EXHIBIT 10.1
DATED 10TH MARCH, 2003
INDUSTRIES INTERNATIONAL, INCORPORATED
and
KIT TSUI
THE SOLE SHAREHOLDER OF XX XXX POWER INTERNATIONAL LIMITED
and
XX XXX POWER INTERNATIONAL LIMITED
and
WUHAN HANHAI HIGH TECHNOLOGY LIMITED
and
WUHAN CITY PUHONG TRADING LIMITED
and
SHENZHEN CITY XING ZHICHENG INDUSTRIAL LIMITED
and
SHENZHEN KEXUNTONG INDUSTRIAL CO. LTD.
-----------------------------------------
AGREEMENT FOR THE
SALE AND PURCHASE OF SHARES IN
XX XXX POWER INTERNATIONAL LIMITED
-------------------------------------------
XXXX & PARTNERS
SOLICITORS
10th Floor
Chiyu Bank Xxxxxxxx
00 Xxx Xxxxx Xxxx Xxxxxxx
Xxxx Xxxx
TEL: (000) 0000 0000
FAX: (000) 0000 0000
THIS AGREEMENT is made the 10th day of March, Two Thousand and Three.
BETWEEN:-
1. INDUSTRIES INTERNATIONAL, INCORPORATED, a company incorporated in the
State of Nevada, USA and listed in the Over-the-Counter Bulletin Board
under the trading symbol of "INDI" (the "PURCHASER").
2. KIT TSUI , THE SOLE SHAREHOLDER OF XX XXX POWER INTERNATIONAL LIMITED
(Holder of Hong Kong Identity Card No. X000000(0)) of 0xx Xxxxx, Xxxxxxx
Xxxxxxxx, Xxxx Xxxx Xxx 0, Xxxxxxxx High-Tech Industrial Park, Shennan
Blvd, Shenzhen, People's Republic of China (the "VENDOR").
3. XX XXX POWER INTERNATIONAL LIMITED, a company incorporated in the
British Virgin Islands whose registered office is situated at Xxxxx
Xxxx., 00 Xx Xxxxxx Xxxxxx Wickhams Cay I, Road Town, Tortola, British
Virgin Islands (the "BVI COMPANY").
4. WUHAN HANHAI HIGH TECHNOLOGY LIMITED, a company incorporated in the
People's Republic of China, whose registered office is situated at
Yuejiaju Xx. 00, Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxx Xxxx, Xxxxx (the
"PRC 1").
5. WUHAN CITY PUHONG TRADING LIMITED, a company incorporated in the
People's Republic of China, whose registered office is situated at Yudai
First Xxxxxxx Xx. 00, Xxxxxxx Xxxxxxxx, Xxxxx Xxxx, Xxxxx (the "PRC 2").
6. SHENZHEN CITY XING ZHICHENG INDUSTRIAL LIMITED, a company incorporated
in the People's Republic of China, whose registered office is situated
at No. 4-702, Hubei Baofeng Garden, 14 Xinzhou Third Road, Futian
District, Shenzhen City, China (the "PRC 3").
7. SHENZHEN KEXUNTONG INDUSTRIAL CO. LTD., a company incorporated in the
People's Republic of China, whose registered office is situated at 0xx
Xxxxx, Xxxxxxx Xxxxxxxx, Xxxx Xxxx Xxx 0, Xxxxxxxx High-Tech Industrial
Park, Shennan Blvd, Shenzhen, People's Republic of China (the "PRC 4").
XXX 0, XXX 0, XXX 0 xxx XXX 0 are collectively referred to as the ("PRC
COMPANIES").
WHEREAS:-
(A) WUHAN LIXING POWER SOURCES CO., LTD. is a private enterprise
incorporated in the People's Republic of China with registered number
4201001170274, whose registered office is situated at Xxx 0, Xxxxxxxx
Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxx Xxxx, Xxxxxx'x Xxxxxxxx of
China and has at the date hereof an authorized share capital of
Renminbi 36,786,750.00 of Renminbi 1.00 per share ("THE COMPANY").
(B) 72.83% of the Company is held by the PRC Companies on trust in favour of
the BVI Company pursuant to 4 Declarations of Trust. 7.95% of the
Company is held by PRC 1; 2.71% of the Company is held by PRC 2; 1.92%
of the Company is held by PRC 3 and 60.25% of the Company is held by PRC
4.
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(C) 16.89% of the Company is held by 3 state-owned enterprises and the
remaining 10.28% is held by 1,000 shareholders all being natural
persons.
(D) The BVI Company is the equitable and legal owner of all those properties
and the estate, right, title, interest, property, claim and demand
whatsoever as described in SCHEDULE 1 (collectively "THE PROPERTY").
(E) As at the date of this Agreement, the bank accounts as more particularly
mentioned in SCHEDULE 2 represent all the bank accounts ever held or
maintained by the Company, and those of its subsidiary companies, and
the companies more particularly mentioned in SCHEDULE 3 represent all
the subsidiary companies of the Company.
(F) The parties hereto have agreed for the sale by the Vendor to the
Purchaser of 100% of the capital stock of the BVI Company ("THE SALE
SHARES") for the consideration and on the terms and conditions
hereinafter appearing and the consideration shall be transferred from
the Purchaser to the Vendor as set out in Clause 3 herein.
NOW IT IS HEREBY AGREED AND DECLARED AS FOLLOWS :-
1. AGREEMENT TO SELL AND PURCHASE OF THE SALE SHARE
1.1 In this Agreement, words and expressions on the left column hereunder
shall bear the respective meanings on the corresponding parts on the
right hand column hereunder, unless the context otherwise requires:-
"ACCOUNTS" means the Existing Management
Accounts and the Management Accounts.
"ACCOUNTS DATE" means the 31st December 2002.
"BVI Company" means Xx Xxx Power International
Limited.
"EXISTING MANAGEMENT means the set of management accounts
as prepared by the ACCOUNT" Company
to the BVI Company.
"COMPANY" means Wuhan Lixing Power Sources Co.,
Ltd.
"COMPLETION" means completion of the exchange of
the Sale Share pursuant to this
Agreement and the performance by the
parties hereto of the several
obligations contained in this
Agreement.
"COMPLETION DATE" means such date as the parties
hereto may agree, but in any event
shall be on or before 10th May 2003.
"INDI" means the Purchaser, Industries
International, Incorporated.
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"LAW" means the laws of Hong Kong Special
Administrative Region.
"SECRETARY" means the Company Secretary of the
Company.
"SALE SHARES" is defined in Recital F.
1.2 The Vendor shall sell and the Purchaser shall purchase the Sale Shares
free from all charges, mortgages, equities, liens, hypothecation,
encumbrances, and any other adverse claims and interests with all the
right to all dividends hereafter paid declared or made in respect
thereof.
2. CONDITIONS PRECEDENT
This Agreement is conditional upon:-
(i) the acquisition of the Company is subject to the approval of the
SEC, the NASD, the Over The Counter Bulletin Board or the
shareholders of INDI, if required. The said approval cannot be
obtained, if required, this Agreement will be cancelled and no
damages to be paid to the Vendor;
(ii) the Board of Directors of the Purchaser must be satisfied with
the result of its due diligence review of the financial and the
operational aspects of the BVI Company after the auditor performs
its due diligence search.
3. CONSIDERATION
(1) The consideration for the purchase of the Sale Shares
("Consideration") shall be fixed at 6 times of net profit after
tax as reported in the audited financial statements of the BVI
Company based on United States Generally Accepted Accounting
Principles (US GAAP) for the year ended 31st December 2002.
(2) The consideration shall be paid to the Vendor as follows:-
(i) 50% of the Consideration shall be paid in cash within 30
days from the Completion Date. If the Purchaser fails to pay
the cash payment when due as aforesaid, the Purchaser has an
option to settle, the payment in the form of Convertible
Notes issued by the Purchaser, which are convertible into
equivalent value of INDI's common stock, calculated based on
the average closing bid price between 12th February 2003 and
the date of this Agreement; and
(ii) 50% of the Consideration shall be paid on the Completion
Date by issuance of shares of INDI's common stock, with the
number of shares to be issued calculated based on the
average closing bid price between 12th February 2003 and
the date of this Agreement.
(3) All the INDI common stock to be issued as payment of
Consideration shall be restricted shares issued in accordance
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with applicable securities laws and regulations of the United
States.
4. BUSINESS ACTIVITY, ACCOUNTS AND SPECIAL AUDIT
4.1 The Purchaser shall, at its option, at any time prior to Completion, be
entitled to appoint its own accountants or auditors to perform due
diligence search and to inspect and/or study and/or audit the affairs,
books, accounts, records, financial statements and any other documents
of the BVI Company.
4.2 The Vendor and the BVI Company shall, and it is of essence of this A
greement that they shall :-
(a) give full co-operation and assistance to the Purchaser's
accountants or auditors,
(b) give to the Purchaser's accountants or auditors full access to
the books, accounts, records, bank statements, documents, papers
and records of the BVI Company to enable them to complete and
prepare, in good time before Completion, an audited report.
5. TIME TO BE OF ESSENCE
Time in every respect shall be of essence of this Agreement.
6. COMPLETION
6.1 Subject as hereinafter provided Completion shall take place at the Hong
Kong Special Administrative Region on the Completion Date between the hours
of 9:00 a.m. to 5.00 p.m. or at such other place and between such other
hours as may be agreed between the parties hereto.
6.2 On Completion the Vendor and the BVI Company shall deliver and produce to
the Purchaser :-
(a) duly executed transfers and contract notes of the Sale Share in
favour of the Purchaser and/or such person(s) as the Purchaser
may direct or nominate, accompanied by the relative share
certificates in respect of the Sale Share;
(b) such waivers and/or consents and/or resolutions (whether members'
or directors') as the Purchaser may require duly signed by
members and/or directors;
(c) such shares or any documents of the BVI Company as the Purchaser
may require to enable the Purchaser and/or its representative or
nominee to be registered as holders of the Sale Share;
(d) written resolutions of the members and/or of the directors of the
BVI Company and of Vendor (as the Purchaser may require)
approving and/or ratifying the entering into of this Agreement
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and the due performance thereof;
(e) such written evidence as may be reasonably satisfactory to the
Purchaser to prove that the directors of the BVI Company have,
before the signing of this Agreement duly made, and will, before
and on Completion, duly make full disclosure of their respective
interests in, of or in relation to this Agreement or the
transaction herein contemplated pursuant to the Law, the Articles
of Association of the BVI Company, and otherwise;
(f) the originals as well as duly certified copies of the board
resolutions of the then existing directors :-
(i) revoking all existing authorities to bankers in respect of
the operation of its bank accounts and giving authority in
favour of such persons as the Purchaser may nominate to
operate such accounts;
(ii) appointing such persons (within the maximum number
permitted by the Articles of Association) as the Purchaser
may nominate as directors; and
(iii) approving the registration of the share transfers of the
Sale Shares subject to the same being duly stamped;
(g) the Existing Management Accounts which must show full compliance
with the terms and conditions of this Agreement;
(h) the statutory books of the BVI Company which must be duly
completed and written up to date;
(i) all books, accounts, papers and records of the BVI Company;
(j) the written resignations of all the then existing directors of
BVI Company from their directorships with acknowledgements signed
by each of them in a form annexed hereto as APPENDIX 1 to the
effect that they have no claim against the BVI Company for
compensation for loss of office, fees or disbursements or
otherwise whatsoever;
(k) the written resignations of the then existing secretary of the
BVI Company to take effect on the date of Completion with
acknowledgements signed by him in a form annexed hereto as
APPENDIX 1 to the effect that he has no claim against the BVI
Company for compensation for loss of office, fees or
disbursements or otherwise whatsoever;
7. EMPLOYMENT MATTERS
7.1 The BVI Company is not bound nor accustomed to pay any moneys other than in
respect of remuneration, or emoluments of employment, or pension benefits,
to, or for the benefit of; any director officer or employee.
7.2 The BVI Company has no employee whose contract of employment cannot be
terminated by three months' notice.
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7.3 The BVI Company is not, and shall not be, under any obligation to the
Secretary or any director of the BVI Company for fees or any emoluments
or income or compensation or any other moneys whatsoever.
7.4 The BVI Company is not, except as disclosed herein, a party to :-
(i) any agreement, arrangement or scheme (whether or not legally
enforceable) for any payment in connection with retirement, death
or disability to any person who is or has been a director,
officer, or employee of the BVI Company or a relative or
dependent of such a person;
(ii) any agreement, arrangement or scheme (whether or not legally
enforceable) for profit sharing or for the payment to employees
or bonuses or incentive payments or the like;
(iii) any collective bargaining or procedural or other agreement with
any trades union or similar association; or
(iv) any obligations or ex-gratia arrangements to pay pensions,
gratuities, retirement, annuities and benefits periodical sums or
any compensation to any person.
8. WARRANTIES UNDERTAKINGS COVENANTS AND INDEMNITIES
8.1 The Vendor and the BVI Company hereby represent, undertake, warrant and
covenant to the Purchaser in the terms set out in SCHEDULE 4.
8.2 The amount of any claim for breach of the representations, warranties
and undertakings contained in this Agreement must be proved by the
Purchaser.
9. DEFAULT BY VENDOR
If the Vendor shall, otherwise than by reason of the default of the
Purchaser, fail to complete the sale of the Sale Share, to the Purchaser
hereunder on the Completion Date, the Vendor shall forthwith (in
addition and without prejudice to any other rights or remedies available
to the Purchaser) return to the Purchaser, the deposit and all or any
part of the Consideration paid by the Purchaser pursuant to Clause 3.
The provisions hereof shall not preclude the Purchaser from obtaining an
order for specific performance and/or damages in lieu of or in addition
to the remedies provided herein.
10. DEFAULT BY PURCHASER
If the Purchaser shall, otherwise than by reason of the default of
Vendor, fails to complete the purchase of the Sale Share from Vendor
hereunder on Completion, the Vendor shall be entitled to obtain an order
for specific performance and/or damages in lieu of or in addition to the
remedies provided herein.
11. TERMINATION BY THE PURCHASER
In addition to any other rights and remedies (under this Agreement or
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otherwise) which the Purchaser may have to terminate or rescind this
Agreement, the Purchaser may, at its option, terminate this Agreement by
notice in writing to the Vendor if :-
(a) the Vendor shall fail to complete the sale or the transfer of the
Sale Share in accordance with the terms of this Agreement, or
(b) the Vendor and/or the BVI Company (or any of them) shall be
in breach of Clauses 4, 6, 7 or 8 or any part thereof, or
(c) the Vendor and/or the BVI Company (or any of them) being in
material breach of any of the material obligations on their part
or on the part of any of them under this Agreement, or
(d) any of the Vendor and/or the BVI Company shall become bankrupt or
go into liquidation (as the case may be) or shall commit any act
of bankruptcy or any proceeding or resolution shall be passed for
the winding up of the BVI Company, or any of the Vendor and/or
the BVI Company shall otherwise become insolvent or unable to pay
his debts, or a trustee in bankruptcy or receiver or liquidator
or similar officer shall be appointed in respect of any of the
Vendor and/or the BVI Company and/or any of their assets, or any
of the Vendor and/or the BVI Company shall suffer his assets or
any significant part thereof to be seized or levied on execution
or other process or proceedings.
12. TERMINATION BY THE VENDOR
In addition to any other rights and remedies (under this Agreement or
otherwise) which the Vendor may have to terminate or rescind this
Agreement, the Vendor may, at their option, terminate this Agreement by
notice in writing to the Purchaser if :-
(a) the Purchaser shall default in payment of the Consideration in
accordance with Clause 3, or
(b) The Purchaser shall become bankrupt or commit any act of
bankruptcy or go into liquidation (as the case may be) or shall
otherwise become insolvent or a trustee in bankruptcy or similar
officer shall be appointed in respect of the Purchaser or the
Purchaser shall suffer his assets or any significant part thereof
to be seized or levied on execution or other process or
proceedings, or
(c) the Purchaser shall be in material breach of any material
obligation under this Agreement and/or any other written
agreement (if any) between the parties hereto then existing or
subsisting.
13. OTHER PROVISIONS ON REMEDIES
Nothing in this Agreement precludes either the Vendor or the Purchaser
from bringing an action and/or obtaining a decree for specific
performance either in lieu of damages or in addition thereto.
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14. LIABILITIES OF THE PARTIES
The obligations of the Vendor and the BVI Company under this Agreement
shall be joint and several, and accordingly, liability on and for every
obligation agreement, acknowledgement, representation, undertaking,
warranty and/or covenant on the part of the Vendor and the BVI Company
shall be joint and several.
15. OBLIGATION TO PROCURE
Where any party hereto is required under this Agreement to procure a
particular matter or thing in relation to the BVI Company, such
obligation shall be deemed to include (but not limited to) an obligation
to exercise his powers both as an owner (legal or beneficial) of the
registered capital of the BVI Company or any part thereof and (as the
case may be) as the director of the BVI Company.
16. PROPER LAW
This Agreement for all purposes shall be governed by and construed in
accordance with the laws of Hong Kong.
17. SEVERABILITY
Any part of this Agreement which may be held illegal, invalid or
unenforceable shall be deemed to be severed from this Agreement and does
not affect the legality, validity or enforceability of the rest of this
Agreement.
18. FURTHER ASSURANCE
Each party hereto shall execute and perform, or procure the execution
and performance of, such further documents and acts as may from time to
time be required to make this Agreement fully and legally effective,
binding and enforceable, or to perfect the intention of the parties
hereto.
19. NO WAIVER
No failure by any party hereto to insist upon the strict performance of
any term or condition of this Agreement or to exercise any right or
remedy consequent upon the breach thereof shall constitute a waiver of
such breach or any subsequent breach of such term and condition of this
Agreement. A breach, default, alteration or modification under or of
this Agreement shall only be waived or effected in writing by the party
against whom such alleged waiver, alteration or modification is sought
to be enforced.
20. CUMULATIVE RIGHTS
All rights and remedies of the parties hereto under this Agreement are
in addition to and without prejudice to each other and to all other
rights and remedies available to them under any statute, at law or in
equity.
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21. CONFIDENTIALITY
Each of parties hereto undertake to each other that they will not at any
time hereafter use or divulge or communicate to any person other than to
their respective officers or employees or solicitors/accountants whose
province it is to know the same or on the instructions of the board of
directors of the Vendor or of the BVI Company, as appropriate, any
confidential information concerning the business, accounts, finance or
contractual arrangement or other dealings, transactions or affairs of
the BVI Company which may come to their knowledge and they shall use
their best endeavors to prevent the publication or disclosure of any
confidential information concerning such matters.
22. SURVIVAL OF THE PROVISIONS OF THIS AGREEMENT
All provisions of this Agreement shall, so far as they are capable of
being performed or observed, continue in full force and effect
notwithstanding Completion except in respect of those matters then
already performed or observed.
23. ASSIGNABILITY
This Agreement is personal to the parties hereto, and accordingly,
unless the parties hereto shall otherwise agree in writing, none of the
benefits or rights hereunder may be assigned.
24. COSTS AND EXPENSES
24.1 Each party shall bear its own costs and expenses in connection with this
Agreement and the transactions contemplated hereby except as otherwise
provided herein.
24.2 All stamp duty and additional stamp duty chargeable on the instruments
of transfer and contract notes mentioned in Clause 6 shall be borne by
the Purchaser.
25. NOTICES
Any notice required to be given hereunder may, without prejudice to
other means of service, be given by telex or facsimile transmission or
by sending the same through the post via pre-paid envelope (airmail in
the case of an overseas address) addressed to the party concerned at his
address above stated or any other address notified (and expressed to be
so notified) to the other parties for the purposes of this Clause and
any notice so given shall be deemed to have been served on the second
(2nd) day after the day on which it is posted in the case of local mail
or on the day of transmission if given by telex or facsimile
transmission and on the fifth (5th) day after the day on which it is
posted in the case of airmail. In proving service by mail it will be
sufficient to prove that the envelope containing the notice was duly
stamped, addressed and posted as aforesaid.
26. INTERPRETATION AND CONSTRUCTION
26.1 The Schedules and Annexures (if any) hereto form part of this Agreement
and shall have the same force and effect as if expressly set out in the
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body of this Agreement and any reference to this Agreement shall include
the Schedules and Annexures hereto and any variation or supplement
hereof.
26.2 Unless the context otherwise requires, in this Agreement :-
(a) reference to any legislation or subordinate legislation shall
include any legislation or subordinate legislation which amends
or replaces it;
(b) a body corporate shall be deemed to be associated with another
body corporate if it is a holding company or a subsidiary of that
other body corporate or a subsidiary of a holding company of that
other body corporate; and
(c) words importing the singular number shall include the plural
number and vice versa and words importing one gender shall
include every other gender.
26.3 References to Recitals, Clauses, Schedules and Appendixes are to
Recitals, Clauses, Schedules and Appendixes of this Agreement.
26.4 Headings and the index or table of contents are for convenience only and
shall not affect the interpretation or construction of this Agreement in
any way.
26.5 In construing this Agreement:-
(a) the rule known as the ejusdem generis rule shall not apply and
accordingly general words introduced by the word "other" shall
not be given a restrictive meaning by reason of the fact that
they are preceded by words indicating a particular class of acts,
matters or things; and
(b) general words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples
intended to be embraced by the general words.
26.6 If any of the date or dates stipulated for payment herein or if the
Completion Date shall otherwise fall on a day which is not a business
day (defined as a day on which licensed banks are opened for business in
Hong Kong) or shall fall on a day on which typhoon signal No.8 or above
or Black rainstorm signal is hoisted in Hong Kong at any time during
business hours such date or dates for payment or the Completion Date (as
the case may be) shall automatically be postponed to the next business
day.
26.7 The expressions "the Company," the "BVI Company," the "PRC Companies"
(or each of them separately), "the Vendor" and/or "the Purchaser"
wherever used shall (if the context so permits or requires) in the case
of individuals include the persons specifically named and their
executors and administrators and in the case of a company or corporation
include the company or corporation specifically named and its successors
and in the case of persons holding as tenants in common include the
persons specifically named and any of them and their respective
executors and administrators and in the case of the persons holding as
joint tenants include the persons specifically named and the survivors
or survivor of them and the executors and administrators of such
survivor.
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Schedule 1 - Property - Omitted
Schedule 2 - Bank Accounts of the Company - Omitted
Schedule 3 - Subsidiary Companies of the Company - Omitted
Schedule 4 - Representation, undertakings, Warranties and Covenants
by the Vendor and the BVI Company - Omitted
Appendix 1 - Forms of Resignations - Omitted
Copies of Schedules 1-4 and Appendix 1 are available upon request.
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As witness the hands of the parties hereto the day and year first above written.
SIGNED BY INDUSTRIES INTERNATIONAL, )
INCORPORATED by its director )
)
(Holder of )
No. ) in the presence of :- )
SIGNED BY KIT TSUI, THE SOLE )
---- )
SHAREHOLDER OF XX XXX POWER )
INTERNATIONAL LIMITED )
(Holder of Hong Kong Identity Card )
No. X000000(0)) in the presence of :- )
SIGNED BY XX XXX POWER INTERNATIONAL )
LIMITED by its director )
)
(Holder of )
No. ) in the presence of :- )
SIGNED BY )
Wuhan Hanhai High Technology Limited )
by its director )
(Holder of )
No. ) in the presence of :- )
SIGNED BY )
Wuhan City Puhong Trading Limited )
by its director )
(Holder of )
No. ) in the presence of :- )
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SIGNED BY )
Shenzhen City Xing Zhicheng Industrial Limited )
by its director )
(Holder of )
No. ) in the presence of :- )
SIGNED BY )
Shenzhen Kexuntong Industrial Co. Ltd. )
by its director )
(Holder of )
No. ) in the presence of :- )
SIGNED BY COMPANY by its director )
)
(Holder of )
No. ) in the presence of :- )
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