Document:

exv4w7

Exhibit 4.7

Execution Copy

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

     THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (the “Agreement”) is made as of June 18,
2009, by and among EASTERN WELL HOLDINGS LIMITED , a company duly incorporated and
validly existing under the Laws of Hong Kong (the “Company”), CHINA ENVIRONMENT FUND III, L.P., a
limited liability partnership organized and validly existing under the Laws of the Cayman Islands
(the “Investor”), SUN KWOK PING , a citizen of Hong Kong with the Hong Kong passport No. of
DA9001901 (the “Founder”), SHANGHAI NOBO COMMERCE & TRADE CO., LTD. , a wholly
foreign owned enterprise duly organized and validly existing under the Laws of the PRC (“Shanghai
Nobo”), NUOXIN ENERGY TECHNOLOGY (SHANGHAI) CO., LTD. , a wholly foreign
owned enterprise duly organized and validly existing under the Laws of the PRC (“Shanghai Nuoxin”)
and JIANGXI NOBAO ELECTRIC CO., LTD. , a wholly foreign owned enterprise duly
organized and validly existing under the Laws of the PRC (“Jiangxi Nobao”).

     Each of the Company, the Investor, the Founder, Shanghai Nobo, Shanghai Nuoxin and Jiangxi
Nobao shall be referred to individually as a “Party” and collectively as the “Parties”. Shanghai
Nobo, Shanghai Nuoxin and Jiangxi Nobao shall be collectively referred to as the “PRC Companies”.

RECITALS

	A.	 	Immediately prior to the Closing (as defined in Section 2.4(i)), the Founder owns
beneficially and legally one hundred percent (100%) of the equity interest of the Company. The
Company owns beneficially and legally one hundred percent (100%) of the equity interest of each PRC
Company.

	B.	 	The Company wishes to issue and sell to the Investor, and the Investor wishes to purchase and
subscribe for from the Company, an aggregate of 4,906,480 Series A Preferred Shares of the Company,
subject to the terms and conditions of this Agreement.

WITNESSETH

	 	 	THE PARTIES HEREBY AGREE AS FOLLOWS:

	1	 	Definitions.

     Capitalized terms used herein shall have the meanings ascribed to them in Schedule 1 attached hereto.

	2	 	Purchase and Sale of Series A Preferred Shares; Closing.

     2.1 Authorization.

     As of the Closing, the Company shall have an authorized share capital of US$100,000 comprising
of 100,000,000 shares with a par value of US$0.001 per share. As of the Closing, the Company shall
have authorized the issuance at the Closing, pursuant to the terms and conditions of this
Agreement, of at least 4,906,480 Series A Preferred Shares, having the

	 	 	 	 	 
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rights, preferences, privileges and restrictions as set forth in the Memorandum and Articles.

     2.2 Conversion of the Loan; Sale and Issuance of Series A Preferred Shares.

     (i) Subject to, and in accordance with, the terms and conditions of this Agreement, and the
Promissory Note, upon the Closing the outstanding Loan shall be converted into a total of 2,453,240
Series A Preferred Shares (the “Conversion Shares”). Following the issuance of the Conversion
Shares at the Closing, (i) the Loan, together with any interest accrued thereon, shall be deemed
have been fully repaid and discharged and the outstanding Loan so converted shall be deemed to have
been used to satisfy the subscription price for the Conversion Shares and no additional payment
shall be made by the Investor for the Conversion Shares; (ii) the Promissory Note shall be
automatically cancelled and terminated, and (iii) the Company and the Founder shall be released of
any and all obligations under the Promissory Note and the Collateral Documents.

     (ii) Subject to the terms and conditions of this Agreement, at the Closing, the Investor
agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, an
aggregate of additional 2,453,240 Series A Preferred Shares (the “Subscribed Shares”), par value
US$0.001 per share, each having the rights and privileges as set forth in the Memorandum and
Articles, at a per share purchase price of US$4.076 for an aggregate amount of consideration of
US$10,000,000 (the “Subscription Price”), plus the Series A Preferred Shares converted from the
Loan, representing 24.5324% of the Company’s aggregate equity interest immediately after Closing on
a fully-diluted basis.

     (iii) Subject to the terms and conditions of this Agreement, the Company shall issue a Series
A warrant to the Investor in substantially the form attached hereto as Exhibit G-1 (the
“Series A Warrant”) so that the Investor shall have the right to purchase certain amount of Series
A Preferred Shares with a total purchase price of US$10,000,000. The Warrant will be exercisable
at an exercise price per share equal to the price paid for each Series A Preferred Share hereunder
(as adjusted for share splits, combinations, recapitalizations, reclassifications and similar
transactions, if any).

     (iv) Subject to the terms and conditions of this Agreement, the Company shall issue to each of
the Investor and the Founder warrants in substantially the form attached hereto as Exhibit
G-2 (the “Valuation Adjustment Warrants”, collectively with the Series A Warrant, the
“Warrants”, and each a “Warrant”) so that the Investor or the Founder shall be entitled to acquire
additional Series A Preferred Shares or Ordinary Shares (as adjusted for share splits,
combinations, recapitalizations, reclassifications and similar transactions, if any) in accordance
with adjusted post money valuation of the Company, which will be determined in accordance with the
audited and consolidated 2009 net profit of the Company for 2009 fiscal year.

     2.3 Closing.

     (i) Subject to the satisfaction by the Company, the PRC Companies and the Founder of the
conditions set forth in Section 5, and subject to the satisfaction by the Investor of the
conditions set forth in Section 6, the issuance of the Conversion Shares and the purchase
and sale of the Subscribed Shares hereunder shall take place remotely via the exchange of documents
and signatures on a date specified by the Parties, or by another method or at another time and date
and at another location to be mutually agreed to by the Parties, (which time, date and place are
designated as the “Closing”), which date shall be no

	 	 	 	 	 
	 
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later than five (5) Business Days after the satisfaction or waiver of each condition to the Closing
set forth in Section 5 and Section 6 (other than conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions).
The date on which the Closing shall be held is referred to in this Agreement as the “Closing Date.”

     (ii) At the Closing, the Company shall (i) deliver to the Investor a certificate representing
the Series A Preferred Shares acquired by the Investor hereunder as set forth on Exhibit A,
and (ii) cause the Company’s register of members to be updated to reflect the Series A Preferred
Shares purchased by the Investor.

     (iii) At the Closing, the Investor shall (i) deliver an executed counterpart of this Agreement
and the Ancillary Agreements to the Company and the Founder, and (ii) deposit the Subscription
Price as indicated on Exhibit A by wire transfer of immediately available U.S. dollar funds
into a bank account designated by the Company.

     2.4 Termination of Agreement.

     This Agreement may be terminated before the Closing as follows:

     (i) at the election of the Investor on or after the date that is ninety (90) days after the
Execution Date (the “Termination Date”), if the Closing shall not have occurred on or before such
date, provided that: (i) the terminating party is not in material default of any of its
obligations hereunder, and (ii) the right to terminate this Agreement pursuant to this Section
2.4(i) shall not be available to any party whose breach of any provision of this Agreement has
been the cause of, or resulted, directly or indirectly, in, the failure of the Closing to be
consummated by the Termination Date;

     (ii) by mutual written consent of Company and the Investor as evidenced in writing signed by
each of the Company and the Investor;

     (iii) by the Investor in the event of any material breach or violation of any representation
or warranty, covenant or agreement contained herein or in any of the other Transaction Documents by
the Company, the Founder, or any of the PRC Companies, and such breach or violation cannot be cured
within fourteen (14) days from the receipt of the notice by the Investor;

     (iv) by the Company, in the event of any material breach or violation of any representation or
warranty, covenant or agreement contained herein or in any of the other Transaction Documents by
the Investor, including but without limitation the failure of the Investor to pay the Subscription
Price within fourteen (14) working days after the satisfaction by the Company, the PRC Companies
and the Founder of the conditions set forth in Section 5; or

     (v) at the election of the Company or the Investor when governmental orders, decrees or
decisions have been issued or governmental actions have been taken to prohibit the transaction
contemplated under this Agreement or any of the Ancillary Agreements;

     In the event of termination by the Company and/or the Investor pursuant to Section 2.4
hereof, written notice thereof shall forthwith be given to the other Party, and this Agreement
shall terminate, and the issuance of the Conversion Shares and the Subscribed

	 	 	 	 	 
	 
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Shares hereunder shall be abandoned, without further action by the Company or the Investor, in
which case, the Company shall repay the full amount of the Loan, together with any accrued but not
paid interest thereon, to the Lender in accordance with Section 3.1 of the Promissory Note.

     2.5 Effect of Termination.

     In the event that this Agreement is validly terminated pursuant to Section 2.4, then
each of the Parties shall be relieved of their duties and obligations arising under this Agreement
after the date of such termination and such termination shall be without liability to the Company,
the Founder or the Investor; provided that no such termination shall relieve any Party
hereto from liability for any breach of this Agreement. In the event that this Agreement is validly
terminated pursuant to Section 2.4 before the Closing, the Investor shall be obligated to assist
the Company and/or the PRC Companies to cancel the certificate/registration under Section 2.3(ii)
hereof. The provisions of this Section 2.5, Section 7, Section 9.9 and
Section 9.13 hereof shall survive any termination of this Agreement.

     2.6 Closing Account.

     (i) Payment of the Subscription Price shall be made by the Investor to the Company on the
Closing Date by remittance of immediately available fund to the following bank account of the
Company, which shall be an interest bearing account with a reputable bank agreed upon among the
Investor, the Company and the Founder (the “Closing Account”):

	 	 	 	 	 	 	 
	 

	 	Account Bank:
	 	Deutsche Bank AG, Hong Kong Branch

	 

	 	Account Name:
	 	Eastern Well Holdings Limited

	 

	 	Account Number:
	 	0012732-05-1
	 

	 	Bank Code:
	 	054
	 

	 	SWIFT Code:
	 	DEUTHKHH

	 

	 	Address:
	 	55/F Cheung Kong Center, 2 Queen’s Road Central, HK

     (ii) All bank charges and related expenses for remittance and receipt of funds shall be
for the account of the Company. The authorized person appointed by the Company and the Investor
respectively shall be co-signatories to the Closing Account and no disbursement shall be made from
the Closing Account without the signature of each of the signatories designated by the Company and
the Investor. The Company shall provide seven (7) days prior notice to the Investor of any planned
disbursement from the Closing Account.

3 Representations and Warranties of the Company, the PRC Companies and the Founder.

     The Company, and the Founder, jointly and severally, represent and warrant to the Investor
with respect to each member of the Company Group, and each PRC Company hereby represents and
warrants to the Investor with regard to itself that the statements contained in this Section
3 are true, correct and complete (except as set forth on the Disclosure Schedule
attached hereto as Exhibit D (the “Disclosure Schedule”), which exceptions shall be deemed
to be representations and warranties as if made hereunder (in this Agreement, any reference to a
party’s “knowledge” means such party’s actual knowledge after due and diligent inquiries of
officers and directors of such party).

	 	 	 	 	 
	 
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     3.1 Organization, Good Standing; Due Authorization.

     Each member of the Company Group is duly organized, validly existing and in good standing
under the Laws of their respective jurisdiction of incorporation. Each member of the Company Group
has all requisite legal and corporate power and authority to carry on its business as now
conducted, and is duly qualified to transact business in each jurisdiction in which the failure to
so qualify would have a Material Adverse Effect on such Person.

     3.2 Authorization; Consents.

     Each of the Company and the PRC Companies has all requisite legal and corporate power, and has
taken all corporate action necessary, for each to properly and legally authorize, execute and
deliver this Agreement and each of the Transaction Documents to which it is a party, and to carry
out its respective obligations hereunder and thereunder. The authorization and issuance of all of
(A) the Series A Preferred Shares under this Agreement, (B) the Ordinary Shares issuable upon
conversion of the Series A Preferred Shares, (C) the Series A Preferred Shares issuable upon
exercise of the Warrants, has been taken or will be taken prior to the Closing. This Agreement,
each of the Transaction Documents to which the Company, any of the PRC Companies, and/or the
Founder is party, when executed and delivered by the same, will constitute the valid and legally
binding obligation of the Company, any of the PRC Companies and/or the Founder, as the case may be,
and enforceable against such Person in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general
application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws
relating to the availability of specific performance, injunctive relief, or other equitable
remedies. The issuance of any Series A Preferred Shares or Ordinary Shares issuable upon
conversion of the Series A Preferred Shares is not subject to any preemptive rights or rights of
first refusal, or if any such preemptive rights or rights of first refusal exist, waiver of such
rights has been obtained from the holders thereof. For the purpose only of this Agreement,
“reserve,” “reservation” or similar words with respect to a specified number of Ordinary Shares or
Series A Preferred Shares of the Company shall mean that the Company shall, and the Board of
Directors of the Company shall procure that the Company shall, refrain from issuing such number of
shares so that such number of shares will remain in the authorized but unissued shares of the
Company until the conversion rights of the holders of any Convertible Securities exercisable for
such shares and the Warrants are exercised in accordance with the Memorandum and Articles or
otherwise.

     3.3 Valid Issuance of Series A Preferred Shares; Consents.

     (i) The Series A Preferred Shares, when issued and sold to the Investor in accordance with the
terms of this Agreement, the Ordinary Shares, when issued upon conversion of Series A Preferred
Shares, and the Series A Preferred Shares issued upon exercise of the Warrants will be duly and
validly issued, fully paid and non-assessable, free from any Liens and will be free of restrictions
on transfer (except for any restrictions on transfer under applicable securities Laws). The
Ordinary Shares issuable upon conversion of the Series A Preferred Shares and the Series A
Preferred Shares issuable upon exercise of the Warrants, when issued and sold to the Investor in
accordance with the terms of this Agreement, have been duly and validly reserved for issuance and,
upon issuance in accordance with the terms of the Memorandum and Articles, will be duly and validly
issued, fully paid and non-assessable, free from any Liens and will be free of restrictions on
transfer (except for any restrictions on transfer under applicable securities Laws).

	 	 	 	 	 
	 
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     (ii) Except as set forth in Section 3.3(ii) of the Disclosure Schedule, no
consent, approval, order or authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority on the part of the Company is required in
connection with the valid execution, delivery and consummation of the transactions contemplated by
this Agreement or the Ancillary Agreements or the offer, sale, issuance or reservation for issuance
of the Series A Preferred Shares.

     (iii) Subject in part to the truth and accuracy of the Investor’s representations set forth in
Section 4 of this Agreement, the offer, sale and issuance of all Series A Preferred Shares
and Ordinary Shares issuable upon conversion of the Series A Preferred Shares as contemplated by
this Agreement and the Ancillary Agreements, are exempt from the qualification, registration and
prospectus delivery requirements of the Securities Act and any applicable securities Laws.

     (iv) All presently outstanding Ordinary Shares of the Company were duly and validly issued,
fully paid and non-assessable, and are free and clear of any liens and free of restrictions on
transfer (except for any restrictions on transfer under applicable securities Laws) and have been
issued in compliance in all material respects with the requirements of all applicable securities
Laws and regulations, including, to the extent applicable, the Securities Act.

     3.4 Capitalization and Voting Rights.

     (i) Section 3.4(i) of the Disclosure Schedule sets forth the complete and
accurate shareholding structure of the Company Group, including but not limited, to: (i) all
registered and beneficial owners of each member of the Company Group; and, (ii) all share capital
or registered capital of each member of the Company Group. Except as set forth in Section
3.4 of the Disclosure Schedule, all share capital or registered capital of each member
of the Company Group have been duly and validly issued (or subscribed for) and fully paid and are
non-assessable. All share capital or registered capital of each member of the Company Group is
free of Liens and any restrictions on transfer (except for any restrictions on transfer under
applicable Laws). No share capital or registered capital of any member of the Company Group was
issued or subscribed to in violation of the preemptive rights of any person, terms of any agreement
or any Laws, by which each such Person at the time of issuance or subscription was bound. Except
as set forth in Section 3.4 of the Disclosure Schedule, (i) there are no
resolutions pending to increase the share capital or registered capital of any member of the
Company Group; (ii) there are no outstanding options, warrants, proxy agreements, pre-emptive
rights or other rights relating to the share capital or registered capital of any member of the
Company Group, other than as contemplated by this Agreement; (iii) there are no outstanding
Contracts or other agreements under which any member of the Company Group or any other Person
purchases or otherwise acquires, or has the right to purchase or otherwise acquire, any interest in
the share capital or registered capital of any member of the Company Group; (iv) there are no
dividends which have accrued or been declared but are unpaid by any member of the Company Group;
and (v) there are no outstanding or authorized equity appreciation, phantom equity, equity plans or
similar rights with respect to any member of the Company Group.

     (ii) Immediately prior to the Closing, the authorized capital of the Company shall consist of:

          (a) Ordinary Shares. A total of 70,000,000 authorized Ordinary Shares, of

	 	 	 	 	 
	 
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which 14,593,520 is issued and outstanding. Exhibit E attached hereto is a true and correct
Capitalization Table for the Company. The rights, privileges and preferences of Ordinary Shares
are as stated in the Memorandum and Articles and the Ancillary Agreements.

          (b) Preferred Shares. A total of 30,000,000 authorized preferred shares, of which
4,906,480 shares are designated as Series A Preferred Shares, none of which are issued and
outstanding. The rights, privileges and preferences of the Series A Preferred Shares will be as
stated in the Memorandum and Articles and the Ancillary Agreements.

          (c) Options, Reserved Shares. The Company has authorized sufficient Ordinary Shares
for issuance upon conversion of the Series A Preferred Shares and sufficient Series A Preferred
Shares for issuance upon exercise of the Warrants. Except for (1) the conversion privileges of the
Series A Preferred Shares, (2) the Warrants to be granted to the Investor as of the Closing, and
(3) the participation rights and other similar rights provided in the Ancillary Agreements, there
are no options, warrants, reserved shares, conversion privileges or other rights, or agreements
with respect to the issuance thereof, presently outstanding to purchase any of the shares of the
Company before the Closing. Apart from the exceptions noted in this Section 3.4 and the
Ancillary Agreements, no shares of the Company’s outstanding share capital, or shares issuable upon
exercise or exchange of any outstanding options or other shares issuable by the Company, are
subject to any participation rights, rights of first refusal or other rights to purchase such
shares.

          (d) Except as set forth above and except for (1) the conversion privileges of the Series A
Preferred Shares, and (2) certain rights provided in this Agreement or the Ancillary Agreements,
there are no outstanding options, securities, warrants, rights (including conversion or preemptive
rights and rights of first refusal), proxy or shareholders agreements, or agreements of any kind
for the purchase or acquisition from the Company of any of its equity securities. Except as
contemplated hereby and as set forth in Section 3.4(ii)(d) of the Disclosure
Schedule, the Company is not a party or subject to any agreement that affects or relates to the
voting or giving of written consents with respect to any security of the Company.

     (iii) The Company is the sole owner of one hundred percent (100%) or the equity interest of
each PRC Company.

     3.5 Tax Matters.

     (i) The provisions for taxes as shown on the balance sheet included in the Financial
Statements (as defined in Section 3.7 below) are sufficient in all material respects for
the payment of all accrued and unpaid applicable taxes of the Company Group as of the date of each
such balance sheet, whether or not assessed or disputed as of the date of each such balance sheet.
To the knowledge of the Company, the PRC Companies and the Founder, and except as set forth in
Section 3.5 of the Disclosure Schedule, there have been no extraordinary
examinations or audits of any tax returns or reports by any applicable Governmental Authority.
Except as set forth in Section 3.5 of the Disclosure Schedule, each member of the
Company Group has filed or caused to be filed on a timely basis all tax returns that are or were
required to be filed (to the extent applicable), all such returns are correct and complete, and
each member of the Company Group has paid all taxes that have become due, or have reflected such
taxes in accordance with PRC GAAP as a reserve for taxes on the Financial Statements. There are in
effect no waivers of applicable statutes of limitations with respect to taxes for any year.

	 	 	 	 	 
	 
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     (ii) No member of the Company Group is, nor expects to become, a “controlled foreign
corporation” within the meaning of Section 957 of the Code or a passive foreign investment company
as described in Section 1297 of the United States Internal Revenue Code of 1986, as amended (the
“Code”).

     (iii) To the knowledge of the Company, the PRC Companies and the Founder, no shareholder of
any member of the Company Group, solely by virtue of its status as shareholder of such member of
the Company Group, has personal liability under local Law for the debts and claims of such member
of the Company Group. There has been no communication from any tax authority relating to or
affecting the tax classification of any member of the Company Group.

     (iv) The Founder and the PRC Companies have complied with all applicable PRC tax Laws and
regulations.

     3.6 Books and Records.

     Each member of the Company Group maintains in all material respects its books of accounts and
records in the usual, regular and ordinary manner, on a basis of no material inconsistency with
prior practice, and which permits its Financial Statements to be prepared in accordance with
generally accepted accounting principles in the PRC.

     3.7 Financial Statements.

     Section 3.7 of the Disclosure Schedule sets forth, and the Company has
delivered to the Investor, (a) the audited financial statements of each PRC Company for the fiscal
year ending December 31, 2008 prepared by each PRC Company in accordance with the PRC GAAP, (b) the
unaudited balance sheet, statements of operations and cash flows of each PRC Company for the period
from January 1, 2009 to May 31, 2009 (the “Statement Date”), prepared by each PRC Company in
accordance with the PRC GAAP, (c) the unaudited consolidated financial statements of the Company
for the fiscal year ending December 31, 2008, prepared by the Company in accordance with the IFRS,
and (e) the audited consolidated financial statements of the Company for the fiscal year ending
December 31, 2008, prepared by the Company in accordance with the IFRS (collectively, the
“Financial Statements”). The Financial Statements are complete and correct in all material respects
and present fairly the financial condition and position of the Company and the PRC Companies as of
their respective dates, in each case except as disclosed therein and except for the absence of
notes.

     3.8 Changes.

     Since the Statement Date, except as contemplated by this Agreement and except as set forth in
Section 3.8 of the Disclosure Schedule, there has not been:

     (i) any change in the assets, liabilities, financial condition or operations of any member of
the Company Group from that reflected in the Financial Statements, other than changes in the
ordinary course of business, or other changes which would not reasonably be expected to have a
Material Adverse Effect on any member of the Company Group;

     (ii) any resignation or termination of any Senior Manager of any member of the Company Group;

	 	 	 	 	 
	 
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     (iii) any satisfaction or discharge of any Lien or payment of any obligation by any member of
the Company Group, except those made in the ordinary course of business or those that are not
material to the assets, properties, financial condition, or operation of such entities (as such
business is presently conducted);

     (iv) any material change, amendment to or termination of a Material Contract (as defined below
in Section 3.11(i));

     (v) any material change in any compensation arrangement or agreement with any Senior Manager
of any member of the Company Group;

     (vi) any sale, assignment or transfer of any Intellectual Property of any member of the
Company Group, other than in the ordinary course of business or which would not reasonably be
expected to have a Material Adverse Effect on any member of the Company Group;

     (vii) any declaration, setting aside or payment or other distribution in respect of any member
of the Company Group’s capital shares, or any direct or indirect redemption, purchase or other
acquisition of any of such shares by any member of the Company Group other than the repurchase of
capital shares from employees, officers, directors or consultants pursuant to agreements approved
by the Board of Directors of the such Person;

     (viii) any failure to conduct business in the ordinary course, consistent with such member of
the Company Group’s past practices;

     (ix) any damages, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the assets, properties, financial condition, operation or business of any
member of the Company Group;

     (x) any event or condition of any character which might have a Material Adverse Effect on the
assets, properties, financial condition, operation or business of any member of the Company Group,
but excluding any of the foregoing resulting from general economic conditions or from conditions
that generally affect the industry of such member of the Company Group (other than changes that
have a materially disproportionate effect on such Person); or

     (xi) any agreement or commitment by any member of the Company Group to do any of the things
described in this Section 3.8.

     3.9 Litigation.

     There is no action, suit, or other court proceeding pending or threatened, against any member
of the Company Group. To the best knowledge of the Company, the PRC Companies and the Founder,
there is no investigation pending or threatened against any member of the Company Group, and there
is no action, suit, proceeding or investigation pending or threatened against any Senior Manager of
any member of the Company Group in connection with their respective relationship with such Person,
as the case may be. There is no judgment, decree, or order of any court or Governmental Authority
in effect and binding of any member of the Company Group or its assets or properties. There is no
court action, suit, proceeding or investigation by any member of the Company Group which such
Person intends to initiate against any third party. No Government Authority has at any time

	 	 	 	 	 
	 
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materially challenged or questioned in writing the legal right of any member of the Company Group
to conduct its business as presently being conducted.

     3.10 Liabilities.

     Except as set forth in Section 3.10 of the Disclosure Schedule or arising
under the instruments set forth in Section 3.11 of the Disclosure Schedule, the
Company Group has no liabilities of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, except for (i) liabilities set forth in the Financial Statements,
(ii) trade or business liabilities incurred in the ordinary course of business, and (iii) other
liabilities that do not exceed US$20,000 in the aggregate.

     3.11 Commitments.

     (i) Section 3.11 of the Disclosure Schedule contains a complete and accurate
list of all Contracts to which any member of the Company Group is bound that involve (a)
obligations (contingent or otherwise) or payments to any member of the Company Group in excess of
US$100,000, (b) the license or transfer of Intellectual Property or other proprietary rights to or
from any member of the Company Group, (c) any Contracts that affect the assets, properties,
financial condition, operation or business of any member of the Company Group in material respects,
including but not limited to any Contract having an effective term of more than one (1) year or
payments in excess of US$100,000 (collectively, the “Material Contracts”).

     (ii) Except as set forth in Section 3.11 of the Disclosure Schedule, there are
no Contracts of any member of the Company Group containing covenants that in any material way
purport to restrict the business activity of such member of the Company Group or limit in any
material respect the freedom of such member of the Company Group to engage in any line of business
that it is currently engaged in, to compete in any material respect with any entity or to obligate
in any material respect such member of the Company Group to share, license or develop any product
or technology.

     (iii) All of the Material Contracts are valid, subsisting, in full force and effect and
binding upon the respective member of the Company Group and to the other parties thereto.

     (iv) Each member of the Company Group has in all material respects satisfied or provided for
all of its liabilities and obligations under the Material Contracts requiring performance prior to
the date hereof, is not in default in any material respect under any Material Contract, nor does
any condition exist that with notice or lapse of time or both would constitute such a default. The
Company, the PRC Companies and the Founder are not aware of any material default thereunder by any
other party to any Material Contract or any condition existing that with notice or lapse of time or
both would constitute such a material default, or give any Person the right to declare a material
default or exercise any remedy under, or to accelerate the maturity or performance of, or to
cancel, terminate, or modify, a Material Contract.

     (v) No member of the Company Group has given to, or received from, any Person any notice or
other communication (whether oral or written) regarding any actual, alleged, possible, or potential
material violation or material breach of, or material default under, any Material Contract.

	 	 	 	 	 
	 
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     3.12 Compliance with Laws.

     (i) Except as set forth in Section 3.12(i) of the Disclosure Schedule, each
member of the Company Group is in compliance with all Laws and regulations that are applicable to
it or to the conduct or operation of its business or the ownership or use of any of its assets or
properties, including any PRC governmental claims arising under any applicable PRC Laws or
regulations that may require the registration or licensing of any Intellectual Property but
excluding any third party claims.

     (ii) No event has occurred and no circumstance exists that (with or without notice or lapse of
time) (a) may constitute or result in a violation by any member of the Company Group of, or a
failure on the part of any member of the Company Group to comply with, any Law or regulation
applicable to such member of the Company Group, or (b) may give rise to any obligation on the part
of any member of the Company Group to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature, except for such violations or failures by such member of the Company
Group that, individually or in the aggregate, would not result in any Material Adverse Effect on
such entity.

     (iii) No member of the Company Group has received any written notice from any Governmental
Authority regarding (a) any actual, alleged, possible, or potential material violation of, or
material failure to comply with, any Law, or (b) any actual, alleged, possible, or potential
material obligation on the part of any member of the Company Group to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature.

     (iv) To the best knowledge of the Company, the PRC Companies and the Founder, no member of the
Company Group, nor any shareholder, director, agent, employee or any other person acting for or on
behalf of any member of the Company Group, has directly or indirectly (a) made any contribution,
gift, bribe, payoff, influence payment, kickback, or any other fraudulent payment in any form,
whether in money, property, or services to any Public Official or otherwise (A) to obtain favorable
treatment in securing business for any member of the Company Group, (B) to pay for favorable
treatment for any member of the Company Group for any member of the Company Group for business
secured, or (C) to obtain special concessions or for special concessions already obtained, for or
in respect of the any member of the Company Group, in each case which would have been in violation
of any applicable Law, (b) established or maintained any fund or assets in which any member of the
Company Group shall have proprietary rights that have not been recorded in the books and records of
such Person, or (c) committed any act which violates the Foreign Corrupt Practices Act of the
United States (15 U.S.C. §§ 78dd-1, et seq.), as amended, or any similar statute or law, rule,
regulation, official policy, interpretation or pronouncement of any Governmental Authority.

     (v) All consents, permits, approvals, orders, authorizations or registrations, qualifications,
designations, declarations or filings by or with any Governmental Authority and any third party
which are required to be obtained or made by each Company Group and the Founder in connection with
the consummation of the transactions contemplated hereunder shall have been obtained or made prior
to and be effective as of the Closing.

     3.13 Title; Liens; Permits.

     (i) Each member of the Company Group has good and marketable title to all the tangible
properties and assets reflected in its books and records, whether real, personal, or mixed,
purported to be owned by such Person, free and clear of any Liens, other than

	 	 	 	 	 
	 
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Permitted Liens. With respect to the tangible property and assets it leases, each member of the
Company Group is in compliance in all material respects with such leases and holds a valid
leasehold interest free of any Liens, other than Permitted Liens. Each member of the Company Group
owns or leases all tangible properties and assets necessary to conduct in all material respects its
business and operations as presently conducted.

     (ii) Each member of the Company Group has all material franchises, authorizations, approvals,
permits, certificates and licenses (“Permits”) necessary for its business and operations as now
conducted or planned to be conducted, and believes that each member of the Company Group can
continue to hold such Permits without undue burden or expense, including but not limited to any
special approval or permits required under the Laws of the PRC for the PRC Companies to engage in
its business. No member of the Company Group is in default in any material respect under any such
Permits.

     3.14 Subsidiaries.

     No member of the Company Group owns or Controls, directly or indirectly, any interest in any
other Person and is not a participant in any joint venture, partnership or similar arrangement.
Section 3.14 of the Disclosure Schedule lists each Person (other than a natural
person) that is, directly or indirectly, Controlled by each member of the Company Group.

     3.15 Compliance with Other Instruments.

     (i) No member of the Company Group is in violation, breach or default of its articles of
association. The execution, delivery and performance by the Company Group of and compliance with
each of the Transaction Documents, and the consummation of the transactions contemplated thereby,
will not result in any such violation, breach or default, or be in conflict with or constitute,
with or without the passage of time or the giving of notice or both, a default under (a) the
articles of association of any member of the Company Group, (b) any Material Contract, (c) any
judgment, order, writ or decree, or (d) any applicable Law.

     (ii) The execution and delivery of this Agreement do not, and the performance by the Founder
of the transactions contemplated hereby or thereby will not violate, conflict with, or result in a
violation or breach of, or constitute a default (with or without due notice or lapse of time or
both) under, or give any party the right to terminate or accelerate any obligation under, any of
the terms, conditions, or provisions of any agreement or other instrument or obligation to which
the Founder is a party or by which it may be bound.

     3.16 Related Party Transactions.

     Except as set forth in Section 3.16 of the Disclosure Schedule, no officer or
director of any member of the Company Group or any “affiliate” or “associate” (as those terms are
defined in Rule 405 promulgated under the Securities Act) of any of them (each of the foregoing, a
“Related Party”), has any material agreement, understanding, proposed transaction with, or is
materially indebted to, any member of the Company Group, nor is any member of the Company Group
materially indebted (or committed to make loans or extend or guarantee credit) to any Related Party
(other than for accrued salaries, reimbursable expenses or other standard employee benefits). No
Related Party has any material direct or indirect ownership interest in any firm or corporation
with which any member of the Company Group is affiliated or with which any member of the Company
Group has a business relationship, or any firm or corporation that competes with any member of the
Company Group (except that

	 	 	 	 	 
	 
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Related Parties may own less than 1% of the stock of publicly traded companies that engage in the
foregoing). No Related Party has, either directly or indirectly, a material interest in: (a) any
Person which purchases from or sells, licenses or furnishes to any member of the Company Group any
goods, property, intellectual or other property rights or services; or (b) any Contract to which
any member of the Company Group is a party or by which it may be bound or affected. For purposes of
this Section 3.16 only, the term “material” or “materially” shall mean an obligation or
interest in excess of US$20,000.

     3.17 Intellectual Property Rights.

     (i) Each member of the Company Group owns or otherwise has the right or license to use all
Intellectual Property material to their business as currently conducted without any violation or
infringement of the rights of others, free and clear of all Liens other than Permitted Liens.
Section 3.17(i) of the Disclosure Schedule contains a complete and accurate list of
all Intellectual Property owned, licensed to or used by all members of the Company Group, whether
registered or not, and a complete and accurate list of all licenses granted by any member of the
Company Group to any third party with respect to any Intellectual Property. There is no pending or
threatened, claim or litigation against any member of the Company Group, contesting the right to
use its Intellectual Property, asserting the misuse thereof, or asserting the infringement or other
violation of any Intellectual Property of any third party. All material inventions and material
know-how conceived by employees of each member of the Company Group, including the Founder, and
related to the businesses of such Person were “works for hire,” and all right, title, and interest
therein, including any applications therefore, were transferred and assigned to such member of the
Company Group.

     (ii) No proceedings or claims in which any member of the Company Group alleges that any person
is infringing upon, or otherwise violating, its Intellectual Property rights are pending, and none
has been served, instituted or asserted by a member of the Company Group.

     (iii) To the best knowledge of the Company, the PRC Companies and the Founder, none of the
Senior Managers or employees of any member of the Company Group, or the Founder is obligated under
any Contract (including a Contract of employment), or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or her best efforts to
promote the interests of the Company Group, or that would conflict with the business of any member
of the Company Group as presently conducted. To the best knowledge of the Company, the PRC
Companies and the Founder, it will not be necessary to utilize in the course of the any member of
the Company Group’s business operations any inventions of any of the employees of any member of the
Company Group made prior to their employment by the such member of the Company Group, except for
inventions that have been validly and properly assigned or licensed to such member of the Company
Group as of the date hereof.

     (iv) Each member of the Company Group has taken all security measures that in the judgment of
such Person are commercially prudent in order to protect the secrecy, confidentiality, and value of
its material Intellectual Property.

     (v) No Public Software forms part of the any product or service provided by any member of the
Company Group (“CG Product or Service”) and no Public Software was or is used in connection with
the development of any CG Product or Service or is incorporated

	 	 	 	 	 
	 
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into, in whole or in part, or has been distributed with, in whole or in part, any CG Product or
Service. As used in this Section 3.17(v), “Public Software” means any software that
contains, or is derived in any manner (in whole or in part) from, any software that is distributed
as free software (as defined by the Free Software Foundation), open source software (e.g., Linux or
software distributed under any license approved by the Open Source Initiative as set forth
www.opensource.org) or similar licensing or distribution models which require the distribution or
making available of source code as well as object code of the software to licensees without charge
(except for the cost of the medium) and (b) the right of the licensee to modify the software and
redistribute both the modified and unmodified versions of the software, including software licensed
or distributed under any of the following licenses: (i) GNU’s General Public License (GPL) or
Lesser/Library GPL (LGPL); (ii) the Artistic License (e.g., PERL); (iii) the Mozilla Public
License; (iv) the Netscape Public License; (v) the BSD License; or (vi) the Apache License.

     (vi) Shanghai Nobo has been duly authorized by Glen Dimplex Deutschland GmbH, a German
company, to distribute the Nobo-branded heat pump in the PRC, Taiwan, Korea, Hong Kong and Macao.
Such authorization is legal and valid and the cooperation relationship between Glen Dimplex
Deutschland GmbH and the Company Group is in good condition. Neither the Company Group nor the
Founder has received any notice, in oral or in writing, from Glen Dimplex Deutschland GmbH,
indicating that such authorization and/or the cooperation may be adversely affected for any reason.
To the best knowledge of the Company, the PRC Companies, and the Founder, such authorization is
not likely to be withdrawn for any reason and the Company Group will be able to distribute the
Nobo-branded heat pump of Glen Dimplex Deutschland GmbH in the future.

     3.18 Entire Business.

     There are no material facilities, services, assets or properties shared with any entity other
than the members of the Company Group which are used in connection with the businesses of the
Company Group.

     3.19 Labor Agreements and Actions.

     Except as set forth in Section 3.19 of the Disclosure Schedule, and except as
required by Law, no member of the Company Group is a party to or bound by any currently effective
deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement
agreement or other employee compensation agreement. Each member of the Company Group has complied
in all material respects with all applicable Laws related to employment, and no member of the
Company Group has any union organization activities, threatened or actual strikes or work stoppages
or material grievances. No member of the Company Group is bound by or subject to (and none of their
assets or properties is bound by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union.

     3.20 Specific Events.

     Since the Statement Date, except as set forth in the Financial Statements or in Section
3.20 of the Disclosure Schedule, no member of the Company Group has (a) declared, paid
or committed to pay any dividends or authorized, made or committed to make any distribution upon or
with respect to any of its securities, (b) incurred or committed to incur any indebtedness for
money borrowed in excess of US$20,000 individually or US$50,000 in the

	 	 	 	 	 
	 
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aggregate that is currently outstanding, (c) made or committed to make any loans or advances to any
individual, other than ordinary advances for travel or other bona fide business-related expenses,
or (d) waived or committed to waive any material right of value.

     3.21 Business Plan and Budget.

     The Founder has delivered to the Investor on or before the Closing a business plan and budget
for the PRC Companies for the twelve (12) months following the Closing. Such Business Plan was
prepared in good faith based upon assumptions and projections which the Founder believes are
reasonable and not materially misleading.

     3.22 Disclosure.

     No representation or warranty of the Company, the PRC Companies or the Founder contained in
this Agreement, the Ancillary Agreements, or any certificate furnished or to be furnished to the
Investor at the Closing (when read together) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.

     3.23 Environmental and Safety Laws.

     No member of the Company Group is in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety and no material expenditures are or
will be required in order to comply with any such existing statute, law or regulation.

     3.24 Exempt Offering.

     The offer and sale of the Series A Preferred Shares pursuant to this Agreement are exempt from
the registration requirements of the Securities Act and from the registration or qualification
requirements of any other applicable securities Laws and regulations, and the issuance of Ordinary
Shares issuable upon conversion of the Series A Preferred Shares in accordance with the Memorandum
and Articles and issuance of Series A Preferred Shares upon exercise of any Warrant will be exempt
from such registration or qualification requirements.

     3.25 Representations and Warranties Relating to the Founder.

     Except for those set forth in Section 3.25 of the Disclosure Schedule,

     (i) Except as disclosed in Section 3.25 of the Disclosure Schedule, the
Founder does not presently own or Control, and will not as of the Closing own or Control, directly
or indirectly, any interest in any other corporation, partnership, trust, joint venture,
association, or other entity, except any interest in the Company and/or the PRC Companies.

     (ii) The Founder does not presently and will not as of the Closing own, manage, operate,
finance, join, or Control, or participate in the ownership, management, operation, financing or
Control of, or be associated as a director, senior management, partner, lender, investor or
representative in connection with, any business or corporation, partnership, or organization which
competes with the principal business conducted by the Company Group or with which the Company Group
has a business relationship.

	 	 	 	 	 
	 
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     (iii) The Founder is not aware of any action, suit, proceeding, claim, arbitration or
investigation pending against him in connection with his involvement with any member of the Company
Group. The Founder is not a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality and there is no action,
suit, proceeding, claim, arbitration or investigation which the Founder intends to initiate in
connection with his involvement with any member of the Company Group.

     (iv) Except as disclosed in Section 3.25 of the Disclosure Schedule, the
Founder is currently devoting one hundred percent (100%) of his working time to the conduct of the
business of the Company Group. The Founder is not planning to work less than full time at the
Company Group in the future. The Founder does not, directly or indirectly, own, manage, or is
engaged in, operate, Control, work for, consult with, render services for, do business with,
maintain any interest in (proprietary, financial or otherwise) or participate in the ownership,
management, operation, or Control of, any business, whether in corporate, proprietorship or
partnership form or otherwise, that is related to the business currently conducted by the Company
Group or otherwise competes with the Company Group.

     3.26 Other Representations and Warranties Relating to the PRC Companies.

     (i) Except as disclosed in Section 3.26 (i) of the Disclosure Schedule, the
constitutional documents and certificates and related contracts and agreements of each PRC Company
are valid and have been duly approved or issued (as applicable) by competent PRC authorities.

     (ii) All consents, approvals, authorizations or licenses required under PRC Law for the due
and proper establishment and operation of each PRC Company have been duly obtained from the
relevant PRC authorities and are in full force and effect.

     (iii) The capital and organizational structure of each PRC Company and the conduct by each PRC
Company of its applicable business under such structure is valid and in full compliance with PRC
Laws.

     (iv) All filings and registrations with the PRC authorities required in respect of each PRC
Company and its operations, including but not limited to the filings and registrations with the
Ministry of Commerce, the State Administration of Industry and Commerce, the State Administration
for Foreign Exchange, tax bureaus, customs authorities, and relevant product registration
authorities, have been duly completed in accordance with the relevant rules and regulations of the
PRC.

     (v) Except as disclosed in Section 3.26 (v) of the Disclosure Schedule, the registered
capital of the PRC Subsidiary is fully paid up. The Company legally and beneficially owns 100% of
the equity interest in each PRC Company. There are no outstanding rights, or commitments made by
any of the PRC Companies to sell any of its equity interest.

     (vi) None of the PRC Companies is in receipt of any letter or notice from any relevant
authority notifying revocation of any permits or licenses issued to it for non-compliance or the
need for compliance or remedial actions in respect of the activities carried out directly or
indirectly by it.

	 	 	 	 	 
	 
	 	 	 	Series A Preferred Share Purchase Agreement

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     (vii) Each PRC Company has been conducting and will conduct its business activities within the
permitted scope of business or is otherwise operating its business in full compliance with all
relevant legal requirements and with all requisite licenses, permits and approvals granted by
competent PRC authorities.

     (viii) Each PRC Company has procured all necessary approvals, licenses or permits requisite
for and essential to the conduct of any part of its business and possession of valid title to all
of its material properties and assets in connection with the carrying on of its business, and each
PRC Company has legal and valid title to all of its properties and assets in connection with the
carrying on of its business, in each case, free and clear of all liens, charges, encumbrances,
equities, claims, defects, options and restrictions.

     (ix) Except as disclosed in Section 3.26 (ix) of the Disclosure Schedule, with regard
to employment and staff or labor management, each PRC Company has complied with all applicable PRC
Laws and regulations in all respects, including without limitation, laws and regulations pertaining
to welfare funds, social benefits, medical benefits, insurance, retirement benefits, and pensions.

     (x) The Company’s acquisition of 100% equity interest in Shanghai Nobo in April 2008 does not
conflict with any PRC Law, including without limitation the Regulations on Merger and Acquisitions
of Domestic Enterprise by Foreign Investors issued by six PRC regulatory agencies on August 8,
2006. The final ownership structure and the conduct of business as contemplated under the
Agreement do not conflict with any PRC Law.

     (xi) The Company’s acquisition of 100% equity interest in Jiangxi Nobao is in compliance with
any PRC Law.

	4	 	Representations and Warranties of the Investor.

     The Investor hereby represents and warrants to the Company and the Founder that the statements
contained in this Section 4 with respect to the Investor are correct and complete as of the
date of this Agreement and on and as of the date of the Closing with the same effect as if made on
and as of the date of the Closing.

     (i) The Investor is an entity duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its formation.

     (ii) The Investor has all requisite legal and corporate power and authority, and has taken all
corporate action necessary to properly and legally authorize, execute and deliver this Agreement
and each of the Ancillary Agreements to which it is a party, and to carry out its respective
obligations hereunder and thereunder, and this Agreement and each of the Ancillary Agreements to
which it is a party, when executed and delivered by the Investor, will constitute valid and legally
binding obligations of the Investor, enforceable against it in accordance with their respective
terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as
limited by Laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies.

     (iii) The Series A Preferred Shares will be acquired or accepted for investment purposes for
the Investor’s own accounts, not as a nominee or agent. By executing this Agreement, the Investor
further represents that its has not been organized for the purpose of

	 	 	 	 	 
	 
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acquiring the Series A Preferred Shares.

     (iv) The Investor understands and acknowledges that the offering of the Series A Preferred
Shares will not be registered or qualified under the Securities Act, or any applicable securities
Laws on the grounds that the offering and sale of securities contemplated by this Agreement and the
issuance of securities hereunder is exempt from registration or qualification, and that the
Company’s reliance upon these exemptions is predicated upon the Investor’s representations in this
Agreement. The Investor further understands that no public market now exists for any of the
securities issued by the Company and the Company has given no assurances that a public market will
ever exist for the Company’s securities.

     (v) The Investor is an “accredited investor” within the meaning of Securities and Exchange
Commission (“SEC”) Rule 501 of Regulation D, as presently in effect, under the Securities Act.

     (vi) The Investor understands that the Series A Preferred Shares are characterized as
“restricted securities” under U.S. federal securities Laws as they are being acquired from the
Company in a transaction not involving a public offering and that under such Laws and applicable
regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances. The Investor understands that the Series A Preferred Shares have
not been qualified or registered under the Laws of any other jurisdiction and therefore may be
viewed as restricted securities under any or all of such other applicable securities Laws.

     (vii) The Investor understands that the certificates evidencing the Series A Preferred Shares
may bear the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.”

     (viii) The Investor shall not appoint to the board of directors of any member of the Company
Group any individual who is concurrently serving on the board of directors of any entity that is
competing with any member of the Company Group.

	5	 	Conditions of the Investor’s Obligations at Closing.

     The obligations of the Investor under Sections 2 of this Agreement, unless otherwise
waived in writing by the Investor, are subject to the fulfillment of each of the following
conditions on or before the Closing:

     5.1 Representations and Warranties.

     Except as set forth in the Disclosure Schedules, the representations and warranties of
the Company, the PRC Companies and the Founder contained in Sections 3 shall be true and
correct in all material respects when made, and shall be true and correct in all material

	 	 	 	 	 
	 
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respects on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing Date, except in either case for those
representations and warranties (i) that already contain any materiality qualification, which
representations and warranties, to the extent already so qualified, shall instead be true and
correct in all respects as so qualified as of such respective dates and (ii) that address matters
only as of a particular date, which representations will have been true and correct in all material
respects (subject to clause (i)) as of such particular date.

     5.2 Performance.

     Each member of the Company Group and the Founder shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.

     5.3 Authorizations.

     Each member of the Company Group and the Founder shall have obtained all authorizations,
approvals, waivers or permits of any Person or any Governmental Authority necessary for the
consummation of all of the transactions contemplated by this Agreement and other Transaction
Documents, including without limitation any authorizations, approvals, waivers or permits that are
required in connection with the lawful issuance of the Series A Preferred Shares, and all such
authorizations, approvals, waivers and permits shall be effective as of the Closing. The Investor
shall have received approval and authorization by its investment committee (or other similar
governing body) for the transactions contemplated hereunder.

     5.4 Closing Certificate.

     The Founder, the Company and each of the PRC Companies shall have executed and delivered to
the Investor at the Closing a certificate (i) stating that the conditions specified hereto have
been fulfilled, and (ii) attaching thereto (A) the Memorandum and Articles as then in effect, and
(B) copies of all resolutions of the Company’s shareholder and director approving the transactions
contemplated hereby.

     5.5 Proceedings and Documents.

     All corporate and other proceedings in connection with the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in form and substance
to the Investor, and the Investor shall have received all such counterpart original or other copies
of such documents as it may reasonably request.

     5.6 Memorandum and Articles.

     The Memorandum and Articles shall have been duly amended by all necessary action of the Board
of Directors and/or the members of the Company, as set forth in the
form attached hereto as Exhibit
B, and such amendment shall have been duly filed with the Companies Registry of Hong Kong.

     5.7 Shareholders Agreement.

     The Company, the PRC Companies and the Founder shall have executed and

	 	 	 	 	 
	 
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delivered to the Investor a Shareholders Agreement in the form attached hereto as Exhibit
C-1.

     5.8 Right of First Refusal and Co-Sale Agreement.

     The Company, the PRC Companies and the Founder shall have executed and delivered to the
Investor the Right of First Refusal and Co-Sale Agreement in the form attached hereto as
Exhibit C-2.

     5.9 Warrants.

     The Company shall have executed and delivered to the Investor the Warrants in the form
attached hereto as Exhibit G-1 and Exhibit G-2.

     5.10 Completion of Due Diligence.

     The Investor shall have satisfactorily completed their business, financial, tax, technical and
legal due diligence review.

     5.11 Register of Members.

     The Investor shall have received a copy of the Company’s register of members, certified by a
director of the Company as true and complete as of the date of the Closing, updated to show the
Investor as the holder of its relevant number of the Series A Preferred Shares as of the Closing.

     5.12 Indemnification Agreement.

     The Company shall have entered into an indemnification agreement substantially in the form
attached hereto as Exhibit F with the director appointed by the Investor.

     5.13 Board of Directors.

     At the Closing, the Board of Directors of the Company shall consist of persons elected or
appointed in accordance with the Shareholder Agreement and Memorandum and Articles, and the
appointment of director by the Investor shall have been filed with the Companies Registry of Hong
Kong.

     5.14 Delivery of Legal Opinions.

     The Company shall have delivered or caused to be delivered each of the legal opinions issued
by the Hong Kong legal counsel and the PRC legal counsel of the Company, dated as of the Closing
Date, in form and substance satisfactory to the Investor.

     5.15 Completion of Environmental Compliance Review.

     The Investor shall have completed its environmental, health, safety and social compliance
review, with respect to each member of the Company Group.

     5.16 Employment Agreement.

	 	 	Each of the Senior Managers of each member of the Company Group has entered into

	 	 	 	 	 
	 
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an Employment Agreement, a Confidentiality, Non-competition Agreement and Invention Assignment
Agreement, in form and substance satisfactory to the Investor. Each employee of the Company Group
shall have entered into a formal written Employment Agreement in form and substance satisfactory to
the Investor.

     5.17 Execution of Asset Transfer Agreement.

     Shanghai Nobo shall have entered into an agreement with Shanghai Nuoxin to transfer its assets
(as listed in Exhibit H hereto, including without limitation all of its business contracts
entered into with its suppliers/customers) to Shanghai Nuoxin in form and substance satisfactory to
the Investor (the “Asset Transfer Agreement”).

     5.18 Land Use Right of Jiangxi Nobao.

     With regard to the New Land, Jiangxi Nobao shall have entered into a land use right granting
agreement with responsible Governmental Authority governing land use right and fully paid the
respective land use right granting fee and other necessary fees and taxes.

     5.19 Social Insurance Payment of Jiangxi Nobao.

     Jiangxi Nobao shall have obtained the Social Insurance Registration Certificate.

     5.20 Capital Contribution to Shanghai Nuoxin.

     The Company shall have made the capital contributions to Shanghai Nuoxin in accordance with
its articles of association, or shall have obtained an approval from the Government Authority
approving capital contribution extension.

     5.21 Capital Contribution to Jiangxi Nobao.

     The Company shall have obtained an approval from the Government Authority, satisfactory to the
Investor, approving extension of capital contributions to Jiangxi Nobao.

     5.22 Loan Legal Opinion.

     The Investor shall have received the original legal opinion dated March 12, 2009 from Cheung &
Liu, Solicitors regarding the Promissory Note.

     5.23 Delivery of 2008 Audit Report.

     The audited consolidated financial statements of the Company for the fiscal year ending
December 31, 2008 prepared by PricewaterhouseCoopers shall have been delivered to the Investor.

	6	 	Conditions of the Company’s Obligations at Closing.

     6.1 Representations and Warranties.

     The obligations of the Company, the PRC Companies and the Founder as of the Closing under this
Agreement, unless otherwise waived in writing by them, are subject to the condition that the
representations and warranties of the Investor contained in Section 4 shall be true and
correct in all material respects when made, and shall be true and correct in all

	 	 	 	 	 
	 
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material respects on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.

     6.2 Payment of Subscription Price.

     The obligations of the Company, the PRC Companies and the Founder as of the Closing under this
Agreement, unless otherwise waived in writing by them, are subject to the condition that the
Investor shall be obligated to pay, via wire transfer, as the case may be, the Subscription Price
according to the provisions Section 2.3(i).

     6.3 Memorandum and Articles.

     The Memorandum and Articles shall have been duly amended by all necessary action of the Board
of Directors and/or the members of the Company.

     6.4 Execution of the Agreement and the Shareholders Agreement.

     The Investor shall have executed and delivered to the Company and the Founder this Agreement
and the Shareholders Agreement in the form attached hereto as Exhibit C-1.

     6.5 Right of First Refusal and Co-Sale Agreement.

     The Investor shall have executed and delivered to the Company the Right of First Refusal and
Co-Sale Agreement in the form attached hereto as Exhibit C-2.

     6.6 Warrants.

     The Investor shall have executed and delivered to the Company the Warrants in the form
attached hereto as Exhibit G-1 and Exhibit G-2.

	7	 	Confidentiality.

     7.1 Disclosure of Terms.

     The terms and conditions of this Agreement, any term sheet or memorandum of understanding
entered into pursuant to the transactions contemplated hereby, all exhibits and schedules attached
hereto and thereto, and the transactions contemplated hereby and thereby (collectively, the
“Financing Terms”), including their existence, shall be considered confidential information and
shall not be disclosed by any Party hereto to any third party except as permitted in accordance
with the provisions set forth below.

     7.2 Permitted Disclosures.

     Notwithstanding the foregoing, the Company may disclose (i) the existence of the investment to
its bona fide prospective investors, employees, bankers, lenders, accountants, legal counsels and
business partners, or to any person or entity to which disclosure is approved in writing by the
Investor and (ii) only after the Closing, the Financing Terms to its current investors, employees,
bankers, lenders, accountants and legal counsels, in each case only where such persons or entities
are under strict nondisclosure obligations substantially similar to those set forth in this
Section 7.2, or to any person or entity to which disclosure is approved in writing by the
Investor. The Investor may disclose (i) the existence of the investment and the Financing Terms to
any partner, limited partner, former partner, potential

	 	 	 	 	 
	 
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partner or potential limited partner of the Investor or other third parties and (ii) the fact of
the investment to the public, in each case as it deems appropriate in its sole discretion. Any
Party hereto may also provide disclosure in order to comply with applicable Laws, as set forth in
Section 7.3 below.

     7.3 Legally Compelled Disclosure.

     In the event that any Party is requested or becomes legally compelled (including without
limitation, pursuant to any applicable tax, securities, or other Laws and regulations of any
jurisdiction) to disclose the existence of this Agreement or content of any of the Financing Terms,
such Party (the “Disclosing Party”) shall provide the other Parties with prompt written notice of
that fact and shall consult with the other Parties regarding such disclosure. At the request of
another Party, the Disclosing Party shall, to the extent reasonably possible and with the
cooperation and reasonable efforts of the other Parties, seek a protective order, confidential
treatment or other appropriate remedy. In any event, the Disclosing Party shall furnish only that
portion of the information that is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such information.

     7.4 Other Exceptions.

     Notwithstanding any other provision of this Section 7, the confidentiality obligations
of the Parties shall not apply to: (a) information which a restricted Party learns from a third
party having the right to make the disclosure, provided the restricted Party complies with any
restrictions imposed by the third party; (b) information which is rightfully in the restricted
Party’s possession prior to the time of disclosure by the protected Party and not acquired by the
restricted Party under a confidentiality obligation; or (c) information which enters the public
domain without breach of confidentiality by the restricted Party.

     7.5 Press Releases, Etc.

     No announcements regarding the Investor’s investment in the Company may be made by any Party
hereto in any press conference, professional or trade publication, marketing materials or otherwise
to the public without the prior written consent of the Investor and the Company, provided,
that any such announcement made by any partner, limited partner, bona fide potential partner or
bona fide potential limited partner of the Investor shall not be subject to the consent of the
Company.

     7.6 Other Information.

     The provisions of this Section 7 shall terminate and supersede the provisions of any
separate nondisclosure agreement executed by any of the Parties with respect to the transactions
contemplated hereby.

     7.7 Notices.

     All notices required under this Section 7 shall be made pursuant to Section
9.7 of this Agreement.

	8	 	Undertakings.

     After the Execution Date or the Closing Date (as the case may be), the Company

	 	 	 	 	 
	 
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(with respect to itself and each Company Group), each PRC Company (with respect to itself) and the
Investor agree as follows:

     8.1 Use of Proceeds from the Sale of Series A Preferred Shares.

     The proceeds from the sale of the Series A Preferred Shares shall be used for the business
expansion, capital expenditures, general working capital in the principal business of the Company
Group, and repayment of a shareholder loan of USD500,000 to the Founder by the Company. Such
proceeds may not be used for repaying any shareholder loan, or purchasing shares of other listed
companies or corporate bonds or any other negotiable securities.

     8.2 Exclusivity.

     From the Execution Date until the earlier date of the following dates: (a) a date that is five
(5) Business Days after the satisfaction or waiver of each condition to the Closing set forth in
Section 5 and Section 6 (other than conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), and (b)
the date of the termination of this Agreement pursuant to Section 2.4, the Company, the Founder,
and the Company shall cause each of the PRC Companies to, agree not to (i) discuss the sale of any
Ordinary Shares or Convertible Securities of the Company with any third party, or (ii) to provide
any information with respect to the Company to a third party in connection with a potential
investment by such third party in the Ordinary Shares or Convertible Securities of the Company, or
(iii) to close any equity financing transaction of the Ordinary Shares or Convertible Securities of
the Company with any third party. This Section 8.2 shall terminate and be of no further
force and effect immediately following the Closing Date.

     8.3 Compliance by Shareholders.

     The Founder shall, at his own expenses, fully comply with all applicable PRC Laws and
regulations and the requirements of the PRC Governmental Authorities with respect to his direct and
indirect holding of equity securities in the PRC Companies, if necessary, on a continuing basis
(including, but not limited to, all obligations imposed and all consents, approvals, registrations
and permits required by the SAFE and by other PRC Governmental Authorities or under other
applicable PRC Laws and regulations in connection therewith), and Foreign Corrupt Practices Act of
the United States (15 U.S.C. §§ 78dd-1, et seq.), as amended, or any similar statute or Law, rule,
regulation, official policy, interpretation or pronouncement of any Governmental Authority,
including without limitation any transfer of his direct and indirect holding of equity securities
in the Company to any third party.

     8.4 Compliance by Company Group.

     Each member of the Company Group shall, at its own expenses, fully comply with all applicable
Laws and regulations of the jurisdiction of its incorporation as well as all requirements of the
competent Government Authorities with respect to their conducting of business, on a continuing
basis, and Foreign Corrupt Practices Act of the United States (15 U.S.C. §§ 78dd-1, et seq.), as
amended, or any similar statute or Law, rule, regulation, official policy, interpretation or
pronouncement of any Governmental Authority.

     8.5 Additional Covenants.

	 	 	 	 	 
	 
	 	 	 	Series A Preferred Share Purchase Agreement

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     Except as required by this Agreement, no resolution of the directors, owners, members,
partners or shareholders of any member of the Company Group shall be passed, including resolutions
in connection with declaration or distribution of dividends, nor shall any contract or commitment
be entered into, in each case, prior to the Closing without the prior written consent of the
Investor, which consent may not be unreasonably withheld, delayed or conditioned, except that the
Company Group may carry on its business in the same manner as heretofore and may pass resolutions
and enter into contracts for so long as they are effected in the ordinary course of business. No
declaration or distribution of dividends by any Company Group shall be made prior to the Closing
without the prior written consent of the Investor. If any member of Company Group has distributed
any dividends or profits to its shareholders, such distributed amounts shall be excluded when
calculating the Company’s post money valuation.

     8.6 Founder Shares Lock-up.

     Any Ordinary Shares directly or indirectly held by the Founder shall not be transferable
except as provided in the Shareholders Agreement and the Right of First Refusal and Co-Sale
Agreement.

     8.7 Composition of the Board of the Company Group.

     Within one (1) month after the Closing, the board of directors of each PRC Companies shall be
re-constituted in accordance with the Shareholders Agreement and the Memorandum and Articles.

     8.8 Environmental Management System.

     Within one (1) month after the Closing, each member of the Company Group shall establish and
adopt an appropriate Environmental Management System (the “EMS”), satisfactory to the Investor,
comprising:

	 	(i)	 	EMS Policy. As part of the process of establishing an EMS, each member of the
Company Group shall prepare and adopt a set of environmental and social safeguard policies to
ensure compliance by each Company Group with all Applicable Environmental & Social
Requirements.

	 	(ii)	 	EMS procedures. Each member of the Company Group shall:

	 	(a)	 	permit representatives of the Investor or its designated entities to visit the
premises where the business of each Company Group is conducted, and to have access to
books of account and records of each member of Company Group, for the purpose of
confirming compliance with Applicable Environmental & Social Requirements, provided
that such visitation and access is (i) upon reasonable advance notice and
during normal business hours, (ii) does not unreasonably interfere with the
operations of each member of Company Group, and (iii) does not impose any
material expense or burden on each member of Company Group, while the Company shall
bear all fees and expenses in connection with such social and environment audit and
delivery of the auditing report, provided that the auditing team of no more than three
(3) persons; two half-yearly social and environmental audits will be conducted during
the

	 	 	 	 	 
	 
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	 	 	 	first year after the Closing. Social and environmental audits and selected site
inspections will be requested annually by the Investor, and the Company shall
bear all fees and expenses in connection with such social and environment audit
and delivery of the auditing report, provided that the auditing team of no more
than three (3) persons;
	 
	 	(b)	 	continue (1) to comply with all Applicable Environmental & Social
Requirements, and (2) not to engage in any Prohibited Activity;
	 
	 	(c)	 	as promptly as possible after becoming aware of any activity by any member of
Company Group which does not comply with Applicable Environmental and Social
Requirements, or which is classified as a Prohibited Activity, shall use its best
efforts to implement a Corrective Action Plan. In the event that any member of the
Company Group does not implement and adhere to the Corrective Action Plan in all
material respects, the Investor shall have the option upon written notice to such
member of Company Group to require that the Investor’s investment in the Company Group
be liquidated as soon as possible, but in any event within one hundred and eighty
(180) days after such notice, and the proceeds thereof distributed to the Investor
less the reasonable cost of such liquidation; and
	 
	 	(d)	 	as promptly as possible, but in any event not more than sixty (60) days after the
close of each fiscal year, furnish the Investor with an Environmental Performance
Report in a form designed by the Investor.

     8.9 Transfer of Assets.

     Transactions contemplated by the Asset Transfer Agreement shall be completed by the end of
December 31, 2009, and relevant certificates or receipts satisfactory to the Investor evidencing
completion of such transfer shall be provided to the Investor.

     8.10 Termination of Jiangxi Nobao Loan Agreement.

     Within three (3) months after the Closing, Jiangxi Nobao shall (i) enter into an agreement
with Gong Qing Cheng Finance Management Investment Co, Ltd. , in form and
substance satisfactory to the Investor, to terminate the Jiangxi Nobao Loan Agreement; (ii) repay
the outstanding amounts under the Jiangxi Nobao Loan Agreement to Gong Qing Cheng Finance
Management Investment Co, Ltd. ; and (iii) release the land use right
mortgage under the Jiangxi Nobao Loan Agreement satisfactory to the Investor.

     8.11 Capital Contribution to Jiangxi Nobao.

     The Company shall make the full capital contributions to Jiangxi Nobao in accordance with its
articles of association no later than May 30, 2010.

     8.12 Amendments to the Articles of Association of the PRC Companies.

     The Articles of Association of each of the PRC Companies shall be amended satisfactory to the
Investor, and such amendment shall be approved by the original approval

	 	 	 	 	 
	 
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authority of each PRC Company and duly registered with the relevant Administration for Industry and
Commerce within three (3) months after the Closing.

     8.13 Change of Registered Address.

     The registered address of Jiangxi Nobao shall be changed to the address of its current actual
working office, which changes shall be registered with the relevant local branch of the State
Administration of Industry and Commerce within three (3) months after the Closing.

     8.14 Appointment of Management Personnel.

     The Company shall hire a financial controller, human resources director, vice president on
operation, vice president responsible for Environmental and Social Requirements, and a general
manager of Jiangxi Nobao selected and approved jointly by the Investor and the Company within three
(3) months after the Closing.

     8.15 ESOP.

     Within three (3) months after the Closing, the Company shall adopt an employee stock option
plan for the issuances of Ordinary Shares representing 2.5% of the share capital of the Company
after the Closing on a fully-diluted basis to selected members of the Company’s directors,
consultants and employees; provided, that the terms of the ESOP shall be approved by the
Board and shall be acceptable to the Investor in its discretion. Option granted in accordance with
the ESOP may be exercised, in whole or in part, in accordance with the following schedule: 25% of
the Ordinary Shares subject to the option shall vest on the first anniversary after the vesting
commencement date, with remaining portions vesting monthly over next 36 months on a pro rata basis.

     8.16 Environmental Effect Evaluation Report.

     Within three (3) months after the Closing, the Company shall deliver an environmental effect
evaluation report with regard to the ongoing or completed constructions on the Old Land, in form
and substance satisfactory to the Investor.

     8.17 Social Security Payment.

     Each of the PRC Company shall make all due and payable statutory social insurance and housing
funds for all of its employees in accordance with the PRC Law after the Closing, and Jiangxi Nobao
shall provide a social security payment receipt for June 2009 to the Investor no later than July
31, 2009.

     8.18 Adjustment of Corporate Structure.

     Upon requested by the Investor, each of the Founder and Company Group shall adjust the
corporate structure of the Company Group to achieve the change of potential listing vehicle from
the Company to another company (including without limitation a company incorporated and existing
under the Law of the Cayman Islands), satisfactory to the Investor.

     8.19 Land Use Right of Jiangxi Nobao.

	 	 	 	 	 
	 
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     (i) With regard to the Old Land, Jiangxi Nobao shall fully pay the land use right granting fee
in accordance with the Old Land Use Right Granting Contract and the Old Supplemental Land Use Right
Granting Contract within three (3) months after the Closing.

     (ii) With regard to the New Land, Jiangxi Nobal shall procure the land use right certificate
within three (3) months after the Closing.

	9	 	Miscellaneous.

     9.1 Survival of Representations and Warranties.

     The representations and warranties set forth under Sections 3 and any covenants of the
Company, the PRC Companies and the Founder contained in or made pursuant to this Agreement shall
survive for a period of three (3) years from the Closing, and such warranties, representations and
covenants shall in no way be affected by any investigation of the subject matter thereof made by or
on behalf of the Company. For avoidance of doubt, the representations and warranties of the
Company, the PRC Companies and the Founder in Section 3 are made on and as of the Execution
Date and on and as of the Closing Date, unless otherwise stated therein.

     9.2 Successors and Assigns.

     Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the Parties whose
rights or obligations hereunder are affected by such terms and conditions. This Agreement, and the
rights and obligations hereunder, shall not be assigned without the mutual written consent of the
Parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any party
other than the Parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.

     9.3 Indemnity.

     (i) The Company and the Founder shall, jointly and severally, indemnify the Investor for any
losses, liabilities, damages, liens, penalties, costs and expenses, including reasonable advisor’s
fees and other reasonable expenses of investigation and defense of any of the foregoing, incurred
by the Investor as a result of any breach or violation of any representation or warranty made by
the Company or the Founder, or any breach by the Company or the Founder of any covenant or
agreement contained herein or in any of the other Transaction Documents (the “Indemnifiable
Event”), and each PRC Company hereby indemnifies the Investor for any losses, liabilities, damages,
liens, penalties, costs and expenses, including reasonable advisor’s fees and other reasonable
expenses of investigation and defense of any of the foregoing, incurred by the Investor as a result
of any Indemnifiable Event of the relevant PRC Company (an “Indemnifiable Loss”). For the purpose
of this Section 9.3, each of the Company, the Founder and the PRC Companies shall be
referred to as an “Indemnitor”. If the Investor believes that it has a claim that may give rise to
an indemnity obligation hereunder, it shall give prompt notice thereof to the Company, the Founder
and/or the relevant PRC Companies (as the case may be) stating specifically the basis on which such
claim is being made, the material facts related thereto, and the amount of the claim asserted;
provided that in any event any such notice with respect to the breach of any covenant shall
be given on a timely basis. No such claim shall be settled or resolved

	 	 	 	 	 
	 
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without the consent of the Company, the Founder and/or the relevant PRC Companies (as the case may
be), except that any dispute related thereto will be resolved pursuant to Section 9.13.

     The Founder’s indemnity obligations that are determined to arise hereunder may be satisfied by
the Founder by remittance of immediately available funds to the Investor. However, if the Founder
is unable to satisfy its indemnity obligations within sixty (60) days of delivery of the notice
provided by the Investor, then such indemnity obligations shall, at the election of the Investor,
be satisfied with the Ordinary Shares held (either directly or indirectly) or acquired after the
date hereof by the Founder (with each such share valued at the greater of (i) the price paid for
each Series A Preferred Share hereunder (as adjusted for share splits, combinations,
recapitalizations, reclassifications and similar transactions) and (ii) the fair market value of
such Ordinary Share determined pursuant to Section 9.3(iv).

     (ii) Notwithstanding the foregoing, the PRC Companies and the Founder shall, jointly and
severally, indemnify and keep indemnified the Investor at all times and hold the Investor harmless
against any claim for tax which has been made or may hereafter be made against the PRC Companies
wholly or partly in respect of or in consequence of any event occurring or any income, profits or
gains earned, accrued or received by the PRC Companies on or before the Closing and any reasonable
costs, fees or expenses incurred and other liabilities which the PRC Companies may properly incur
in connection with the investigation, assessment or the contesting of any claim, the settlement of
any claim for tax, any legal proceedings in which the PRC Companies claim in respect of the claim
for tax and in which an arbitration award or judgment is given for the PRC Companies and the
enforcement of any such arbitration award or judgment whether or not such tax is chargeable against
or attributable to any other person, provided, however, that the PRC Companies and the
Founder shall be under no liability in respect of taxation:

	 	(a)	 	to the extent that provision, reserve or allowance has been made for such tax in
the audited consolidated financial statement of the Company, or to the extent that
such liability for tax has been discharged by the PRC Companies;
	 
	 	(b)	 	if it has arisen in and relates to the ordinary course of business of the PRC
Companies since the Statement Date;
	 
	 	(c)	 	to the extent that the liability arises as a result only of a provision or reserve
in respect of the liability made in the Financial Statements being insufficient by
reason of any increase in rates of tax announced after the Closing with retrospective
effect;
	 
	 	(d)	 	to the extent that the liability arises as a result of legislation which comes
into force after the Closing and which is retrospective in effect;
	 
	 	(e)	 	to the extent that the liability would not have arisen but for a voluntary act,
omission or transaction after the Closing on the part of the PRC
Companies which could reasonably have been avoided or carried out and which was
not in the ordinary course of business; and
	 
	 	(f)	 	if such claim is settled or resolved without the consent of the Company, except
that any dispute related thereto will be resolved pursuant to Section 9.13.

	 	 	 	 	 
	 
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     Any of the Founder’s indemnity obligations that are determined to arise hereunder shall be
satisfied by remittance of immediately available funds to the Investor. However, if the Founder is
unable to satisfy his indemnity obligations hereunder within sixty (60) days of delivery of the
notice provided by the Investor, then such indemnity obligations shall, at the election of the
Investor, be satisfied solely with, and recourse will be limited solely to, the Ordinary Shares
held (either directly or indirectly) by the Founder (with each such share valued at the greater of
(i) the price paid for each Series A Preferred Share hereunder (as adjusted for share splits,
combinations, recapitalizations, reclassifications and similar transactions) and (ii) the fair
market value of such Ordinary Share (determined pursuant to Section 9.3(iv) if the parties
to such dispute cannot agree).

     (iii) In the event that the Investor suffers an Indemnifiable Loss as provided in Section
9.3(i) and the Founder and/or the PRC Companies fail to fulfill their obligations under
Section 9.3(i) to indemnify the Investor for the full amount of such Indemnifiable Loss
within ninety (90) days of receipt of written notice thereof from the Investor, then the Company
shall indemnify the Investor for the full amount of such Indemnifiable Loss as though an
Indemnitor. Any indemnification provided by the Company pursuant to this Section 9.3(iii)
shall not prejudice or otherwise affect the right of the Investor to seek indemnification from the
Founder and the PRC Companies under Section 9.3; provided, however, that to
the extent the Investor is able to recover any Indemnifiable Loss from the Founder and/or the PRC
Companies, the Company shall not be obligated to indemnify the Investor with respect to such
amount.

     (iv) The value of the Ordinary Shares to be delivered in satisfaction of the Founder’s
indemnity obligation under Section 9.3(i) shall be determined in good faith by the Board.
The Founder or the Investor shall have the right to challenge any determination by the Board of
fair market value pursuant to Section 9.3(iv), in which case the determination of fair
market value shall be made by an independent appraiser selected jointly by the Board and the
challenging Party. Should the market value made by an independent appraiser differ from that made
by the Board, the market value made by an independent appraiser shall form the value of the
Ordinary Share. The cost of such appraisal shall be borne by the Founder if the independent
appraiser determines that the fair market value of the Ordinary Shares is less than that determined
by the Board by a factor of more than 5%. The cost of such appraisal shall be borne by the Company
if the independent appraiser determines that the fair market value of the Ordinary Shares is equal
to at least 95% of the fair market value determined by the Board.

     (v) Notwithstanding any other provision contained herein, this Section 9.3 shall be
the sole and exclusive remedy of the Investor for any claim against the Founder, the PRC Companies
or the Company of a breach of any representation, warranty or covenant, other than with respect to
Indemnifiable Loss arising due to the fraud or willful misconduct of an Indemnitor.

     (vi) The Founder shall solely indemnify the Company Group against any losses incurred , either
before or after the Closing, in connection with or arising out of any of the following events
(including without limitation any losses in connection with or arising out of any government
punishment and/or any depreciation of the equity interest of the Company), which are existing prior
to the Execution Date. The Founder’s indemnification obligations shall be satisfied in accordance
with the mechanism set out in this Section 9.3.

	 	 	 	 	 
	 
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	 	(a)	 	status of Shanghai Nobo as a limited liability company, which is duly
organized, validly existing and in good standing under the Laws of PRC since its
establishment;
	 
	 	(b)	 	acquisition of 100% equity interest of Shanghai Nobo by the Company from Guo
Wei and Sang Jin Lai in March 2008;
	 
	 	(c)	 	delayed capital contribution to the registered capital of Jiangxi Nobao by the
Company;
	 
	 	(d)	 	adoption of the current effective Articles of Association of Jiangxi Nobao by
the Company;
	 
	 	(e)	 	Jiangxi Nobao Loan Agreement and the transactions contemplated therein;
	 
	 	(f)	 	Jiangxi Nobao’s acquisition of land use right to the land at No. 1 Dong Cheng
Road of Gong Qing Cheng 
	 
	 	(g)	 	Jiangxi Nobao’s failure (1) to enter into employment contract with its
employees, (2) to obtain the Social Insurance Registration Certificate and Housing
Fund Registration Certificate, or (3) to pay any statutory social insurance and
housing fund for its employees; or
	 
	 	(h)	 	delayed capital contribution to the registered capital of  Shanghai Nuoxin
by the Company.
	 
	 	(i)	 	acquisition of 100% equity interest of Jiangxi Nobao by the Company, and
required tax payment in connection with or arising out of the transfer price paid
to Bright Praise Holdings Limited by the Company.

     9.4 Governing Law.

     This Agreement shall be governed by and construed in accordance with the Laws of Hong Kong as
to matters within the scope thereof and without regard to its principles of conflicts of laws.

     9.5 Counterparts.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Facsimile and
e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of
this Agreement.

     9.6 Titles and Subtitles.

     The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

     9.7 Notices.

     Any notice required or permitted pursuant to this Agreement shall be given in writing

Series A Preferred Share Purchase Agreement

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and shall be given either personally or by sending it by next-day or second-day courier service,
fax, electronic mail or similar means to the address as shown below the signature of such Party on
the signature page of this Agreement (or at such other address as such Party may designate by
fifteen (15) days’ advance written notice to the other Parties given in accordance with this
Section 9.7). Where a notice is sent by next-day or second-day courier service, service of the
notice shall be deemed to be effected by properly addressing, prepaying and sending by next-day or
second-day service through an internationally-recognized courier a letter containing the notice,
with a confirmation of delivery, and by two (2) days having passed after the letter containing the
same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice
shall be deemed to be effected on the same day on which it is properly addressed and sent through a
transmitting organization with a reasonable confirmation of delivery.

     9.8 Finder’s Fee.

     Each Party agrees to indemnify and to hold harmless the other from any liability for any
broker, finder or similar fee or commission (and the reasonable costs and expenses of defending
against such liability or asserted liability) incurred by such Party in connection with the
transactions contemplated hereunder. Any broker, finder or similar fee owing by the Company shall
be disclosed to the Investor prior to Closing.

     9.9 Administrative Fees and Other Expenses.

     Subject to this Section 9.9, the Company shall pay all of its own costs and expenses incurred
in connection with the negotiation, execution, delivery and performance of this Agreement and other
Transaction Documents and the transactions contemplated hereby and thereby. The Company shall
reimburse the Investor at the Closing up to US$130,000 of their legal, financial, administrative
and other expenses incurred in connection with the negotiation, execution, delivery and performance
of this Agreement and the Ancillary Agreements (the “Investor Expenses”), which payment shall be
made directly to the legal or financial service provider at the Closing if so requested by the
Investor. In the event that the investment transaction does not proceed and this Agreement is
terminated, each Party shall be responsible for its own costs and expenses, provided, however, that
the Company shall pay all reasonable costs and expenses incurred by the Investor if the discussion
in connection with transaction contemplated by this Agreement is terminated by any member of
Company Group or the Founder.

     9.10 Amendments and Waivers.

     Any term of this Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Parties hereto. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.

     9.11 Severability.

     If one or more provisions of this Agreement are held to be unenforceable under applicable Law,
such provision shall be excluded from this Agreement and the balance of the

Series A Preferred Share Purchase Agreement

32

 

Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

     9.12 Entire Agreement.

     This Agreement and the documents referred to herein, together with all schedules and exhibits
hereto and thereto, constitute the entire agreement among the Parties and no Party shall be liable
or bound to any other Party in any manner by any warranties, representations, or covenants except
as specifically set forth herein or therein. For the avoidance of doubt, this Agreement shall be
deemed to terminate and supersede the provisions of any confidentiality and nondisclosure
agreements executed by the Parties prior to the date of this Agreement, none of which agreements
shall continue.

     9.13 Dispute Resolution.

     (i) Any dispute, controversy or claim arising out of or relating to this Agreement, or the
interpretation, breach, termination or validity hereof, shall first be subject to resolution
through consultation of the parties to such dispute, controversy or claim. Such consultation shall
begin within seven (7) days after one Party hereto has delivered to the other Parties involved a
written request for such consultation. If within thirty (30) days following the commencement of
such consultation the dispute cannot be resolved, the dispute shall be submitted to arbitration
upon the request of any Party with notice to the other Parties.

     (ii) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”). There shall be three arbitrators. The complainant
and the respondent to such dispute shall each select one arbitrator within thirty (30) days after
giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed list. The Chairman of the HKIAC
shall select the third arbitrator, who shall be qualified to practice Law in Hong Kong and fluent
in English and Mandarin. If either party to the arbitration does not appoint an arbitrator who has
consented to participate within thirty (30) days after selection of the first arbitrator, the
relevant appointment shall be made by the Chairman of the HKIAC.

     (iii) The arbitration proceedings shall be conducted in English. The arbitration tribunal
shall apply the Arbitration Rules of the HKIAC in effect at the time of the arbitration. However,
if such rules are in conflict with the provisions of this Section 9.13, including the provisions
concerning the appointment of arbitrators, the provisions of this Section 9.13 shall prevail.

     (iv) The arbitrators shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the Laws of Hong Kong and shall not apply any other substantive Law.

     (v) Each Party hereto shall cooperate with any party to the dispute in making full disclosure
of and providing complete access to all information and documents requested by such party in
connection with such arbitration proceedings, subject only to any confidentiality obligations
binding on the Party receiving the request; all such requested information and documents can be
provided in English or Chinese with equal legal validity.

     (vi) The award of the arbitration tribunal shall be final and binding upon the

Series A Preferred Share Purchase Agreement

33

 

disputing parties, and any party to the dispute may apply to a court of competent jurisdiction for
enforcement of such award.

     (vii) Any party to the dispute shall be entitled to seek preliminary injunctive relief, if
possible, from any court of competent jurisdiction pending the constitution of the arbitral
tribunal.

     9.14 Rights Cumulative.

     Each and all of the various rights, powers and remedies of a Party will be considered to be
cumulative with and in addition to any other rights, powers and remedies which such Party may have
at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise
or partial exercise of any right, power or remedy will neither constitute the exclusive election
thereof nor the waiver of any other right, power or remedy available to such Party.

     9.15 Interpretation.

     Unless a provision hereof expressly provides otherwise: (i) all references to dollars are to
currency of the United States of America; (ii) words in the singular include the plural, and words
in the plural include the singular; (iii) the terms “herein,” “hereof,” and other similar words
refer to this Agreement as a whole and not to any particular section, subsection, paragraph,
clause, or other subdivision; (iv) the term “including” will be deemed to be followed by “, but not
limited to,”; (v) the masculine, feminine, and neuter genders will each be deemed to include the
others; (vi) the terms “shall,” “will,” and “agrees” are mandatory, and the term “may” is
permissive; and (vii) the term “day” means “calendar day.”

     9.16 No Waiver.

     Failure to insist upon strict compliance with any of the terms, covenants, or conditions
hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy
power hereunder at any one or more times be deemed a waiver or relinquishment of such right, power
or remedy at any other time or times.

     9.17 No Presumption.

     The Parties acknowledge that any applicable Law that would require interpretation of any
claimed ambiguities in this Agreement against the Party that drafted it has no application and is
expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity
in the provisions of this Agreement, no presumption or burden of proof or persuasion will be
implied because this Agreement was prepared by or at the request of any Party or its counsel.

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

Series A Preferred Share Purchase Agreement

34

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	COMPANY:	 	EASTERN WELL HOLDINGS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	
	 

	 	By: /s/ Sun Kwok Ping	 	 
	 
	 	
 
	 	 
	 

	 	Name: Sun Kwok Ping	 	 
	 

	 	Title: Director	 	 
	 

	 	Address:
	 	No. 485-487, Gu Yang Road, Changning	 	 
	 

	 	 	 	District, Shanghai, China	 	 
	 

	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first written above.

	 	 	 	 	 	 	 
	INVESTOR:	 	CHINA ENVIRONMENT FUND III, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Donald Chang Ye	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 
	 

	 	Address:
	 	A2302, SP Tower, Tsinghua Science Park,	 	 
	 

	 	 	 	Beijing 100084 China	 	 
	 

	 	Fax: 86-10-8215-1150	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

          IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.

	 	 	 	 	 	 	 
	FOUNDER:	 	SUN KWOK PING	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sun Kwok Ping	 	 
	 

	 	 	 	 

Passport Number: DA9001901
	 	 
	 

	 	 	 	Address: No. 485-487, Gu Yang Road,	 	 
	 

	 	 	 	Changning District, Shanghai, China	 	 
	 

	 	 	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	SHANGHAI NOBO:	 	SHANGHAI NOBO COMMERCE & TRADE 

CO., LTD.	 	 
	 
	 	 	 	 	 	 
	 	 			 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	/s/ Sun Kwok Ping	 	 
	 

	 	Name:
	 

Sun Kwok Ping
	 	 
	 

	 	Title:
	Legal Representative	 	 
	 

	 	Address: 	No. 485-487, Gu Yang Road, Changning	 	 
	 

	 	 	District, Shanghai, China	 	 
	 

	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	SHANGHAI NUOXIN:	 	NUOXIN ENERGY TECHNOLOGY (SHANGHAI) CO., LTD	 	 
	 
	 	 	 	 	 	 
	 	 			 	 
	 
	 	 	 	 	 	 
	 

	 	By: /s/ Sun Kwok Ping	 	 
	 
	 	
 
	 	 
	 
	 	Name: Sun Kwok Ping	 	 
	 
	 	Title: Legal Representative	 	 
	 

	 	Address: 	No. 485-487, Gu Yang Road, Changning	 	 
	 
	 	 	District, Shanghai, China	 	 
	 

	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	JIANGXI NOBAO:	 	JIANGXI NOBAO ELECTRIC CO., LTD	 	 
	 
	 	 	 	 	 	 
	 	 	     		 	 
	 
	 	 	 	 	 	 
	 

	 	By: /s/ Sun Kwok Ping	 	 
	 
	 	
 
	 	 
	 
	 	Name: Sun Kwok Ping	 	 
	 
	 	Title: Legal Representative	 	 
	 

	 	Address:	 No. 485-487, Gu Yang Road, Changning	 	 
	 

	 	 	 District, Shanghai, China	 	 
	 

	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

SCHEDULE 1

     “Affiliates” means, with respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common Control with such Person.

     “Agreement” means this Series A Preferred Share Purchase Agreement.

     “Ancillary Agreements” means, collectively, the Shareholders Agreement, the Right of First
Refusal and Co-Sale Agreement and the Warrants.

     “Applicable Environmental and Social Requirements” means, with respect to each of the Company
Group, the environmental, health, safety and social requirements specified by the Investor or, when
not specified by the Investor, such requirements of any law, treaty, International Labour
Organization convention rule, regulation, permit, authorization, or judicial or other legally
enforceable governmental determination (including any provincial governmental determination)
enacted, adopted, promulgated or issued in the region or in any jurisdiction within the region
where each of the Group Companies has significant operations, in effect from time to time.

     “Asset Transfer Agreement” has the meaning set forth in Section 5.17 of this Agreement.

     “Board of Directors” or “Board” means the board of directors of the Company.

     “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by applicable Laws or executive order to be closed in the PRC, Hong Kong or
New York.

     “Business Plan” has the meaning set forth in Section 3.21 of this Agreement.

     “CG Product or Service” has the meaning set forth in Section 3.17(v) of this Agreement.

     “Closing” has the meaning set forth in Section 2.3 of this Agreement.

     “Closing Account” has the meaning set forth in Section 2.6(i) of this Agreement.

     “Closing
Date” has the meaning set forth in Section 2.3 of this Agreement.

     “Code” has the meaning
set forth in Section 3.5(ii) of this Agreement.

     “Collateral Documents” means the Guarantee dated January 22, 2009 by and between the Founder
and the Investor, and the Share Mortgage by and among the Founder, the Investor and the Company
dated February 25, 2009.

     “Company”
means Eastern Well Holdings Limited
, a company duly incorporated
and validly existing under the Laws of Hong Kong.

     “Company Group” means the Company, the PRC Companies, any of their Subsidiaries, and each
Person (other than a natural person) that is, directly or indirectly, Controlled by the Founder,
the Company or the PRC Companies.

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

     “Contract” means a legally binding contract, agreement, understanding, indenture, note,
bond, loan, instrument, lease, mortgage, franchise or license.

     “Control” of a given Person means the power or authority, whether exercised or not, to direct
the business, management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, which power or authority shall
conclusively be presumed to exist upon possession of beneficial ownership or power to direct the
vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members
or shareholders of such Person or power to control the composition of a majority of the board of
directors of such Person; the terms “Controlling” and “Controlled” have meanings correlative to the
foregoing.

     “Convertible Securities” means, with respect to any specified Person, Securities convertible
or exchangeable into any shares of any class of such specified Person, however described and
whether voting or non-voting.

     “Conversion Shares” has the meaning set forth in Section 2.2 of this Agreement.

     “Corrective Action Plan” shall mean a remediation or corrective action plan developed by each
member of the Company Group (which is at all times satisfactory to the Investor), including the
details of an implementation schedule and costs, which upon implementation is reasonably expected
in the good faith opinion of the Investor to enable each member of the Company Group to carry out
its business in compliance with Applicable Environmental and Social Requirements.

     “Disclosing Party” has the meaning set forth in Section 7.3 of this Agreement.

     “Disclosure Schedule” has the meaning set forth in Section 3 of this Agreement.

     “EMS” has the meaning
ascribed to it in Section 8.8.

     “Environmental Performance Report” shall mean a written report, to be prepared by each member
of the Company Group, evaluating the environmental, health, safety and social performance of each
member of the Company Group for the previous fiscal year based on the requirements set forth in
this Agreement.

     “ESOP” has the meaning set forth in Section 8.15 of this Agreement.

     “Execution Date” means the date of this Agreement.

     “Financial Statements” has the meaning set forth in Section 3.7 of this Agreement.

     “Financing Terms” has the meaning set forth in Section 7.1 of this Agreement.

     “Founder”
means Sun Kwok Ping, a citizen of Hong Kong.

     “Governmental Authority” means any nation or government or any province or state or any other
political subdivision thereof; any entity, authority or body exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government, including without
limitation any government authority, agency, department, board, commission or instrumentality of
the PRC or Hong Kong or any political subdivision thereof, any court, tribunal or arbitrator, and
any self-regulatory organization.

 

 

     “HKIAC” means the Hong Kong International Arbitration Centre.

     “Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

     “IFRS” shall mean the International Financial Reporting Standards promulgated by the
International Accounting Standards Board (“IASB”) (which includes standards and interpretations
approved by the IASB and International Accounting Principles issued under previous constitutions),
together with its pronouncements thereon from time to time, and applied on a consistent basis.

     “Indemnitor” has the meaning set forth in Section 9.3 of this Agreement.

     “Indemnifiable Loss” has the meaning set forth in Section 9.3 of this Agreement.

     “Intellectual Property” means all patents, patent applications, trademarks, service marks,
trade names, copyrights, trade secrets, processes, compositions of matter, formulas, designs,
inventions, proprietary rights, know-how and any other confidential or proprietary information
owned or otherwise used by the Company Group.

     “Investor” means China Environment Fund III, L.P., a limited liability partnership organized
and validly existing under the Laws of the Cayman Islands.

     “Investor Expenses” has the meaning set forth in Section 9.9 of this Agreement

     “Jiangxi Nobao” means Jiangxi Nobao Electric Co., Ltd , a wholly foreign
owned enterprise duly organized and validly existing under the Laws of the PRC.

     “Jiangxi Nobao Loan Agreement” means a loan agreement dated as of January 8, 2009 by and
between Jiangxi Nobao and Gong Qing Cheng Finance Management Investment Co, Ltd. .

     “Law” means any constitutional provision, statute or other law, rule, regulation, official
policy or interpretation of any Governmental Authority and any injunction, judgment, order, ruling,
assessment or writ issued by any Governmental Authority.

     “Lender” means China Environment Fund III, L.P., a limited partnership organized and validly
existing under the Laws of the Cayman Islands.

     “Lien” means any mortgage, pledge, claim, security interest, encumbrance, title defect, lien,
charge or other restriction or limitation.

     “Loan” means the loan in the amount of US$10,000,000 provided by the Lender to the Company
pursuant to the Promissory Note.

     “Material Adverse Effect” means with respect to any Person, any (i) event, occurrence, fact,
condition, change or development that has had a material adverse effect on the operations, results
of operations, financial condition, assets or liabilities, or (ii) material impairment of the
ability to perform the material obligations of such Person hereunder or under the other Transaction
Documents, as applicable. For avoidance of doubt and without limitation, any event, occurrence,
fact, condition, change or development that has the effect of reducing the net asset value of the
Company by five percent (5%) shall be deemed to be a

 

 

Material Adverse Effect.

     “Material Contracts” has the meaning set forth in Section 3.11(i) of this Agreement.

     “Memorandum and Articles” means the amended and restated memorandum of association and the
articles of association of the Company attached hereto as
Exhibit B, to be adopted by resolutions
in writing of all members of the Company and to be effective on or before the Closing.

     “New Land” means a piece of land located at South Area of West Avenue, Gong Qing Cheng
Industrial New District, Gong Qing Cheng, Jiangxi, with size of 66,666.67m2.

     “Old Land” means a piece of land located at No.1 Dong Cheng Road, Gong Qing Cheng, Jiangxi,
with size of 213,333.3m2.

     “Old Land Use Right Granting Contract” means that certain state-owned land use right granting
agreement executed by and between Jiangxi Nobao and Gong Qing Cheng State Land and Environmental
Protection Bureau as of July 4, 2005, with regard to the Old Land.

     “Old Supplemental Land Use Right Granting Contract” means that certain supplemental agreement
to the Old Land Use Right Granting Contract executed by and between Jiangxi Nobao and Gong Qing
Cheng Kaifang Development Zone Administrative Committee as of November 3, 2007.

     “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
award of a Governmental Authority.

     “Ordinary Shares” means the Company’s Ordinary Shares, par value US$0.001 per share.

     “Party” has the meaning set forth in the Preamble of this Agreement.

     “Permits” has the meaning set forth in Section 3.13(ii).

     “Permitted Liens” means (i) Liens for taxes not yet delinquent or the validity of which are
being contested and (ii) Liens incurred in the ordinary course of business, which (x) do not in the
aggregate materially detract from the value of the assets that are subject to such Liens and (y)
were not incurred in connection with the borrowing of money.

     “Person” means any individual, corporation, partnership, limited partnership, proprietorship,
association, limited liability company, firm, trust, estate or other enterprise or entity.

     “PRC” means the People’s Republic of China, but solely for the purposes of this Agreement and
the other Transaction Documents excluding the Hong Kong Special Administrative Region, the Macau
Special Administrative Region and Taiwan.

     “PRC Companies”means Shanghai Nobo, Shanghai Nuoxin and Jiangxi Nobao.

     “PRC GAAP” means generally accepted accounting principles in effect in the PRC from time to
time.

 

 

     “Prohibited Activity” shall mean one or more of the following activities: (1) production or
activities involving harmful or exploitative forms of forced labor; (2)
harmful child labor; (3) production or trade in any product or activity deemed illegal under
PRC Laws or regulations or otherwise prohibited under any international convention or agreement;
production or trade in weapons and munitions; (4) production or trade in alcoholic beverages
(excluding beer and wine); (5) production or trade in tobacco; (6) gambling, casinos and equivalent
enterprises; (7) trade in wildlife or wildlife products to the extent prohibited under the
Convention on International Trade in Endangered Species of Wild Fauna and Flora; (8) production or
trade in radioactive materials; (9) production or trade in or use of unbonded asbestos fiber; (10)
commercial logging operations or the purchase of logging equipment for use in primary tropical
moist forest; (11) production or trade in pharmaceuticals subject to international phase-outs or
bans; (12) production or trade in pesticides/herbicides subject to international phase-out; (13)
production or trade in ozone depleting substances subject to international phase out; and (14)
drift net fishing in the marine environment using nets in excess of 2.5 kilometers in length.

     “Promissory Note” means the Secured Convertible Promissory Note dated January 22,
2009, entered into by and between the Lender and the Company pursuant to which the Lender agrees to
lend an aggregate of US$10,000,000 to the Company.

     “Public Official” means an employee of a Governmental Authority, a member of a political
party, a political candidate, an officer of a public international organization, or an officer or
employee of a state-owned enterprise, including a PRC state-owned enterprise.

     “Related Party” has the meaning set forth in Section 3.16 of this Agreement.

     “Right of First Refusal and Co-Sale Agreement” means the Right of First Refusal and Co-Sale
Agreement, in the form attached hereto as Exhibit C-2, to be entered into at the Closing by and
among the Company, the Founder, the PRC Companies and the Investor.

     “SAFE” means the State Administration of Foreign Exchange of the PRC.

     “SEC” means the Securities and Exchange Commission of the United States.

     “Securities Act” means the U.S. Securities Act of 1933, as amended and interpreted from time
to time.

     “Senior Managers” means, with respect to the Company and each member of the Company Group, the
chief executive officer, the chief financial officer, the chief technology officer, the president,
the general manager or any other manager with the title of “vice-president” or higher, or any other
employee with responsibilities similar to any of the foregoing, of such entity.

     “Series A Preferred Shares” means any and all of the Company’s Series A preferred shares, par
value US$0.001 per share, with the rights and privileges as set forth in the Memorandum and
Articles.

     “Series A
Purchase Price ” means US$20,000,000.

     “Series A Warrant” has the meaning set forth in Section 2.2(iii) of this Agreement.

 

 

     “Shanghai Nobo” means Shanghai Nobo Commerce & Trade Co., Ltd. , a wholly
foreign owned enterprise duly organized and validly existing under the Laws of the PRC.

     “Shanghai Nuoxin” means Noxin Energy Technology (Shanghai) Co., Ltd
, a wholly foreign owned enterprise duly organized and validly existing under the
Laws of the PRC.

     “Shareholders Agreement” means the Shareholders Agreement, in the form attached hereto as
Exhibit C-1, to be entered into at the Closing by and among the Company, the Founder, the PRC
Companies and the Investor.

     “Statement Date” has the meaning set forth in Section 3.7 of this Agreement.

     “Subscribed
Shares” has the meaning set forth in Section 2.2 of this Agreement.

     “Subscription Price”
has the meaning set forth in Section 2.2(ii) of this Agreement.

     “Subsidiary” or “Subsidiaries” means, with respect to any specified Person, any Person of
which the specified Person, directly or indirectly, owns more than fifty percent (50%) of the
issued and outstanding authorized capital, share capital, voting interests or registered capital.

     “Termination Date” has the meaning set forth in Section 2.4(i) of this Agreement.

     “Transaction Documents” means this Agreement, the Ancillary Agreements, the Memorandum and
Articles, and other agreements and documents the execution and delivery of which is contemplated
under this Agreement.

     “Valuation Adjustment Warrant” has the meaning set forth in Section 2.2(iv) of this Agreement.

     “Warrants”
means the Warrants, in the form attached hereto as
Exhibit G-1 and Exhibit G-2, to
be entered into at the Closing by and between the Company and the Investor.

     For purposes of this Agreement, the term “knowledge” refers only to the best knowledge of the
relevant Person. Where a word or phrase is defined, its other grammatical forms have a
corresponding meaning.

 

 

EXHIBIT A

SCHEDULE OF INVESTOR

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	 	 	Number of	 	 
	 	 	Subscription	 	Subscription	 	Conversion	 	 
	Name of Investor	 	Shares	 	Price	 	Shares	 	Loan
	CHINA ENVIRONMENT
FUND III, L.P.
	 	 	2,453,240	 	 	US$10,000,000	 	2,453,240	 	US$10,000,000
	 
	 	 	 	 	 	 	 	 	 	 
	Total:
	 	 	2,453,240	 	 	US$10,000,000	 	2,453,240	 	US$10,000,000

[Signature Page to Series A Preferred Share Purchase Agreement]

 

 

EXHIBIT B

MEMORANDUM AND ARTICLES

AMENDED AND RESTATED

MEMORANDUM

AND

ARTICLES OF ASSOCIATION

OF

EASTERN WELL HOLDINGS LIMITED

 

Incorporated on the 24th day of January, 2007.

 

HONG KONG

No. 1104778

[COPY]

COMPANIES ORDINANCE

(CHAPTER 32)

CERTIFICATE OF INCORPORATION

__________* * *__________

I hereby certify that

EASTERN WELL HOLDINGS LIMITED

is this day incorporated in Hong Kong under the Companies Ordinance,
and that this company is limited.

     Issued by the undersigned on 24th January 2007.

	 	 	 

	 

	 	 
	 

	 	for Registrar of Companies
	 

	 	Hong Kong

 

 

THE COMPANIES ORDINANCE (Chapter 32)

 

Private Company Limited by Shares

 

AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

OF

EASTERN WELL HOLDINGS LIMITED

(Adopted by Special Resolution on _______, 2009)

First:— The name of the Company is “EASTERN WELL HOLDINGS LIMITED”.

Second:— The Registered Office of the Company will be situated in Hong Kong.

Third:— The liability of the members is limited.

Fourth:— The Share Capital of the Company is US$100,000 divided into 100,000,000 shares of a
nominal or par value of US$0.001 comprising (i) 70,000,000 Ordinary Shares of a nominal or par
value of US$0.001, and (ii) 30,000,000 preferred shares of a nominal or par value of US$0.001, each
with power for the Company insofar as is permitted by law, to redeem any of its shares and to
increase or reduce the said capital subject to the provisions of the Companies Ordinance and the
Articles of Association and to issue all or any part of its capital whether original, redeemed,
increased or reduced with or without any preference, priority or special privilege or subject to
any postponement of rights or to any conditions or restrictions whatsoever and so that unless the
conditions of issue shall otherwise expressly declare every issue of shares whether declared to be
ordinary, preference or otherwise shall be subject to the powers hereinbefore contained.

 

 

     I/We, the undersigned, whose name(s), address(es) and description(s) is/are hereto subscribed,
am/are desirous of being formed into a Company in pursuance of this Memorandum of Association, and I/we
respectively agree to take the number of share(s) in the capital of the Company set opposite to my/our respective
name(s):-

	 	 	 	 	 
	 	 	Number of Share(s)
	 	 	taken by each
	Name(s), Address(es) and Description(s) of Subscriber(s)	 	subscriber
	 
	 	 	 	 
	For and on behalf of
	 	 	1	 
	ARSD06 Limited
	 	 	 	 
	(Sd.) LEUNG Wah Lok
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Authorised Signature(s)
	 	 	 	 
	 
	Total Number of Shares Taken
	 	 	1	 

     Dated the 18 day of January, 2007.

WITNESS to the above signatures:

	 	 	 

	 

	 	(Sd.) LEUNG Wai Fun Fanny
	 

	 	Merchant
	 

	 	Room 904, Harvest Building,
	 

	 	29-35 Wing Kut Street,
	 

	 	Central, Hong Kong.

 

 

THE COMPANIES ORDINANCE (Chapter 32)

Private Company Limited by Shares

AMENDED AND RESTATED ARTICLES OF ASSOCIATION

OF

EASTERN WELL HOLDINGS LIMITED

(Adopted by Special Resolution on _______, 2009)

PRELIMINARY

	1.	 	The regulations in Table A in the First Schedule to the Companies Ordinance (Chapter 32) shall not apply to
the Company.

INTERPRETATION

	2.	 	(a)   In these Articles, save where the context otherwise requires: -

	 	 	 	 	 

	 

	 	“the Company”
	 	means the above named Company;
	 
	 	 	 	 
	 

	 	“the Ordinance”
	 	means the Companies Ordinance (Cap. 32 of the Laws of Hong Kong), and includes every
other Ordinance incorporated therewith or substituted therefor; and in the case of any
such substitution the references in these Articles to the provisions of the Ordinance
shall be read as references to the provisions substituted therefor in the new Ordinance;
	 
	 	 	 	 
	 

	 	“the Board” or “the Board of Directors”
	 	means the board of directors of the Company;
	 
	 	 	 	 
	 

	 	“the Board” and “the Directors”
	 	means the directors for the time being of the Company or the director present at a duly
convened meeting of the Board at which a quorum is present;
	 
	 	 	 	 
	 

	 	“Dividend”
	 	includes bonuses, distributions in specie and in kind, capital distributions and
capitalisation issues;
	 
	 	 	 	 
	 

	 	“month”
	 	means calendar month;
	 
	 	 	 	 
	 

	 	“the Office”
	 	means the registered office of the Company for the time being;
	 
	 	 	 	 
	 

	 	“Ordinary Share”
	 	means the Ordinary Shares in the capital of the Company, par value of US$0.001 per share;
	 
	 	 	 	 
	 

	 	“paid up”
	 	includes credited as paid up;
	 
	 	 	 	 
	 

	 	“the Register”
	 	means the register of members of the Company kept pursuant to the Ordinance and includes
any branch register kept pursuant to the Ordinance;
	 
	 	 	 	 
	 

	 	“the Secretary”
	 	means the secretary for the time being of the Company;
	 
	 	 	 	 
	 

	 	“the Seal”
	 	means the common seal of the Company or any official seal that the Company may have as
permitted by the Ordinance;
	 
	 	 	 	 
	 

	 	“Schedule A”
	 	means Schedule A of the Articles;
	 
	 	 	 	 
	 

	 	“Series A Director”
	 	has the meaning ascribed to it in Article 75(a);

 

 

	 	 	 	 	 

	 

	 	“Series A Preferred Shares”
	 	means the series A preferred shares in the capital of the Company with a nominal or par
value of US$0.001 per share;
	 
	 	 	 	 
	 

	 	“these Articles”
	 	means the Articles of Association in their present form or as altered from time to time;
	 
	 	 	 	 
	 

	 	“in writing” and “written”
	 	includes cable, telex, facsimile messages, electronic messages and any mode of
reproducing words in a legible and non-transitory form.

	 	(b)	 	In these Articles, if not inconsistent with the subject or context, words importing the singular number only shall include the plural number and vice versa, and words importing any gender shall include
all genders and vice versa.
	 
	 	(c)	 	Subject as aforesaid, any words defined in the Ordinance or any statutory modification thereof in force at the date at which these Articles become binding on the Company shall, if not inconsistent with
the subject or context, bear the same meaning in these Articles.
	 
	 	(d)	 	The headings are inserted for convenience only and shall not affect the construction of these Articles.

PRIVATE COMPANY

	3.	 	The Company is a private company, and accordingly:-

	 	(a)	 	any invitation to the public to subscribe for any shares or debentures of the Company is prohibited;
	 
	 	(b)	 	the number of the members of the Company (not including persons who are in the employment of the Company, and persons who, having been formerly in the employment of the Company, were, while in such
employment, and have continued after the determination of such employment to be, members of the Company) shall be limited to 50 PROVIDED that where two or more persons hold one or more shares in the
Company jointly they shall, for the purposes of these Articles, be treated as a single member;
	 
	 	(c)	 	the right to transfer the shares of the Company shall be restricted in manner hereinafter prescribed and as described in Schedule A; and
	 
	 	(d)	 	the Company shall not have power to issue share warrants to bearer.

THE OFFICE

	4.	 	The Office shall be at such place in Hong Kong as the Directors or Secretary shall from time to time appoint.

SHARES

	 	 	 	 	 

	5.

	 	(a)
	 	Subject to the provisions of Section 57B of the Ordinance and Schedule A, and save as provided by these Articles to the contrary, all unissued shares shall be at the disposal of the Directors who may
allot, grant options over, or otherwise deal with or dispose of the same to such persons, at such times, for such consideration and generally upon such terms and conditions as they think proper, but so
that no shares of any class shall be issued at a discount except in accordance with Section 50 of the Ordinance.

	 	(b)	 	The Company may give such financial assistance for purposes of acquiring shares in the Company as is not prohibited by the Ordinance.
	 
	 	(c)	 	The Directors are authorised to make statements or take such other steps as may be required by the Ordinance in relation to the giving of financial assistance to acquire shares in the Company.

	6.	 	The Company may make arrangements on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and the time of payment of such calls.
	 
	7.	 	If by the conditions of allotment of any shares the whole or part of the amount or issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the Company by the person who for the time
being is the registered holder of the shares, or his legal personal representative.

 

 

	 	 	 	 	 

	8.

	 	(a)
	 	Subject to sections 49 to 49S of the Ordinance, the Company may issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or the shareholder. The redemption of
shares may be effected upon such terms and in such manner as the Company before or upon issue of the shares shall by ordinary resolution determine.

	 	(b)	 	Subject to sections 49 to 49S of the Ordinance, the Company may purchase its own shares (including redeemable shares) and without prejudice to the generality of the foregoing the Company may purchase
its own shares (including any redeemable shares) in order to:

	 	(i)	 	settle or compromise a debt or claim;
	 
	 	(ii)	 	eliminate a fractional share or fractional entitlement;
	 
	 	(iii)	 	fulfil an agreement in which the Company has an option or is obliged to purchase shares under an employee share scheme which had
previously been approved by the Company in general meeting;
	 
	 	(iv)	 	comply with an order of court under section 8(4), 47G(6), or 168A(2) of the Ordinance.

	 	(c)	 	Subject to sections 49I to 49O of the Ordinance, the Company may make a payment in respect of the redemption or purchase under section 49A or (as the case may be) section 49B of its own shares
otherwise than out of its distributable profits or the proceeds of a fresh issue of shares.
	 
	 	(d)	 	For purposes of Article 8(c), the Directors are authorised to make statements or take such other steps as may be required by the Ordinance in relation to the redemption or purchase by the Company of
its own shares out of capital.

	9.	 	Subject to the provisions of these Articles, the Company shall not, except as required by law, be bound by or required in any way to recognise any contingent, future, partial or equitable interest in any share or in any
fractional part of a share, or any other right in respect of any share, or any other claim to or in respect of any such share on the part of any person (even when having notice thereof) except an absolute right to the entirety
thereof in the registered holder.

	10.	 	The Company may in connection with the issue of any shares exercise all powers of paying interest out of capital and of paying commission and brokerage conferred or permitted by the Ordinance.
	 
	11.	 	No person shall become a member until his name shall have been entered into the Register.

JOINT HOLDERS OF SHARES

	12.	 	Where two or more persons are registered as the holders of any share they shall be deemed to hold the same as joint tenants with benefit of survivorship, subject to the following provisions:-

	 	(a)	 	the Company shall not be bound to register more than three persons as the holders of any shares except in the case of the legal personal representative of a deceased member;
	 
	 	(b)	 	the joint holders of any shares shall be liable severally as well as jointly in respect of all payments which ought to be made in respect of such shares;
	 
	 	(c)	 	on the death of any one of such joint holders the survivor or survivors shall be the only person or persons recognised by the Company as having any title to such shares, but the Directors may require
such evidence of death as they may deem fit;
	 
	 	(d)	 	any one of such joint holders may give effectual receipts for any dividend, return of capital or other payment in the share; and

 

 

	 	(e)	 	the Company shall be at liberty to treat the person whose name stands first in the Register as one of the joint holders of any shares as solely entitled to delivery of the certificate relating to such
 shares, or to receive notices from the Company, and to attend and vote at general meetings of the Company, and any notice given to such person shall be deemed notice to all the joint holders; but any
one of such joint holders may be appointed the proxy of the persons entitled to vote on behalf of such joint holders, and as such proxy to attend and vote at general meetings of the Company, and if
more than one of such joint holders be present at any meeting personally or by proxy that one so present whose name stands first in the Register in respect of such shares shall alone be entitled to
vote in respect thereof.

SHARE CERTIFICATES

	13.	 	Every member shall, without payment, be entitled to receive within two months after allotment or lodgment of an instrument of transfer duly stamped, or within such other period as the conditions of issue may provide, a
certificate for all his shares of any particular class, or several certificates, each for one or more of his shares, upon payment of such fee, not exceeding two dollars for every certificate after the first, as the Directors
shall from time to time determine, provided that in the event of a member transferring part of the shares represented by a certificate in his name a new certificate in respect of the balance thereof shall be issued in his name
without payment and, in the case of joint holders, the Company shall not be bound to issue more than one certificate for all the shares of any particular class registered in their joint names.
	 
	14.	 	Every share certificate shall be issued under the Seal and shall specify the number and class of shares, and, if required, the distinctive numbers thereof comprised therein, the amount paid up thereon and, if appropriate, whether
such shares carry no voting rights. No certificate shall be issued in respect of more than one class of shares. If there shall be more than one class of shares then each certificate of every class shall state thereon that the
share capital is divided into different classes and the nominal value of the voting rights attaching to each class.
	 
	15.	 	If any share certificate shall be worn out, defaced, destroyed or lost, it may be renewed on such evidence being produced as the Directors shall require, and in case of wearing out or defacement, on delivery up of the old
certificate, and in case of destruction or loss, on the execution of such indemnity (if any), as the Directors may from time to time require. In case of destruction or loss, the person to whom such renewed certificate is given
shall also bear and pay to the Company all expenses incidental to the investigation by the Company of the evidence of such destruction or loss and of such indemnity.

CALLS ON SHARES

	 	 	 	 	 

	16.

	 	(a)
	 	The Directors may from time to time make calls upon the members in respect of all monies unpaid on their shares
(whether on account of the nominal value of the shares or by way of premium) but subject always to the terms of issue
of such shares, and any such call may be made payable by instalments.

	 	(b)	 	Each member shall, subject to receiving at least fourteen days notice specifying the time or times and place for
payment, pay to the Company the amount called on his shares and at the time or times and place so specified. The
non-receipt of a notice of any call by, or the accidental omission to give notice of a call to, any of the members
shall not invalidate the call.

	17.	 	A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. A call may be revoked, varied or postponed as the Directors
may determine.
	 
	18.	 	If any part of a sum called in respect of any shares or any instalment of a call be not paid before or on the day appointed for payment thereof, the person from whom the sum is due
shall be liable to pay interest on the outstanding part thereof at such rate as the Directors shall determine from the day appointed for the payment of such call or instalment to the
time of discharge thereof in full; but the Directors may, if they shall think fit, waive the payment of such interest or any part thereof.
	 
	19.	 	If, by the terms of the issue of any shares or otherwise, any amount is made payable upon allotment or at any fixed time, whether on account of the nominal amount of the shares or by
way of premium, every such amount shall be payable as if it were a call duly made and payable on the date on which by the terms of the issue the same becomes payable; and all the
provisions thereof with respect to the payment of calls and interest thereon, or to the forfeiture of shares for non-payment of calls, shall apply to every such amount and the shares in
respect of which it is payable in the case of non-payment thereof.

 

 

	20.	 	The Directors may, if they shall think fit, receive from any member willing to advance the same all or any part of the monies uncalled and unpaid upon any shares held by him; and upon
all or any of the monies so paid in advance the Directors may (until the same would, but for such payment in advance, become presently payable) pay interest at such rate as may be
agreed upon between the member paying the monies in advance and the Directors. The Directors may also at any time repay the amount so advanced upon giving to such member one month’s
notice in writing.
	 
	21.	 	On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the member sued is entered in the Register as the
holder, or one of the holders, of the shares in respect of which such debt accrued; that the resolution making the call is duly recorded in the Minute Book; and that notice of such call
was duly given to the member sued in pursuance of these Articles; and it shall not be necessary to prove the appointment of the Directors who made such call, nor any other matters
whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.
	 
	22.	 	No member shall, unless the Directors otherwise determine, be entitled to receive any dividend, or, subject to the Ordinance, to receive notice of or to be present or vote at any
general meeting, either personally or (save as proxy for another member) by proxy, or to exercise any privileges as a member, or be reckoned in a quorum, until he shall have paid all
calls or other sums for the time being due and payable on every share held by him, whether alone or jointly with any other person, together with interest and expenses (if any).

FORFEITURE

	23.	 	If any member fails to pay in full any call or instalment of a call on the day appointed for payment thereof, the Directors may at any time thereafter, during such time as any part of
the call or instalment remains unpaid, serve a notice on him requiring him to pay so much of the call or instalment as is unpaid together with interest accrued and any expenses incurred
by reason of such non-payment.
	 
	24.	 	The notice shall name a further day (not being less than fourteen days from the date of the notice) on or before which such call or instalment or part thereof and all interest accrued
and expenses incurred by reason of such non-payment are to be paid, and it shall also name the place where payment is to be made, such place being either the Office, or some other place
at which calls of the Company are usually made payable. The notice shall also state that, in the event of non-payment at or before the time and at the place appointed, the shares in
respect of which such call or instalment is payable will be liable to be forfeited.
	 
	25.	 	If the requirements of any such notice as aforesaid be not complied with, any shares in respect of which such notice has been given may, at any time thereafter before the payment
required by the notice had been made, be forfeited by a resolution of the Directors to that effect, and any such forfeiture shall extend to all dividends declared in respect of the
 shares so forfeited but not actually paid before such forfeiture. The Directors may accept the surrender of any shares liable to be forfeited hereunder and in such case references in
these Articles to forfeiture shall include surrender.
	 
	26.	 	Any shares so forfeited shall be deemed for the purposes of these Articles to be the property of the Company, and may be sold, re-allotted or otherwise disposed of either subject to or
discharged from all calls made or instalments due prior to the forfeiture, to any person, upon such terms and in such manner and at such time or times as the Directors think fit. For
the purpose of giving effect to any such sale or other disposition the Directors may authorise some person to transfer the shares so sold or otherwise disposed of to the purchaser
thereof or any other person becoming entitled thereto.
	 
	27.	 	The Directors may, at any time before any shares so forfeited shall have been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think
fit.
	 
	28.	 	Any person whose shares have been forfeited shall thereupon cease to be the holder of any such shares but shall notwithstanding be and remain liable to pay to the Company all calls,
instalments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereon from the time of forfeiture until payment at such
rate as the Directors shall think fit and without any deduction or allowance for the value of the shares at the time of forfeiture, and the Directors may enforce the payment of such
monies or any part thereof and may waive payment of such interest wholly or in part.
	 
	29.	 	When any shares have been forfeited an entry shall be made in the Register recording the forfeiture and the date thereof, and so soon as the shares so forfeited have been sold or
otherwise disposed of an entry shall also be made of the manner and date of the sale or disposal thereof.

 

 

LIEN

	30.	 	The Company shall have a first and paramount lien on every share for all monies outstanding in respect of such share, whether presently payable or not, and the Company shall also have a
first and paramount lien on every share standing registered in the name of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of
such member or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and
whether the same shall have fallen due for payment or not, and notwithstanding that the same are joint debts or liabilities of such member or his estate and any other person, whether a
member or not. The Directors may at any time either generally or in any particular case waive any lien that has arisen, or declare any share to be wholly or in part exempt from the
provisions of these Articles.
	 
	31.	 	The Company may sell in such manner as the Directors think fit any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists
is presently payable, nor until the expiration of fourteen days after a notice in writing stating and demanding payment of the sum presently payable and giving notice of intention to
sell in default shall have been given to the holder for the time being of the share or the person entitled thereto by reason of his death, bankruptcy or winding up or otherwise by
operation of law or court order.
	 
	32.	 	The net proceeds of such sale after payment of the costs of such sale shall be applied in or towards payment or satisfaction of the debts or liabilities in respect whereof the lien
existed so far as the same are presently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the shares prior to the
sale) be paid to the person entitled to the shares at the time of the sale. For giving effect to any such sale the Directors may authorise some person to transfer the shares so sold to
the purchaser thereof.
	 
	33.	 	A statutory declaration in writing that the declarant is a Director or the Secretary of the Company and that a share has been duly forfeited or surrendered or sold to satisfy a lien of
the Company on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. Such declaration
and the receipt of the Company for the consideration (if any) given for the share on the sale, re-allotment or disposal thereof together with the shares certificate delivered to a
purchaser or allottee thereof shall (subject to the execution of a transfer if the same be required) constitute a good title to the share and the person to whom the share is sold,
re-allotted or disposed of shall be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the
share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, surrender, sale, reallotment or disposal of the share.

TRANSFER OF SHARES

	34.	 	The transfer of shares shall be subject to Schedule A. The instrument of transfer of any shares in the Company shall be in writing and shall be executed by or on behalf of the
transferor and by or on behalf of the transferee, subject to Schedule A. The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in
the Register in respect thereof.
	 
	35.	 	Every instrument of transfer shall be lodged at the Office for registration accompanied by the certificate relating to the shares to be transferred and such other evidence as the
Directors may require in relation thereto. All instruments of transfer which shall be registered shall be retained by the Company but, save where fraud is suspected, any instrument of
transfer which the Directors may decline to register shall, on demand, be returned to the person depositing the same.
	 
	36.	 	There shall be paid to the Company in respect of the registration of a transfer and of any Grant of Probate or Letters of Administration, Certificate of Marriage or Death, Power of
Attorney or other document relating to or affecting the title to any share or the making of any entry in the Register affecting the title to any share such fee (if any) as the Directors
may from time to time require or prescribe.
	 
	37.	 	The registration of transfers may be suspended at such times and for such periods as the Directors may from time to time determine and either generally or in respect of any class of
 shares provided always that such registration shall not be suspended for more than 30 days in any year.

	 	 	 	 	 

	38.

	 	(a)
	 	Subject to these Articles and Schedule A, the Directors may at any time in their absolute discretion, decline to
register any transfer of any share whether or not it is a fully paid share.

	 	(b)	 	The Directors may also decline to register any transfer unless:-

 

 

	 	(i)	 	The instrument of transfer is in respect of only one class of shares;
	 
	 	(ii)	 	in the case of a transfer to joint holders, the number of joint holders to
whom the shares are to be transferred does not exceed three; and
	 
	 	(iii)	 	the shares concerned are free of any lien in favour of the Company.

	 	(c)	 	If the Directors refuse to register a transfer they shall, within two months after the date on which the transfer was
lodged with the Company, send to the transferor and transferee notice of the refusal.

TRANSMISSION OF SHARES

	39.	 	In case of the death of a member, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder,
shall be the only persons recognised by the Company as having any title to his interest in the shares; but nothing herein contained shall release the estate of a deceased joint holder
from any liability in respect of any share which had been jointly held by him with other persons.

	 	 	 	 	 

	40.

	 	(a)
	 	Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence
being produced as may from time to time properly be required by the Directors and, subject as hereinafter provided,
elect either to be registered himself as holder of the share or to have some person nominated by him registered as
the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend
registration as they would have had in the case of a transfer of the share by that member before his death or
bankruptcy, as the case may be.

	 	(b)	 	If the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Company a
notice in writing signed by him stating that he so elects. If he shall elect to have another person registered he
shall execute a transfer of the share in favour of that person. All the limitations, restrictions and provisions of
these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable
to any such notice or transfer as aforesaid as if the death or bankruptcy of the member had not occurred and the
notice or transfer were a transfer signed by the member.

	41.	 	A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he
were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right
conferred by membership in relation to meetings of the Company:
PROVIDED always that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not
complied with within 90 days the Directors may thereafter withhold payment of all dividends or other monies payable in respect of the share until the requirements of the notice have
been complied with.
	 
	42.	 	Any person to whom the right to any shares in the Company has been transmitted by operation of law shall, if the Directors refuse to register the transfer, be entitled to call on the
Directors to furnish within 28 days a statement of the reasons for the refusal.

INCREASE OF CAPITAL

	43.	 	Subject to Schedule A, the Company may, from time to time, by ordinary resolution increase its authorised capital by such sum divided into shares of such amounts as the resolution shall
prescribe.
	 
	44.	 	Subject to Schedule A, without prejudice to any special rights, privileges or restrictions for the time being attaching to any class of shares then existing in the capital of the
Company, any new shares created pursuant to Article 43 may be issued upon such terms and conditions, and with such rights, privileges and restrictions attached thereto as the general
meeting resolving upon the creation thereof shall direct or, if no such direction be given, as the Directors shall determine, and in particular such shares may be issued with a
preferential, qualified or deferred right to dividends and in the distribution of assets of the Company, and with a special, or without any, right of voting.

 

 

	45.	 	The general meeting resolving upon the creation of any new shares may direct that the same or any of them shall be offered in the first instance, and either at par or at a premium or
(subject to the provisions of the Ordinance) at a discount, to all the holders for the time being of any class of shares in the capital of the Company in proportion to the number of
 shares of such class held by them respectively, or make any other provisions as to the issue and allotment of the new shares.
	 
	46.	 	Subject to any direction or determination that may be given or made in accordance with the powers contained in these Articles and Schedule A, all new shares created pursuant to Article
43 shall be subject to the same provisions herein contained with reference to the payment of calls, transfer, transmission, forfeiture, lien and otherwise as the shares in the capital
of the Company existing at the date of creation of such new shares.

ALTERATIONS OF SHARE CAPITAL

	47.	 	Subject to Schedule A, the Company may by ordinary resolution:-

	 	(a)	 	subdivide its existing shares or any of them into shares of smaller amount than is fixed by the Memorandum of
Association of the Company, provided that in the subdivision of an existing share the proportion between the amount
paid and the amount (if any) unpaid on each reduced share shall be the same as it was in the case of the share from
which the reduced share is derived, and so that the resolution whereby any share is subdivided may determine that as
between the holders of the shares resulting from such subdivision one or more of the shares may, as compared with the
others, have any such preferred, deferred or other special rights or be subject to any such restrictions as the
Company has power to attach to unissued or new shares;
	 
	 	(b)	 	consolidate and divide its capital or any part thereof into shares of larger amount than its existing shares; or
	 
	 	(c)	 	cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any
person and diminish the amount of its authorised capital by the amount of the shares so cancelled.

	48.	 	Subject to Schedule A, the Company may by special resolution reduce its share capital and any capital redemption reserve fund or any share premium account in any manner allowed by law.
	 
	49.	 	Where any difficulty arises in regard to any consolidation and division under paragraph (b) of Article 47, the Directors may settle the same as they think expedient and in particular
may arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale in due proportion amongst the members who would have been entitled to the
fractions, and for this purpose the Directors may authorise some person to transfer the shares representing fractions to the purchaser thereof, who shall not be bound to see to the
application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

GENERAL MEETINGS

	 	 	 	 	 

	50.

	 	(a)
	 	The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings
in that year, and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall
elapse between the date of one annual general meeting of the Company and that of the next, PROVIDED that so long as
the Company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it
in the year of its incorporation or in the following year. The annual general meeting shall be held at such time and
place as the Directors shall appoint.

	 	(b)	 	All other general meetings shall be called extraordinary general meetings.

	51.	 	The Directors may, whenever they think fit, and shall, on requisition by Members in accordance with the Ordinance, proceed to convene an extraordinary general meeting. The provisions of
the Ordinance shall apply to any requisition and to any failure by the Directors to convene an extraordinary general meeting when so requisitioned.

NOTICE OF GENERAL MEETINGS

 

 

	52.	 	An annual general meeting and a meeting called for the passing of a special resolution shall be called by twenty-one (21) days notice in writing at the least, and a meeting of the
Company other than an annual general meeting or a meeting for the passing of a special resolution shall be called by fourteen (14) days notice in writing at the least. The notice shall
specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business, and shall be given in manner hereinafter mentioned or in such
other manner, if any, as may be prescribed by the Company in general meeting, to such persons as are, under the Articles of the Company, entitled to receive such notices from the
Company:
	 
	 	 	PROVIDED that a meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in these Articles, be deemed to have been duly called if it is so
agreed:-

	 	(a)	 	in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote
thereat; and
	 
	 	(b)	 	in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the
meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving that
right.

	53.	 	The accidental omission to give notice of a meeting or (in cases where an instrument of proxy is sent out with the notice) the accidental omission to send such instrument of proxy to,
or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive such notice shall not invalidate the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

	54.	 	All business shall be deemed special that is transacted at an extraordinary general meeting and also all business that is transacted at an annual general meeting with the exception of: -

	 	(a)	 	the declaration and sanction of dividends;
	 
	 	(b)	 	the consideration of the accounts and balance sheets and the reports of the Directors and other documents required to be annexed to the accounts;
	 
	 	(c)	 	the election of Directors in place of those retiring (if any);
	 
	 	(d)	 	the appointment of the Auditors of the Company and the fixing of, or the determination of the method of fixing, the remuneration of the Auditors.

	 	 	 	 	 

	55.

	 	(a)
	 	No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business; two (2)
members, which shall include the holder of the majority of the then outstanding Series A Preferred Shares (including the Ordinary Shares that the
Series A Preferred Shares are convertible into) and the holder of the majority of the then outstanding Ordinary Shares (excluding the Ordinary Shares
that the Series A Preferred Shares are convertible into) present in person or by proxy shall be quorum provided always that if the Company has one
shareholder of record the quorum shall be that one (1) member present in person or by proxy.

	 	(b)	 	A meeting of the members or any class thereof may be held by means of such telephone, electronic or other communication facilities (including, without
limiting the generality of the foregoing, by telephone or video conferencing) which permit all persons participating in the meeting to communicate with
each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

	56.	 	The Chairman (if any) of the Board or, in his absence, a Deputy Chairman (if any) shall preside as Chairman at every general meeting. If there is no such Chairman or Deputy Chairman, or
if at any meeting neither the Chairman nor a Deputy Chairman is present within fifteen minutes after the time appointed for holding the meeting, or if neither of them is willing to act
as Chairman, the Directors present shall choose one of their number to act, or if one Director only is present he shall preside as Chairman if willing to act. If no Director is present,
or if each of the Directors present declines to act as Chairman, the persons present and entitled to vote shall elect one of their number to be Chairman of the meeting.

 

 

	57.	 	If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved and in any other
case it shall stand adjourned to the same day in the next week at the same time and place or to such other time or such other place as the Directors may determine and if at the
adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the members present shall be a quorum.
	 
	58.	 	The Chairman of any general meeting at which a quorum is present may, with the consent of the meeting, and shall, if so directed by the meeting, adjourn the meeting from time to time
and from place to place or sine die; but no business shall be transacted at any adjourned meeting other than business which might have been transacted at the meeting from which the
adjournment took place, unless due notice thereof is given or such notice is waived in the manner prescribed by these Articles. When a meeting is adjourned for 30 days or more, or sine
die, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid, it shall not be necessary to give any notice of an adjourned meeting or the
business to be transacted thereat. Where a meeting is adjourned sine die the time and place for the adjourned meeting shall be fixed by the Directors.

	 	 	 	 	 

	59.

	 	(a)
	 	Subject to the provisions of the Ordinance, a resolution in writing signed by all the members for the time being entitled to receive notice of and to
attend and vote at general meetings (or, being corporations, by their duly authorised representatives) shall be as valid and effective as if the same
had been passed at a general meeting of the Company duly convened and held. A written notice of confirmation of such resolution in writing sent by or
on behalf of a member shall be deemed to be his signature to such resolution in writing for the purposes of these Articles. Such resolution in writing
may consist of several documents, and each such document shall be certified by the Secretary to contain the correct version of the proposed resolution.

	 	(b)	 	Where the Company has only one member and that member takes any decision that may be taken by the Company in general meeting and that has effect as if
agreed by the Company in general meeting, unless that decision is taken by way of a written resolution agreed in accordance with section 116(B) of the
Ordinance, a written record of that decision shall be sufficient evidence of the decision having been taken by the member. The member shall provide the
Company with such written record of the decision within 7 days after the decision is made provided that failure by the member to provide the written
record within such time limit shall not affect the validity of any decision concerned.

VOTING

	 	 	 	 	 

	60.

	 	(a)
	 	At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless, before
or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll, a poll
is demanded by : -

	 	(i)	 	the Chairman of the meeting; or
	 
	 	(ii)	 	at least two members present in person or by proxy and entitled to vote; or
	 
	 	(iii)	 	any member or members present in person or by proxy and representing in
the aggregate not less than seventy percent (70%) of the total voting
rights of all members having the right to attend and vote at the meeting;
or
	 
	 	(iv)	 	any member or members present in person or by proxy and holding shares
conferring a right to attend and vote at the meeting on which there have
been paid up sums in the aggregate equal to not less than seventy percent
(70%) of the total sum paid up on all shares conferring that right.

	 	(b)	 	Unless a poll is so demanded and the demand is not withdrawn, a declaration by the Chairman that a resolution has, on
a show of hands, been carried unanimously or by a particular majority or not carried by a particular majority or lost
shall be final and conclusive evidence of the fact without proof of the number of the votes recorded for or against
such resolution.

	61.	 	A demand for a poll may be withdrawn only with the approval of the meeting. If a poll be directed or demanded in the manner above mentioned it shall (subject to the provisions of
Article 63 hereof) be taken at such time (being not later than seven days after the date of the demand) and in such manner as the Chairman of the meeting may appoint. No notice need be
given of a poll not taken immediately. The result of such poll shall be deemed for all purposes to be the resolution of the meeting at which the poll was so directed or demanded.

 

 

	62.	 	In the case of an equality of votes at any general meeting, whether upon a show of hands or on a poll, the Chairman of the meeting shall be entitled to a second or casting vote.
	 
	63.	 	A poll demanded upon the election of a Chairman or upon a question of adjournment shall be taken forthwith. Any business, other than that upon which a poll has been demanded, may be
proceeded with pending the taking of the poll.

	 	 	 	 	 

	64.

	 	(a)
	 	No objection shall be made to the validity of any vote except at a meeting or poll at which such vote shall be
tendered and every vote whether given personally or by proxy not disallowed at such meeting or poll shall be deemed
valid for all purposes whatsoever of such meeting or poll.

	 	(b)	 	In case of any dispute as to voting the Chairman shall determine the same, and such determination shall be final and
conclusive.

	65.	 	Subject to any special rights or restrictions for the time being attaching to any special class of shares in the capital of the Company, on a show of hands every member who is present
in person or by proxy or by attorney shall be entitled to one vote only, and, in the case of a poll, every member present in person or by proxy or by attorney shall be entitled to one
vote for each share held by him.
	 
	66.	 	On a poll, votes may be given either personally or by proxy and a member entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.
	 
	67.	 	A member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee,
curator bonis or other person in the nature of a committee or curator bonis appointed by that court, and any such committee , curator bonis or other person may, on a poll, vote by
proxy. If any member be a minor, he may vote by his guardian or one of his guardians who may give their votes personally or by proxy.

PROXIES

	 	 	 	 	 

	68.

	 	(a)
	 	A proxy need not be a member of the Company.

	 	(b)	 	An instrument appointing a proxy shall be in writing in any usual or common form or in any other form which the
Directors may accept, and shall be deemed, save where the contrary appears on the face of the instrument of proxy, to
confer authority to demand or concur in demanding a poll and to include power to act generally at the meeting for the
person giving the proxy and any adjournment thereof, and either to vote on any resolution (or amendment thereto) put
to the meeting for which it is given as the proxy thinks fit. No instrument appointing a proxy shall be valid except
for the meeting mentioned therein and any adjournment thereof.

	69.	 	The instrument appointing a proxy shall be signed by the appointor, or his duly authorised attorney in writing or, if such appointor be a corporation, under its common seal or signed by
such officer, attorney or other person duly authorised in that behalf.
	 
	70.	 	The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, shall be
deposited at the Office at least 48 hours before the time fixed for holding the meeting at which the person named in such instrument proposes to vote or, in the case of a poll, not less
than 24 hours before the time appointed for taking the poll; otherwise the person so named shall not be entitled to vote in respect thereof except with the approval of the Chairman of
the meeting.
	 
	71.	 	Any member may by power of attorney appoint any person to be his attorney for the purpose of voting at any meeting, and such power may be a special power limited to any particular
meeting or a general power extending to all meetings at which such member is entitled to vote. Every such power shall be deposited at the Office at least 48 hours before being acted
upon.

	 	 	 	 	 

	72.

	 	(a)
	 	An instrument of proxy may be revoked by forwarding to the Office written notification of such revocation signed by
or on behalf of the person who issued or authorised the issue of the instrument of proxy.

 

 

	 	(b)	 	A vote given in accordance with the terms of an instrument of proxy or power of attorney shall be valid
notwithstanding the previous death or insanity of the principal, or revocation of the proxy or power of attorney, or
transfer of the shares in respect of which the vote is given, provided that no intimation in writing of the death,
insanity, revocation or transfer shall have been received at the Office 24 hours at least before the time fixed for
holding the meeting, or adjourned meeting, or the taking of the poll, at which the instrument of proxy is to be used.

CORPORATIONS ACTING BY REPRESENTATIVES

	73.	 	Any corporation which is a member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any
meeting of the Company or of any class of members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he
represents as that corporation could exercise if it were an individual member of the Company.

DIRECTORS

	74.	 	Each Director of the Company shall serve a term of two (2) years except having been removed in accordance with the provisions of these Articles, and may serve consecutive terms if
re-appointed by the members(s) that are entitled under Article 75 to appoint that Director.

	 	 	 	 	 

	75.

	 	(a)
	 	There shall be a Board of Directors consisting of three (3) persons. The holders of a majority of the then outstanding Ordinary Shares shall have the
right to nominate and appoint two (2) Directors to the Board, to remove any Director occupying such position and to fill any vacancy caused by the
resignation, death or renewal of any Director occupying such position; the holders of a majority of the outstanding Series A Preferred Shares shall be
entitled to nominate and appoint one (1) Director to the Board, to remove any Director occupying such position and to fill any vacancy caused by the
resignation, death or renewal of any Director occupying such position (the “Series A Director”).

	 	(b)	 	Subject to Schedule A, all decisions of the Board shall require the approval of a majority of all Directors.
	 
	 	(c)	 	The nomination of a person as a reserve Director of the Company ceases to be valid if before the death of the Director in respect of whom he was
nominated he resigns as reserve Director in accordance with section 157D of the Ordinance or the Company in general meeting revokes the nomination or
the Director in respect of whom he was nominated ceases to be the sole member and sole Director of the Company for any reason other than the death of
that Director.

	76.	 	A Director need not hold any shares in the Company. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at general meetings.
	 
	77.	 	[Reserved]

DIRECTORS’ REMUNERATION

	78.	 	The remuneration of the Directors shall from time to time be determined by the Company in general meeting. Such remuneration shall be deemed to accrue from day to day. The Directors may
also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general
meetings of the Company or in connection with the business of the Company.

POWERS OF DIRECTORS

	79.	 	Subject to the provisions of the Ordinance, the memorandum and articles and to any directions given by special resolution, the business and affairs of the Company shall be managed by
the Directors, who may exercise all the powers of the Company. No alteration of the memorandum or articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. The powers given by this regulation shall not be limited by any special power given to
the Directors by the articles, and a meeting of the Directors at which a quorum is present may exercise all powers exercisable by the Directors.

 

 

	80.	 	The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in Hong Kong or elsewhere, and may appoint any persons to be members of
such local boards, or any managers or agents for the Company, and may fix their remuneration, and may delegate to any local board, manager or agent any of the powers, authorities and
discretions vested in the Directors, with power to sub-delegate, and may authorise the members of any local boards, or any of them, to fill any vacancies therein, and to act
notwithstanding vacancies, and any such appointment and delegation may be made upon such terms and subject to such conditions as the Directors may think fit, and the Directors may
remove any person so appointed, and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected
thereby.
	 
	81.	 	The Directors may from time to time and at any time by power of attorney or otherwise appoint any company, firm or person or any fluctuating body of persons, to be the attorney or
attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for
such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with
any such attorney as the Directors may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him.
	 
	82.	 	Subject to and to the extent permitted by the Ordinance, the Company, or the Directors on behalf of the Company, may cause to be kept in any territory a Branch Register of members
resident in such territory, and the Directors may make and vary such regulations as they may think fit respecting the keeping of any such Branch Register.
	 
	83.	 	All cheques, promissory notes, drafts, bills of exchange, and other negotiable or transferable instruments, and all receipts for monies paid to the Company, shall be signed, drawn,
accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine.
	 
	84.	 	The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and
uncalled capital of the Company and to issue debentures including, subject to Section 57B of the Ordinance and the Schedule A, convertible debentures and convertible debenture stock,
and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

ALTERNATE DIRECTORS

	85.	 	Each Director may by written notification to the Company nominate any other person to act as alternate Director in his place and, at his discretion, in similar manner remove such
alternate Director. A Director may appoint two or more persons in the alternative to act as Alternate Director and in the event of any dispute as to who is to represent the Director as
his Alternate the first named of such alternative persons shall be the only person recognised as the Alternate Director and shall in any case, if in Hong Kong, be the only person
entitled to receive notice of Directors’ meetings in the absence from Hong Kong of his appointor. The alternate Director shall (except as regards the power to appoint an alternate) be
subject in all respects to the terms and conditions existing with reference to the other Directors of the Company; and each alternate Director, whilst acting as such, shall exercise and
discharge all the functions, powers and duties of the Director he represents, but shall look to such Director solely for his remuneration as alternate Director. Every person acting as
an alternate Director shall have one vote for each Director for whom he acts as alternate (in addition to his own vote if he is also a Director). The signature of an alternate Director
to any resolution in writing of the Board or a committee of the Board shall, unless the notice of his appointment provides to the contrary, be as effective as the signature of his
appointor. Any person appointed as an alternate Director shall vacate his office as such alternate Director as and when the Director by whom he has been appointed removes him or vacates
office as Director. A Director shall not be liable for the acts or defaults of any alternate Director appointed by him.

DISQUALIFICATION OF DIRECTORS

	86.	 	The office of a Director shall ipso facto be vacated:-

	 	(a)	 	if he becomes prohibited by law or court order from being a Director;
	 
	 	(b)	 	if a receiving order or, in the case of a company, a winding up order is made against him or he makes any arrangement
or composition with his creditors;
	 
	 	(c)	 	if he becomes of unsound mind;

 

 

	 	(d)	 	if he gives the Company notice in writing that he resigns his office;
	 
	 	(e)	 	if he is removed by an ordinary resolution of the Company in accordance with the provisions of these Articles;
	 
	 	(f)	 	if he is convicted of an arrestable offence.

DIRECTORS’ INTERESTS

	87.	 	A Director may hold any other office or place of profit under the Company (other than the office of Auditor), and he or any firm of which he is a member may act in a professional
capacity for the Company in conjunction with his office of Director, for such period and on such terms (as to remuneration and otherwise) as the Directors may determine. No Director or
intending Director shall be disqualified by his office from contracting with the Company, nor shall any contract or arrangement entered into by or on behalf of the Company in which any
Director or intending Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any
profit, remuneration or other benefits of such Director holding that office, or of any fiduciary relationship thereby established.
	 
	88.	 	A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract (being a contract of significance in relation to the Company’s business) with
the Company shall declare the nature of his interest in accordance with the provisions of the Ordinance. A general notice given to the Directors by a Director to the effect that he is a
member of a specified company or firm, and is to be regarded as interested in any contract, arrangement or dealing which may, after the date of the notice, be entered into or made with
that company or firm, shall, for the purposes of these Articles, be deemed to be a sufficient disclosure of interest in relation to any contract, arrangement or dealing so entered into
or made.
	 
	89.	 	A Director may vote as a Director in regard to any contract or arrangement in which he is interested or upon any matter arising thereout, and if he shall so vote his vote shall be
counted and he shall be taken into account in determining a quorum when any such contract or arrangement is under consideration.
	 
	90.	 	A Director may hold office as a Director in or as manager of any other company in which the Company is a shareholder or is otherwise interested, and (subject to any agreement with the
Company to the contrary) shall not be liable to account to the Company for any remuneration or other benefits receivable by him from such other company. The Board may exercise the
voting power conferred by the shares in any company held or owned by the Company in such manner and in all respects as the Board thinks fit (including the exercise thereof in favour of
any resolution appointing the Directors or any of the Directors of such company or voting or providing for the payment of remuneration to the Directors of such company) and any Director
of the Company may vote in favour of the exercise of such voting rights other than his own appointment or the arrangement of the terms thereof, in manner aforesaid.

MANAGING DIRECTORS AND OTHER APPOINTMENTS

	91.	 	The Directors may, from time to time, appoint one or more of their number to be Managing Director or Joint Managing Director of the Company, or to hold such office in the management,
administration or conduct of the business of the Company as they may decide, and for such period and upon such terms and for such remuneration as the Directors shall think fit, and the
Directors may also, from time to time (subject to the provisions of any agreement between him or them and the Company) remove him or them from office, and appoint another or others in
his or their place or places.
	 
	92.	 	A Managing Director or a Joint Managing Director (subject to the provisions of any agreement between him as Managing Director or a Joint Managing Director and the Company) shall be
subject to the same provisions as to resignation and removal as the other Directors of the Company, and shall ipso facto and immediately cease to be Managing Director or Joint Managing
Director if he shall cease to hold the office of Director.
	 
	93.	 	The Directors may, from time to time, entrust to and confer upon any Managing Director, Joint Managing Director or Director holding any other office in the management, administration or
conduct of the business of the Company, such of the powers exercisable under these Articles by the Directors as they may think fit, and may confer such powers for such time, and to be
exercised for such objects and purposes, and upon such terms and conditions and with such restrictions as they may consider expedient, and may confer such powers collaterally with, or
to the exclusion of, and in substitution for, all or any of the powers of the Directors in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such
powers.

 

 

PROCEEDINGS OF DIRECTORS

	94.	 	The Directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. Until otherwise determined by the Board, two (2)
Directors, including a Series A Director, attending in person or by duly authorized proxy(ies), shall constitute a quorum, provided, however, that if such quorum cannot be obtained per
two (2) consecutive meetings of Board due to the failure of a Series A Director to attend such meetings after the notice of the meetings has been sent by the Company in accordance with
these Articles, then the attendance of any two (2) Directors at the next duly called meeting of Board shall constitute a quorum. A Director and his appointed Alternate Director shall
be considered only one person for the purpose of these Articles. For the purposes of these Articles an Alternate Director or proxy appointed by a Director shall be counted in a quorum
at a meeting at which the Director appointing him is not present. One Director shall constitute a quorum where the Company has only one Director. Questions arising at any meeting
shall be decided by at least two (2) Directors, except those matters indicated in the Schedule A. In case of an equality of votes, the Chairman of the meeting shall not have a second
or casting vote. A Director or the Secretary may, at any time, summon a meeting of the Directors.
	 
	95.	 	A Director shall be given not less than fourteen (14) days’ notice of meetings of Board, but a meeting of Board held without fourteen (14) days’ notice having been given to all
Directors shall be valid if all the Directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a Director at a meeting
shall constitute waiver by that Director.
	 
	96.	 	The Directors may elect a Chairman of the Board and determine the period for which he is to hold office; but if no such Chairman be elected, or if at any meeting the Chairman be not
present within fifteen minutes after the time appointed for holding the same, the Directors present shall choose one of their number to be Chairman of such meeting.

	 	 	 	 	 

	97.

	 	(a)
	 	A resolution in writing signed by all of the Directors for the time being shall be as effective for all purposes as a
resolution of the Directors passed at a meeting duly convened, held and constituted. A written notification of
confirmation of such resolution in writing sent by a Director shall be deemed to be his signature to such resolution
in writing for the purposes of these Articles. Such resolution in writing may consist of several documents, each
signed by one or more Directors.

	 	(b)	 	Any Director or member of a committee of Directors may participate in a meeting of the Directors or such committee by
means of telephone or other audio communications equipment whereby all persons attending or participating in the
meeting can hear each other. The person or persons participating in the meeting in the aforesaid manner shall be
deemed for all purposes to be present in person at such meeting.
	 
	 	(c)	 	Where the Company has only one Director and that Director takes any decision that may be taken in a meeting of the
Directors and that has effect as if agreed in a meeting of the Directors, unless that decision is taken by way of a
resolution in writing, a written record of that decision shall be sufficient evidence of the decision having been
taken by the Director. The Director shall provide the Company with such written record of the decision within 7 days
after the decision is made provided that failure by the Director to provide the written record within such time limit
shall not affect the validity of any decision concerned.

	98.	 	A meeting of the Directors at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the
Directors generally.
	 
	99.	 	The Directors may, from time to time, appoint committees consisting of such persons as they think fit, and may delegate any of their powers to any such committee and, from time to time,
revoke any such delegation and discharge any such committee wholly or in part. Any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that
may, from time to time, be imposed upon it by the Directors. Any such committee shall be properly constituted even if it consists of one person. One Series A Director shall serve on
each committee.
	 
	100.	 	The meetings and proceedings of any such committee consisting of two or more members shall be governed mutatis mutandis by the provisions of these Articles regulating the meetings and
proceedings of the Board insofar as the same are not superseded by any regulations made by the Directors under the last preceding Article.
	 
	101.	 	All acts done bona fide by any meeting of the Directors or of a committee of Directors, or by any persons acting as Directors, shall, notwithstanding that there was some defect in the
appointment of any such Directors or persons acting as aforesaid, or that they or any of them were disqualified, or had vacated office, be as valid as if every such person had been duly
appointed and was qualified and continued to be a Director.

 

 

MINUTES

	102.	 	The Directors shall cause to be entered and kept in books provided for the purpose minutes of the following:-

	 	(a)	 	all appointments of officers;
	 
	 	(b)	 	the names of the Directors and any alternate Director who is not also a Director present at each meeting of the
Directors and of any committee of Directors;
	 
	 	(c)	 	all orders made by the Directors and committees of Directors; and
	 
	 	(d)	 	all resolutions and proceedings of general meetings and meetings of the Directors and committees and, where the
Company has only one member and / or one Director, all written records of the decision of the sole member and / or
the sole Director.

	 	 	Any such minutes of any meeting of the Directors, or any committee, or of the Company, if purporting to be signed by the Chairman of such meeting, or by the Chairman of the next
succeeding meeting shall be receivable as prima facie evidence of the matters stated in such minutes.

THE SEAL

	103.	 	The Directors shall forthwith procure a common seal to be made for the Company, and shall provide for the safe custody thereof. The Seal shall not be affixed to any instrument except by
the authority of a resolution of the Directors or a committee of the Directors and every instrument to which the Seal shall be affixed shall be signed by one Director or some other
person nominated by the Directors for the purpose.
	 
	104.	 	The Company may exercise all the powers of having official seals conferred by the Ordinance and such powers shall be vested in the Directors.

SECRETARY

	105.	 	The Company shall have a Secretary. The Secretary and any joint secretaries or deputy or assistant secretary or secretaries may be appointed by the Directors for such term, at such
remuneration and upon such conditions as the Directors may think fit and the Secretary and any joint secretaries or deputy or assistant secretary so appointed may at any time be removed
from office by the Directors. The First Secretary of the Company shall be Company Kit Registrations Limited, who may resign from this office upon giving notice to the Company of such
intention and suh resignation shall take effect upon the expiration of the period specified in such notice or its earlier acceptance.
	 
	106.	 	A Director may be the Secretary. If the Company has only one Director, the sole Director shall not also be the Secretary. Where the Company has only one Director, the Company shall not
have as Secretary of the Company a body corporate the sole Director of which is the sole Director of the Company.
	 
	107.	 	A provision of the Ordinance or these regulations requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the
same person acting both as Director and as, or in place of, the Secretary.

DIVIDENDS AND RESERVES

	 	 	 	 	 

	108.

	 	(a)
	 	Subject to Schedule A, the Company may by ordinary resolution declare dividends but no such dividend shall exceed the
amount recommended by the Directors.

	 	(b)	 	No distribution (as defined in section 79A of the Ordinance) shall be made save in accordance with the provisions of
Part IIA of the Ordinance and Schedule A.

 

 

	109.	 	The Directors may, if they think fit, from time to time, pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company, subject to
Schedule A. If at any time the share capital of the Company is divided into different classes the Directors may pay such interim dividends in respect of those shares in the capital of
the Company which confer on the holders thereof deferred or non-preferred rights as well as in respect of those shares which confer on the holders thereof preferential or special rights
in regard to dividend, and provided that the Directors act bona fide they shall not incur any responsibility to the holders of shares conferring a preference for any damage that they
may suffer by reason of the payment of an interim dividend on any shares having deferred or non-preferred rights. The Directors may also pay at half-yearly or at other suitable
intervals to be settled by them any dividend which may be payable at a fixed rate if they are of the opinion that the profits justify the payment.
	 
	110.	 	The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion
of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion, either be employed
in the business of the Company or be invested in such investments (other than shares of the Company) as the Directors may from time to time think fit. The Directors may also without
placing the same to reserve carry forward any profits which they may think prudent not to divide.
	 
	111.	 	No dividend shall be payable except out of the profits of the Company, and no dividend shall bear interest as against the Company.
	 
	112.	 	The Directors may retain any dividend or other monies payable on or in respect of a share on which the Company has a lien, and may apply the same in or towards satisfaction of the debts
and liabilities in respect of which the lien exists.
	 
	113.	 	Any resolution declaring a dividend on shares of any class, whether a resolution of the Company in general meeting or a resolution of the Directors, may specify that the same shall be
payable to the persons registered as the holders of such shares at the close of business on a particular date, notwithstanding that it may be a date prior to that on which the
resolution is passed, and thereupon the dividend shall be payable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in
respect of such dividend of transferors and transferees of any such shares. The provisions of these Articles shall mutatis mutandis apply to capitalisations to be effected in pursuance
of these Articles.
	 
	114.	 	Subject to Schedule A, unless and to the extent that the rights attached to any shares or the terms of issue thereof otherwise provide, all dividends shall (as regards any shares not
fully paid throughout the period in respect of which the dividend is paid) be apportioned and paid pro rata according to the amounts paid on the shares during any portion or portions of
the period in respect of which the dividend is paid. For the purposes of these Articles no amount paid on a share in advance of calls shall be treated as paid on the share.
	 
	115.	 	Unless otherwise directed, any dividend or other monies payable in cash on or in respect of a share may be paid by cheque or warrant sent through the post to the registered address of
the member or person entitled, or, in the case of joint holders, to the registered address of that one whose name stands first on the register in respect of joint holding, or addressed
to such person at such address as the holder or joint holders shall direct. The Company shall not be liable or responsible for any cheque or warrant lost in transmission nor for any
dividend or other monies lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant. Payment of the cheque or warrant by the banker on whom it is
drawn shall be a good discharge to the Company.
	 
	116.	 	The Directors may, with the sanction of the Company in general meeting, distribute in specie or in kind among the members in satisfaction in whole or in part of any dividend any of the
assets of the Company, and in particular any shares or securities of other companies to which the Company is entitled.

 

 

CAPITALISATION OF RESERVES ETC.

	117.	 	The Company in general meeting may upon the recommendation of the Directors resolve to capitalise any part of the amount for the time being standing to the credit of any of the
Company’s reserve accounts or to the credit of the profit and loss account or otherwise available for distribution, and accordingly that such sums be set free for distribution amongst
the members who would have been entitled thereto if distributed by way of dividend and in the same proportions, on condition that the same be not paid in cash but be applied either in
or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures or other obligations of the
Company to be allotted and distributed credited as fully paid up to and amongst such members in the proportions aforesaid, or partly in one way and partly in the other, and the
Directors shall give effect to such resolution:

PROVIDED that a share premium account and a capital redemption reserve fund may, for the purposes of these Articles, only be applied in the paying up of unissued shares to be issued to
members of the Company as fully paid bonus shares.
	 
	118.	 	Whenever such a resolution as aforesaid shall have been passed the Directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby,
and all allotments and issues of fully paid shares or debentures, if any, and generally shall do all acts and things required to give effect thereto.
	 
	119.	 	For the purpose of giving effect to any resolution under Articles 116 and 117 hereof the Directors may settle any difficulty which may arise in regard to the distribution as they think
expedient, and in particular may issue fractional certificates, and may fix the value for distribution of any specific assets, and may determine that cash payments shall be made to any
members upon the footing of the value so fixed or that fractions of such value as the Directors may determine may be disregarded in order to adjust the rights of all parties, and may
vest any such cash or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalised fund as may seem expedient to the Directors. The provisions of
the Ordinance in relation to the filing of contracts for allotment shall be observed, and the Directors may appoint any person to sign such contract on behalf of the persons entitled to
share in the appropriation and distribution, and such appointment shall be effective and binding upon all concerned, and the contract may provide for the acceptance by such persons of
the shares or debentures to be allotted and distributed to them respectively in satisfaction of their claims in respect of the sum so capitalised.

ACCOUNTS AND AUDITORS

	 	 	 	 	 

	120.

	 	(a)
	 	The Directors shall cause proper and true books of account to be kept of all sums of money received and expended by
the Company, and the matters in respect of which such receipt and expenditure take place; of all sales and purchases
of goods by the Company; and of the assets and liabilities of the Company and of all other matters necessary to give
a true and fair view of the state of the Company’s affairs and to explain its transactions.

	 	(b)	 	The Directors shall from time to time determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection
of members not being Directors, and no member (not being a Director) shall have any right of inspecting any account
or book or document of the Company except as conferred by statute or authorised by the Directors or by the Company in
general meeting.

	121.	 	The Directors shall from time to time, in accordance with the provisions of the Ordinance, cause to be prepared and to be laid before the Company in general meeting such Profit and Loss
Accounts, Balance Sheets, Group Accounts (if any) and Reports as are required by the Ordinance and Schedule A.
	 
	122.	 	A copy of every Balance Sheet (including every document required by law to be annexed thereto) which is to be laid before the Company in general meeting, together with a copy of the
Directors’ Report and a copy of the Auditors’ Report, shall, not less than 21 days before the date of the meeting, be sent to every member of, and every holder of debentures of, the
Company and to all persons other than members or holders of debentures of the Company, being persons entitled to receive notices of general meetings of the Company:

PROVIDED that these Articles shall not require a copy of those documents to be sent to any person of whose address the Company is not aware nor to more than one of the joint holders of
any shares or debentures.
	 
	123.	 	Auditors shall be appointed and their duties regulated in the manner provided by the Ordinance and Schedule A.

 

 

NOTICES

	124.	 	Any notice or other document may be served by the Company upon any member either personally or by sending it through the post in a prepaid letter, envelope or wrapper addressed to such
member at his registered address, and, in any case where the registered address of a member is outside Hong Kong, by prepaid airmail. The signature to any notice to be given by the
Company may be written or printed.
	 
	125.	 	Each member shall, from time to time, notify in writing to the Company some place which shall be deemed his registered address within the meaning of the last preceding Article.
	 
	126.	 	Any notice sent by post shall be deemed to have been served in the case where the member’s registered address is in Hong Kong at the expiration of 48 hours after the letter, envelope or
wrapper containing the same was posted in Hong Kong and in any other case on the fifth day after the day of posting. In proving such service it shall be sufficient to prove that the
letter, envelope or wrapper containing the notice was properly addressed and put in the post as a prepaid letter.
	 
	127.	 	A notice may be given by the Company to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending it through the post in a prepaid letter
addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, within Hong Kong supplied
for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if
the death or bankruptcy had not occurred.
	 
	128.	 	Notice of every general meeting shall be given in any manner hereinbefore authorised to:-

	 	(a)	 	every member;
	 
	 	(b)	 	every person entitled to a share in consequence of the death or bankruptcy of a member who, but for his death or
bankruptcy, would be entitled to receive notice of the meeting; and
	 
	 	(c)	 	the Auditors for the time being of the Company.

	 	 	No other person shall be entitled to receive notices of general meetings.

	129.	 	Any summons, notice, order or other document required to be sent to or served upon the Company, or upon any officer of the Company, may be sent or served by leaving the same or sending
it through the post in a prepaid letter, envelope or wrapper, addressed to the Company or to such officer at the Office.
	 
	130.	 	Subject to any special provisions contained in these Articles or in the Ordinance, all notices required to be given by advertisement shall be advertised in at least one daily Chinese
and one daily English newspaper in Hong Kong.
	 
	131.	 	In reckoning the period for any notice given under these Articles, the day on which notice is served, or deemed to be served and the day for which such notice is given shall be excluded.

WINDING UP

	132.	 	Subject to Schedule A, if the Company shall be wound up, the surplus assets remaining after payment to all creditors shall be divided among the members in proportion to the capital
which at the commencement of the winding up is paid up on the shares held by them respectively, and if such surplus assets shall be insufficient to repay the whole of the paid up
capital, they shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up at the commencement of the winding up on
the shares held by them respectively. These Articles are, however, to be subject to the rights of any shares which may be issued on special terms or conditions.

 

 

	133.	 	If the Company shall be wound up the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by the Ordinance and the Schedule, divide
amongst the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set
such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members of different classes of members.
The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like
sanction, shall think fit, but so that no member shall be compelled to accept any shares or other securities whereon there is any liability.

INDEMNITY

	134.	 	Every Director, Managing Director, Agent, Auditor, Secretary and other officer for the time being of the Company shall be indemnified out of the assets of the Company against any
liability incurred by him in relation to the Company in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in
connection with any application under Section 358 of the Ordinance in which relief is granted to him by the court.
	 
	135.	 	In case of inconcistency between the body of these Articles and Schedule A, the provisions of Schedule A shall prevail.

	 	 	 	 	 

	 	 	Name(s), Address(es) and Description(s) of Subscriber(s)
	 
	 	 	 	 
	 

	 	For and on behalf of	 	 
	 

	 	ARSD06 Limited	 	 
	 

	 	(Sd.) LEUNG Wah Lok	 	 
	 
	 	 	 	 
	 

	 	 

Authorised Signature(s)
	 	 

	 	 	Dated the 18 day of January, 2007.

WITNESS to the above signatures:

	 	 	 

	 

	 	(Sd.) LEUNG Wai Fun Fanny
	 

	 	Merchant
	 

	 	Room 904, Harvest Building,
	 

	 	29-35 Wing Kut Street,
	 

	 	Central, Hong Kong.

[Schedule A to this Memorandum and Articles Follows]

 

 

Execution Copy

EXHIBIT C-1

SHAREHOLDERS AGREEMENT

     THIS SHAREHOLDERS AGREEMENT (the “Agreement”) is made as of June 24, 2009, by and among
EASTERN WELL HOLDINGS LIMITED, a company duly incorporated and validly existing under the Laws of
the Hong Kong (the “Company”), CHINA ENVIRONMENT FUND III, L.P., a limited liability partnership
duly organized and existing under the laws of the Cayman Islands (the “Investor”), Sun Kwok Ping ,
a citizen of the Hong Kong with the Hong Kong passport No. of DA9001901(the “Founder”), SHANGHAI
NOBO COMMERCE &TRADE CO.,LTD., a wholly foreign owned enterprise duly organized
and validly existing under the Laws of the PRC (“Shanghai Nobo”), NUOXIN ENERGY TECHNOLOGY (SHANG
HAI) CO., LTD., a wholly foreign owned enterprise duly organized and
validly existing under the Laws of the PRC (“Shanghai Nuoxin”) and JIANGXI NOBAO ELECTRIC CO., LTD.
, a wholly foreign owned enterprise duly organized and validly existing under
the Laws of the PRC (“Jiangxi Nobao”).

     Each of the Company, the Investor, the Founder, Shanghai Nobo, Shanghai Nuoxin and Jiangxi
Nobao shall be referred to individually as a “Party” and collectively as the “Parties”. Shanghai
Nobo, Shanghai Nuoxin and Jiangxi Nobao shall be collectively referred to as the “PRC Companies”.

RECITALS

	A.	 	A Series A Preferred Share Purchase Agreement was entered into on June 18, 2009 (the “Share
Purchase Agreement”) by and among the Parties.
	 
	B.	 	It is condition precedent of Closing under the Share Purchase Agreement that the Parties enter
into this Agreement.
	 
	C.	 	As of the date of this Agreement, the Company owns beneficially and legally one hundred percent
(100%) of the equity interest of each PRC Companies.

WITNESSETH

     NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and
covenants set forth herein and other good and valuable consideration, the Parties agree as follows:

     1. Interpretation.

     1.1 Definitions.

     Capitalized terms used herein shall have the meanings ascribed to them in Schedule 1
hereunder. Capitalized terms used herein without definitions shall have the meanings set forth in
the Share Purchase Agreement.

     1.2 Interpretation.

     For all purposes of this Agreement, except as otherwise expressly provided herein, (i) the
terms defined in Schedule 1 shall have the meanings ascribed to them in Schedule 1
hereunder and shall include the plural as well as the singular, (ii) all accounting terms not

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

otherwise defined herein have the meanings assigned under the IFRS, (iii) all references in this
Agreement to designated “Sections” and other subdivisions are to the designated Sections and other
subdivisions of the body of this Agreement, (iv) pronouns of either gender or neuter shall include,
as appropriate, the other pronoun forms, (v) the words “herein,” “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any particular Section or
other subdivision (vi) all references in this Agreement to designated Schedules, Exhibits and
Annexes are to the Schedules, Exhibits and Annexes attached to this Agreement unless explicitly
stated otherwise, (vii) all references to dollars are to currency of the United States of America,
(viii) the term “including” will be deemed to be followed by “, but not limited to,”; (ix) the
terms “shall,” “will,” and “agrees” are mandatory, and the term “may” is permissive; and (x) the
term “day” means “calendar day.”

     1.3 Jurisdiction.

     The terms of this Agreement are drafted primarily in contemplation of an offering of
securities in the United States of America. The parties recognize, however, the possibility that
securities may be qualified or registered in a jurisdiction other than the United States of America
for offering to the public or that the Company might effect an offering in the United States of
America in the form of American Depositary Receipts or American Depositary Shares. Accordingly:

     (a) It is their intention that, whenever this Agreement refers to a law, form, process or
institution of the United States of America but the parties wish to effectuate qualification or
registration in a different jurisdiction, reference in this Agreement to the laws or institutions
of the United States shall be read as referring, mutatis mutandis, to the
comparable laws or institutions of the jurisdiction in question; and

     (b) It is agreed that the Company will not undertake any listing of American Depositary
Receipts, American Depositary Shares or any other security derivative of the Company’s Ordinary
Shares unless arrangements have been made reasonably satisfactory to a majority in interest of the
Holders of then outstanding Registrable Securities to ensure that the spirit and intent of this
Agreement will be realized and that the Company is committed to take such actions as are necessary
such that the Holders will enjoy rights corresponding to the rights hereunder to sell their
Registrable Securities in a public offering in the United States of America as if the Company had
listed Ordinary Shares in lieu of such derivative securities.

     2. Demand Registration.

     2.1 Registration Other Than on Form F-3 or Form S-3.

     Subject to the terms of this Agreement, at any time or from time to time after the earlier of
(i) one (1) year after the Closing Date and (ii) completion of a Qualified IPO, Holders holding
fifty percent (50%) or more of the then outstanding Registrable Securities may request in writing
that the Company effect a Registration for an anticipated gross proceeds of at least US$5,000,000
to the Company from the Registration in any jurisdiction in which the Company has had a registered
underwritten public offering (or, if the Company has not yet had a registered underwritten public
offering, then such request may be to effect such Registration on the New York Stock Exchange, the
NASDAQ National Market, the Hong Kong Stock Exchange Main Board, the Hong Kong Stock Exchange GEM,
or any other internationally recognized exchange that is approved by Company) of all or part of the
Registrable Securities, including without limitation any registration statement filed under the
Securities Act providing

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of
the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission on Form F-1 or Form S-1 (or any comparable form for
Registration in a jurisdiction other than the United States, if applicable). Upon receipt of such a
request, the Company shall (a) promptly give written notice of the proposed Registration to all
other Holders and (b) as soon as practicable, use its reasonable best efforts to cause the
Registrable Securities specified in the request, together with any Registrable Securities of any
Holder who requests in writing to join such Registration within fifteen (15) days after the
Company’s delivery of written notice, to be Registered and/or qualified for sale and distribution
in such jurisdiction. The Company shall be obligated to effect no more than two (2) Registrations
pursuant to this Section 2.1 that have been declared and ordered effective, and shall not be
obligated to effect a Registration within one year following the effective date of the Company’s
IPO.

     2.2 Registration on Form F-3 or Form S-3.

     Subject to the terms of this Agreement, at any time after a Qualified IPO, if the Company
qualifies for registration on Form F-3 or Form S-3 (or any comparable form for Registration in a
jurisdiction other than the United States), any Holder may request the Company to file, in any
jurisdiction in which the Company has had a registered underwritten public offering, a Registration
Statement on Form F-3 or Form S-3 (or any comparable form for Registration in a jurisdiction other
than the United States), including without limitation any registration statement filed under the
Securities Act providing for the registration of, and the sale on a continuous or delayed basis by
the Holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act
and/or any similar rule that may be adopted by the Commission, for a public offering of Registrable
Securities for which the reasonably anticipated aggregate price to the public, net of Selling
Expenses, would exceed US$1,000,000. Upon receipt of such a request, the Company shall (i) promptly
give written notice of the proposed Registration to all other Holders and (ii) as soon as
practicable, use its reasonable best efforts to cause the Registrable Securities specified in the
request, together with any Registrable Securities of any Holder who requests in writing to join
such Registration within fifteen (15) days after the Company’s delivery of written notice, to be
Registered and qualified for sale and distribution in such jurisdiction. The Holders may at any
time, and from time to time, require the Company to effect the Registration of Registrable
Securities under this Section 2.2, provided, however, that the Company shall be
obligated to effect no more than one (1) Registrations in every twelve (12) month period pursuant
to this Section 2.2 that have been declared and ordered effective.

     2.3 Right of Deferral.

     (a) The Company shall not be obligated to Register or qualify Registrable Securities pursuant
to this Section 2:

          (i) if, within ten (10) days of the receipt of any request of the Holders to Register any
Registrable Securities under Section 2.1 or Section 2.2, the Company gives notice to the Initiating
Holders of its bona fide intention to effect the filing for its own account of a Registration
Statement of Ordinary Shares within sixty (60) days of receipt of that request; provided
that the Company is actively employing in good faith its reasonable best efforts to cause that
Registration Statement to become effective within sixty (60) days of the initial filing;
provided further that the Holders are entitled to join such Registration subject to
Section 3;

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

          (ii) during the period starting with the date of filing by the Company of, and ending six (6)
months following the effective date of any Registration Statement pertaining to Ordinary Shares of
the Company; provided that the Holders are entitled to join such Registration subject to
Section 3; or

          (iii) in any jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such Registration or qualification, unless the Company is
already subject to service of process in such jurisdiction;

     (b) If, after receiving a request from Holders pursuant to Section 2.1 or Section 2.2 hereof,
the Company furnishes to the Holders a certificate signed by the chief executive officer of the
Company stating that, in the good faith judgment of the Board, there is a reasonable likelihood
that it would be materially detrimental to the Company or its members for a Registration Statement
to be filed in the near future, then the Company shall have the right to defer such filing for a
period during which such filing would be materially detrimental, provided that such
deferral by the Company shall not exceed ninety (90) days from the receipt of any request duly
submitted by Holders under Section 2.1 or sixty (60) days from the receipt of any request duly
submitted by Holders under Section 2.2 to Register Registrable Securities; provided
further, that the Company may not Register any other of its Securities during such sixty
(60) or ninety (90) day period (except for Registrations contemplated by Section 3.4); as the case
may be, and provided that the Company shall not utilize this right more than once in any
twelve (12) month period.

     2.4 Underwritten Offerings.

     If, in connection with a request to Register Registrable Securities under Section 2.1 or
Section 2.2, the Initiating Holders seek to distribute such Registrable Securities in an
underwriting, they shall so advise the Company as a part of the request, and the Company shall
include such information in the written notice to the other Holders described in Sections 2.1 and
2.2. In such event, the right of any Holder to include its Registrable Securities in such
Registration shall be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided
herein. All Holders proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or underwriters of
internationally recognized standing selected for such underwriting by the Company. Notwithstanding
any other provision of this Agreement, if the managing underwriter advises the Company that
marketing factors (including without limitation the aggregate number of securities requested to be
Registered, the general condition of the market, and the status of the Persons proposing to sell
securities pursuant to the Registration) require a limitation of the number of Registrable
Securities to be underwritten in a Registration pursuant to Section 2.1 or 2.2, the underwriters
may (i) in the event the offering is the Company’s IPO, exclude from the underwriting all of the
Registrable Securities (so long as the only securities included in such offering are those of the
Company), or (ii) otherwise exclude up to twenty percent (20%) of the Registrable Securities
requested to be Registered but only after first excluding all other Equity Securities from the
Registration and underwriting and so long as the number of shares to be included in the
Registration on behalf of Holders is allocated among all Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities requested by such Holders to be
included, provided that if, as a result of such underwriter cutback, the Holders cannot
include in the initial public offering all of the Registrable Securities that they have requested
to be included therein, then such Registration

					
	 	 	 	 	 
	 
	 	4
	 	Shareholders Agreement

 

 

shall not be deemed to constitute one (1) of the two (2) demand Registrations to which the Holders
are entitled pursuant to Section 2.1. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the Registration.

     3. Piggyback Registrations.

     3.1 Registration of the Company’s Securities.

     Subject to the terms of this Agreement, if the Company proposes to Register for its own
account any of its Equity Securities, or for the account of any holder (other than a Holder) of
Equity Securities any of such holder’s Equity Securities, in connection with the public offering of
such securities solely for cash (except as set forth in Section 3.4), the Company shall promptly
give each Holder written notice of such Registration and, upon the written request of any Holder
given within fifteen (15) days after delivery of such notice, the Company shall use its reasonable
best efforts to include in such Registration any Registrable Securities thereby requested to be
Registered by such Holder. If a Holder decides not to include all or any of its Registrable
Securities in such Registration by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent Registration Statement or
Registration Statements as may be filed by the Company, all upon the terms and conditions set forth
herein. No shareholder (other than the Holder) of the Company shall be granted piggyback
registration rights superior to those of the Holder without the consent of the holders of at least
50% of then-outstanding Series A Preferred Shares (or Ordinary Shares issued upon conversion of the
Series A Preferred Shares or a combination of such Ordinary Shares, Series A Preferred Shares).

     3.2 Right to Terminate Registration.

     The Company shall have the right to terminate or withdraw any Registration initiated by it
under Section 3.1 prior to the effectiveness of such Registration, whether or not any Holder has
elected to participate therein. The expenses of such withdrawn Registration shall be borne by the
Company in accordance with Section 4.3.

     3.3 Underwriting Requirements.

     (a) In connection with any offering involving an underwriting of the Company’s Equity
Securities solely for cash, the Company shall not be required to Register the Registrable
Securities of a Holder under this Section 3 unless such Holder’s Registrable Securities are
included in the underwriting and such Holder enters into an underwriting agreement in customary
form with the underwriter or underwriters of internationally recognized standing selected by the
Company and setting forth such terms for the underwriting as have been agreed upon between the
Company and the underwriters. In the event the underwriters advise Holders seeking Registration of
Registrable Securities pursuant to this Section 3 in writing that market factors (including the
aggregate number of Registrable Securities requested to be Registered, the general condition of the
market, and the status of the Persons proposing to sell securities pursuant to the Registration)
require a limitation of the number of Registrable Securities to be underwritten, the underwriters
may (i) in the event the offering is the Company’s IPO, exclude all of the Registrable Securities
(so long as the only securities included in such offering are those of the Company and no
securities of other selling shareholders are included), or (ii) otherwise exclude up to thirty
percent (30%) of the Registrable Securities requested to be Registered but only after first
excluding all other Equity Securities (except for securities to be offered by the Company) from the
Registration and underwriting and so long as the Registrable

					
	 	 	 	 	 
	 
	 	5
	 	Shareholders Agreement

 

 

Securities to be included in such Registration on behalf of Holders are allocated among all Holders
in proportion, as nearly as practicable, to the respective amounts of Registrable Securities
requested by such Holders to be included.

     (b) If any Holder disapproves the terms of any underwriting, the Holder may elect to withdraw
therefrom by written notice to the Company and the underwriters delivered at least ten (10) days
prior to the effective date of the Registration Statement. Any Registrable Securities excluded or
withdrawn from the underwriting shall be withdrawn from the Registration.

     3.4 Exempt Transactions.

     The Company shall have no obligation to Register any Registrable Securities under this Section
3 in connection with a Registration by the Company (i) relating solely to the sale of securities to
participants in a Company share plan, or (ii) relating to a corporate reorganization or other
transaction under Rule 145 of the Securities Act (or comparable provision under the laws of another
jurisdiction, as applicable).

     4. Procedures.

     4.1 Registration Procedures and Obligations.

     Whenever required under this Agreement to effect the Registration of any Registrable
Securities held by the Holders, the Company shall, as expeditiously as reasonably possible:

     (a) Prepare and file with the Commission a Registration Statement with respect to those
Registrable Securities and use its reasonable best efforts to cause that Registration Statement to
become effective, and, upon the request of the Holders holding a majority of the Registrable
Securities Registered thereunder, keep the Registration Statement effective for up to one hundred
and eighty (180) days or, if earlier, until the distribution thereunder has been completed;
provided, however, that such one hundred and eighty (180) day period shall be
extended for a period of time equal to the period any Holder refrains from selling any Registrable
Securities included in such Registration at the written request of the underwriter(s) for such
Registration.

     (b) Prepare and file with the Commission amendments and supplements to that Registration
Statement and the prospectus used in connection with the Registration Statement as may be necessary
to comply with the provisions of Applicable Securities Law with respect to the disposition of all
securities covered by the Registration Statement;

     (c) Furnish to the Holders the number of copies of a prospectus, including a preliminary
prospectus, required by Applicable Securities law, and any other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned by them;

     (d) Use its reasonable best efforts to Register and qualify the securities covered by the
Registration Statement under the securities laws of any jurisdiction, as reasonably requested by
the Holders, provided that the Company shall not be required to qualify to do business or
file a general consent to service of process in any such jurisdictions;

     (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in customary form, with the managing

					
	 	 	 	 	 
	 
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underwriter(s) of the offering. Each shareholder participating in the underwriting shall also enter
into and perform its obligations under such an agreement;

     (f) Notify each Holder of Registrable Securities covered by the Registration Statement at any
time when a prospectus relating thereto is required to be delivered under Applicable Securities Law
of (i) the issuance of any stop order by the commission, or (ii) the happening of any event as a
result of which any prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing;

     (g) Provide a transfer agent and registrar for all Registrable Securities Registered pursuant
to the Registration Statement and, where applicable, a number assigned by the Committee on Uniform
Securities Identification Procedures for all those Registrable Securities, in each case not later
than the effective date of the Registration;

     (h) Furnish, at the request of any Holder requesting Registration of Registrable Securities
pursuant to this Agreement, on the date that such Registrable Securities are delivered for sale in
connection with a Registration pursuant to this Agreement, (i) an opinion, dated the closing date
of the sale, of the counsel representing the Company for the purposes of the Registration, in form
and substance as is customarily given to underwriters in an underwritten public offering; (ii) (A)
a comfort letter dated the signing date of the underwriting agreement; and (B) a bring down comfort
letter dated the closing of the sale, each from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed to the underwriters; and

     (i) Take all reasonable action necessary to list the Registrable Securities on the primary
exchange on which the Company’s securities are then traded or in connection with a Qualified IPO,
the primary exchange on which the Company’s securities will be traded.

     4.2 Information from Holder.

     It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be
required to effect the Registration of such Holder’s Registrable Securities.

     4.3 Expenses of Registration.

     All expenses, other than the Selling Expenses (which shall be borne by the Holders requesting
Registration on a pro rata basis in proportion to their respective numbers of Registrable
Securities sold in such Registration), incurred in connection with Registrations, filings or
qualifications pursuant to this Agreement, including (without limitation) all Registration, filing
and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the
Company and reasonable fees and disbursement of one counsel for all selling Holders, shall be borne
by the Company.

     4.4 Delay of Registration.

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

     No Holder shall have any right to obtain or seek an injunction restraining or otherwise
delaying any Registration as the result of any controversy that may arise with respect to the
interpretation or implementation of Sections 2, 3, 4, 5 or 6 of this Agreement.

     5. Indemnification.

     5.1 Company Indemnity.

     (a) To the maximum extent permitted by law, the Company will indemnify and hold harmless each
Holder, such Holder’s officers, directors, shareholders, legal counsel and accountants, any
underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who
controls (as defined in the Securities Act) such Holder or underwriter, against any losses, claims,
damages or liabilities (joint or several) to which they may become subject under laws which are
applicable to the Company and relate to action or inaction required of the Company in connection
with any Registration, qualification, or compliance, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (each a “Violation”), in each case to the extent that such
Violation occurs in reliance upon information furnished by the Company for use in connection with
such Registration: (i) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, on the effective date thereof (including any preliminary
prospectus or final prospectus contained therein or any amendments or supplements thereto), (ii)
the omission or alleged omission to state in the Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or supplements thereto, a
material fact required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of Applicable Securities
Laws, or any rule or regulation promulgated under Applicable Securities Laws. The Company will
reimburse each such Holder, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability or action.

     (b) The indemnity agreement contained in this Section 5.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably withheld or delayed),
nor shall the Company be liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises solely out of or is solely based upon a Violation that occurs
in reliance upon and in conformity with written information furnished for use in connection with
such Registration by any such Holder, underwriter or controlling person.

     5.2 Holder Indemnity.

     (a) To the maximum extent permitted by law, each selling Holder will indemnify and hold
harmless the Company, its directors, officers, legal counsel and accountants, any underwriter, any
other Holder selling securities in connection with such Registration and each Person, if any, who
controls (within the meaning of the Securities Act) the Company, such underwriter or other Holder,
against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing
persons may become subject, under Applicable Securities Laws, or any rule or regulation promulgated
under Applicable Securities Laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

reliance upon and in conformity with written information furnished by such Holder for use in
connection with such Registration; and each such Holder will reimburse any Person intended to be
indemnified pursuant to this Section 5.2, for any legal or other expenses reasonably incurred by
such Person in connection with investigating or defending any such loss, claim, damage, liability
or action. No Holder’s liability under this Section 5.2 shall exceed the net proceeds (less
underwriting discounts and selling commissions) received by such Holder from the offering of
securities made in connection with that Registration; provided, however, such limitation shall not
apply in the case of willful fraud by such Holder.

     (b) The indemnity contained in this Section 5.2 shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or delayed).

     5.3 Notice of Indemnification Claim.

     Promptly after receipt by an indemnified Party under Section 5.1 or Section 5.2 of notice of
the commencement of any action (including any governmental action), such indemnified Party will, if
a claim in respect thereof is to be made against any indemnifying party under Section 5.1 or
Section 5.2, deliver to the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the indemnifying parties. An indemnified
Party (together with all other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the reasonably incurred fees and
expenses to be paid by the indemnifying party, if representation of such indemnified Party by the
counsel retained by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified Party and any other Party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party, to the extent so prejudiced, of any liability
to the indemnified Party under this Section 5, but the omission to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any indemnified Party
otherwise than under this Section 5.

     5.4 Contribution.

     If any indemnification provided for in Section 5.1 or Section 5.2 is held by a court of
competent jurisdiction to be unavailable to an indemnified Party with respect to any loss,
liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified Party hereunder, shall contribute to the amount paid or payable by
such indemnified Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and of the indemnified Party, on the other, in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of the indemnified
Party shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified Party and the parties’ relative intent,
knowledge, access to information, and opportunity to correct or prevent such

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

statement or omission.

     5.5 Underwriting Agreement.

     To the extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

     5.6 Survival.

     The obligations of the Company and Holders under this Section 5 shall survive the completion
of any offering of Registrable Securities in a Registration Statement under this Agreement.

     6. Additional Undertakings.

     6.1 Reports under the Exchange Act.

     With a view to making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any comparable provision of any Applicable Securities Law that may at any time
permit a Holder to sell securities of the Company to the public without Registration or pursuant to
a Registration on Form F-3 or Form S-3 (or any comparable form in a jurisdiction other than the
United States), the Company agrees to:

     (a) make and keep public information available, as those terms are understood and defined in
Rule 144 (or comparable provision, if any, under Applicable Securities Laws in any jurisdiction
where the Company’s securities are listed), at all times following ninety (90) days after the
effective date of the first Registration under the Securities Act filed by the Company for an
offering of its securities to the general public;

     (b) file with the Commission in a timely manner all reports and other documents required of
the Company under all Applicable Securities Laws; and

     (c) at any time following ninety (90) days after the effective date of the first Registration
under the Securities Act filed by the Company for an offering of its securities to the general
public by the Company, promptly furnish to any Holder holding Registrable Securities, upon request
(i) a written statement by the Company that it has complied with the reporting requirements of all
Applicable Securities Laws at any time after it has become subject to such reporting requirements
or, at any time after so qualified, that it qualifies as a registrant whose securities may be
resold pursuant to Form F-3 or Form S-3 (or any form comparable thereto under Applicable Securities
Laws of any jurisdiction where the Company’s securities are listed), (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents as may be filed by
the Company with the Commission, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the Commission, that permits the selling of any
such securities without Registration or pursuant to Form F-3 or Form S-3 (or any form comparable
thereto under Applicable Securities Laws of any jurisdiction where the Company’s Securities are
listed).

     6.2 Limitations on Subsequent Registration Rights.

	 	 	From and after the date of this Agreement, the Company shall not, without the prior

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

written consent of the Holders of a majority of the Registrable Securities then outstanding, enter
into any agreement with any holder or prospective holder of any Equity Securities of the Company
that would allow such holder or prospective holder (i) to include such Equity Securities in any
Registration filed under Section 2 or 3, unless under the terms of such agreement such holder or
prospective holder may include such Equity Securities in any such Registration only to the extent
that the inclusion of such Equity Securities will not reduce the amount of the Registrable
Securities of the Holders that are included, (ii) to demand Registration of their securities, or
(iii) cause the Company to include such Equity Securities in any Registration filed under Section
2.2 or Section 3 hereof on a basis more favorable to such holder or prospective holder than is
provided to the Holders thereunder.

     6.3 “Market Stand-Off” Agreement.

     Each Holder agrees, if so required by the managing underwriter(s), that it will not during the
period commencing on the date of the final prospectus relating to the Company’s IPO and ending on
the date specified by the Company and the managing underwriter (such period not to exceed one
hundred eighty (180) days from the date of such final prospectus, or such other period, not to
exceed twenty (20) additional days, as may be requested by the Company or an underwriter to
accommodate regulatory restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including but not limited to, the
restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions
or amendments thereto), (i) lend, offer, pledge, hypothecate, hedge, sell, make any short sale of,
loan, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly
or indirectly, any Equity Securities (other than those included in such offering) or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Equity Securities, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Equity Securities or such other
securities, in cash or otherwise; provided, that (x) all directors, officers and all other
holders of share capital of the Company must be bound by restrictions substantially identical to
those applicable to any Holder pursuant to this Section 6.3, (y) all Holders will be released from
any restrictions set forth in this Section 6.3 to the extent that any other members subject to
substantially similar restrictions are released, and (z) the lockup agreements shall permit Holders
to transfer their Registrable Securities to their respective Affiliates so long as the transferees
enters into the same lockup agreement. In order to enforce the foregoing covenant, the Company may
place restrictive legends on the certificates and impose stop-transfer instructions with respect to
the Registrable Securities of each shareholder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.

     6.4 Directed Shares.

     The Company agrees that, in the event of a filing for an IPO, the Company shall require that
the managing underwriter or underwriters of such IPO offer to the Investor the right to purchase or
to direct to the investors affiliated with the Investor, up to five percent (5%) of the total
number Ordinary Shares to be sold by the Company in the IPO (the “Directed Shares”). The Directed
Shares shall be offered pursuant to the immediately preceding sentence, to the fullest extent
practicable, on the same terms and at the same price at which they are being offered to the public,
pursuant to the Company’s IPO registration statement, subject (i) to the other provisions of this
Agreement and (ii) in all cases to the requirements of applicable federal, state or other
securities laws (including but not limited to the Securities Act or the rules and

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

regulations of any securities exchange (including but not limited to the New York Stock Exchange,
the NASDAQ National Market, the Hong Kong Stock Exchange Main Board, the Hong Kong Stock Exchange
GEM, or any other internationally recognized exchange that is approved by Company) on which the
Company has listed or desires to list shares of Ordinary Share in connection with the IPO.

     6.5 Assignment of Registration Rights.

     The rights to cause the Company to register Registrable Securities pursuant to Section 2 and
Section 3 may be assigned (but only with all related obligations) by a Holder to (i) a transferee
or assignee of a minimum Registrable Securities, or (ii) an Affiliate or partner of the Holder or
shareholders who agree to act through a single representative; provided the Company is, within a
reasonable time after such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such registration rights are being
assigned; and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. For the purposes of determining the number of
shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and
assignees of a partnership who are partners or retired partners of such partnership (including
spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire
Registrable Securities by gift, will or intestate succession) shall be aggregated together and with
the partnership; provided that all assignees and transferees who would not qualify individually for
assignment of registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action hereunder.

     6.6 Exercise of Series A Preferred Shares.

     Notwithstanding anything to the contrary provided in this Agreement, the Company shall have no
obligation to register Registrable Securities which, if constituting Ordinary Share Equivalents,
have not been exercised, converted or exchanged, as applicable, for Ordinary Shares.

     6.7 Termination of Registration Rights.

     Unless otherwise provided in this Agreement, the Registration Rights will be terminated three
(3) years after consummation of a Qualified IPO or earlier as to a particular Holder if such Holder
can sell all of its Registrable Securities in a ninety (90) day period pursuant to Rule 144 of the
Securities Act of 1934.

     7. Preemptive Right.

     7.1 General.

     The Company hereby grants to the holders of then-outstanding Series A Preferred Shares (each,
a “Series A Holder”) a right to purchase up to its pro rata shares of any New Securities that the
Company may, from time to time, propose to sell or issue to any person or entity other than the
holders of Ordinary Shares. A Series A Holder’s “pro rata share” for purposes of this purchase
right shall be determined according to the number of Ordinary Shares owned by such Series A Holder
immediately prior to the issuance of the New Securities (assuming the exercise, conversion or
exchange of all then outstanding Ordinary Share Equivalents) in relation to the total number of
Ordinary Shares of the Company outstanding

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

immediately prior to the issuance of the New Securities (assuming the exercise, conversion or
exchange of all then outstanding Ordinary Share Equivalents).

     7.2 Issuance Notice.

     In the event the Company proposes to undertake an issuance of New Securities, it shall give
each Series A Holder written notice (an “Issuance Notice”) of such intention, describing the type
of New Securities, and their price and the general terms upon which the Company proposes to issue
the same. The Series A Holder shall have fifteen (15) days after the receipt of such notice to
agree to purchase such New Securities (as determined in Section 7.1 above) for the price and upon
the terms specified in the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased. Failure by a Series A Holder to give notice within
such fifteen-day period shall be deemed to constitute a decision by such Series A Holder not to
exercise its purchase rights with respect to such issuance of New Securities.

     7.3 Over Allotment.

     If any Series A Holder fails to exercise its right to purchase its full pro rata share of any
New Securities (each, a “Non-Exercising Holder”), the Company shall, within five (5) days after the
expiration of the fifteen (15) day period described in Section 7.2 above, deliver written notice
specifying the aggregate number of unpurchased New Securities that were eligible for purchase by
all Non-Exercising Holders (the “Remaining Securities”) to each Series A Holder that exercised its
right to purchase its full pro rata share of the New Securities (each, an “Exercising Holder”).
Each Exercising Holder shall have a right of overallotment, and may exercise an additional right to
purchase the Remaining Securities by notifying the Company in writing within fifteen (15) days
after receipt of the notice by the Company pursuant to the prior sentence of this Section 7.3;
provided, however, that if the Exercising Holders desire to purchase in aggregate
more than the number of Remaining Securities, then the Remaining Securities will be allocated to
the extent necessary among the Exercising Holders in accordance with their relative pro rata
shares.

     7.4 Sales by the Company.

     For a period of one hundred twenty (120) days following the expiration of the fifteen (15) day
period as described in Section 7.2 above (or the fifteen (15) day period as described in Section
7.3 above, if applicable), the Company may sell any New Securities with respect to which a Series A
Holder’s preemptive rights under this Section 7 were not exercised, at a price and upon terms not
more favorable to the purchasers thereof than specified in the Issuance Notice. In the event the
Company has not sold such New Securities within such one hundred twenty (120) day period, the
Company shall not thereafter issue or sell any New Securities, without first again offering such
securities to the Series A Holders in the manner provided in Section 7.1 above.

     7.5 Termination of Preemptive Rights.

     The preemptive rights in this Section 7 shall terminate on the earlier of (i) the closing of
the Qualified IPO, or (ii) a Liquidation Event.

     8. Information and Inspection Rights.

					
	 	 	 	 	 
	 
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     8.1 Delivery of Financial Statements.

     The Company shall deliver to such Investor the following documents or reports:

     (a) within ninety (90) days after the end of each fiscal year of the Company Group,
consolidated, audited annual financial statements for the Company for such fiscal year and a
consolidated balance sheet for the Company Group as of the end of the fiscal year, audited and
certified by an accounting firm selected by the Company and approved by the Investor, a copy of the
Company Group’s annual operating plan and budget, and a management report including a comparison of
the financial results of such fiscal year with the corresponding business plan, all prepared in
accordance with IFRS;

     (b) within thirty (30) days of the end of each quarter, a consolidated unaudited income
statement and statement of cash flows for such quarter and a consolidated balance sheet for the
Company Group as of the end of such quarter, and a management report which will disclose all
material activities (financial or otherwise) of the Company Group including a comparison of the
financial results against the Company’s business plan, all prepared in accordance with IFRS (except
for year-end adjustments and except for the absence of notes);

     (c) within twenty (20) days of the end of each month, a consolidated unaudited income
statement and statement of cash flows for such month and a consolidated balance sheet for the
Company Group as of the end of such month, and a management report which will disclose all material
activities (financial or otherwise) of the Company including a comparison of the financial results
against the Company’s business plan, all prepared in accordance with IFRS (except for year-end
adjustments and except for the absence of notes);

     (d) no later than thirty (30) days prior to the beginning of each fiscal year, an annual
budget and operating plan for the succeeding fiscal year; and

     (e) no later than ten (10) days after the Company’s monthly, quarterly and annual operation
analysis meetings, notes from the Company’s monthly, quarterly and annual operation analysis
meetings and a written update on monthly operations and material events; and

     (f) copies of all documents or other information sent to any shareholder and any reports
publicly filed by the Company Group with any relevant securities exchange, regulatory authority or
governmental agency.

     The Company shall also promptly notify the holders of the Series A Preferred Shares the
following events in writing:

     (a) occurrence of any event of default under any of the bank loans borrowed by any member of
the Company Group;

     (b) the Company’s net assets become negative, on a consolidated basis;

     (c) each Company Group’s any material licenses or permits are revoked or not renewed and such
revocation is not cured within a reasonable period of time;

     (d) any material amendment or termination of any contract with a nominal value in excess of
US$1,000,000, to which any member of the Company Group is a party or by which any of them or any of
their respective properties are bound; and

					
	 	 	 	 	 
	 
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     (e) any other event, in the reasonable opinion of the Company, has or is likely to have a
material adverse effect on the business of the Company or its affiliates.

     8.2 Inspection.

     Each of the Company, the Founder and the PRC Company shall procure each member of the Company
Group to permit the Investor, at its own expense, to visit and inspect, during normal business
hours following reasonable notice by the Investor to such member of the Company Group and only in a
manner so as not to interfere with the normal business operations of the Company Group, any of the
properties of the Company Group, and examine the books of account and records of the Company Group,
and discuss the affairs, finances and accounts of the Company Group with the directors, officers,
management employees, accountants, legal counsel and investment bankers of such companies, all at
such reasonable times as may be requested in writing by the Investor; provided, that the Investor
agrees to keep confidential any information so obtained; provided, further, that the Investor may
be excluded from access to any material, records or other information if the Company Group is
restricted from making such disclosure pursuant to a bona fide agreement with a third party or if
such disclosure will jeopardize the attorney-client privilege.

     8.3 Termination of Information and Inspection Rights.

     The rights and covenants set forth in Sections 8.1 and 8.2 shall terminate and be of no
further force or effect upon the earlier occurrence of (i) the closing of a Qualified IPO, (ii) the
date that the Company becomes subject to the reporting requirements of Section 13 and Section 15 of
the Securities Act of 1934, as amended; or (iii) a Liquidation Event.

     8.4 Governmental/Securities Filings.

     For three (3) years after the time when the Company becomes subject to the filing requirements
of the Exchange Act or any other organized securities exchange, the Company shall deliver to the
Investor copies of, or provide a link on its public website to, any quarterly, annual,
extraordinary, or other reports publicly filed by the Company with the Commission or any other
relevant securities exchange, regulatory authority or government agency, and any annual reports and
other materials to the members.

     8.5 United States Tax Matters.

     (a) The Company shall determine annually, within forty-five (45) days from the end of each
taxable year, with respect to such taxable year (i) whether the Company is “controlled foreign
corporation” (“CFC”) as defined in the U.S. Internal Revenue Code of 1986, as amended (or any
successor thereto) (the “Code”) or a passive foreign investment company (“PFIC”) as described in
Section 1297 of the Code (including whether any exception to PFIC status may apply) or is or may
be classified as a partnership or branch for U.S. federal income tax purposes, and (ii) to provide
such information reasonably available to the company as any U.S. Investor may request to permit
such U.S. Investor to elect to treat the Company and/or any such entity (including a Subsidiary of
the Company) as a “qualified electing fund” (within the meaning of Section 1295 of the U.S.
Internal Revenue Code of 1986, as amended) (a “QEF Election”) for U.S. federal income tax purposes.
The Company shall also obtain and provide reasonably promptly upon request any and all other
information deemed necessary by the U.S. Investor to comply with the provisions of this Section
8.5(a).

					
	 	 	 	 	 
	 
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	 	Shareholders Agreement

 

 

     (b) If a determination is made by the Company that the Company is a PFIC for a particular
taxable year, then for such year and for each year thereafter, the Company shall also provide each
known U.S. Investor within 60 days from the end of such year with a completed “PFIC Annual
Information Statement,” in form and substance as attached in Exhibit A, as required by Treasury
Regulation Section 1.1295-1(g) and any other information required by a U.S. Investor to comply with
any reporting or other requirements in connection with the QEF Election.

     (c) The Company will comply and will cause its Subsidiaries to comply with all record-keeping,
reporting, and other requests necessary for the Company and its Subsidiaries to allow any U.S.
Investor to comply with any applicable U.S. federal income tax law. The Company will also provide
any known U.S. Investor with any information reasonably requested to allow such investor to comply
with any applicable U.S. federal income tax law.

     (d) The Company shall, if requested by a U.S. Investor, cooperate in determining whether it
would be desirable, reasonable and appropriate for the Company and/or any Subsidiary to elect to be
classified as a partnership or branch for U.S. federal income tax purposes and, if so, to take all
reasonable steps to cause any such elections to be made.

     (e) For purposes of this Section 8.5: (i) “U.S. Investor” means (A) any investor that is a
United States person and (B) any investor that is an entity treated as a foreign partnership for
U.S. federal income tax purposes, one or more of the owners of which are, or controlled by, United
States persons; and (ii) “United States person” means any person described in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended.

     9. Election of Directors.

     9.1 Board of Directors.

     (a) Number of Directors. The Company shall have a Board consisting of three (3) directors, of
which (i) one (1) Director shall be appointed by the Investor (the “Series A Director”); and (ii)
two (2) Directors shall be appointed by the holders of Ordinary Shares (collectively, the
“Management Directors”, and each a “Management Director”)

     (b) Designation and Election of the Series A Directors. At each election of the directors of
the Board, each holder of Series A Preferred Shares and each holder of Ordinary Shares shall vote
at any meeting of members, such number of Series A Preferred Shares (on an as-converted basis) and
Ordinary Shares as may be necessary, or in lieu of any such meeting, shall give such holder’s
written consent, as the case may be, with respect to such number of Series A Preferred Shares (on
an as-converted basis) and Ordinary Shares (i) as may be necessary to elect as the Series A
Director one (1) individuals designated by the Investor and remove any Series A Director determined
by the Investor, and (ii) against any other Series A Director nominees not so designated by
Investor.

     (c) Designation and Election of the Management Directors. At each election of the directors of
the Board, each holder of Series A Preferred Shares and each holder of Ordinary Shares shall vote
at any meeting of members, such number of Series A Preferred Shares (on an as-converted basis) and
Ordinary Shares as may be necessary, or in lieu of any such meeting, shall give such holder’s
written consent, as the case may be, with respect to such number of Series A Preferred Shares (on
an as-converted basis) and Ordinary Shares (i) as may be necessary to elect as the Management
Directors two (2) individuals designated by the holders

					
	 	 	 	 	 
	 
	 	16
	 	Shareholders Agreement

 

 

of Ordinary Shares, and (ii) against any other Management Director nominees not so designated.

     (d) PRC Companies. The Company and the Founder shall cause the board of directors of each PRC
Company to have the same number of directors and consist of the same directors as that of the
Company.

     9.2 Alternate.

     Subject to applicable law, the Series A Director and the Management Directors, in the case of
his or her absence, shall be entitled to appoint an alternate to serve at any Board meeting, and
such alternate shall be permitted to attend all Board meetings and vote on behalf of the director
for whom she or he is serving as an alternative.

     9.3 Meetings and Expenses.

     The Board shall meet in person or by teleconference no less than one time per quarter. The
Company shall reimburse all reasonable, documented expenses of all the Directors related to all
Board activities, including but not limited to attending the Board meetings.

     9.4 Assignment.

     Regardless of anything else contained herein, the rights of the Investor under this Section 9
are non-transferable and non-assignable (including without limitation by operation of law).

     9.5 Amendment.

     So long as an Investor holds any Series A Preferred Share, no rights of such Investor under
this Section 9 may be amended or waived (either generally or in a particular instance and either
retroactively or prospectively).

     9.6 Directors’ Insurance and Indemnification.

     After the execution of this Agreement, the Company shall provide customary insurance coverage
for members of its Board of Directors to the extent available on commercially reasonable terms. The
Memorandum and Articles of the Company shall at all times provide that the Company shall indemnify
the members of the Company’s Board of Directors to the maximum extent permitted by the law of the
jurisdiction in which the Company is organized.

     9.7 Board Meetings.

     The Company shall use its reasonable best efforts to hold no less than one (1) Board meeting
during each quarter, and the Series A Director shall have additional two (2) opportunities to
request to have a Board meeting during every quarter. Such request shall not be deemed exercise if
the quorum for the meeting is not obtained, unless due to the Series A Director’s failure to attend
the meeting. A quorum for a Board meeting shall consist of two (2) directors, including a Series A
Director; provided, however, if such quorum cannot be obtained per two (2)
consecutive meetings of directors due to the failure of a Series A Director to attend such meetings
of directors after the notice of the meeting has been sent by the Company in accordance with the
Memorandum and Articles, then the attendance of any two (2) directors at the next duly called
meeting of directors shall constitute a quorum.

					
	 	 	 	 	 
	 
	 	17
	 	Shareholders Agreement

 

 

     In the case of an equality of votes in a Board meeting, no director shall have a second or
casting vote and the second Board meeting shall be convened within thirty (30) days in which the
unresolved matter shall be put to the vote again. In case that the matter cannot be resolved in the
second Board meeting, such matter shall be put to the vote in the general meeting of the
shareholders of the Company in accordance with this Agreement and Memorandum and Articles.

     10 Additional Agreement; Covenants.

     10.1 Qualified IPO.

     Subject to applicable laws, the Company and the Founder shall use commercially reasonable best
efforts to effectuate the closing of a Qualified IPO within thirty-six (36) months of the date of
this Agreement. In the event of the closing of a Qualified IPO, each of the Company and the Founder
agree to use commercially reasonable best efforts, subject to applicable laws, to minimize
restrictions on the transfer of any Series A Preferred Shares held by the Investor (or Ordinary
Shares that have been converted from such Series A Preferred Shares).

     10.2 Use of Proceeds.

     The Company shall use the proceeds that it receives pursuant to the Share Purchase Agreement
for the business expansion, capital expenditures, general working capital in the principal business
of the Company Group and repayment of a shareholder loan of USD500,000 to the Founder by the
Company. Such proceeds may not be used for repaying any shareholders’ loan, purchasing shares of
other listed companies or corporate bonds or any other negotiable securities.

     10.3 Approval of Business Plan.

     The Company, the Founder and the Investor shall use their reasonable best efforts to cause
each quarterly or annual budget, business plan or operating plan (including any capital expenditure
budget, operating budget and financing plan) to be approved before the beginning of each quarter or
year, as the case may be.

     10.4 Related-Party Transactions.

     Until the closing of the Qualified IPO, except for the transactions contemplated under this
Agreement and the Transaction Documents, all related party transactions between any of the Company,
the members of the Company Group, the Founder, the Senior Managers, and directors of the Company
Group, “related party” (as referred to in IFRS) of any of such Persons and the Founder, shall be
negotiated and entered into on an arms-length basis and shall be subject to the approval of the
Board. In addition, any related party transactions concerning consideration in excess of US$10,000
shall be subject to the approval of the Board, including the approval of a Series A Director,
except for the transactions among the PRC Companies during the normal course of business.

     10.5 Restriction on Transfer.

     Unless with the prior written approval of the Board, which shall include the approval of a
Series A Director, the Founder shall not, directly or indirectly, transfer, sell, pledge, mortgage,
encumber or otherwise dispose of any of his shares in the Company. The Founder hereby

					
	 	 	 	 	 
	 
	 	18
	 	Shareholders Agreement

 

 

agrees that he will not effect any transfer in violation of this Section 10.5 nor will it treat any
alleged transferee as the holder of such shares or equity interest.

     10.6 Non-Competition by the Founder.

     Unless otherwise agreed and acknowledged by the Investor, the Founder undertakes to the
Company and the Investor that commencing from the date of this Agreement for the later of a period
of twenty-four (24) months after he ceases to be (x) employed by the Company Group or (y) a
shareholder in any member of the Company Group, he will not, without the prior written consent of
the Board (including the consent of a Series A Director), either on his own account or through any
of his Affiliates, or in conjunction with or on behalf of any other person: (i) invest or be
engaged or interested directly or indirectly in any other corporate or entity which carries out any
business that is in direct competition with the principal business of the Company Group, or
otherwise carry out any such business; (ii) act as the shareholder, director, employee, partner,
agent or representative of any entity described in subsection (i) above; (iii) solicit or entice
away or attempt to solicit or entice away from any member of the Company Group, any person, firm,
company or organization who is a customer, client, representative, agent or correspondent of such
member of the Company Group or in the habit of dealing with such member of the Company Group.

     10.7 Assignments and Transfers; No Third Party Beneficiaries.

     Except as otherwise provided herein, this Agreement and the rights and obligations of the
parties hereunder shall inure to the benefit of, and be binding upon, their respective successors,
assigns and legal representatives, but shall not otherwise be for the benefit of any third party.
The rights of any Holder hereunder are assignable in connection with the transfer (subject to
applicable securities and other laws) of Equity Securities held by such Holder; provided,
however, that (1) the transferor shall, prior to the effectiveness of such transfer,
furnish to the Company written notice of the name and address of such transferee and the Equity
Securities that are being assigned to such transferee, (2) the transferor shall cause such
transferee to, concurrently with the effectiveness of such transfer, become a party to this
Agreement as a Holder and be subject to all applicable restrictions set forth in this Agreement.
Subject to Section 6.6, this Agreement and the rights and obligations of any Party hereunder shall
not otherwise be assigned without the mutual written consent of the other parties.

     10.8 Protective Provision.

     (i) In addition to any requirements set forth in the Memorandum and Articles or by the laws of
Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall cause
any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means), take
any of the following actions without the prior approval of the holder(s) of at least sixty-seven
percent (67%) of the outstanding Series A Preferred Shares (for the purpose of this Section, the
term Company below shall also include the members of the Company Group):

     (a) Any action that authorizes, creates or issues any class of the Company securities having
preferences superior to or on a parity with the Series A Preferred Shares or any other securities
of the Company;

					
	 	 	 	 	 
	 
	 	19
	 	Shareholders Agreement

 

 

     (b) Any action that reclassifies any outstanding shares into shares having preferences or
priority as to dividends or assets senior to or on a parity with the preference of the Series A
Preferred Shares;

     (c) Consolidation or merger with or into any other business entity, or the disposition of
assets in excess of US$1,000,000 (individually or in the aggregate), or the sale of the license out
of all or substantially all of the Company’s intellectual property rights;

     (d) Any amendment to the Memorandum and Articles of Association of the Company;

     (e) Any amendment or change of the rights, preferences, privileges or powers of, or the
restrictions provided for the benefit of, the Series A Preferred Shares;

     (f) Any action that repurchases, redeems or retires any of the Company’s voting securities;

     (g) The liquidation or dissolution of the Company; and

     (h) Issuance of debt over US$2,000,000 in a single transaction or series of related
transactions.

     (ii) In addition to any requirements set forth in the Memorandum and Articles or by the laws
of Hong Kong, the Company and the PRC Companies shall not, and the Company and the Founder shall
cause any Subsidiary not to (by way of shareholders resolutions, board resolutions or other means),
take any of the following actions without the prior approval by all Directors of the Board of the
Company, which shall include the affirmative vote of a Series A Director (for the purpose of this
Section, the term Company below shall also include the members of the Company Group):

     (a) Making any loans by the Company to any Director, officer or employee outside the ordinary
course of business;

     (b) Declaration of dividends or other distributions and any changes in the dividend policy of
the Company;

     (c) Adoption and implementation of the annual operating budget or strategic plans, which, once
approved, shall not deviate from such operating budget or strategic plans;

     (d) Approval, adoption, amendment or administration of the ESOP;

     (e) Initiation and settlement of any material litigation where the amount claimed or in
dispute exceeds US$250,000;

     (f) Any issuance of equity or debt securities of the Company (in a single transaction or a
series related transactions);

     (g) Selection of the listing exchange, any financial advisors, underwriters, or approval of
the valuation and terms and conditions for a Qualified IPO or any form of merger or consolidation;

					
	 	 	 	 	 
	 
	 	20
	 	Shareholders Agreement

 

 

     (h) Sale, mortgage, pledge, lease, transfer or otherwise disposition of any of the assets of
the Company which are (i) outside the ordinary course of business, or (ii) in excess of US$250,000
in the aggregate over any twelve (12) months;

     (i) Approval or amendment of any quarterly and annual budget, business plan and operating plan
(including any capital expenditure budget, operating budget and financing plan) of the Company;

     (j) Engaging in any business materially different from that described in the then current
business plan, change of the name of the Company or ceasing any business undertaking of the
Company;

     (k) Incurrence of any indebtedness or assumption of any financial obligation, or assumption,
guarantee or creation of any liability for borrowed money in excess of US$250,000 in the aggregate
at any time outstanding unless such liability is incurred pursuant to the then current business
plan;

     (l) Any expenditure or other purchase of tangible or intangible assets in excess of US$500,000
in the aggregate over any twelve (12) months unless such expenditure or purchase is made pursuant
to the then current business plan;

     (m) Entering into any material agreement or contract with any party or group of related
parties under which the Company’s aggregate commitments, pledge or obligations to such party or
group of related parties;

     (n) Any material change in the accounting methods or policies or appointment or change of the
auditors of the Company;

     (o) Disposition of or dilution of the Company’s interest, directly or indirectly, in any of
its subsidiaries;

     (p) Appointment, removal, and determination of the remuneration of the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, Vice President or General Manager of the
Company and any material subsidiaries of the Company; and

     (q) All accounts holding cash of the Company shall be established such that any expenditure
exceeding RMB1,000,000, not relating to the core business or not included in the annual business
plan of the Company, shall require the signature of a Series A Director . Such threshold may be
adjusted at the discretion of the Investor holding at least 70% of the Series A Preferred Shares
then outstanding (at an as converted basis), with written notice to the Company and such other
documents as may be required by the applicable financial institutions.

     10.9 Assignment.

     The Information and Inspection Rights under Section 8 may be assigned to any holder of Series
A Preferred Shares; provided, however, that no party may be assigned any of the
foregoing rights unless the Company is given written notice by the assigning party stating the name
and address of the assignee and identifying the securities of the Company as to which the rights in
question are being assigned; and provided further, that any such assignee shall
receive such assigned rights subject to all the terms and conditions of this Agreement, including
without limitation the provisions of this Section 10.9.

					
	 	 	 	 	 
	 
	 	21
	 	Shareholders Agreement

 

 

     11. Miscellaneous.

     11.1 Governing Law.

     This Agreement shall be governed by and construed in accordance with the laws of Hong Kong as
to matters within the scope thereof and without regard to its principles of conflicts of laws.

     11.2 Dispute Resolution.

     (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the
interpretation, breach, termination or validity hereof, shall first be subject to resolution
through consultation of the parties to such dispute, controversy or claim. Such consultation shall
begin within seven (7) days after one Party hereto has delivered to the other Parties involved a
written request for such consultation. If within thirty (30) days following the commencement of
such consultation the dispute cannot be resolved, the dispute shall be submitted to arbitration
upon the request of any Party with notice to the other Parties.

     (b) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”). There shall be three arbitrators. The complainant
and the respondent involved in such dispute shall each select one arbitrator within thirty (30)
days after giving or receiving the demand for arbitration. Such arbitrators shall be freely
selected, and the Parties shall not be limited in their selection to any prescribed list. The
Chairman of the HKIAC shall select the third arbitrator, who shall be qualified to practice law in
the Hong Kong and fluent in English and Mandarin. If either party to the arbitration does not
appoint an arbitrator who has consented to participate within thirty (30) days after selection of
the first arbitrator, the relevant appointment shall be made by the Chairman of the HKIAC.

     (c) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the Arbitration Rules of the HKIAC in effect at the time of the arbitration. However, if such
rules are in conflict with the provisions of this Section 11.2, including the provisions concerning
the appointment of arbitrators, the provisions of this Section 11.2 shall prevail.

     (d) The arbitrators shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the substantive law of the Hong Kong and shall not apply any other
substantive law.

     (e) Each Party hereto shall cooperate with any party to the dispute in making full disclosure
of and providing complete access to all information and documents requested by such party in
connection with such arbitration proceedings, subject only to any confidentiality obligations
binding on the Party receiving the request; all such requested information and documents can be
provided in English or Chinese with equal legal validity.

     (f) The award of the arbitration tribunal shall be final and binding upon the disputing
parties, and any party to the dispute may apply to a court of competent jurisdiction for
enforcement of such award.

     (g) Any party to the dispute shall be entitled to seek preliminary injunctive relief, if
possible, from any court of competent jurisdiction pending the constitution of the arbitral

					
	 	 	 	 	 
	 
	 	22
	 	Shareholders Agreement

 

 

tribunal.

     11.3 Counterparts.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Facsimile and
e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of
this Agreement.

     11.4 Notices.

     Any notice required or permitted pursuant to this Agreement shall be given in writing and
shall be given either personally or by next-day or second-day courier service, fax, electronic mail
or similar means to the address as shown below the signature of such Party on the signature page of
this Agreement (or at such other address as such Party may designate by fifteen (15) days’ advance
written notice to the other Parties to this Agreement given in accordance with this Section).
Where a notice is sent by next-day or second-day courier service, service of the notice shall be
deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day
service through an internationally-recognized courier a letter containing the notice, with a
confirmation of delivery, and by two days having passed after the letter containing the same is
sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall
be deemed to be effected on the same day on which it is properly addressed and sent through a
transmitting organization with a reasonable confirmation of delivery.

     11.5 Headings and Titles.

     Headings and titles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

     11.6 Expenses.

     If any action at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such Party may be entitled.

     11.7 Entire Agreement: Amendments and Waivers.

     This Agreement (including the Schedules and Exhibits hereto) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects hereof and thereof. Any
term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of (i) the Company, (ii) the Founder and (iii) the Investor. Any
amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of
any Registrable Securities, each future holder of all such Registrable Securities, and the Company.

     11.8 Severability.

     If a provision of this Agreement is held to be unenforceable under applicable laws, such
provision shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with

					
	 	 	 	 	 
	 
	 	23
	 	Shareholders Agreement

 

 

its terms.

     11.9 Further Assurances.

     The parties agree to execute such further instruments and to take such further action as may
be reasonably necessary to carry out the intent of this Agreement.

     11.10 Rights Cumulative.

     Each and all of the various rights, powers and remedies of a Party hereto will be considered
to be cumulative with and in addition to any other rights, powers and remedies which such Party may
have at law or in equity in the event of the breach of any of the terms of this Agreement. The
exercise or partial exercise of any right, power or remedy will neither constitute the exclusive
election thereof nor the waiver of any other right, power or remedy available to such Party.

     11.11 No Waiver.

     Failure to insist upon strict compliance with any of the terms, covenants, or conditions
hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy
power hereunder at any one or more times be deemed a waiver or relinquishment of such right, power
or remedy at any other time or times.

     11.12 Conflict with Articles of Association.

     The Parties hereto (other than the Company) agree that in the event of any conflict or
inconsistency between the provisions of this Agreement and the provisions of the Company’s Articles
or Memorandum of Association or other constitutional documents, the terms of this Agreement shall
prevail as between the shareholders of the Company only. The Parties (other than the Company)
shall, notwithstanding the conflict or inconsistency, act so as to effect the intent of this
Agreement to the greatest extent possible under the circumstances and shall promptly amend the
conflicting constitutional documents to conform to this Agreement to the greatest extent possible.

     11.13 No Presumption.

     The parties acknowledge that any applicable law that would require interpretation of any
claimed ambiguities in this Agreement against the Party that drafted it has no application and is
expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity
in the provisions of this Agreement, no presumption or burden of proof or persuasion will be
implied because this Agreement was prepared by or at the request of any Party or its counsel.

     11.14 Information Waiver.

     The Company acknowledges that the Investor and its Affiliates, members, equity holders,
director representatives, partners, employees, agents and other related persons are engaged in the
business of investing in private and public companies in a wide range of industries, including the
industry segment in which the Company operates (the “Company Industry Segment”). Accordingly, the
Company and the Investor acknowledge and agree that a Covered Person shall:

					
	 	 	 	 	 
	 
	 	24
	 	Shareholders Agreement

 

 

     (a) have no duty to the Company to refrain from participating as a director, investor or
otherwise with respect to any company or other person or entity that is engaged in the Company
Industry Segment or is otherwise competitive with the Company; and

     (b) in connection with making investment decisions, to the fullest extent permitted by law,
have no obligation of confidentiality or other duty to the Company to refrain from using any
information, including, but not limited to, market trend and market data, which comes into such
Covered Person’s possession, whether as a director, investor or otherwise (the “Information
Waiver”), provided that the Information Waiver shall not apply, and therefore such Covered Person
shall be subject to such obligations and duties as would otherwise apply to such Covered Person
under applicable law, if the information at issue (i) constitutes material non-public information
concerning the Company, or (ii) is covered by a contractual obligation of confidentiality to which
the Company is subject. Notwithstanding anything in this Section 11.14 to the contrary, nothing
herein shall be construed as a waiver of any Covered Person’s duty of loyalty or obligation of
confidentiality with respect to the disclosure of confidential information of the Company.For the
purposes of this Section 11.14, “Covered Persons” shall have the meaning set forth in the Company’s
Memorandum and Articles.

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

					
	 	 	 	 	 
	 
	 	25
	 	Shareholders Agreement

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	COMPANY:	 	EASTERN WELL HOLDINGS LIMITED	 	
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Sun Kwok Ping	 
	 

	 	 	 	 	 
	 	 	Name: Sun Kwok Ping	 
	 	 	Title: Director	 
	 	 	Address: No. 485-487, Gu Yang Road, Changning District, Shanghai, China	 
	 	 	Fax: 86-21-6631-2459	 

[Signature Page to Shareholders Agreement]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 

	INVESTOR:

	 	CHINA ENVIRONMENT FUND III, L.P.
	 
	 	 
	 

	 	/s/ [ILLEGIBLE]
	 

	 	 
	 

	 	Name:
	 

	 	Title: Authorized Signatory
	 

	 	Address: A2302, SP Tower, Tsinghua Science Park, Beijing 100084 China

	 

	 	Fax: 86-10-8215-1150

[Signature Page to Shareholders Agreement]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 

	FOUNDER:	 	SUN KWOK PING
	 
	 	 	 	 
	 

	 	By:
	 	/s/ [ILLEGIBLE]
	 

	 	 	 	 
	 	 	Passport Number: DA9001901
	 	 	Address: No. 485-487, Gu Yang Road, Changning District, Shanghai, China
	 	 	Fax: 86-21-6631-2459

[Signature Page to Shareholders Agreement]

 

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	PRC COMPANIES :	 	SHANGHAI NOBO COMMERCE & TRADE CO., LTD.	 	
	 
	 	 	 	 	 
	 	 		 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Sun Kwok Ping	 
	 

	 	 	 	 	 
	 	 	Name: Sun Kwok Ping	 
	 	 	Title: Legal Representative	 
	 	 	Address: No. 485-487, Gu Yang Road, Changning District,	 
	 	 	Shanghai, China
	 
	 	 	Fax: 86-21-6631-2459	 
	 
	 	 	 	 	 	 
	 	 	NOXIN ENERGY TECHNOLOGY (SHANG HAI) CO., LTD	 	
	 
	 	 	 	 	 
	 	 		 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Sun Kwok Ping	 
	 

	 	 	 	 	 
	 	 	Name: Sun Kwok Ping	 
	 	 	Title: Legal Representative	 
	 	 	Address: No. 485-487, Gu Yang Road, Changning District,	 
	 	 	Shanghai, China
	 
	 	 	Fax: 86-21-6631-2459	 
	 
	 	 	 	 	 	 
	 	 	JIANGXI NOBAO ELECTRIC CO., LTD	 	
	 
	 	 	 	 	 
	 	 		 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Sun Kwok Ping	 
	 

	 	 	 	 	 
	 	 	Name: Sun Kwok Ping	 
	 	 	Title: Legal Representative	 
	 	 	Address: No. 485-487, Gu Yang Road, Changning District,	 
	 	 	Shanghai, China
	 
	 	 	Fax: 86-21-6631-2459	 

[Signature Page to Shareholders Agreement]

 

 

SCHEDULE 1

     “Affiliates” means, with respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common Control with such Person.

     “Agreement” has the meaning ascribed to it in the Preamble hereof.

     “Applicable Securities Law” means (i) with respect to any offering of securities in the United
States, or any other act or omission within that jurisdiction, the securities law of the United
States, including the Exchange Act and the Securities Act, and any applicable securities law of any
state of the United States, and (ii) with respect to any offering of securities in any jurisdiction
other than the United States, or any related act or omission in that jurisdiction, the applicable
securities laws of that jurisdiction.

     “Board” or “Board of Directors” means the board of directors of the Company.

     “CFC” has the meaning ascribed to it in Section 8.5 hereof.

     “Code” has the meaning ascribed to it in Section 8.5 hereof.

     “Commission” means (i) with respect to any offering of securities in the United States, the
Securities and Exchange Commission of the United States or any other federal agency at the time
administering the Securities Act, and (ii) with respect to any offering of securities in a
jurisdiction other than the United States, the regulatory body of the jurisdiction with authority
to supervise and regulate the offering and sale of securities in that jurisdiction.

     “Company” has the meaning ascribed to it in the Preamble hereof.

     “Company Group” means the Company, the PRC Companies, any of their Subsidiaries, and each
Person (other than a natural person) that is, directly or indirectly, controlled by the Founder
and/or the PRC Companies. “Control” of a given Person means the power or authority, whether
exercised or not, to direct the business, management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise, which
power or authority shall conclusively be presumed to exist upon possession of beneficial ownership
or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at
meetings of the members or shareholders of such Person or power to control the composition of a
majority of the board of directors of such Person; the terms “Controlling” and “Controlled” have
meanings correlative to the foregoing.

     “Conversion Shares” means any Ordinary Shares of the Company issuable upon conversion of the
Series A Preferred Shares.

     “Covered Persons” shall have the meaning set forth in the Company’s Memorandum and Articles.

     “Effective Date” has the meaning ascribed to it in the Preamble hereof.

     “Equity Securities” means any Ordinary Shares and/or Ordinary Share Equivalents of the
Company.

 

 

     “Exercising Holder” has the meaning ascribed to it in Section 7.3 hereof.

     “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

     “Form F-3” means Form F-3 promulgated by the Commission under the Securities Act or any
successor form or substantially similar form then in effect.

     “Form S-3” means Form S-3 promulgated by the Commission under the Securities Act or any
successor form or substantially similar form then in effect.

     “Founder” means Sun Kwok Ping, a citizen of Hong Kong.

     “HKIAC” has the meaning ascribed to it in Section 11.2 hereof.

     “Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

     “Holders” means the holders of Registrable Securities who are parties to this Agreement from
time to time, and their permitted transferees that become parties to this Agreement from time to
time.

     “Initiating Holders” means, with respect to a request duly made under Section 2.1 or Section
2.2 to Register any Registrable Securities, the Holders initiating such request.

     “Investor” has the meaning ascribed to it in the Preamble hereof.

     “Jiangxi Nobao” means Jiangxi Nobao Electric Co., Ltd , a wholly foreign
owned enterprise duly organized and validly existing under the Laws of the PRC.

     “IPO” means the first firmly underwritten registered public offering by the Company of its
Ordinary Shares pursuant to a Registration Statement that is filed with and declared effective by
either the Commission under the Securities Act or another Governmental Authority (as defined in the
Share Purchase Agreement) for a Registration in a jurisdiction other than the United States.

     “Issuance Notice” has the meaning ascribed to it in Section 7.2.

     “Liquidation Event” means (i) any liquidation, winding-up, or dissolution of the Company, (ii)
any consolidation, amalgamation, share acquisition or merger of the Company with or into any
Person, or any other corporate reorganization, including a sale or acquisition of Equity Securities
of the Company, in which the members of the Company immediately before such transaction own less
than fifty percent (50%) of the Company’s voting power immediately after such transaction
(excluding any transaction effected solely for tax purposes or to change the Company’s domicile);
(iii) a sale of all or substantially all of the assets of the Company; or (iv) the exclusive
licensing of all or substantially all of the Company’s intellectual property to a third party
(excluding any transaction effected solely for the Company’s internal restructuring).

     “Management Director” has the meaning ascribed to it in Section 9.1(a).

     “Memorandum and Articles” means the Company’s Memorandum and Articles of

 

 

Association, as amended and restated from time to time.

     “New Securities” means, subject to the terms of Section 7 hereof, any newly issued Equity
Securities of the Company, except for (i) up to 500,000 Ordinary Shares issued to the selected
senior managers and other employees of the Company pursuant to the ESOP or any Ordinary Shares
Equivalent issued to the employees, consultants, officers or directors of the Company Group
pursuant to other share option, share purchase or share bonus plan, agreement or arrangement to be
approved by the Compensation Committee from time to time; (ii) securities issued upon conversion of
the Series A Preferred Shares or exercise of any outstanding warrants or options; (iii) securities
issued in connection with a bona fide acquisition of another business; (iv) securities issued in a
Qualified IPO; (v) securities issued in connection with any share split, share dividend,
combination, recapitalization or similar transaction of the Company; (vi) securities issued
pursuant to the Share Purchase Agreement, as such agreement may be amended or modified from time to
time; (vii) Ordinary Shares issued or issuable pursuant to equipment lease financings or bank
credit arrangements approved by the Board; or (viii) any other issuance of Equity Securities
whereby the Investor gives a written waiver of their rights under Section 7 hereof at the
Investor’s sole discretion.

     “Non-Exercising Holder” has the meaning ascribed to it in Section 7.3 hereof.

     “Ordinary Shares” means the Ordinary Shares, par value US$0.001, of the Company.

     “Ordinary Share Equivalents” means warrants, options and rights exercisable for Ordinary
Shares or securities convertible into or exchangeable for Ordinary Shares, including, without
limitation, the Series A Preferred Shares.

     “Party” has the meaning ascribed to it in the Preamble hereof.

     “Person” means any individual, corporation, partnership, limited partnership, proprietorship,
association, limited liability company, firm, trust, estate or other enterprise or entity.

     “PFIC” has the meaning ascribed to it in Section 8.5 hereof.

     “PRC” means the People’s Republic of China, but solely for the purposes of this Agreement,
excluding the Hong Kong Special Administrative Region, Macau Special Administrative Region and
Taiwan.

     “PRC Companies” means Shanghai Nobo, Shanghai Nuoxin and Jiangxi Nobao.

     “QEF Election” has the meaning ascribed to it in Section 8.5 hereof.

     “Qualified IPO” means the IPO approved by the Board of Directors (including the approval of
the Series A Director) with gross proceeds to the Company of at least US$20,000,000 (prior to any
underwriters’ commissions and expenses) (or any cash proceeds of other currency of equivalent
value) that reflects a market valuation of the Company of not less than US$200,000,000.

     “Registrable Securities” means (i) the Ordinary Shares issuable or issued upon conversion of
the Series A Preferred Shares, (ii) any Ordinary Shares owned or hereafter acquired by the Investor
and (iii) any Ordinary Shares of the Company issued as a dividend or

 

 

other distribution with respect to, in exchange for, or in replacement of, the shares referenced in
(i) and (ii) herein, excluding in all cases, however, any of the foregoing sold by a Person in a
transaction other than an assignment pursuant to Section 10. For purposes of this Agreement, (i)
Registrable Securities shall cease to be Registrable Securities when a Registration Statement
covering such Registrable Securities has been declared effective under the Securities Act by the
Commission whether or not such Registrable Securities have been disposed of pursuant to such
effective Registration Statement and (ii) the Registrable Securities of a Holder shall not be
deemed to be Registrable Securities at any time when the entire amount of such Registrable
Securities proposed to be sold by such Holder in a single sale are or, in the opinion of counsel
satisfactory to the Company and such Holder, each in their reasonable judgment, may be, so
distributed to the public pursuant to Rule 144 (or any successor provision then in effect) under
the Securities Act in any three (3) month period or any such Registrable Securities have been sold
in a sale made pursuant to Rule 144 of the Securities Act.

     “Registration” means a registration effected by preparing and filing a Registration Statement
and the declaration or ordering of the effectiveness of that Registration Statement; and the terms
“Register” and “Registered” have meanings concomitant with the foregoing.

     “Registration Statement” means a registration statement prepared on Form F-1, F-2, F-3, S-1,
S-2 or S-3 under the Securities Act (including, without limitation, Rule 415 under the Securities
Act), or on any comparable form in connection with registration in a jurisdiction other than the
United States.

     “Remaining Securities” has the meaning ascribed to it in Section 7.3 hereof.

     “Securities Act” means the United States Securities Act of 1933, as amended.

     “Selling Expenses” means all underwriting discounts and selling commissions applicable to the
sale of Registrable Securities pursuant to this Agreement.

     “Senior Managers” means, with respect to the Company and each member of the Company Group, the
chief executive officer, the chief financial officer, the chief technology officer, the president,
the general manager or any other manager with the title of “vice-president” or higher, or any other
employee with responsibilities similar to any of the foregoing, of such entity.

     “Series A Director” has the meaning ascribed to it in Section 9.1(a) hereof.

     “Series A Holder” has the meaning ascribed to it in Section 7.1 hereof.

     “Series A Preferred Shares” means any and all of the Company’s Series A Preferred Shares, par
value US$0.001 per share, with the rights and privileges as set forth in the Memorandum and
Articles.

     “Shanghai Nobo” means Shanghai Nobo Commerce & Trade Co., Ltd. , a wholly
foreign owned enterprise duly organized and validly existing under the Laws of the PRC.

     “Shanghai Nuoxin” means Noxin Energy Technology (Shang Hai) Co., Ltd , a wholly foreign owned enterprise duly organized and validly existing under the
Laws of the PRC.

 

 

     “Share Purchase Agreement” has the meaning ascribed to it in the Recitals hereof.

     “Subsidiary” or “Subsidiaries” means, with respect to any specified Person, any Person of
which the specified Person, directly or indirectly, owns more than fifty percent (50%) of the
issued and outstanding authorized capital, share capital, voting interests or registered capital.

     “Violation” has the meaning ascribed to it in Section 5.1 hereof.

     Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.

 

 

EXHIBIT A

[Must be signed by an authorized representative of the Company]

PFIC ANNUAL INFORMATION STATEMENT

     PFIC Annual Information Statement pursuant to U.S. Treasury Regulation § 1.1295-1(g).

     _________________________ (the “Company”) hereby represents that:

     1. This PFIC Annual Information Statement applies to the Company’s taxable year beginning on
________ and ending on _________.

     2. The pro rata shares of the Company’s ordinary earnings and net capital gain attributable to
the U.S. Shareholder (directly or indirectly through any other entity that holds the investment in
the Company) for the taxable year specified in paragraph (1) are:

          Ordinary Earnings: $_____________

          Net Capital Gain: $______________

     3. The amount of cash and the fair market value of other property distributed or deemed
distributed by the Company to the U.S. Shareholder during the taxable year specified in paragraph
(1) are as follows:

          Cash: $_______________________________________

          Fair Market Value of Property: $___________________

     4. The Company will permit the U.S. Shareholder to inspect the Company’s permanent books of
account, records, and such other documents as may be maintained by the Company that are necessary
to establish that the Company’s ordinary earnings and net capital gain are computed in accordance
with U.S. Federal income tax principles, and to verify these amounts and the U.S. Shareholders
direct or indirect pro rata shares thereof; provided, that (i) a Company representative shall, at
the Company’s option, accompany the Investor on any such inspection, and (ii) the Company shall not
be required to permit such inspection if such inspection would violate applicable laws, regulations
or policies of the PRC.

By: ________________________

Title:

Date:

 

 

EXHIBIT C-2

RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

     THIS RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT (this “Agreement”) is made as of [ ],
2009, by and among EASTERN WELL HOLDINGS LIMITED, a company duly incorporated and validly existing
under the Laws of the Hong Kong (the “Company”), CHINA ENVIRONMENT FUND III, L.P., a limited
liability partnership duly organized and existing under the laws of the Cayman Island (the
“Investor”), Sun Kowk Ping, a citizen of the Hong Kong with the Hong Kong passport No. of DA9001901

(the “Founder”), SHANGHAI NOBO COMMERCE &TRADE CO.,LTD. , a wholly foreign
owned enterprise duly organized and validly existing under the Laws of the PRC (“Shanghai Nobo”),
NUOXIN ENERGY TECHNOLOGY (SHANG HAI) CO., LTD., a wholly foreign owned
enterprise duly organized and validly existing under the Laws of the PRC (“Shanghai Nuoxin”) and
JIANGXI NOBAO ELECTRIC CO., LTD. , a wholly foreign owned enterprise duly
organized and validly existing under the Laws of the PRC (“Jiangxi Nobao”).

     Each of the Company, the Investor, the Founder, Shanghai Nobo, Shanghai Nuoxin and Jiangxi
Nobao shall be referred to individually as a “Party” and collectively as the “Parties”. Shanghai
Nobo, Shanghai Nuoxin and Jiangxi Nobao shall be collectively referred to as the “PRC Companies”.

RECITALS

	A.	 	The Parties, together with certain other related parties, have entered into that certain
Series A Preferred Share Purchase Agreement dated [      ], 2009 (the “Share Purchase
Agreement”).
	 
	B.	 	It is a condition precedent of Closing under the Share Purchase Agreement that the Parties
enter into this Agreement.

WITNESSETH

     NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and
covenants set forth herein and other good and valuable consideration, the Parties agree as follows:

1. Definitions.

     Capitalized terms used herein shall have the meanings ascribed to them in Schedule 1
hereto. Capitalized terms used herein without definitions shall have the meanings set forth in the
Share Purchase Agreement (as defined herein).

2. Rights of First Refusal and Co-Sale Rights

     2.1 Prohibition on Transfer of Shares.

     (a) Holders of Ordinary Shares.

          Except as provided in Sections 2.2 through 2.5 of this Agreement, any holder (whether directly
or indirectly) of Ordinary Shares of the Company other than the Investor or
holders of Ordinary Shares converted from Series A Preferred Shares (each a “Restricted

					
	 	 	 	 	 
	 
	 	 	 	Right of First Refusal and

Co-Sale Agreement

 

 

Shareholder”), regardless of any such holder’s employment status with the Company, may not transfer
any direct or indirect interest in any Equity Securities of the Company now or hereafter owned or
held by him prior to a Qualified IPO, unless otherwise approved in writing by the majority of the
Board, including the approval of the director appointed by the Investor. For the purposes hereof,
redemption or repurchase of shares by the Company shall not be prohibited under this clause.

     (b) Prohibited Transfers Void.

          Any transfer of Equity Securities by a Restricted Shareholder not made in compliance with this
Agreement shall be null and void as against the Company and the Holders, shall not be recorded on
the books of the Company and shall not be recognized by the Company.

     2.2 Rights of First Refusal.

     (a) Transfer Notice.

          Prior to the closing of a Qualified IPO, if a Restricted Shareholder proposes to transfer the
Equity Securities he or it directly or indirectly holds in the Company to one or more third parties
pursuant to an understanding with such third parties (a “Transfer”, and such holder a
“Transferor”), then the Transferor shall, subject to the applicable statutory provisions and the
Memorandum and Articles, give the Company written notice of the Transferor’s intention to make the
Transfer (the “Transfer Notice”), which shall include (i) a description of the Equity Securities to
be transferred (the “Offered Shares”), (ii) subject to any applicable non-disclosure agreement with
such third party, the identity of the prospective transferee and (iii) the consideration and the
material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice
shall certify that the Transferor has received a firm offer from the prospective transferee and in
good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in
the Transfer Notice.

     (b) Company’s Option.

          (i) The Company shall have an option for a period of fifteen (15) days following the receipt
of the Transfer Notice to elect to purchase all of the Offered Shares (not in part) at the same
price and subject to the same material terms and conditions as described in the Transfer Notice,
subject further to complying with all the applicable statutory provisions (including, without
limitation, the Companies Ordinance (Cap. 32 of the Laws of Hong Kong)) and the Memorandum and
Articles.

          (ii) The Company may exercise such purchase option and, thereby, purchase all of the Offered
Shares, by notifying Transferor in writing, before expiration of the fifteen (15) day period, that
it wishes to purchase all of the Offered Shares.

          (iii) If the Company gives the Transferor notice that it desires to purchase Offered Shares,
then payment for the Offered Shares to be purchased shall be by check or wire transfer in
immediately available funds of the appropriate currency, against delivery of such Offered Shares to
be purchased at a place agreed by the Transferor and the Company and at the time of the scheduled
closing therefor, which shall be no later than forty-five (45) days after the Company’s receipt of
the Transfer Notice, unless such notice contemplated a later closing with
the prospective third party transferee or unless the value of the purchase price has not yet
been

					
	 	 	 	 	 
	 
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established pursuant to Section 2.2(d) or if later, the day on which all the mandatory
statutory procedures shall have been completed.

          (iv) Regardless of any other provision of this Agreement, if the Company declines in writing,
or fails to exercise its purchase option pursuant to this Section 2.2 with respect to all (and not
less than all) Offered Shares, then the Transferor shall be under no obligation to transfer the
Offered Shares to the Company pursuant to this Section 2.2 and shall then be required to provide a
Transfer Notice regarding the Offered Shares to the Holders (the “Holder Transfer Notice”) pursuant
to Section 2.2(c).

          (v) The Transferor shall have the right to terminate or withdraw any Transfer Notice and any
intent to transfer Offered Shares at any time, whether or not the Company has elected to purchase
under this Section 2.2 any Offered Shares offered thereby.

     (c) Holder’s Option.

          (i) If the Company at any time elects not to purchase all of the Offered Shares pursuant to
its right of first refusal in Section 2.2(b) hereof, then each Holder shall have an option for a
period of fifteen (15) days following the Holder’s receipt of the Holder Transfer Notice to elect
to purchase its respective pro rata share of the Offered Shares at the same price and subject to
the same material terms and conditions as described in the Holder Transfer Notice.

          (ii) Each Holder may exercise such purchase option and, thereby, purchase all or any portion
of its pro rata share (with any re-allotment as provided below) of the Offered Shares, by notifying
Transferor and the Company in writing, before expiration of the fifteen (15) day period as to the
number of such shares that it wishes to purchase (including any re-allotment).

          (iii) Each Holder’s pro rata share of the Offered Shares shall be a fraction, the numerator of
which shall be the number of Equity Securities (assuming the exercise, conversion and exchange of
any Ordinary Share Equivalents) owned by such Holder on the date of the Holder Transfer Notice and
the denominator of which shall be the total number of Equity Securities (assuming the exercise,
conversion and exchange of any Ordinary Share Equivalents) held by all Holders on such date,
multiplied by the Offered Shares.

          (iv) If any Holder fails to exercise such purchase option pursuant to this Section 2.2, the
Transferor shall give notice of such failure (the “Re-allotment Notice”) to each other Holder that
elected to purchase its entire pro rata share of the Offered Shares (the “Purchasing Holders”).
Such Re-allotment Notice may be made by telephone if confirmed in writing within two (2) days. The
Purchasing Holders shall have a right of re-allotment such that they shall have ten (10) days from
the date such Re-allotment Notice was given to elect to increase the number of Offered Shares they
agreed to purchase under Section 2.2(c)(iiii) to include their respective pro rata share of the
Offered Shares contained in any Re-allotment Notice.

          (v) Subject to applicable securities Laws, the Holder shall be entitled to apportion Offered
Shares to be purchased among its partners and Affiliates upon written notice to the Company and the
Transferor.

          (vi) If a Holder gives the Transferor notice that it desires to purchase Offered

					
	 	 	 	 	 
	 
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	 	Right of First Refusal and

Co-Sale Agreement

 

 

Shares, then
payment for the Offered Shares to be purchased shall be by check or wire transfer in immediately
available funds of the appropriate currency, against delivery of such Offered Shares to be
purchased at a place agreed by the Transferor and all the participating Holders and at the time of
the scheduled closing therefor, which shall be no later than forty-five (45) days after the
Company’s receipt of the Transfer Notice, unless such notice contemplated a later closing with the
prospective third party transferee or unless the value of the purchase price has not yet been
established pursuant to Section 2.2(d).

          (vii) Regardless of any other provision of this Agreement, if the Holders decline in writing,
or fail to exercise their purchase option pursuant to this Section 2.2(c) with respect to all (and
not less than all) Offered Shares, the Transferor shall be under no obligation to transfer the
Offered Shares to the Holders or the Company pursuant to this Section 2.2 and instead shall be free
to sell such Offered Shares pursuant to the Holder Transfer Notice, subject to Sections 2.3 and 2.4
hereunder.

          (viii) The Transferor shall have the right to terminate or withdraw any Holder Transfer Notice
and any intent to transfer Offered Shares at any time, whether or not any Holder has elected to
purchase under this Section 2.2(c) any Offered Shares offered thereby.

          (ix) If the Company or any Holder exercises its right of first refusal to purchase the Offered
Shares, then, upon the date of the completion of the relevant share transfers, the Transferor will
have no further rights as a holder of such Offered Shares except the right to receive payment for
such Offered Shares from the Company or such Holder in accordance with the terms of this Agreement,
and the Transferor will forthwith cause all certificate(s) evidencing such Offered Shares to be
surrendered to the Company for cancellation or transfer to such Holder.

          (x) In the event that the Company or Holders have not elected to purchase all of the Offered
Shares, then the sale of the remaining Offered Shares will become subject to the co-sale right of
the Holders as set forth in Section 2.3 below.

     (d) Valuation of Property.

          (i) Should the purchase price specified in the Transfer Notice or Holder Transfer Notice be
payable in property other than cash or evidences of indebtedness, the Holders or the Company, as
the case may be, shall have the right to pay the purchase price in the form of cash equal in amount
to the fair market value of such property.

          (ii) If the Transferor, on the one hand, and the Holders or the Company, as the case may be,
on the other hand, cannot agree on such cash value within seven (7) days after the Holders’ receipt
of the Holder Transfer Notice or the Company’s receipt of the Transfer Notice, the valuation shall
be made by an appraiser of internationally recognized standing jointly selected by the Transferor
and the Holders or the Company, as the case may be, or, if they cannot agree on an appraiser within
ten (10) days after the Holders’ receipt of the Holder Transfer Notice or the Company’s receipt of
the Transfer Notice, each shall select an appraiser of internationally recognized standing and the
two appraisers shall designate a third appraiser of internationally recognized standing, whose
appraisal shall be determinative of such value.

          (iii) The cost of such appraisal shall be shared equally by the Transferor and the Holders or
the Company, as the case may be, with the half of the cost borne by the Holders
to be borne pro rata by each Holder based on the number of shares such Holder has elected to

					
	 	 	 	 	 
	 
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	 	Right of First Refusal and

Co-Sale Agreement

 

 

purchase pursuant to this Section 2.

          (iv) If the value of the purchase price offered by the prospective transferee is not
determined within the time limit specified in Section 2.2(b)(iii) or Section 2.2(c)(vi) above, the
closing of the Holders’ or the Company’s purchase shall be held on or prior to the fifth business
day after such valuation shall have been made pursuant to this Section 2.2(d).

     2.3 Right of Co-Sale.

     (a) To the extent the Holders do not exercise their respective right of first refusal as to
all of the Offered Shares pursuant to Section 2.2, each Holder that did not exercise its right of
first refusal as to any of the Offered Shares pursuant to Section 2.2 shall have the right to
participate in such sale of Equity Securities on the same terms and conditions as specified in the
Transfer Notice by notifying the Transferor in writing within fifteen (15) days after receipt of
the Holder Transfer Notice referred to in Section 2.2(b) (such Holder, a “Selling Holder”).

          (i) Such Selling Holder’s notice to the Transferor shall indicate the number of Equity
Securities the Selling Holder wishes to sell under its right to participate.

          (ii) To the extent one or more of the Holders exercise such right of participation in
accordance with the terms and conditions set forth below, the number of Equity Securities that the
Transferor may sell in the Transfer shall be correspondingly reduced.

     (b) Each Selling Holder may elect to sell such number of Equity Securities that in aggregate
equals to the total number of Offered Shares being transferred following the exercise or expiration
of all rights of first refusal pursuant to Section 2.2 hereof on pro rata basis. Each Selling
Holder may elect to sell such number of Equity Securities that equals to the product of (i) the
aggregate number of the Offered Shares being transferred following the exercise or expiration of
all rights of first refusal pursuant to Section 2.2 hereof multiplied by (ii) a fraction, the
numerator of which is the number of Ordinary Shares (on as-if-converted basis which include the
number of Ordinary Shares that would be issuable upon the exercise, conversion or exchange of
Ordinary Share Equivalents) owned by the Selling Holder on the date of the Transfer Notice and the
denominator of which is the total number of Ordinary Shares (on as-if-converted basis which include
the number of Ordinary Shares that would be issuable upon the exercise, conversion or exchange of
Ordinary Share Equivalents) owned by all Selling Holders on the date of the Transfer Notice.

     (c) If any Selling Holder fails to exercise such co-sale option pursuant to this Section 2.3,
the Transferor shall give notice of such failure (the “Co-Sale Re-allotment Notice”) to each other
Selling Holders that elected to sell its entire pro rata share of the Offered Shares (the “Co-Sale
Selling Holders”). Such Co-Sale Re-allotment Notice may be made by telephone if confirmed in
writing within two (2) days. The Co-Sale Selling Holders shall have a right of re-allotment such
that they shall have ten (10) days from the date such Co-Sale Re-allotment Notice was given to
elect to increase the number of Equity Securities they agreed to sell under Section 2.3(b) to
include their respective pro rata share of the Equity Securities to be sold contained in any
Co-Sale Re-allotment Notice.

     (d) Each Selling Holder shall effect its participation in the sale by promptly delivering to
the Transferor for transfer to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent the type and number of Equity Securities which
such Selling Holder elects to sell; provided, however that if the prospective
third-party

					
	 	 	 	 	 
	 
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	 	Right of First Refusal and

Co-Sale Agreement

 

 

purchaser objects to the delivery of any Ordinary Share Equivalents in lieu of Ordinary
Shares, such Selling Holder shall only deliver Ordinary Shares (and therefore shall convert any
such Ordinary Share Equivalents into Ordinary Shares) and certificates corresponding to such
Ordinary Shares. The Company agrees to make any such conversion concurrent with the actual
transfer of such shares to the purchaser and contingent on such transfer.

     (e) The share certificate or certificates that a Selling Holder delivers to the Transferor
pursuant to Section 2.3(d) shall be transferred to the prospective purchaser in consummation of the
sale of the Equity Securities pursuant to the terms and conditions specified in the Transfer
Notice, and the Transferor shall concurrently therewith remit to such Selling Holder that portion
of the sale proceeds to which such Selling Holder is entitled by reason of its participation in
such sale.

     (f) To the extent that any prospective purchaser prohibits the participation of a Selling
Holder exercising its co-sale rights hereunder in a proposed Transfer or otherwise refuses to
purchase shares or other securities from a Selling Holder exercising its co-sale rights hereunder,
the Transferor shall not sell to such prospective purchaser any Equity Securities unless and until,
simultaneously with such sale, the Transferor shall purchase from such Selling Holder such shares
or other securities that such Selling Holder would otherwise be entitled to sell to the prospective
purchaser pursuant to its co-sale rights for the same consideration and on the same terms and
conditions as the proposed transfer described in the Transfer Notice.

     2.4 Non-Exercise of Rights.

     (a) Subject to any other applicable restrictions on the sale of such shares, to the extent
that the Holders have not exercised their rights to purchase the Offered Shares within the time
periods specified in Section 2.2 and the Holders have not exercised their rights to participate in
the sale of the Offered Shares within the time periods specified in Section 2.3, the Transferor
shall have a period of sixty (60) days from the expiration of such rights in which to sell the
Offered Shares, as the case may be, to the third-party transferee identified in the Transfer Notice
upon terms and conditions (including the purchase price) no more favorable to the purchaser than
those specified in the Transfer Notice.

     (b) In the event the Transferor does not consummate the sale or disposition of the Offered
Shares within sixty (60) days from the expiration of such rights, the Holders’ first refusal rights
and co-sale rights shall continue to be applicable to any subsequent disposition of the Offered
Shares by the Transferor until such rights lapse in accordance with the terms of this Agreement.

     (c) The exercise or non-exercise of the rights of the Holders under this Section 2 to purchase
Equity Securities from a Transferor or participate in the sale of Equity Securities by a Transferor
shall not adversely affect their rights to make subsequent purchases from the Transferor of Equity
Securities or subsequently participate in sales of Equity Securities by the Transferor hereunder.

     2.5 Limitations to Rights of First Refusal and Co-Sale.

     (a) Notwithstanding the provisions of this Section 2, the Founder may sell or otherwise
assign, up to five percent (5%) of Equity Securities now or hereafter held by him, to any Person,
and such sale or assignment shall be subject to only the Investor’s right of first
refusal under Section 2.2 and the Investor’s co-sale right under Section 2.3 under the same

					
	 	 	 	 	 
	 
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Co-Sale Agreement

 

 

terms and conditions, provided that (i) only one transfer is permitted and any additional
transfer shall require the prior consent of the Investor, and (ii) each such transferee, prior to
the completion of the sale, transfer, or assignment, shall have executed documents, in form and
substance reasonably satisfactory to the Holders, assuming the obligations of the Restricted
Shareholders under this Agreement, including but not limited to Section 2.1 hereof, with respect to
the transferred securities.

     (b) In addition to the provisions of this Section 2.5(a), any Restricted Shareholder may sell
or otherwise assign, with or without consideration, up to five percent (5%) of Equity Securities
now or hereafter held by such holder, to an entity wholly-owned by such holder, or to a spouse or
child of such holder, or to a trust, custodian, trustee, or other fiduciary for the account of any
of the foregoing, or to a trust for such holder’s account (collectively, the “Permitted
Transferees” and each, a “Permitted Transferee”) and such sale or assignment shall not be subject
to Sections 2.1, 2.2 or 2.3, provided that (i) only one transfer to Permitted Transferees
is permitted and any additional transfer by any holder of Equity Securities to a Permitted
Transferee shall require the prior consent of the Investor, which shall be determined at the
Investor’s sole discretion and such consent shall not be unreasonably withheld or delayed, (ii)
each such Permitted Transferee, prior to the completion of the sale, transfer, or assignment, shall
have executed documents, in form and substance reasonably satisfactory to the Holders, assuming the
obligations of the Restricted Shareholders under this Agreement, including but not limited to
Section 2.1 hereof, with respect to the transferred securities and (iii) each Permitted Transferee
shall have executed and delivered to the transferring Restricted Shareholder (with a copy to the
Company) an irrevocable, unconditional and permanent power of attorney, all in form and manner
reasonably satisfactory to the Holders, effective immediately after the closing of such sale or
assignment, appointing the transferring Restricted Shareholder (or such holder existing
attorney-in-fact) as such Permitted Transferee’s attorney-in-fact and authorizing him to vote, in
his absolute discretion as the attorney-in-fact of the Permitted Transferee, any and all Equity
Securities of the Company owned by such Permitted Transferee with respect to any Company related
matters.

     2.6 Change in Control. The Parties agree that, for purposes of the transfer restrictions in
this Agreement and in other Transaction Documents, a transaction or series of transactions that
result in a change in Control of a Shareholder shall be deemed to constitute a Transfer of such
Restricted Shareholders’ Equity Securities.

     2.7 Termination. The rights of Investor in this Section 2 will terminate on the completion of
a Qualified IPO or upon the merger of the Company into another entity.

3. Assignments and Transfers; No Third Party Beneficiaries.

     3.1 Except as otherwise provided herein, this Agreement and the rights and obligations of the
Parties hereunder shall inure to the benefit of, and be binding upon, their respective successors,
assigns and legal representatives, but shall not otherwise be for the benefit of any third party.
Except as otherwise provided herein, the rights of any Holder hereunder are only assignable in
connection with the transfer (subject to applicable securities and other Laws) of Equity Securities
held by such Holder but only to the extent of such transfer; provided, however,
that (i) the transferor shall, prior to the effectiveness of such transfer, furnish to the Company
written notice of the name and address of such transferee and the Equity Securities that are being
assigned to such transferee, and (ii) such transferee shall, concurrently with the effectiveness of
such transfer, become a party to this Agreement as a
Holder and be subject to all applicable restrictions set forth in this Agreement. This Agreement

					
	 	 	 	 	 
	 
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and the rights and obligations of any Party hereunder shall not otherwise be assigned without the
mutual written consent of the other Parties.

     3.2 The sale or transfer of any Equity Securities by the Holders shall not be subject to any
right of first refusal, co-sale rights or any other contractual conditions or restrictions on
transfer except as may be required by Law.

4. Drag-Along Rights.

     4.1 If, at any time after the second anniversary of the Closing, there is (a) an offer by a
bona fide third party not affiliated with any Party to purchase all the Shares in the Company; or
(b) a merger or consolidation of the Company with or into another corporation in which the Company
is not the surviving entity; or (c) a sale or transfer of all or substantially all the Company’s
properties and assets to any bona fide third person not affiliated with any Party (each a “Trade
Sale”), then the Holders of at least sixty-seven percent (67%) of the outstanding Series A
Preferred Shares shall have the right to cause other shareholders of the Company to sell all of the
then outstanding Ordinary Shares, Series A Preferred Shares and all options, warrants or other
rights to acquire any such shares then held by them on the same terms and conditions when the price
offered by such third party is not lower than one point five (1.5) times the equity valuation of
the Company implied by the Series A Purchase Price immediately after the Closing, subject to change
in accordance with the Ancillary Agreements (the “Drag Along Election”), provided,
however, that the Founder shall have a pre-emptive right to buy all of the Equity
Securities of the Company held by the Investor under the same terms and conditions. The Drag Along
Election shall include the right on the part of the Investor to cause the holders of Ordinary
Shares to approve a sale of assets, merger, consolidation, corporations or exchange or
reorganization of the Company with or into any other corporations, corporation or other entity
(excluding any merger effected exclusively for the purpose of changing the domicile of the
Company), or any other transaction or series of related transactions, in which the shareholders of
the Company immediately prior to such reorganization, merger or consolidation own less than fifty
percent (50%) of the voting power of the surviving entity, or a sale, conveyance or other
disposition of all or substantially all of the assets of the Company to a third party (each a “Sale
Transaction”), provided, however, that in no event shall a holder of Ordinary
Shares be obligated to undertake the foregoing if the distribution of consideration received by the
shareholders upon consummation of the Sale Transaction is not in accordance with the liquidating
distribution requirements set forth in the Company’s then-current Memorandum of Association. The
Investor may exercise the Drag-Along Election by providing written notice of such election (the
“Drag-Along Notice”) to all shareholders of the Company, including the name and address of the
third party acquirer, the aggregate purchase price to be paid by such third party purchaser, the
proposed date for the closing of such Trade Sale, and the other material terms and conditions of
such Trade Sale. Within fifteen (15) days upon receipt of the Drag-Along Notice, if the Founder
doesn’t exercise the right to purchase all of the Equity Securities of the Company held by the
Investor under the same terms and conditions, then each shareholder of the Company shall execute
and deliver such instruments of conveyance and transfer and take such other action, including
executing any purchase agreements, merger agreements, indemnity agreements, escrow agreements or
related documents as the Investor or the acquirer in such Trade Sale may reasonably require in
order to carry out the terms and provisions of this Section 4.

     4.2 Should the consideration to be paid in connection with the Trade Sale be payable in
property other than cash, the Investor and other shareholders of the Company agree
and acknowledge that the value of the consideration will be determined in accordance with the

					
	 	 	 	 	 
	 
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following arrangement: (i) if the consideration to be paid in connection with the Trade Sale is for
publicly-traded securities, the value of the consideration to be paid shall be equal to the average
closing price based on a period of thirty (30) days prior the closing; or (ii) if the consideration
for the Trade Sale is not for publicly-traded securities, and the holders of Ordinary Shares and
Series A Preferred Shares cannot agree on such value with seven (7) days after receipt of
Drag-Along Notice by holders of Ordinary Shares, the valuation shall be made by an appraiser of
internationally recognized standing jointly selected by the holders of Ordinary Shares and the
Investor, whose appraisal shall be determinative of such value.

4.3 The rights of Investor in this Section 4 will terminate on the completion of a Qualified IPO.

5. Legend.

     Each existing or replacement certificate for shares now owned or hereafter acquired by any
Restricted Shareholder shall bear the following legend:

	 	 	 	“THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A RIGHT OF
FIRST REFUSAL AND CO-SALE AGREEMENT BY AND BETWEEN THE MEMBER, THE COMPANY AND
CERTAIN HOLDERS OF SHARES OF THE COMPANY. COPIES OF SUCH AGREEMENTS MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

6. Further Instruments and Actions.

     The Parties agree to execute such further instruments and to take such further action as may
reasonably be necessary to carry out the intent of this Agreement. Each Party agrees to cooperate
affirmatively with the other Parties, to the extent reasonably requested by another Party, to
enforce rights and obligations pursuant hereto.

7. Miscellaneous

     7.1 Governing Law.

     This Agreement shall be governed by and construed in accordance with the laws of Hong Kong as
to matters within the scope thereof and without regard to its principles of conflicts of laws.

     7.2 Notices.

     Any notice required or permitted pursuant to this Agreement shall be given in writing and
shall be given either personally or by next-day or second-day courier service, fax, electronic mail
or similar means to the address as shown below the signature of such Party on the signature page of
this Agreement (or at such other address as such Party may designate by fifteen (15) days’ advance
written notice to the other Parties to this Agreement given in accordance with this Section).
Where a notice is sent by next-day or second-day courier service, service of the notice shall be
deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day
service through an internationally-recognized courier a
letter containing the notice, with a confirmation of delivery, and by two (2) days having
passed

					
	 	 	 	 	 
	 
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after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or
electronic mail, service of the notice shall be deemed to be effected on the same day on which it
is properly addressed and sent through a transmitting organization with a reasonable confirmation
of delivery.

     7.3 Entire Agreement.

     This Agreement, the Share Purchase Agreement and the exhibits hereto and thereto contain the
entire understanding of the Parties with respect to the subject matter hereof, and supersede all
other agreements between or among any of the Parties with respect to the subject matter hereof.

     7.4 Amendments and Waivers.

     Any term of this Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of each of (i) the Company, (ii) the Founder, and (iii) the Investor.
Any amendment or waiver effected in accordance with this paragraph shall be binding upon the
Parties and their respective successors and assigns.

     7.5 Severability.

     If one or more provisions of this Agreement are held to be unenforceable under applicable law,
such provision shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with its
terms.

     7.6 Attorney’s Fees.

     In the event that any dispute among the Parties arising from or in relation to this Agreement
should result in litigation, the prevailing Party in such dispute shall be entitled to recover from
the losing Party all fees, costs and expenses of enforcing any right of such prevailing Party under
or with respect to this Agreement, including, without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.

     7.7 Titles and Subtitles.

     The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

     7.8 Counterparts.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Facsimile and
e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of
this Agreement.

     7.9 Dispute Resolution.

     (a) Any dispute, controversy or claim arising out of or relating to this Agreement,
or the interpretation, breach, termination or validity hereof, shall first be subject to
resolution

					
	 	 	 	 	 
	 
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through consultation of the parties to such dispute, controversy or claim. Such
consultation shall begin within seven (7) days after one Party hereto has delivered to the other
Parties involved a written request for such consultation. If within thirty (30) days following the
commencement of such consultation the dispute cannot be resolved, the dispute shall be submitted to
arbitration upon the request of any Party with notice to the other Parties.

     (b) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”). There shall be three arbitrators. The complainant
and the respondent to such dispute shall each select one arbitrator within thirty (30) days after
giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed list. The Chairman of the HKIAC
shall select the third arbitrator, who shall be qualified to practice law in Hong Kong
and fluent in English and Mandarin. If either party to the arbitration does not appoint an
arbitrator who has consented to participate within thirty (30) days after selection of the first
arbitrator, the relevant appointment shall be made by the Chairman of the HKIAC.

     (c) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the Arbitration Rules of the HKIAC in effect at the time of the arbitration. However, if
such rules are in conflict with the provisions of this Section 7.9, including the provisions
concerning the appointment of arbitrators, the provisions of this Section 7.9 shall prevail.

     (d) The arbitrators shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the substantive laws of New York and shall not apply any other
substantive law.

     (e) Each Party hereto shall cooperate with any party to the dispute in making full disclosure
of and providing complete access to all information and documents requested by such party in
connection with such arbitration proceedings, subject only to any confidentiality obligations
binding on the Party receiving the request; all such requested information and documents
can be provided in English or Chinese with equal legal validity.

     (f) The award of the arbitration tribunal shall be final and binding upon the disputing
parties, and any party to the dispute may apply to a court of competent jurisdiction for
enforcement of such award.

     (g) Any party to the dispute shall be entitled to seek preliminary injunctive relief, if
possible, from any court of competent jurisdiction pending the constitution of the arbitral
tribunal.

     7.10 Rights Cumulative.

     Each and all of the various rights, powers and remedies of a Party hereto will be considered
to be cumulative with and in addition to any other rights, powers and remedies which such Party may
have at law or in equity in the event of the breach of any of the terms of this Agreement. The
exercise or partial exercise of any right, power or remedy will neither constitute the exclusive
election thereof nor the waiver of any other right, power or remedy available to such Party.

     7.11 No Waiver.

					
	 	 	 	 	 
	 
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     Failure to insist upon strict compliance with any of the terms, covenants, or conditions
hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy
power hereunder at any one or more times be deemed a waiver or relinquishment of such right, power
or remedy at any other time or times.

     7.12 No Presumption.

     The Parties acknowledge that any applicable law that would require interpretation of any
claimed ambiguities in this Agreement against the Party that drafted it has no application and is
expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity
in the provisions of this Agreement, no presumption or burden of proof or persuasion will be
implied because this Agreement was prepared by or at the request of any Party or its counsel.

     7.13 Confidentiality.

     The terms and conditions of this Agreement, all exhibits and schedules attached hereto and
thereto, and the transactions contemplated hereby and thereby, including their existence, shall be
considered confidential information and shall not be disclosed by any Party hereto to any third
party except as permitted in accordance with the Share Purchase Agreement.

[Remainder of page intentionally left blank; signature pages to follow]

					
	 	 	 	 	 
	 
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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	COMPANY:	 	EASTERN WELL HOLDINGS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Sun Kwok Ping
	 	 
	 

	 	Title:
	 	Director	 	 
	 

	 	Address:
	 	No. 485-487, Gu Yang Road, Changning District, 	 	 
	 

	 	Shanghai, China
	 	 
	 

	 	Fax:
	 	86-21-6631-2459	 	 

[Signature Page to Right of First Refusal and Co-Sale Agreement]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	FOUNDER:	 	SUN KWOK PING	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Passport Number: DA9001901	 	 
	 

	 	Address:
	 	No. 485-487, Gu Yang Road, Changning District,	 	 
	 

	 	Shanghai,
China
	 	 
	 

	 	Fax:
	 	86-21-6631-2459	 	 

[Signature Page to Right of First Refusal and Co-Sale Agreement]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	INVESTOR:	 	CHINA ENVIRONMENT FUND III, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 

	 	Name:

Title:
	 	

Authorized Signatory	 	 
	 

	 	Address:
	 	A2302, SP Tower, Tsinghua Science Park, Beijing 
100084
China	 	 
	 

	 	Fax:
	 	86-10-8215-1150	 	 

[Signature Page to Right of First Refusal and Co-Sale Agreement]

 

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 

	PRC COMPANIES :	 	SHANGHAI NOBO COMMERCE & TRADE CO., LTD.	 	 
	 	 		 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Sun Kwok Ping
	 	 
	 

	 	Title:
	 	Legal Representative	 	 
	 

	 	Address:
	 	No. 485-487, Gu Yang Road, Changning District,
Shanghai, China	 	 
	 

	 	Fax:
	 	86-21-6631-2459	 	 
	 
	 	 	 	 	 	 
	 	 	NOXIN ENERGY TECHNOLOGY (SHANG HAI) CO., LTD	 	 
	 	 		 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Sun Kwok Ping
	 	 
	 

	 	Title:
	 	Legal Representative	 	 
	 

	 	Address:

Fax:
	 	No. 485-487, Gu Yang Road, Changning District,
Shanghai, China

86-21-6631-2459	 	 
	 
	 	 	 	 	 	 
	 	 	JIANGXI NOBAO ELECTRIC CO., LTD	 	 
	 	 		 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Sun Kwok Ping
	 	 
	 

	 	Title:
	 	Legal Representative	 	 
	 

	 	Address:
	 	No. 485-487, Gu Yang Road, Changning District,
Shanghai, China	 	 
	 

	 	Fax:
	 	86-21-6631-2459	 	 

[Signature Page to Right of First Refusal and Co-Sale Agreement]

 

 

SCHEDULE 1

     “Affiliates” means, with respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common Control with such Person.

     “Agreement” has the meaning set forth in the Preamble hereof.

     “Ordinary Shares” means the Company’s ordinary shares, par value US$0.001 per share.

     “Ordinary Share Equivalents” means warrants, options and rights exercisable for Ordinary
Shares or securities convertible into or exchangeable for Ordinary Shares, including, without
limitation, the Series A Preferred Shares and the Warrant Shares.

     “Company” has the meaning set forth in the Preamble hereof.

     “Control” of a given Person means the power or authority, whether exercised or not, to direct
the business, management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, which power or authority shall
conclusively be presumed to exist upon possession of beneficial ownership or power to direct the
vote of more than fifty percent (50%) of the votes entitled to be cast at meetings of the members
or shareholders of such Person or power to control the composition of a majority of the board of
directors of such Person; the terms “Controlling” and “Controlled” have meanings correlative to the
foregoing.

     “Co-Sale Re-allotment Notice” has the meaning set forth in Section 2.3(c) hereof.

     “Co-Sale Selling Holders” has the meaning set forth in Section 2.3(c) hereof.

     “Drag-Along Election” has the meaning set forth in Section 4.1 hereof.

     “Drag-Along Notice” has the meaning set forth in Section 4.1 hereof.

     “Equity Securities” means any Ordinary Shares and/or Ordinary Share Equivalents of the
Company.

     “Founder” shall mean Sun Kwok Ping, a citizen of Hong Kong.

     “HKIAC” has the meaning set forth in Section 7.9(a) hereof.

     “Holder” means the Investor, together with the permitted transferees and assigns of the
Investor who become parties to this Agreement.

     “Holder Transfer Notice” has the meaning section forth in Section 2.2(b) hereof.

     “Offered Shares” has the meaning set forth in Section 2.2(a) hereof.

     “Party” has the meaning set forth in the Preamble hereof.

     “Permitted Transferee” has the meaning set forth in Section 2.5(b) hereof.

     “Person” means any individual, corporation, partnership, limited partnership, proprietorship,
association, limited liability company, firm, trust, estate or other enterprise or
entity.

 

 

     “Purchasing Holders” has the meaning set forth in Section 2.2(c) hereof.

     “Qualified IPO” has the meaning given to such term in the Memorandum and Articles, as amended
and restated from time to time.

     “Re-allotment Notice” has the meaning set forth in Section 2.2(c) hereof.

     “Restricted Shareholder” has the meaning set forth in Section 2.1(a) hereof.

     “Sale Transaction” has the meaning set forth in Section 4.1 hereof.

     “Selling Holder” has the meaning set forth in Section 2.3 hereof.

     “Series A Preferred Shares” means any and all of the Company’s Series A Preferred Shares, par
value US$0.001 per share, with the rights and privileges as set forth in the Memorandum and
Articles.

     “Shares” means the Company’s Ordinary Shares and/or Series A Preferred Shares.

     “Share Purchase Agreement” has the meaning set forth in the Recitals hereof.

     “Transfer” or “Transferor” has the meaning set forth in Section 2.2(a) hereof.

     “Transfer Notice” has the meaning set forth in Section 2.2(a) hereof.

     “Trade Sale” has the meaning set forth in Section 4.1 hereof.

 

 

EXHIBIT D

DISCLOSURE SCHEDULE

The sequential number indicated below is in correspondence with those in Section 3 of this
Agreement.

Save as expressly provided in this Disclosure Schedule, or where the context otherwise requires,
words and expressions defined in the Agreement shall have the same respective meanings in this
Disclosure Schedule.

Disclosures made as to each numbered representation apply to and /or qualify only the corresponding
representation in Section 3 of this Agreement and constitute formal and complete disclosure to the
Investors for the purpose of this Agreement.

3.4 Capitalization and Voting Rights.

3.4(i)

(1) Capitalization Table of the Company

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Pre-Closing	 	 	Post-Closing	 
	Security	 	Number of Shares	 	 	Ratio	 	 	Number of Shares	 	 	Ratio	 
	Ordinary Shares
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUN KWOK PING
	 	 	10,000,000	 	 	 	100	%	 	 	14,593,520	 	 	 	72.9676	%
	ESOP
	 	 	0	 	 	 	0	%	 	 	500,000	 	 	 	2.5	%
	Series A Preferred Shares
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CHINA ENVIRONMENT
FUND III, L.P.
	 	 	0	 	 	 	0	%	 	 	4,906,480	 	 	 	24.5324	%
	Total
	 	 	10,000,000	 	 	 	100	%	 	 	20,000,000	 	 	 	100	%

 

			
	(2)	 	Capitalization Table of the PRC Companies at the Closing

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Company Name	 	Capital	 	Shareholder	 	Shareholding Ratio
	Shanghai Nobo
	 	RMB 10,000,000	 	 	 	 	 	 	 	 
	 
	 	(RMB 10,000,000	 	 	 	 	 	 	 	 
	 
	 	paid up)	 	Company	 	 	100	%
	Shanghai Nuoxin
	 	US$29,800,000 (US$	 	 	 	 	 	 	 	 
	 
	 	4,000,000 paid up)	 	Company	 	 	100	%
	Jiangxi Nobao
	 	US$15,000,000 (US$	 	 	 	 	 	 	 	 
	 
	 	4,830,000 paid up)	 	Company	 	 	100	%

 

			
	(3)	 	The Company as the sole shareholder of Shanghai Nuoxin, shall contribute 20% of

1

 

			
	 	 	the registered capital of Shanghai Nuoxin, that is, US$5,960,000, within 3 months from the
date of issuance of Shanghai Nuoxin’s business license. As of 28 February 2009, the Company
has contributed US$4,000,000 to Shanghai Nuoxin and has obtained an approval from Shanghai
Zhabei Commercial Commission to postpone the contribution of outstanding amount of US$
1,960,000 till 30 June 2009. The registered capital of Shanghai Nuoxin shall be fully paid up
before 27 November 2010.
	 
	(4)	 	The registered capital of Jiangxi Nobao is US$15,000,000. The Company as the sole
shareholder of Jiangxi Nobao has contributed US$4,830,000 to Jiangxi Nobao and has obtained
the approval from Jiujiang Commercial Bureau to postpone the contribution of outstanding
amount of US$10,170,000 to 30 May 2010.

3.7 Financial Statement

The Company has delivered to the Investor:

	(1)	 	the audited consolidated financial statements of the Company for the fiscal year ending
December 31, 2008, prepared by the Company in accordance with the IFRS.

3.8 Changes

	(1)	 	Shanghai Nobo and Shanghai Nuoxin will enter into an asset transfer agreement in respect of
transfer of assets, business contracts and personnel of Shanghai Nobo to Shanghai Nuoxin
before Closing;

3.11 Commitments

List of Material Contracts (Please see attached Exhibit D-1)

3.13 Title; Liens; Permits

The outstanding matters in respect of the land use right of Jiangxi Nobao:

	(1)	 	With regard to the New Land, Jiangxi Nobao has entered into a Land Use Right Granting
Contract with State-owned Land, Environmental Protection and Construction Bureau of
Gongqingcheng on 16 April 2009 and the land use right grant fee is RMB 4,000,000. Jiangxi
Nobao has fully paid the respective land use right granting fee.

	(2)	 	With regard to the Old Land, Jiangxi Nobao has entered into the Old Land Use Right Granting
Contract with State-owned Land, Environmental Protection and Construction Bureau of
Gongqingcheng on 4 July 2005 and the land use right grant

2

 

	 	 	fee is RMB 11,940,000. After that, Jiangxi Nobao has entered into the Old Supplemental Land
Use Right Granting Contract with Regulatory Committee of Kaifang Development District of
Gongqingcheng of Jiangxi Province on 3 November 2007, providing that the fee for granting of
land use right and transfer of real estate on such land shall be RMB 6,000,000, and such fee
could be paid in four installments. So far, Jiangxi Nobao has paid RMB 2,000,000.

	(3)	 	As of the date of this Agreement, Jiangxi Nobao has not carried out environmental compliance
review for the completed and ongoing constructions on the New Land and the Old Land and no
environmental effect evaluation reports in respect of such constructions are available.

	(4)	 	Jiangxi Nobao entered into a loan agreement of RMB 5,000,000 with Gong Qing Cheng Finance
Management Investment Co., Ltd. on January 8, 2009 and the land use right of the Old Land has
been mortgaged to Gong Qing Cheng Finance Management Investment Co., Ltd. to guarantee the
loan under such loan agreement.

3.16 Related Party Transactions

The Founder provided a loan of US$500,000 to the Company on November 4, 2008;

3.17 Intellectual Property Rights

3.17(i)

	(1)	 	Intellectual Property owned, licensed to or used by the Company Group:

	 	 	 	 	 	 	 
	IP	 	Owner	 	Owned/Licensed/Used	 	Explanatory Notes
	Nobo-branded heat 

pump

	 	Glen Dimplex

Deutschland GmbH
	 	Licensed
	 	Authorized to
distribute
Nobo-branded heat
pump in the PRC,

Taiwan, Korea, Hong
Kong and Macao.

	Trademark “”
	 	Jiangxi Nobao
	 	Owned
	 	Under application
(Application No.: 5069225)

 

			
	3.19	 	Labor Agreement and Actions

The Company and Shanghai Nuoxin have no employees as of the date of this

3

 

Agreement.

Key Employees of Shanghai Nobo and Jiangxi Nobao are listed in Exhibit D-2

3.26 Other Representations and Warranties Relating to the PRC Companies

3.26(v)

Please refer to Section 3.4(i)(3) and 3.4(i)(4).

3.26(ix)

Jiangxi Nobao obtained the Social Insurance Registration Certificate on May 27, 2009, and shall
make contributions and payments to mandatory social insurance funds as required by PRC laws and
regulations for or on behalf of its employees since June 2009.

4

 

EXHIBIT D-1

LIST OF MATERIAL CONTRACTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Contract Price	 	 
	Project Name	 	Contracted Party	 	(RMB)	 	Contract Date
	EMC of
Jutailong Home
Furnishing Center
	 	Beijing Jutailong (Shanghai)	 	 	1,080,000	 	 	August 5, 2007
	EMC of Dahua Hotel
	 	Shanghai Dahua Hotel	 	 	3,855,800	 	 	October 10, 2007
	EMC of Donghu Hotel
	 	Shanghai Donghu Hotel	 	 	14,444,000	 	 	November 20, 2007
	EMC of Minhang Hotel
	 	Shanghai Minhang Hotel	 	 	5,080,000	 	 	January 5, 2009
	EMC of Xinyuan Hotel
	 	Shanghai Xinyuan Hotel	 	 	13,308,800	 	 	February 5, 2009
	EMC of Jinshangjiang Hotel
	 	Shanghai Jinshangjiang Hotel	 	 	9,884,000	 	 	February 6, 2009
	EMC of Longbai Hotel
	 	Shanghai Longbai Hotel	 	 	12,732,000	 	 	February 7, 2009

5

 

EXHIBIT D-2

STAFF INFORMATION FORM OF SHANGHAI NOBO AND JIANGXI NOBAO

	 	 	 	 	 	 	 
	No.	 	Department	 	Name	 	Position
	1.

	 	General Manager Office
	 	Lei Zhang
	 	Vice-Chairman
	2.

	 	 	 	Yani Wang
	 	Secretary of
General Manager
	3.

	 	Vice-General Manager Office
	 	Ping Song
	 	Vice-General Manager
	4.

	 	 	 	Hao Zhang
	 	Vice-General

Manager Assistant
	5.

	 	Engineering
	 	Jun Chen
	 	Manager
	6.

	 	 	 	Jinhua Du
	 	Engineer
	7.

	 	 	 	Yunfu Guan
	 	Engineer
	8.

	 	 	 	Jian Wu
	 	Engineer
	9.

	 	 	 	Jiayin Liu
	 	Assistant
	10.

	 	 	 	Hao Zhang
	 	After-sale Service
	11.

	 	 	 	Dawei Cheng
	 	After-sale Service
	12.

	 	 	 	Pinggao Han
	 	After-sale Service
	13.

	 	 	 	Chunhua Hu
	 	Driver
	14.

	 	Technology
	 	Yuanzhi Liu
	 	Manager
	15.

	 	 	 	Yunlin Shou
	 	Engineer
	16.

	 	 	 	Chunhua Li
	 	Driver
	17.

	 	Sales
	 	Shijin Cao
	 	Vice-Manager
	18.

	 	 	 	Siyi Teng
	 	Engineer
	19.

	 	Legal
	 	Wenli Lu
	 	Manager
	20.

	 	 	 	Wenjun Zhao
	 	Assistant
	21.

	 	Import & Export
	 	Jing Wang
	 	Manager
	22.

	 	Energy Management
	 	Hang Wen
	 	Manager
	23.

	 	Finance
	 	Jianqin Zhang
	 	Manager
	24.

	 	 	 	Lin Jiang
	 	Cashier
	25.

	 	Human Resources
	 	Jieqi Chen
	 	Manger
	26.

	 	Administration
	 	Xiaoqiong Sun
	 	Receptionist

6

 

EXHIBIT E

CAPITALIZATION TABLE AT THE CLOSING

     Capitalization: The Company’s capital structure before and after the Closing is set forth below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Pre-Closing	 	 	 	 	 	Post-Closing	 	 
	Security	 	# of Shares	 	%	 	# of Shares	 	%
	Ordinary Shares
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUN KWOK PING

	 	 	10,000,000	 	 	 	100	%	 	 	14,593,520	 	 	 	72.9676	%
	ESOP

	 	 	0	 	 	 	0	 	 	 	500,000	 	 	 	2.5	%
	Series A Preferred Shares
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CHINA ENVIRONMENT FUND III, L.P.

	 	 	0	 	 	 	0	 	 	 	4,906,480	 	 	 	24.5324	%
	Total

	 	 	10,000,000	 	 	 	100	%	 	 	20,000,000	 	 	 	100	%

 

 

EXHIBIT F

INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT (this “Agreement”) dated as of June 24, 2009, by and among EASTERN
WELL HOLDINGS LIMITED (the “Company”), and Chen Xiaobing, a citizen of the United States of America
with passport number of 095303866 (the “Director” or “Indemnitee”).

RECITALS

     A. The Company and the Indemnitee recognize the continued difficulty in obtaining liability
insurance for its directors and officers, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance.

     B. The Company and the Indemnitee further recognize the substantial increase in corporate
litigation in general, which subjects directors, officers, employees, controlling persons,
stockholders, agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely limited.

     C. The Indemnitee does not regard the current protection available as adequate under the
present circumstances, and Indemnitee and other directors and officers of the Company may not be
willing to serve in such capacities without additional protection.

     D. The Company (i) desires to attract and retain highly qualified individuals and entities,
such as the Director, to serve the Company and, in part, in order to induce the Director to be
involved with the Company and (ii) wishes to provide for the indemnification and advancing of
expenses to each Indemnitee to the maximum extent permitted by law as provided herein.

     E. In view of the considerations set forth above, the Company desires that each Indemnitee be
indemnified by the Company as set forth herein.

     NOW, THEREFORE, the Company and each Indemnitee hereby agree as follows:

     1. Indemnification.

          (a) Indemnification of Expenses.

               (i) Third-Party Claims. Subject to Section 8 below, the Company shall indemnify and hold
harmless the Director to the fullest extent permitted by law if the Director was or is or becomes a
party to or witness, or is threatened to be made a party to or witness, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing,
inquiry or investigation that such Director reasonably believes might lead to the instigation of
any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other (hereinafter a “Claim”) (other than an action by
right of the Company) by reason of the fact that the Director is or was a director or officer of
the Company, or any subsidiary of the Company, or is or was serving at the request of the Company
as a director or officer of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise, or by reason of any action or inaction on the part of the
Director while serving in such capacity (hereinafter, an “Agent”) or as a direct or indirect result
of any Claim made by any stockholder of the Company against the Director and arising out of or
related to any round of financing of the Company (including but not limited to Claims regarding
non-participation, or non-pro rata participation, in such round by such stockholder), or made by a
third party against the Director based on any misstatement or omission of a material fact by the
Company in

 1.

 

violation of any duty of disclosure imposed on the Company by federal or state securities or common
laws (hereinafter an “Indemnification Event”) against any and all expenses (including attorneys’
fees and all other costs, expenses and obligations), judgments, fines, penalties and amounts paid
in settlement (if, and only if, such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) (the “Expenses”) actually and reasonably incurred by
the Director in connection with investigating, defending or participating in (including on appeal)
such Claim if the Director acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.

               (ii) Derivative Actions. If the Director is a person who was or is a party or is threatened to
be made a party to any Claim by or in the right of the Company to procure a judgment in its favor
by reason of the fact that he or she is or was an Agent of the Company, or by reason of anything
done or not done by him or her in any such capacity, the Company shall indemnify the Director
against any amounts paid in settlement of any such Claim and all Expenses actually and reasonably
incurred by him or her in connection with the investigation, defense, settlement or appeal of such
Claim if he or she acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Company; except that no indemnification under this
subsection shall be made in respect of any claim, issue or matter as to which such person shall
have been finally adjudged to be liable to the Company by a court of competent jurisdiction due to
willful misconduct of a culpable nature in the performance of his duty to the Company, unless and
only to the extent that the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such amounts which such other
court shall deem proper.

          (b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations of the Company under
Section 1(a) shall be subject to the condition that the Reviewing Party (as described in Section
10(e) hereof) shall not have determined that the Indemnitee would not be permitted to be
indemnified under applicable law or pursuant to Section 8 hereof, and (ii) each Indemnitee
acknowledges and agrees that the obligation of the Company to make an advance payment of Expenses
to an Indemnitee pursuant to Section 2(a) (an “Expense Advance”) shall be subject to the condition
that, if, when and to the extent that the Reviewing Party determines that such Indemnitee would not
be permitted to be so indemnified under applicable law or Section 8 hereof, the Company shall be
entitled to be reimbursed by the Indemnitee (who each hereby agree to promptly reimburse the
Company) for all such amounts theretofore paid; provided, however, that if the Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure
a determination that such Indemnitee should be indemnified under applicable law or Section 8
hereof, any determination made by the Reviewing Party that the Indemnitee would not be permitted to
be indemnified under applicable law shall not be binding and the Indemnitee shall not be required
to reimburse the Company for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). The
Indemnitee’s obligation to reimburse the Company for any Expense Advance shall be unsecured and no
interest shall be charged thereon. If there has not been a Change in Control (as defined in Section
10(c) hereof), the Reviewing Party shall be selected by the a majority of the Board of Directors
(excluding the Director), and if there has been such a Change in Control (other than a Change in
Control which has been approved by a majority of the Company’s Board of Directors (other than the
Director) who were directors immediately prior to such Change in Control), the Reviewing Party
shall be the Independent Legal Counsel referred to in Section 1(e) hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under applicable law or
Section 8 hereof,
the Indemnitee shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases

 2.

 

therefor, and the Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on
the Company and the Indemnitee.

          (c) Contribution. If the indemnification provided for in Section 1(a) above for any reason
other than the statutory limitations of applicable law or as provided in Section 8, is held by a
court of competent jurisdiction to be unavailable to an Indemnitee in respect of any losses,
claims, damages, expenses or liabilities in which the Company is jointly liable with such
Indemnitee, as the case may be (or would be jointly liable if joined), then the Company, in lieu of
indemnifying the Indemnitee thereunder, shall contribute to the amount actually and reasonably
incurred and paid or payable by the Indemnitee as a result of such losses, claims, damages,
expenses or liabilities in such proportion as is appropriate to reflect (i) the relative benefits
received by the Company and the Indemnitee, and (ii) the relative fault of the Company and such
Indemnitee in connection with the action or inaction that resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable considerations. The relative
fault of the Company and the Indemnitee shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or the Indemnitee
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent the circumstances resulting in such losses, claims, damages, expenses or liabilities.

     The Company and the Indemnitee agree that it would not be just and equitable if contribution
pursuant to this Section 1(c) were determined by pro rata or per capita allocation or by any other
method of allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act of 1933, as amended (the “Securities Act”))
shall be entitled to contribution from any person who was not found guilty of such fraudulent
misrepresentation.

          (d) Survival Regardless of Investigation. The indemnification and contribution provided for
in this Section 1 will remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnitee.

          (e) Change in Control. The Company agrees that if there is a Change in Control of the Company
(other than a Change in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control) then, with respect to all
matters thereafter arising concerning the rights of Indemnitee to payments of Expenses under this
Agreement or any other agreement or under the Company’s Memorandum and Articles of Association, as
amended (the “M&A”), Independent Legal Counsel (as defined in Section 10(d) hereof) shall be
selected by the Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld) to determine all such matters. The Company agrees to abide by the determination of the
Independent Legal Counsel and to pay the reasonable fees of the Independent Legal Counsel referred
to above and to fully indemnify such counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

          (f) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement, to
the extent an Indemnitee has been successful on the merits or otherwise, in the defense of any
Claim referred to in Section 1(a) hereof or in the defense of any claim, issue or matter therein,
such Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by such
Indemnitee in connection herewith.

 3.

 

     2. Expenses; Indemnification Procedure.

          (a) Advancement of Expenses. Subject to Section 8 and except as prohibited by applicable law,
the Company shall advance all Expenses incurred by an Indemnitee in connection with the
investigation, defense, settlement or appeal of any Claim to which such Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Director is or was an Agent of the
Company or by reason of anything done or not done by him or her in any such capacity. The
Indemnitee hereby undertakes to promptly repay such amounts advanced only if, and to the extent
that, it shall ultimately be determined that such Indemnitee is not entitled to be indemnified by
the Company under the provisions of this Agreement, the M&A, applicable law or otherwise. The
advances to be made hereunder shall be paid by the Company to the Indemnitee as soon as practicable
but in any event no later than thirty days after written demand by the Indemnitee therefor to the
Company.

          (b) Notice/Cooperation by Indemnitee. The Indemnitee shall give the Company notice in writing
promptly after receipt of notice of commencement of any Claim, or the threat of the commencement of
any Claim, made against such Indemnitee for which indemnification will or could be sought under
this Agreement. Notice to the Company shall be directed to the Chief Executive Officer of the
Company at the address shown on the signature page of this Agreement (or such other person and/or
address as the Company shall designate in writing to the Indemnitee).

          (c) No Presumptions. For purposes of this Agreement, the termination of any Claim by judgment,
order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether the Indemnitee has met any particular
standard of conduct or had any particular belief, nor an actual determination by the Reviewing
Party that the Indemnitee had not met such standard of conduct or did not have such belief, prior
to the commencement of legal proceedings by the Indemnitee to secure a judicial determination that
the Indemnitee should be indemnified under applicable law, shall be a defense to the Indemnitee’s
claim or create a presumption that the Indemnitee had not met any particular standard of conduct or
did not have any particular belief.

          (d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim
pursuant to Section 2(b) hereof, the Company has liability insurance in effect which may cover such
Claim, the Company shall give prompt written notice of the commencement of such Claim to the
insurers in accordance with the procedures set forth in each of the policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or
investigation in accordance with the terms of such policies.

          (e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the
Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim, with
counsel reasonably approved by the Indemnitee, upon the delivery to such Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such counsel by the
Indemnitee and the retention of such counsel by the Company, the Company will not be liable to such
Indemnitee under this Agreement for any fees of counsel subsequently incurred by such Indemnitee
with respect to the same Claim; provided that, (i) the Indemnitee shall have the right to employ
such Indemnitee’s counsel in any such Claim at the Indemnitee’s expense; (ii) the Indemnitee shall
have the right to employ its own counsel in connection with any such proceeding, at the expense of
the Company, if such counsel serves in a review, observer, advice and counseling capacity and does
not otherwise materially control or participate in the defense of such proceeding; and (iii) if (A)
the employment of counsel by the Indemnitee has been

 4.

 

previously authorized by the Company, (B) such Indemnitee shall have reasonably concluded that
there is a conflict of interest between the Company and such Indemnitee in the conduct of any such
defense, or (C) the Company shall not in fact continue to retain such counsel to defend such Claim,
then the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company.

     3. Additional Indemnification Rights; Nonexclusivity.

          (a) Scope. The Company hereby agrees to indemnify the Director to the fullest extent
permitted by law (except as provided in Section 8) with respect to Claims for Indemnification
Events, even if such indemnification is not specifically authorized by the other provisions of this
Agreement or any other agreement, the M&A or by statute. In the event of any change after the date
of this Agreement in any applicable law, statute or rule which expands the right of a Hong Kong
company to indemnify a member of its Board of Directors or an officer, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such
change. In the event of any change in any applicable law, statute or rule which narrows the right
of a Hong Kong company to indemnify a member of its Board of Directors or an officer, such change,
to the extent not otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as
set forth in Section 8 hereof.

          (b) Nonexclusivity. Notwithstanding anything in this Agreement, the indemnification provided
by this Agreement shall be in addition to any rights to which the Indemnitee may be entitled under
the M&A, any agreement, any vote of stockholders or disinterested directors, the laws of Hong Kong,
or otherwise. Notwithstanding anything in this Agreement, the indemnification provided under this
Agreement shall continue as to each Indemnitee for any action the Director took or did not take
while serving in an indemnified capacity even though such Director may have ceased to serve in such
capacity and such indemnification shall inure to the benefit of each Indemnitee from and after the
Director’s first day of service as a director with the Company or affiliation with a director from
and after the date the Director commences services as a director with the Company.

     4. No Duplication of Payments. The Company shall not be liable under this Agreement to make
any payment in connection with any Claim made against any Indemnitee to the extent such Indemnitee
has otherwise actually received payment (under any insurance policy, M&A or otherwise) of the
amounts otherwise indemnifiable hereunder.

     5. Partial Indemnification. If any Indemnitee is entitled under any provision
of this
Agreement to indemnification by the Company for any portion of Expenses incurred in connection with
any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion of such Expenses to which such Indemnitee is entitled.

     6. Mutual Acknowledgement. The Company and each Indemnitee acknowledge that in certain
instances, federal law or applicable public policy may prohibit the Company from indemnifying its
directors, officers, employees, controlling persons, agents or fiduciaries under this Agreement or
otherwise.

     7. Liability Insurance. To the extent the Company maintains liability insurance applicable to
directors, the Company shall use commercially reasonable efforts to provide that Director shall be
covered by such policies in such a manner as to provide the Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if such Indemnitee is a
director.

     8. Exceptions. notwithstanding any other provision herein to the contrary, the Company shall
not be obligated pursuant to the terms of this Agreement:

 5.

 

          (a) Claims Under Section 16(b). To indemnify either Indemnitee for expenses and the payment of
profits or an accounting thereof arising from the purchase and sale by such Indemnitee of
securities in violation the provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or any similar provisions of any federal, state or local statutory
law;

          (b) Unauthorized Settlements. To indemnify the Indemnitee hereunder for any amounts paid in
settlement of a proceeding unless the Company consents in advance in writing to such settlement,
which consent shall not be unreasonably withheld.

          (c) Unlawful Indemnification. To indemnify an Indemnitee if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not lawful. In this
respect, the Company and the Indemnitee have been advised that the Securities and Exchange
Commission takes the position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication.;

          (d) Fraud. To indemnify an Indemnitee if a final decision by a court having jurisdiction in
the matter shall determine that the Indemnitee has committed fraud on the Company; or

          (e) Insurance. To indemnify any Indemnitee for which payment is actually and fully made to the
Indemnitee under a valid and collectible insurance policy; or

          (f) Company Contracts. To indemnify an Indemnitee with respect to any Claim related to any
dispute or breach arising under any contract or similar obligation between the Company and such
Indemnitee.

     9. Period of Limitations. No legal action shall be brought and no cause of action shall be
asserted by or in the right of the Company against the Director, the Director’s estate, spouse,
heirs, executors or personal or legal representatives after the expiration of five (5) years from
the date of accrual of such cause of action, and any claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a legal action within
such five (5) year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall govern.

     10. Construction of Certain Phrases.

          (a) For the purposes of this Agreement, references to the “Company” shall include, in addition
to the resulting corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors and officers, so that if the Director
is or was or may be deemed a director or officer of such constituent corporation, or is or was or
may be deemed to be serving at the request of such constituent corporation as a director or officer
of another corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, each Indemnitee shall stand in the same position under the provisions of this Agreement
with respect to the resulting or surviving corporation as the Director would have with respect to
such constituent corporation if its separate existence had continued.

          (b) For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on the Director with
respect to an employee benefit plan; and references to “serving at the request of the Company”
shall include any service as a director or officer of the Company which imposes duties on, or
involves services

 6.

 

by, such director or officer with respect to an employee benefit plan, its participants or its
beneficiaries; and if the Director acted in good faith and in a manner the Director reasonably
believed to be in the interest of the participants and beneficiaries of an employee benefit plan,
the Director shall be deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.

          (c) For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if
(i) any “person” (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
other than a trustee or other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 30% of the total voting power represented by the
Company’s then outstanding Voting Securities, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a majority thereof, or
(iii) the stockholders of the Company approve a merger or consolidation of the Company with any
other corporation other than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving entity) at least
two-thirds (2/3) of the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of transactions) all
or substantially all of the Company’s assets; provided that in no event shall a Change in Control
be deemed to include (i) a merger, consolidation or reorganization of the Company for the purpose
of changing the Company’s jurisdiction of incorporation and in which there is no substantial change
in the shareholders of the Company or its successor (as the case may be), or (ii) the Company’s
first firm commitment underwritten public offering of any of its securities to the general public
pursuant to (i) a registration statement filed under the Securities Act, or (ii) the securities
laws applicable to an offering of securities in another jurisdiction pursuant to which such
securities will be listed on an internationally recognized securities exchange (the “IPO”).

          (d) For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm
of attorneys, selected in accordance with the provisions of Section 1(e) hereof, who shall not have
otherwise performed services for the Company or any Indemnitee within the last two (2) (other than
with respect to matters concerning the right of any Indemnitee under this Agreement, or of other
indemnitee under similar indemnity agreements).

          (e) For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate person or
body consisting of a member or members of the Company’s Board of Directors (other than the
Director) or any other person or body appointed by the Board of Directors who is not a named party
to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal
Counsel.

          (f) For purposes of this Agreement, “Voting Securities” shall mean any securities of the
Company that vote generally in the election of directors.

     11. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall constitute an original.

 7.

 

     12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Company and personal and legal
representatives. The Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of
the business and/or assets of the Company, by written agreement in form and substance reasonably
satisfactory to each Indemnitee, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect with respect to Claims relating
to Indemnifiable Events regardless of whether any Indemnitee continues to serve as a director or
officer of the Company or of any other enterprise, including subsidiaries of the Company, at the
Company’s request.

     13. Attorneys’ Fees. Subject to Section 8 and except as prohibited by applicable law, in the
event that any action is instituted by an Indemnitee under this Agreement or under any liability
insurance policies maintained by the Company to enforce or interpret any of the terms hereof or
thereof, such Indemnitee shall be entitled to be paid all Expenses actually and reasonably incurred
by such Indemnitee with respect to such action if such Indemnitee is ultimately successful in such
action. In the event of an action instituted by or in the name of the Company under this Agreement
to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to be
paid Expenses actually and reasonably incurred by such Indemnitee in defense of such action
(including costs and expenses incurred with respect to Indemnitee counterclaims and cross-claims
made in such action), and shall be entitled to the advancement of Expenses with respect to such
action, in each case only to the extent that such Indemnitee is ultimately successful in such
action.

     14. Notice. All notices and other communications required or permitted hereunder shall be in
writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5)
days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight courier, freight
prepaid, or (d) one day after the business day of delivery by facsimile transmission, if
deliverable by facsimile transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to the Indemnitee, at the Director’s addresses as set forth beneath his signature to
this Agreement and if to the Company at the address of its principal corporate offices (attention:
Chief Executive Officer), with a copy to No. 485-487, Gu Yang Road, Changning District, Shanghai,
China (attention: Sun Kwok Ping), or at such other address as such party may designate by ten (10)
days’ advance written notice to the other party hereto.

     15. Severability. The provisions of this Agreement shall be severable in the event that any of
the provisions hereof (including any provision within a single section, paragraph or sentence) are
held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore,
to the fullest extent possible, the provisions of this Agreement (including, without limitations,
each portion of this Agreement containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or unenforceable.

     16. Choice of Law. This Agreement shall be governed by and its provisions construed and
enforced in accordance with the laws of Hong Kong, without regard to the conflict of laws
principles thereof.

 8.

 

     17. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee who
shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Company effectively to bring suit to enforce such rights.

     18. Amendment and Termination. Except as provided in Section 21, no amendment, modification,
termination or cancellation of this Agreement shall be effective unless it is in writing signed by
the parties to be bound thereby. Notice of same shall be provided to all parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     19. No Construction as Employment Agreement. Nothing contained in this Agreement shall be
construed as giving the Indemnitee any right to be retained in the employ or service of the Company
or any of its subsidiaries.

     20. Corporate Authority. The Board of Directors of the Company and its stockholders in
accordance with Hong Kong law have approved the terms of this Agreement.

     21. Termination of Agreement. This Agreement shall terminate and be of no further force or
effect upon the closing of the IPO, provided that each Indemnitee will be entitled to all of the
benefits and rights accorded such party under this Agreement with respect to any Claims for any
Indemnification Events arising or related to events, circumstances and actions or omissions which
have occurred or alleged and to have occurred prior to the closing of the IPO.

[The remainder of this page is intentionally left blank.]

 9.

 

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written

	 	 	 	 	 	 	 

	COMPANY:	 	EASTERN WELL HOLDINGS LIMITED	 	 
	 

	 	By
	 	/s/ [ILLEGIBLE]
	 	
	 

	 	 	 	 	 
	 

	 	Title	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	DIRECTOR:	 	As Individual:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Chen Xiaobing	 	 
	 	 	 	 	 
	 	 	Name: Chen Xiaobing	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	A2302, SP Tower, Tsinghua Science Park,
Beijing 
100084 China
	 	 

[Signature Page to Indemnification Agreement]

  

 

Execution Copy

EXHIBIT G-1

SERIES A WARRANT

THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND THE SHARES ISSUABLE HEREUNDER, HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION.
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SHARES ISSUABLE UNDER THIS WARRANT ARE SUBJECT
TO THE TERMS AND CONDITIONS OF THE SHAREHOLDERS’ AGREEMENT BY AND AMONG THE HOLDER HEREOF, THE
COMPANY AND CERTAIN OTHER PARTIES NAMED THEREIN. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

EASTERN WELL HOLDINGS LIMITED

WARRANT TO PURCHASE SERIES A PREFERRED SHARES

(Subject to Adjustment)

Date: June 24, 2009

     THIS CERTIFIES THAT, for value received, CHINA ENVIRONMENT FUND III, L.P. (the “Holder”) is
entitled, subject to the terms and conditions of this Warrant, at any time and from time to time
during the Exercise Period (as defined below), to purchase from EASTERN WELL HOLDINGS LIMITED , a
company duly incorporated and validly existing under the Laws of Hong Kong (the
“Company”), up to 2,453,240 Series A convertible and redeemable preferred shares of the Company,
par value US$0.001 per share (the “Warrant Shares”), at the Exercise Price Per Share (as defined
below). The Exercise Price Per Share and number of Warrant Shares are subject to adjustment and
change as provided herein. This Warrant is issued pursuant to the Series A Preferred Share Purchase
Agreement dated June 18, 2009 (the “Purchase Agreement”), among the Company, the Holder and certain
other parties named therein.

     1. Certain Definitions. Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Purchase Agreement. As used in this Warrant the following terms
shall have the following respective meanings:

     “Board” shall mean the board of directors of the Company.

     “Company” means EASTERN WELL HOLDINGS LIMITED , a company duly incorporated
and validly existing under the Laws of Hong Kong.

     “Encumbrances” shall have the meaning ascribed to it in Section 7.

     “Exercise Date” shall mean the date of effective exercise of this Warrant by the Holder during
the Exercise Period.

					
	 	 	 	 	 
	 
	 	1
	 	Series A Warrant

 

 

     “Exercise Period” shall mean the twelve-month period commencing on the date of this Warrant.

     “Exercise Price Per Share” means the per share exercise price of the Warrant Shares which
shall initially be US$4.076 (which is subject to the adjustment stated in Section 4 herein and the
adjustment of the purchase price of Series A Preferred Shares pursuant to the Purchase Agreement),
amounting to an aggregate exercise price of all the Warrant Shares of US$10,000,000.

     “Exercise Price” shall have the meaning ascribed to it in Section 2.1.

     “Notice of Exercise” shall have the meaning ascribed to it in Section 2.1.

     “Permitted Transferee” means an Affiliate of the Holder.

     “Person” means any individual, sole proprietorship, partnership, firm, joint venture, estate,
trust, unincorporated organization, association, corporation, institution, public benefit
corporation, entity or governmental authority or other entity of any kind or nature.

     “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and
regulations of the United States Securities and Exchange Commission promulgated thereunder, all as
from time to time in effect.

     “Series A Director” means a director appointed by the Holder to the Company.

     “Series A Preferred Shares” means the Series A convertible and redeemable preferred shares,
par value US$0.001 per share, of the Company.

     “Ordinary Shares” means the ordinary shares, par value US$0.001 per share, of the Company.

     “Purchase Agreement” means the Series A Preferred Share Purchase Agreement dated June 18, 2009
by and among the Company, the Holder and certain other parties named therein.

     “Shares” means the shares of the Company.

     “Shareholders Agreement” means that certain Shareholders Agreement dated June 24, 2009 by and
among the Company, the Holder and certain other parties named therein.

     “Warrant” as used herein, shall include this Warrant and any warrant delivered in substitution
or exchange therefor as provided herein.

     “Warrant Shares” shall have the meaning ascribed to it in the first paragraph of this Warrant
(which is subject to the adjustment stated in Section 4 herein and the adjustment set forth in the
Purchase Agreement).

     2. Exercise of Warrant

          2.1. Exercise and Payment. Subject to compliance with the terms and conditions of this
Warrant and applicable securities laws, this Warrant may be exercised, in whole or in part, at any
time during the Exercise Period by the delivery of notice of exercise

					
	 	 	 	 	 
	 
	 	2
	 	Series A Warrant

 

 

substantially in the form attached hereto as Exhibit A (the “Notice of Exercise”), duly executed by
the Holder, to the Company at the address provided for notice to the Company under the Purchase
Agreement, and within thirty (30) days thereafter, the Holder shall (a) surrender this Warrant to
the Company at such address, and (b) effect payment to the Company, (i) in cash (by check) or by
wire transfer, (ii) by cancellation of indebtedness of the Company owed to the Holder, or (iii) by
a combination of (i) and (ii), of an amount equal to the product obtained by multiplying the number
of Warrant Shares being purchased upon such exercise by the then effective Exercise Price Per Share
(the “Exercise Price”). The Warrant will expire if not exercised within the Exercise Period.

          2.2. Share Certificates; Fractional Shares. Upon surrender of this Warrant and payment of the
Exercise Price by the Holder, the Company shall register the Holder as a member of the Company in
the Company’s share register in respect of the number of Warrant Shares issuable upon such
exercise, and issue and deliver to the Holder or person(s) entitled to receive the same a
certificate or certificates for such number of Warrant Shares issuable upon such exercise at the
Company’s expense, together with cash in lieu of any fraction of a Warrant Share equal to the
Exercise Price Per Share multiplied by such fraction. No fractional Warrant Share or scrip
representing a fractional Warrant Share shall be issued upon an exercise of this Warrant.

          2.3 Effective Date of Exercise. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for exercise and payment by
the Holder of the Exercise Price as provided in Clause 2.1 above. The person entitled to receive
the Warrant Shares issuable upon exercise of this Warrant shall be treated for all purposes as the
holder of record of such Warrant Shares from the close of business on the date the Holder is deemed
to have exercised this Warrant.

     3. Valid Issuance; Taxes. All Warrant Shares issued upon the exercise of this Warrant shall
be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other
governmental charges that may be imposed in respect of the issue or delivery thereof.

     4. Adjustment of Exercise Price Per Share and Number of Warrant Shares. The Exercise Price Per
Share and number of Warrant Shares issuable upon exercise of this Warrant is subject to the
adjustment upon occurrence of the following events before the Exercise Date:

          4.1. Subdivision, Combination or Reclassification of Series A Preferred Shares. If the Company
shall, at any time or from time to time, (i) subdivide the outstanding Series A Preferred Shares,
(ii) combine the outstanding Series A Preferred Shares into a smaller number of shares, or (iii)
issue any shares of its capital stock in a reclassification of the Series A Preferred Shares
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each such case, the Exercise Price Per Share in
effect at the time of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date shall be proportionately
adjusted so that the holder of any Warrant exercised after such date shall be entitled to receive,
upon payment of the same aggregate amount as would have been payable before such date, the
aggregate number and kind of shares of capital stock which, if such Warrant had been exercised
immediately prior to such date, such Holder would have owned upon such exercise and been entitled
to receive

					
	 	 	 	 	 
	 
	 	3
	 	Series A Warrant

 

 

by virtue of such subdivision, combination or reclassification. Any such adjustment shall become
effective immediately after the effective date of such subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event listed above shall
occur.

          4.2. Other Changes, etc. If the Company at any time or from time to time, after the issuance
of this Warrant but prior to the exercise hereof, shall take any action affecting its Series A
Preferred Shares similar to or having an effect similar to any of the actions described in Section
4.1 or 4.4 (but not including any action described in such Sections) then, and in each such case,
the Exercise Price Per Share and number of Warrant Shares shall be adjusted in such manner and at
such time as the Board of Directors in good faith determines would be equitable under the
circumstances (such determination to be evidenced in a resolution, a certified copy of which shall
be mailed to the Holder).

          4.3. Adjustments to Other Shares. In the event that at any time, as a result of an adjustment
made pursuant to this Section 4, the Holder shall become entitled to receive, upon exercise of this
Warrant, any shares of capital stock of the Company other than Series A Preferred Shares, the
number of such other shares so receivable upon exercise of this Warrant and the Exercise Price Per
Share shall be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Series A Preferred Shares contained
in this Section 4 herein.

          4.4. Adjustment for Capital Reorganization, Merger or Consolidation. In case of any
reorganization of the capital shares of the Company (other than a combination, reclassification or
subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the assets of the Company
then, and in each such case, as a part of such reorganization, merger, consolidation, sale or
transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive, upon exercise of this Warrant, and upon payment of the Exercise Price then in
effect, the number of shares or other securities or property of the successor corporation resulting
from such reorganization, merger, consolidation, sale or transfer that a holder of the shares
deliverable upon exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 4. The foregoing provisions of this Section 4.4
shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers
and to the shares or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in
connection with any such transaction is in a form other than cash or marketable securities, then
the value of such consideration shall be determined in good faith by the Company’s Board of
Directors (including the affirmative vote of Series A Director). In all events, appropriate
adjustment (as determined in good faith by the Company’s Board of Directors, including the
affirmative vote of Series A Director) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the transaction, to the end
that the provisions of this Warrant shall be applicable after that event, as near as reasonably may
be, in relation to any shares or other property deliverable after that event upon exercise of this
Warrant.

Series A Warrant

4

 

     5. Certificate as to Adjustments. In each case of any adjustment in the Exercise
Price Per Share, or number or type of shares issuable upon exercise of this Warrant, the chief
financial officer (or any person of an equivalent position) of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth
such adjustment and showing in detail the facts upon which such adjustment is based, including a
statement of the adjusted Exercise Price Per Share. The Company shall promptly send (by facsimile
or electronic mail, and by either first class mail, postage prepaid or overnight delivery) a copy
of each such certificate to the Holder.

     6. Loss or Mutilation. Upon receipt of evidence reasonably satisfactory to the Company of
the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of
this Warrant, the Company will execute and deliver in lieu thereof a new Warrant of like tenor as
the lost, stolen, destroyed or mutilated Warrant.

     7. Reservation of Shares. The Company hereby covenants and agrees that at all times there
shall be reserved in the Company’s authorized but unissued shares for issuance and delivery upon
exercise of this Warrant such number of Warrant Shares (or other securities of the Company as are
from time to time issuable upon exercise of this Warrant) and Ordinary Shares for issuance on
conversion of such Warrant Shares, including, amending its Memorandum and Articles of Association
or other constitutional documents from time to time to increase its authorized shares as necessary.
All such shares shall be duly authorized, and when issued by way of registration in the name of the
Holder in the Company’s register of members upon such exercise in accordance with the terms herein,
shall be validly issued, fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and clear of all
preemptive and similar rights (“Encumbrances”), except such Encumbrances arising under Law or
under the Shareholders Agreement. The Holder acknowledges that “reserve,” “reservation” or similar
words may have no technical meaning under the Laws of Hong Kong. For purposes only of this Warrant,
“reserve”, “reservation” and similar words shall mean that the Board of Directors of the Company
have approved and authorized an intent by the Company to refrain from issuing a number of Warrant
Shares sufficient to satisfy the exercise rights of the Holder of this Warrant (including Ordinary
Shares issuable upon conversion of such Series A Preferred Shares issued upon exercise of this
Warrant) such that such Warrant Shares (and the Ordinary Shares issuable upon conversion thereof)
will remain in the authorized but unissued shares of the Company until, as applicable, this Warrant
is exercised in accordance with its terms or the Warrant Shares are converted into Ordinary Shares
in accordance with the terms thereof.

     8. Transfer and Exchange. Subject to the terms and conditions of this Warrant and the
Shareholders Agreement, and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any person, in whole or in part, on the books of the Company
maintained for such purpose at the address provided for notice to the Company under the Purchase
Agreement, by the Holder hereof in person, or by duly authorized attorney, upon surrender of this
Warrant properly endorsed and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer, the Company will issue and deliver to
the Holder a new Warrant or Warrants with respect to the Warrant Shares not so transferred. Each
taker and holder of this Warrant, by taking or holding the same, consents and agrees that when this
Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the
Company, and all other persons dealing with this Warrant, as the absolute owner hereof for

					
	 	 	 	 	 
	 
	 	5
	 	Series A Warrant

 

 

any purpose and as the person entitled to exercise the rights represented hereby, any notice to the
contrary notwithstanding; provided, however, that until a transfer of this Warrant is duly
registered on the books of the Company, the Company may treat the Holder hereof as the owner for
all purposes.

     9. Representations and Warranties. The Company covenants that the representations and
warranties contained in Section 3 of the Purchase Agreement shall be true and correct in all
respects as of the date hereof and as of the Exercise Date, provided that if any of the
representation or warranty contained in Section 3 of the Purchase Agreement shall become untrue on
the date of exercise of this Warrant, due to reason of amendment of the applicable Laws by the
competent government authorities or due to the action of any third party, the Company shall notify
the Holder of such situation promptly after it has become aware of the same.

     10. Compliance with Securities Laws. By acceptance of this Warrant, the Holder hereby
represents, warrants and covenants that any Warrant Share purchased upon exercise of this Warrant
or any Ordinary Share acquired upon conversion thereof shall be acquired for investment only and
not with a view to, or for sale in connection with, any distribution thereof in the United States;
that the Holder has had such opportunity as such Holder has deemed adequate to obtain from
representatives of the Company such information as is necessary to permit the Holder to evaluate
the merits and risks of its investment in the company; that the Holder is able to bear the economic
risk of holding such Warrant Shares as may be acquired pursuant to the exercise of this Warrant for
an indefinite period; that the Holder understands that the Warrant Shares acquired pursuant to the
exercise of this Warrant or Ordinary Shares acquired upon conversion thereof will not be registered
under the Securities Act (unless otherwise required pursuant to exercise by the Holder of the
registration rights, if any, previously granted to the Holder) and will be “restricted securities”
within the meaning of Rule 144 under the Securities Act.

     11. No Rights or Liabilities as Shareholders. This Warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder or member of the Company. In the absence of
affirmative action by such Holder to purchase Warrant Shares by exercise of this Warrant or
Ordinary Shares upon conversion thereof, no provisions of this Warrant, and no enumeration herein
of the rights or privileges of the Holder hereof shall cause such Holder hereof to be a shareholder
or member of the Company for any purpose.

     12. Registration Rights. All Warrant Shares issuable upon exercise of this Warrant and
Ordinary Shares issuable upon conversion of the Warrant Shares shall be “Registrable Securities”
within the meaning of the relevant provisions of the Shareholders Agreement, and are entitled,
subject to the terms and conditions of that agreement, to all registration rights granted to the
Holder thereunder.

     13. Amendments and Waivers. Any term of this Warrant may be amended and the observance of any
term of this Warrant may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the Holder.

     14. Notices. All notices and other communications from the Company to the Holder shall be
given in accordance with the Purchase Agreement.

					
	 	 	 	 	 
	 
	 	6
	 	Series A Warrant

 

 

     15. Headings. The headings in this Warrant are for purposes of convenience in reference only,
and shall not be deemed to constitute a part hereof.

     16. Law Governing. This Warrant shall be governed in all respects by the Laws of Hong Kong
without regards to conflicts of law principles.

     17. Dispute Resolution.

          (a) Any dispute, controversy or claim arising out of or relating to this Warrant, or the
interpretation, breach, termination or validity hereof, shall first be subject to resolution
through consultation of the parties to such dispute, controversy or claim. Such consultation shall
begin within seven (7) days after one party hereto has delivered to the other party involved a
written request for such consultation. If within thirty (30) days following the commencement of
such consultation the dispute cannot be resolved, the dispute shall be submitted to arbitration
upon the request of any party with notice to the other party.

          (b) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”). There shall be three arbitrators. The complainant
and the respondent to such dispute shall each select one arbitrator within thirty (30) days after
giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed list. The Chairman of the HKIAC
shall select the third arbitrator, who shall be qualified to practice Law in Hong Kong and fluent
in English and Mandarin. If either party to the arbitration does not appoint an arbitrator who has
consented to participate within thirty (30) days after selection of the first arbitrator, the
relevant appointment shall be made by the Chairman of the HKIAC.

          (c) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the Arbitration Rules of the HKIAC in effect at the time of the arbitration. However, if
such rules are in conflict with the provisions of this Section 17, including the provisions
concerning the appointment of arbitrators, the provisions of this Section 17 shall prevail.

          (d) The arbitrators shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the Laws of Hong Kong and shall not apply any other substantive law.

          (e) Each party hereto shall cooperate with any party to the dispute in making full disclosure
of and providing complete access to all information and documents requested by such party in
connection with such arbitration proceedings, subject only to any confidentiality obligations
binding on the party receiving the request; all such requested information and documents can be
provided in English or Chinese with equal legal validity.

          (f) The award of the arbitration tribunal shall be final and binding upon the disputing
parties, and any party to the dispute may apply to a court of competent jurisdiction for
enforcement of such award.

          (g) Any party to the dispute shall be entitled to seek preliminary injunctive relief, if
possible, from any court of competent jurisdiction pending the constitution of the arbitral
tribunal.

					
	 	 	 	 	 
	 
	 	7
	 	Series A Warrant

 

 

     18. No Impairment. The Company will not cooperate with or facilitate any amendment of its
Memorandum and Articles of Association or other constitutional documents, or any reorganization,
consolidation, merger, dissolution, issue or sale of shares, sale of assets or any other voluntary
action, so as to avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such action as may be necessary or appropriate in order to protect the rights of
the Holder of this Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will use its best efforts to ensure that the par value of any shares issuable upon
the exercise of this Warrant will not be increased above the amount payable therefor upon such
exercise, and (b) will take or procure the taking of all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and non-assessable
Warrant Shares upon exercise of this Warrant and fully paid and non-assessable Ordinary Shares upon
conversion of such Warrant Shares.

     19. Notices of Record Date. In the event:

          (a) the Company shall take a record of the holders of its Series A Preferred Shares or
Ordinary Shares (or other shares or securities at the time receivable upon the exercise of this
Warrant), for the purpose of entitling them to receive any right to subscribe for or purchase any
shares of any class or any other securities or to receive any other right; or

          (b) of any consolidation or merger of the Company with or into another corporation, any
capital reorganization of the Company, any reclassification of the shares of the Company, or any
conveyance of all or substantially all of the assets of the Company to another corporation in which
holders of the Company’s shares are to receive shares, securities or property of another
corporation; or

          (c) of any voluntary dissolution, liquidation or winding-up of the Company; or

          (d) of any redemption or conversion of all outstanding Ordinary Shares or Series A Preferred
Shares;
then, and in each such case, the Company will mail or cause to be mailed to the Holder of this
Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for
the purpose of such right, or (ii) the date on which a record is to be taken for a vote on such
reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion, and the time, if any is to be fixed, as of which the holders
of record of Series A Preferred Shares, Ordinary Shares or such shares or securities as at the time
are receivable upon the exercise of this Warrant, shall be entitled to exchange their Series A
Preferred Shares, Ordinary Shares or such other shares or securities, for securities or other
property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least twenty (20) days
prior to the date therein specified.

     20. Severability. If any term, provision, covenant or restriction of this Warrant is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Warrant shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.

					
	 	 	 	 	 
	 
	 	8
	 	Series A Warrant

 

 

     21. Counterparts. For the convenience of the parties, any number of counterparts of this
Warrant may be executed by the parties hereto and each such executed counterpart shall be, and
shall be deemed to be, an original instrument, but all of which together shall constitute one and
the same instrument.

     22. Entire Agreement. This Warrant, the Purchase Agreement and the Shareholders Agreement
constitute the entire agreement between the Company and the Holder with respect to the Warrant and
supersedes all prior agreements and understanding with respects to the subject matter of this
Warrant.

     23. Binding Effect: Benefits. This Warrant shall inure to the benefit of and shall be binding
upon the Company and the Holder and their respective permitted successors and assigns. Nothing in
this Warrant, expressed or implied, is intended to or shall confer on any person other than the
Company and the Holder, or their respective permitted successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant.

     24. No Inconsistent Agreements. The Company will not on or after the date of this Warrant
enter into any agreement with respect to its Shares which is inconsistent with the rights granted
to the Holder or otherwise conflicts with the provisions hereof. The rights granted to Holder
hereunder do not in any way conflict with and are not inconsistent with the rights granted to
holders of the Company’s Shares under any other agreements, except rights that have been waived.

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

					
	 	 	 	 	 
	 
	 	9
	 	Series A Warrant

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the day and year herein above
first written

	 	 	 	 	 	 	 

	 	 	SEALED with the Common Seal of 

EASTERN WELL HOLDINGS LIMITED 

and SIGNED by
	 
	 	 	 	 	 	 
	 	 	/s/ [ILLEGIBLE]	 	
	 	 	 	 
	 	 	in the presence of:	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	No 485-487, Gu Yang Road,	 	 
	 

	 	 	 	Changning District, Shanghai,	 	 
	 

	 	 	 	China	 	 
	 	 	Fax: 86-21-6631-2459	 	 

	 	 	 

	Accepted and agreed,
	 	 
	CHINA ENVIRONMENT FUND III, L.P.

	 	 
	 
	 	 
	/s/ [ILLEGIBLE]
	 	 
	 	 	 
	Name:
	 	 
	Title: Authorized Signatory
	 	 
	Address: A2302, SP Tower, Tsinghua Science
	 	 
	Park, Beijing 100084 China
	 	 
	Fax: 86-10-8215-1150
	 	 

[Signature page to Series A Warrant]

					
	 	 	 	 	 
	 
	 	10
	 	Series A Warrant

 

 

 Execution Copy

EXHIBIT G-2

VALUATION ADJUSTMENT WARRANTS

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE LAWS OF ANY OTHER
JURISDICTION. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR A COMPARABLE
DOCUMENT UNDER THE LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.

EASTERN WELL HOLDINGS LIMITED

June 24, 2009

WARRANT TO PURCHASE

ORDINARY SHARES

     This Warrant is issued to Sun Kwok Ping (the “Holder”) by EASTERN WELL HOLDINGS
LIMITED, a Hong Kong company (the “Company”), in connection with the purchase by the Holder
of Ordinary Shares, par value US$0.001 per share (“Ordinary Shares”), of the Company pursuant to
the Series A Preferred Share Purchase Agreement, dated as of June 18, 2009 (as may be amended from
time to time, the “Purchase Agreement”), by and among the Holder, the Company and the other parties
thereto. Capitalized terms not otherwise defined herein shall have the meanings given to such terms
in the Purchase Agreement. All accounting terms not otherwise defined herein have the meanings
assigned under IFRS.

     1. Purchase During Exercise Period. Subject to the terms and conditions set forth in
this Warrant, the Holder shall be entitled, at any time during the Exercise Period, to purchase
from the Company, at a price of US$0.001 per share (the “Exercise Price”), a number of fully paid
Ordinary Shares equal to the “Adjustment Number” (as defined below). Subject to Section 4(c), the
Adjustment Number shall be the number of Ordinary Shares, if issued to the Holder on the Closing
Date, would result in the Percentage Interest equal to a new number, which in no event shall exceed
77.5% of the Company’s aggregate equity interest immediately after Closing on a fully-diluted
basis, to be determined in accordance with the Adjusted Post Money Valuation. After the Adjust Post
Money Valuation is available, the Adjustment Number shall be certain Ordinary Shares, obtained by
the number of Ordinary Shares then outstanding on an as-converted basis (giving effect to the
conversion and exchange of all securities or rights that are convertible or exchangeable into
Ordinary Shares, including the Shares implied by ESOP but excluding the Shares issued upon exercise
of the Warrants), multiplied by a percentage, which is a percentage, obtained by dividing (i)
Series A Purchase Price by (ii) the Initial Post Money
Valuation, minus another percentage, obtained by dividing (iii) Series A Purchase Price by
(iv) the Adjusted Post Money Valuation, with the exchange rate between United States Dollar and
Renminbi is USD1 = RMB6.82.

 

 

     2. Termination. Subject to Section 4(c), the Exercise Period shall not commence, and
the rights under this Warrant shall terminate and shall not be exercisable, if it is determined in
accordance with Section hereof that the Adjusted Post-Money Valuation lowers the Initial Post-Money
Valuation.

     3. Determination of Adjusted Post-Money Valuation.

     (a) Adjusted Post-Money Valuation. Simultaneously with the delivery of the financial
statements for the 2009 Fiscal Year pursuant to Section 8.1 of the Shareholders Agreement, but in
any event within 60 days after the end of the 2009 Fiscal Year of the Company, the Company shall
deliver to the Holder, together with such financial statements, (i) an audited statement of profits
and losses for the 2009 Fiscal Year (divided into two periods, i.e. a period from January 1, 2009
to December 31, 2009, and another period from January 1, 2010 to February 28, 2010), audited by the
accounting firm agreed by the Company and the Holder, prepared in accordance with the IFRS, (ii) a
statement of revenue and cost breakdown by project for the 2009 Fiscal Year issued by the Company
and confirmed by the accounting firm in writing, setting forth in reasonable detail the calculation
of Adjusted Post-Money Valuation. The Holder shall have the right to object to the determination of
Adjusted Post-Money Valuation in accordance with Section 3(b) below.

     (b) Objection Procedure

     (i) Unless the Holder gives written notice to the Company of its objection (an
“Objection”) to the Company’s calculation of the Adjusted Post-Money Valuation within 30
days following its receipt of the financial statements and accompanying chief financial
officer’s certificate, the Company’s calculation shall be final and binding upon the parties
for purposes of this Warrant. If the Holder waives in writing its right to deliver an
Objection with respect to any such determination, the applicable determination shall be
final and binding upon the parties as of the date of delivery of such waiver. Any Objection
shall specify in reasonable detail the nature of any disagreement so asserted. Upon request
of the Holder, the Company shall promptly provide a representative of the Holder such access
to the books and records of the Company and its Subsidiaries as are reasonably necessary to
confirm the Company’s calculation of the Adjusted Post-Money Valuation and the Holder agrees
to maintain any such information in strict confidence (except for such disclosure to
advisors or otherwise as appropriate in connection with the proceedings referred to below in
clause (ii)). During the 15-day period following the delivery of an Objection, the Company
and the Holder shall attempt in good faith to resolve any differences which they may have
with respect to any matter specified in the Objection.

     (ii) If at the end of such 15-day period, the Company and the Holder shall have failed
to reach written agreement with respect to all matters specified in any Objection, any
matter that remains in dispute shall promptly be submitted to an independent accounting firm
of internationally recognized standing (the “Accountant”) designated by the Company
and the Holder within ten days after

2

 

the expiration of such 15-day period, or, if they cannot agree on an accounting firm, such
dispute shall be promptly referred to the HKIAC and an independent accounting firm of
internationally recognized standing shall be appointed thereby. The Accountant shall
consider only the matters specified in the Objection. The Accountant shall act promptly to
resolve all matters specified in the Objection, and shall give its decision within 30 days
after the referral of the matter to it. Upon resolution by the Accountant of all matters
specified in the Objection, the Accountant shall determine the Adjusted Post-Money
Valuation and/or whether the Adjusted Post Money Valuation is lower than the Initial Post
Money Valuation, as applicable, on the basis of the matters it has resolved. The
Accountant’s decisions and determinations with respect to all matters specified in the
Objection and its determination as to Adjusted Post Money Valuation shall be final and
binding upon the Company and the Holder. The costs and expenses of the Accountant shall be
borne equally by the Company, on the one hand, and the Holder, on the other hand.

     4. Covenants.

     Without limiting any other covenant of the Company to operate its business in the ordinary
course of business consistent with past practice, under the Purchase Agreement, the Memorandum and
Articles of Association of the Company, and the Shareholders Agreement:

     (a) the Company shall not change any method of accounting or accounting practice or policy,
other than (i) pursuant to guidance provided by any applicable regulatory authority, with the
Holder’s consent, or (ii) as recommended by the Company’s independent auditors, with the Holder’s
consent, which consent shall not be unreasonably withheld; and

     (b) the Company shall not (i) directly or indirectly change the allocation of items of
revenue, income and/or gain between, or the principles applied to allocate items of revenue,
income and/or gain in, EMC related profits on the one hand, and other items of income or gain on
the other hand, or (ii) otherwise artificially affect the Adjusted Post Money Valuation.

     (c) If there is any change to any Accounting Rules prior to an IPO of the Company, the
Company shall employ the adjusted Accounting Rules to re-calculate the Adjusted Post Money
Valuation and deliver the re-calculated Adjusted Post Money Valuation to the Holder within 60 days
after such change. The Adjusted Post Money Valuation can be re-calculated from time to time prior
to the IPO of the Company, due to change of the Accounting Rules. Determination of the
re-calculated Adjusted Post Money Valuation shall be in accordance with Section 3 of this Warrant.

     (d) If the Adjusted Post Money Valuation is adjusted prior to the IPO, and if, accordingly,
the Holder is not entitled to exercise this Warrant, any and all Ordinary Shares that have been
subscribed by the Holder by exercising this Warrant shall be

3

 

redeemed by the Company with the Exercise Price, or shall be cancelled pursuant to applicable
Laws in a way satisfactory to the Holder.

     5. Definitions. As used herein, the following terms shall have the following
meanings:

     (a) “Adjusted Post Money Valuation” means the post money valuation of the Company as
of the Closing Date, equaling to the audited and consolidated Net Profit for 2009 Fiscal Year of
the Company multiplied by X, where X is determined in accordance with the following formula. The
exchange rate between United States Dollar and Renminbi is USD1 = RMB6.82.

	 	 	 	 	 	 	 

	 

	 	A
	 	=
	 	EMC Gross Profit for the 2009 Fiscal Year;
	 
	 	 	 	 	 	 
	 

	 	B
	 	=
	 	Normal Business Gross Profit for the 2009 Fiscal Year;
	 
	 	 	 	 	 	 
	 

	 	C
	 	=
	 	other Gross Profit for the 2009 Fiscal Year, i.e. B minus A;

     (b) “Initial Post Money Valuation” means the post money valuation of the Company as of
the Closing Date, subject to adjustment, equaling to the audited and consolidated Net Profit for
2009 Fiscal Year of the Company, which is RMB100,000,000 initially, multiplied by X, which is 5.56
initially, and the exchange rate between United States Dollar and Renminbi is USD1 = RMB6.82.

     (c) “Exercise Period” means the period beginning on the date (if any) that it is
determined in accordance with Section 3 hereof that the Adjusted Post Money Valuation exceeds the
Initial Post Money Valuation and ending at 5:00 p.m., Beijing time on the tenth anniversary of the
date hereof, or if such date is not a Business Day, then 5:00 p.m., Beijing time on the following
Business Day, or ending at the tenth anniversary of the date of publication of the final
re-calculated Adjusted Post Money Valuation in accordance with Section 4(c) hereof, whichever is
longer.

     (d) “2009 Fiscal Year” commences on January 1, 2009, ending on February 28, 2010.

     (e) “Percentage Interest” of the Holder means, as of the Closing Date, the quotient,
expressed as a percentage, obtained by dividing (i) the number of Ordinary Shares then owned by
the Holder on an as-converted basis (giving effect to the conversion and exchange of all
securities or rights of the Holder that are convertible or exchangeable into Ordinary Shares,
including the Shares implied by ESOP but excluding the Shares issued upon exercise of the
Warrants) by (ii) the number of Ordinary Shares then outstanding on an as-converted basis (giving
effect to the conversion and exchange of all securities or rights that are convertible or
exchangeable into Ordinary Shares, including the Shares implied by ESOP but excluding the
Shares issued upon exercise of the Warrants). After the Adjust Post Money Valuation is
available, the Percentage

4

 

Interest shall be adjusted to a percentage, obtained by the Holder’s Percentage Interest as of the
Closing, plus that percentage implied by the Adjustment Number.

     (f) “Accounting Rules” means the accounting policies and critical accounting
estimates and assumptions (including without limitation, those descriptions under Note 3 from Page
10 to Page 23 and Note 5 from Page 24 to Page 25 in the report attached as Exhibit C hereto)
employed by PricewaterhouseCoopers in connection with preparation of the Company’s consolidated
2008 audit report.

     (g) “IPO” means the first firmly underwritten registered public offering by the
Company of its Ordinary Shares pursuant to a registration statement that is filed with and declared
effective by a Governmental Authority in a jurisdiction.

     (h) “EMC” means energy management contracts projects, which are central heating and
cooling refurbishment and replacements for existing buildings and installation projects for new
buildings. In the EMC, the Company (including the PRC Companies) designs, manufactures and
installs ground-source heat pump (“GSHP”) systems under long-term (which shall be no less than 10
years) service contracts, which have an annual energy management fee, to large scale commercial
businesses, such as hotels and supermarkets. The Company (including the PRC Companies) will retain
the title to various GSHP related equipment and facilities until expiration of term under a
service contract. For avoidance of confusion, EMC shall include, but not limited to, the long term
service contracts described in the report attached as Exhibit C hereto. China Environment Fund
III, L.P. shall reserve the right to determine whether a contract constitutes an EMC. However,
such determination shall not be made in conflict with the provisions hereof.

     (i) “EMC Gross Profit” means gross profit generated only from the EMC.

     (j) “EPC” means engineering-procurement construction projects. In the EPC, the Company
(including the PRC Companies) designs and installs central heating/cooling/hot water system using
its GSHP technology on a single project basis, charging an upfront fee to large scale commercial
customers, including large office buildings, industrial parks, and financial centres. By the
completion of the project, customers must settle the payment to and assume ownership of the system
from the Company.

     (k) “Net Profit” means Normal Business Gross Profit minus distribution costs minus
administrative expenses (excluding other gains) plus finance income minus tax. The accounting
terms used herein shall have the meaning ascribed to them in the report attached as Exhibit C
hereto.

     (l) “Normal Business Gross Profit” means gross profit generated only from the
Normal Business.

     (m) “Normal Business” means heat pump related sales contracts, EPC, EMC and other
heat pump related businesses.

5

 

     6. Methods of Exercise.

     During the Exercise Period, the Holder may exercise, in whole or in part, the purchase
rights pursuant to this Warrant by either of the following methods:

     (a) Cash Exercise. The Holder may exercise by delivering a notice of exercise, in the
form attached as Exhibit A hereto (a “Notice of Exercise”) to the Company at its principal office
and paying to the Company an amount (i) in cash (by check or wire transfer of immediately available
funds), (ii) by cancellation of indebtedness of the Company owed to the Holder, or (iii) by a
combination of (i) and (ii), equal to the aggregate Exercise Price for the number of Ordinary
Shares being purchased by such Holder.

     (b) Net Exercise. Alternatively, the Holder may exercise by:

     (i) delivering a Notice of Exercise to the Company at its principal offices; and

     (ii) receiving such lesser number of Ordinary Shares calculated in accordance with the
formula below representing the satisfaction of the payment to the Company of an amount equal
to the aggregate Exercise Price for the number of Ordinary Shares being purchased.

In the event a Holder chooses to exercise the purchase rights pursuant to this Warrant in
accordance with this Section 6(b) (a “Net Exercise”), the Company shall issue to such Holder a
number of Ordinary Shares computed using the following formula:

where:

X = the number of Ordinary Shares to be issued to the Holder

Y = the number of Ordinary Shares purchasable under this Warrant or, if only a
portion of the Warrant is being exercised, the number of Ordinary Shares for which
this Warrant is being exercised (at the date of such calculation)

A = the fair market value of one Ordinary Share (at the date of such
calculation)

B = the Exercise Price (as adjusted to the date of such calculation).

For purposes of this Section 6(b), the fair market value of an Ordinary Share shall be the average
of the closing prices of the Ordinary Shares quoted (i) in the over-the-counter market in which the
Ordinary Shares are traded, or (ii) on any exchange or electronic securities market on which
the Ordinary Shares are listed for trading, as applicable, for the 30 trading days prior to the
date of determination of fair market value (or such shorter

6

 

period of time during which such Ordinary Shares were traded over-the-counter or on such
exchange). If the Ordinary Shares are not traded on the over-the-counter market, an exchange or an
electronic securities market, the fair market value of an Ordinary Share shall be determined by
dividing:

     (i) the cash price at which a willing seller would sell and a willing buyer would
buy all of the issued and outstanding Ordinary Shares in a transaction negotiated at
arm’s length by unaffiliated third parties, each being apprised of and considering all
relevant facts, circumstances and factors, and neither acting under compulsion or time
constraints, by

     (ii) the number of then issued and outstanding Ordinary Shares.

In the case of any determination of the fair market value of the Ordinary Shares pursuant to this
Section 6(b), fair market value shall not include any discount (i) by reason of such Ordinary
Shares representing a minority interest, or (ii) to reflect the fact that such Ordinary Shares are
illiquid and subject to the restrictions on transfer set forth in this Warrant and the
Shareholders Agreement.

If the Company and the Holder cannot agree on the fair market value of an Ordinary Share within 30
days after the date upon which the Holder delivers a Notice of Exercise to the Company at its
principal offices (the “Negotiation Period”), the valuation shall be made by an appraiser of
internationally recognized standing designated jointly by the Company and the Holder within ten
days after the expiration of the Negotiation Period or, if they cannot so agree on an appraiser,
such dispute shall be promptly referred to the HKIAC and an appraiser of nationally recognized
standing shall be appointed thereby. The valuation shall be made by such appraiser within 20 days
of its designation by the HKIAC. Any valuation made by an appraiser under this Section 6(b) shall
be determinative of such value and binding upon the Company and the Holder. The cost of such
valuation shall be borne equally by the Company and the Holder, but each party shall bear its own
legal expenses, if any, incurred in connection therewith.

     (c) Partial Exercise. This Warrant may be exercised for less than the full number
of Ordinary Shares, in which case the number of Ordinary Shares receivable upon the exercise of
this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced.

     7. Certificates for Ordinary Shares. Upon the exercise of any of the purchase rights
pursuant to this Warrant, one or more certificates for the number of Ordinary Shares so issued
shall be issued and delivered by the Company to the Holder as soon as practicable thereafter, and
in any event within ten days of the delivery by the Holder to the Company of the Notice of
Exercise. The date of delivery of such certificates is referred to herein as the “Delivery Date.”

     8. Dividend, Subdivision, Combination, Reclassification, Reorganization,
Consolidation, Merger or Sale of Assets. The number of and kind of securities that
may

7

 

be issued pursuant to this Warrant and the Exercise Price shall be subject to adjustment from
time to time as follows:

     (a) In case of any reclassification, capital reorganization, or change in the shares of the
Company, or consolidation or merger of the Company with or into another corporation, or the sale of
all or substantially all of the assets of the Company to another corporation pursuant to which the
holders of Ordinary Shares shall be entitled to receive shares, securities, cash or other property
with respect to or in exchange for Ordinary Shares, then, as a condition to such reclassification,
reorganization, change, consolidation, merger or sale, the Company shall make appropriate provision
so that the Holder (or its permitted transferees) shall have the right at any time prior to the
expiration of the Exercise Period to acquire, at a total per-share price equal to that payable
pursuant to this Warrant, the kind and amount of shares, securities, cash or other property
receivable in connection with such reclassification, reorganization, change, consolidation, merger
or sale by a holder of the same number of Ordinary Shares as were purchasable by the Holder
immediately prior to such reclassification, reorganization, change, consolidation, merger or sale.
In any such case, appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares,
securities, cash or other property deliverable upon exercise hereof, and appropriate adjustments
shall be made to the purchase price per Ordinary Share payable hereunder, provided that the
aggregate purchase price shall remain the same.

     The Company will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets in such sale shall assume, by
written instrument mailed or delivered to the Holder at the last address of the Holder appearing on
the books of the Company, the obligation to deliver to the Holder such shares, securities, cash or
other property as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase. If a purchase, tender or exchange offer is made to and accepted by the holders of more
than 50% of the outstanding Ordinary Shares, the Company shall not effect any consolidation, merger
or sale with the Person having made such offer or with any Affiliate of such Person, unless prior
to the consummation of such consolidation, merger or sale the Holder shall have been given a
reasonable opportunity to then elect to receive pursuant to this Warrant either the stock,
securities, cash or other property then issuable with respect to the Ordinary Shares or the stock,
securities, cash or other property, or the equivalent, issued to holders of Ordinary Shares in
accordance with such offer.

     (b) If the Company shall, at any time or from time to time, (i) declare a dividend on the
Ordinary Shares payable in shares of its capital stock, (ii) subdivide the outstanding Ordinary
Shares, (iii) combine the outstanding Ordinary Shares into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the Ordinary Shares (including any
such reclassification in connection with a consolidation or merger in which the Company is the
continuing corporation), then in each such case, the Exercise Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and

8

 

kind of shares of capital stock issuable on such date shall be proportionately adjusted so that the
holder of any Warrant exercised after such date shall be entitled to receive, upon payment of the
same aggregate amount as would have been payable before such date, the aggregate number and kind of
shares of capital stock which, if such Warrant had been exercised immediately prior to such date,
such Holder would have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of such subdivision,
combination or reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur. If a dividend is declared and such dividend is not paid, the Exercise
Price shall again be adjusted to be the Exercise Price in effect immediately prior to such record
date.

     (c) Notice of Adjustment. When any adjustment is required to be made in the number or
kind of shares purchasable upon exercise of this Warrant, or in the Exercise Price, the Company
shall provide the Holder with not less than 20 days’ prior written notice of the date on which the
event requiring such adjustment is to take place and information, reasonably detailed, regarding
the pertinent facts of such event, as well as the calculation of the adjusted Exercise Price and
the adjusted number of Ordinary Shares or securities, cash or other property thereafter purchasable
upon exercise of this Warrant.

     (d) Adjustment by Board of Directors. If any event occurs as to which, in the opinion
of the Board of Directors of the Company, the provisions of this Section 8 are not strictly
applicable or if strictly applicable would not fairly protect the rights of the Holder in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance with such essential
intent and principles, so as to protect such rights as aforesaid, but in no event shall any
adjustment have the effect of increasing the Exercise Price as otherwise determined pursuant to any
of the provisions of this Section 8, except in the case of a combination of shares of a type
contemplated in Section 8(a), and then in no event to an amount larger than the Exercise Price as
adjusted pursuant to Section 8(a).

     (e) Officer’s Statement as to Adjustments. Whenever the Exercise Price shall be
adjusted as provided in this Section 8, the Company shall forthwith file at each office designated
for the exercise of this Warrant, a statement, signed by the chief financial officer of the Company
(or an officer holding a comparable position), showing in reasonable detail the facts requiring
such adjustment and the Exercise Price that will be effective after such adjustment.

     9. No Dilution or Impairment. The Company will not, by amendment of its
Memorandum and Articles of Association, or through reorganization, consolidation,
merger, dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect the rights of
the Holder against dilution or other impairment. Without limiting the generality of the
foregoing, the Company will not increase the par value of any shares receivable
pursuant to this Warrant

9

 

above the amount payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and legally issue fully
paid shares pursuant to this Warrant.

     10. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such
fractional shares the Company shall make a cash payment therefor on the basis of the Exercise
Price then in effect.

     11. Representations, Warranties and Covenants of the Company

     (a) Corporate Actions. The Company represents and warrants to the Holder that all
corporate actions on the part of the Company, its officers, directors and shareholders necessary
for the sale and issuance of this Warrant have been taken.

     (b) Issuance of Shares. The Company covenants that the Ordinary Shares, when issued
pursuant to this Warrant, will be duly authorized, validly issued, fully paid and non-assessable,
and free from all taxes and Liens with respect thereto or the issuance thereof.

     (c) Covenants as to Exercise of Warrant. The Company covenants that the Company will
at all times during the Exercise Period, have authorized a sufficient number of Ordinary Shares to
provide for the exercise of the rights pursuant to this Warrant. If at any time during the Exercise
Period the number of authorized but unissued Ordinary Shares shall not be sufficient to permit
exercise of the rights pursuant to this Warrant, or the number of authorized but unissued Ordinary
Shares shall not be sufficient to permit the conversion of the Ordinary Shares issuable upon
exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued Ordinary Shares as shall be
sufficient for such purposes.

     (d) Legal Opinion. Upon the issuance of the Ordinary Shares pursuant to this Warrant,
the Company shall deliver to the Holder receiving such Ordinary Shares an opinion of Hong Kong
counsel to the Company, addressed to the Holder, in form and substance reasonably satisfactory to
the Holder, and including an opinion as to the Company’s compliance with Section 11(b) hereof.

     12. Reservation of Shares. The Company hereby covenants and agrees that at all times there
shall be reserved in the Company’s authorized but unissued shares for issuance and delivery upon
exercise of this Warrant such number of Ordinary Shares (or other securities of the Company as are
from time to time issuable upon exercise of this Warrant), including, amending its Memorandum and
Articles of Association or other constitutional documents from time to time to increase its
authorized shares as necessary. All such shares shall be duly authorized, and when issued by way
of registration in the name of the Holder in the Company’s register of members upon such exercise
in accordance with the terms herein, shall be validly issued, fully paid and non-assessable, free
and clear of all liens, security interests, charges and other encumbrances or

10

 

restrictions on sale and free and clear of all preemptive and similar rights
(“Encumbrances”), except such Encumbrances arising under law or under the Shareholders
Agreement. The Holder acknowledges that “reserve,” “reservation” or similar words may have no
technical meaning under the laws of Hong Kong. For purposes only of this Warrant, “reserve”,
“reservation” and similar words shall mean that the Board of Directors of the Company have
approved and authorized an intent by the Company to refrain from issuing a number of Ordinary
Shares sufficient to satisfy the exercise rights of the Holder of this Warrant such that such
Ordinary Shares will remain in the authorized but unissued shares of the Company until, as
applicable, this Warrant is exercised in accordance with its terms.

     13. Restrictive Legend. The Ordinary Share certificates shall be stamped or
imprinted with a legend in substantially the following form (unless registered under the Act or
if the Holder delivers to the Company an opinion of counsel (who may be an employee of the
Holder) reasonably satisfactory in form and substance to the Company, that the Ordinary Shares do
not require registration under the Act or any applicable state securities laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR THE LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR A COMPARABLE DOCUMENT
UNDER THE LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT. THE
OFFERING OF THESE SECURITIES HAS NOT BEEN REVIEWED OR APPROVED BY ANY STATE
SECURITIES ADMINISTRATOR.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS
AGREEMENT, DATED AS OF JUNE 24, 2009, AMONG THE COMPANY AND CERTAIN OF ITS
SHAREHOLDERS, A COPY OF WHICH IS ON FILE WITH THE COMPANY. NO SALE, ASSIGNMENT,
TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED
HEREBY SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SAID
SHAREHOLDERS AGREEMENT SHALL HAVE BEEN COMPLIED WITH IN FULL.

Any certificate issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon completion of a public distribution pursuant to a
registration statement under the Act) shall also bear such legend unless, in the opinion of
counsel selected by the Holder (who may be an employee of the Holder) and reasonably acceptable
to the Company, the securities represented thereby need no longer be subject to restrictions on
resale under the Act.

11

 

     14. Warrant and Shares Transferable

     (a) Subject to compliance with the terms and conditions of the Shareholders Agreement and this
Section 14, this Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant properly endorsed
or accompanied by written instructions of transfer. With respect to any offer, sale or other
disposition of this Warrant or any Ordinary Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Warrant or Ordinary Shares, the Holder agrees to give written
notice to the Company prior thereto, describing briefly the manner thereof, together with a written
opinion of such holder’s counsel, or other evidence, if reasonably requested by the Company, to the
effect that such offer, sale or other disposition may be effected without registration or
qualification (under the Act as then in effect or any U.S. federal or state or Hong Kong securities
law then in effect) of this Warrant or the Ordinary Shares and indicating whether or not under the
Act certificates for this Warrant or the Ordinary Shares to be sold or otherwise disposed of
require any restrictive legend as to applicable restrictions on transferability in order to ensure
compliance with such law. Upon receiving such written notice and reasonably satisfactory opinion or
other evidence, if so requested, the Company, as promptly as practicable, shall notify such holder
that such holder may sell or otherwise dispose of this Warrant or such Ordinary Shares, all in
accordance with the terms of the notice delivered to the Company. If a determination has been made
pursuant to this Section 14 that the opinion of counsel for the Holder or other evidence is not
reasonably satisfactory to the Company, the Company shall so notify the Holder promptly with
details thereof after such determination has been made. Each certificate representing this Warrant
or the Ordinary Shares transferred in accordance with this Section 14 shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with such laws, unless in
the aforesaid opinion of counsel for the Holder, such legend is not required in order to ensure
compliance with such laws. The Company may issue stop transfer instructions to its transfer agent
in connection with such restrictions.

     15. Rights of Shareholders. No holder of this Warrant shall be entitled, as a Warrant
holder, to vote or receive dividends or be deemed the holder of the Ordinary Shares or any other
securities of the Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the holder of this
Warrant, as such, any of the rights of a shareholder of the Company or any right to vote upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock, reclassification of
Ordinary Shares, change of par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the Ordinary Shares purchasable upon the exercise hereof
shall have become deliverable, as provided herein.

     16. Notices. Any notice required or permitted pursuant to this Warrant shall be given
in writing and shall be given either personally or by sending it by next-day or second-day courier
service, fax, electronic mail or similar means to the address as shown below the signature of such
Party on the signature page of this Warrant (or at such other

12

 

address as such party may designate by fifteen (15) days’ advance written notice to the other
parties given in accordance with this Section 16). Where a notice is sent by next-day or second-day
courier service, service of the notice shall be deemed to be effected by properly addressing,
pre-paying and sending by next-day or second-day service through an internationally-recognized
courier a letter containing the notice, with a confirmation of delivery, and by two (2) days having
passed after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or
electronic mail, service of the notice shall be deemed to be effected on the same day on which it
is properly addressed and sent through a transmitting organization with a reasonable confirmation
of delivery.

     17. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement in an amount reasonably satisfactory
to it, or (in the case of mutilation) upon surrender and cancellation thereof, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

     18. Subdivision of Rights. This Warrant (as well as any new warrants issued pursuant
to the provisions of this Section 18) is exchangeable, upon the surrender hereof by the Holder, at
the principal office of the Company for any number of new warrants of like tenor and date
representing in the aggregate the right to subscribe for and purchase the number of Ordinary
Shares which may be subscribed for and purchased hereunder.

     19. “Market Stand-Off” Agreement. The Holder hereby agrees that, during the period of
time specified by the Company and an underwriter of Ordinary Shares or other securities of the
Company, following the effective date of (i) a registration statement of the Company filed under
the Act, or (ii) a comparable offering document filed under the applicable laws and regulations of
any foreign governmental authority, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any securities of the Company held by it at
any time during such period, except Ordinary Shares included in such registration or offering;
provided, however, that:

     (a) all officers and directors of the Company, and each Person who holds one percent (1%) or
more of the Company’s outstanding shares, enter into similar agreements; and

     (b) such market stand-off time period shall not exceed 90 days.

The Holder agrees to provide to the underwriters of any public offering such further agreements as
such underwriters may reasonably request in connection with this market stand-off agreement,
provided that the terms of such agreements are substantially consistent with the provisions of
this Section 19. In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the securities of the Company held by the Holder (and the shares or
securities of every other Person subject to the foregoing restriction) until the end of such
period.

13

 

Notwithstanding the foregoing, the obligations described in this Section 19 shall not apply to
(i) a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms which may be promulgated in the future, (ii) a registration relating solely to a
transaction under Rule 145 of the Act, or (iii) any offering which would the equivalent of clause
(i) or (ii) under the applicable laws and regulations of any foreign governmental authority.

     20. Change, Waiver, Etc. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally except by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or termination is
sought.

     21. Remedies. The Company stipulates that the remedies at law of the Holder in the
event of any default by the Company in the performance of or compliance with any of the terms of
this Warrant are not and will not be adequate, and that the same may be specifically enforced.

     22. Governing Law. This Warrant and all actions arising out of or in connection with
this Agreement shall be governed by and construed in accordance with the laws of the Hong Kong,
without regard to the conflicts of law provisions of the Hong Kong.

     23. Dispute Resolution.

     (a) The parties agree to negotiate in good faith to resolve any dispute between them regarding
this Warrant. If the negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party that is a company, shall nominate one (1) authorized officer as its
representative. The parties or their representatives, as the case may be, shall, within thirty (30)
days of a written request by either party to call such a meeting, meet in person and alone (except
for one (1) assistant for each party) and shall attempt in good faith to resolve the dispute. If
the disputes cannot be resolved by such senior managers in such meeting, the parties agree that
they shall, if requested in writing by either party, meet within thirty (30) days after such
written notification for one (1) day with an impartial mediator and consider dispute resolution
alternatives other than formal arbitration. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one (1) day mediation, either party may begin formal
arbitration proceedings to be conducted in accordance with subsection (b) below. This procedure
shall be a prerequisite before taking any additional action hereunder.

     (b) In the event the parties are unable to settle a dispute between them regarding this
Warrant in accordance with subsection (a) above, such dispute shall he referred to and finally
settled by arbitration at the HKIAC in accordance with the Hong Kong International Arbitration
Centre Administered Arbitration Rules in effect, which rules are deemed to be incorporated by
reference into this subsection (b), subject to the following: (i) the arbitration tribunal shall
consist of three (3) arbitrators to be appointed according to the Hong Kong International
Arbitration Centre Administered Arbitration Rules; and (ii) the language of the arbitration shall
be English. Notwithstanding anything in this Warrant or in the Hong Kong International Arbitration
Centre Administered

14

 

Arbitration Rules or otherwise, the arbitration tribunal shall not have the power to award
injunctive relief or any other equitable remedy of any kind against any Holder unless such award
both (x) is expressly appealable to and subject to de novo review by the courts of Hong Kong, and
(y) would not, if upheld, have the effect of impairing, restricting, or imposing any conditions on
the right or ability of such Holder or its affiliates to conduct its respective business
operations or to make or dispose of any other investment. The prevailing party shall be entitled
to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief
to which such party may be entitled.

     24. Rights and Obligations Survive Exercise of Warrant. Unless otherwise provided
herein, the rights and obligations of the Company, of the Holder and of the holder of the
Ordinary Shares issued upon exercise of this Warrant, shall survive any exercise of this
Warrant.

[Signature page follows]

15

 

Issued this 24 day of June, 2009.

SEALED with the Common Seal of EASTERN WELL HOLDINGS

LIMITED and SIGNED by

                                            

in the presence of:

Address: No. 485-487, Gu Yang Road, Changning

District, Shanghai, China

Fax: 86-21-6631-2459

Acknowledged and Agreed:

SUN KWOK PING

	 	 	 	 	 

	By:

	 	/s/ Sun Kwok Ping
 

Name: Sun Kwok Ping
	 	 
	 

	 	Address: No., 485-487, Gu Yang Road, Changning	 	 
	 

	 	               District, Shanghai, China	 	 
	 

	 	Fax: 86-21-6631-2459	 	 

[Signature Page to Warrant to Purchase Ordinary Shares]

 

 

Execution Copy

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). OR THE LAWS OF ANY OTHER JURISDICTION.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR A COMPARABLE DOCUMENT UNDER THE
LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED.

EASTERN WELL HOLDINGS LIMITED

June 24, 2009

WARRANT NO.1 TO PURCHASE

SERIES A PREFERRED SHARES

     This Warrant is issued to China Environment Fund III, L.P.(the “Holder”) by EASTERN WELL
HOLDINGS LIMITED, a Hong Kong company (the “Company”), in connection with the purchase by the
Holder of Series A Preferred Shares, par value US$0.001 per share (“Preferred Shares”), of the
Company pursuant to the Series A Preferred Share Purchase Agreement, dated as of June 18, 2009 (as
may be amended from time to time, the “Purchase Agreement”), by and among the Holder, the Company
and the other parties thereto. Capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Purchase Agreement. All accounting terms not otherwise defined
herein have the meanings assigned under IFRS.

     1. Purchase During Exercise Period. Subject to the terms and conditions set forth in
this Warrant, the Holder shall be entitled, at any time during the Exercise Period, to purchase
from the Company, at a price of US$0.001 per share (the “Exercise Price”), a number of fully paid
Preferred Shares equal to the “Adjustment Number” (as defined below). Subject to Section 4(c), the
Adjustment Number shall be the number of Preferred Shares, if issued to the Holder on the Closing
Date, would result in the Percentage Interest equal to a new number, which in no event shall exceed
45% of the Company’s aggregate equity interest immediately after Closing on a fully-diluted basis,
to be determined in accordance with the Adjusted Post Money Valuation.

     2. Termination. Subject to Section 4(c), the Exercise Period shall not commence, and
the rights under this Warrant shall terminate and shall not be exercisable, if it is determined in
accordance with Section hereof that the Adjusted Post-Money Valuation equals or exceeds the Initial
Post-Money Valuation.

     3. Determination of Adjusted Post-Money Valuation.

     (a) Adjusted Post-Money Valuation. Simultaneously with the delivery of the financial
statements for the 2009 Fiscal Year pursuant to Section 8.1 of the Shareholders Agreement, but in
any event within 60 days after the end of the 2009 Fiscal Year of the

 

 

Company, the Company shall deliver to the Holder, together with such financial statements, (i) an
audited statement of profits and losses for the 2009 Fiscal Year (divided into two periods, i.e. a
period from January 1, 2009 to December 31, 2009, and another period from January 1, 2010 to
February 28, 2010), audited by the accounting firm agreed by the Company and the Holder, prepared
in accordance with the IFRS, and (ii) a statement of revenue and cost breakdown by project for the
2009 Fiscal Year issued by the Company and confirmed by the accounting firm in writing, setting
forth in reasonable detail the calculation of Adjusted Post-Money Valuation; provided, that if the
Company fails to deliver such financial statements, statement of profits and losses, or such
statement within 60 days after the end of the 2009 Fiscal Year, the Adjusted Post Money Valuation
will be conclusively deemed lower than the Initial Post Money Valuation, the Holder’s Percentage
Interest can be adjusted to up to 45% of the Company’s aggregate equity interest immediately after
Closing on a fully-diluted basis at the Holder’s sole discretion and the Exercise Period will
commence on the business day next following such 60th day. The Holder shall have the right to
object to the determination of Adjusted Post-Money Valuation in accordance with Section 3(b) below.

     (b) Objection Procedure

     (i) Unless the Holder gives written notice to the Company of its objection (an
“Objection”) to the Company’s calculation of the Adjusted Post-Money Valuation within 30
days following its receipt of the financial statements and accompanying chief financial
officer’s certificate, the Company’s calculation shall be final and binding upon the
parties for purposes of this Warrant. If the Holder waives in writing its right to deliver
an Objection with respect to any such determination, the applicable determination shall be
final and binding upon the parties as of the date of delivery of such waiver. Any Objection
shall specify in reasonable detail the nature of any disagreement so asserted. Upon request
of the Holder, the Company shall promptly provide a representative of the Holder such
access to the books and records of the Company and its Subsidiaries as are reasonably
necessary to confirm the Company’s calculation of the Adjusted Post-Money Valuation and the
Holder agrees to maintain any such information in strict confidence (except for such
disclosure to advisors or otherwise as appropriate in connection with the proceedings
referred to below in clause (ii)). During the 15-day period following the delivery of an
Objection, the Company and the Holder shall attempt in good faith to resolve any
differences which they may have with respect to any matter specified in the Objection.

     (ii) If at the end of such 15-day period, the Company and the Holder shall have
failed to reach written agreement with respect to all matters specified in any Objection,
any matter that remains in dispute shall promptly be submitted to an independent accounting
firm of internationally recognized standing (the “Accountant”) designated by the Company
and the Holder within ten days after the expiration of such 15-day period, or, if they
cannot agree on an accounting firm, such dispute shall be promptly referred to the HKIAC
and an independent accounting firm of internationally recognized standing shall be
appointed thereby. The Accountant shall consider only the matters specified in the
Objection. The

2

 

Accountant shall act promptly to resolve all matters specified in the Objection, and shall
give its decision within 30 days after the referral of the matter to it. Upon resolution by
the Accountant of all matters specified in the Objection, the Accountant shall determine
the Adjusted Post-Money Valuation and/or whether the Adjusted Post Money Valuation is lower
than the Initial Post Money Valuation, as applicable, on the basis of the matters it has
resolved. The Accountant’s decisions and determinations with respect to all matters
specified in the Objection and its determination as to Adjusted Post Money Valuation shall
be final and binding upon the Company and the Holder. The costs and expenses of the
Accountant shall be borne equally by the Company, on the one hand, and the Holder, on the
other hand.

     4. Covenants.

     Without limiting any other covenant of the Company to operate its business in the ordinary
course of business consistent with past practice, under the Purchase Agreement, the Memorandum and
Articles of Association of the Company, and the Shareholders Agreement:

     (a) the Company shall not change any method of accounting or accounting practice or policy,
other than (i) pursuant to guidance provided by any applicable regulatory authority, with the
Holder’s consent, or (ii) as recommended by the Company’s independent auditors, with the Holder’s
consent; and

     (b) the Company shall (i) not directly or indirectly change the allocation of items of
revenue, income and/or gain between, or the principles applied to allocate items of revenue, income
and/or gain in, EMC related profits on the one hand, and other items of income or gain on the other
hand, or (ii) not otherwise artificially affect the Adjusted Post Money Valuation.

     (c) If there is any change to any Accounting Rules prior to an IPO of the Company, the Company
shall employ the adjusted Accounting Rules to re-calculate the Adjusted Post Money Valuation and
deliver the re-calculated Adjusted Post Money Valuation to the Holder within 60 days after such
change. The Adjusted Post Money Valuation can be re-calculated from time to time prior to the IPO
of the Company, due to change of the Accounting Rules. Determination of the re-calculated Adjusted
Post Money Valuation shall be in accordance with Section 3 of this Warrant.

     (d) If the Adjusted Post Money Valuation is adjusted prior to the IPO, and if, accordingly,
the Holder is not entitled to exercise this Warrant, any and all Preferred Shares that have been
subscribed by the Holder by exercising this Warrant shall be redeemed by the Company with the
Exercise Price, or shall be cancelled pursuant to applicable Laws in a way satisfactory to the
Holder.

     5. Definitions. As used herein, the following terms shall have the following meanings:

3

 

     (a) “Adjusted Post Money Valuation” means the post money valuation of the Company as
of the Closing Date, equaling to the audited and consolidated Net Profit for 2009 Fiscal Year of
the Company multiplied by X, where X is determined in accordance with the following formula. The
exchange rate between United States Dollar and Renminbi is USD1 = RMB6.82.

     A = EMC Gross Profit for the 2009 Fiscal Year;

     B = Normal Business Gross Profit for the 2009 Fiscal Year;

     C = other Gross Profit for the 2009 Fiscal Year, i.e. B minus A;

     (b) “Initial Post Money Valuation” means the post money valuation of the Company as of
the Closing Date, subject to adjustment, equaling to the audited and consolidated Net Profit for
2009 Fiscal Year of the Company, which is RMB100,000,000 initially, multiplied by X, which is 5.56
initially, and the exchange rate between United States Dollar and Renminbi is USD1 = RMB6.82.

     (c) “Exercise Period” means the period beginning on the date (if any) that it is determined in
accordance with Section 3 hereof that the Adjusted Post Money Valuation is lower than the Initial
Post Money Valuation and ending at 5:00 p.m., Beijing time on the tenth anniversary of the date
hereof, or if such date is not a Business Day, then 5:00 p.m., Beijing time on the following
Business Day, or ending at the tenth anniversary of the date of publication of the final
re-calculated Adjusted Post Money Valuation in accordance with Section 4(c) hereof, whichever is
longer.

     (d) “2009 Fiscal Year” commences on January 1, 2009, ending on February 28, 2010.

     (e) “Percentage Interest” of the Holder means, as of the Closing Date, the quotient,
expressed as a percentage, obtained by dividing (i) the number of Ordinary Shares then owned by the
Holder on an as-converted basis (giving effect to the conversion and exchange of all securities or
rights of the Holder that are convertible or exchangeable into Ordinary Shares, including the
Shares implied by ESOP but excluding the Shares issued upon exercise of the Warrants) by (ii) the
number of Ordinary Shares then outstanding on an as-converted basis (giving effect to the
conversion and exchange of all securities or rights that are convertible or exchangeable into
Ordinary Shares, including the Shares implied by ESOP but excluding the Shares issued upon exercise
of the Warrants). After the Adjust Post Money Valuation is available, the Percentage Interest shall
be adjusted to a percentage, obtained by dividing (i) the Series A Purchase Price by (ii) the
Adjusted Post Money Valuation, with the exchange rate between United States Dollar and Renminbi is
USD1 = RMB6.82.

     (f) “Accounting Rules” means the accounting policies and critical accounting
estimates and assumptions (including without limitation, those descriptions under Note 3 from Page
10 to Page 23 and Note 5 from Page 24 to Page 25 in the report attached as

4

 

Exhibit C hereto) employed by PricewaterhouseCoopers in connection with preparation of the
Company’s consolidated 2008 audit report.

     (g) “IPO” means the first firmly underwritten registered public offering by the Company of
its Ordinary Shares pursuant to a registration statement that is filed with and declared
effective by a Governmental Authority in a jurisdiction.

     (h) “EMC” means energy management contracts projects, which are central heating and
cooling refurbishment and replacements for existing buildings and installation projects for new
buildings. In the EMC, the Company (including the PRC Companies) designs, manufactures and installs
ground-source heat pump (“GSHP”) systems under long-term (which shall be no less than 10 years)
service contracts, which have an annual energy management fee, to large scale commercial
businesses, such as hotels and supermarkets. The Company (including the PRC Companies) will retain
the title to various GSHP related equipment and facilities until expiration of term under a service
contract. For avoidance of confusion, EMC shall include, but not limited to, the long term service
contracts described in the report attached as Exhibit C hereto. China Environment Fund III, L.P.
shall reserve the right to determine whether a contract constitutes an EMC. However, such
determination shall not be made in conflict with the provisions hereof.

     (i) “EMC Gross Profit” means gross profit generated only from the EMC.

     (j) “EPC” means engineering-procurement construction projects. In the EPC , the Company
(including the PRC Companies) designs and installs central heating/cooling/hot water system using
its GSHP technology on a single project basis, charging an upfront fee to large scale commercial
customers, including large office buildings, industrial parks, and financial centres. By the
completion of the project, customers must settle the payment to and assume ownership of the system
from the Company.

     (k) “Normal Business” means heat pump related sales contracts, EPC, EMC and
other heat pump related businesses.

     (l) “Normal Business Gross Profit” means gross profit generated only from the
Normal Business.

     (m) “Net Profit” means Normal Business Gross Profit minus distribution costs minus
administrative expenses (excluding other gains) plus finance income minus tax. The accounting terms
used herein shall have the meaning ascribed to them in the report attached as Exhibit C hereto.

     6. Methods of Exercise.

5

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

     During the Exercise Period, the Holder may exercise, in whole or in part, the purchase
rights pursuant to this Warrant by either of the following methods:

     (a) Cash Exercise. The Holder may exercise by delivering a notice of exercise, in the
form attached as Exhibit A hereto (a “Notice of Exercise”) to the Company at its principal office
and paying to the Company an amount (i) in cash (by check or wire transfer of immediately available
funds), (ii) by cancellation of indebtedness of the Company owed to the Holder, or (iii) by a
combination of (i) and (ii), equal to the aggregate Exercise Price for the number of Preferred
Shares being purchased by such Holder.

     (b) Net Exercise. Alternatively, the Holder may exercise by:

     (i) delivering a Notice of Exercise to the Company at its principal
offices; and

     (ii) receiving such lesser number of Preferred Shares calculated in accordance
with the formula below representing the satisfaction of the payment to the Company of an
amount equal to the aggregate Exercise Price for the number of Preferred Shares being
purchased.

In the event a Holder chooses to exercise the purchase rights pursuant to this Warrant in
accordance with this Section 6(b) (a “Net Exercise”), the Company shall issue to such Holder a
number of Preferred Shares computed using the following formula:

where:

X = the number of Preferred Shares to be issued to the Holder

Y = the number of Preferred Shares purchasable under this Warrant or, if only a
portion of the Warrant is being exercised, the number of Preferred Shares for which
this Warrant is being exercised (at the date of such calculation)

A = the fair market value of one Preferred Share (at the date of such
calculation)

B = the Exercise Price (as adjusted to the date of such calculation).

For purposes of this Section 6(b), the fair market value of a Preferred Share shall be the average
of the closing prices of the Preferred Shares (or a number of Ordinary Shares into which the
Preferred Shares are convertible) quoted (i) in the over-the-counter market in which the Preferred
Shares (or Ordinary Shares) are traded, or (ii) on any exchange or electronic securities market on
which the Preferred Shares (or Ordinary Shares) are listed for trading, as applicable, for the 30
trading days prior to the date of determination of fair market value (or such shorter period of
time during which such Preferred Shares (or

6

 

	 	 	Ordinary Shares) were traded over-the-counter or on such exchange). If the Preferred Shares (or
Ordinary Shares) are not traded on the over-the-counter market, an exchange or an electronic
securities market, the fair market value of a Preferred Share shall be determined by dividing:

     (i) the cash price at which a willing seller would sell and a willing buyer
would buy all of the issued and outstanding Preferred Shares in a transaction negotiated at
arm’s length by unaffiliated third parties, each being apprised of and considering all
relevant facts, circumstances and factors, and neither acting under compulsion or time
constraints, by

     (ii) the number of then issued and outstanding Preferred Shares.

In the case of any determination of the fair market value of the Preferred Shares pursuant to this
Section 6(b), fair market value shall not include any discount (i) by reason of such Preferred
Shares representing a minority interest, or (ii) to reflect the fact that such Preferred Shares are
illiquid and subject to the restrictions on transfer set forth in this Warrant and the Shareholders
Agreement.

If the Company and the Holder cannot agree on the fair market value of a Preferred Share within 30
days after the date upon which the Holder delivers a Notice of Exercise to the Company at its
principal offices (the “Negotiation Period”), the valuation shall be made by an appraiser of
internationally recognized standing designated jointly by the Company and the Holder within ten
days after the expiration of the Negotiation Period or, if they cannot so agree on an appraiser,
such dispute shall be promptly referred to the HKIAC and an appraiser of nationally recognized
standing shall be appointed thereby. The valuation shall be made by such appraiser within 20 days
of its designation by the HKIAC. Any valuation made by an appraiser under this Section 6(b) shall
be determinative of such value and binding upon the Company and the Holder. The cost of such
valuation shall be borne equally by the Company and the Holder, but each party shall bear its own
legal expenses, if any, incurred in connection therewith.

     (c) Partial Exercise. This Warrant may be exercised for less than the full
number of Preferred Shares, in which case the number of Preferred Shares receivable upon the
exercise of this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a
whole, shall be proportionately reduced.

     7. Certificates for Preferred Shares. Upon the exercise of any of the purchase rights
pursuant to this Warrant, one or more certificates for the number of Preferred Shares so issued
shall be issued and delivered by the Company to the Holder as soon as practicable thereafter, and
in any event within ten days of the delivery by the Holder to the Company of the Notice of
Exercise. The date of delivery of such certificates is referred to herein as the “Delivery Date.”

     8. Dividend, Subdivision, Combination, Reclassification, Reorganization, Consolidation,
Merger or Sale of Assets. The number of and kind of securities that may

7

 

be issued pursuant to this Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:

     (a) In case of any reclassification, capital reorganization, or change in the shares of the
Company, or consolidation or merger of the Company with or into another corporation, or the sale of
all or substantially all of the assets of the Company to another corporation pursuant to which the
holders of Preferred Shares shall be entitled to receive shares, securities, cash or other property
with respect to or in exchange for Preferred Shares, then, as a condition to such reclassification,
reorganization, change, consolidation, merger or sale, the Company shall make appropriate provision
so that the Holder (or its permitted transferees) shall have the right at any time prior to the
expiration of the Exercise Period to acquire, at a total per-share price equal to that payable
pursuant to this Warrant, the kind and amount of shares, securities, cash or other property
receivable in connection with such reclassification, reorganization, change, consolidation, merger
or sale by a holder of the same number of Preferred Shares as were purchasable by the Holder
immediately prior to such reclassification, reorganization, change, consolidation, merger or sale.
In any such case, appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares,
securities, cash or other property deliverable upon exercise hereof, and appropriate adjustments
shall be made to the purchase price per Preferred Share payable hereunder, provided that the
aggregate purchase price shall remain the same.

     The Company will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets in such sale shall assume, by
written instrument mailed or delivered to the Holder at the last address of the Holder appearing on
the books of the Company, the obligation to deliver to the Holder such shares, securities, cash or
other property as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase. If a purchase, tender or exchange offer is made to and accepted by the holders of more
than 50% of the outstanding Preferred Shares, the Company shall not effect any consolidation,
merger or sale with the Person having made such offer or with any Affiliate of such Person, unless
prior to the consummation of such consolidation, merger or sale the Holder shall have been given a
reasonable opportunity to then elect to receive pursuant to this Warrant either the stock,
securities, cash or other property then issuable with respect to the Preferred Shares or the stock,
securities, cash or other property, or the equivalent, issued to holders of Preferred Shares in
accordance with such offer.

     (b) If the Company shall, at any time or from time to time, (i) declare a dividend on the
Preferred Shares payable in shares of its capital stock (including Preferred Shares), (ii)
subdivide the outstanding Preferred Shares, (iii) combine the outstanding Preferred Shares into a
smaller number of shares, or (iv) issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then in each such case, the Exercise
Price in effect at the time of the record date for such dividend or of the effective date of such
subdivision, combination

8

 

or reclassification, and the number and kind of shares of capital stock issuable on such date shall
be proportionately adjusted so that the holder of any Warrant exercised after such date shall be
entitled to receive, upon payment of the same aggregate amount as would have been payable before
such date, the aggregate number and kind of shares of capital stock which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Any
such adjustment shall become effective immediately after the record date of such dividend or the
effective date of such subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. If a dividend is declared and such
dividend is not paid, the Exercise Price shall again be adjusted to be the Exercise Price in effect
immediately prior to such record date.

     (c) Notice of Adjustment. When any adjustment is required to be made in the number or
kind of shares purchasable upon exercise of this Warrant, or in the Exercise Price, the Company
shall provide the Holder with not less than 20 days’ prior written notice of the date on which the
event requiring such adjustment is to take place and information, reasonably detailed, regarding
the pertinent facts of such event, as well as the calculation of the adjusted Exercise Price and
the adjusted number of Preferred Shares or securities, cash or other property thereafter
purchasable upon exercise of this Warrant.

     (d) Adjustment by Board of Directors. If any event occurs as to which, in the opinion
of the Board of Directors of the Company, the provisions of this Section 8 are not strictly
applicable or if strictly applicable would not fairly protect the rights of the Holder in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance with such essential
intent and principles, so as to protect such rights as aforesaid, but in no event shall any
adjustment have the effect of increasing the Exercise Price as otherwise determined pursuant to any
of the provisions of this Section 8, except in the case of a combination of shares of a type
contemplated in Section 8(a), and then in no event to an amount larger than the Exercise Price as
adjusted pursuant to Section 8(a).

     (e) Officer’s Statement as to Adjustments. Whenever the Exercise Price shall be
adjusted as provided in this Section 8, the Company shall forthwith file at each office designated
for the exercise of this Warrant, a statement, signed by the chief financial officer of the Company
(or an officer holding a comparable position), showing in reasonable detail the facts requiring
such adjustment and the Exercise Price that will be effective after such adjustment.

     9. No Dilution or Impairment. The Company will not, by amendment of its
Memorandum and Articles of Association, or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against dilution or other impairment.
Without limiting the generality of the foregoing, the Company will not increase the par value of
any shares receivable pursuant to this Warrant

9

 

above the amount payable therefor upon such exercise, and at all times will take all such action as
may be necessary or appropriate in order that the Company may validly and legally issue fully paid
shares pursuant to this Warrant.

     10. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional
shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in
effect.

     11. Representations, Warranties and Covenants of the Company

     (a) Corporate Actions. The Company represents and warrants to the Holder that all
corporate actions on the part of the Company, its officers, directors and shareholders necessary
for the sale and issuance of this Warrant have been taken.

     (b) Issuance of Shares. The Company covenants that the Preferred Shares (and the
Ordinary Shares issuable upon exercise thereof), when issued pursuant to this Warrant, will be duly
authorized, validly issued, fully paid and non-assessable, and free from all taxes and Liens with
respect thereto or the issuance thereof.

     (c) Covenants as to Exercise of Warrant. The Company covenants that the Company will
at all times during the Exercise Period, have authorized a sufficient number of Preferred Shares
(and Ordinary Shares issuable upon exercise thereof) to provide for the exercise of the rights
pursuant to this Warrant. If at any time during the Exercise Period the number of authorized but
unissued Preferred Shares shall not be sufficient to permit exercise of the rights pursuant to this
Warrant, or the number of authorized but unissued Ordinary Shares shall not be sufficient to permit
the conversion of the Preferred Shares issuable upon exercise of this Warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued Preferred Shares (or Ordinary Shares) as shall be sufficient for such
purposes.

     (d) Legal Opinion. Upon the issuance of the Preferred Shares pursuant to this Warrant,
the Company shall deliver to the Holder receiving such Preferred Shares an opinion of Hong Kong
counsel to the Company, addressed to the Holder, in form and substance reasonably satisfactory to
the Holder, and including an opinion as to the Company’s compliance with Section 11(b) hereof.

     12. Reservation of Shares. The Company hereby covenants and agrees that at all times there
shall be reserved in the Company’s authorized but unissued shares for issuance and delivery upon
exercise of this Warrant such number of Preferred Shares (or other securities of the Company as are
from time to time issuable upon exercise of this Warrant) and Ordinary Shares for issuance on
conversion of such Preferred Shares, including, amending its Memorandum and Articles of Association
or other constitutional documents from time to time to increase its authorized shares as necessary.
All such shares shall be duly authorized, and when issued by way of registration in the name of the
Holder in the Company’s register of members upon such exercise in accordance with the

10

 

terms herein, shall be validly issued, fully paid and non-assessable, free and clear of all liens,
security interests, charges and other encumbrances or restrictions on sale and free and clear of
all preemptive and similar rights (“Encumbrances”), except such Encumbrances arising under law or
under the Shareholders Agreement. The Holder acknowledges that “reserve,” “reservation” or similar
words may have no technical meaning under the laws of Hong Kong. For purposes only of this Warrant,
“reserve”, “reservation” and similar words shall mean that the Board of Directors of the Company
have approved and authorized an intent by the Company to refrain from issuing a number of Preferred
Shares sufficient to satisfy the exercise rights of the Holder of this Warrant (including Ordinary
Shares issuable upon conversion of such Series A Preferred Shares) such that such Preferred Shares
(and the Ordinary Shares issuable upon conversion thereof) will remain in the authorized but
unissued shares of the Company until, as applicable, this Warrant is exercised in accordance with
its terms or the Preferred Shares issued upon exercise of this Warrant are converted into Ordinary
Shares in accordance with the terms thereof.

     13. Restrictive Legend. The Preferred Share certificates shall be stamped or
imprinted with a legend in substantially the following form (unless registered under the Act or if
the Holder delivers to the Company an opinion of counsel (who may be an employee of the Holder)
reasonably satisfactory in form and substance to the Company, that the Preferred Shares do not
require registration under the Act or any applicable state securities laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR THE LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR A COMPARABLE
DOCUMENT UNDER THE LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
THE OFFERING OF THESE SECURITIES HAS NOT BEEN REVIEWED OR APPROVED BY ANY STATE
SECURITIES ADMINISTRATOR.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS
AGREEMENT, DATED AS OF JUNE 24, 2009, AMONG THE COMPANY AND CERTAIN OF ITS
SHAREHOLDERS, A COPY OF WHICH IS ON FILE WITH THE COMPANY. NO SALE, ASSIGNMENT,
TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED
HEREBY SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SAID
SHAREHOLDERS AGREEMENT SHALL HAVE BEEN COMPLIED WITH IN FULL.

11

 

Any certificate issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon completion of a public distribution pursuant to a
registration statement under the Act) shall also bear such legend unless, in the opinion of counsel
selected by the Holder (who may be an employee of the Holder) and reasonably acceptable to the
Company, the securities represented thereby need no longer be subject to restrictions on resale
under the Act.

     14. Warrant and Shares Transferable

     (a) Subject to compliance with the terms and conditions of the Shareholders Agreement and this
Section 14, this Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant properly endorsed
or accompanied by written instructions of transfer. With respect to any offer, sale or other
disposition of this Warrant or any Preferred Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Warrant or Preferred Shares, the Holder agrees to give
written notice to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, or other evidence, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Act as then in effect or any U.S. federal or state or Hong
Kong securities law then in effect) of this Warrant or the Preferred Shares and indicating whether
or not under the Act certificates for this Warrant or the Preferred Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable restrictions on transferability in
order to ensure compliance with such law. Upon receiving such written notice and reasonably
satisfactory opinion or other evidence, if so requested, the Company, as promptly as practicable,
shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such
Preferred Shares, all in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 14 that the opinion of counsel for the Holder
or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly with details thereof after such determination has been made. Each certificate
representing this Warrant or the Preferred Shares transferred in accordance with this Section 14
shall bear a legend as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless in the aforesaid opinion of counsel for the Holder, such legend
is not required in order to ensure compliance with such laws. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.

     (b) Notwithstanding anything to the contrary contained herein, the Holder may, at any time and
from time to time, transfer this Warrant or any Preferred Shares acquired pursuant to the exercise
of this Warrant and all rights hereunder and thereunder, in whole or in part, without charge to the
Holder (except for transfer taxes) to any of the Holder’s shareholders, partners or members by way
of distribution or dividend, or to one or more of the Holder’s Affiliates, so long as any such
Affiliate is controlled exclusively by the entity making such transfer. Any such transfer shall
solely require that the Holder give written notice thereof to the Company; for greater certainty,
none of the terms and

12

 

conditions set forth in Section 14(a) shall be applicable to any transfer governed by this Section
14(b).

     15. Rights of Shareholders. No holder of this Warrant shall be entitled, as a Warrant
holder, to vote or receive dividends or be deemed the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a shareholder of the Company or any right to vote upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate
action (whether upon any recapitalization, issuance of stock, reclassification of Preferred Shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have
been exercised and the Preferred Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.

     16. Notices. Any notice required or permitted pursuant to this Warrant shall be given
in writing and shall be given either personally or by sending it by next-day or second-day courier
service, fax, electronic mail or similar means to the address as shown below the signature of such
Party on the signature page of this Warrant (or at such other address as such party may designate
by fifteen (15) days’ advance written notice to the other parties given in accordance with this
Section 16). Where a notice is sent by next-day or second-day courier service, service of the
notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or
second-day service through an internationally-recognized courier a letter containing the notice,
with a confirmation of delivery, and by two (2) days having passed after the letter containing the
same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice
shall be deemed to be effected on the same day on which it is properly addressed and sent through a
transmitting organization with a reasonable confirmation of delivery.

     17. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement in an amount reasonably satisfactory
to it, or (in the case of mutilation) upon surrender and cancellation thereof, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

     18. Subdivision of Rights. This Warrant (as well as any new warrants issued pursuant
to the provisions of this Section 18) is exchangeable, upon the surrender hereof by the Holder, at
the principal office of the Company for any number of new warrants of like tenor and date
representing in the aggregate the right to subscribe for and purchase the number of Preferred
Shares which may be subscribed for and purchased hereunder.

     19. “Market Stand-Off Agreement. The Holder hereby agrees that, during the period of
time specified by the Company and an underwriter of Preferred Shares or other securities of the
Company, following the effective date of (i) a registration statement of the Company filed under
the Act, or (ii) a comparable offering document filed under the applicable laws and regulations of
any foreign governmental authority, it

13

 

shall not, to the extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who agree to be
similarly bound) any securities of the Company held by it at any time during such period, except
Preferred Shares (or Ordinary Shares issued upon conversion thereof) included in such registration
or offering; provided, however, that:

     (a) all officers and directors of the Company, and each Person who holds one percent (1%) or
more of the Company’s outstanding shares, enter into similar agreements;

     (b) such market stand-off time period shall not exceed 90 days; and

     (c) the foregoing agreement shall not prohibit privately negotiated transfers of Preferred
Shares among the Holder and its Affiliates.

The Holder agrees to provide to the underwriters of any public offering such further agreements as
such underwriters may reasonably request in connection with this market stand-off agreement,
provided that the terms of such agreements are substantially consistent with the provisions of this
Section 19. In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the securities of the Company held by the Holder (and the shares or
securities of every other Person subject to the foregoing restriction) until the end of such
period.

Notwithstanding the foregoing, the obligations described in this Section 19 shall not apply to (i)
a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms
which may be promulgated in the future, (ii) a registration relating solely to a transaction under
Rule 145 of the Act, or (iii) any offering which would the equivalent of clause (i) or (ii) under
the applicable laws and regulations of any foreign governmental authority.

     20. Change, Waiver, Etc. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally except by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is sought.

     21. Remedies. The Company stipulates that the remedies at law of the Holder in the
event of any default by the Company in the performance of or compliance with any of the terms of
this Warrant are not and will not be adequate, and that the same may be specifically enforced.

     22. Governing Law. This Warrant and all actions arising out of or in connection with
this Agreement shall be governed by and construed in accordance with the laws of the Hong Kong,
without regard to the conflicts of law provisions of the Hong Kong.

     23. Dispute Resolution.

14

 

     (a) The parties agree to negotiate in good faith to resolve any dispute between them regarding
this Warrant. If the negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party that is a company, shall nominate one (1) authorized officer as its
representative. The parties or their representatives, as the case may be, shall, within thirty (30)
days of a written request by either party to call such a meeting, meet in person and alone (except
for one (1) assistant for each party) and shall attempt in good faith to resolve the dispute. If
the disputes cannot be resolved by such senior managers in such meeting, the parties agree that
they shall, if requested in writing by either party, meet within thirty (30) days after such
written notification for one (1) day with an impartial mediator and consider dispute resolution
alternatives other than formal arbitration. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one (1) day mediation, either party may begin formal
arbitration proceedings to be conducted in accordance with subsection (b) below. This procedure
shall be a prerequisite before taking any additional action hereunder.

     (b) In the event the parties are unable to settle a dispute between them regarding this
Warrant in accordance with subsection (a) above, such dispute shall he referred to and finally
settled by arbitration at the HKIAC in accordance with the Hong Kong International Arbitration
Centre Administered Arbitration Rules in effect, which rules are deemed to be incorporated by
reference into this subsection (b), subject to the following: (i) the arbitration tribunal shall
consist of three (3) arbitrators to be appointed according to the Hong Kong International
Arbitration Centre Administered Arbitration Rules; and (ii) the language of the arbitration shall
be English. Notwithstanding anything in this Warrant or in the Hong Kong International Arbitration
Centre Administered Arbitration Rules or otherwise, the arbitration tribunal shall not have the
power to award injunctive relief or any other equitable remedy of any kind against any Holder
unless such award both (x) is expressly appealable to and subject to de novo review by the courts
of Hong Kong, and (y) would not, if upheld, have the effect of impairing, restricting, or imposing
any conditions on the right or ability of such Holder or its affiliates to conduct its respective
business operations or to make or dispose of any other investment. The prevailing party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

     24. Rights and Obligations Survive Exercise of Warrant.Unless otherwise provided
herein, the rights and obligations of the Company, of the Holder and of the holder of the Preferred
Shares issued upon exercise of this Warrant, shall survive any exercise of this Warrant.

[Signature page follows]

15

 

Issued this 24 day of June, 2009

SEALED with the Common Seal of

EASTERN WELL HOLDINGS LIMITED

and SIGNED by

                                            

in the presence of:

Address: No. 485-487, Gu Yang Road, Changning

District, Shanghai, China

Fax: 86-21-6631-2459

Acknowledged and Agreed:

CHINA ENVIRONMENT FUND III, L.P.

	 	 	 	 	 	 	 

	By:	 	/s/ [ILLEGIBLE]	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 
	 	 	Address: A2302, SP Tower, Tsinghua Science Park,	 	 
	 

	 	 	 	Beijing 100084 China	 	 
	 	 	Fax: 86-10-8215-1150	 	 

[Signature Page to Warrant No 1 to Purchase Series A Preferred Shares]

16

 

Execution Copy

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE LAWS OF ANY OTHER
JURISDICTION. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR A COMPARABLE
DOCUMENT UNDER THE LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.

EASTERN WELL HOLDINGS LIMITED

June 24, 2009

WARRANT NO.2 TO PURCHASE

SERIES A PREFERRED SHARES

     This Warrant is issued to China Environment Fund III, L.P.(the “Holder”) by EASTERN
WELL HOLDINGS LIMITED, a Hong Kong company (the “Company”), in connection with the purchase
by the Holder of Series A Preferred Shares, par value US$0.001 per share (“Preferred
Shares”), of the Company pursuant to the Series A Preferred Share Purchase Agreement, dated as
of June 18, 2009 (as may be amended from time to time, the “Purchase Agreement”), by and
among the Holder, the Company and the other parties thereto. Capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the Purchase Agreement. All
accounting terms not otherwise defined herein have the meanings assigned under IFRS.

     1. Purchase During Exercise Period. Subject to the terms and conditions set forth in
this Warrant, the Holder shall be entitled, at any time during the Exercise Period, to purchase
from the Company, at a price of US$0.001 per share (the “Exercise Price”), a number of
fully paid Preferred Shares equal to the “Adjustment Number” (as defined below). The Adjustment
Number shall be the number of Preferred Shares, if issued to the Holder, would result in the
Percentage Interest immediately before the publication of 2010 Fiscal Year Revenue having a 2%
increment.

     2. Termination. Subject to Section 4(c), the Exercise Period shall not commence, and
the rights under this Warrant shall terminate and shall not be exercisable, if it is determined in
accordance with Section hereof that the 2010 Fiscal Year Revenue, compared to the 2009 Fiscal Year
Revenue, has a 25% or more increment.

     3. Determination of Revenue.

     (a) Revenue. Simultaneously with the delivery of the financial statements for the 2009
Fiscal Year and/or 2010 Fiscal Year pursuant to Section 8.1 of the Shareholders Agreement, but in
any event within 60 days after the end of the 2009 Fiscal Year and/or 2010 Fiscal Year of the
Company, the Company shall deliver to the Holder, together with such financial statements, (i) an
audited statement of profits and losses for the 2009 Fiscal

 

 

Year and/or the 2010 Fiscal Year respectively, audited by the accounting firm agreed by the Company
and the Holder, prepared in accordance with the IFRS, and (ii) a statement of Revenue and cost
breakdown by project for the 2009 Fiscal Year and/or the 2010 Fiscal Year issued by the Company and
confirmed by the accounting firm in writing, setting forth in reasonable detail the calculation of
2009 Fiscal Year Revenue and/or 2010 Fiscal Year Revenue respectively; provided, that if the
Company fails to deliver such financial statements, statement of profits and losses, or such
certificate within 60 days after the end of the 2009 Fiscal Year and/or the 2010 Fiscal Year, the
increment of 2010 Fiscal Year Revenue, compared to the 2009 Fiscal Year Revenue, will be
conclusively deemed lower than 25%, and the Exercise Period will commence on the business day next
following such 60th day. The Holder shall have the right to object to the determination of the 2009
Fiscal Year Revenue and/or 2010 Fiscal Year Revenue in accordance with Section 3(b) below.

     (b) Objection Procedure

     (i) Unless the Holder gives written notice to the Company of its objection (an
“Objection”) to the Company’s calculation of the 2009 Fiscal Year Revenue and/or 2010
Fiscal Year Revenue within 30 days following its receipt of the financial statements and
accompanying chief financial officer’s certificate, the Company’s calculation shall be final
and binding upon the parties for purposes of this Warrant. If the Holder waives in writing
its right to deliver an Objection with respect to any such determination, the applicable
determination shall be final and binding upon the parties as of the date of delivery of such
waiver. Any Objection shall specify in reasonable detail the nature of any disagreement so
asserted. Upon request of the Holder, the Company shall promptly provide a representative of
the Holder such access to the books and records of the Company and its Subsidiaries as are
reasonably necessary to confirm the Company’s calculation of the 2009 Fiscal Year Revenue
and/or 2010 Fiscal Year Revenue and the Holder agrees to maintain any such information in
strict confidence (except for such disclosure to advisors or otherwise as appropriate in
connection with the proceedings referred to below in clause (ii)). During the 15-day period
following the delivery of an Objection, the Company and the Holder shall attempt in good
faith to resolve any differences which they may have with respect to any matter specified in
the Objection.

     (ii) If at the end of such 15-day period, the Company and the Holder shall have failed
to reach written agreement with respect to all matters specified in any Objection, any matter
that remains in dispute shall promptly be submitted to an independent accounting firm of
internationally recognized standing (the “Accountant”) designated by the Company and
the Holder within ten days after the expiration of such 15-day period, or, if they cannot
agree on an accounting firm, such dispute shall be promptly referred to the HKIAC and an
independent accounting firm of internationally recognized standing shall be appointed
thereby. The Accountant shall consider only the matters specified in the Objection. The
Accountant shall act promptly to resolve all matters specified in the Objection, and shall
give its decision within 30 days after the referral of the matter to it.

2

 

Upon resolution by the Accountant of all matters specified in the Objection, the Accountant
shall determine the 2009 Fiscal Year Revenue and/or 2010 Fiscal Year Revenue and/or whether
the increment of 2010 Fiscal Year Revenue, compared to the 2009 Fiscal Year Revenue, is lower
than 25%, as applicable, on the basis of the matters it has resolved. The Accountant’s
decisions and determinations with respect to all matters specified in the Objection and its
determination as to the 2009 Fiscal Year Revenue and/or 2010 Fiscal Year Revenue shall be
final and binding upon the Company and the Holder. The costs and expenses of the Accountant
shall be borne equally by the Company, on the one hand, and the Holder, on the other hand.

     4. Covenants.

     Without limiting any other covenant of the Company to operate its business in the ordinary
course of business consistent with past practice, under the Purchase Agreement, the Memorandum and
Articles of Association of the Company, and the Shareholders Agreement:

     (a) the Company shall not change any method of accounting or accounting practice or policy,
other than (i) pursuant to guidance provided by any applicable regulatory authority, with the
Holder’s consent, or (ii) as recommended by the Company’s independent auditors, with the Holder’s
consent, which consent shall not be unreasonably withheld; and

     (b) the Company shall not (i) directly or indirectly change the allocation of items of
revenue, income and/or gain between, or the principles applied to allocate items of revenue, income
and/or gain in, EMC related profits on the one hand, and other items of income or gain on the other
hand, or (ii) otherwise artificially affect the Adjusted Post Money Valuation.

     (c) If there is any change to any Accounting Rules prior to an IPO of the Company, the Company
shall employ the adjusted Accounting Rules to re-calculate the 2009 Fiscal Year Revenue and/or 2010
Fiscal Year Revenue and deliver the re-calculated the 2009 Fiscal Year Revenue and/or 2010 Fiscal
Year Revenue to the Holder within 60 days after such change. The 2009 Fiscal Year Revenue and/or
2010 Fiscal Year Revenue can be re-calculated from time to time prior to the IPO of the Company,
due to change of the Accounting Rules. Determination of the re-calculated the 2009 Fiscal Year
Revenue and/or 2010 Fiscal Year Revenue shall be in accordance with Section 3 of this Warrant.

     (d) If the 2009 Fiscal Year Revenue and/or 2010 Fiscal Year Revenue are adjusted prior to the
IPO, and if, accordingly, the Holder is not entitled to exercise this Warrant, any and all
Preferred Shares that have been subscribed by the Holder by exercising this Warrant shall be
redeemed by the Company with the Exercise Price, or shall be cancelled pursuant to applicable Laws
in a way satisfactory to the Holder.

     5. Definitions. As used herein, the following terms shall have the following meanings:

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     (a) “Normal Business” means heat pump related sales contracts, EPC, EMC and other heat
pump related businesses.

     (b) “Revenue” means the audited consolidated revenue generated from the Normal
Business only.

     (c) “Exercise Period” means the period beginning on the date (if any) that it is
determined in accordance with Section 3 hereof that the increment of 2010 Fiscal Year Revenue,
compared to the 2009 Fiscal Year Revenue, is lower than 25% and ending at 5:00 p.m., Beijing time
on the tenth anniversary of the date hereof, or if such date is not a Business Day, then 5:00 p.m.,
Beijing time on the following Business Day, or ending at the tenth anniversary of the date of
publication of the final re-calculated 2009 Fiscal Year Revenue and/or 2010 Fiscal Year Revenue in
accordance with Section 4(c) hereof, whichever is longer.

     (d) “Fiscal Year” means, with respect to each year, the one-year period ending on
December 31 of such year.

     (e) “Accounting Rules” means the accounting policies and critical accounting estimates
and assumptions (including without limitation, those descriptions under Note 3 from Page 10 to Page
23 and Note 5 from Page 24 to Page 25 in the report attached as Exhibit C hereto) employed by
PricewaterhouseCoopers in connection with preparation of the Company’s consolidated 2008 audit
report.

     (f) “IPO” means the first firmly underwritten registered public offering by the
Company of its Ordinary Shares pursuant to a registration statement that is filed with and declared
effective by a Governmental Authority in a jurisdiction.

     (g) “Percentage Interest” of the Holder means, as of the date of publication of 2010
Fiscal Year Revenue, the quotient, expressed as a percentage, obtained by dividing (i) the number
of Ordinary Shares then owned by the Holder on an as-converted basis (giving effect to the
conversion and exchange of all securities or rights of the Holder that are convertible or
exchangeable into Ordinary Shares, including the Shares implied by ESOP but excluding the Shares
issued upon exercise of the Warrants) by (ii) the number of Ordinary Shares then outstanding on an
as-converted basis (giving effect to the conversion and exchange of all securities or rights that
are convertible or exchangeable into Ordinary Shares, including the Shares implied by ESOP but
excluding the Shares issued upon exercise of the Warrants).

     (h) “EMC” means energy management contracts projects, which are central heating and
cooling refurbishment and replacements for existing buildings and installation projects for new
buildings. In the EMC, the Company (including the PRC Companies) designs, manufactures and installs
ground-source heat pump (“GSHP”) systems under long-term (which shall be no less than 10)
service contracts, which have an annual energy management fee, to large scale commercial
businesses, such as hotels and supermarkets. The Company (including the PRC Companies) will retain
the title to various GSHP related equipment and facilities until expiration of term under a service

4

 

contract. For avoidance of confusion, EMC shall include, but not limited to, the long term service
contracts described in the report attached as Exhibit C hereto. China Environment Fund III, L.P.
shall reserve the right to determine whether a contract constitutes an EMC. However, such
determination shall not be made in conflict with the provisions hereof.

     (i) “EPC” means engineering-procurement construction projects. In the EPC, the Company
(including the PRC Companies) designs and installs central heating/cooling/hot water system using
its GSHP technology on a single project basis, charging an upfront fee to large scale commercial
customers, including large office buildings, industrial parks, and financial centres. By the
completion of the project, customers must settle the payment to and assume ownership of the system
from the Company.

     6. Methods of Exercise.

     During the Exercise Period, the Holder may exercise, in whole or in part, the purchase rights
pursuant to this Warrant by either of the following methods:

     (a) Cash Exercise. The Holder may exercise by delivering a notice of exercise, in the
form attached as Exhibit A hereto (a “Notice of Exercise”) to the Company at its principal
office and paying to the Company an amount (i) in cash (by check or wire transfer of immediately
available funds), (ii) by cancellation of indebtedness of the Company owed to the Holder, or (iii)
by a combination of (i) and (ii), equal to the aggregate Exercise Price for the number of Preferred
Shares being purchased by such Holder.

     (b) Net Exercise. Alternatively, the Holder may exercise by:

     (i) delivering a Notice of Exercise to the Company at its principal offices; and

     (ii) receiving such lesser number of Preferred Shares calculated in accordance with the
formula below representing the satisfaction of the payment to the Company of an amount equal
to the aggregate Exercise Price for the number of Preferred Shares being purchased.

     In the event a Holder chooses to exercise the purchase rights pursuant to this Warrant in
accordance with this Section 6(b) (a “Net Exercise”), the Company shall issue to such
Holder a number of Preferred Shares computed using the following formula:

where:

X = the number of Preferred Shares to be issued to the Holder

5

 

Y = the number of Preferred Shares purchasable under this Warrant or, if only a
portion of the Warrant is being exercised, the number of Preferred Shares for which
this Warrant is being exercised (at the date of such calculation)

A = the fair market value of one Preferred Share (at the date of such calculation)

B = the Exercise Price (as adjusted to the date of such calculation).

For purposes of this Section 6(b), the fair market value of a Preferred Share shall be the average
of the closing prices of the Preferred Shares (or a number of Ordinary Shares into which the
Preferred Shares are convertible) quoted (i) in the over-the-counter market in which the Preferred
Shares (or Ordinary Shares) are traded, or (ii) on any exchange or electronic securities market on
which the Preferred Shares (or Ordinary Shares) are listed for trading, as applicable, for the 30
trading days prior to the date of determination of fair market value (or such shorter period of
time during which such Preferred Shares (or Ordinary Shares) were traded over-the-counter or on
such exchange). If the Preferred Shares (or Ordinary Shares) are not traded on the over-the-counter
market, an exchange or an electronic securities market, the fair market value of a Preferred Share
shall be determined by dividing:

     (i) the cash price at which a willing seller would sell and a willing buyer would buy
all of the issued and outstanding Preferred Shares in a transaction negotiated at arm’s
length by unaffiliated third parties, each being apprised of and considering all relevant
facts, circumstances and factors, and neither acting under compulsion or time constraints, by

     (ii) the number of then issued and outstanding Preferred Shares.

In the case of any determination of the fair market value of the Preferred Shares pursuant to this
Section 6(b), fair market value shall not include any discount (i) by reason of such Preferred
Shares representing a minority interest, or (ii) to reflect the fact that such Preferred Shares are
illiquid and subject to the restrictions on transfer set forth in this Warrant and the Shareholders
Agreement.

If the Company and the Holder cannot agree on the fair market value of a Preferred Share within 30
days after the date upon which the Holder delivers a Notice of Exercise to the Company at its
principal offices (the “Negotiation Period”), the valuation shall be made by an appraiser
of internationally recognized standing designated jointly by the Company and the Holder within ten
days after the expiration of the Negotiation Period or, if they cannot so agree on an appraiser,
such dispute shall be promptly referred to the HKIAC and an appraiser of nationally recognized
standing shall be appointed thereby. The valuation shall be made by such appraiser within 20 days
of its designation by the HKIAC. Any valuation made by an appraiser under this Section 6(b) shall
be determinative of such value and binding upon the Company and the Holder. The cost of

6

 

such valuation shall be borne equally by the Company and the Holder, but each party shall bear its
own legal expenses, if any, incurred in connection therewith.

     (c) Partial Exercise. This Warrant may be exercised for less than the full number of
Preferred Shares, in which case the number of Preferred Shares receivable upon the exercise of this
Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be
proportionately reduced.

     7. Certificates for Preferred Shares. Upon the exercise of any of the purchase rights
pursuant to this Warrant, one or more certificates for the number of Preferred Shares so issued
shall be issued and delivered by the Company to the Holder as soon as practicable thereafter, and
in any event within ten days of the delivery by the Holder to the Company of the Notice of
Exercise. The date of delivery of such certificates is referred to herein as the “Delivery
Date.”

     8. Dividend, Subdivision, Combination, Reclassification, Reorganization, Consolidation,
Merger or Sale of Assets. The number of and kind of securities that may be issued pursuant to
this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

     (a) In case of any reclassification, capital reorganization, or change in the shares of the
Company, or consolidation or merger of the Company with or into another corporation, or the sale of
all or substantially all of the assets of the Company to another corporation pursuant to which the
holders of Preferred Shares shall be entitled to receive shares, securities, cash or other property
with respect to or in exchange for Preferred Shares, then, as a condition to such reclassification,
reorganization, change, consolidation, merger or sale, the Company shall make appropriate provision
so that the Holder (or its permitted transferees) shall have the right at any time prior to the
expiration of the Exercise Period to acquire, at a total per-share price equal to that payable
pursuant to this Warrant, the kind and amount of shares, securities, cash or other property
receivable in connection with such reclassification, reorganization, change, consolidation, merger
or sale by a holder of the same number of Preferred Shares as were purchasable by the Holder
immediately prior to such reclassification, reorganization, change, consolidation, merger or sale.
In any such case, appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares,
securities, cash or other property deliverable upon exercise hereof, and appropriate adjustments
shall be made to the purchase price per Preferred Share payable hereunder, provided that the
aggregate purchase price shall remain the same.

     The Company will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets in such sale shall assume, by
written instrument mailed or delivered to the Holder at the last address of the Holder appearing on
the books of the Company, the obligation to deliver to the Holder such shares, securities, cash or
other property as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase. If a purchase, tender or

7

 

exchange offer is made to and accepted by the holders of more than 50% of the outstanding Preferred
Shares, the Company shall not effect any consolidation, merger or sale with the Person having made
such offer or with any Affiliate of such Person, unless prior to the consummation of such
consolidation, merger or sale the Holder shall have been given a reasonable opportunity to then
elect to receive pursuant to this Warrant either the stock, securities, cash or other property then
issuable with respect to the Preferred Shares or the stock, securities, cash or other property, or
the equivalent, issued to holders of Preferred Shares in accordance with such offer.

     (b) If the Company shall, at any time or from time to time, (i) declare a dividend on the
Preferred Shares payable in shares of its capital stock (including Preferred Shares), (ii)
subdivide the outstanding Preferred Shares, (iii) combine the outstanding Preferred Shares into a
smaller number of shares, or (iv) issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then in each such case, the Exercise
Price in effect at the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares of capital stock
issuable on such date shall be proportionately adjusted so that the holder of any Warrant exercised
after such date shall be entitled to receive, upon payment of the same aggregate amount as would
have been payable before such date, the aggregate number and kind of shares of capital stock which,
if such Warrant had been exercised immediately prior to such date, such Holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective immediately after the
record date of such dividend or the effective date of such subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event listed above shall
occur. If a dividend is declared and such dividend is not paid, the Exercise Price shall again be
adjusted to be the Exercise Price in effect immediately prior to such record date.

     (c) Notice of Adjustment. When any adjustment is required to be made in the number or
kind of shares purchasable upon exercise of this Warrant, or in the Exercise Price, the Company
shall provide the Holder with not less than 20 days’ prior written notice of the date on which the
event requiring such adjustment is to take place and information, reasonably detailed, regarding
the pertinent facts of such event, as well as the calculation of the adjusted Exercise Price and
the adjusted number of Preferred Shares or securities, cash or other property thereafter
purchasable upon exercise of this Warrant.

     (d) Adjustment by Board of Directors. If any event occurs as to which, in the opinion
of the Board of Directors of the Company, the provisions of this Section 8 are not strictly
applicable or if strictly applicable would not fairly protect the rights of the Holder in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance with such essential
intent and principles, so as to protect such rights as aforesaid, but in no event shall any
adjustment have the effect of increasing the Exercise Price as otherwise determined pursuant to any
of the provisions of this Section 8, except in the

8

 

case of a combination of shares of a type contemplated in Section 8(a), and then in no event to an
amount larger than the Exercise Price as adjusted pursuant to Section 8(a).

     (e) Officer’s Statement as to Adjustments. Whenever the Exercise Price shall be
adjusted as provided in this Section 8, the Company shall forthwith file at each office designated
for the exercise of this Warrant, a statement, signed by the chief financial officer of the Company
(or an officer holding a comparable position), showing in reasonable detail the facts requiring
such adjustment and the Exercise Price that will be effective after such adjustment.

     9. No Dilution or Impairment. The Company will not, by amendment of its Memorandum and
Articles of Association, or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any shares receivable
pursuant to this Warrant above the amount payable therefor upon such exercise, and at all times
will take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid shares pursuant to this Warrant.

     10. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional
shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in
effect.

     11. Representations, Warranties and Covenants of the Company

     (a) Corporate Actions. The Company represents and warrants to the Holder that all
corporate actions on the part of the Company, its officers, directors and shareholders necessary
for the sale and issuance of this Warrant have been taken.

     (b) Issuance of Shares. The Company covenants that the Preferred Shares (and the
Ordinary Shares issuable upon exercise thereof), when issued pursuant to this Warrant, will be duly
authorized, validly issued, fully paid and non-assessable, and free from all taxes and Liens with
respect thereto or the issuance thereof.

     (c) Covenants as to Exercise of Warrant. The Company covenants that the Company will
at all times during the Exercise Period, have authorized a sufficient number of Preferred Shares
(and Ordinary Shares issuable upon exercise thereof) to provide for the exercise of the rights
pursuant to this Warrant. If at any time during the Exercise Period the number of authorized but
unissued Preferred Shares shall not be sufficient to permit exercise of the rights pursuant to this
Warrant, or the number of authorized but unissued Ordinary Shares shall not be sufficient to permit
the conversion of the Preferred Shares issuable upon exercise of this Warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary to increase its

9

 

authorized but unissued Preferred Shares (or Ordinary Shares) as shall be sufficient for such
purposes.

     (d) Legal Opinion. Upon the issuance of the Preferred Shares pursuant to this Warrant,
the Company shall deliver to the Holder receiving such Preferred Shares an opinion of Hong Kong
counsel to the Company, addressed to the Holder, in form and substance reasonably satisfactory to
the Holder, and including an opinion as to the Company’s compliance with Section 11(b) hereof.

     12. Reservation of Shares. The Company hereby covenants and agrees that at all times there
shall be reserved in the Company’s authorized but unissued shares for issuance and delivery upon
exercise of this Warrant such number of Preferred Shares (or other securities of the Company as are
from time to time issuable upon exercise of this Warrant) and Ordinary Shares for issuance on
conversion of such Preferred Shares, including, amending its Memorandum and Articles of Association
or other constitutional documents from time to time to increase its authorized shares as necessary.
All such shares shall be duly authorized, and when issued by way of registration in the name of the
Holder in the Company’s register of members upon such exercise in accordance with the terms herein,
shall be validly issued, fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and clear of all
preemptive and similar rights (“Encumbrances”), except such Encumbrances arising under law
or under the Shareholders Agreement. The Holder acknowledges that “reserve,” “reservation” or
similar words may have no technical meaning under the laws of Hong Kong. For purposes only of this
Warrant, “reserve”, “reservation” and similar words shall mean that the Board of Directors of the
Company have approved and authorized an intent by the Company to refrain from issuing a number of
Preferred Shares sufficient to satisfy the exercise rights of the Holder of this Warrant (including
Ordinary Shares issuable upon conversion of such Series A Preferred Shares) such that such
Preferred Shares (and the Ordinary Shares issuable upon conversion thereof) will remain in the
authorized but unissued shares of the Company until, as applicable, this Warrant is exercised in
accordance with its terms or the Preferred Shares issued upon exercise of this Warrant are
converted into Ordinary Shares in accordance with the terms thereof.

     13. Restrictive Legend. The Preferred Share certificates shall be stamped or imprinted
with a legend in substantially the following form (unless registered under the Act or if the Holder
delivers to the Company an opinion of counsel (who may be an employee of the Holder) reasonably
satisfactory in form and substance to the Company, that the Preferred Shares do not require
registration under the Act or any applicable state securities laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR THE LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR A

10

 

COMPARABLE DOCUMENT UNDER THE LAWS OF ANY OTHER JURISDICTION OR AN OPINION OF COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH
ACT. THE OFFERING OF THESE SECURITIES HAS NOT BEEN REVIEWED OR APPROVED BY ANY STATE
SECURITIES ADMINISTRATOR.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS
AGREEMENT, DATED AS OF JUNE 24, 2009, AMONG THE COMPANY AND CERTAIN OF ITS
SHAREHOLDERS, A COPY OF WHICH IS ON FILE WITH THE COMPANY. NO SALE, ASSIGNMENT,
TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED
HEREBY SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SAID
SHAREHOLDERS AGREEMENT SHALL HAVE BEEN COMPLIED WITH IN FULL.

Any certificate issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon completion of a public distribution pursuant to a
registration statement under the Act) shall also bear such legend unless, in the opinion of counsel
selected by the Holder (who may be an employee of the Holder) and reasonably acceptable to the
Company, the securities represented thereby need no longer be subject to restrictions on resale
under the Act.

     14. Warrant and Shares Transferable

     (a) Subject to compliance with the terms and conditions of the Shareholders Agreement and this
Section 14, this Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant properly endorsed
or accompanied by written instructions of transfer. With respect to any offer, sale or other
disposition of this Warrant or any Preferred Shares acquired pursuant to the exercise of this
Warrant prior to registration of such Warrant or Preferred Shares, the Holder agrees to give
written notice to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, or other evidence, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Act as then in effect or any U.S. federal or state or Hong
Kong securities law then in effect) of this Warrant or the Preferred Shares and indicating whether
or not under the Act certificates for this Warrant or the Preferred Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable restrictions on transferability in
order to ensure compliance with such law. Upon receiving such written notice and reasonably
satisfactory opinion or other evidence, if so requested, the Company, as promptly as practicable,
shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such
Preferred Shares, all in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 14 that the opinion of counsel for the Holder
or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly

11

 

with details thereof after such determination has been made. Each certificate representing this
Warrant or the Preferred Shares transferred in accordance with this Section 14 shall bear a legend
as to the applicable restrictions on transferability in order to ensure compliance with such laws,
unless in the aforesaid opinion of counsel for the Holder, such legend is not required in order to
ensure compliance with such laws. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions.

     (b) Notwithstanding anything to the contrary contained herein, the Holder may, at any time and
from time to time, transfer this Warrant or any Preferred Shares acquired pursuant to the exercise
of this Warrant and all rights hereunder and thereunder, in whole or in part, without charge to the
Holder (except for transfer taxes) to any of the Holder’s shareholders, partners or members by way
of distribution or dividend, or to one or more of the Holder’s Affiliates, so long as any such
Affiliate is controlled exclusively by the entity making such transfer. Any such transfer shall
solely require that the Holder give written notice thereof to the Company; for greater certainty,
none of the terms and conditions set forth in Section 14(a) shall be applicable to any transfer
governed by this Section 14(b).

     15. Rights of Shareholders. No holder of this Warrant shall be entitled, as a Warrant
holder, to vote or receive dividends or be deemed the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a shareholder of the Company or any right to vote upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate
action (whether upon any recapitalization, issuance of stock, reclassification of Preferred Shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have
been exercised and the Preferred Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.

     16. Notices. Any notice required or permitted pursuant to this Warrant shall be given
in writing and shall be given either personally or by sending it by next-day or second-day courier
service, fax, electronic mail or similar means to the address as shown below the signature of such
Party on the signature page of this Warrant (or at such other address as such party may designate
by fifteen (15) days’ advance written notice to the other parties given in accordance with this
Section 16). Where a notice is sent by next-day or second-day courier service, service of the
notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or
second-day service through an internationally-recognized courier a letter containing the notice,
with a confirmation of delivery, and by two (2) days having passed after the letter containing the
same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice
shall be deemed to be effected on the same day on which it is properly addressed and sent through a
transmitting organization with a reasonable confirmation of delivery.

12

 

     17. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement in an amount reasonably satisfactory
to it, or (in the case of mutilation) upon surrender and cancellation thereof, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

     18. Subdivision of Rights. This Warrant (as well as any new warrants issued pursuant
to the provisions of this Section 18) is exchangeable, upon the surrender hereof by the Holder, at
the principal office of the Company for any number of new warrants of like tenor and date
representing in the aggregate the right to subscribe for and purchase the number of Preferred
Shares which may be subscribed for and purchased hereunder.

     19. “Market Stand-Off” Agreement. The Holder hereby agrees that, during the period of
time specified by the Company and an underwriter of Preferred Shares or other securities of the
Company, following the effective date of (i) a registration statement of the Company filed under
the Act, or (ii) a comparable offering document filed under the applicable laws and regulations of
any foreign governmental authority, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any securities of the Company held by it at
any time during such period, except Preferred Shares (or Ordinary Shares issued upon conversion
thereof) included in such registration or offering; provided, however, that:

     (a) all officers and directors of the Company, and each Person who holds one percent (1%) or
more of the Company’s outstanding shares, enter into similar agreements;

     (b) such market stand-off time period shall not exceed 90 days; and

     (c) the foregoing agreement shall not prohibit privately negotiated transfers of Preferred
Shares among the Holder and its Affiliates.

The Holder agrees to provide to the underwriters of any public offering such further agreements as
such underwriters may reasonably request in connection with this market stand-off agreement,
provided that the terms of such agreements are substantially consistent with the provisions of this
Section 19. In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the securities of the Company held by the Holder (and the shares or
securities of every other Person subject to the foregoing restriction) until the end of such
period.

Notwithstanding the foregoing, the obligations described in this Section 19 shall not apply to (i)
a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms
which may be promulgated in the future, (ii) a registration relating solely to a transaction under
Rule 145 of the Act, or (iii) any offering which would the equivalent of clause (i) or (ii) under
the applicable laws and regulations of any foreign governmental authority.

13

 

     20. Change, Waiver, Etc. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally except by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is sought.

     21. Remedies. The Company stipulates that the remedies at law of the Holder in the
event of any default by the Company in the performance of or compliance with any of the terms of
this Warrant are not and will not be adequate, and that the same may be specifically enforced.

     22. Governing Law. This Warrant and all actions arising out of or in connection with
this Agreement shall be governed by and construed in accordance with the laws of the Hong Kong,
without regard to the conflicts of law provisions of the Hong Kong.

     23. Dispute Resolution.

     (a) The parties agree to negotiate in good faith to resolve any dispute between them regarding
this Warrant. If the negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party that is a company, shall nominate one (1) authorized officer as its
representative. The parties or their representatives, as the case may be, shall, within thirty (30)
days of a written request by either party to call such a meeting, meet in person and alone (except
for one (1) assistant for each party) and shall attempt in good faith to resolve the dispute. If
the disputes cannot be resolved by such senior managers in such meeting, the parties agree that
they shall, if requested in writing by either party, meet within thirty (30) days after such
written notification for one (1) day with an impartial mediator and consider dispute resolution
alternatives other than formal arbitration. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one (1) day mediation, either party may begin formal
arbitration proceedings to be conducted in accordance with subsection (b) below. This procedure
shall be a prerequisite before taking any additional action hereunder.

     (b) In the event the parties are unable to settle a dispute between them regarding this
Warrant in accordance with subsection (a) above, such dispute shall he referred to and finally
settled by arbitration at the HKIAC in accordance with the Hong Kong International Arbitration
Centre Administered Arbitration Rules in effect, which rules are deemed to be incorporated by
reference into this subsection (b), subject to the following: (i) the arbitration tribunal shall
consist of three (3) arbitrators to be appointed according to the Hong Kong International
Arbitration Centre Administered Arbitration Rules; and (ii) the language of the arbitration shall
be English. Notwithstanding anything in this Warrant or in the Hong Kong International Arbitration
Centre Administered Arbitration Rules or otherwise, the arbitration tribunal shall not have the
power to award injunctive relief or any other equitable remedy of any kind against any Holder
unless such award both (x) is expressly appealable to and subject to de novo review by the courts
of Hong Kong, and (y) would not, if upheld, have the effect of impairing, restricting, or imposing
any conditions on the right or ability of such Holder or its affiliates to conduct its respective
business operations or to make or dispose of any other

14

 

investment. The prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may be entitled.

     24. Rights and Obligations Survive Exercise of Warrant. Unless otherwise provided
herein, the rights and obligations of the Company, of the Holder and of the holder of the Preferred
Shares issued upon exercise of this Warrant, shall survive any exercise of this Warrant.

[Signature page follows]

15

 

Issued this 24 day of June, 2009

	 	 	 	 	 

	 	 	SEALED with the Common Seal of

EASTERN WELL HOLDINGS LIMITED
and SIGNED by
	 
	 	 	 	 
	 

	 	
	 	
	 

	 	in the presence of:	 	 
	 
	 	 	 	 
	 	 	Address: No. 485-487, Gu Yang Road, Changning 

District, Shanghai, China
	 	 	Fax: 86-21-6631-2459

Acknowledged and Agreed:

	 	 	 	 	 

	CHINA ENVIRONMENT FUND III, L.P.	 	 
	 
	 	 	 	 
	By:

	 	/s/ [ILLEGIBLE]	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title: Authorized Signatory	 	 
	 

	 	Address: A2302, SP Tower, Tsinghua Science Park,

               Beijing 100084 China	 	 
	 

	 	Fax: 86-10-8215-1150	 	 

[Signature Page to Warrant No.2 to Purchase Series A Preferred Shares]

 

 

EXHIBIT H

LIST OF ASSETS

LIST OF MATERIAL CONTRACTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Contract Price	 	 
	Project Name	 	Contracted Party	 	(RMB)	 	Contract Date
	EMC of Jutailong Home
Furnishing Center

	 	Beijing Jutailong (Shanghai)
	 	 	1,080,000	 	 	August 5, 2007
	EMC of Dahua Hotel

	 	Shanghai Dahua Hotel
	 	 	3,855,800	 	 	October 10, 2007
	EMC of Donghu Hotel

	 	Shanghai Donghu Hotel
	 	 	14,444,000	 	 	November 20, 2007
	EMC of Minhang Hotel

	 	Shanghai Minhang Hotel
	 	 	5,080,000	 	 	January 5, 2009
	EMC of Xinyuan Hotel

	 	Shanghai Xinyuan Hotel
	 	 	13,308,800	 	 	February 5, 2009
	EMC of Jinshangjiang Hotel

	 	Shanghai Jinshangjiang Hotel
	 	 	9,884,000	 	 	February 6, 2009
	EMC of Longbai Hotel

	 	Shanghai Longbai Hotel
	 	 	12,732,000	 	 	February 7, 2009

 

 

STAFF INFORMATION FORM OF SHANGHAI NOBO AND JIANGXI NOBAO

	 	 	 	 	 	 	 
	No.	 	Department	 	Name	 	Position
	1.

	 	General Manager Office
	 	Lei Zhang
	 	Vice-Chairman
	2.

	 	 	 	Yani Wang
	 	Secretary of General Manager
	 
	 	 	 	 	 	 
	3.

	 	Vice-General Manager Office
	 	Ping Song
	 	Vice-General Manager
	4.

	 	 	 	Hao Zhang
	 	Vice-General Manager Assistant
	 
	 	 	 	 	 	 
	5.

	 	Engineering
	 	Jun Chen
	 	Manager
	6.

	 	 	 	Jinhua Du
	 	Engineer
	7.

	 	 	 	Yunfu Guan
	 	Engineer
	8.

	 	 	 	Jian Wu
	 	Engineer
	9.

	 	 	 	Jiayin Liu
	 	Assistant
	10.

	 	 	 	Hao Zhang
	 	After-sale Service
	11.

	 	 	 	Dawei Chen
	 	After-sale Service
	12.

	 	 	 	Pinggao Han
	 	After-sale Service
	13.

	 	 	 	Chunhua Hu
	 	Driver
	 
	 	 	 	 	 	 
	14.

	 	Technology
	 	Yuanzhi Liu
	 	Manager
	15.

	 	 	 	Yunlin Shou
	 	Engineer
	16.

	 	 	 	Chunhua Li
	 	Driver
	 
	 	 	 	 	 	 
	17.

	 	Sales
	 	Shijin Cao
	 	Vice-Manager
	18.

	 	 	 	Siyi Teng
	 	Engineer
	 
	 	 	 	 	 	 
	19.

	 	Legal
	 	Wenli Lu
	 	Manager
	20.

	 	 	 	Wenjun Zhao
	 	Assistant
	 
	 	 	 	 	 	 
	21.

	 	Import & Export
	 	Jin Wang
	 	Manager
	 
	 	 	 	 	 	 
	22.

	 	Energy Management
	 	Hang Wen
	 	Manager
	 
	 	 	 	 	 	 
	23.

	 	Finance
	 	Jianqin Zhang
	 	Manager
	24.

	 	 	 	Lin Jiang
	 	Cashier
	 
	 	 	 	 	 	 
	25.

	 	Human Resources
	 	Jieqi Chen
	 	Manger
	 
	 	 	 	 	 	 
	26.

	 	Administration
	 	Xiaoqiong Sun
	 	Receptionistexv4w8

Exhibit 4.8

KWOK PING SUN

NOBAO RENEWABLE ENERGY HOLDINGS LIMITED

ACE EXCEL LIMITED

AND

ACE CAPTAIN HOLDINGS LIMITED

 

SHARE SUBSCRIPTION AGREEMENT

 

Dated July 30, 2010

ORRICK, HERRINGTON & SUTCLIFFE

43rd Floor Gloucester Tower

The Landmark

15 Queen’s Road Central

Hong Kong

 

 

EXECUTION COPY

SHARE SUBSCRIPTION AGREEMENT

     THIS SHARE SUBSCRIPTION AGREEMENT (this “Agreement”) is made on July 30, 2010 by and among:

	(1)	 	KWOK PING SUN , an individual holding the Hong Kong identity card numbered P590331(2)
(the “Founder”);
	 
	(2)	 	NOBAO RENEWABLE ENERGY HOLDINGS LIMITED, an exempted company incorporated under the laws of the
Cayman Islands, with its registered address at Scotia Centre, 4th Floor, P.O. Box 2804, George
Town, Grand Cayman KY1-1112, Cayman Islands (the “Company”);
	 
	(3)	 	ACE EXCEL LIMITED, a BVI business company incorporated under the laws of the British Virgin
Islands, with its registered office at Offshore Incorporations Limited, P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands (“ACE Excel”); and
	 
	(4)	 	ACE CAPTAIN HOLDINGS LIMITED, a BVI business company incorporated under the laws of the British
Virgin Islands, with its registered office at Offshore Incorporations Limited, P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“ACE Captain”, together
with ACE Excel, the “Investors”, and each an “Investor”).

The Founder, the Company and the Investors are hereinafter collectively referred to as the “
Parties” and individually as a “Party”.

RECITALS

     A. The Company desires to issue and allot to the Investors and the Investors desire to
subscribe for 5,538,376 ordinary shares, par value US$0.0001 per share, of the Company (the
“Ordinary Shares”) in aggregate on the terms and conditions set forth in this Agreement;

     B. The Founder owns one hundred percent (100%) of the issued and outstanding share capital of
Tai Feng Investments Limited, a BVI business company incorporated under the laws of the British
Virgin Islands, with its registered address at P.O. Box 957, Offshore Incorporation Center, Road
Town, Tortola, British Virgin Islands (the “Founder Holdco”) prior to the Closing (as defined
below) (on a fully diluted basis), free and clear of any Encumbrance (as defined below);

     C. Each of the Founder Holdco, China Environment Fund III, L.P. and Wide Safety International
Limited owns sixty-one point nine percent (61.9%), thirty-four point eight percent (34.8%) and
three point three percent (3.3%), respectively, of the issued and outstanding share capital of the
Company prior to the Closing;

     D. The Company owns hundred percent (100%) equity interest in Eastern Well Holdings Limited
, a limited liability company incorporated under the

 

 

EXECUTION COPY

laws of the Hong Kong, with its registered address at Room 03, 21/F., Far East Consortium Building,
121 Des Voeux Road Central, Hong Kong (the “HK Subsidiary”) (on a fully diluted basis), which in
turn owns hundred percent (100%) equity interest in Nuoxin Energy Technology (Shanghai) Co., Ltd. , a limited liability company incorporated under the laws of the PRC (as
defined below), with its registered address at No. 4, Lane 118, Yonghe Road, Shanghai, its legal
representative being the Founder (“Shanghai Nuoxin”) (on a fully diluted basis) and in Jiangxi
Nobao Electronics Co., Ltd. , a limited liability company incorporated under
the laws of the PRC, with its registered address at Development Zone, Gongqing City, Jiangxi, its
legal representative being the Founder (“Jiangxi Nobao, together with Shanghai Nuoxin, the “PRC
Subsidiaries” and each, a “PRC Subsidiary”) (on a fully diluted basis); and

     E. The PRC Subsidiaries are engaged in the business of providing energy management solutions
utilizing ground source heat pump technologies, and such other related business activities,
including those set forth in their respective business licenses (the “PRC Subsidiary Principal
Business”).

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter
set forth, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS

     1.1 Definitions. Unless otherwise defined in this Agreement, capitalized terms used in this
Agreement shall have the following meanings:

	 	 	 

	“Action”

	 	has the meaning set forth in Section 10 of Exhibit C.
	 
	 	 
	“ADSs”

	 	has the meaning set forth in Section 5.11.
	 
	 	 
	“Affiliate”

	 	with respect to a specified Person means (a) in the case of an
individual, such Person’s spouse and lineal descendants (whether
natural or adopted) or any trust formed and maintained solely for the
benefit of such Person, such Person’s spouse and/or such lineal
descendants, (b) in the case of any Person, a Person that directly, or
indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, the Person
specified, and (c) in the case of an Investor being an investment fund
(or a Subsidiary of an investment fund), the term “Affiliate” shall
include any other investment fund (or a Subsidiary of any such
investment fund) managed by the same manager of the Investor (or,
if the Investor is a Subsidiary of an investment fund, the same
manager of the investment fund of which the Investor is a
Subsidiary).
	 
	 	 
	“Agreement”

	 	has the meaning set forth in the preamble of this Agreement.
	 
	 	 
	“Applicable Laws”

	 	means, with respect to any Person, relevant provisions of any

2

 

EXECUTION COPY

	 	 	 

	or “Applicable Law”

	 	constitution, treaty, statute, law, regulation, ordinance, code, rule,
final judgment, rule of common law, order, decree, award, injunction,
government approval, concession, grant, franchise, permit, license,
agreement, directive, legal requirement, or other published
governmental restriction or any similar form of published decision of,
or determination by, or interpretation and administration of any of the
foregoing by, any Governmental Authority, applicable and having
legal effect to such Person or any of its assets or undertakings.
	 
	 	 
	“Arbitration Notice”

	 	has the meaning set forth in Section 9.4(b).
	 
	 	 
	“Business Day”

	 	any day (excluding Saturdays, Sundays and public holidays in Hong
Kong or the PRC) on which banks generally are open for business in
Hong Kong and the PRC.
	 
	 	 
	“Centre”

	 	has the meaning set forth in Section 9.4(c).
	 
	 	 
	“Closing”

	 	has the meaning set forth in Section 3.1.
	 
	 	 
	“Company”

	 	has the meaning set forth in the preamble of this Agreement.
	 
	 	 
	“Confidential 

Information”

	 	has the meaning set forth in Section 7.1.
	 
	 	 
	“Confidentiality 

Agreement”

	 	has the meaning set forth in Section 18 of Exhibit C.
	 
	 	 
	“Constitutional 

Documents”

	 	means, with respect to any Person, the certificate of incorporation,
memorandum of association, articles of association, joint venture
agreement, shareholders agreement, or similar constitutive
documents for such Person.
	 
	 	 
	“Contract”

	 	means any agreement, arrangement, bond, commitment, franchise,
indemnity, indenture, instrument, lease, license, permit, or binding
understanding, whether or not in writing.
	 
	 	 
	“Control”

	 	(including the correlative meanings of the terms “Controlling,”
“Controlled by” and “under common Control with”) means, with
respect to any Person, direct or indirect possession of the power to
direct or cause the direction of the management or policies (with
respect to operational or financial control or otherwise) of such
Person, whether through the ownership of securities, by contract or
otherwise.
	 
	 	 
	“Disclosure 

Schedule”

	 	has the meaning set forth in Section 4.
	 
	 	 
	“Dispute”

	 	has the meaning set forth in Section 9.4(a).
	 
	 	 
	“Encumbrance”

	 	means (a) any mortgage, charge, pledge, lien, hypothecation, deed of

3

 

EXECUTION COPY

	 	 	 
	 
	 	trust, title retention, security interest, or other similar third-party
rights of any kind securing or conferring any priority of payment in
respect of any obligation of any Person, any other restriction or
limitation; (b) any easement or covenant granting a right of use or
occupancy to any Person; (c) any proxy, power of attorney, voting
trust agreement, interest, option, right of first offer, right of
pre-emptive negotiation, or refusal or transfer restriction in favor of any
Person; (d) any adverse claim as to title, possession, or use, and
includes any agreement or arrange for any of the same.
	 
	 	 
	“Environmental 

Laws”
	 	has the meaning set forth in Section 21(a) of Exhibit C.
	 
	 	 
	“Environmental 

Licenses”
	 	has the meaning set forth in Section 21(b) of Exhibit C.
	 
	 	 
	“ESOP”
	 	means the 2010 Performance Incentive Plan of the Company adopted
by its board of directors on March 2, 2010 for the issuances of up to
an aggregate of 5,000,000 Ordinary Shares (or options to purchase
such Ordinary Shares) to directors, officers, employees and third
party consultants and advisors of any Group Company, as amended
from time to time.
	 
	 	 
	“Financial 

Statements”
	 	has the meaning set forth in Section 6(a) of Exhibit C.
	 
	 	 
	“Founder”
	 	has the meaning set forth in the preamble of this Agreement.
	 
	 	 
	“Governmental 

Authority”
	 	means any government or political subdivision thereof, whether on a
federal, central, state, provincial, municipal or local level and
whether executive, legislative or judicial in nature, including any
agency, authority, board, bureau, commission, court, department or
other instrumentality thereof.
	 
	 	 
	“Group Companies”
	 	means the Company, the HK Subsidiary, the PRC Subsidiaries and
all other direct or indirect Subsidiaries of the foregoing, and the
“Group Company” means any of the Group Companies.
	 
	 	 
	“HK Subsidiary”
	 	has the meaning set forth in the recitals of this Agreement.
	 
	 	 
	“Hong Kong”
	 	means the Hong Kong Special Administrative Region of the PRC.
	 
	 	 
	“IFRS”
	 	means the International Financial Reporting Standards developed by,
and the International Accounting Standards adopted by, the
International Accounting Standards Board as in effect from time to
time. For the purposes of Section 4.1 and Exhibit C,
“IFRS” shall
mean such International Financial Reporting Standards as in effect as
of the date of this Agreement and as of the date of the Closing.
	 
	 	 
	“Investors” and
	 	have the respective meanings set forth in the preamble of this

4

 

EXECUTION COPY

	 	 	 
	“Investor”

	 	Agreement.
	 
	 	 
	“IPO”

	 	means, with respect to a Person, the firm commitment underwritten
initial public offering of its equity interest.
	 
	 	 
	“knowledge”

	 	means, with respect to a Person’s “knowledge,” the actual knowledge
of such Person and that knowledge which should have been acquired
by such Person after making such due inquiry and exercising such
due diligence as a prudent business Person would have made or
exercised in the management of his or her business affairs, including
due inquiry of those officers, directors, key employees and
professional advisers (including attorneys, accountants and
consultants) of the Person and its Affiliates. Without limiting the
generality of the foregoing sentence, the Company’s knowledge
includes knowledge which should have been acquired by the
Company after making due inquiry of the Founder.
	 
	 	 
	“Material Adverse 

Effect”

	 	means a material adverse effect on the condition (financial or
otherwise), assets relating to, or results of operation of or business (as
presently conducted and currently proposed to be conducted) of the
Person(s) specified.
	 
	 	 
	“Material 

Contracts”

	 	has the meaning set forth in Section 9(a) of Exhibit C
	 
	 	 
	“Ordinary Shares”

	 	has the meaning set forth in the recitals of this Agreement.
	 
	 	 
	“Party” and
“Parties”

	 	have the respective meanings set forth in the preamble of this
Agreement.
	 
	 	 
	“Person”

	 	shall be construed as broadly as possible and shall include an
individual, a partnership (including a limited liability partnership), a
company, an association, a joint stock company, a limited liability
company, a trust, a joint venture (including a sino-foreign equity joint
venture or sino-foreign cooperative join venture), an unincorporated
organization and a Governmental Authority.
	 
	 	 
	“PRC”

	 	means the People’s Republic of China, solely for purposes of this
Agreement, excluding Hong Kong, the Macau Special Administrative
Region and Taiwan.
	 
	 	 
	“PRC
Subsidiary”
and “PRC
Subsidiaries”

	 	have the respective meanings set forth in the recitals of this
Agreement.
	 
	 	 
	“PRC Subsidiary 

Principal Business”

	 	has the meaning set forth in the recitals of this Agreement.
	 
	 	 
	“Proprietary Assets”

	 	means all patents, patent applications, trademarks, service marks, trade names, domain names, copyrights, copyright registrations and

5

 

EXECUTION COPY

	 	 	 

	 

	 	applications and all other rights corresponding thereto, inventions,
databases and all rights therein, all computer software including all
source code, object code, firmware, development tools, files, records
and data, including all media on which any of the foregoing is stored,
formulas, designs, trade secrets, confidential and proprietary
information, proprietary rights, know-how and processes of a
company, and all documentation related to any of the foregoing.
	 
	 	 
	“Registered 

Intellectual 

Property”

	 	means, with respect to a Person, all Proprietary Assets of such
Person, wherever located, that is the subject of an application,
certificate, filing, registration or other document issued by, filed with
or recorded by any Governmental Authority.
	 
	 	 
	“Restated Articles”

	 	has the meaning set forth in Section 2.1.
	 
	 	 
	“Securities Act”

	 	has the meaning set forth in Section 5(b) of Exhibit C.
	 
	 	 
	“Series A Shares”

	 	means Series A redeemable convertible preferred shares, par value US$0.0001 per share, of the Company.
	 
	 	 
	“Subscribed Shares”

	 	has the meaning set forth in Section 2.2.
	 
	 	 
	“Subscription 

Price”

	 	has the meaning set forth in Section 2.2.
	 
	 	 
	“Subsidiary”

	 	means, with respect to any given Person, any other Person that is not
a natural person and that is Controlled by such given
Person.
	 
	 	 
	“Termination Date”

	 	has the meaning set forth in Section 8.1.
	 
	 	 
	“US$”

	 	means the lawful currency of the United States of
America.

     1.2 Interpretation. For all purposes of this Agreement, except as otherwise expressly
provided:

          (a) the terms defined in this Section 1 shall have the meanings assigned to them in this
Section 1 and include the plural as well as the singular;

          (b) all accounting terms not otherwise defined herein have the meanings assigned under IFRS;

          (c) all references in this Agreement to designated “Sections” and other subdivisions are to
the designated Sections and other subdivisions of the body of this Agreement;

          (d) pronouns of either gender or neuter shall include, as appropriate, the other pronoun
forms;

6

 

EXECUTION COPY

          (e) the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Section or other subdivision;

          (f) all references in this Agreement to designated exhibits are to the exhibits attached to
this Agreement unless explicitly stated otherwise;

          (g) “include”, “includes”, “including”, and other words of similar import are deemed to be
followed by “without limitation” whether or not they are in fact followed by such words or words of
like import;

          (h) the titles of the sections and subsections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement;

          (i) any reference in this Agreement to any “Party” or any other Person shall be construed so
as to include its successors in title, permitted assigns and permitted transferees;

          (j) any reference in this Agreement to any agreement or instrument is a reference to that
agreement or instrument as amended or novated; and

          (k) this Agreement shall be construed according to its fair language. The rule of construction
to the effect that ambiguities are to be resolved against the drafting party shall not be employed
in interpreting this Agreement.

2. AGREEMENT TO PURCHASE AND ALLOT SHARES

     2.1 Authorization. As of the Closing, the Company will have authorized the issuance, pursuant
to the terms and conditions of this Agreement, of at least 5,538,376 Ordinary Shares having the
rights, preferences, privileges and restrictions, if any, as set forth in the Amended and Restated
Memorandum and Articles of Association of the Company adopted on January 15, 2010 (the “Restated
Articles”) and in this Agreement.

     2.2 Agreement to Purchase and Sell. Subject to the terms and conditions hereof, the Company
hereby agrees to issue and allot to each Investor, and each Investor hereby agrees to purchase from
the Company, on the date of the Closing, 2,769,188 Ordinary Shares, free and clear of any
Encumbrance except as set forth in the Restated Articles, at a price equal to US$2.1667 per
Ordinary Share, each amounting to an aggregate purchase price of US$6,000,000 (the “Subscription
Price”) (for the avoidance of doubt, the aggregate number of Ordinary Shares to be subscribed by
the Investors under this Agreement is 5,538,376 Ordinary Shares and the aggregate subscription
price payable by the Investors under this Agreement is US$12,000,000). The Ordinary Shares to be
subscribed pursuant to this Agreement will be collectively hereinafter referred to as the
“Subscribed Shares”. Immediately after the Closing contemplated under this
Agreement, the shareholding of each Investor and other shareholders of the Company (on a fully
diluted and as converted basis) shall be as set forth in Exhibit A.

3. CLOSINGS; DELIVERIES

7

 

EXECUTION COPY

     3.1 Closing. The purchase and sale of the Subscribed Shares (the “Closing”) shall take place
remotely via the exchange of documents and signatures on the date that is one (1) Business Day
after the satisfaction or waiver of all the conditions set forth in Section 6 hereto, or at such
other time and date as may be mutually agreed upon by the Company and the Investors.

     3.2 Closing Deliveries. At the Closing:

          (a) each Investor shall pay its Subscription Price by wire transfer of immediately available
funds to the account designated by the Company with the following details, or by such other payment
methods as may be mutually agreed upon by the Company and the Investors:

	 	 	 
	Bank name:
	 	 Bank of New York
	SWIFT:
	 	 IRVTUS3N
	ABA:
	 	 021000018
	 
	 	 
	Account name:
	 	 Pershing LLC
	Account number:
	 	 8900512385
	 
	 	 
	Further Credit name:
	 	 Nobao Renewable Energy Holdings Ltd
	Further Credit number:
	 	 219-739257

          (b) unless otherwise waived by the Investors in writing, the Company shall (i) enter each
Investor in the register of members of the Company as a holder of the number of Subscribed Shares
it has subscribed hereunder evidencing such number of Subscribed Shares as having been issued and
credited as fully paid; (ii) deliver to each Investor a copy of the register of members of the
Company certified as a true copy by a director of the Company reflecting the issuance of the
Subscribed Shares subscribed by such Investor; and (iii) deliver to each Investor all other items
required at the Closing under Section 6. Additionally, within three (3) Business Days after the
Closing, the Company shall deliver to each Investor a share certificate registered in its name
evidencing the number of Subscribed Shares subscribed by such Investor.

4. REPRESENTATIONS AND WARRANTIES

     4.1 Representations and Warranties of the Company. The Company hereby represents and warrants
to the Investors, except as set forth in the Disclosure Schedule (the “Disclosure Schedule”)
attached to this Agreement as Exhibit B (which Disclosure Schedule shall be deemed to modify the
representations and warranties set forth in this Agreement) that the representations and warranties
set forth in Exhibit C are true as of the date hereof and will be true as of the date of the
Closing (except for such representations and warranties that speak as of a particular date, in
which case, such representations and warranties shall be true as of such date).

     4.2 Representations and Warranties of the Investors. Each Investor hereby represents and
warrants to the Company that the following representations and warranties are true as of the date
hereof and will be true as of the date of the Closing with respect to such Investor (except for
such representations and warranties that speak as of a particular date, in which case, such
representations and warranties shall be true as of such date):

8

 

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          (a) The Subscribed Shares will be acquired for investment purposes for such Investor’s own
accounts, not as a nominee or agent. By executing this Agreement, such Investor further represents
that it has not been organized for the sole purpose of acquiring the Subscribed Shares.

          (b) Such Investor understands and acknowledges that the issuance of the Subscribed Shares to
it will not be registered or qualified under the Securities Act, or any applicable securities laws
on the grounds that the offering and sale of Subscribed Shares contemplated by this Agreement and
the issuance of Subscribed Shares hereunder is exempt from registration or qualification under the
Securities Act, and that the Company’s reliance upon these exemptions is predicated upon such
Investor’s representations in this Agreement. Such Investor further understands that no public
market now exists for any of the Subscribed Shares issued by the Company to it and the Company has
given no assurances that a public market will ever exist for such Subscribed Shares.

          (c) Such Investor is either (i) an “accredited investor” within the meaning of the SEC Rule
501 of Regulation D, as presently in effect, under the Securities Act, or (ii) a “Non-U.S. Person”
as defined under Rule 902 of Regulation S under the Securities Act.

5. COVENANTS

     5.1 Use of Proceeds from the Sale of Subscribed Shares. Unless otherwise agreed by the
Investors, the Company covenants that the proceeds from the issuance of the Subscribed Shares shall
be used exclusively by the Group Companies to expand their business under the energy management
contract model and for working capital and other general business activities in the PRC Subsidiary
Principal Business.

     5.2 Business of the Company. Unless otherwise agreed by the Investors, the Company covenants
that the business of the Company shall be restricted to the holding, management and disposition of
an equity interest in the HK Subsidiary.

     5.3 Business of the HK Subsidiary. Unless otherwise agreed by the Investors, the Company
covenants that the business of the HK Subsidiary shall be restricted to the holding, management and
disposition of an equity interest in each PRC Subsidiary.

     5.4 Business of the PRC Subsidiaries. Unless otherwise agreed by the Investors, the Company
covenants that the business of each PRC Subsidiary shall be restricted to the PRC Subsidiary
Principal Business.

     5.5 Equity Compensation. Unless otherwise agreed by the Investors, the Company shall not (and
shall procure other Group Company not to) directly or indirectly issue Ordinary Shares, share
options or other forms of equity of any Group Company as compensation to employees, officers,
directors or consultants, except in accordance with the ESOP.

     5.6 Conduct of Business. Between the date hereof and the date of the Closing, the Company
covenants that each Group Company shall conduct its respective business in the same manner as
heretofore and may pass resolutions and enter into Contracts for so long as they are effected in
the ordinary course of business, unless otherwise contemplated by this Agreement (including,
without limitation, the future financing as provided in Section 5.14 of this Agreement) or agreed
by the Investors.

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     5.7 Notice of Changes. Without prejudice to Section 8, between the date hereof and the date of
the Closing, if the Company or the Founder becomes aware of any fact or event that could reasonably
be expected to cause a Material Adverse Effect on the Group Companies taken as a whole or on the
Company or on any PRC Subsidiary, the Company or the Founder shall give prompt written notice
thereof to each Investor and each Investor may, after its receipt of such notice, terminate this
Agreement by written notice without any penalty whatsoever and without prejudice to any rights that
such Investor may have under this Agreement or Applicable Law.

     5.8 Further Assurance. Each of the Company and the Founder shall (a) cooperate with each
Investor to provide all due diligence reasonably requested by such Investor; and (b) take all
necessary and appropriate corporate and other actions to consummate the transactions contemplated
by this Agreement, including the satisfaction of the Closing conditions set forth in this Agreement
(other than the Closing conditions provided in Sections 6.7 and 6.8 hereof), and executing and
delivering all such other certificates, instruments and documents necessary to give effect to the
terms and intent of this Agreement.

     5.9 Compliance. The Company shall at all times ensure that none of the Group Companies will be
in violation of any Applicable Law, including without limitation Applicable Law in respect of the
conduct of its business or the ownership of its properties. The Founder shall at all times comply
with all Applicable Laws.

     5.10 Non-Compete Covenants. The Founder shall not, and shall procure none of his Affiliate
will, directly or indirectly, either by himself or in conjunction with or through any other Person,
engage or participate in or be connected with or be interested in any business competing with the
business of any Group Company.

     5.11 Sale after IPO. The Company will, after its IPO, use its best reasonable endeavors at its
own cost to coordinate with and assist each Investor to sell Ordinary Shares or American depositary
shares (“ADSs”) representing the Ordinary Shares in the public market (including without limitation
prompt delivery of necessary legal opinions from the Company’s counsel in forms reasonably
satisfactory to the depositary of its ADSs and other reasonable assistance during such Investor’s
sale of shares under Rule 144 promulgated by the United States Securities and Exchange Commission
under the Securities Act).

     5.12 Information Rights. The Company covenants and agrees that, commencing on the date of
Closing, it will, or will be caused to:

          (a) deliver to each Investor audited annual consolidated financial statements of the Company,
within ninety (90) days after the end of each fiscal year, prepared in accordance with IFRS and
audited by a one of the four largest international accounting firms;

          (b) deliver to each Investor unaudited quarterly consolidated or combined financial statements
and management accounts and information of the Company, within thirty (30) days after the end of
each quarter, which shall be prepared in accordance with IRFS;

          (c) deliver to each Investor the annual business plan and budget of the Group Companies for
the following fiscal year as approved by the Company’s board of directors, within forty-five (45)
days prior to the end of each fiscal year;

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          (d) keep true and accurate books of account and records of the Group Companies in accordance
with IFRS;

          (e) notify each Investor of all matters that may cause a Material Adverse Effect to the Group
Companies taken as a whole within a reasonable period of time;

          (f) notify each Investor of any progress in relation to any IPO of any Group Company with a
reasonable period of time; and

          (g) within ten (10) days after each meeting of the shareholders of the Company or the passing
of any resolution by the shareholders of the Company, provide to each Investor with copies of any
papers tabled at such meeting, minutes of such meeting or any signed resolutions.

The Company further covenants and agrees that all financial statements to be provided to each
Investor pursuant to this Section 5.12 shall include an income statement, a balance sheet and a
cash flow statement for the relevant period as well as for the fiscal year to date and comparisons
to annual budget.

     5.13 Lockup. Each Investor agrees that, upon request by the underwriters managing the IPO of
the Company, such Investor will enter into a customary lockup agreement with the underwriters
before the public filing of the Company’s registration statement for its IPO under which such
Investor shall agree, without the prior written consent of such underwriters, not to sell or
otherwise transfer or dispose of any Ordinary Shares (other than those permitted to be included in
the registration and other transfers to Affiliates permitted by Applicable Law) for a period of
time specified by such underwriters no greater than 180 days from the effective date of the
registration statement covering such IPO or the pricing date of such IPO as may be requested by
such underwriters (whichever is later); provided that (i) each of the other shareholders of the
Company signs a substantially same lockup agreement and agrees to the same terms and conditions
described in this Section 5.13, and (ii) if each of the other shareholders of the Company signs a
lockup agreement substantially in the form attached hereto as Exhibit E, each Investor shall sign a
lockup agreement substantially in the same form provided that the “initial Lock-Up Period” therein
shall not exceed 180 days after the date of the Underwriting Agreement (as defined in Exhibit E),
and any extension of the Lock-Up Period (as defined in Exhibit E) pursuant to the third and fourth
paragraphs therein is not substantially longer than as set forth in Exhibit E. Notwithstanding the
foregoing, if the underwriters managing such IPO agree to release any other shareholder of the
Company from such lockup, the Company shall use its best endeavors to procure that each Investor
shall be released from such lockup to the maximum extent that any other shareholder of the Company
is so released.

     5.14 Future Financings. Each Investor agrees that it will use best reasonable endeavors to
facilitate the Company’s future financings from private equity and other strategic investors after
the Closing.

     5.15 Legal Opinions. The Company and the Founder shall jointly and severally cause each of the
Cayman Islands counsel, Hong Kong counsel and PRC counsel to the Company to, within thirty (30)
days after the Closing, deliver to the Investors a legal opinion addressed to the Investors in form
and substance reasonably satisfactory to the Investors.

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     5.16 Termination of Covenants. Notwithstanding anything to the contrary in this Agreement, all
of the obligations of the Company and the Founder contained in this Section 5 (except the
obligations in Section 5.11 (Sale after IPO)) and all of the obligations of the Investors contained
in this Section 5 (except the obligations in Section 5.13 (Lockup)) shall terminate upon the
completion of IPO of the Company.

6. CLOSING CONDITIONS

     The obligation of each Investor to purchase the Subscribed Shares at the Closing is subject to
the fulfillment on or prior to the Closing, to the satisfaction of such Investor, or waiver by such
Investor, of the following conditions:

     6.1 Representations and Warranties. The representations and warranties made by the Company in
Exhibit C hereof shall be true, correct and complete in all respects, as of the date hereof and as
of the date of the Closing, with the same force and effect as if they were made on and as of such
date.

     6.2 Performance of Obligations. Each of the Company and the Founder shall have performed and
complied with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it or him on or before the Closing.

     6.3 Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated under this Agreement shall be completed and satisfactory in substance and
form to the Investors, and the Investors shall have received all such counterpart copies of such
documents as it may reasonably request.

     6.4 No Material Adverse Effect. Since the date of this Agreement, no Group Company has
suffered a Material Adverse Effect.

     6.5 Compliance Certificate. The Company shall deliver to the Investors a certificate, dated
the date of the Closing, signed by a director of the Company and the Founder, certifying that
closing conditions set forth in this Agreement have been fulfilled.

     6.6 Approvals, Consents and Waivers. Each of the Company and the Founder shall have obtained
all approvals, consents and waivers necessary for consummation of the transactions contemplated by
this Agreement, including, but not limited to, (a) all permits, authorizations, approvals or
consents of any Governmental Authority or other Person, and (b) the waiver by the existing
shareholders of the Company of any anti-dilution rights, rights of first refusal, preemptive rights
and all similar rights in connection with the issuance of the Subscribed Shares at the Closing.

     6.7 No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or
entered any Applicable Law that has the effect of making any of the transactions contemplated by
this Agreement illegal or otherwise restraining or prohibiting any of the items above mentioned.

     6.8 Due Diligence. The Investors shall have completed their legal, financial, technical,
business and personnel due diligence investigation of the Group Companies, the Founder and the key
employees and potential hires currently in discussion of any Group Company to its satisfaction.

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7. CONFIDENTIALITY AND NON-DISCLOSURE

     7.1 Confidentiality. From the date hereof until (i) the closing of the IPO of any Group
Company, or (ii) one (1) year after the Termination Date, whichever is earlier, each Party shall,
and shall cause any Person who is Controlled by such Party to, keep confidential the terms,
conditions, and existence of this Agreement, the identities of any of the Parties, and other
information of a non-public nature received from any other Party or prepared by such Party
exclusively in connection herewith or therewith (collectively, the “Confidential Information”)
except as the Company and the Investors shall mutually agree otherwise; provided, that any Party
hereto may disclose Confidential Information or permit the disclosure of Confidential Information
(a) to the extent required by Applicable Law or the rules of any stock exchange; provided that such
Party shall, where practicable and to the extent permitted by Applicable Law, provide the other
Parties with prompt written notice of that fact and use all reasonable endeavors to seek (with the
cooperation and reasonable endeavors of the other Parties) a protective order, confidential
treatment or other appropriate remedy; and in such event, such Party shall furnish only that
portion of the information which is legally required to be disclosed and shall exercise reasonable
endeavors to keep such information confidential to the extent reasonably requested by any such
other Parties, (b) to its officers, directors, employees, agents, underwriters, and professional
advisors on a need-to-know basis for the performance of its obligations in connection herewith so
long as such Party advises each Person to whom any Confidential Information is so disclosed as to
the confidential nature thereof and where such Person are under appropriate nondisclosure
obligations, (c) in the case of an Investor, its fund manager, other funds managed by its fund
manager and their respective auditors, counsel, directors, officers, agents, employees,
shareholders, partners or investors for the purposes of fund reporting or inter-fund reporting so
long as the Investor advises each Person to whom any Confidential Information is so disclosed as to
the confidential nature thereof and where such Person are under appropriate nondisclosure
obligations, (d) to its current or bona fide prospective investors, investment bankers and any
Person otherwise providing substantial debt or equity financing to such Party so long as the Party
advises each Person to whom any Confidential Information is so disclosed as to the confidential
nature thereof and where such Person are under appropriate nondisclosure obligations and (e) to
facilitate the IPO of the Company (including without limitation filing a copy of this Agreement as
an exhibit to the registration statement or any other similar offering document in connection with
such IPO). For the avoidance of doubt, Confidential Information does not include information that
(i) was already in the possession of the receiving Party before such disclosure by the disclosing
Party other than as a result of (A) a breach by the receiving Party of this Section 7 or (B) a
breach of a confidentiality obligation by a third party discloser, where the breach was known to
the receiving Party, (ii) is or becomes available to the public other than as a result of (A)
disclosure by the receiving Party in violation of this Section 7 or (B) a breach of a
confidentiality obligation by a third party discloser, where the breach was known to the receiving
Party, or (iii) is or becomes available to the receiving Party from a third party not known by the
receiving Party to be in breach of any legal or contractual obligation not to disclose such
information to it.

     7.2 Press Releases. The Parties shall not make any announcement regarding the consummation of
the transaction contemplated by this Agreement and any related documentation in a press release,
conference, advertisement, announcement, professional or trade publication, marketing materials or
otherwise to the general public without the prior written consent of both the Company and the
Investors.

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8. TERMINATION

     8.1 Termination of Agreement. Subject to other provisions herein, this Agreement and the
transactions contemplated by this Agreement shall terminate (a) at the election of the Company or
any Investor on or after the seventh (7th) Business Day after the date of this Agreement (such
elected date hereinafter referred to as the “Termination Date”), if the Closing shall not have
occurred on or before the Termination Date; provided that (i) the terminating Party is not in
material default of any of its obligations hereunder, and (ii) the right to terminate this
Agreement pursuant to this Section 8.1 shall not be available to any Party whose breach of any
provision of this Agreement has been the cause of, or resulted, directly or indirectly, in, the
failure of the Closing to be consummated by the Termination Date (for the avoidance of doubt, any
failure to fulfill the Closing conditions provided in Sections 6.7 and 6.8 hereof shall not be
deemed a “material default” or “breach” by the Company or the Founder as the terms are used in the
foregoing items (i) and (ii)); or (b) upon the mutual consent in writing of the Company and the
Investors.

     8.2 Effect of Termination. If this Agreement is terminated pursuant to the provisions of
Section 8.1 above, then this Agreement shall become void and have no further effect; provided, that
no Party shall be relieved of any liability of any nature for a breach of this Agreement or for any
misrepresentation hereunder, nor shall such termination be deemed to constitute a waiver of any
available remedy (including specific performance if available) for any such breach or
misrepresentation.

     8.3 Survival. Notwithstanding any provision to the contrary, the provisions of Section 7
(Confidentiality and Non-Disclosure), this Section 8 (Termination), Section 9.3 (Governing Law) and
Section 9.4 (Dispute Resolution) shall survive any expiration or termination of this Agreement.

9. MISCELLANEOUS

     9.1 Binding Effect; Assignment. This Agreement shall be binding on and shall enure for the
benefit of the successors, heirs, executors and administrators and permitted assignees of the
Parties hereto but shall not be capable of being assigned by the Founder or the Company without the
prior consent in writing of the Investors. This Agreement and the rights and obligations herein may
be assigned and transferred by an Investor to any Person without the written consent of the other
Parties hereto.

     9.2 Expenses. Each Party shall pay all of its own costs and expenses incident to its
negotiation, preparation, execution and delivery of this Agreement and any other related
documentation and the performance of and compliance with all agreements and conditions contained
herein or therein on its part to be performed or complied with, including the fees, expenses,
taxes, duties and disbursements of any counsel and/or accountants that it may have retained;
provided that the Company agrees if the Closing has occurred, it shall bear fifty percent (50%) of
all actual and documented financial due diligence expenses incurred by the Investors in connection
with the transaction
contemplated hereby; provided, further, that such amount reimbursed by the Company shall not
exceed US$50,000.

     9.3 Governing Law. This Agreement shall be governed by and construed in all respects in
accordance with the laws of Hong Kong.

     9.4 Dispute Resolution.

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          (a) Any dispute, controversy or claim (each, a “Dispute”) arising out of or relating to this
Agreement or the interpretation, breach, termination or validity hereof, shall be resolved at the
first instance through consultation between the Parties to such Dispute. Such consultation shall
begin immediately after any Party has delivered written notice to any Party to the Dispute
requesting such consultation.

          (b) If the Dispute is not resolved within fifteen (15) days following the date on which such
notice is given, the Dispute shall be submitted to arbitration upon the request of any Party to the
Dispute with notice to each other Party to the Dispute (the “Arbitration Notice”).

          (c) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “Centre”). There shall be three (3) arbitrators. The
claimants shall collectively choose one (1) arbitrator, the respondents shall collectively choose
one (1) arbitrator and the two (2) arbitrators shall jointly select the third (3rd) arbitrator who
shall serve as the chairman of the arbitral tribunal. If any of the members of the arbitral
tribunal have not been appointed within thirty (30) days after the Arbitration Notice is given, the
relevant appointment shall be made by the Secretary General of the Centre.

          (d) The arbitration proceedings shall be conducted in English. The arbitral tribunal shall
apply the Arbitration Rules of the United Nations Commission on International Trade Law, as
administered by the Centre at the time of the arbitration. However, if such rules are in conflict
with the provisions of this Section 9.4, including the provisions concerning the appointment of
arbitrators, the provisions of this Section 9.4 shall prevail.

          (e) The arbitrators shall decide any Dispute submitted by the Parties strictly in accordance
with the substantive law of Hong Kong; provided that when the published laws of Hong Kong do not
cover a certain matter, international legal principles and practices shall apply.

          (f) Each Party to the arbitration shall cooperate with the other Parties 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 arbitration proceedings, subject only to any
confidentiality obligations binding on such Party.

          (g) The costs of arbitration shall be borne by the losing Party, unless otherwise determined
by the arbitral tribunal.

          (h) When any Dispute occurs and when any Dispute is under arbitration, except for the matters
in dispute, the Parties shall continue to fulfill their respective obligations and shall be
entitled to exercise their rights under this Agreement.

          (i) The award of the arbitral tribunal shall be final and binding upon the Parties, and the
prevailing Party may apply to a court of competent jurisdiction for enforcement of such award.

          (j) Any Party shall be entitled to seek preliminary injunctive relief from any court of
competent jurisdiction pending the constitution of the arbitral tribunal.

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          (k) During the course of the arbitral tribunal’s adjudication of the Dispute, this Agreement
shall continue to be performed except with respect to the part in dispute and under adjudication.

     9.5 Entire Agreement. This Agreement and any transaction agreement the execution of which is
contemplated hereunder and the schedules and exhibits hereto and thereto constitute the entire
understanding and agreement between the Parties with respect to the subject matter hereof and
thereof and supersede all prior written or oral understandings or agreements with respect to the
subject matter hereof and thereof.

     9.6 Notices. Except as may be otherwise provided herein, all notices, requests, waivers and
other communications made pursuant to this Agreement shall be in writing and shall be conclusively
deemed to have been duly given (a) when hand delivered to the other Party, upon delivery; (b) when
sent by facsimile at the number set forth on Exhibit D hereto, upon receipt of confirmation of
error-free transmission; (c) three (3) days after deposit in the mail as air mail or certified
mail, postage prepaid and addressed to the other Parties as set forth
on Exhibit D hereto; or (d)
one (1) day after deposit with an overnight delivery service, postage prepaid, addressed to the
other Parties as set forth on Exhibit D hereto with next day delivery guaranteed. A Party may
change or supplement the facsimile number or mailing addresses given
in Exhibit D, or designate an
additional facsimile number or mailing addresses, for purposes of this Section 9.6 by giving, the
other Parties written notice of the new facsimile number or mailing addresses in the manner set
forth above.

     9.7 Amendments and Waivers. Any term of this Agreement may be amended only with the written
consent of the Parties hereto. Any amendment or waiver effected in accordance with this Section 9.7
shall be binding upon all Parties hereto, and their respective permitted assigns.

     9.8 Delays or Omissions. No delay or omission in exercising any right, power or remedy
accruing to any Party hereto, upon any breach or default of any other Party under this Agreement,
shall impair any such right, power or remedy of such Party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of any
Party of any breach or default under this Agreement or any waiver of any provisions or conditions
of this Agreement, must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded
to any Party shall be cumulative and not alternative.

     9.9 Severability. The illegality, invalidity or unenforceability of any provision of this
Agreement under any law does not affect its legality, validity or enforceability under any other
law nor the legality, validity or enforceability of any other provision.

     9.10 Adjustments for Share Splits, Etc. Wherever in this Agreement there is a reference to a
specific number of Series A Shares or Ordinary Shares, then, upon the occurrence of any
subdivision, combination or share dividend of the Series A Shares or the Ordinary Shares, the
specific number of shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the effect on the outstanding shares of such class or series of shares by such
subdivision, combination or share dividend.

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     9.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.

     9.12 Several Liability of the Investors. The liability of the Investors under this Agreement
shall be several and not joint and several.

[SIGNATURE PAGE TO FOLLOW]

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

	 	 	 	 	 	 

	FOUNDER:

	 	 	 	 	 
	 

	 	 	)	 	 
	EXECUTED AS A DEED

	 	 	)	 	 
	 

	 	 	)	 	 
	SIGNED
SEALED AND DELIVERED

	 	 	)	 	 
	 

	 	 	)	 	 
	by
KWOK PING SUN 

	 	 	)	 	 
	 

	 	 	)	 	 
	the holder of Hong Kong

	 	 	)	 	 
	 

	 	 	)	 	 
	ID
Card No. P590331 (2)

	 	 	)	 	 
	 

	 	 	)	 	 
	in the presence of:

	 	 	)	 	 
	 

	 	 	)	 	 
	

	 	 	 	 	 
	Name
of Witness: Song Ping

	 	 	)	 	 
	Address
of Witness: Build
4. No. 150, Yong He Road, Shanghai

	 	 	)	 	 
	
	 	 	 	 	 

        

[SIGNATURE PAGE TO SHARE SUBSCRIPTION AGREEMENT]

 

 

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

COMPANY:

For and on behalf of

NOBAO RENEWABLE ENERGY HOLDINGS LIMITED

	 	 	 	 	 

	By:
	 	
 
	 
	Name:
	 	KWOK PING SUN		 
	Title:

	 	Director	 	 

[SIGNATURE PAGE TO SHARE SUBSCRIPTION AGREEMENT]

 

 

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

INVESTOR:

For and on behalf of

ACE EXCEL LIMITED

	 	 	 	 	 

	

By: 

Name:

	 	
 

PHEN, CHUN SHING VINCENT
	 	 
	Title:

	 	AUTHORIZED SIGNER	 	 

[SIGNATURE PAGE TO SHARE SUBSCRIPTION AGREEMENT]

 

 

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

INVESTOR:

For and on behalf of

ACE CAPTAIN HOLDINGS LIMITED

	 	 	 	 	 

	

By: 

Name:

	 	
 

PHEN, CHUN SHING VINCENT
	 	 
	Title:

	 	AUTHORIZED SIGNER	 	 

[SIGNATURE PAGE TO SHARE SUBSCRIPTION AGREEMENT]

 

 

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LIST OF EXHIBITS

	 	 	 

	Exhibit A
	 	Shareholding Ratio

	 	 	 

	Exhibit B
	 	Disclosure Schedule

	 	 	 

	Exhibit C
	 	Representations and Warranties

	 	 	 

	Exhibit D
	 	Notice

	 	 	 

	Exhibit E
	 	Form of Lockup Agreement

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EXHIBIT A

SHAREHOLDING RATIO

	 	 	 	 	 
	 	 	Shareholding Ratio	 
	 	 	(on an as-converted and fully	 
	Shareholders	 	diluted basis)	 
	Ace Excel
	 	 	1.205	%
	Ace Captain
	 	 	1.205	%
	Founder Holdco
	 	 	59.07	%
	China Environment Fund III, L.P.
	 	 	33.18	%
	Wide Safety International Limited
	 	 	3.17	%
	ESOP
	 	 	2.17	%
	 
	 	 	 
	TOTAL
	 	 	100	%

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EXHIBIT B

DISCLOSURE SCHEDULE

The following are exceptions to the representations, warranties, covenants and agreements of
Nobao Renewable Energy Holdings Limited (the “Company”), contained in the Share Subscription
Agreement (the “Agreement”), dated July 30, 2010, by and among the Company, the Investors named
therein (the “Investors”) and other parties thereto, pursuant to which the Investors will subscribe
and the Company will issue and allot to the Investors 5,538,376 ordinary shares, par value
US$0.0001 per share, of the Company on the terms and conditions set forth in the Agreement. The
section numbers in this Disclosure Schedule correspond to the section numbers in the Exhibit C of
the Agreement; provided, however, that any information disclosed herein shall be deemed
incorporated into and made a part of the representations and warranties of the Company in the
Agreement and disclosed and incorporated into any other sections of this Disclosure Schedule where
such disclosure would be appropriate and reasonably apparent in the context of the disclosure
herein, whether or not repeated under any section number where such disclosure might be deemed
appropriate. Any terms defined in the Agreement shall have the same meaning when used in this
Disclosure Schedule as when used in the Agreement, unless otherwise provided. Notwithstanding any
materiality qualifications in any of the Company’s representations, warranties, covenants and
agreements in the Agreement, for administrative ease, certain items have been included herein that
are not considered by the Company to be material to the business, assets or results of operations
of the Company. The inclusion of any item hereunder shall not be deemed to be an admission by the
Company that such item is material to the business, assets or results of operations of the Company
nor shall it be deemed an admission of any obligation or liability to any third party. This
Disclosure Schedule and the information and disclosures contained in this Disclosure Schedule are
intended only to qualify and limit the representations, warranties and covenants of the Company
contained in the Agreement and shall not be deemed to expand in any way the scope or effect of any
of such representations, warranties or covenants.

2. Capitalization.

     (a) The transactions with respect to the issuance or transfer of any shares of the Company are
as follows:

	 	 	 	 	 	 	 
	 	 	Date of Sale or	 	 	 	Consideration
	Purchaser	 	Issuance	 	Number of Shares	 	in U.S. dollars
	Kwok Ping Sun
	 	September 30, 2008	 	50,000 ordinary shares	 	50,000
	 
	 	January 15, 2010	 	3,863,844 ordinary shares	 	Pursuant to share swap
	Tai Feng Investment Limited
	 	April 19, 2010	 	135,894,620 ordinary shares1	 	Pursuant to share split2
	Wide Safety International Limited
	 	January 15, 2010	 	729,676 ordinary shares	 	Pursuant to share swap

 

			
	1	 	These ordinary shares of the Company were initially transferred by Mr. Kwok Ping Sun to Tai Feng Investment on April 8, 2010.
	 
	2	 	The Company effected a one for ten share split on April 19, 2010.

 

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	China Environment Fund III, L.P.
	 	January 15, 2010	 	7,359,720 Series A preferred shares	 	Pursuant to share swap
	 
	 	April 19, 2010	 	73,597,200 Series A preferred shares	 	Pursuant to share split2
	 
	 	 	 	2,743,820 ordinary shares	 	Pursuant to share split2

     The Company has issued options under the ESOP to purchase a total of 4,635,180 Ordinary
Shares. Each of the grantees of such options has entered into an option agreement with the Company.

     (a) and (e) :

     Shareholders Agreement dated January 15, 2010 between the Company and its shareholders.

     Right of First Refusal and Co-sale Agreement dated January 15, 2010 between the Company and
its shareholders.

     Amended and Restated Option Agreement No.2 dated April 8, 2010 between China Environment Fund
III, L.P., Kwok Ping Sun, Tai Feng Investment Limited and the Company.

     The Restated Articles.

3. Subsidiaries; Group Structure.

     The following diagram illustrates the current structure of the Group Companies.

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6. Financial Statements.

(e) The Company and Jiangxi Nobao have entered into the following loan agreements.

	 	 	 	 	 	 	 
	Date of the	 	 	 	 	 	 
	Loan	 	 	 	 	 	 
	Agreement	 	Borrower	 	Lender	 	Security
	January 8, 2009

	 	Jiangxi Nobao
	 	
	 	collaterized by Jiangxi Nobao’s land use rights
	June 25, 2010

	 	Company
	 	FV Investment Alpha Five Limited
	 	N/A

     Reference is made to Section 9 of this Disclosure Schedule.

7. Title to Properties and Assets.

     Certain land use rights of Jiangxi Nobao is subject to the Encumbrance pursuant to the Loan
Agreement dated January 8, 2009 between Jiangxi Nobao and Gongqing City Finance Management
Investment Co., Ltd. ().

     The Lease Agreement of Office Building dated November 1, 2009 between the Founder and
Shanghai Nuoxin is not registered with the relevant PRC Government Authority.

8. Status of Proprietary Assets.

(a) Jiangxi Nobao has obtained the registered trademark of “” which is classified under
registered trademark categories of home electronic appliances and corporate services in China.
In addition, Jiangxi Nobao has applied for trademark registration of the “” and “Econobao”
brands and logos which are classified under registered trademark categories of building
construction and maintenance services in China.

9. Material Contracts and Obligations.

     Shareholders Agreement dated January 15, 2010 between the Company and its shareholders.

     Right of First Refusal and Co-sale Agreement dated January 15, 2010 between the Company and
its shareholders.

     Share Exchange Agreement dated January 15, 2010 between the Company and its shareholders.

     Contract for the Grant of State-owned Land Use Rights dated July 4, 2005 between Gongqing
City Bureau of Land, Environmental Protection and Construction and Jiangxi Nobao.

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     Contract for the Grant of State-owned Land Use Rights dated April 16, 2009 between
Gongqing City Bureau of Land, Environmental Protection and Construction and Jiangxi Nobao.

     Lease Agreement of Office Building dated November 1, 2009 between Mr. Kwok Ping Sun and
Shanghai Nuoxin.

     Employment Agreements between the Company and its senior executive officers including Kwok
Ping Sun, Ping Song, Arthur Wong, Jun Chen, Tao Chen and Jian Xiong.

     Indemnification Agreements dated April 17, 2010 between the Company and Kwok Ping Sun, Ping
Song and Shelby Chen.

     Amended and Restated Option Agreement No.2 dated April 8, 2010 between China Environment
Fund III, L.P., Kwok Ping Sun, Tai Feng Investment Limited and the Company.

14. Registration Rights.

     The Company has granted certain registration rights in the Shareholders Agreement dated
January 15, 2010 between the Company and its shareholders.

15. Activities Since Financial Statement.

     On April 28, 2010, the Company publicly filed a Registration Statement on Form F-1 with the
U.S. Securities and Exchange Commission (the “SEC”) in connection with a proposed IPO (the
“Registration Statement”). The Registration Statement is on the SEC’s official website. On May
4, 2010, May 17, 2010 and June 1, 2010, the Company amended the Registration Statement. On June
4, 2010, the Company withdrew the Registration Statement.

     Loan Agreement with FV Investment Alpha Five Limited dated June 25, 2010.

17. Interested Party Transactions.

     Reference is made to the Company’s disclosures under the title “Related Party Transactions”
in the Registration Statement, as amended.

18. Employment Matters.

     Shelby Chen, the director of the Company, has been a partner of Tsing Capital, a fund
advisory company that is the advisor to China Environment Funds. Mr. Chen also serves as board
member of Beijing Sound-Puhua Technology Co.,Ltd., Zhuhai Biofan Environmental Technology Co.,
Ltd., SureAuto Corporation and SunPreme Inc.

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24 Insurance.

     Jiangxi Nobao currently holds an insurance policy (No. 00015807) dated December 31, 2009.

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EXHIBIT C

REPRESENTATIONS AND WARRANTIES

	1.	 	Organization, Standing and Qualification. Each Group Company is duly organized,
validly existing and in good standing (or equivalent status in the relevant jurisdiction)
under, and by virtue of, the laws of the place of its incorporation or establishment and has
all requisite power and authority to own its properties and assets and to carry on its
business as now conducted and as currently proposed to be conducted, and to perform each of
its obligations hereunder to which it is a party. Each Group Company is qualified or licensed
to do business and is in good standing (or equivalent status in the relevant jurisdiction) in
each jurisdiction where failure to be so qualified or licensed could have a Material Adverse
Effect. Each Group Company is not in receivership or liquidation; no steps have been taken to
enter into liquidation; and no petition has been presented for winding up any Group Company;
and there are no grounds on which a petition or application could be based for the winding up
or appointment of a receiver of any Group Company.
	 
	2.	 	Capitalization.

	 	(a)	 	Immediately prior to the Closing, the share capital of the Company is
US$50,000, consisting of the following:

	 	(i)	 	Ordinary Shares. A total of 400,000,000 authorized
Ordinary Shares, of which 145,935,200 Ordinary Shares are issued and
outstanding.
	 
	 	(ii)	 	Preferred Shares. A total of 100,000,000 authorized
Series A Shares, of which 73,597,200 Series A Shares are issued and
outstanding.
	 
	 	(iii)	 	Options, Warrants, Reserved Shares. The Company has
reserved 73,597,200 Ordinary Shares for issuance upon the conversion of the
Series A Shares. Except for (A) the conversion privileges of the Series A
Shares; (B) the transactions contemplated by this Agreement; and (C) the
transactions as disclosed in the Disclosure Schedule, there are no
subscriptions, options, warrants, conversion privileges, pre-emptive or other
rights or Contracts with respect to the issuance or transfer of any shares of
the Company. Except as set forth in the preceding sentence, in the Restated
Articles or in the Disclosure Schedule, no shares (including the Subscribed
Shares) of the Company’s outstanding share capital, or shares issuable upon
exercise or exchange of any outstanding options or other shares issuable by
the Company, are subject to any preemptive rights, rights of first refusal or
other rights to purchase

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	 	 	 	such shares (whether in favor of the Company or any other Person).

	 	 	 	Each of the Founder Holdco, China Environment Fund III, L.P. and Wide Safety International
Limited owns sixty-one point nine percent (61.9%), thirty-four point eight percent (34.8%)
and three point three percent (3.3%) of the issued and outstanding share capital of the
Company respectively immediately prior to the Closing, free and clear of any Encumbrance.
	 
	 	(b)	 	HK Subsidiary. Immediately prior to the Closing, the HK Subsidiary has 70,000,000
authorized ordinary shares, par value US$0.001, of which 14,593,520 shares are issued and
outstanding, and 30,000,000 authorized preference shares, par value US$0.001, of which
7,359,720 shares are issued and outstanding, and the Company owns hundred percent (100%) of
the issued and outstanding shares of the HK Subsidiary (on a fully diluted basis) which is
free and clear of any Encumbrance. There are no subscriptions, options, warrants, conversion
privileges, pre-emptive or other rights or Contracts with respect to the issuance or transfer
of any shares of the HK Subsidiary. No shares of the HK Subsidiary’s outstanding share
capital, or shares issuable upon exercise or exchange of any outstanding options or other
 shares issuable by the HK Subsidiary are subject to any preemptive rights, rights of first
refusal or other rights to purchase such shares (whether in favor of the HK Subsidiary or any
other Person).
	 
	 	(c)	 	Shanghai Nuoxin Registered Capital. Immediately prior to the Closing, the registered
capital of Shanghai Nuoxin is US$29,800,000, US$16,000,000 of which has been contributed in
full and duly verified by a certified accountant registered in the PRC, and the verification
report was timely filed with the relevant PRC Governmental Authority. The HK Subsidiary owns
hundred percent (100%) of the registered capital of Shanghai Nuoxin (on a fully diluted
basis), which is free and clear of any Encumbrance. There are no subscriptions, options,
warrants, conversion privileges, pre-emptive or other rights or Contracts with respect to the
issuance or transfer of any equity interest or registered capital, or any securities
convertible into or exchangeable for any equity interest or registered capital, of Shanghai
Nuoxin.
	 
	 	(d)	 	Jiangxi Nobao Registered Capital. Immediately prior to the Closing, the registered
capital of Jiangxi Nobao is US$15,000,000, all of which has been contributed in full and duly
verified by a certified accountant registered in the PRC, and the verification report was
timely filed with the relevant PRC Governmental Authority. The HK Subsidiary owns hundred
percent (100%) of the registered capital of Jiangxi Nobao (on a fully diluted basis), which is
free and clear of any Encumbrance. There are no subscriptions, options, warrants, conversion
privileges, pre-emptive or

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	 	 	 	other rights or Contracts with respect to the issuance or transfer of any equity
interest or registered capital, or any securities convertible into or exchangeable
for any equity interest or registered capital, of Jiangxi Nobao.
	 
	 	(e)	 	No Encumbrance. Except for the transactions contemplated under this
Agreement, none of the Company, the Founder Holdco, the Founder or any of their
respective Affiliates is a party to any Contracts by which any of them is bound or
obligated to transfer or assign or create any Encumbrance on any interest, economic or
otherwise, in any equity interests of any Group Company to any Person. Except as
disclosed in the Disclosure Schedule, there is no other Contracts between or among any
Founder and/or any other shareholder of any Group Company with respect to the
ownership or voting or Control of any Group Company.

	3.	 	Subsidiaries; Group Structure. Except as specified in Section 2 of Exhibit C,
and subject to Section 3 of the Disclosure Schedule, no Group Company has any Subsidiary or
presently own or Control, directly or indirectly, any interest in any other Person. The Group
Companies do not maintain any offices or branches or Subsidiaries except for the offices
disclosed in the Disclosure Schedule.
	 
	4.	 	Due Authorization. All corporate action on the part of the Company and, as
applicable, its officers, directors and shareholders necessary for (a) the authorization,
execution and delivery of, and the performance of all obligations of the Company under this
Agreement and any other documents the execution of which is contemplated hereunder, and (b)
the authorization, issuance, reservation for issuance and delivery of all of the Subscribed
Shares being sold under this Agreement has been taken or will be taken prior to the Closing.
The Company and the Founder have all requisite power and authority to execute and deliver this
Agreement. This Agreement constitutes a valid and binding obligation of the Company and of the
Founder, enforceable against it/him in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally, and (ii) the effect
of rules of law governing the availability of equitable remedies.
	 
	5.	 	Valid Issuance.

	 	(a)	 	The Subscribed Shares, when issued, sold and delivered in accordance with the
terms of this Agreement will be duly and validly authorised and issued, credited as
fully paid, and nonassessable.
	 
	 	(b)	 	The issued and outstanding share capital of the Group Companies are duly and
validly authorized and issued, fully paid and nonassessable. All outstanding shares,
options, warrants and other securities of the Company have been issued (and the
issuance of Subscribed Shares shall be) in full compliance with the Company’s
Constitutional Documents at the time of

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	 	 	 	such issuance and the requirements of all Applicable Laws, including, to the extent
applicable, the registration and prospectus delivery requirements of the United
States Securities Act of 1933, as amended (the “Securities Act"), or in compliance
with applicable exemptions therefrom, and all other provisions of applicable
securities laws and regulations, including, without limitation, anti-fraud
provisions.

	6.	 	Financial Statement.

	 	(a)	 	Prior to the date of the Closing, the Company has made available to the
Investors its audited consolidated or combined financial statements for the fiscal
year of 2008 and 2009 and its unaudited consolidated or combined financial statements
(including balance sheet, profit and loss statement, and cash flow statement) for the
first three (3) months ended March 31, 2010 (collectively, the “Financial
Statements”).
	 
	 	(b)	 	The Financial Statements have been prepared in accordance with IFRS. Since
March 31, 2010, none of the Group Companies has changed any of the accounting
principles or practices used by it in the past.
	 
	 	(c)	 	The Financial Statements are accurate and complete in all material respects
and present fairly the financial position of the Group Companies on a consolidated or
combined basis (as the case may be) as of the respective dates thereof and the results
of operations of the Group Companies on a consolidated or combined basis (as the case
may be) for the periods covered thereby. In particular, the Financial Statements
reflect all debts, liabilities, and obligations of any nature whether due or to become
due, (including, without limitation, absolute liabilities, accrued liabilities, and
contingent liabilities) of the Group Companies on a consolidated or combined basis (as
the case may be) as at the respective dates thereof, and contain all necessary
reserves, provisions and accruals in accordance with IFRS. The Financial Statements
present an accurate picture of the net assets, financing and results of operations of
the Group Companies taken as a whole in accordance with IFRS as at the respective
dates thereof.
	 
	 	(d)	 	All transactions conducted by the Group Companies have been duly recorded on
their books and in their accounting records to the extent required by IFRS. As at
March 31, 2010, the Group Companies have not incurred, assumed or guaranteed any
liabilities or debts of any nature (whether due, fixed, contingent or otherwise) that
were material to the business of the Group Companies taken as a whole and were not
reflected or expressly provisioned against in the Financial Statements.
	 
	 	(e)	 	Except as set forth in the Financial Statements and in the Disclosure
Schedule, (i) none of the Group Companies have any liability or obligation with an
aggregate value or amount in excess of US$2,000,000, absolute or

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	 	 	 	contingent (individually or in the aggregate), or any indebtedness for borrowed
money that it has directly or indirectly created, incurred, assumed or guaranteed
with an aggregate value or amount in excess of US$2,000,000; (ii) no Group Company
is a guarantor or indemnitor of any liability, obligation or indebtedness of any
Person, (iii) the Founder is not a guarantor or indemnitor of any liability,
obligation or indebtedness of any Group Company, and (iv) neither the Founder nor
the Company has pledged or created any Encumbrance over any of its interest in the
securities of any Group Company.

	7.	 	Title to Properties and Assets. Each Group Company has good and marketable title to
its properties and assets, and none of its properties and assets is subject to any
Encumbrance. With respect to the properties and assets it leases, each Group Company is in all
material respects in compliance with each lease to which it is a party and such Group Company
holds valid leasehold interests in such properties and assets.
	 
	8.	 	Status of Proprietary Assets.

	 	(a)	 	Each Group Company (i) has independently developed and owns free and clear of
any Encumbrance, or (ii) has a valid right or license to use, all Proprietary Assets,
including Registered Intellectual Property, necessary and appropriate for its business
as now conducted and as proposed to be conducted and, to the knowledge of the Company,
without any conflict with or infringement of the rights of others. Section 8 of the
Disclosure Schedule contains a complete list of Registered Intellectual Property of
each Group Company.
	 
	 	(b)	 	There are no outstanding options, licenses, Contracts or rights of any kind
granted by any Group Company or any other Person relating to any Group Company’s
Proprietary Assets, nor is any Group Company bound by or a party to any options,
licenses, Contracts or rights of any kind with respect to the Proprietary Assets of
any other Person, except, in either case, for standard end-user agreements with
respect to commercially readily available intellectual property such as “off the
shelf” computer software.
	 
	 	(c)	 	Neither the Founder nor any of the Group Companies has received any
communications alleging that it has violated or, by conducting its business as
proposed, would violate any Proprietary Assets of any other Person, nor, to the best
knowledge of the Group Companies is there any reasonable basis therefor. To the best
knowledge of the Group Companies, no other Person is infringing any Proprietary Assets
of any Group Company.
	 
	 	(d)	 	Neither the Founder, nor any of the current or former officers, employees or
consultants of any Group Company (at the time of their employment or engagement by a
Group Company) has been or is obligated under any

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	 	 	 	Contract, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his, her or its best
endeavors to promote the interests of such Group Company or that would conflict
with the business of such Group Company as proposed to be conducted or that would
prevent such Founder, officers, employees or consultants from assigning to such
Group Company inventions conceived or reduced to practice in connection with
services rendered to such Group Company. Neither the execution, delivery nor
performance of this Agreement, nor the carrying on of the business of any Group
Company by its employees, nor the conduct of the business of any Group Company as
proposed, will, to the best knowledge of the Group Companies, conflict with or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, any Contract under which any of such employees is now obligated.

	9.	 	Material Contracts and Obligations.

	 	(a)	 	All Contracts, indebtedness, liabilities and other obligations to which a
Group Company is a party or by which it is bound, that (i) are material to the conduct
and operations of such Group Company’s business and properties, (ii) involve any of
the Founder, executive officers, directors or key employees of any Group Company or
any shareholder of the Company; or (iii) obligate such Group Company to share, license
or develop any product or technology (except licenses granted in the ordinary course
of business), other than agreements entered into by or on behalf of any Group Company
in the ordinary course of business, are disclosed in Section 9 of the Disclosure
Schedule and have been made available for inspection by the Investors and their
counsel (such Contracts, indebtedness, liabilities and other obligations, the
“Material Contracts”). Such Contract, indebtedness, liabilities and obligations are
valid and binding, in full force and effect and enforceable against such Group Company
in accordance with its terms. None of the Group Companies is in default or breach in
any material respect under any of such Contract, indebtedness, liabilities and
obligations.
	 
	 	(b)	 	For purposes of this Section 9 of Exhibit C, “material” shall mean
(i) having an aggregate value, cost or amount, or imposing liability or contingent
liability on any Group Company, in excess of US$2,000,000, (ii) containing
exclusivity, non-competition, or similar clauses that impair, restrict or impose
conditions on any Group Company’s right to offer or sell products or services in
specified areas, during specified periods, or otherwise, (iii) not entered into in the
ordinary course of business, (iv) transferring or licensing any Proprietary Assets to
or from any Group Company (other than licenses granted in the ordinary course of
business or licenses for commercially readily available “off the shelf” computer
software) or (v) an agreement the termination of which could be

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	 	 	 	reasonably likely to have a Material Adverse Effect on any Group Company.

	10.	 	Litigation. There is no action, suit, proceeding, claim, arbitration or investigation
(the “Action”) pending or currently threatened, against the Founder, any Group Company, the
Founder’s or Group Company’s activities, properties or assets, or, to the best knowledge of
the Group Companies, against any officer, director or employee of a Group Company in
connection with such officer’s, director’s or employee’s relationship with, or actions taken
for or on behalf of, the Group Company or otherwise. To the best knowledge of the Group
Companies, there is no factual or legal basis for any such Action that could be likely to
result, individually or in the aggregate, in any Material Adverse Effect on the Founder or any
Group Company. Neither the Founder nor the Group Companies is a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or Governmental
Authority or instrumentality and there is no Action by the Founder or any Group Company
currently pending or which he/it intends to initiate.
	 
	11.	 	Compliance with Laws; Consents and Permits.

	 	(a)	 	None of the Group Companies is in any material respect in violation of any
Applicable Law applicable to or binding upon it, including without limitation
Applicable Law in respect of its formation or the conduct of its business or the
ownership of its properties.
	 
	 	(b)	 	All consents, permits, approvals, orders, authorizations or registrations,
qualifications, designations, declarations or filings by or with any Governmental
Authority or any third party, which are required to be obtained or made by any Group
Company or the Founder in connection with due and proper establishment and operation
of any Group Company and in connection with the consummation of the transactions
contemplated under this Agreement shall have been obtained or made prior to and be
effective as of the Closing. Except as the failure to do so could reasonably be
expected to result in a Material Adverse Effect on the Group Companies taken as a
whole or on the Company or on any PRC Subsidiary, each Group Company has all
franchises, permits, licenses and any similar authority necessary for the conduct of
its business as currently conducted and as currently proposed to be conducted, which
are in full force and effect. None of the Group Companies is in default in any
material respect under any of such franchise, permit, license or other similar
authority.
	 
	 	(c)	 	No Group Company is in receipt of any letter or notice from any relevant
Governmental Authority notifying revocation of any permits or licenses issued to it
for noncompliance or the need for compliance or remedial actions in respect of the
activities carried out directly or indirectly by it.

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	 	(d)	 	In respect of approvals, licenses or permits requisite for the conduct of any
part of the business of any Group Company which are subject to periodic renewal, none
of the Group Companies has any reason to believe that such requisite renewals will not
be timely granted by the relevant Governmental Authorities.

	12.	 	Non-Contravention. No Group Company is in, nor shall the conduct of its business as
currently or currently proposed to be conducted result in, violation, breach or default of (a)
any term of the Constitutional Documents of such Group Company, or (b) in any material respect
any term or provision of any Material Contract to which such Group Company is a party or by
which it may be bound, or (c) any provision of any Applicable Law applicable to or binding
upon such Group Company where such violation, breach or default could reasonably be expected
to result in a Material Adverse Effect on such Group Company. None of the activities,
Contract, or rights of any Group Company is ultra vires or unauthorized. The execution,
delivery and performance of and compliance with this Agreement and the consummation of the
transactions contemplated hereby do not and will not result in any such violation, breach or
default, or conflict with or constitute, with or without the passage of time or the giving of
notice or both, either a default under any Constitutional Documents of any Group Company or
any Material Contract, or a violation of any Applicable Law, or an event which results in the
creation of any Encumbrance (or any obligation to create any Encumbrance) upon any asset of
any Group Company. The Constitutional Documents of each Group Company are valid and have been
duly approved or issued (as applicable) by the competent Governmental Authorities.
	 
	13.	 	Disclosure. Each of the Group Companies has provided or made available to the
Investors with all the information that the Investors have requested for deciding whether to
purchase the Subscribed Shares and all information that each of the Group Companies believe is
reasonably necessary to enable the Investors to make such decision. No representation or
warranty by the Company in this Agreement and no written information or materials provided by
any Group Company or the Founder to the Investors in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances in which
they are made, not misleading, including without limitation the Financial Statements and any
information contained therein.
	 
	14.	 	Registration Rights. Except as disclosed in the Disclosure Schedule, neither the
Founder nor any Group Company has granted or agreed in writing to grant any Person any
registration rights with respect to, nor is any Group Company obliged to list or register, any
Group Company’s equity interest on any stock exchange.
	 
	15.	 	Activities Since Financial Statements. Since March 31, 2010, (a) each Group
Company has conducted their respective businesses in ordinary course, in substantially the
same manner in which they had been previously conducted and

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	 	(b)	 	there has not been any event or condition of any character which could have a
Material Adverse Effect on any Group Company.

	16.	 	Tax Matters.

	 	(a)	 	Each of the Group Companies has timely filed all tax returns and reports as
required by Applicable Law. Such tax returns and reports are true and correct in all
material respects. All taxes actually assessed against each of the Group Companies
(whether or not shown on any tax return or report) have been paid on or prior to the
due date for such taxes. None of Group Companies is currently the beneficiary of an
extension of time within which to file any tax return or report with any applicable
taxing authority.
	 
	 	(b)	 	There has been no deficiency for taxes assessed against any of the Group
Companies by any taxing authority and no circumstances exist, to the knowledge of the
Group Companies, that could reasonably be expected to cause any Group Company to be
assessed for a material tax deficiency.

	17.	 	Interested Party Transactions.

	 	(a)	 	Except as disclosed in the Financial Statements and in Section 17 of the
Disclosure Schedule, none of the Founder, officer, employee or director of a Group
Company or any Affiliate of any of the foregoing has any Contract, understanding,
proposed transaction with, or is indebted to, any Group Company, nor is any Group
Company indebted (or committed to make loans or extend or guarantee credit) to any of
such Persons (other than for accrued salaries, reimbursable expenses or other standard
employee benefits) (other than those transactions contemplated in this Agreement).
	 
	 	(b)	 	Except as disclosed in the Financial Statements and in Section 17 of the
Disclosure Schedule, neither any officer, employee or director of a Group Company nor
any Affiliate of any of the foregoing has any direct or indirect ownership interest in
any firm or corporation with which a Group Company or Founder is affiliated or with
which a Group Company or Founder has a business relationship, or any firm or
corporation that competes with a Group Company. Neither the Founder nor any of his
Affiliate has any direct or indirect ownership interest in any firm or corporation
with which a Group Company is affiliated or with which a Group Company has a business
relationship, or any firm or corporation that competes with a Group Company (other
than other Group Companies).
	 
	 	(c)	 	Except as disclosed in the Financial Statements and in Section 17 of the
Disclosure Schedule, none of the Founder, officer, employee or director of a Group
Company or any Affiliate of any of the foregoing has had, either directly or
indirectly, a material interest in: (i) any Person which purchases

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	 	 	 	from or sells, licenses or furnishes to a Group Company any goods, property,
intellectual or other property rights or services; or (ii) any Contract to which a
Group Company is a party or by which it may be bound or affected.

	18.	 	Employee Matters. Each Group Company has complied in all material aspects with all
applicable employment and labor laws. To the best knowledge of the Group Companies, none of
the Group Company’s officers or key employees intends to terminate his or her employment with
such Group Company, nor does any Group Company have a present intention to terminate the
employment of any officer or key employee. None of the Group Companies is a party to or bound
by any currently effective incentive plan, profit sharing plan, retirement agreement or other
employee compensation agreement except the ESOP and the option agreements entered under the
ESOP. Each Founder, employee and officer of the Group Companies has duly executed a
confidential information and invention assignment agreement with such Group Company (the
“Confidentiality Agreement”). The Group Companies have no knowledge that any of the Founder,
employees, directors, officers or consultants are in violation thereof. Unless disclosed in
Section 18 of the Disclosure Schedule, neither the Founder nor the key employees of any Group
Company are involved in any daily business, operation, management and administration of any
Person other than the Group Companies. Each of the key employees of the Group Companies and
the Founder has devoted his/her full business efforts and time to the Group Companies, and
the performance of his/her duties to the Group Companies will not constitute a breach of, or
otherwise contravene, the terms of any employment or other agreement or policy to which
he/she is a party or is otherwise bound. Nothing contained in the Confidentiality Agreement
or other related agreements will modify the provisions hereof and in the case of any
conflict, this provision shall prevail.
	 
	19.	 	No Other Business. The Company was formed solely to acquire and hold an equity
interest in the HK Subsidiary. Since its formation, the Company has not engaged in any other
business and, subject to other provisions in this Exhibit C, has not incurred any
liability. The HK Subsidiary was formed solely to acquire and hold an equity interest in each
PRC Subsidiary. Since its formation, the HK Subsidiary has not engaged in any other business
and, subject other provisions in this Exhibit C, has not incurred any liability. Each
PRC Subsidiary since established is engaged solely in the PRC Subsidiary Principal Business
and has no other activities.
	 
	20.	 	Financial Advisor Fees. There exists no Contract between any Group Company or any of
its Affiliates on one hand, and any investment bank or other financial advisor on the other
hand under which such Group Company may owe any brokerage, placement or other fees relating
to the offer or sale of the Subscribed Shares.
	 
	21.	 	Environmental Matters.

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	 	(a)	 	No Group Company or its Affiliates is in any material respect in violation of any
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules or timetables imposed or required by any
Governmental Authority or Applicable Law relating to pollution or protection of the
environment, including without limitation, Applicable Laws relating to the emission,
discharge or release of any substance into the environment (including without
limitation ambient air, surface water, ground water, drinking water supply, land
surface or subsurface strata located both on and off-site) (the “Environmental
Laws”).
	 
	 	(b)	 	All environmental documents, information, material, permits, consents,
certificates, registrations, licenses, franchises and other authorisations and
approvals necessary to conduct the business of each Group Company as currently or
currently proposed to be conducted (including without limitation those applicable to
its respective buildings, properties, land, sites, plant, equipment, facilities or
applicable to the PRC Subsidiary Principal Business) (the “Environmental Licenses”)
have been lawfully and validly issued and are currently valid and in full force and
effect, and the absence of which might have a Material Adverse Effect on the Group
Companies taken as a whole or on the Company or on any PRC Subsidiary. To the
knowledge of the Company, all such Environmental Licenses are not subject to any
threat from any Governmental Authority to revoke, cancel, withdraw, terminate,
suspend, not renew, or modify any such Environmental Licenses.
	 
	 	(c)	 	None of the Group Company knows or should know of (i) any past leaks, spills
or discharges into the ground, water or air of any chemicals, fuels or other
substances which are potentially harmful to the environment (within the meaning of
the applicable Environmental Laws), or (b) any contamination caused by same of any
buildings, soils or ground water currently existing on any property or land owned by
any Group Company.

	22.	 	Minute Books. The internal records of each Group Company contain a complete summary
of all material meetings and actions taken by directors and equity interest holders of such
Group Company since its time of formation, and reflect all transactions referred to in such
minutes accurately in all material respects.
	 
	23.	 	Insurance. Section 23 of the Disclosure Schedule provides a complete list of each
Group Company’s insurance policies currently in effect. No Group Company has done or omitted
to do or suffered anything to be done or not to be done other than any acts in the ordinary
course of business which has or would render any policies of insurance taken out by it or by
any other Person in relation to any of such Group Company’s assets void or voidable or which
would result in an increase in the rate of premiums on the said policies and there are no
claims outstanding and, to the best knowledge of the Group Companies, no circumstances which
would give rise to any claim under any of such policies of insurance.

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	24.	 	Founder SAFE Registration. The Founder is not in violation against any Applicable
Law with respect to his direct or indirect holding of any equity interest in the Founder
Holdco or in the Company (if any), and the Founder is not required under any Applicable Law to
register such shareholding or in connection with the transaction contemplated hereunder with
the State Administration for Foreign Exchange of the PRC as required under the Circular of the
State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange
Administration of Financing and Inbound Investment through Offshore Special Purpose Companies
by PRC Residents ,
and any other Applicable
Law imposed by the PRC Governmental Authorities, nor to obtain any necessary
consents, approvals, permits and registrations in connection therewith under any
Applicable Law.

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EXHIBIT D

NOTICE

For the purpose of the notice provisions contained in this Agreement, the following are the initial
facsimile number and mailing address of each Party hereto:

In case of the Founder:

KWOK PING SUN 

Address: Building 4, No. 150, Yonghe Road, Shanghai, PRC

Post Code: 200072

Fax Number: (8621) 6652-0666

In case of the Company:

NOBAO RENEWABLE ENERGY HOLDINGS LIMITED

Address: Building 4, No. 150, Yonghe Road, Shanghai, PRC

Post Code: 200072

Fax Number: (8621) 6652-0666

Attention: Mr. Kwok Ping Sun 

In case of any Investor:

c/o CMS CAPITAL (HK) CO., LTD.

Address: 48/F, One Exchange Square, Central, Hong Kong

Fax Number: (852) 2899 2867

Attention: Mr. Ray Feng / Mr. Vincent Phen

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EXHIBIT E

FORM OF LOCKUP AGREEMENT

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Lock-Up Agreement

[•]

_________, ____

As Representatives of the several Underwriters 

named in Schedule [•] attached to the
Underwriting Agreement (as defined below).

Re: Nobao Renewable Energy Holdings Limited

Ladies and Gentlemen:

     The undersigned understands that you, as representatives (the “Representatives”) on behalf of
the several underwriters named in Schedule [•] to such agreement (collectively, the
“Underwriters”), proposes to enter into an underwriting agreement (the “Underwriting Agreement”)
with Nobao Renewable Energy Holdings Limited (the “Company”), a company incorporated in the Cayman
Islands, and the Selling Shareholders named therein, with respect to the public offering (the
“Offering”) of American Depositary Shares (the “ADSs”), each representing [•] ordinary shares of
the Company, par value US$0.0001 per share (the “Ordinary Shares”).

          In recognition of the benefit that such an offering will confer upon the undersigned, and of
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the undersigned will not, for a period of 180 days after the date of the Underwriting Agreement
(the “Lock-Up Period”), without the prior written consent of the Representatives on behalf of the
Underwriters, (1) directly or indirectly, offer, sell, pledge, contract to sell, announce the
intention to sell, issue, lend, grant or purchase any option, right or warrant for the sale of, or
otherwise dispose of or transfer, any of the ADSs, Ordinary Shares underlying the ADSs or any
securities of the Company that are convertible into or exercisable or exchangeable for ADSs or
Ordinary Shares (collectively, the “Lock-Up Securities”), whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter acquires the power of
disposition; or (2) enter into any swap or any other agreement or transaction that transfers, in
whole or in part, directly or indirectly, the economic consequences of ownership of the Lock-Up
Securities, whether any such swap or transaction described in (1) or (2) above is to be settled by
delivery of the Lock-Up Securities or other securities, in cash or otherwise. The foregoing
sentence shall not apply to (a) the sale and transfer of the ADSs and the underlying Ordinary
Shares in the Offering, (b) transactions relating to any Lock-Up Security acquired in open market
transactions after the completion of the Offering, (c) the exercise of any of the undersigned’s
rights to acquire any Lock-Up Security of the Company issued pursuant to any share option or
similar equity incentive or compensation plan of the Company (collectively, the “Equity Incentive
Grants”), provided that in each case, such plan is in effect as of the date of and disclosed in the
prospectus to the Offering (it being understood that any subsequent sale, transfer or disposition
of any securities of the Company issued upon exercise of such Equity Incentive Grants shall be
subject to the restrictions set forth in this Agreement), (d) transfers of Lock-Up Securities to
affiliates (as defined in Rule 12b-2 of the Exchange

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Act) of the undersigned, (e) transfers of Lock-Up Securities to (i) an immediate family
member or a trust formed for the benefit of the undersigned or any immediate family member of the
undersigned, (ii) as a bona fide gift, or (iii) through will or intestacy, provided that in the
case of any transfer or distribution pursuant to clauses (d) and (e), each transferee, donee or
distributee shall sign and deliver a lock up letter substantially in the form of this Lock-Up
Agreement. For purposes of this paragraph, “immediate family member” means the spouse, domestic
partner, any lineal descendant, father, mother, brother or sister of the transferor.

          Notwithstanding the above, if (1) during the last 17 days of the initial Lock-Up Period, the
Company releases earnings results or material news about the Company or a material event relating
to the Company occurs, or (2) prior to the expiration of the initial Lock-Up Period, the Company
announces that it will release earnings results, or it becomes aware that material news about the
Company will be released or a material event will occur, during the 16-day period beginning on the
last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be extended until
the expiration of the 18-day period beginning on the date of the release of the earnings results or
the material news or the occurrence of the material event, as applicable, unless the
Representatives waive, in writing, such extension.

          The undersigned further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-up Agreement during the period from the date of
this Lock-up Agreement to and including the 34th day following the expiration of the initial
Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
Lock-Up Period (as may have been extended pursuant to the previous paragraph) has expired. At any
time and without public notice, the Representatives may, in their sole discretion, provide consent
to release some or all the Lock-Up Securities from this Lock-Up Agreement.

          In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and other similar rights that the undersigned may
have in connection with the Offering or with any issuance or sale by the Company of any equity or
other securities before the Offering, except for any such rights as have been heretofore duly
exercised.

          The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with this Lock-Up Agreement.

          The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representatives, successors, and assigns.

          Notwithstanding anything to the contrary contained herein, this Lock-Up Agreement will
terminate and the undersigned will be released from all of its obligations

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hereunder on [•] if the Offering shall not have completed on or before such date. This Lock-Up
Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.

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	Very truly yours,
	 	 
	 
	 	 
	 

[Name of Shareholder]

	 	 
	 
	 	 
	 

Authorized Signature

	 	 
	 
	 	 
	 

Title

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