PAKER TECHNOLOGY LIMITED SERIES A PREFERRED SHARE PURCHASE AGREEMENT May 8, 2008


Exhibit 4.5		Execution Copy

PAKER TECHNOLOGY LIMITED

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

May 8, 2008

SERIES A PREFERRED SHARE PURCHASE AGREEMENT

THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made as of May 8, 2008, by and among the parties as follows:

(1)	PAKER TECHNOLOGY LIMITED ( , “the Company”) , a company duly incorporated and validly existing under the Laws of Hong Kong Special Administrative Region (“Hong Kong”);

(2)	LI Xiande, XXXX Xxxxxxxx, XX Xxxxxxx, each a citizen of the People’s Republic of China (the “PRC”) (collectively the “Founders” and each, a “Founder”);

(3)	JIANGXI KINKO ENERGY CO., LTD. ( , “Kinko”), a wholly foreign owned enterprise duly organized and validly existing under the Laws of the PRC; and

(4)	FCC, a company duly incorporated and validly existing under the Laws of Singapore (the “Series A Investor”).

Each of the Company, the Founders, Kinko and the Series A Investor shall be referred to individually as a “Party” and collectively as the “Parties”.

RECITALS

The Company is a limited liability company incorporated under the law of Hong Kong. As of the date hereof, the Company has an authorized capital of HK$10,000.00, divided into 10,000 ordinary shares of par value HK$1.00 each (the “Ordinary Shares”), of which, (i) a total of 200 shares, representing 50% of the issued share capital of the Company, has been issued to LI Xiande; (ii) a total of 120 shares, representing 30% of the issued share capital of the Company, has been issued to XXXX Xxxxxxxx; and (iii) a total of 80 shares, representing 20% of the issued share capital of the Company, has been issued to LI Xianhua. All the said issued and outstanding Ordinary Shares has been fully paid;

The Company wishes to increase its authorized capital and the Series A Investor wishes to subscribe for from the Company, and the Company wishes to sell to the Series A Investor, an aggregate of 67,402 Series A Preferred Shares of the Company pursuant to the terms and 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 HK$10,000, consisting of 9,892,188 Ordinary Shares of HK$0.001 each and 107,812 Series A Preferred Shares of HK$0.001 each. As of the Closing, the Company shall have authorized (a) the issuance at the Closing, pursuant to the terms and conditions of this Agreement, of 107,812 Series A Preferred Shares to the Series A Investor, having the rights, preferences, privileges and restrictions as set forth in the Memorandum and Articles; and (b) the reservation of at least 107,812 Ordinary Shares for the conversion of the Series A Preferred Shares.

2.2

Sale and Issuance of Series A Preferred Shares.

Subject to the terms and conditions of this Agreement, at the Closing, the Series A Investor agrees to subscribe for, and the Company agrees to issue and allot to the Investor, an aggregate of 67,402 Series A Preferred Shares, par value HK$0.001 per share, each having the rights and privileges as set forth in the Memorandum and Articles (the “Series A Preferred Shares”), at a per share issue price of US$222,545 for an aggregate amount of consideration of US$15,000,000 (the “Series A Purchase Price”), to be paid in accordance with Section 2.3. Each Founder hereby waives any pre-emptive rights or rights of first refusal if any that he or she has with regard to the issuance and sale of Series A Preferred Shares pursuant to this Section 2.2 and Section 9.4.

2.3

Closing.

(i)

Subject to 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 issue and allotment of the Series A Preferred Shares hereunder shall take place at the offices of Xxxxx & XxXxxxxx, 14^th Xxxxx Xxxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx on the date that is no later than seven (7) days after the execution of this Agreement (which date may be extended by a further seven (7) days upon agreement by the parties) or at another time and date and at another location to be mutually agreed by the Parties, (which time, date and place are designated as the “Closing”). 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 Series A Investor a certificate representing the Series A Preferred Shares subscribed by the Series A Investor, (ii) cause the Company’s share register to be updated to reflect the Series A Preferred Shares subscribed and purchased by the Series A Investor; and (iii) cause the register of directors of the Company to be updated to reflect the director designated by the Series A Investor.

(iii)

At the Closing, the Series A Investor shall (A) deliver an executed counterpart of the Shareholders Agreement in the form attached hereto as Exhibit B to the Company, the Founders and Kinko; and (B) deposit, or cause its affiliate to deposit, the Series A Purchase Price set forth in Section 2.2 by wire transfer of immediately available U.S. dollar funds into an account specified by the Company.

(iv)

At the Closing, the Founders and the Kinko shall deliver an executed counterpart of the Shareholders Agreement in the form attached hereto as Exhibit B to the Series A Investor.

2.4

Termination of Agreement.

This Agreement may be terminated before the Closing as follows:

(i)

at the election of the Series A Investor or the Company, after the date of June 30, 2008 or another date to be mutually agreed by the Parties (the “Termination Date”), if the Closing shall not have occurred on or before such date;

(ii)

by mutual written consent of the Company, the Founders, Kinko and the Series A Investor as evidenced in writing signed by each of the Company, the Founders, Kinko and the Series A Investor;

(iii)

by the Series A 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 Founders or Kinko; or

(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 Series A Investor.

In the event of termination by any Party pursuant to this Section 2.4, written notice thereof shall forthwith be given to the other Parties, and this Agreement shall terminate, and the purchase of the issue and subscription of the Series A Preferred Shares hereunder shall be terminated.

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 Founders, Kinko or the Series A Investor; provided that no such termination shall relieve any party hereto from liability for any breach of this Agreement occurring prior to such termination. The provisions of this Section 2.5, Section 7, Section 9.8 and Section 9.13 hereof shall survive any termination of this Agreement.

3	Representations and Warranties of the Company, the Founders and Kinko.

The Company, Kinko, and, to the extent only specifically set out herein, the Founders, jointly and severally, represent and warrant to the Series A Investor that the statements contained in this Section 3 are true, correct and complete with respect to each member of the Company Group, on and as of the Execution Date and the date of the Closing Date, except as set forth on the Disclosure Schedule attached hereto as Exhibit C (the “Disclosure Schedule”), which exceptions shall be deemed to modify the following representations and warranties. The Series A Investor acknowledges that the Disclosure Schedule may be revised and delivered to the Series A Investor prior to Closing. In the event that any such revision reflects a Material Adverse Effect in relation to any member of the Company Group, the Series A Investor shall not be obligated to proceed with the Closing. In the event that the Series A Investor elects to proceed with the Closing, it will be deemed to waive its rights to xxx the Company, the Founders or any member of the Company Group or seek indemnification for any losses suffered as a result of such Material Adverse Effect.

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, the Founders and Kinko 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 he/she/it is a party, and to carry out his/her/its respective obligations hereunder and thereunder. The authorization of all of (A) the Series A Preferred Shares being issued and sold under this Agreement and (B) the Ordinary Shares issuable upon conversion of the Series A Preferred Shares has been taken or will be taken prior to the Closing. This Agreement, each of the Transaction

Documents to which the Company, the Founders and/or Kinko is a party, when executed and delivered by the Company, the Founders and/or Kinko, will constitute the valid and legally binding obligation of the Company, the Founders and/or Kinko, 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 Conversion 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 or will be obtained prior to the Closing from the holders thereof. For the purpose only of this Agreement, “reserve”, “reservation” or similar words with respect to a specified number of 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 share capital of the Company until the conversion rights of the holders of any Convertible Securities exercisable for such shares 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 Series A Investor in accordance with the terms of this Agreement, and the Conversion Shares, when issued upon conversion of the Series A Preferred Shares, 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, when issued and sold to the Series A Investor in accordance with the terms of this Agreement and other relevant documents, have been or at the time of Closing will 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 or the Shareholders Agreement).

(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 the Transaction Documents.

(iii)

Subject to the truth and accuracy of the Series A Investor’s representations set forth in Section 4 of this Agreement, the offer, sale and issuance of all Series A Preferred Shares and Conversion Shares as contemplated by this Agreement and

the Ancillary Agreements, are exempt from the registration and prospectus delivery requirements of the Securities Act and any applicable securities laws.

(iv)

Except as contemplated under the Transaction Documents, 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)

The Corporate Chart sets forth the complete and accurate shareholding structure of the Company Group, including but not limited, to: (i) all record and beneficial owners of each member of the Company Group; and, (ii) all share capital or registered capital holdings of each member of the Company Group. 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 and the Shareholders Agreement). 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 and as contemplated under this Agreement or the Ancillary Agreements, (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, preemptive 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 9,892,188 authorized Ordinary Shares, of which 1,000,000 are issued and outstanding. Exhibit D 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 107,812 authorized preferred shares, all of which 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. Except for (i) the conversion privileges of the Series A Preferred Shares and as contemplated hereby, and (ii) Options that may be granted under the Original ESOP, 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 (i) the conversion privileges of the Series A Preferred Shares, and (ii) certain rights provided in 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. 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 Equity Securities of the Company.

(iii)

The capitalization table attached hereto as Exhibit D sets forth an accurate and complete list of all of the holders (assuming the consummation of and upon the Closing pursuant hereto) of the Company’s Equity Securities with reasonable detail and includes all outstanding shares of the Company as well as all securities that are convertible into, or exercisable for shares of the Company as of the date hereof and on a pro-forma basis, giving effect to the Closing.

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. There have been no extraordinary examinations or audits of any tax returns or reports by any applicable Governmental Authority. 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, except where the failure to make such payment would not cause a Material Adverse Effect. There are in effect no waivers of applicable statutes of limitation with respect to taxes for any year, except as disclosed.

(ii)

No member of the Company Group is, or (without taking into account the transactions contemplated in this Agreement or the Shareholders Agreement) 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)

No shareholder of any member of the Company Group, solely by virtue of his/her/its status as shareholder of such member of the Company Group, has personal liability which, under local law, may result in 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 clarification of any member of the Company Group, except as disclosed.

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 consistent with prior practice, and which permits its Financial Statements to be prepared in accordance with generally accepted accounting principles in the PRC or Hong Kong.

3.7

Financial Statements.

The Company has delivered to the Series A Investor, (a) the audited consolidated financial statements (including income statement, balance sheet and cash flow statements) of the Company Group for the fiscal year ended December 31, 2007 prepared by

the Auditor in accordance with US GAAP, (b) the unaudited consolidated financial Statement of the Company Group for the period commencing from January 1, 2008 and ended on March 31, 2008 (the “Statement Date”) prepared by the Company in accordance with US GAAP (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 Group 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, the Restructuring Documents, the Offshore Reorganization or as set out in the Financial Statements, 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 Key Employee of any member of the Company Group;

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

(v)

any material change in any compensation arrangement or agreement with any Key Employee 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 such Person;

(viii)

any failure to conduct business in the ordinary course, consistent with such member of the Company Group’s past practices which would have a Material Adverse Effect on any member of the Company Group;

(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;

(xi)

any agreement or commitment by any member of the Company Group to do any of the things described in this Section 3.8 except pursuant to this Agreement, the Ancillary Agreements or the Restructuring Documents;

(xii)

any incurrence or commitment to incur any indebtedness for money borrowed in excess of US$150,000 individually or in the aggregate that is currently outstanding;

(xiii)

any loan or commitment to make any loans or advances to any individual, other than ordinary advances for travel or other bona fide business-related expenses;

(xiv)

waiver or commitment to waive any material right of value.

3.9

Litigation.

To the best knowledge of the Company and the Company Group, there is no action, suit, or other court proceeding pending or threatened, against any member of the Company Group which involves an amount in dispute exceeding US$150,000. To the best knowledge of the Company and Kinko, there is no investigation pending or threatened in the PRC or Hong Kong against any member of the Company Group. To the best knowledge of the Company and Kinko, there is no action, suit, proceeding or investigation pending or threatened in the PRC or Hong Kong against any Key Employee of any member of the Company Group in connection with their respective relationship with such Person, as the case may be. To the best knowledge of the Company and the Company Group, there is no judgment, decree, or order of any court in the PRC or Hong Kong 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 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, any member of 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$150,000 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$2,000,000 concerning the normal business of any member of the Company Group, (b) the license or transfer of Intellectual Property or other proprietary rights to or from any member of the Company Group in excess of US$250,000, and (c) any other Contracts that affect the assets, properties, financial condition, operation or business of any member of the Company Group in material respects, including any Contract having an effective term of more than one (1) year or payments in excess of US$150,000 (collectively, the “Material Contracts”).

(ii)

Except as set forth in Section 3.11 of the Disclosure Schedule and except for this Agreement or the Ancillary Agreements , 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 except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(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, and Kinko 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.

3.12

Compliance with Laws.

(i)

Each of the Founders or any member of the Company Group is in compliance with all Laws or regulations that are applicable to it, or to the conduct or operation of its business or the ownership or use of any of his/her/its assets or properties.

(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 Founder or any member of the Company Group of, or a failure on the part of any Founder or any member of the Company Group to comply with, any Law or regulation applicable to such Founder or 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 Founder or member of the Company Group that, individually or in the aggregate, would not result in any Material Adverse Effect on such entity.

(iii)

No Founder or 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 Founder or 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 Company’s, the Founders’ and Kinko’s best knowledge, no Founder or member of the Company Group, nor any 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 business secured, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of

any member of the Company Group, in each case which would have been materially in violation of any applicable Law or (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.

(v)

Except as set forth in Section 3.12 of Disclosure Schedule, 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 each 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. The Founders have obtained all approvals and registration required by the Laws of the PRC.

(vi)

Each of full time employees of Kinko has entered into an employment agreement with Kinko in accordance with PRC Law.

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 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 under the Corporate Chart, the Business Plan and current budget, and believes that each member of the Company Group can renew and 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 Kinko 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.

Except as indicated under the Corporate Chart, 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.

3.15

Compliance with Other Instruments.

(i)

No member of the Company Group is in violation, breach or default of its articles of association except for such violation, breach or default that would not result in a Material Adverse Effect on such member. The execution, delivery and performance by any member of 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) to the best knowledge of the Company, the Founder and Kinko, any applicable Law.

(ii)

The execution and delivery of this Agreement do not, and the performance by the Founders 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 any of the Founders is a party or by which he/she may be bound except for violation, breach or default that would not result in a Material Adverse Effect on such member.

3.16

Related Party Transactions.

Except as set forth in Section 3.16 of the Disclosure Schedule or in the Restructuring Documents, no Founder, 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 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$50,000.

3.17

Finder’s Fee.

Except as disclosed in Section 3.17 of the Disclosure Schedule, there is no 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 the Company in connection with the transactions contemplated hereunder.

3.18

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 except where any non-compliance with this subsection would not result in any Material Adverse Effect. Section 3.18(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 Founders, and related in all its material aspects to the businesses of such Person were “works for hire,” and all right, title, and interest therein, including any applications therefore, have been or will be 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)

None of the Key Employees or employees of any member of the Company Group or the Founders 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 and Kinko, 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 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 necessary 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.

3.19

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 business of any member of the Company Group.

3.20

Labor Agreements and Actions.

Except as required by Law or as set forth in Section 3.20 of the Disclosure Schedules, no member of the Company Group is a party to or bound by any currently effective employment contract, 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. Except as required by law, 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.

3.21

Business Plan and Budget.

The Founders have delivered to the Series A Investor on or before the Closing a business plan and budget for the twelve months following the Closing (the “Business Plan”). Such Business Plan was prepared in good faith based upon assumptions and projections which the Founders believe are reasonable and not materially misleading.

3.22

Environmental and Safety Laws.

None of the Company Group is in violation of any applicable statute, law, or regulation relating to the environment or occupational health and safety which would have a Material Adverse Effect on any member of the Company Group and no material expenditures are or will be required in order to comply with any such existing statute, law or regulation.

3.23

Disclosure.

No representation or warranty of the Company, the Founders or Kinko contained in this Agreement (including the Disclosure Schedule), the Ancillary Agreements, or any certificate furnished or to be furnished to the Series A 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.

3.24

Exempt Offering.

Assuming the accuracy of the representations and warranties of the Series A Investor, 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 the issuance of the Conversion Shares in accordance with the Memorandum and Articles, will be exempt from such registration requirements.

3.25

Representations and Warranties Relating to the Founders.

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

(i)

Each Founder has the legal right and full power to enter into and perform this Agreement and any other documents to be executed by it pursuant to or in connection with the Transaction Documents.

(ii)

Except for the Company Group, none of the Founders presently owns or controls, and will as of the Closing own or control, directly or indirectly, more than 3% of the entire issued and outstanding shares of a listed company or any interest in any other corporation, partnership, trust, joint venture, association, or other entity, and none of such Founder is a director, supervisor, a member of the senior management, general partner, trustee or Controlling person of any entity, or own or control any interest in any entity competing with, or any material supplier or customer of, any member of Company Group.

(iii)

None of the Founders presently and will 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 directly with the principal business conducted by the Company Group or with which a Company Group has a material business relationship.

(iv)

There is no action, suit, proceeding, claim, arbitration or investigation pending in PRC or Hong Kong against any of the Founders in connection with his involvement with any member of the Company Group. No Founder is 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 a Founder intends to initiate in connection with his involvement with any member of the Company Group.

4	Representations and Warranties of the Series A Investor.

The Series A Investor hereby represents and warrants to the Company and the Founders that the statements contained in this Section 4 with respect to the Series A 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 Series A Investor is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or formation.

(ii)

The Series A Investor has the financial capability and other resources necessary for the consummation of the transaction contemplated in this Agreement and as of the Closing Date it will provide the Company with all the corporate documents as listed in Schedule 3.

(iii)

The Series A 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 Series A Investor, will constitute valid and legally binding obligations of the Series A Investor, enforceable against it in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Law of general application affecting enforcement of creditors’ rights generally and (ii) as limited by Law relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(iv)

The Series A Preferred Shares will be acquired or accepted for investment purposes for the Series A Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Series A Investor does not have any present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Series A Investor further represents that it does not have any Contract with any Person to, directly or indirectly, sell, transfer or grant participations, with respect to any of the Series A Preferred Shares and has not solicited any Person for such purpose. There is no contract or arrangement pursuant to which the equity interest, ownership or control of Series A Investor will be transferred

(v)

The Series A 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 Series A Investor’s representations in this Agreement. The Series A 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.

(vi)

The Series A Investor is an “accredited investor” within the meaning of SEC Rule 501 of Regulation D, as presently in effect, under the Securities Act.

(vii)

The Series A Investor understands that the Series A Preferred Shares have been sold in an offshore transaction and accordingly have not been, and will not be, registered under the Securities Act in reliance on the exemption from registration provided by Regulation S under the Securities Act, and may not be resold, pledged or otherwise transferred except (i) pursuant to an effective registration statement under the Securities Act, (ii) pursuant to an available exemption from the registration requirements of the Securities Act and in accordance with applicable laws of any state of the United States of America, or (iii) outside the United States of America in an offshore transaction in compliance with Regulation S under the Securities Ac. The Series A Investor acknowledges that the Company has no obligation to register or qualify the Series A Preferred Shares, or the Ordinary Shares into which they may be converted, for resale except as set forth in the Shareholders’ Agreement. The Series A Investor further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Series A Preferred Shares, and on requirements relating to the Company which are outside the Series A Investor’s control, and which the Company is under no obligation and my not be able to satisfy. The Series A Investor understands that this offering is not intended to be part of the public offering, and that the Series A Investor will not be able to rely on the protection of Section 11 of the Securities Act.

(viii)

The Series A Investor is not a U.S. person within the meaning of Rule 902 of Regulation S under the Securities Act.

(ix)

The Series A Investor understands that the certificates evidencing the Series A Preferred Shares and the Conversion 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.”

5	Conditions of the Series A Investor’s Obligations at Closing.

The obligations of the Series A Investor under Section 2 of this Agreement, unless otherwise waived in writing by the Series A 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 Schedule, the representations and warranties of the Company, the Founders and Kinko contained in Section 3 shall be true and correct in all material respects when made, and shall be true and correct in all material respects on and as of the Closing with the same effect as if such representations and warranties had been made on and as of the date of the Closing, 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.

The Company, the Founders and Kinko 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 him/her/it on or before the Closing.

5.3

Authorizations.

The Company, the Founders and Kinko 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 other than those that by their nature shall be obtained after the Closing, including without limitation any authorizations, approvals, waivers or permits that are required in connection with the lawful issuance of the Series A Preferred Shares pursuant to this Agreement and the transactions contemplated by the Corporate Chart, and all such authorizations, approvals, waivers and permits shall be effective as of the Closing.

5.4

Closing Certificate.

The director of the Company shall have executed and delivered to the Series A Investor at the Closing a certificate of the Company (i) stating that the conditions specified in Sections 5.1, 5.2 and 5.3 hereto have been fulfilled, and (ii) attaching thereto a true and complete copy of (A) the Memorandum and Articles as then in effect and (B) all resolutions of the Company’s shareholders and board of directors 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 Series A Investor, and the Series A 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 forms attached hereto as Exhibit A-1 and Exhibit A-2, respectively.

5.7

Legal Opinions.

The Series A Investor shall have received from Chen & Co. Law Firm, the PRC counsel to the Company Group, an opinion, dated as of the Closing, satisfactory to the Series A Investor. The Series A Investor shall have received from Xxxxx & XxXxxxxx, the Hong Kong legal counsel to the Company, an opinion, dated as of the Closing, satisfactory to the Series A Investor.

5.8

Completion of Due Diligence.

The Series A Investor shall have satisfactorily completed their business, legal and financial due diligence review, including but not limited to the receipt by the Series A Investor of the Financial Statements, with respect to each member of the Company Group, at the Company’s expense, and shall have confirmed completion of such due diligence in writing to the Company.

5.9

Submission of the Estimated Profit and Loss Statement of the Company for 2008.

The Series A Investor shall have been provided and satisfied with the estimated profit and loss statement of the Company for 2008 on or before the Closing.

5.10

Investment Committee Approval.

The Series A Investor’s investment committee has approved the execution of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby and such approval remains valid at the Closing Date.

5.11

Employment Agreements.

Each of the Key Employees and the Founders who are also employees of the Company Group shall have entered into an employment agreement with the Company or a member of the Company Group in compliance with applicable laws and regulations. Substantially all of the full time employees of the Company Group who have been employed by the Company Group on a full time basis for not less than one month shall have entered into employment agreements that are in compliance with applicable PRC laws with Kinko.

5.12

Non-Competition Agreement and Confidentiality Agreement, Proprietary Information and Inventions Assignment Agreement.

Each of the Key Employees and the Founders who are also employees of the Company Group shall have entered into a Non-Competition Agreement and Confidentiality Agreement with the member of the Company Group to which he or she has employment or service relationship, each case in a form acceptable to the Series A Investor. Each of the Key Employees and the Founders shall have entered into a Proprietary Information and Inventions Assignment Agreement with the Company on terms and conditions satisfactory to the Series A Investor.

5.13

Financial Committee.

The Board of Director of the Company shall have established a financial committee (the “Financial Committee”), which shall consist of 3 members, including 1 director nominated by the Series A Investor. The Financial Committee shall be responsible for supervising the finance and accounting of the Company Group, including but not limited to budget, Related Party transactions, employee welfare planning and conducting internal audit provided however, that all actions of the Financial Committee relating to matters set out in Section 14.10 of the Shareholders Agreement shall require the affirmative vote of the director nominated by the Series A Investor. The Financial Committee shall meet on a regular basis at least once every quarter.

5.14

Executive Committee.

The Board of Directors of the Company shall have established an executive committee (the “Executive Committee”), which shall consist of at least 3 members, including 1 director nominated by the Series A Investor and all the key management members designated by the Board of Directors, and the chairman of the Executive Committee shall be appointed by the Board of Directors. The authority of the Executive Committee shall be determined by the Board of Directors, which shall, amongst others, include the authority of providing guidance, supervision and support to the management team of the Company Group, assessing the management

team’s performance and conducting other activities in relation to the Company Group’s business operations. The Executive Committee shall meet on a regular basis at least once every month.

5.15

Closing Account.

The Company shall have opened and maintained the Company Closing Account.

5.16

No Adverse Change.

There shall be no Material Adverse Effect on the Company or Company Group.

5.17

Foreign Exchange Registration by Kinko.

Kinko shall have fulfilled its foreign exchange registration proceedings with the competent SAFE so as to reflect its approved registered capital increase in such a manner satisfactory to the Series A Investor.

5.18

Annual Review and Examination of Kinko.

Kinko shall have passed its annual review and examination for Year 2007.

5.19

Capital Verification Report.

The Series A Investor shall have received the capital verification report of Kinko showing the paid-up registered capital of Kinko.

5.20

Indemnification Agreement with the Series A Director.

At the Closing, the Company shall have entered into an indemnification agreement with the Company’s director appointed by the Series A Investor, on terms and conditions satisfactory to the Series A Investor.

5.21

SAFE Registration under Circular 75.

The Founders shall have obtained all approvals and registration required by the State Administration of Foreign Exchange (the “SAFE”) 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 issued by the SAFE on October 21, 2005 (“Circular 75”) and any of its implementing measures or guidelines.

6	Conditions of the Company’s and the Founders’ Obligations at Closing.

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

6.1

Representations and Warranties.

The representations and warranties of the Series A Investor contained in Section 4 shall be true and correct in all material respects when made, and shall be true and correct in all 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.

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 Financing Terms to its bona fide prospective investors, employees bankers, accountants, and legal counsels in relation to a transaction under Section 9.4, in each case , only where such persons or entities are under appropriated non disclosure obligations substantially similar to those set forth in this Section 7.2, (ii) 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 Series A Investor, and, (iii) 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 appropriate 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 Series A Investor. The Series A Investor may disclose (i) the existence of the investment and the Financing Terms to any partner, limited partner, former partner, potential partner or potential limited partner of the Series A Investor or other third parties and (ii) the fact of the investment to the public, in each case only if such disclosure is approved in advance in writing by the Company. Any Party hereto may also provide disclosure in order to comply with applicable Laws, as set forth in Section 7.3 below. The Company and the Series A Investor agree that this Agreement and its exhibits and schedules will be filed as exhibits to the Registration Statement on Form F-1 to be filed by the Company with the United States Securities and Exchange Commission (“SEC”) in connection with the Qualified IPO, and available to the public on the SEC’s website.

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 Series A 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 Series A Investor and 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, including the Term Sheet dated as of March 24, 2008.

8	Undertakings.

After the Execution Date or the Closing Date (as the case maybe), the Company, the Founders and Kinko 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 as follows: all the Series A Purchase Price shall be injected by the Company to Kinko as its increased registered capital, of which (i) approximately US$3,000,000 for the purchase of equipment for Kinko and (ii) approximately US$12,000,000 as working capital of Kinko.

8.2

Exclusivity.

Except as set out in Section 9.4, from the Execution Date until the 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), the Company, the Founders and Kinko agree not to (i) discuss the sale of any Ordinary Shares, Convertible Securities or Equity 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, Convertible Securities or Equity Securities of the Company, or (iii) to close any equity financing transaction of the Ordinary Shares, Convertible Securities or Equity Securities of the Company with any third party, so long as the Series A Investor shall not have breached or violated any of its representations, warranties, covenants or agreement contained herein or in any of the other Transaction Documents. Subject to the Shareholders Agreement, this Section 8.2 shall terminate and be of no further force and effect immediately following the Closing Date or the Termination Date.

8.3

Compliance by Shareholders.

Each of the Founders shall take all necessary actions, at his/her own expenses, to fully comply with all Applicable Laws and the requirements of the Governmental Authorities with respect to his/her direct and indirect holding of Equity Securities in the Company 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 Laws of the PRC in connection therewith).

8.4

Compliance by Company Group.

Each member of the Company Group shall, at its own expenses, fully comply with all Applicable Laws 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. The Company shall (i) comply with the US Foreign Corrupt Practices Act, (ii) use its commercially reasonable efforts to avoid PFIC status and minimize the effects of CFC and PFIC status to the extent either one occurs, and (iii) comply with PRC Laws.

8.5

Filing of Memorandum and Articles.

The Company shall duly file the Memorandum and Articles with the Registry of Companies in Hong Kong within five (5) working days after the Closing.

8.6

Offshore Reorganization.

Each of the Founders and the Company undertakes to, and shall procure each member of the Company Group to, take all actions or transactions considered necessary to complete an offshore reorganization within two (2) months of the date of this Agreement, so as to achieve a shareholding structure as indicated under the Corporate Chart as shown in Exhibit E hereto.

8.7

Social Insurance.

Kinko shall pay the social insurance, welfare funds, medical benefits, retirement benefits, pensions or other insurance and benefits for all of its employees in accordance with, and to the extent required by, the PRC laws and regulations.

8.8

Employee Stock Option Plan.

(i)

After the completion of the Offshore Reorganization, an employee share option plan (the “Original ESOP”) shall be adopted among the Company and the Founders pursuant to which options to purchase up to 2% of the Ordinary Shares issued and outstanding prior to the Closing may be issued to qualifying officers, directors and employees of the Company Group.

(ii)

Options under the Original ESOP (“Options”) shall be granted by the Financial Committee (or any other committee of the Board of Directors formed for the purpose of deciding and administering matters relating to compensation).

(iii)

The Ordinary Shares subject to the options (“Optionable Shares”) shall be made available for issuance under the Original ESOP by the Founders ratably in accordance with their respective holdings of Ordinary Shares prior to the Closing. The Founders shall place such Optionable Shares, together with undated share transfers executed in blank, in escrow with an agent (the “Option Agent”) for issuance against exercise of options. The Option Agent shall transfer Ordinary Shares (“Option Shares”) against the exercise of options in accordance with the terms of the Original ESOP.

(iv)

The Original ESOP shall include such ordinary and customary terms as the Parties may agree, including among others the following:

(a)

the Original ESOP shall be administered by the Financial Committee or such other committee, which shall grant Options in accordance with the provisions of the Original ESOP and on such other terms as they may in their discretion determine, in relation to the number of options, vesting schedule, exercise price and other terms;

(b)

the vesting schedule for Options granted under the Original ESOP shall not be less than four (4) years, with a maximum of 25% of the Options under any grant vesting in each year;

(c)

Options not exercised prior to the expiration date specified in the relevant grant shall expire, subject to any extension approved by the Financial Committee or such other committee;

(d)

Options granted to employees whose employment is involuntarily terminated for cause, and Options granted to employees who voluntarily leave the employ of the Company, shall forthwith terminate;

(e)

no Options granted under the Original ESOP shall have an exercise price of less than the greater of (A) fair market value of the Option Shares at the date of grant and (B) the purchase price per share of the Series A Preferred Shares purchased by the Series A Investor hereunder; and

(f)

no Options shall be granted under the Original ESOP unless both the grant and the exercise of the Options and the transfer of the Option Shares by the Option Agent are exempt from registration requirements under applicable securities laws, including the Securities Act.

(v)

Prior to the Qualified IPO, the Company shall adopt a new employee share option plan (“IPO ESOP”) and a long-term incentive plan (“LTIP”) on such terms as the shareholders shall agree. Commencing from the time of the adoption of the IPO ESOP and the LTIP (the “Adoption Date”):

(a)

no further Options shall be issued pursuant to the Original ESOP; and

(b)

the Option Agent shall promptly release from escrow and return to the Founders in proportion with their interests any Optionable Shares as to which Options have not been granted as of the Adoption Date and any Optionable Shares as to which the Options granted have not been exercised (“Unexercised Options”) as of the Adoption Date or have expired or terminated.

(vi)

Commencing from the Adoption Date, upon the exercise of Unexercised Options granted under the Original ESOP, the Company shall deliver newly-issued Ordinary Shares reserved for this purpose under the IPO ESOP.

(vii)

The Company, the Founders and Kinko shall have, obtained (or cause the Subsidiaries to have obtained) all authorizations, consents, orders and approvals of all Governmental Authorities and officials that may be or become necessary to adopt the Original ESOP in compliance with PRC Law and regulations.

8.9

Dispose of Equity Interest in Desun.

The Company shall take all actions dispose or transactions necessary to sell all its equity interest in DESUN ENERGY CO., LTD. , “Desun”) within two (2) months of the date of this Agreement.

9	Miscellaneous.

9.1

Survival of Representations and Warranties.

The representations and warranties set forth under Sections 3 and Section 4 and any covenants of the Company, the Founders, Kinko and Series A Investor contained in or made pursuant to this Agreement shall survive for a period of earlier of (i) second anniversary of the Closing Date, or (ii) Qualified IPO, 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 Series A Investor or the Company. For avoidance of doubt, the representations and warranties of the Company, the Founders or Kinko in Section 3 and the representations and warranties of the Series A Investor in Section 4 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.

9.3

Indemnity.

(i)

The Founders and Kinko (each, an “Indemnitor”) shall, jointly and severally, indemnify the Series A 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 (but excluding any consequential, speculative or punitive damages) (“Losses”), incurred by such Series A Investor as a result of any breach or violation of any representation or

warranty made by the Company, the Founders or Kinko, or any breach by the Company, the Founders or Kinko of any covenant or agreement contained herein or in any of the other Transaction Documents (an “Indemnifiable Loss”). If a Series A Investor believes that it has a claim that may give rise to an indemnity obligation hereunder, it shall give prompt notice thereof to the Founders or Kinko 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 representation or warranty shall be given within two (2) year after the Closing; provided further that in any event any such notice with respect to the breach of any covenant shall be given on a timely basis.

(ii)

Notwithstanding anything to the contrary in this Agreement, no amount of indemnity shall be payable by the Indemnitor as a result of any Losses arising under Section 9.3(i):

(a)

with respect to any claim, unless and until the aggregate amount of Losses suffered cumulatively by the Series A Investor exceeds US$500,000;

(b)

to the extent it arises from or was caused by actions taken by the Series A Investor; or

(c)

to the extent the Series A Investor has been compensated for such Losses.

(iii)

Notwithstanding any other provision of this Agreement, the Founders and Kinko shall not be obliged to indemnify the Series A Investor in excess of an aggregate amount of US$15,000,000.

9.4

Subsequent Investment.

(i)

The Series A Investor agrees that the Company may issue additional Series A Preferred Shares and additional series of preferred shares (together, “Additional Preferred Shares”) to the potential investors in the indicative amounts set out in Schedule 2 or such other investors as the Series A Investor may agree, subject to the following conditions:

(a)

No Additional Preferred Shares shall be issued at a price per share lower than the Series A Purchase Price;

(b)

The terms and conditions of the Additional Preferred Shares shall be substantially identical to the terms and conditions of the Series A Preferred Shares, notwithstanding that the issue dates may differ and the price per share may be higher than the Series A Preferred Shares.

(ii)

The Series A Investor agrees that (i) the Company may offer to each potential investor in Additional Preferred Shares who proposes to invest US$15,000,000 or more the right to appoint one (1) director to the Board of Directors and (ii) in each such event, it will approve both an increase to the number of directors to accommodate one (1) director appointed by such investor and a further increase to the number of directors to accommodate the appointment of one (1) additional director appointed by the Founders.

9.5

Governing Law.

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

9.6

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.

9.7

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.

9.8

Notices.

Any notice required or permitted pursuant to this Agreement 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 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 9.8). 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.

9.9

Transaction 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. Kinko shall also pay all reasonable costs and expenses incurred or to be incurred by the Series A Investor, which shall include all reasonable costs and expenses in conducting due diligence investigations on the Company and the Company Group and in preparing, negotiating and executing all documentation, including all reasonable fees and expenses of any outside legal counsel, as well as all costs and expenses related to the financial due diligence review of the Company or the Company Group up to an amount to be agreed by the Parties, upon presentation of invoices in reasonable detail by the Series A Investor.]

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 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, including the Term Sheet, dated as of March 24, 2008.

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 at 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 the State of New York. 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 Chinese. 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 substantive law of the State of New York and shall not apply any other substantive law.

(v)

Each Party hereto shall cooperate with any other 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.

(vi)

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.

(vii)

Any party to the dispute shall be entitled to seek preliminary injunctive relief, if available, 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.” For purposes of this Agreement, the term “knowledge” shall be deemed to refer to the belief, knowledge or awareness (as the case may be) of the relevant Person who shall be deemed to have knowledge of such matters that they would have discovered had they made due and careful enquiries.

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 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]

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


COMPANY:	PAKER TECHNOLOGY LIMITED

	By:	/s/ Xxxxxxxx Xxxx

		Name:

		Title:

		Address:

		Attn:

		Tel:

		Fax:

		Email:

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


FOUNDER:	LI Xiande

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:

		Tel:

		Fax:

		Email:

FOUNDER:	XXXX Xxxxxxxx

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:

		Tel:

		Fax:

		Email:

FOUNDER:	LI Xianhua

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:

		Tel:

		Fax:

		Email:

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


		JIANGXI KINKO ENERGY CO., LTD.

		By:		/s/ Xxxxxxxx Xxxx

				Name:

				Title:

				Attn:

				Tel:

				Fax:

				Email:

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


SERIES A INVESTOR:

	By:	/s/ Xxxx Xxx Pun

		Name:

		Title:

		Attn:

		Tel:

		Fax:

		Email:

SCHEDULE 1

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

“Ancillary Agreements” means, collectively, the Shareholders Agreement, the Memorandum and Articles of the Company.

“Auditors” means any of PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG, or Ernst & Young as may be appointed as auditors of the Company from time to time.

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

“Business Day” means any day of the year on which national banking institutions in Xxx Xxxx, Xxxx Xxxx, Xxxxxxxxx and the PRC are open to the public for conducting business and are not required or authorized to close.

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

“CFC” means controlled foreign corporation under the US Law.

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

“Company” means PAKER TECHNOLOGY LIMITED, a limited liability company duly incorporated and validly existing under the Laws of Hong Kong.

“Company Closing Account” has the meaning set forth in Section 5.15 of this Agreement.

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

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

“Corporate Chart” means the Corporate Chart attached hereto as Exhibit E.

“Disclosing Party” has the meaning ascribed to it in Section 7.3 hereof.

“Disclosure Schedule” has the meaning ascribed to it in Section 3 hereof.

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

“Execution Date” shall mean the date of this Agreement.

“Executive Committee” means the executive committee to be established under the Board in accordance with Section 5.14 of this Agreement.

“Financial Committee” means the financial committee to be established under the Board in accordance with Section 5.13 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.

“Founders” shall mean LI Xiande, XXXX Xxxxxxxx, XX Xxxxxxx, each a citizen of the PRC.

“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 any government authority, agency, department, board, commission or instrumentality of the PRC or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization.

“HKIAC” means the Hong Kong International Arbitration Centre.

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

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

“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.

“IPO ESOP” has the meaning set forth in Section 8.8 of this Agreement.

“Key Employees” means, with respect to each of the members of the Company Group, the chief executive officer, the chief financial officer, the president, the general manager or any other manager with the title of “vice-president” or higher, of such entity. The name and tile of each Key Employee are set forth on Exhibit F attached hereto.

“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.

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

“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; provided, however, that in no event shall any of the following be deemed, either alone or in combination, to constitute, nor shall any of the following be taken into account in determining whether there has been, a Material Adverse Effect: (i) any Effect that results from changes in general economic conditions or as a result of war or an act of terrorism, (ii) any Effect that results from any action taken pursuant to or in accordance with this Agreement or at the request of the Series A Investor or (iii) any issue or condition which the Company may reasonably demonstrate was known to the Series A Investor prior to the date of this Agreement or has been disclosed in the Disclosure Schedules.

“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 A-1 and Exhibit A-2, respectively, to be adopted by resolution in writing of all members of the Company and to be effective on or before the Closing.

“Offshore Reorganization” means the series of transactions described in Section 14.12 of the Shareholders Agreement.

“Ordinary Shares” means the Company’s ordinary shares, par value HK$1.00 per share as of the date hereof and HK$0.001 per share at the Closing.

“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.

“Original ESOP” has the meaning set forth in Section 8.8 of this Agreement.

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

“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 (a) do not in the aggregate materially detract from the value of the assets that are subject to such Liens and (b) 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.

“PFIC” means passive foreign investment company under the US Law.

“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, the Macau Special Administrative Region and Taiwan.

“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.

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

“SEC” means the Securities and Exchange Commission of U.S.

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

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

“Series A Investor” has the meaning set forth in the first paragraph of this Agreement.

“Series A Purchase Price” has the meaning set forth in Section 2.2 of this Agreement.

“Shareholders Agreement” means the Shareholders Agreement, in the form attached hereto as Exhibit B, to be entered into at the Closing by and among the Company, the Founders and the Series A Investor.

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

“Subsidiary” 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, and other documents required in connection with the Corporate Chart, and other agreements and documents the execution and delivery of which is contemplated under this Agreement.

“US” means the United States of America.

“US GAAP” means generally accepted accounting principles of the US, in effect from time to time.

SCHEDULE 2

Proposed investor in additional Series A Preferred Shares:

Investor:

Yongjia Capital

[address]

Proposed investment amount: US$9,000,000

Number of Series A Preferred Shares: 49,410

Price per Share: US$222,545

Proposed investors in Series B Preferred Shares

Investors:

Wangling Capital

[address]

Proposed investment amount: US$[ ]

Huiyuan Capital

[address]

Proposed investment amount: US$[ ]

EXHIBIT A-1

AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

[To come]

EXHIBIT A-2

AMENDED AND RESTATED ARTICLES OF ASSOCIATION

EXHIBIT B

FORM OF SHAREHOLDERS AGREEMENT

[To come]

EXHIBIT D

CAPITALIZATION TABLE OF THE COMPANY AT THE CLOSING

Capitalization Table


Authorized Shares		10,000,000

Issued Shares
Ordinary Shares		1,000,000
Li Xiande		500,000
Xxxx Xxxxxxxx		300,000
Li Xianhua		200,000

Consultant’s Fee		14,657

		1,014,657
Series A Preferred Shares
FCC		67,402
Yongjia Capital		40,410

		107,812


Total Shares Outstanding		1,122,469

EXHIBIT E

CORPORATE CHART

1. PARTICULARS OF MEMBER OF THE COMPANY GROUP PRIOR TO THE CLOSING:

(i)	Paker Technology Limited


Company Name	:	Paker Technology Limited

Registered Address	:	XX. 0000, 00/X., Xxxxx 0, Xxxxx Xxxx Xxxx City, 00 Xxxxxx Xxxx, X.X.X., Xxxxxxx, Xxxx Xxxx

Date of Incorporation	:	November 10, 2006

Nature of the Entity	:	Limited Liability Company

Authorized Share Capital	:	HK$10,000 divided into 10,000 shares of HK$1.00 each

Issued Share Capital	:	HK$400

Directors	:	Chen Xiafang

Shareholders and shareholding	:	Li Xiande	200 shares (50%)

		Xxxx Xxxxxxxx	120 shares (30%)

		Li Xianhua	80 shares (20%)

(ii)	Jiangxi Kinko Energy Co., Ltd.


Registered Name	:	Jiangxi Kinko Energy Co., Ltd.

Registered Address	:	Xxxxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxxxxxxx Xxxx

Establishment Date	:	December 13, 2006

Nature of the Entity	:	Limited Liability Company (wholly invested by Taiwan, Hong Kong and Macau enterprise)

Registered Capital	:	HK dollar 85,000,000

Capital Received	:	HK dollar 85,000,000



Business Scope	:	Manufacture and sale of solar cell, silicon material and other relevant product (subject to license or qualification if is required by a specific regulation)

Legal Representative	:	Xxx Xxx Sang

Shareholder and shareholding	:	Paker Technology Limited holds 100% of shares

2. CORPORATE CHART IMMEDIATELY BEFORE THE CLOSING:

Footnote: The Company also holds 27.02% of the equity interests in Desun. The Company will dispose all its equity interest in Desun within two (2) months after the date of this Agreement.

3. CORPORATE CHART AT THE CLOSING:

4. CORPORATE CHART AFTER OFFSHORE REORGANIZATION

Footnote: According to Section 8.8 of this Agreement, after the completion of the Offshore Reorganization, the Original ESOP shall be adopted among the Company and the Founders pursuant to which options to purchase up to 2% of the Ordinary Shares issued and outstanding prior to the Closing may be issued to qualifying officers, directors and employees of the Company Group. For purposes of the Original ESOP, the “Company” may also refer to the Cayman Islands Co. as appropriate

EXHIBIT F

LIST OF KEY EMPLOYEES


NO.	Name	Position	Academic Qualification
1	Li Xiande	Chairman	Bachelor’s Degree

2	Xxxx Xxxxxxxx	General Manager	Master’s Degree

3	Li Xianhua	Vice General Manager	Bachelor’s Degree

4	Xx Xxxxx	Vice General Manager	Bachelor’s Degree

5	Wang Xiaoou	Board Secretary	Doctor’s Degree

6	Xxxx Xxxxxxx	Human Resource Controller	Master’s Degree

7	Xxxx Xxxxxx	Vice Financial Controller	Bachelor’s Degree

Execution Copy

AMENDMENT TO SERIES A PREFERRED SHARE

PURCHASE AGREEMENT

THIS AMENDMENT (“Amendment”) is made as of May 19, 2008, by and among the parties as follows:

(5)	PAKER TECHNOLOGY LIMITED ( , “the Company”) , a company duly incorporated and validly existing under the Laws of Hong Kong Special Administrative Region (“Hong Kong”);

(6)	LI Xiande, XXXX Xxxxxxxx, XX Xxxxxxx, each a citizen of the People’s Republic of China (the “PRC”) (collectively the “Founders” and each, a “Founder”);

(7)	JIANGXI KINKO ENERGY CO., LTD. ( , “Kinko”), a wholly foreign owned enterprise duly organized and validly existing under the Laws of the PRC; and

(8)	FLAGSHIP DESUN SHARES CO., LIMITED, a company duly incorporated and validly existing under the Laws of Hong Kong (the “Series A Investor”).

Each of the Company, the Founders, Kinko and the Series A Investor shall be referred to individually as a “Party” and collectively as the “Parties”.

RECITALS

C.	The Parties have entered into a Series A Preferred Share Purchase Agreement dated May 8, 2008 (“Agreement”); and

D.	The Parties wish to amend the Agreement in accordance with Section 9.10 thereof.

WITNESSETH

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.	Capitalized terms used herein shall have the meanings ascribed to them in the Agreement.

2.	Each reference to in the Agreement shall be deleted in entirety and replaced with .

3.	Paragraph B of the preamble of the Agreement shall be amended by deleting its text and replacing with the following:

“The Series A Investor wishes to subscribe for from the Company, and the Company wishes to sell to the Series A Investor, an aggregate of 67,544 Series A Preferred Shares of the Company pursuant to the terms and subject to the terms and conditions of this Agreement.”

4.	Section 2.1 of the Agreement is hereby amended by deleting its text and replacing with the following:

“As of the Closing, the Company shall have an authorized share capital of HK$10,000, consisting of 9,891,929 Ordinary Shares of HK$0.001 each and 108,071 Series A Preferred Shares of HK$0.001 each. As of the Closing, the Company shall have authorized (a) the issuance at the Closing, pursuant to a letter of appointment (the “Letter of Appointment”) entered into between the Company and Wealth Plan Investments Limited (“Wealth Plan”) on May 19, 2008, of 14,685 Ordinary Shares to Wealth Plan; (b) the issuance at the Closing, pursuant to the terms and conditions of this Agreement, of 67,544 Series A Preferred Shares to the Series A Investor, having the rights, preferences, privileges and restrictions as set forth in the Memorandum and Articles; (c) the issuance at the Closing, pursuant to the terms and conditions of a Series A Preferred Share Purchase Agreement (“Everbest Share Purchase Agreement”) entered into by and among Everbest International Capital Limited (“Everbest”), the Founders, Kinko and the Company on May 19, 2008, of 40,527 Series A Preferred Shares to Everbest, having the rights, preferences, privileges and restrictions as set forth in the Memorandum and Articles; and (d) the reservation of at least 108,071 Ordinary Shares for the conversion of the Series A Preferred Shares.”

5.	Section 2.2 of the Agreement is hereby amended by deleting its text in entirety and replacing with the following:

“(i)

Subject to the terms and conditions of this Agreement, the Series A Investor agrees to subscribe for, and the Company agrees to issue and allot to the Series A Investor, an aggregate of 67,544 Series A Preferred Shares, par value HK$0.001 per share, each having the rights and privileges as set forth in the Memorandum and Articles (the “Series A Preferred Shares”), at a per share issue price of US$222.077 for an aggregate amount of consideration of US$15,000,000 (the “Series A Purchase Price”), to be paid in accordance with this Section 2.2 and Section 2.3, provided that the number of Series A Preferred Shares so subscribed by the Series A Investor and price per share are based on the exchange rates of U.S. dollar against Renminbi on May 16, 2008, and shall be subject to adjustment at the Closing based on the exchange rates of U.S. dollar against Renminbi on May 19, 2008 and the Closing Date, so that as a result of such adjustments the total number of the Series A Preferred Shares issued to the Series A Investor shall represent a percentage (rounded to the nearest 2 decimal places) of a shareholding percentage calculated by the following formula:


N	=	FIA
N	=	RMB250,000,000 × 6.3 + FIA + EIA

N = the percentage of the Series A Preferred Shares to be issued to Series A Investor;

FIA = the First Tranche Investment Amount (as defined in Section 2.2(ii) herebelow) multiplied by the exchange rate between the US dollar and Renminbi on May 19, 2008, plus, the Second Tranche Investment Amount (as defined in Section 2.3(iii) herebelow) multiplied by the exchange rate between the US dollar and Renminbi on Closing Date.

EIA = the purchase price paid by Everbest in US dollar multiplied by the exchange rate between the US dollar and Renminbi of the date Everbest makes the payment of such purchase price.

Each Founder hereby waives any pre-emptive rights or rights of first refusal if any that he or she has with regard to the issuance and sale of Series A Preferred Shares pursuant to this Section 2.2 and Section 9.4.

(ii)

On May 19, 2008, the Series A Investor shall deposit or cause its affiliate to deposit US$10,000,000 (the “First Tranche Investment Amount”) by wire transfer in immediately available U.S. dollar funds into an account of the Company, the details of which are set forth in Schedule 4 hereto”

6.	Section 2.3 of the Agreement shall be amended by deleting the first three paragraphs in entirety and replacing it with the following:

“(i)

Subject to 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 issue and allotment of the Series A Preferred Shares hereunder shall take place at the offices of Xxxxx & XxXxxxxx, 00^xx Xxxxx Xxxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx before May 29, 2008 or at another time and date and at another location to be mutually agreed by the Parties, (which time, date and place are designated as the “Closing”). 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 (A) deliver an counterpart of the Shareholders Agreement in the form attached hereto as Exhibit B executed by the Company, the Founders and Kinko to the Series A Investor; (B) deliver to the Series A Investor a certificate representing the Series A Preferred Shares subscribed by the Series A Investor, (C) cause the Company’s share register to be updated to reflect the Series A Preferred Shares subscribed and purchased by the Series A Investor; and (D) cause the register of directors of the Company to be updated to reflect the director designated by the Series A Investor.

(iii)

deposit, the remainder of the Series A Purchase Price (US$5,000,000) (the “Second Tranche Investment Amount”) by wire transfer in immediately available U.S. dollar funds into the account of the Company set forth in Section 2.2.”

7.	Section 2.5 of the Agreement shall be amended by deleting the text in entirety and replacing it with the following:

“(i)

In the event that this Agreement is validly terminated prior to the Closing 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 Founders, Kinko or the Series A Investor; provided that no such termination shall relieve any party hereto from liability for any breach of this Agreement occurring prior to such termination. Notwithstanding the above, if the Series A Investor has made the payment pursuant to Section 2.2(ii) hereof, the Company shall, and the Founders shall cause the Company to, return to the Series A Investor the full amount of such payment made by the Series A Investor as soon as commercially practicable, but nevertheless within ten (10) days of the Termination Date, provided that in such case, the Company shall not be liable for any interest accrued on such funds.

(ii)

The provisions of this Section 2.5, Section 7, Section 9.8 and Section 9.13 hereof shall survive any termination of this Agreement.”

8.	Section 3.4(ii) shall be amended by deleting the first two subparagraphs and replacing with the following:

“(a)

Ordinary Shares. A total of 9,891,929 authorized Ordinary Shares, of which 400,000 are issued and outstanding. Exhibit D 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 108,071 authorized preferred shares, all of which 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.”

9.	Section 9.4 shall be amended by inserting a new paragraph (ii) between original paragraph (i) and paragraph (ii) and the original paragraph (ii) shall be new paragraph (iii). The new paragraph (ii) shall read as follows:

“(ii)

The Series A Investor hereby waives any preemptive rights, rights of first refusal or other similar rights in

relation to the issue of Additional Preferred Shares in accordance with paragraph (i) above, the conversion of Additional Preferred Shares into Ordinary Shares in accordance with their terms and the issuance of Ordinary Shares to Wealth Plan pursuant to the Letter of Appointment.”

10.	Schedule 1 of the Agreement shall be amended by adding the following definitions in appropriate places:

“Everbest” shall have the meaning set forth in Section 2.1.

“Everbest Share Purchase Agreement” shall have the meaning set forth in Section 2.1.

“First Tranche Investment Amount” shall have the meaning set forth in Section 2.2.

“Letter of Appointment” shall have the meaning set forth in Section 2.1.

“Second Tranche Investment Amount” shall have the meaning set forth in Section 2.3.

“Wealth Plan” shall have the meaning set forth in Section 2.1.

11.	Schedule 2 of the Agreement shall be deleted and replaced with Schedule 2 attached to this Amendment.

12.	Schedule 4 attached to this Amendment shall be added to the Agreement as Schedule 4 of the Agreement.

13.	Exhibit D of the Agreement shall be deleted and replaced with Exhibit D attached to this Amendment.

14.	Other terms and provisions of the Agreement shall not be affected and shall continue in full force and effect.

15.

This Amendment 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 Amendment.

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

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


COMPANY:	PAKER TECHNOLOGY LIMITED

	By:	/s/ Xxxxxxxx Xxxx

		Name:

		Title:

		Address:	Xxxx/Xx 0000, 00/X, Xxxxx 0 Xxxxx Xxxx Xxxx City, 00 Xxxxxx Xx. X.X.X XX, Xxxx Xxxx

		Attn:

		Tel:

		Fax: x000 0000 0000

		Email:

Execution Copy

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


FOUNDER:	LI Xiande

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email:

FOUNDER:	XXXX Xxxxxxxx

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email: xxx@xxxxxxxxxx.xxx


FOUNDER:	LI Xianhua

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email:

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


JIANGXI KINKO ENERGY CO., LTD.

By:	/s/ Xxxxxxxx Xxxx

	Name:

	Title:

	Address:	Kinko Road, Xuri District, Shangrao Economic Development Zone, Jiangxi, P.R. China

	Attn: Xxxxx Xxxx

	Tel:

	Fax: x00 0000 000 0000

	Email: xxx@xxxxxxxxxx.xxx

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


SERIES A INVESTOR:	FLAGSHIP DESUN SHARES CO., LIMITED

	By:	/s/ Xxxx Xxx Pun

		Name: Xxxx Xxx Pun

		Title: Director

		Address:	00 Xxxxxxxx Xxxx, 0000, XXX Xxxxxxxx, Xxxxxxxxx 000000

		Attn: Xxxx Xxx Pun

		Tel: x00 0000 0000

		Fax: x00 0000 0000

		Email:

SCHEDULE 2

Proposed investor in additional Series A Preferred Shares:


Investor:		EVERBEST INTERNATIONAL CAPITAL LIMITED

		Xxxx/XX 000 XXX A

		Cambridge Plaza, 188 San Wan Rd. Sheung Shui, NT, Hong Kong

Proposed investment amount: US$9,000,000

Number of Series A Preferred Shares: 40,527 (subject to adjustment pursuant to the Everbest Share Purchase Agreement)

Price per Share: US$222.077 (subject to adjustment pursuant to the Everbest Share Purchase Agreement)

Proposed investors in Series B Preferred Shares


Investors:		Wangling Capital

		[address] Proposed investment amount: US$[ ] Huiyuan Capital [address] Proposed investment amount: US$[ ]

SCHEDULE 4

Account Name: PAKER TECHNOLOGY LIMITED

Account NO.: 039-737-9-202372-0

Bank Name: Chiyu Banking Corporation Ltd.

Bank Address: SHOP3, G/F., XXX XXXX BLDG., 315-319 QUEEN’S ROA

CENTRAL, HONGKONG

Swift Code: XXXXXXXX

EXHIBIT D

CAPITALIZATION TABLE OF THE COMPANY AT THE CLOSING

Capitalization Table


Authorized Shares		10,000,000

Issued Shares
Ordinary Shares		1,000,000
Li Xiande		500,000
Xxxx Xxxxxxxx		300,000
Li Xianhua		200,000

Wealth Plan Investments Limited		14,685

		1,014,685

Series A Preferred Shares
Flagship Desun Shares Co., Limited		67,544
Everbest International Capital Limited		40,527

		108,071


Total Shares Outstanding		1,122,756

Execution Copy

AMENDMENT NO. 2 TO SERIES A PREFERRED SHARE

PURCHASE AGREEMENT

THIS AMENDMENT NO. 2 (“Amendment No. 2”) is made as of September 18, 2008, by and among the parties as follows:

(9)	PAKER TECHNOLOGY LIMITED ( , “the Company”) , a company duly incorporated and validly existing under the Laws of Hong Kong Special Administrative Region (“Hong Kong”);

(10)	LI Xiande, XXXX Xxxxxxxx, XX Xxxxxxx, each a citizen of the People’s Republic of China (the “PRC”) (collectively the “Founders” and each, a “Founder”);

(11)	JIANGXI KINKO ENERGY CO., LTD. ( , “Kinko”), a wholly foreign owned enterprise duly organized and validly existing under the Laws of the PRC; and

(12)	FLAGSHIP DESUN SHARES CO., LIMITED, a company duly incorporated and validly existing under the Laws of Hong Kong (the “Series A Investor”).

Each of the Company, the Founders, Kinko and the Series A Investor shall be referred to individually as a “Party” and collectively as the “Parties”.

RECITALS

E.	The Parties have entered into a Series A Preferred Share Purchase Agreement dated May 8, 2008 (such agreement, as amended by Amendment No. 1 referred to below and this Amendment No. 2, the “Agreement”);

F.	The Parties have entered into an amendment to the Agreement dated May 19, 2008; and

G.	The Parties wish to further amend the Agreement in accordance with Section 9.10 of the Agreement.

WITNESSETH

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.	Capitalized terms used herein shall have the meanings ascribed to them in the Agreement.

2.	Section 8 is hereby amended by adding a new subsection 8.10 following subsection 8.9 as follows:

“ 8.10 Shareholding Percentage Adjustment Based on Year 2008 Net Earnings

(i)

The Company shall deliver to the Series A Investor the Year 2008 Account on or prior to April 1, 2009. If the Year 2008 Net Earnings is less than RMB225 million or greater than RMB275 million:

(a)

If the Series A Preferred Shares held by the Series A Investor have not been converted into Ordinary Shares at the time of delivery of the Year 2008 Account, the conversion price of the Series A Preferred Shares shall be adjusted so that when the Series A Investor converts all of its Series A Preferred Shares it acquired under this Agreement into Ordinary Shares, such Ordinary Shares shall represent a percentage (rounded to the nearest 2 decimal places) of all of the then outstanding Ordinary Shares and Ordinary Share Equivalents calculated as follows:

N = Investment Amount / Final Post-money Valuation, where:

N = the percentage of the Ordinary Share held by the Series A Investor after giving effect to the adjustment under this Section 8.10 and subscription for the Series A Preferred Shares as provided herein;

Investment Amount = RMB104,411,500, being the subscription price paid by the Series A Investor in US dollar multiplied by the respective exchange rate between the US dollar and Renminbi as of the date the Series A Investor makes the payment of such subscription price.

Final Post-money Valuation = Year 2008 Net Earnings in Renminbi multiplied by 6.3 plus (a) the Investment Amount and (b) RMB62,464,644, being the subscription price paid by Everbest in US dollars multiplied by the exchange rate between the US dollar and Renminbi as of the date Everbest makes the payment of such purchase price.

(b)

If all the Series A Preferred Shares held by the Series A Investor have been converted into Ordinary Shares at the time of delivery of the Year 2008 Account, the Founders (on pro rata basis) and Series A Investor shall, within five (5) Business Days, transfer Ordinary Shares among them, so that as the result of such transfer of Ordinary Shares under this Section 8.10 and the subscription for the Series A Preferred Shares as provided herein, the percentage of the total Ordinary Shares held by the Series A Investor shall equal N calculated in subparagraph (a) above.

(c)

The Series A Investor shall not convert any portion of the Series A Preferred Shares into Ordinary Shares unless all of the Series A Preferred Shares held by the Series A Investor are proposed to be converted into Ordinary Shares.

(iii)

If the Year 2008 Net Earnings is less than RMB175 million, it shall, for the purposes of calculating N in Paragraph (i) above, be deemed to be RMB175 million. If the Year 2008 Net Earnings is greater than RMB325 million, it shall, for the purposes of calculating N in Paragraph (i) above, be deemed to be RMB325 million.

(iv)

Any earnings obtained through or as the result of mergers or acquisitions or any extraordinary or non-recurring earnings shall not be counted toward the audited consolidated Year 2008 Net Earnings of the Company for purposes of this Section 8.10. In calculating the Year 2008 Net Earnings of the Company, the costs and expenses incurred by the Company in relation to the investment by the Series A Investor, any other financing conducted by the Company or the Parent Company and implementing any equity incentive plan including employee stock option plan shall not be deducted from the income of the Company. Year 2008 Net Earnings of the Company shall be rounded to the nearest RMB100,000.”

3.	Section 9.2 of the Agreement is hereby amended by deleting its text in entirety and replacing with the following:

“(i)

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. Except as otherwise provided herein, the rights of the Series A Investor are only assignable in connection with the transfer or sale (subject to applicable securities and other laws) of the Series A Preferred Shares or Ordinary Shares converted from such Series A Preferred Shares held by the Series A Investor but only to the extent of such transfer, provided, however, that (a) the Series A Investor shall, prior to the effectiveness of such transfer, furnish to the Company written notice of the name and address of such transferee and Series A Preferred Shares or Ordinary Shares that are being assigned to such transferee, (b) such transferee shall, concurrently with the effectiveness of such transfer, become a party to this Agreement as the Series A Investor, (c) such transfer shall satisfy the requirements set forth in the Shareholders Agreement and Memorandum and Articles.

(ii)

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.”

4.	Schedule 1 is hereby amended by adding the following definitions in appropriate places:

“Parent Company” means any company which may become the owner of all the outstanding shares of the Company.

“Year 2008 Account” means the audited consolidated financial statements of the Company for the period from January 1, 2008 to December 31, 2008 audited by the Auditors and prepared in accordance with U.S. GAAP.

“Year 2008 Net Earnings” means the consolidated after-tax net income of the Company as reflected in the Year 2008 Account, subject to the adjustments pursuant to Section 8.10 (iv) hereof.

5.	Except as modified by this Amendment No. 2, all other terms and provisions of the Agreement (as amended by Amendment No. 1) shall continue in full force and effect without modification or amendment.

This Amendment No. 2 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 Amendment No. 2.

If one or more provisions of this Amendment No. 2 are held to be unenforceable under applicable law, such provision shall be excluded from this Amendment No. 2 and the balance of this Amendment No. 2 shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 as of the date first written above.


COMPANY:	PAKER TECHNOLOGY LIMITED

	By:	/s/ Xxxxxxxx Xxxx

		Name:

		Title:

		Address:	Xxxx/Xx 0000, 00/X, Xxxxx 0 Xxxxx Xxxx Xxxx City, 00 Xxxxxx Xx. X.X.X XX, Xxxx Xxxx

		Attn:

		Tel:

		Fax: x000 0000 0000

		Email:

Execution Copy

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 as of the date first written above.


FOUNDER:	LI Xiande

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email:

FOUNDER:	XXXX Xxxxxxxx

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email: xxx@xxxxxxxxxx.xxx


FOUNDER:	LI Xianhua

	BY:	/s/ Xxxxxxxx Xxxx

		ID Number:

		Address:	Xxxxxxxx Xxxx 0, Xxxx Xxxxxxxx Xxxxxxxx Economic Development Zone Jiangxi, P.R. China

		Tel:

		Fax: x00 0000 000 0000

		Email:

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 as of the date first written above.


JIANGXI KINKO ENERGY CO., LTD.

By:	/s/ Xxxxxxxx Xxxx

	Name:

	Title:

	Address:	Kinko Road, Xuri District, Shangrao Economic Development Zone, Jiangxi, P.R. China

	Attn: Xxxxx Xxxx

	Tel:

	Fax: x00 0000 000 0000

	Email: xxx@xxxxxxxxxx.xxx

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 as of the date first written above.


SERIES A INVESTOR:	FLAGSHIP DESUN SHARES CO., LIMITED

	By:	/s/ Xxxx Xxx Pun

		Name: Xxxx Xxx Pun

		Title: Director

		Address:	00 Xxxxxxxx Xxxx, 0000, XXX Xxxxxxxx, Xxxxxxxxx 000000

		Attn: Xxxx Xxx Pun

		Tel: x00 0000 0000

		Fax: x00 0000 0000

		Email:

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Table of Contents

PAKER TECHNOLOGY LIMITED SERIES A PREFERRED SHARE PURCHASE AGREEMENT May 8, 2008

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