Document:

Unassociated Document

    
      FIRST AMENDMENT TO CREDIT
AGREEMENT

       

      This FIRST AMENDMENT to Credit Agreement (this
“Amendment”)
is entered into as of November 8, 2010, among DUFF & PHELPS, LLC, a Delaware
limited liability company (the “Borrower”), DUFF & PHELPS
ACQUISITIONS, LLC (“Holdings”),
CHANIN CAPITAL PARTNERS LLC (“Chanin”), and RASH & ASSOCIATES,
L.P. (“Rash” and together with
Holdings and Chanin, each a “Guarantor” and together the “Guarantors”), BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer (as such terms are defined in the
Credit Agreement defined below), and each of the Lenders (as defined in the
Credit Agreement defined below) signatory hereto.

       

      WITNESSETH:

       

      WHEREAS, the Borrower, the
Administrative Agent, the L/C Issuer and the Lenders have entered into that
certain Credit Agreement dated as of July 15, 2009 (as from time to time
amended, modified, supplemented, restated, or amended and restated, the “Credit Agreement”;
capitalized terms used in this Amendment not otherwise defined herein shall have
the respective meanings given thereto in the Credit Agreement), pursuant to
which the L/C Issuer and the Lenders have made available to the Borrower certain
Committed Loans; and

       

      WHEREAS, the Borrower has
requested that the Administrative Agent and the Lenders make certain adjustments
to the Consolidated Fixed Charge Coverage definition and covenant and certain
other amendments to the Credit Agreement.

      NOW, THEREFORE, in
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

      1.            
Amendments to Credit Agreement: Restated
Defined Terms.  The following defined terms set forth in
Section 1.02 of the Credit Agreement are hereby amended and restated as
follows:

      “Consolidated Fixed Charge
Coverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated EBITDA minus, without duplication, (i) Capital Expenditures, (ii)
United States federal income taxes or other taxes measured by net income paid by
Holdings and its Subsidiaries and distributions made to the holders of Equity
Interests of Holdings for the payment of such taxes and (iii) cash
Restricted Payments to Persons other than another Group Member (other than
Restricted Payments described in part (ii) above or Restricted Payments made
with proceeds of a substantially concurrent sale of Equity Interests of Holdings
or DPC), in each case for the period of the four prior fiscal quarters ending on
such date, to (b)
Consolidated Fixed Charges for the period of the four prior fiscal quarters
ending on such date.  The amounts described in clauses (a)(i), (a)(ii), and
(a)(iii) above for the three (3) fiscal quarters most recently ended prior to
the Closing Date for which financial statements are available are set forth on
Schedule 1.02.  For purposes of calculating the Consolidated Fixed Charge
Coverage Ratio for any four fiscal quarter period which includes the second
fiscal quarter of 2009, the following shall be excluded: (i) Restricted Payments
consisting of the redemption by Holdings of 4,550,000 of its New Class A Units
which occurred in May of 2009 and (ii) the repayment in full on or about May 22,
2009 of all principal amounts outstanding under the Amended and Restated Credit
Agreement, dated as of July 30, 2008, among the Borrower, Holdings, the lenders
and L/C issuers party thereto and General Electric Capital Corporation as
administrative agent and collateral agent.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

         

      

      “Consolidated Fixed
Charges” means, for any period, for DPC and its Subsidiaries on a
consolidated basis, the sum for such period of (a) Consolidated Cash Interest
Charges for such period, and (b) the principal amount of Consolidated
Funded Indebtedness of such Person and its Subsidiaries permanently repaid
(other than pursuant to a refinancing) during such period.  Consolidated
Fixed Charges for the three (3) fiscal quarters most recently ended prior to the
Closing Date for which financial statements are available are set forth on Schedule 1.03.

      “Related Treasury
Management Arrangement” means any Bank of America ePayables Solution and
any arrangement for the delivery of treasury management services to or for the
benefit of any Loan Party which is entered into or maintained with a Lender or
Affiliate of a Lender and which is not prohibited by the express terms of the
Loan Documents; provided that, at any time the provider of such services ceases
to be a Lender or an Affiliate of a Lender hereunder, such arrangements shall no
longer be considered “Related Treasury Management Arrangements”.

      2.            
Amendments to Credit Agreement: Restricted
Payments.  Section 7.06(d)(v) of the Credit Agreement is
hereby amended and restated as follows:

      “(v)
any other Restricted Payment so long as at the time such Restricted Payment is
declared or otherwise agreed to, such Restricted Payment is not specifically
prohibited hereunder, no Default or Event of Default then exists or would result
therefrom, and after giving effect thereto the Borrower remains in compliance
with the financial covenants set forth in Section 7.11 on a pro forma
basis.”

      3.            
Amendments to Credit Agreement: Burdensome
Agreements.  Section 7.09 of the Credit Agreement is hereby
amended and restated as follows:

      “7.09  Burdensome
Agreements.  Enter into any Contractual Obligation (other than (i)
this Agreement or any other Loan Document, (ii) limits on Liens on, or sales of,
property whose acquisition, use, repair, improvement or construction is financed
with purchase money Indebtedness or Capitalized Lease Obligations (or Permitted
Refinancings thereof), (iii) Contractual Obligations governing Indebtedness
permitted hereunder, and (iv) licenses for Intellectual Property containing
customary anti-assignment provisions) that (a) limits the ability of any Group
Member to (x) make Restricted Payments to any Loan Party or to otherwise
transfer property to the Loan Parties, (y) Guarantee the Obligations or (z)
create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (z) shall
not prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section
7.03(e) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.”

      4.            
Amendments to Credit Agreement: Consolidated
Fixed Charge Coverage Ratio.  Section 7.11(a) of the Credit
Agreement is hereby amended and restated as follows:

      “             
(a)           Consolidated Fixed Charge
Coverage Ratio.  Permit the Consolidated Fixed Charge Coverage Ratio
to be less than (i) as of the last day of each fiscal quarter of DPC through and
including June 30, 2010, 2.00:1:00 and (ii) as of the last day of each fiscal
quarter of DPC thereafter, 1.25:1.00.”

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      5.            
Effectiveness; Conditions
Precedent.  The effectiveness of this Amendment shall be
conditioned upon the Administrative Agent’s receipt of two (2) counterparts of
this Amendment, duly executed by the Borrower, the Administrative Agent, the L/C
Issuer and the Required Lenders.

      6.            
Representations and
Warranties.  In order to induce the Administrative Agent and
the Lenders to enter into this Amendment, the Borrower represents and warrants
to the Administrative Agent and the Lenders as follows:

      (a)           
After giving effect to this Amendment, the representations and warranties made
by the Borrower and each other Loan Party in Article V of the Credit Agreement and
in each of the other Loan Documents, or which are contained in any document
furnished at any time under or in connection herewith or therewith, are true and
correct in all material respects on and as of the date hereof, except to the
extent that such representations and warranties expressly relate to an earlier
date, provided, however, that the representations and warranties contained in
subsections (a) and (b) of Section 5.05
of the Credit Agreement are deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit
Agreement;

      (b)          
This Amendment has been duly authorized, executed and delivered by the Borrower
and constitutes a legal, valid and binding obligation of the Borrower, except as
may be limited by general principles of equity or by the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors’ rights generally; and

      (c)           
After giving effect to this Amendment, no Default or Event of Default has
occurred and is continuing. 

      7.            
Reaffirmation of Guaranty. 
Each of the Guarantors hereby expressly: (a) consents to the
execution by the Borrower, the Administrative Agent, the L/C Issuer and each of
the Lenders of this Amendment; (b) acknowledges that the Obligations
referred to in and guaranteed by the Guaranty include all of the obligations and
liabilities owing from time to time by the Borrower to the Administrative Agent,
the L/C Issuer and each of the Lenders, including, but not limited to, the
obligations and liabilities of the Borrower to the Administrative Agent, the L/C
Issuer and each of the Lenders under and pursuant to the Credit Agreement, as
amended from time to time, and as evidenced by the Note, as modified, extended,
and/or replaced from time to time; (c) acknowledges that such Guarantor
does not have any set-off, defense or counterclaim to the payment or performance
of any of the obligations of the Borrower under the Credit Agreement or such
Guarantor under the Guaranty; (d) reaffirms, assumes and binds itself in
all respects to all of the obligations, liabilities, duties, covenants, terms
and conditions that are contained in the Guaranty; (e) agrees that all such
obligations and liabilities under the Guaranty shall continue in full force and
that the execution and delivery of this Amendment to, and its acceptance by, the
Bank shall not in any manner whatsoever (i) impair or affect the liability
of any Guarantor to the Administrative Agent, the L/C Issuer or any of the
Lenders under the Guaranty, (ii) prejudice, waive, or be construed to
impair, affect, prejudice, or waive the rights and abilities of the
Administrative Agent, the L/C Issuer or any of the Lenders at law, in equity or
by statute, against any Guarantor pursuant to the Guaranty, and/or
(iii) release or discharge, nor be construed to release or discharge, any
of the obligations and liabilities owing to the Administrative Agent, the L/C
Issuer or any of the Lenders by any Guarantor under the Guaranty; and (f)
represents and warrants that each of the representations and warranties made by
such Guarantor in any of the documents executed in connection with the Loan
remain true and correct as of the date hereof.

      8.            
Entire Agreement.  This
Amendment, together with all the Loan Documents and all related amendments,
consents, waivers, and other similar documents (collectively, the “Relevant
Documents”), sets forth the entire understanding and agreement of the parties
hereto in relation to the subject matter hereof and supersedes any prior
negotiations and agreements among the parties relating to such subject
matter.  No promise, condition, representation or warranty, express or
implied, not set forth in the Relevant Documents shall bind any party hereto,
and no such party has relied on any such promise, condition, representation or
warranty.  Each of the parties hereto acknowledges that, except as
otherwise expressly stated in the Relevant Documents, no representations,
warranties or commitments, express or implied, have been made by any party to
any other party in relation to the subject matter hereof or thereof.  None
of the terms or conditions of this Amendment may be changed, modified, waived or
canceled orally or otherwise, except in writing and in accordance with Section 10.01 of the Credit
Agreement.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      9.            
Full Force and Effect of
Agreement.  Except as hereby specifically amended, modified
or supplemented, the Credit Agreement and all other Loan Documents are hereby
confirmed and ratified in all respects and shall be and remain in full force and
effect according to their respective terms.  

      10.          
Counterparts.  This
Amendment may be executed in any number of counterparts, each of which shall be
deemed an original as against any party whose signature appears thereon, and all
of which shall together constitute one and the same instrument.

      11.          
Governing Law.  THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, and shall be further subject to the provisions of Section 10.15 of the Credit
Agreement.

      12.          
Enforceability.  Should
any one or more of the provisions of this Amendment be determined to be illegal
or unenforceable as to one or more of the parties hereto, all other provisions
nevertheless shall remain effective and binding on the parties
hereto.

      13.          
References.  All
references in any of the Loan Documents to the Credit Agreement (whether as
“Credit Agreement” or “Agreement,” as applicable based on the context) shall
mean the Credit Agreement, as amended, supplemented or modified
hereby.

      14.          
Successors and Assigns. 
This Amendment shall be binding upon and inure to the benefit of the Borrower,
the Administrative Agent, the L/C Issuer and each of the Lenders, and their
respective successors, legal representatives, and assignees to the extent such
assignees are permitted assignees as provided in Section 10.06 of the Credit
Agreement.

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be made, executed and delivered by
their duly authorized officers as of the day and year first above written.

     

    
      	 	
              DUFF & PHELPS, LLC
      

              as
      the Borrower

            	 
	 	 	 	 
	
               

            	
              By:

            	/s/
      Jacob L. Silverman 	 
	 	Name:	Jacob
      L. Silverman   	 
	 	Title:	Chief
      Financial Officer    	 
	 	 	 	 

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	 
      	
              

                DUFF
      & PHELPS ACQUISITIONS, LLC 

                as
      Guarantor

              

            	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      Jacob L. Silverman

            	 
      
	 
      	
              Name:

            	
              Jacob
      L. Silverman

            	 
      
	 
      	
              Title:

            	
              Chief
      Financial Officer

            	 
      
	 
      	 
      	 
      	 
      

    

     

    
      
        
          	 	

                  CHANIN
      CAPITAL PARTNERS LLC

                  as
      Guarantor

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Jacob L. Silverman	 
	 	Name:	Jacob
      L. Silverman	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 

        

      

       

      
        
          	 
      	
                  

                    RASH
      & ASSOCIATES, L.P. 

                    as
      Guarantor

                  

                	 
      
	 
      	 
      	 
      	 
      
	 	By:
      Rash Acquisition GP, its general partner	 
	 	 	 	 
	 
      	
                  By:

                	
                  /s/
      Jacob L. Silverman

                	 
      
	 
      	Name:	
                  Jacob
      L. Silverman

                	 
      
	 
      	Title:	
                  Chief Financial Officer

                	 
      
	 
      	 
      	 
      	 
      

        

         

      

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      
        	 	BANK OF AMERICA, N.A.,
      
as Administrative Agent	 
	 	 	 	 
	
                 

              	
                By:

              	/s/
      Brian Peterson	 
	 	Name:	Brian
      Peterson	 
	 	Title:	Senior
      Vice President	 
	 	 	 	 

      

    

    

    
      	 	BANK OF AMERICA, N.A.,
      
as a Lender and L/C Issuer	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/
      Brian Peterson	 
	 	Name:	Brian
      Peterson	 
	 	Title:	Senior
      Vice PresidentUnassociated Document

    
       

      [Ningbo
Heng Bang Long Electrical Equipment Co., Ltd.]

      (as the
“Purchaser”)

      

      

      and

      

      

      [Ningbo
Bang Shi Da Electrical Equipment Co., Ltd.]

      (as the
“Seller”)

      

      and

      

      Fan
Wenda

       (as
the “Guarantor” of the Seller)

      

       

      
        
          

        

      

       

      

      Asset
and Business Purchase Agreement

      

      

      
        
 

      November
6, 2010, in Shenzhen

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
OF CONTENTS

       

       

      
        	
                Chapter

              	
                Page

              
	 
      	 
      
	
                CHAPTER
      I   DEFINITION

              	
                2

              
	 	 
	
                CHAPTER
      II   PURCHASE OF ASSET AND BUSINESS

              	
                4

              
	 	 
	
                CHAPTER
      III   CONSIDERATION

              	
                5

              
	 	 
	
                CHAPTER
      IV   PREREQUISITE AND FULFILMENT

              	
                7

              
	 	 
	
                CHAPTER
      V   REPRESENTATIONS AND WARRANTieS

              	
                11

              
	 	 
	
                CHAPTER
      VI   SELL BACK OPTION

              	
                14

              
	 	 
	
                CHAPTER
      VII   CONFIDENTIALITY

              	
                15

              
	 	 
	
                CHAPTER
      VIII   NOTICES

              	
                16

              
	 	 
	
                CHAPTER
      IX   TAXES AND EXPENDITURES

              	
                16

              
	 	 
	
                CHAPTER
      X   FORCE MAJEURE

              	
                17

              
	 	 
	
                CHAPTER
      XI   BREACH OF CONTRACT

              	
                17

              
	 	 
	
                CHAPTER
      XII   GOVERNING LAW AND RESOLUTION DISPUTES

              	
                19

              
	 	 
	
                CHAPTER
      XIII   EFFECTIVENESS OF THIS AGREEMENT

              	
                19

              
	 	 
	
                CHAPTER
      XIV   MISCELLANEOUS

              	
                19

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      This
Asset and Business Purchase Agreement is made and entered into by and among the
following parties on November 6, 2010 (the “Execution Date”) in the
Peoples Republic of China (“China”):

      

      
        	
                Purchaser:

              	
                [Ningbo Heng Bang Long
      Electrical Equipment Co., Ltd.] (the
“Purchaser”)

              
	 
      	
                Registered
      Address: No. 17, Tian Tong Road, Hu Di Village, Lin Shan Town,
      Yuyao

              
	 
      	
                Legal
      Representative: Wang Yue

              
	 
      	
                Title:
      Chairman of the Board

              
	 
      	 
      
	
                Seller:

              	
                [Ningbo Bang Shi Da Electrical
      Equipment Co., Ltd.] (the “Seller”)

              
	 
      	
                Registered
      Address: Hu Di Village, Lin Shan Town, Yuyao

              
	 
      	
                Legal
      Representative: Fan Wenda

              
	 
      	
                Title:
      Chairman of the Board

              
	 
      	 
      
	
                Guarantor
      of the Seller:   

              	
                Fan Wenda (the
      “Guarantor”)

              
	 
      	
                ID
      Number: 330219197710282890

              
	 
      	
                Address:
      Hu Di Village, Lin Shan Town, Yuyao

              

      

      

      The
forgoing parties shall be hereinafter referred to as a “Party” respectively, and
as the “Parties” collectively.

      

      Whereas

      

      
        	
                1、

              	
                The
      Seller is a limited liability company duly incorporated and validly
      existing under the laws of China, mainly engaging in (i)
      the production and processing of auto electrical equipment, plastic
      products, hardware, auto fittings and moulds; and (ii) dealing in or
      acting as an agent of import and export of goods and technology
      (except for goods and technology restricted to be operated or prohibited
      to be imported and exported by the
State);

              

      

       

      
        	
                2、

              	
                The
      Purchaser is a limited liability company duly incorporated and validly
      existing in Lin Shan Town, Yuyao, under the laws of China, mainly engaging
      in (i) the production and processing of auto electrical equipment,
      plastic products, hardware, auto fittings, moulds and micro motor and
      relevant fittings; and (ii) dealing in or acting as an agent
      of import and export of goods and
  technology;

              

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	
                3、

              	
                The
      Seller desires to transfer all of the Target Assets and Target Business to
      the Purchaser, and the Purchaser desires to acquire the Target Assets and
      Target Business from the Seller according to this Agreement (“Asset
      Purchase”).

              

      

      

      Through amicable negotiation, the
Parties agrees as follows

      

      
        CHAPTER
I    DEFINITION

      

      

      
        	
                1.

              	
                Except
      as otherwise prescribed in this Agreement, words and expressions as below
      shall have the following meanings:

              

      

      

      (1)  “Agreement”
means this Asset and Business Purchase Agreement, all the exhibits, schedules
attached hereto, all the supplement agreements, exhibits and schedule executed
for unmentioned matters of this Asset and Business Purchase Agreement, and any
agreement, memorandum executed for amendment of such documents, and, from time
to time, any amendments, alteration and supplement made in any form to above
documents.

      

      (2)  “Purchaser”
means [Ningbo Heng Bang Long Electrical Equipment Co., Ltd.]

      

      (3)  “Controller”
means [Shenzhen Yue Peng Cheng Electric Motor Co., Ltd.], which is the
controlling shareholder of the Purchaser, with its registered address at Fu
Yuaner Road, High-tech Park, Fu Yong Street, Fu Yong Town, Shenzhen. The legal
representative is Li Jianrong.

      

      (4)  “Seller”
means [Ningbo Bang Shi Da Electrical Equipment Co., Ltd.]

      

      (5)  “Guarantor”
means Mr. Fan Wenda, who is the shareholder of Ningbo Bang Shi Da Electrical
Equipment Co., Ltd.

      

      (6)  “Evaluation
Report” means Assets
Evaluation Report on [Ningbo Bang Shi Da Electrical Equipment Co., Ltd.]
Regarding to the Proposed Asset Acquisition by China Electric Motor, Inc. (Shen
Guo Zhong Lian Ping Bao Zi [2010] No. 2-430) issued on September 30, 2010
by Shenzhen Tian Jian Guo Zhong Lian Asset, Land and Real Property Evaluation
Co., Ltd., the evaluation base date of which is August 31, 2010.

      

      (7)  “Target
Assets” means all of the assets actually controlled and/or operated by the
Seller, including but not limited to the inventory and fixed assets as described
on Exhibit 2 attached hereto. Each Party confirms that the real property and
vehicles of the Seller shall not be included in the definition of Target
Assets.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (8)  “Inventory”
means all products that have been produced but not sold by the Seller at the
Closing Date, semi-manufactured products in good quality and raw materials
(excluding the excess materials), as described on the Summary Schedule and
Detailed Schedule of Inventory Evaluation attached hereto as Exhibit
2.

      

      (9)  “Fixed
Asset” means all equipment owned by the Seller and used in the operation of the
Target Business at the Closing Date, as described on the Summary Schedule and
Detailed Schedule of Fixed Asset Evaluation attached hereto as Exhibit
2.

      

      (10)  “Target
Business” means the business of production and processing of auto electrical
equipment, plastic product, hardware, auto fittings and moulds, and dealing
in or acting as an agent of import and export of goods and technology
(except for goods and technology restricted to be operated or prohibited to be
imported and exported by the State), which is operated by the Seller and
proposed to be controlled, operated and managed by Purchaser after the Closing
Date pursuant to this Agreement, including, but is not limited to, those
Clients listed on Exhibit 3 hereto, those Transferred Employees listed on
Exhibit 4 hereto, and all rights associated with the foregoing under relevant
laws and agreements.

      

      (11)  “Clients”
means all entities and individuals relevant to the Target Business, who have
business contacts with the Seller and intend to purchase products and/or
services of the Seller, and whose name, address and contact information is
listed as Exhibit 3 hereto.

      

      (12)  “Transferred
Employee” means those employees currently employed by the Seller and proposed to
be transferred to the Purchaser, whose names shall be listed on Exhibit 4
attached hereto.

      

      (13)  “Control”
means to own management power, earning right and decision making power of any
enterprise, entity, asset and business through shareholding, trust, nominee
shareholders or voting right.

      

      (14)   “Consideration”
means the consideration to be paid to the Seller by the Purchaser in connection
with the acquisition of the Target Assets and the Target Business, as prescribed
in Article 7, and adjusted in accordance with this Agreement.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (15)  “Closing
Date” shall have the meaning as prescribed in Article 13 of this
Agreement.

      

      (16)  “Sell
Back Option” means the right entitled to the Purchaser as a remedy in the event
of an occurrence of certain circumstance prescribed in Chapter VI of this
Agreement.

      

      (17)  “Affiliate”
means any entity whether or not incorporated as a legal person, (a) who owns or
actually control 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 forgoing persons; and (e) who is owned or actually
controlled by any of the forging 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.

      

      (18)  The
terms “above”, “exceed”, “amount to” used in this Agreement include the number
itself.

      

      
        	
                2.

              	
                Provisions
      and exhibits referred to herein mean provisions and exhibits of this
      Agreement.

              

      

      

      
        	
                3.

              	
                Titles
      of this Agreement are set forth only for convenience of reading and shall
      not influence the content and interpretation of any
    provision.

              

      

      

      
        CHAPTER
II    PURCHASE
OF ASSET AND BUSINESS

      

      

      
        	
                4.

              	
                The
      Seller agrees to transfer the Target Assets and the Target Business to the
      Purchaser according to the terms of this Agreement, and the Purchaser
      agrees to acquire Target Assets and Target Business according to the terms
      of this Agreement. Upon execution of this Agreement, the Seller shall not
      contact or negotiate with any third party with respect to the transfer or
      disposition of the Target Assets and/or the Target Business, and shall not
      impair the value of the Target Assets and/or affect the normal operation
      of the Target Business until Closing
Date.

              

      

      

      
        	
                5.

              	
                The
      Seller shall proceed to provide all necessary working and living
      conditions and facilities for preparation teams consisting of specific
      employees (including but not limited to warehouse keeper, accountant,
      cashier, purchasing staff and project leader) dispatched in batches by the
      Controller or the Purchaser beginning on the Execution
    Date.

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                6.

              	
                After
      the Asset Purchase has been completed according to this Agreement, the
      Seller shall nullify its registration with the Administration for Industry
      and Commerce within 6 months following the Closing
  Date.

              

      

      

      
        CHAPTER
III    CONSIDERATION

      

      

      
        	
                7.

              	
                Consideration
      of Target Assets and Target Business contemplated hereunder amounts to RMB
      49,322,100 (“Consideration”), which shall be paid by the Purchaser in cash
      in RMB.

              

      

      

      
        	
                8.

              	
                The
      Parties agree that the Consideration contemplated hereunder shall be paid
      in three installments:

              

      

      

      (A)  First
Installment: RMB 5,000,000 (“First Installment Consideration” or “Deposit”),
which shall be paid to the bank account designated by the Seller within 10
business days after the Execution Date;

      

      (B)  Second
Installment: RMB 41,322,100 (“Second Installment Consideration”), which shall be
paid to the bank account designated by the Seller within 3 months after the
Closing Date;

      

      (C)  Third
Installment: RMB 3,000,000 (“Third Installment Consideration”), which shall be
paid to the bank account designated by the Seller within 7 business days in
accordance with Section 10 below after all the conditions prescribed in Article
13 have been consummated or waived in written by the Controller or the
Purchaser.

      

      Each
Party agrees and confirms that, the Second Installment Consideration can be
adjusted pursuant to Article 9 of this Agreement, and the Third Installment
Consideration can be adjusted pursuant to Article 11 of this
Agreement,

      

      
        	
                9.

              	
                The
      Seller and the Purchaser shall check inventory and fixed asset in the
      Target Assets before the Closing Date. If the actual value of the Target
      Assets (“Actual Value of Target Assets”) is discovered to be lower than
      the evaluation value (“Evaluation Value of Target Assets”) in the
      Evaluation Report after such review, the Second Installment Consideration
      shall be adjusted in accordance with the following
  formula:

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Second
Installment Consideration actually paid by the Purchaser = RMB 41,322,100 –
(Evaluation Value of Target Assets – Actual Value of Target Assets)

      

      
        	
                10. 

              	
                The
      Third Installment Consideration shall be paid to the bank account
      designated by the Seller in three separate installments, each installment,
      in amount of 1/3 of the Third Installment Consideration, will be payable
      after the first, second and third anniversary of the Closing Date
      (whichever is applicable). Each of the three separate installments shall
      be paid within 30 working days after the Controller or the Purchaser has
      first made written confirmation of the satisfaction of, or the Controller
      or the Purchaser has waived in writing, the following conditions (each
      payment date shall be a “Payment Date of Third Installment
      Consideration”):

              

      

      

      (1)  The
Target Assets and the Target Business have been successfully transferred and are
well operated under the control of the Purchaser, and no material adverse change
has occurred with respect to such Target Assets and Target
Business.

      

      (2)  All
“Key Employees” included within in the Transferred Employees (including but not
limited to Fan Wenda and his wife) shall continue to work for the Purchaser, and
shall not have materially violate their respective Employment Contract,
Confidentiality and Non-compete Agreement by and between such employees and the
Purchaser, and such contract and agreement shall continue to be
valid.

      

      (3)  The
amount of Third Installment Consideration to be paid has been adjusted and
confirmed according to Article 11 of this Agreement.

      

      (4)  As
of each Payment Date of Third Installment Consideration, the statements,
representations and warrants made hereunder by the Seller and the Purchaser
shall be true, complete and sufficient. The Seller and the Purchaser shall have
performed and complied with any obligation and covenant applicable to such Party
hereunder in all the material aspects.

      

      (5)  As
of each Payment Date of Third Installment Consideration, no event or
circumstance shall have occurred or, to the knowledge of either Party, is likely
to occur, which may lead to a material adverse change with respect to the Target
Assets, the Target Business, the Transferred Employees and/or the other
transaction provided hereunder.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (6)  As
of each Payment Date of Third Installment Consideration, there shall be no
existing, pending and/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 the Target Assets,
the Target Business, or the Transferred Employees, or (iv) engendering any
material adverse influences to the Purchaser’s right or capacity to operate the
Target Business.

      

      To avoid
any doubt, regardless of whether there is conflicting provision in this
Agreement, the Parties agree that in the event the Guarantor resigns or is
terminated as an employee of the Purchaser for any reason before any Payment
Date of any Third Installment Consideration, all unpaid Consideration shall no
longer be due and payable hereunder.

      

      
        	
                11.

              	
                The
      Parties agree and confirm that the Third Installment Consideration shall
      be adjusted according to the annual sales volume (“Annual Effective
      Sales”) arising from the operation of the Target Business from and after
      the Closing Date, as audited on an annual basis. From and after the
      Closing Date, if the Annual Effective Sales of the Purchaser for every 12
      month period is less than RMB 100,000,000, Third Installment Consideration
      shall be adjusted according to the following
  formula:

              

      

      

      Third
Installment Consideration of relevant 12 month period = Annual Effective Sales
÷ RMB
100,000,000 ×
(Third Installment Consideration ÷ 3)

      

      To avoid
any doubt, after any adjustment in accordance with this Section 11 has been made
and the adjusted amount has been paid, if the Annual Effective Sales for any 12
month period following such adjustment is greater than RMB 100,000,000, none of
the Parties shall claim for further adjustment of payment of the Third
Installment Consideration adjusted and paid, which means each installment of the
Third Installment Consideration to be paid within 3 years after the Closing Date
shall be accounted independently and shall not be accumulated and carried
forward.

      

      
        	
                12.

              	
                The
      Seller shall promptly issue to Purchaser written confirmation regarding
      its receipt of such funds on the date of receipt of any
      Consideration.

              

      

      

      
        CHAPTER
IV    PREREQUISITE
AND FULFILMENT

      

      

      
        	
                13.

              	
                The
      Purchaser shall pay the Second Installment Consideration to domestic bank
      account designated by the Seller (the date of consummation or written
      waiver of such prerequisites by the Seller and the Purchaser shall be
      referred as the “Closing Date”) within 7 business days after written
      confirmation of the satisfaction of, or written waiver of, each of the
      following conditions by the Controller or the
  Purchaser:

              

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (1)  The
Purchaser is duly incorporated and validly existing and has obtained all the
permits and governmental approvals required by daily operation, including but
not limited to qualification of general tax payer;

      

      (2)  Execution
of this Agreement and transactions contemplated hereunder have been approved by
Shareholders’ Meeting of the Purchaser;

      

      (3)  Execution
of this Agreement and transactions contemplated hereunder have been approved by
Shareholders’ Meeting and/ or the Board of the Controller (if
required);

      

      (4)  The
Controller and the Purchaser shall have finished their financial and legal due
diligence of the Seller and shall be satisfied with the result of such due
diligence. The Seller shall have finished relevant rectification according to
suggestions in connection with the results of due diligence proposed by the
Controller and the Purchaser (if any);

      

      (5)  All
of the governmental approvals and registrations required in connection with this
Agreement, and consents and permits of any third party, shall have been duly
obtained;

      

      (6)  The
Target Assets shall have been duly delivered to the Purchaser, including but not
limited to:

      

      
        	
                 
      

              	
                (a)  Closing
      of Fixed Asset: the Parties confirm that, all Fixed Asset shall have been
      delivered to the Purchaser, any required registration, filing and approval
      shall have been completed, and any relevant supporting documents shall
      have been delivered to Purchaser. If there is any insurance attached to
      such Fixed Assets, transfer of insurance documents and formalities shall
      have been finished;

              

      

      

      
        	
                 
      

              	
                (b)  Closing
      of Inventory: the Parties confirm that all the Inventory shall have been
      delivered to the Purchaser, any required registration, filing and approval
      shall have been completed, and any relevant supporting documents shall
      have been delivered to Purchaser. If there is any insurance attached on
      such Inventory, transfer of insurance documents and formalities shall have
      been finished; in the event of any losses incurred by the Purchaser
      arising from quality problems of products in the Inventory, which shall be
      attributed to actions or inactions by the Seller and/ or Guarantor, the
      Seller and the Guarantor shall bear a several and joint compensation
      liability to such losses.

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (c)  The
      Purchaser and the Seller shall have entered into a legal transfer
      agreement and document in respect to forgoing Target Assets, and the
      Controller and Purchaser shall be satisfied with content and form of such
      transfer documents.

              

      

      

      (7)  The
Purchaser (and/or the Controller) and the Seller shall have performed a physical
count of the Target Assets, and have adjusted and confirmed the exact amount of
the Second Installment Consideration in accordance with the results of such
physical count as described in Article 9.

      

      (8)  The
Target Business shall have been duly delivered to the Purchaser through
agreement, including but not limited to:

      

      
        	
                 
      

              	
                (a)  Closing
      of Client Resources: the Seller shall have submitted to the Purchaser a
      complete Client list and contact materials responding to each
      Client;

              

      

      

      
        	
                 
      

              	
                (b)  Closing
      of Transferred Employees: the Seller shall provide a current employees
      list (attached as Exhibit 4 hereo) to the Purchaser, listing the name,
      position, time of signing on, serving entity, work place, salary and other
      welfare of employees, and shall confirm key employees with the Purchaser
      and Controller; Transferred Employees shall have terminated labor
      relationship with the Seller and have entered into new labor contract and
      confidentiality and non-compete agreement whose form and content are
      reasonably satisfactory to the Purchaser and Controller, with the
      Purchaser; The working age shall have been recalculated;, Among others,
      Fan Wenda and his wife, Wang Hongyan, shall have entered into new labor
      contract and confidentiality and non-compete agreement with terms of 3
      years whose form and content are satisfactory to the Purchaser and
      Controller; Remuneration of Fan Wenda’s wife shall be determined subject
      to her position in the Purchaser; Basic remuneration of Fan Wenda shall be
      RMB 20,000 per month; In the event that the Annual Effective Sales for any
      12 month period commencing after the Closing Date is lower than RMB
      100,000,000, the Purchaser shall pay and additional 3% of net profit after
      tax to Fan Wenda as business commission; In the event that the Annual
      Effective Sales for any 12 month period commencing after the Closing Date
      is more than RMB 100,000,000, the Purchaser shall additionally pay 4% of
      net profit after tax to Fan Wenda as business commission; Notwithstanding
      any of the forgoing, under no circumstance, if the Annual Effective Sales
      for any 12 month period commencing after the Closing Date is less than RMB
      80,000,000, or net profit ratio is lower than 10%, shall NOT the Purchaser
      be required to provide any business commission of such year to Fan Wenda.
      If any Transferred Employee is not willing to execute a labor contract
      with the Purchaser, the Seller shall have executed a confidentiality and
      non-compete agreement (non –compete period shall not be less than 3 years)
      with such employee and shall have paid certain economic compensation and
      non-compete compensation to such employee (provided that the Seller shall
      ensure that each Key Employees shall be transferred to the
      Purchaser)

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (c)  All
      interested Parties have executed transfer agreements and documents with
      respect to the transfer of the Target Business, whose content and form is
      reasonably satisfactory to the Controller and the
    Purchaser.

              

      

      

      (9)  The
Seller and the Guarantor grant to the Purchaser an exclusive and irrevocable
lease priority with respect to real property owned and occupied by the Seller,
for a term of 1 year from of Execution Date of this Agreement. The Seller and
the Guarantor agree that, in the event that the Purchaser exercises such
priority within the term, rent of such real property shall not be higher than
RMB 6.2/ m2/ month and the lease term shall not be less than 2 years. The Seller
and the Guarantor shall not, for any reason, interfere with the exercise of such
priority by the Purchaser.

      

      (10)  The
organ of power of the Seller (Shareholders Meeting or the Board, as appropriate)
has executed all relevant resolutions and approved the execution of this
Agreement and the transactions contemplated hereunder, including but not limited
to approving the transfer of the Target Assets, the Target Business and
Transferred Employees;

      

      (11)  As
of the Closing Date, the statements, representations and warrants made hereunder
by the Seller and the Guarantor are true, complete and sufficient. The Seller
and the Guarantor have performed and complied with all obligations and
representations hereunder in all the material aspects;

      

      (12)  As
of the Closing Date, no changes, events or circumstances have occurred or
reasonably likely to occur which may have a material adverse influence on the
Target Assets, the Target Business, the Transferred Employees and/or the
transactions contemplated hereunder;

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (13)  As
of the Closing Date, there shall be no existing, pending and/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 the Target Assets, the Target Business, or the Transferred
Employees, or (iv) engendering any material adverse influences to the
Purchaser’s right and capacity to operate the Target Business..

      

      
        	
                14.

              	
                The
      Seller and the Guarantor shall take all the measures to ensure that the
      Asset Purchase be completed within 15 business days following the
      Execution Date of this Agreement.

              

      

      

      
        CHAPTER
V    REPRESENTATIONS
AND WARRANTIES

      

      

      
        	
                15.

              	
                The
      Seller and the Guarantor severally and jointly make the following
      representations and warranties to the Controller and Purchaser, and except
      as otherwise prescribed, such representations and warrants shall be true
      on the Execution Dare and the Closing
Date:

              

      

      

      (1)  All
of the information and materials in connection with the Target Business and the
Target Assets provided to the Controller and the Purchaser by the Seller and the
Guarantor in the process of due diligence and negotiation for execution of this
Agreement are true, complete and accurate, and no such information and materials
is false, misleading and materially deviated.

      

      (2)  The
Target Assets and the Target Business are legally owned by the Seller, and there
is no pledge, mortgage, security, priority, option and other encumbrance
existing on the Target Assets and the Target Business; the Seller and the
Guarantor are duly authorized to execute and perform this Agreement and to
transfer the Target Assets and the Target Business to the Purchaser
unconditionally, without reservation, completely, legally and validly before the
Closing Date.

      

      (3)  The
execution and performance of this Agreement by the Seller and the Guarantor
shall not violate their Articles of Associations, binding laws and regulations,
any administrative order, arbitration or judgment, other executed agreements and
representations made to any third party, or lead any entity to claim
ineffectiveness jointly or separately against the Controller and/or the
Purchaser, or result in any claim, compensation, or claim or set any rights on
the the Target Assets and/or the Target Business.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	
                16.

              	
                The
      Seller and the Guarantor severally and jointly make the following
      representations and warrants, with respect to Closing of the Target Assets
      and the Target Business, to the Controller and
  Purchaser:

              

      

      

      (1)  Closing
of Target Assets and Target Business:

      

      
        	
                 
      

              	
                (a)  There
      is no title dispute, pledge, mortgage, lien, other rights, rights
      limitation or debt existing on, influencing, restricting or limiting all
      or part of the Target Assets; there is no agreement or representations
      which may entitle or create any such dispute, pledge, mortgage, lien,
      other rights, rights limitation or debt on all or part of the Target
      Assets;

              

      

      

      
        	
                 
      

              	
                (b)  The
      Controller and the Purchaser have confirmed and are satisfied with the
      agreement regarding to transfer of the Target Assets and the Target
      Business to the Purchaser. The Target Assets and the Target Business may
      not be delivered to the Purchaser without such confirmation by the
      Controller and the Purchaser;

              

      

      

      
        	
                 
      

              	
                (c)  The
      delivered Inventory shall be certified goods and shall comply with normal
      marketing standard and quality requirement of such
    industry;

              

      

      

      
        	
                 
      

              	
                (d)  The
      Seller shall promote and ensure that the Transferred Employees set forth
      on Exhibit 4 execute employment contracts with the Purchaser after
      termination of labor relationship with the Seller.  Transferred
      Employees who refuse to enter into employment contracts with the Purchaser
      shall be otherwise settled by the Seller.  The Seller shall be
      liable for labor disputes and settlement, arbitration or suits arising
      herefrom and assume all the relevant fees and
  expenses;

              

      

      

      (2)  Labor
Relationship

      

      
        	
                 
      

              	
                (a)  Payable
      salary, fees for settlement, compensation and suit, or payable economic
      compensation or other relevant unpaid expenses arising from labor disputes
      between the Seller and a Transferred Employee existing, arising, or
      incurred before the Closing Date shall be unconditionally and irrevocably
      assumed and indemnified by the
Seller;

              

      

      

      
        	
                 
      

              	
                (b)  Any
      economic compensation arising from termination of labor relationship
      between a Transferred Employee and the Seller shall be assumed by the
      Seller; Once the Transferred Employees have been employed by the
      Purchaser, the working age shall be recalculated and any economic
      compensation regarding the termination of the labor relationship shall be
      assumed by the Seller; If any economic compensation is required by any
      employee of the Seller for his/her office leave, such compensation
      calculated subject to the working age after the Closing Date shall be
      assumed by the Seller.

              

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (3)  Social
insurance and Housing Fund: Any social insurance, housing fund and social
welfare unpaid or underpaid by the Seller before the Closing Dare, or fines and
other penalties imposed by labor administrative authorities which has not been
paid and performed by the Seller shall be unconditionally and irrevocably
assumed by the Seller.

      

      (4)  Target
Business

      

      
        	
                 
      

              	
                (a)  Target
      Business shall be operated normally by the Purchaser, and its nature and
      manner may not be changed or
interrupted.

              

      

      

      
        	
                 
      

              	
                (b)  None
      of the Clients will conduct material adverse adjustment to their
      relationship with the Target Business before the Closing Date or in the
      foreseeable period after the Closing
Date.

              

      

      

      (5)  Creditors’
Rights and Liabilities

      

      
        	
                 
      

              	
                (a)  Any
      liabilities or responsibilities (including but not limited to any product
      liabilities, liabilities for breach of contract, administrative penalties
      and contingent liabilities) existing on, arising from, or incurred by the
      Seller before the Closing Date shall be assumed by the
    Seller.

              

      

      

      
        	
                 
      

              	
                (b)  As
      of the Closing Date, none of the Target Assets and/or the Target Business
      will be involved in any administrative inquiry, suit, arbitration or other
      material disputes. There is no pending judgment, adjudication, fines,
      compensation or court order with respect to the Target Assets and/or the
      Target Business. To the best knowledge of the Seller and the Guarantor,
      there is no possibility of occurrence of any of the forgoing
      events.

              

      

      

      (6)  Non-Competition.
As of the Closing Date, the Seller, the Guarantor and their affiliates shall
not, directly or indirectly, participate in any activities which may compete
with Purchaser or Controller (including the Target Business), or may deprive of,
impair or infringe business interests or opportunities of the Purchaser or
Controller, or acquire or possess interests from such activities; each of the
Seller and the Guarantor shall not, in any identity or manner, directly or
indirectly procure, induce or lead any employee, service provider, consultant or
agent who have established or will establish an employment relationship, service
relationship, client relationship, or agent relationship with the Purchaser or
Controller, to terminate such relationship or give up or refuse to establish
such relationship with the Purchaser or Controller, or engage in any activity
which is intended to cause the forgoing result. The Seller and the Guarantor
agree and confirm that, in the event of any violation of such non-competition
and non-solicitation obligations, they shall indemnify the Purchaser and/ or the
Controller for all the losses arising herefrom, including but not limited to
reasonable attorney expenses. Any competition behavior conducted by any of the
affiliates of the Seller or the Guarantor shall be deemed to be a violation of
this article by the Seller or the Guarantor, and the Seller and Guarantor shall
assume joint and several liabilities for such behavior. The employment of Fan
Wenda and his wife by the Purchaser or their solicitation of employees or
clients on behalf of the Purchaser shall not be a violation of this
article

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                17.

              	
                In
      accordance with this Agreement, the Seller and the Guarantor shall be
      responsible for or assist in the diligent execution, approval,
      registration, alteration and filing of this
  Agreement.

              

      

      

      
        	
                18.

              	
                At
      any time after execution of this Agreement or completion of due diligence
      of the Seller (whichever is earlier), in the event of any requirement by
      the Controller or the Purchaser to amend, delete, or add articles hereto,
      or enter into any supplement agreement as a result of due diligence
      findings, the Seller shall not refuse such requirement unreasonably and
      shall use its best efforts to coordinate such changes with the
      Purchaser.

              

      

      

      
        CHAPTER
VI    SELL
BACK OPTION

      

      

      
        	
                19.

              	
                The
      Parties agree that, in the event of any claim or suit against, or
      liability of the Controller or/ and Purchaser, or loss of ownership/ use
      right of the Target Assets by the Purchaser, or the impossibility of
      conducting the Target Business, which arise from a material violation of
      this Agreement by the Seller and/or Guarantor (including but not limited
      to a violation of the non-compete provisions applicable to such Parties
      and their affiliate), malicious act or negative act, false statement and
      concealment, the Purchaser is entitled to exercise a Sell Back Option,
      subject to which the Purchaser can resell the Target Assets and Target
      Business to the Seller according to provisions as
  follows.

              

      

      

      
        	
                20.

              	
                Exercise
      period of Sell Back Option is 3 years following the Closing
      Date.

              

      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        	
                21.

              	
                The
      Purchaser has a complete and independent option to resell the Target
      Assets and the Target Business to the Seller when exercising the Sell Back
      Option. The Seller shall refund the breach penalty which is equivalent to
      the Consideration paid and an annual interest of 15% of such Consideration
      to the Purchaser within 10 days of receipt of the notice issued by the
      Purchaser. When the Purchaser exercises the Sell Back Option, the Seller
      and the Guarantor agree to execute all required document and take all the
      necessary action according to this Agreement, including but not limited to
      timely executing documents required for alteration registration with the
      applicable governing authority.

              

      

      

      
        	
                22.

              	
                In
      the event of a circumstance prescribed in Article 19, however, if the
      Purchaser fails to exercise the Sell Back Option, the Purchaser is
      entitled to rectify and adjust the Consideration contemplated hereunder,
      and the adjusted Consideration shall not exceed 70% of the original
      Consideration. The Seller shall refund the margin of Consideration
      unconditionally to the Purchaser in the manner accepted by the Controller
      and the Purchaser within 10 days of receipt of notice issued by the
      Purchaser; In the event that the Seller fails to pay such margin, the
      Purchaser is entitled to deduct the margin from any fund payable to the
      Seller.

              

      

      

      
        CHAPTER
VII    CONFIDENTIALITY

      

      

      
        	
                23.

              	
                The
      Parties hereby agree that each Party shall maintain confidentiality of any
      trade secret or technology information of any other Party obtained during
      the performance of this Agreement, regardless of whether the transactions
      contemplated hereunder are consummated. Such confidentiality obligation
      shall not terminate until the date on which such confidentiality
      information is voluntarily disclosed by its own right holder or enters
      into public domain through other lawful methods. The Parties shall not
      publish any media report, announcement, correspondence, notice or document
      regarding the drafting and performance of terms in this Agreement, the
      transactions or arrangements under this Agreement or any matters related
      hereof without obtaining prior written consent of the other Parties,
      except for the situation as required by any applicable legal or regulatory
      stipulations, or requirements possibly raised by New York Stock Exchange,
      NASDAQ, the Stock Exchange of Hong Kong, London Stock Exchange, Singapore
      Exchange Limited and Supervisory Commission of other stock exchanges, or
      the prudent disclosure to the shareholders, controllers, investment
      advisors, financial advisors, auditors, legal advisors by Purchaser and/or
      Controller. This article shall survive the termination of this Agreement
      for any reason.

              

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        CHAPTER
VIII    NOTICES

      

      

      All
notices or other documents pursuant to this Agreement shall be in writing and
delivered personally or sent by express mail, or by facsimile transmission to
the address and/or facsimile number of such Party set forth below, or other
address and/or facsimile number as prescribed in the latest notice and/or
facsimile transmission by such Party to other Parties:

      

      
        	
                (i)

              	
                Controller: 
      

              	
                Shenzhen
      Yue Pengcheng Electric Motor Co., Ltd.

              
	 
      	
                Address:

              	
                Fu
      Yuaner Road, High-tech Park, Fu Yong Street, Fu Yong Town,
      Shenzhen

              
	 
      	
                Facsimile:

              	
                0755-81499855

              
	 
      	
                Attn:

              	
                Li
      Jianrong

              
	 
      	 
      	 
      
	
                (ii)

              	
                Seller:

              	
                Ningbo
      Bang Shi Da Electrical Equipment Co., Ltd.

              
	 
      	
                Address:

              	
                Hu
      Di Village, Lin Shan Town, Yuyao

              
	 
      	
                Facsimile:

              	
                0574-62161677

              
	 
      	
                Attn:

              	
                Fan
      Wenda

              
	 
      	 
      	 
      
	
                (iii) 
      

              	
                Guarantor:

              	
                Fan
      Wenda

              
	 
      	
                Address:

              	
                Hu
      Di Village, Simen Twon, Yuyao

              
	 
      	
                Facsimile:

              	
                0574-62161677

              

      

      

      
        
          	
                  24.

                	
                  Any
      such notices or other documents given by personal delivery shall be
      deemed effectively
      given when received by the designated receiver; notices or other documents
      given by facsimile transmission shall be deemed effectively given when
      replying code or other confirmation signal has been received; notices or
      other documents given by mail shall be deemed effectively given in 7 days
      as of the delivery date. In order to certify the delivery of such notice,
      the relevant Party merely needs to certify that such notice has been
      placed or delivered to the address of the receiver, or the address of the
      receiver has been appropriately written on the envelop of such notice, and
      such notice has been mailed
appropriately.

                

        

      

      

      
        CHAPTER
IX    TAXES
AND EXPENDITURES

      

      

      
        	
                25.

              	
                The
      fees and other costs arising from the investigation, negotiation,
      drafting, execution and performance related to this Agreement and
      transactions relating to this Agreement shall be respectively born by the
      Party incurring such costs.

              

      

      

      
        	
                26.

              	
                The
      taxes and fees relating to the transfer of Target Assets and Target
      Business levied by governmental authorities shall be borne by
      Seller.

              

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      
 

      
        	
                27.

              	
                Unless
      otherwise required pursuant to applicable laws or provided in this
      Agreement, the taxes and fees relating to the transactions under this
      Agreement payable as prescribed by laws shall be borne by the respective
      Parties.

              

      

      

      
        	
                28.

              	
                Purchaser
      shall withhold and remit taxes which shall ultimately be borne by Seller
      in the event that Purchaser is required to withhold and remit taxes upon
      paying Consideration pursuant to applicable laws and
      regulations.

              

      

      

      
        CHAPTER
X    FORCE
MAJEURE

      

      

      
        	
                29.

              	
                Proportionate
      exemption shall be rendered for the total or partial failure to perform
      this Agreement due to force majeure. Force Majeure means any event,
      situation or condition beyond anticipation, avoidance and reasonable
      control of relevant Parties and unable to be avoided or overcome after
      reasonable and prudential measures have been taken, which directly or
      indirectly hinders the performance of any obligation under this Agreement,
      including but not limited to disaster, war, fire, explosion, epidemics,
      flood and storm.  The Party shall give notice to the other
      Parties which states in detail the force majeure event within 14 days
      commencing from the date of the occurrence of such force majeure event in
      the event that any Party fails to perform any clause or condition of this
      Agreement due to the occurrence of any force majeure event.  Any
      extension to perform or failure to perform under this Agreement due to
      force majeure event shall not constitute breach of contract by the
      implicated Parties, nor shall it constitute the basis of any claim,
      compensation or penalty. Under such circumstance, the Parties shall take
      reasonable and feasible measures to perform this Agreement, and the
      Parties implicated by force majeure event shall take reasonable measures
      to prevent the increase of losses. The implicated Parties shall give
      notice to the other Parties stating the cease of the force majeure event
      within 14 days commencing from the date of the cease of the force majeure
      event.

              

      

      

      
        	
                30.

              	
                The
      Parties may negotiate to terminate this Agreement in the event that this
      Agreement cannot be performed due to any force majeure event occurring
      prior to Closing Date, which lasts for more than 6 months; in the event
      that this Agreement is terminated by such method, any amount paid by
      Controller or Purchaser shall be refunded immediately, including but not
      limited to Deposit in the amount of RMB
  5,000,000.

              

      

      

      
        CHAPTER
XI    BREACH
OF CONTRACT

      

      

      
        	
                31.

              	
                Failure
      of performance or sufficient performance of this Agreement, 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 Agreement. 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/or notarization fees of the non-breaching
      Party.  The respective breaching Parties shall bear their own
      corresponding damages arising from their respective breach in proportion
      with their respective faults in the event that several Parties under this
      Agreement commit breach of this Agreement.  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.

              

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      
        	
                32.

              	
                Purchase
      shall be entitled to deduct directly the amount of damages from
      Consideration and recover any deficiency pursuant to the laws and this
      Agreement in the event that Seller and/or Guarantor commit a breach under
      this Agreement.

              

      

      

      
        	
                33.

              	
                In
      consideration that Guarantor is the shareholder of Seller and Seller will
      nullify its Industry and Commerce registration within 6 months as of
      Closing Date, Guarantor hereby irrevocably agrees and confirms that
      Guarantor shall be jointly liable with Seller for any and all obligations
      and liabilities of the Seller under this Agreement, including but not
      limited to any obligation of payment and
  damages.

              

      

      

      
        	
                34.

              	
                Seller
      shall refund the First Installment Consideration (interest in accordance
      with bank interest rate in the same period added) to Purchaser within 3
      business days upon receipt of written notice by Controller or Purchaser in
      the event of the occurrence of any of the following circumstance after
      payment of First Installment Consideration by
  Purchase:

              

      

      

      (1)  the
transaction under this Agreement fails to be completed within 45 days of the
Execution Date for whatever reasons;

      

      (2)  the
prerequisites of Closing provided in Article 13 of this Agreement fail to be
fulfilled due to the action or inaction of Seller and/or Guarantor;

      

      (3)  substantial
and unfavorable changes occur in the assets, business, personnel or finance of
Seller and/or Guarantor prior to Closing Date, for which Controller or Purchaser
reasonably deems that conditions for closing under this Agreement may not be
fulfilled within a reasonable time;

      

      (4)  Seller
and/or Guarantor commit a material breach of any provision under this Agreement
prior to Closing Date, including but not limited to any representation,
commitment or warranty under this Agreement.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      
        CHAPTER
XII    GOVERNING
LAW AND RESOLUTION DISPUTES

      

      

      
        	
                35.

              	
                This
      Agreement shall be governed, bound and protected by the laws of the PRC.
      The interpretation, performance, amendment, termination, validity and
      dispute resolution of this Agreement shall be conducted in accordance with
      the laws of the PRC.

              

      

      

      
        	
                36.

              	
                In
      the event of any dispute with respect to the execution, interpretation,
      performance or validity of the provisions of this Agreement or any dispute
      related to this Agreement, the Parties shall negotiate in good faith to
      resolve the dispute. In the event the Parties fail to reach an agreement
      on the resolution of such a dispute, any Party may submit the relevant
      dispute to the China International Economic and Trade Arbitration
      Commission South China Sub-Commission (the “CIETAC South China”) for
      arbitration. The arbitration shall be conducted in Shenzhen in accordance with
      then-effective and applicable arbitration rules of CIETAC. The arbitration
      ruling shall be final and binding on both
  Parties.

              

      

      

      
        CHAPTER
XIII    EFFECTIVENESS
OF THIS AGREEMENT

      

      

      
        	
                37.

              	
                This
      Agreement shall become effective as of the Execution Date first above
      written after all Parties or their respective authorized representatives
      sign and/or seal in this Agreement, and come into force and be become
      binding upon all Parties. All Parties shall perform their respective
      obligations in accordance with relevant provisions of this Agreement as of
      the Execution Date.

              

      

      

      
        	
                38.

              	
                In
      the event that any provision or stipulation under this Agreement is
      invalid, unlawful or unenforceable in accordance with the laws of the PRC,
      any other provision shall remain effective and binding on all Parties
      without affecting the integral performance and material contents of this
      Agreement.

              

      

      

      
        CHAPTER
XIV    MISCELLANEOUS

      

      

      
        	
                39.

              	
                This
      Agreement shall constitute the entire agreement reached by and among the
      Parties with respect to this Agreement, and shall supersede all prior
      intentions, understandings, agreements, other written records, oral
      consensus or promises reached among the Parties with respect to this
      Agreement.

              

      

      

      
        	
                40.

              	
                Any
      omission or delay in exercising any right, power or privilege under this
      Agreement shall not be deemed as waiver of such right, power or privilege
      to the extent permitted by the laws of PRC. Any right, power or privilege
      under this Agreement shall be accumulative, and shall not exclude any
      other right, power or privilege (regardless of whether regulated by laws);
      any separate or partial  exercise of any right, power or
      privilege shall not exclude any other exercise or further exercise of such
      right, power or privilege in future
  circumstances.

              

      

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      
        	
                41.

              	
                This
      Agreement is executed in three copies, each Party having one copy with
      equal legal validity.

              

      

       

       

      
        Exhibits
of this Agreement:

      

      

      
        Exhibit
A: Evaluation Report

      

      
        Exhibit
B: List of Inventory and Fixed Assets

      

      
        Exhibit
C: Clients List

      

      
        Exhibit
D: List of Transferred Employees

      

      

      

      

      [The remainder of this page has
intentionally been left blank]

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

         

      

      
        Signature
Pages of Assets and Business Purchase Agreement.

      

      

      

      
        Purchaser:
[Ningbo Heng Bang Long Electrical Equipment Co., Ltd.]

      

      

      
        Signature/Seal: /s/ Wang
Yue                    
[Company Seal]

      

      
        Name of
Legal Representative: Wang Yue

      

      
        Title:
Chairman of the Board

      

      
         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        Signature
Pages of Assets and Business Purchase Agreement.

      

      

      

      
        Seller:
[Ningbo Bang Shi Da Electrical Equipment Co., Ltd.]

      

      

      
        Signature/Seal: /s/ Fan
Wenda                    [Company Seal]

      

      
        Name of
Authorized Representative:

      

      
        Title:

      

      
         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

         

        Signature
Pages of Assets and Business Purchase Agreement.

      

      

      

      
        Guarantor:
Fan Wenda

      

      

      
        Signature: /s/ Fan Wenda        

      

      

      
        
          
          

        

        
          23

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