Announcements and Notices - Continuing Connected Transaction: Factoring Agreement and Leaseback Agreement

Date

19 October 2017

Parties

Shenzhen Chuangwei Financial Leasing (factor) Nanjing Golden Dragon Bus (seller)

Financing Term

Transfer of accounts receivable

Factoring principal amount

1 year commencing from the date of the Factoring Agreement

Subject to the terms and conditions of the Factoring Agreement, the accounts receivable of Nanjing Golden Dragon Bus as referred to in the Factoring Agreement shall be transferred to Shenzhen Chuangwei Financial Leasing.

RMB499,500,000 (equivalent to approximately HK$591.6million)

Factoring interest

8.0% per annum on the sum being the factoring principal amount minus any accounts receivables recovered, payable on a quarterly basis

Repayment of the factoring principal amount

Repurchase

Nanjing Golden Dragon Bus shall repay to Shenzhen Chuangwei Financial Leasing at the end of the financing term a sum equal to the factoring principal amount minus any accounts receivables recovered.

Shenzhen Chuangwei Financial Leasing shall be entitled to demand Nanjing Golden Dragon Bus to immediately repurchase the outstanding amount of accounts receivable being transferred to Shenzhen Chuangwei Financial Leasing and repay the outstanding factoring principal amount in the event that any of the triggering events (including but not limited to the following) occurs:

(i) the portion of the accounts receivable not yet transferred to Shenzhen Chuangwei Financial Leasing is pledged or transferred to any third party or any rights over the accounts receivable are created in favour of any third party;

Guarantee

1. the statements and guarantees of Nanjing Golden Dragon Bus are untrue or contrary to its commitments under the Factoring Agreement;

2. Shenzhen Chuangwei Financial Leasing does not receive payment in settlement of the accounts receivable from the relevant debtor within 3 days after such accounts receivable becoming due;

3. the total amount of accounts receivable being transferred to Shenzhen Chuangwei Financial Leasing is lower than the principal factoring amount of RMB499,500,000 (equivalent to approximately HK$591.6 million);

4. without the prior consent of Shenzhen Chuangwei Financial Leasing, Nanjing Golden Dragon Bus merges, changes its management or otherwise restructures; leases, sells, contracts, transfers, mortgages or otherwise disposes its assets; reduces or reorganizes its registered capital; changes its shareholders; provides security in favour of third parties or assumes responsibility for third party debts;

5. Nanjing Golden Dragon Bus dissolves, is bankrupt, cannot fulfill its debt obligations or commits a major breach under the Factoring Agreement,; all or part of its properties are damaged, seized, withheld, confiscated or auctioned or legally or illegally possessed; is prosecuted, sanctioned, involved in claims or its payment obligation is accelerated;

6. the business operation Nanjing Golden Dragon Bus seriously deteriorates; the assets of Nanjing Golden Dragon Bus are transferred or the funds of Nanjing Golden Dragon Bus are misappropriated in order to avoid fulfilling its debt obligations; the loss of business reputation of Nanjing Golden Dragon Bus; or any circumstances which affects or potentially affects its ability to repay under the Factoring Agreement; and

7. Nanjing Golden Dragon Bus breaches other obligations under the Factoring Agreement.

Mr. Wong entered into a guarantee in favour of Shenzhen Chuangwei Financial Leasing in respect of all debt payable by Nanjing Golden Dragon Bus to Shenzhen Chuangwei Financial Leasing under the Factoring Agreement.

Date

19 October 2017

Parties

Shenzhen Chuangwei Financial Leasing (lessor) Nanjing Golden Dragon Bus (lessee)

Financing Term Subject matter

1 year commencing from the date of the Leaseback Agreement

Subject to the terms and conditions of the Leaseback Agreement, Nanjing Golden Dragon Bus will sell a motor vehicle to Shenzhen Chuangwei Financial Leasing at an initial sale price of RMB500,000 (equivalent to approximately HK$592,000) and the motor vehicle will be leased back to Nanjing Golden Dragon Bus over a lease term of one year. The total lease payment in respect of the leasing of the vehicle is RMB540,555.56 (equivalent to approximately HK$640,241), which is payable by Nanjing Golden Dragon Bus in quarterly interval as follows:-

1. first quarterly lease payment: RMB10,222.22 (equivalent to approximately HK$12,107)

2. second quarterly lease payment: RMB10,000.00 (equivalent to approximately HK$11,844)

3. third quarterly lease payment: RMB10,111.11 (equivalent to approximately HK$11,976)

4. last quarterly lease payment: RMB510,222.22 (equivalent to approximately HK$604,314)

Upon expiry of the lease term, Nanjing Golden Dragon Bus is required to repurchase the vehicle from Shenzhen Chuangwei Financial Leasing at a purchase price of RMB1.00 (equivalent to approximately HK$1.18).

Guarantee

Mr. Wong entered into a guarantee in favour of Shenzhen Chuangwei Financial Leasing in respect of all sums payable by Nanjing Golden Dragon Bus to Shenzhen Chuangwei Financial Leasing under the Leaseback Agreement.