions, (d) directors and other senior staff and
(e) all related legal procedures and provisions for the normal operation
of the Group, and has gone through all official formalities therefor.

 

(2) Within their authorities, the Group and its
executives have not had or been aware of any serious breach any law or
regulation that might affect the Group or the business of the Group.

 

6. Management Accounts

 

(1) Management Accounts:

 

(i) Are developed according to the methods
approved by and in line with the Chinese or Hong Kong accounting standards;

 

(ii) Are thorough and accurate in all key items,
in particular, have explained in detail all the debts as of the date on which
this Agreement is executed, or have made appropriate provisions for or added
remarks according to related good accounting practices to all deferred or
unconfirmed liabilities, either liquidated or not liquidated;

 

(iii) Can truthfully and fairly reflect the
financial and business status of the Group as of the Accounting Date and the
performance report for the fiscal years ended at the related dates; and

 

(iv) Are not subject to any unusual or irregular
items that have not been disclosed in the management accounts.

 

(2) Management accounts have been developed
according to the generally accepted accounting principles in China and Hong
Kong that are generally applied by certain companies engaging in the same type
of business as the Group.

 

(3) The Group has not discovered any outstanding
tax liability in any form that has not been recorded in the management
accounts.

 

14

 

(4) Unless having disclosed to the Buyers, the
Group has not made any undertaking in terms of capital or been involved in any
plan or project requiring Capex.

 

(5) All the businesses and assets that the Group
owns and that are included or appear in the management accounts are not subject
to any encumbrance and are kept or managed by the Group.

 

(6) The Group has not held any pledge, including
any guarantee or indemnification. According to their terms, such pledges, if
any, are invalid or unenforceable to the assignors of any related pledge.

 

(7) All financial arrangements relating to and
involving the Group:

 

(i) The Buyers have been provided with all
related details and copies of all related documents, which are truthful and
correct;

 

(ii) No related applicable law or regulation is
breached or broken;

 

(iii) No action has been taken or threatened to
be taken regarding the enforcement of any encumbrance;

 

(iv) All the aforementioned financial
arrangements have full force and effect and have not made any change to the
terms or conditions of any related arrangement;

 

(v) No action or omission of any issue will
affect or impair the aforementioned financial arrangements, which have the full
force and effect or the continuity of the borrowing convenience; and

 

(vi) The aforementioned related arrangements are
not determined by any guarantee or pledge provided by any third party.

 

(8) Total borrowings of the Group:

 

(i) For those borrowed from banks, the total
amount shall not exceed the upper limit of the overdraft services for the
Group; and

 

(ii) For those borrowed from other sources, the
total amount shall not exceed the upper limit stated in the articles of
association of the Group or any other deed or document binding to the Group.

 

(9) In order to be able to continue running its
business with its current operating method and revenue level, and to implement
and fulfill the obligations under all the orders, projects and other covenants
received or contracted by the Group, the Group has prepared adequate working
capital from the credit lines currently granted to the Group.

 

15

 

7. Audited Accounts

 

Audited accounts:

 

(a) were prepared according to applicable laws
and the generally accepted accounting principles, standards and practices in
China or Hong Kong and are in line with the basis of the audited financial
statements of the Group for the three years ended at the Accounting Date; and

 

(b) Truthfully and fairly reflect the affairs and
financial status of the Group and the performance results of the Group during
the financial period ended at such date.

 

8. Issues from the Accounting Date

 

Except for those that have been disclosed to the
Buyers in writing, from the Accounting Date to the Transaction Completion Date:

 

(1) The financial status and prospects of the
Group have not had any important negative change. The Group has not distributed
to its shareholder any profit in any form. If the Group plans to distribute to
its shareholder any profit in any form, the prior consent of the Buyers shall
be obtained. The Group has not entered into any agreement beyond the scope of
its routine business or incurred any debt; the Group has not incurred or made
any Capex or capital undertaking in an amount exceeding RMB100,000, or disposed
any asset the total amount of which exceeds RMB100,000;

 

(2) The Group has not gone through any capital
restructuring or changed its capital structure except for the case in which the
assignees have been advised in writing before the date on which this Agreement
is executed;

 

(3) Group has not passed any resolution on the
level of the board of directors, or made any guidance to or carried out any
management over the affairs of the Group that might significantly make the net
asset value of the Group reduce. Besides, the Group has not announced, issued
or engaged in any dividend distribution or any other profit distribution, or
planned to carry out any of the aforementioned activities;

 

(4) The settlement date of the fiscal year of the
Group is September 30 and will remain unchanged. Meanwhile, the assets and
liabilities reflected by the management accounts have not had any essential
change, either actual or contingent;

 

(5) There has existed no event the occurrence of
which enables any third party to have the right (whether a notice is requested
to be issued or not) to request any repayment for any debt prior to its normal
due date;

 

(6) In the course of running its routine
business, the Group has been operating its business in the 

 

16

 

same mode as the Group did in the past, including the
nature and the scope, has not increased the value or any fixed asset or stock,
written off any debt, or entered into any unusual or abnormal contract;

 

(7) For the assignment of any asset (including
stock) or the provision of any service or lease or tenancy of (or the issuance
of any license for) any types of business facilities (including any loan or
property, either tangible or intangible), the Group, under the circumstances at
the time of such assignment or provision and after factoring in all taxes, has
not actually collected any consideration lower than the amount that should have
been received by the Group for such assignment or provision.

 

(8) There has existed no event the occurrence of
which will incur any tax liability to the Group for any projected (not actual)
income, profit or earning, or cause the Group to pay any tax that should be
directly or mainly collected from or attributable to other persons, companies
or groups, or to bear such tax liability;

 

(9) Unless having been disclosed to the Buyers,
the remunerations (including bonuses) and benefits of each executive and
employee of the Group have been normally distributed according to the internal
approval procedures implemented by the Group and have not been increased.
Meanwhile, the Group has no obligation to raise the remunerations of such
senior staff or employees at any time in the future (regardless of whether
there exists any retroactive force). In addition, the Group has not paid and
will not pay any benefit in any form other than reasonable remunerations and
benefits;

 

(10) The Group has not cancelled, waived,
discharged or interrupted any right, debt or claim; and

 

(11) For any book debt that has appeared in the
management accounts and already been realized from the date thereof, and any
other book debt that occurs from such date, the realized amount is not less
than the one appearing in the management accounts; and the amount of any book
debt occurring after such date is not less than the face value thereof.

 

9. Contracts, Undertakings, Financial and Other
Arrangements

 

(1) Unless the Seller discloses otherwise in
writing, from the Accounting Date, the Group has not

 

(i) Failed to advise any director or employee of
the termination of his service contract on a real time basis or with any
reasonable advice (other than in writing) that will not incur any
indemnification or remedy (statutory severance pay excluded);

 

(ii) Had any agreement or arrangement allowing
the Group or any member thereof to participate in any profit distribution,
stock incentive plan, stock subscription right, incentive remuneration or
employee bonus payout;

 

(iii) Had any liability or arrangement for paying
pensions, remunerations, annuities or benefits, 

 

17

 

or any similar liability or arrangement to make any
person benefit therefrom; the layoff indemnification has not been paid to the
corresponding employees due to a shortage of capital, and the final statements
of such employees are deemed as the undertaking of the Group to them;

 

(iv) Been obliged to bear any actual or
undetermined obligation for any agreement reached in any of the following
situations (whether reached in the form of hypothecation, indemnification,
guarantee, representation or any other form);

 

(a) Any assignment of its asset or business (or
any part thereof), but not including the usual assignments in the routine and
due trade operations by the date on which this Agreement is executed; and

 

(b) Any other person’s liabilities;

 

(v) Participated in any long-term contract of a
non-trade nature or any contract including any unusual, unreasonable,
complicated or demanding term, the disclosure of which is expected to influence
any buyer that decides and prepares for purchasing any or all related equity
with a valuable consideration;

 

(vi) Negotiated any price or executed any
agreement based on the independent interests of any member of the Group;

 

(vii) Had any important arrangement (made in the
contractual or any other form) with any party in the negotiation that will or
may be terminated or that will or may incur any serious or damaging impact for
selling any related equity or complying with any other provision of this
Agreement;

 

(viii) Had any contract significantly restricting
the Group from freely running its existing business at any place;

 

(ix) Directly or indirectly participated in any
agreement or arrangement that can be deemed as a connected transaction
according to the security listing rules of Hong Kong Exchanges and
Clearing Limited.

 

(2) The Seller has not been aware that any major
agreement in which the Group has participated is invalid or there exists any
reason for terminating, canceling, annulling or stop implementing such
agreement.

 

(3) No asset of the Group is subject to any
charge, hypothecation or any type of third party rights; and the Group has not
agreed to establish or allow the occurrence of any of the aforementioned
rights.

 

(4) The Group has not borne any obligation or
been involved in any contract that cannot be implemented or fulfilled in due
time without incurring any unreasonable or irregular expenses or 

 

18

 

efforts.

 

(5) The Group has not been involved in any
agreement relating to any loan, bond, guarantee, indemnification or letter of
credit, or any sales agreement relating to any lease, tenancy, hire purchase,
credit sales or any conditional sales agreement, borne any current or future
obligation under any aforementioned agreement, or entered into any contract or
undertaking that requires, or is likely to require, the Group to be involved in
certain obligations or expenses, either irregular, abnormal in nature or huge.

 

(6) The Group has not been involved in any
agency, distribution or management agreement, or any agreement or arrangement
that restricts the Group from running any business (even if such agreement is
approved by the articles of association of the Group or allowed by the law, the
Group may still operate in any place around the world in a manner that the
Group considers appropriate).

 

(7) The Group has not made any application for
any bid, invitation to bid, sales or service recommendation, as certain related
applications that after being accepted, may incur losses to the Group.

 

(8) The Group has not been involved in any
marketing, purchase, franchising or licensing agreement.

 

(9) The Group has not executed any contract
exceeding the normal demand of the Group’s operation or with a value of more
than RMB100,000 for purchasing or using any material, supply or equipment.

 

(10) Except for the guarantees and warranties
implied by the law, the Group has not made any guarantee, warranty or representation
for the goods or services that the Group provides or has agreed to provide, or
accepted any liability or obligation applicable after providing any goods or
service. In its business, the Group may be involved in after-sales warranties
and rebate agreements, e.g., guaranteed replacement and maintenance in the
after-sales services.

 

(11) The contracts, obligations, agreements,
arrangements and agreed activities with the Group as one party thereof and
binding to the Group, and the businesses engaged in by the Group have not been
subject to any invalidity, unlawfulness or unenforceability or any registration
or notification activity under any law or regulation, or breached any law or
regulation.

 

(12) The execution, delivery and implementation of
this Agreement will not result in any breach, cancellation or termination of
any agreement or undertaking, or cause the Group become a party thereof, or
produce any possible binding or influential force to the Group or its
properties or assets, or lead to increased obligations under any loan
agreement, or breach any law, rule or regulation of any administrative
authority or governmental agency, or affect the terms or conditions of any
order, writ, injunction or decree of any court, administrative organ or governmental
agency, or constitute any breach of the content thereof.

 

19

 

 

(13) There exists no agreement relating to the Group
that will be terminated or has been terminated due to any change to the control
over the Group or the constitution of the board of directors of the Group, or
cause any person’s rights under such agreement to be essentially and negatively
affected.

 

(14) The Group is not a target for any official
investigation or inquiry. Meanwhile, there exists no fact that may lead to such
investigation or inquiry.

 

(15) According to due and prudent inquiries and the Seller’s
knowledge, awareness and belief, the Group has complied with all applicable
laws and regulations in its operations; the Group, or any of its director,
senior staff members, employees or agent connected to the Group has not
committed any crime, engaged in any act of tort, or breached any law,
agreement, regulation, rule, or any requirement or condition of any other
obligation relating to the Group or the operation of its business; provided
that the general applicability of the aforementioned content is not affected,
the Group has obtained all the registrations, permits and consents necessary
for possessing its assets and running its business, which exist and will
continue existing effectively; and all guarantors have not had any knowledge or
had any reason to believe that any of such registrations, permits and consents
shall be terminated, cancelled or annulled (regardless of whether such
termination, cancellation or annulations arise from the sale and purchase of
the equity for assignment under this Agreement).

 

(16) Except for authorizing its employees to execute
regular trade contracts in the course of the normal implementation of their
functions, the Group has never made any outstanding or valid entrustment or
authorization, either express, implied or nominal, to any person to make him
represent the Group to execute any contract or make any undertaking.

 

10. Intellectual Property

 

(1) The Group owns all the intellectual
properties required for running its business, which are valid and registered
(if applicable). After the date on which this Agreement is executed, no
intellectual property will become invalid; and the registration of no
intellectual property will need to be renewed.

 

(2) The Group has not allowed any third party to
use any intellectual property of the Group and does not need to make any
disclosure to or provide any technical support to any third party on any
intellectual property.

 

(3) The Group has not breached any intellectual
property right of any third party in normal operations and is not subject to
any royalty or fee for the use of any intellectual property.

 

(4) The registration fees and other costs for the
Group to hold and use intellectual properties have been paid in full. No
intellectual property will be cancelled or annulled resulting from the failure
of payment for any related charge.

 

20

 

(5) The Group did not use or need to use any
intellectual property by breaching any intellectual property or spiritual right
of any third party within three years of the date on which this Agreement is
executed.

 

(6) The Group has not disclosed any technique or
confidential information to any third party.

 

11. Insurance

 

(1) According to the requirements of Chinese or
Hong Kong laws, and with reference to the amount and range that the business of
the Group shall be covered, the Group has already bought and maintained an
effective insurance scheme, paid all the premiums due in full of the related
insurance policies, and comprehensively implemented and complied with all the
other major conditions of the related insurance policies. Meanwhile, no action
or omission has made or might make the aforementioned policies become invalid.
The related policies are not subject to any special or unusual term or
condition, and do not require the payment of any premium above the normal
tariff level to become valid.

 

(2) No claim made by any insurer or insured
according to the aforementioned policies is still pending. Meanwhile, no claim
made by any third party against the Group concerning any risk covered by any
related policy (any policy ever held by the Group) is pending.

 

(3) (After reasonable inquiries), the Seller has
not been aware of any situation in which the Group will be entitled to make any
claim based on any of the aforementioned policies. Meanwhile, the Seller has
not had any knowledge of any situation in which the insurer needs (or might
need) to be notified under any of the aforementioned policies.

 

12. Litigation

 

Except for those that have been disclosed to the
Buyers, the Group has not been involved in any major litigation or arbitration,
or any administrative, criminal or other litigation, either as the plaintiff or
defendant, or in any other identity. Meanwhile, no litigation, administrative, criminal
or other litigation that is unsettled, threatens to be made or is contemplated
is against the Group. According to the knowledge of the Seller (after making
reasonable inquiries), no fact or situation so far will lead to any of the
aforementioned litigation or arbitration, or administrative, criminal or other
litigation, or lead to any litigation against any (either former or existing)
director, senior staff member or employee, by which the Group has to bear legal
liabilities for any action or delinquency.

 

The Group does not have any dispute with any of its
customers, suppliers, employees or senior staff members regarding the purchased
or supplied goods or services, plants or machines, obligations or work, or any
loss, damage or injury resulting therefrom.

 

21

 

13. Insolvency

 

(1) No receiver has been appointed to take over
all or part of the assets or businesses of the Group.

 

(2) No submission of any application, issuance of
any court order or approval of any meeting resolution needs to liquidate or
dissolve the Group or any member thereof.

 

(3) The Group has not interrupted any payment or
gone bankrupt, or become insolvent.

 

(4) No unsatisfactory verdict against the Group
is yet to be enforced.

 

14. Delinquency

 

The Group has not discovered that it has engaged in
any criminal or illegal activity or any activity that has not been approved, or
has to bear legal liabilities therefor. The Group has not breached any
liability, regardless of whether the related liability is provided or imposed
by laws, regulations, contracts, or other rules.

 

15. Tax Filing

 

(1) With reference to the annual tax assessment
statements from the incorporation of the Group to the date on which this
Agreement is executed, the Group has filed or arranged to file appropriately
all tax returns, and has provided or arranged to provide all tax authorities
(in Hong Kong or elsewhere) with all the materials that need to be prepared or
provided on tax issues. The Group has not had any dispute with any competent
tax authority on any tax arrear that the tax authority can pursue to collect
from the Group, any collection liability or potential liability (including
fines and interests in certain specific cases), or any tax deduction or
exemption that can be granted to the Group, failed to settle such issues, or
expected that such disputes or failures will occur.

 

(2) The Group has also kept complete records of
the events occurring within seven (7) years of the Transaction Completion
so as to calculate the tax liabilities, deductions or exemptions resulting from
the assignment or sale of any asset already existing on the date of the
management accounts or from the purchase of any asset from the date of the
management accounts.

 

(3) The Group has already submitted all claims
and disclaimers that are deemed as being made for the accounts and management
accounts.

 

16. Stamp Duty and Other Taxes

 

(1) The Group has paid all the taxes according to
Hong Kong and Chinese laws and regulations on time. There exists no unpaid tax
payable by the Group according to the requirements of Chinese laws and
regulations.

 

22

 

(2) Prior to the date on which this Agreement is
executed, the Group or any of its directors or senior staff members has not
paid or been requested to pay any fine, penalty, surcharge or penalty interest
connected to any tax.

 

(3) The Group has fully complied with the
requirements on withholding taxes provided by Hong Kong and Chinese tax
collection laws and regulations.

 

(4) The Group has no tax liability (either actual
or contingent) or any liability for any interest, penalty or charge incurred by
any tax in Hong Kong or China which has not been thoroughly or completely
disclosed in the accounts.

 

17. Employment

 

(1) No (existing or former) employee or expert or
consultant has filed any claim, labor dispute or arbitration against the Group.

 

(2) All and any compensations or severance pay
that the Group shall make for any job loss, mistaken dismissal, job reduction,
or unreasonable lay-off have been recorded in the accounts or management
accounts in detail.

 

(3) The Group has paid all statutory social
security funds (including the pension, unemployment insurance, maternity and
medical insurance and other funds (if any), such as the housing mutual fund,
retirement and welfare funds or schemes) according the Chinese laws applicable
to all the employees of the Group. Except for the pension and other statutory
mutual funds and insurances that the Group shall pay according to the law, the
Group does not make any payment for retirement, death, disability, any employee
reaching a designated age or a designated number of service years or
termination of employment, or guarantee to bear any liability, either actual or
undetermined, for the aforementioned benefits.

 

(4) No contribution, tax or other levy that the
Group shall pay to any governmental agency or regulator of any jurisdiction for
employing or recruiting any person has not been paid yet.

 

(5) The details of the remunerations granted to
the directors and senior staff members provided to the Buyers are complete and
correct. Except for those disclosed in the management accounts, the Group has
not revised the employment terms of any person whose remuneration exceeds the
aforementioned amount.

 

(6) For each employee (and former employee), the
Group has complied with all Chinese laws, regulations, codes of conduct,
collective agreements, terms and conditions of employment, orders and verdicts
relating to employees’ working conditions (including but not limited to the
provisions of laws on the minimum wage and compensations for overtime work),
and with all the provisions of Chinese laws and regulations in respect of its
relations with its employees (or former employees, as the case may be), or any
trade union, employees’ organization or any other organization representing all
or part of such employees).

 

23

 

(7) There has been no dispute between the Group
and the majority or any group of employees (or any trade union, employees’
organization, or any other organization representing all or part of such
employees) over the past three (3) years, and exists no situation that
might lead to such disputes.

 

(8) The Group has no pending obligation for any
accident, injury or disease of any employee thereof (regardless of whether
connected to work).

 

(9) According to the Knowledge of the Seller, no
management or senior employee of the Group plans to quit the Group due to this
equity assignment or any other performance of the terms of this Agreement.

 

18. Power of Attorney

 

Except for the authorizations allowing the employees
of the Group to execute routine business contracts within the scope of the
normal authorities of such employees, no power of attorney or other competency
document issued by the Group for authorizing any person to enter into any
contract or undertaking on behalf of the Group (either in an express, implied
or evident manner) is yet to be implemented or still has any legal effect.

 

19. Deductible, Exemptible and Withholding Taxes

 

The Group has already made all the tax deductions and
exemptions that it has the right to enjoy from all the taxes that shall be
filed and already filed all the deducted and exempted amounts with competent
authorities.

 

20. Interests in Groups, Partnerships and Joint
Ventures

 

Except of those listed in Annex I, the Group holds no
interest in the equity of any partnership or joint venture

 

21. Properties

 

(1) Issues relating to lease agreements are as
below:

 

(a) All lease agreements are appropriate, have
legal force and effect, are still valid, and will not become invalid or can be
made invalid in any aspect;

 

(b) All covenants, liabilities, conditions and
restrictions imposed on the Group according to any lease agreement have been
appropriately complied with and implemented appropriately and on a real time
basis;

 

(c) The rents and other costs that need to be
paid under all lease agreements have been paid on 

 

24

 

time on the due date. No rent has already been prepaid
before the due date;

 

(d) Neither the Group nor any of its members has
ever granted any waiver on any covenant, liability or restriction that a tenant
shall comply with or implement under a lease;

 

(e) The Group has not collected any assignment
fee or reached any agreement thereon;

 

(f) The Group has not reached any agreement on or
been involved in any mutual guarantee, undertaking, waiver, change or
modification relating to any lease;

 

(g) According to the knowledge and belief of the
Seller, the tenant has not breached any covenant, condition, liability or
restriction imposed thereon according to any lease agreement;

 

(h) The Group has acquired all the consents (if
any) required for approving a lease from the mortgagee of the underlying
property and added related terms in the corresponding lease agreement;

 

(i) All lease agreements have been appropriately
registered;

 

(j) The terms, option of extension and the
detailed rules on all the rents and deposits that are and need to be paid
of each lease agreement shall be thoroughly and correctly disclosed to the
Buyers;

 

(k) The rent that a tenant shall pay under a
lease agreement is not at a stage in which an adjustment is considered; and no
reconstruction or refurbishment of a building is ignored in the adjustment to a
rent;

 

(l) Except for those that have been disclosed to
the Buyers before the transaction is completed, there exist no other options to
renew any lease agreement or being exercised;

 

(m) In each lease agreement, there does not exist
any unusual condition or any option allowing a tenant to purchase any part of
any property;

 

(n) All moving notices that shall be delivered to
a tenant so as to terminate such lease agreements (or any one of them) and
allow the Group to have the right to collect the right of possession of the
related parts of such properties upon the expiry of the validity term of such
lease agreements and other lease termination notices provided by laws and
regulations, if any, (hereinafter referred to as the “Notice”) have been
appropriately filled out and delivered appropriately in due time.

 

(o) The Group or any related subordinate group
has not engaged in anything that might compromise or impair the rights thereof
under any notice of any tenant that has expired or will expire before the
transaction is completed, or, in particular, engaged in anything that might,
either in an express or implied way, constitute a new lease.

 

25

 

22. All the warranties and statements set forth
hereinbefore will be deemed as the warranties and statements that are made once
again on the existing facts immediately before the transaction is completed.

 

26

 

IN WITNESS THEREOF, the
Buyers and the Seller have executed this Agreement as of the date stated in the
first paragraph.

 

First Buyer: Premium Sino Finance Limited

 

 

	
  /s/ Liu Qingzeng

  	
   

  
	
   

  	
   

  
	
  (Name of Representative)

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  

 

 

	
  /s/ Lam Ming Yung

  	
   

  
	
   

  	
   

  
	
  (Name of Witness)

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
  Lam Ming Yung

  	
   

  
	
  Chief PRC Consultant

  	
   

  
	
  Corporate Finance

  	
   

  
	
  SIDLEY AUSTIN

  	
   

  
	
  Hong Kong SAR

  	
   

  

 

27

 

Second Buyer: Wise Worldwide Limited

 

 

	
  /s/ Xu Bin

  	
   

  
	
   

  	
   

  
	
  (Name of Representative)

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  

 

 

	
  /s/ Lam Ming Yung

  	
   

  
	
   

  	
   

  
	
  (Name of Witness)

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
  Lam Ming Yung

  	
   

  
	
  Chief PRC Consultant

  	
   

  
	
  Corporate Finance

  	
   

  
	
  SIDLEY AUSTIN

  	
   

  
	
  Hong Kong SAR

  	
   

  

 

28

 

Seller:

 

 

	
  /s/ Ernest Ka-Kui Cheung

  	
   

  
	
   

  	
   

  
	
  (Name of Seller)

  	
   

  
	
   

  	
   

  
	
  Name: Ernest Ka-Kui Cheung

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Du Hequn

  	
   

  
	
   

  	
   

  
	
  (Name of Witness)

  	
   

  
	
   

  	
   

  
	
  Name: Du Hequn

  	
   

  

 

29

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]