General Terms and Conditions

Hong Kong

1
Terms and Conditions
1. Definitions
In these Terms the following definitions apply:
(a) Agreement: any written or verbal agreement,
pursuant to which Services are rendered;
(b) Applicable Law: any law, regulation, rule,
requirement, practice and guidelines of any
government, regulatory authority or selfregulating organization or any self-imposed rule that
applies to the provision of the Services including
but not limited to the Anti-Money Laundering and
Counter-Terrorist Financing Ordinance and the
Companies Ordinance and applicable regulations
prevailing in Hong Kong, as amended from time to
time;
(c) Claim: any and all claims (contractual or
otherwise), threatened claims, suits, taxes,
penalties, charges, fines, liabilities, losses,
damages, amounts paid in settlement, costs and
expenses including but not limited to reasonable
legal fees incurred in connection withany actual or
threatened proceedings, suffered, incurred or
expended, directly or indirectly, all in the widest
sense;
(d) Client Entity: the individual, legal entity, trust,
foundation, association or partnership (whether or
not having separate legal personality) receiving the
Services;
(e) Confidential Information: all non-public
information which relates to the operations or
businessof a partywhether disclosed by a party or by
a third party and which (i) is designated or marked
as confidential or (ii) given the nature of the
information or the circumstances surrounding its
disclosure, reasonably should be considered as
confidential;
(f) Data: as defined in clause 11.1;
(g) Expenses: as defined in clause 6.2;
(h) Fees: as defined in clause 6.1;
(i) Funds: as defined in clause 19;
(j) FY or Fung Yu: all companies ultimately beneficially
ownedbythe partners or directors of Fung, Yu & Co.,
CPA Limited, Fung Yu Trust Services (Hong Kong)
Limited, or Harris Corporate Solutions Limited, Fung
Yu Advisory Services Limited, Fung Yu
Management Consultancy Limited, Harris Property
Management (H.K.) Limited or other FY entity from
time to time, eachofwhichis a separate legal entity.
(k) Know your client file: as defined in clause 4.2;
(l) Services: any services rendered byFY including but
not limited to Directorship Services; and
(m) Terms: these general terms and conditions.
2. Applicability
2.1. These Terms apply to:
(a) all Agreements;
(b) all agreements arising from and/or in relation to the
Agreements; and
(c) all offers, proposals and quotations made by FY or
representative to the Client Entity.
2.2. Any general terms and conditions of the ClientEntity, and/or
of any entity related to the Client Entity, are rejected
explicitly.
2.3. Each affiliate, director, officer and/or employee of FY
involved in the performance of Services, may at all times
rely upon the provisions of these Terms for his/her/its
own benefit as a third party beneficiary.
3. Amendments andadditions to the Terms
3.1. FY has the right to unilaterally amend these Terms. The
amended Terms will become effective and take precedence
over all other previously notified general terms and
conditions within 1 (one) month after notification of such
amendment is given byFY to the relevant parties.
3.2. All other amendments and additions to these Terms and/or
the Agreement can only be agreed in writing by the
relevant parties to the Agreement. If such an amendment
and/or addition is agreed in respect of an Agreement, such
amendment and/or addition shall only apply to that
particular Agreement.
4. Obligations and responsibilities of the Client Entity
4.1. The Client Entity is responsible for determining that the
scope of the Services is appropriate for its needs.
4.2. The Client Entity shall procure that FYis provided from time
to time with any information relating to the Client Entity,
the nature of its business, its ultimate beneficial owner(s),
the origins of the funds used within the relevant structure of
which it is part, and more generally any other information
which it may hold and which FY is or may be required by
Applicable Law to collect, update and maintain (the “Know
your client file”), as well as all information required to
enable FY to determine the volume and nature of the
transactions entered into by the Client Entity or necessary
to enable FY to properly perform the Services. FY may
use the information and data furnished by the Client Entity
or others and rely on its accuracy, completeness and
lawfulness without audit or verification.
4.3. The Client Entity is not and will not, directly or indirectly, be
engaged in unregulated gambling, arms or sex-related
business or any illegal activities including but not limited to
money laundering, terrorism financing and tax fraud.
5. Obligations and responsibilities of FY
5.1. FY shall discharge its duties in good faith and with due
professional care, and in accordance with Applicable Law.
FY shall not do or omit to do anything which it considers to
be in conflict with Applicable Law.
5.2. FY shall determine in what manner and by which person(s)
the Services shall be performed.
5.3. FY may at any time without notifying the Client Entity
make any changes to the Services which are necessary to
ensure compliance with Applicable Law, or which it
considers necessary and do not materially affect the nature
or quality of the Services.
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5.4. All dates for delivery of the Services given by FY or
specified by the Client Entity are intended for planning
and estimating purposes only and are not contractually
binding.
5.5. Although FY may need to review sections of draft
agreements or (notarial) deeds prepared by the Client
Entity’s legal advisers, FY does not provide any legal,
investment, exchange control or other advice and none of
the communications of FY may be regarded as advice.
5.6. FY shall be entitled to retain any other entity which is part
of the Fung Yu and/or any sub-contractor to perform
part or all of the Services on behalf of FY, without prior
consent of the Client Entity. Notwithstanding any such
engagement, FY shall remain fully responsible for the
fulfilment of any of its obligations under this
Agreement.
5.7. FY has no responsibility to:
(a) monitor events occurring after the date of
completion of the Services; or
(b) to update any deliverable under the Agreement
unless otherwise explicitly agreed to in writing.
5.8. The Services are performed solely for the benefit of the
Client Entity. Third parties cannot derive any rights from
the Services.
5.9. FYshallbeauthorised todestroyanydocuments ithaswith
respect to the Client Entity after expiry of the relevant
statute of limitations applicable for the retention of any
such document.
6. Fees and Expenses
6.1. The Client Entity shall pay all amounts due to FY for the
Services renderedas setout intheAgreement(the “Fees”).
6.2. In addition to the Fees, the Client Entity shall reimburse
FY for any and all expenses incurred in the performance
of its duties under the Agreement, including but not
limited to office expenses and disbursements (the
“Expenses”). The office expenses amount to at least 6%
of the Fees.
6.3. All Fees andExpensesareexclusiveof VAT,salestaxorthe
equivalent thereof.
6.4. FY may charge additional fees for the provision of
Services where the volume of work required to be carried
out by FY is greater than expected, for example, as a
result of the Client Entity’s (lack of) instructions, failure or
delay in providing information, FY having to deal with
outstanding queries, the inaccuracy of any material, or
otherwise.
6.5. Fees for Services not included in the Agreement or as
referred toinclause6.4 may be charged either through:
(a) providing the Client Entity with an estimate as to
amended or additional fees; or (b) charging on a time
spent basis at the prevailing hourly rate commensurate
with the work undertaken and the seniority of the person
doing the work.
6.6. The Fees and Expenses will be automatically adjusted
annually in case of inflation. FY is entitled to increase the
Fees and/or Expenses (i) annually in case of inflation up to
5% per year; (ii) quarterly in case of inflation between 5%
and 10% per year; and (iii) monthly in case of inflation of
more than 10% per year. The inflation percentage used for
this clause is the percentage as set out in the Hong Kong
Consumer Price Index. The Fees and/or Expenses will be
increased with this percentage. The adjustments shall take
effect 1 (one) month after notice of adjustment has been
given to the Client Entity.
6.7. In addition to clause 6.6, FY is entitled to adjust the Fees
and/orExpenses for currency changes and changing market
circumstances, which adjustments take effect as of 1
(one) month after notice of adjustment has been given
to the Client Entity.
6.8. Any Fees and/or Expenses which are invoiced by FY under
the Agreement are to be paid within 30 (thirty) calendar
days after the relevant invoice date. If the Fees and/or
Expenses are not paid within this payment term, the Client
Entity shall be in default without a notice of default being
required and FYwill be entitled to charge a late payment
interest of 1% per month up to a maximum as authorised
under Applicable Law. Late payment interest will accrue as
per the first day when payment becomes overdue.
6.9. All costs incurred by FY to collect any amounts
outstanding either in connection with legal proceedings
conducted or otherwise shall be borne and paid by the
Client Entity. A fee equal to the time spent by FY on an
hourly rate basis will be charged to the Client Entity for
each notice of default, reminder notice or request for
payment of an overdue invoice.
6.10. FY is entitled to suspend or cease the provision of the
Services with immediate effect whenever any Fees and/or
Expenses due to FY are not paid within 60 (sixty) calendar
days from the relevant invoice date.
6.11. FY shall be entitled to require that the Client Entity
provides (supplementary) security in a form to be
determined by FY. If the Client Entity fails to provide the
required security, FY shall be entitled, without prejudice to
its other rights, to suspend the performance of the
Services or terminate the Agreement with immediate
effect, and everything the Client Entity owes to FY for
whatever reason shall be forthwith due and payable.
6.12. If the Client Entity withdraws its request to provide Services
prior to the signing of an Agreement, but FY has already
spent time preparing for the provision of Services, FY may
charge all time spent at the prevailing hourly rate or for an
agreed fees amount.
6.13. In the event the Agreement is terminated during the course
of a calendar year, any fixed Fees paid upfront for that year
will not be reimbursed.
7. Liability
7.1. Nothing in these Terms shall exclude orrestrict(or prevent a
Claim being brought in respect of) any liabilities which
cannot lawfully be limited or excluded save to the extent
permitted by mandatory Applicable Law.
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7.2. Neither FY nor any of its affiliates, directors, officers or
employees is liable for damages incurred by the Client
Entity due to a breach of the Agreement if FY is able to
cure the breach within 30 (thirty) calendar days from the
date notice is given by the Client Entity in respect of such
breach with no subsisting material damage to the Client
Entity.
7.3. In no event shall FY or any of its affiliates, directors,
officers or employees be liable for any loss of use,
contracts, data, goodwill, revenues or profits (whether or
not deemed to constitute direct losses) or any
consequential, special, indirect, incidental, punitive or
exemplary loss, damage or expense.
7.4. Any liability of FY or any of its affiliates, directors, officers
or employees shall be limited to the amount paid out in the
relevant case by the professional liability insurance ofFY. If
the insurer makes no payment under such insurance, the
liability of FY or any of its affiliates, directors, officers or
employees shall be limited to an amount which will not
exceed the aggregate amount of the Fees paid during the
period of 12 (twelve) months prior to the occurrence of the
event or incident which was alleged to have led to the
Claim, and, in all circumstances, subject to a maximum
liability of HKD 100,000 (Hong Kong Dollar one
hundred thousand).
7.5. All Claims made by the Client Entity against FY or any of its
affiliates, directors, officers or employees shall expire 3
(three) months after the moment that the Client Entity is
aware, or could reasonably have been aware, of the event
or incident that has led to the Claim. In any event, all Claims
against FY or any of its affiliates, directors, officers or
employees shall lapse following the 12 (twelve)
months’ period after the event or incident which was
alleged to have led to the Claim.
7.6. FY shall not be liable towards the Client Entity for
activities conducted or services rendered by third parties to
the Client Entity or for any fees due to third parties for
services renderedtotheClientEntity.TheClientEntity shall
indemnify and hold FY harmless from and against any and
all Claims in this respect.
8. Indemnity
During and after termination of the Agreement, the Client
Entity agrees to indemnify and hold FY and any of its
affiliates, directors, officers and employees harmless from
and against any and all Claims from third parties relating to
or arising from the provision of or the failure to provide the
Services,exceptintheeventofgrossnegligence,deliberate
recklessness,wilfulmisconductorfraud on thepartofFY or
any of its directors.
9. Force Majeure
No party to the Agreement shall be liable for any delays or
non-performance directly or indirectly resulting from
circumstances or a cause beyond his/her/its reasonable
control.
10. Confidentiality
10.1. FY shall not disclose any Confidential Information relating
to the Client Entity to any third party, except with respect
to, and only to the extent that:
(a) such disclosure is reasonably necessary or
desirable for the proper performance of its duties;
(b) such disclosure is reasonably necessary or
desirable to enable the entity which is part of the
Fung Yu and/or the sub-contractor to perform part
or all of the Services on behalf of FY;
(c) suchdisclosureis required under Applicable Law;
(d) such disclosure is required upon the order of any
court or other governmental, tax, supervising or
regulatory body; or
(e) such information is within, or falls within the public
domain through no fault of FY.
10.2. The ClientEntity agrees to reimburse any costs that FY may
incur in complying with any such disclosure requirement
relating to the Client Entity or the Services if requested in
accordance with clause 10.1(c), not involving any
substantive claim or proceedings against FY.
10.3. FY may under Applicable Law be required to report and
disclose unusual transactions which it becomes aware
of in respect of the Client Entity. FY is not liable in respect
of any damages resulting from or relating to such reporting
or disclosure.
11. Use of Data
11.1. The Client Entity acknowledges and agrees that FY will be
entitled to process personal data of directors, officers and
employees of the Client Entity, its affiliates and to the
extent applicable, of its customers (the “Data Subjects”), as
well as the information included inthe Know Your Client file
(the “Data”), including but not limited to transmission of
the Data to, from and within the Fung Yu worldwide and
to, from and within sub-contractors engaged by FY to
perform part or all of the Services on behalf of FY thereby
allowing worldwide access to the Data to designated staff
members of the Fung Yu and/or to subcontractors with a
need to know,in the opinion of FY. The processing and the
worldwide transmission shall comply withApplicable Law
which includes among others the binding corporate rules
of FY on international data transfers.
11.2. The Data may be obtained either from the Client Entity or
from other (public) sources, whether or not prior, on or
after the date of establishing a relationship with the Client
Entity.
11.3. The Data will be used only for the purposes of
communication with the Client Entity (including but not
limited to direct marketing), management of the
relationship with the Client Entity, performance of the
Services and conducting compliance procedures imposed on
FY by Applicable Law.
11.4. The Client Entity confirms its understanding of the
processing of Data and, as far as required hereby,
unambiguously grants consent to the processing of the Data
as set out above. The Client Entity represents and warrants
that the consent of the Data Subject for such processinghas
been obtained in so faras necessary.
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12. Termination
12.1. The Agreement can be terminated by any party to the
Agreement at any time by giving 3 (three) months prior
notice in writing.
12.2. Each party to theAgreement may terminate theAgreement
if another party to the Agreement has committed a
material breach, provided that a prior written notice of
such material breach has been given and the material
breach has not been remedied by that party within 30
(thirty) calendar days of the giving of such notice. The
inability of a Client Entity to meet its payment obligations
arising out of the Agreement shall always be considered a
material breach.
12.3. To the extent possible under Applicable Law, each party to
the Agreement may terminate the Agreement with
immediate effect in the event that:
(a) a request for a moratorium or bankruptcy
relating to another party to the Agreement has
been filed;
(b) another party to theAgreement has been declared
insolvent or bankrupt;
(c) the assets of another party to the Agreement are
subject to attachment of material substance; or
(d) the circumstances are such that FY cannot
reasonably be expected to continue to provide the
Services to the Client Entity, including but not
limited to suspicion of fraudulent or criminal
activities of the Client Entity or any of its affiliates.
12.4. In case of termination of the Agreement, the Client Entity
shall procure that all acts are done as may be necessary to
give practical and immediate effect to such termination.
Where the Client Entity unreasonably fails to do so, FY is
entitled to:
(a) resign from any office it holds for the Client Entity;
and
(b) transfer the Client Entity to another service
provider as it deems fit.
12.5. In case of termination of the Agreement and subject to
payment to FY of all outstanding Fees and Expenses,
including but not limited to any additional fees (or costs
for time spent) for assembling and handover of all
corporate documents and financial records of the Client
Entity, FY shall, if so requested, return the corporate
documents and financial records relating to the Client
Entity, whichareinFY’s possession, to the Client Entity.
As long as Fees and Expenses remain outstanding, FY
has a lienonanysuch corporate documents and financial
records.
12.6. Any clause of theseTerms which expressly orimpliedly has
an effect after the termination, rescission or expiration of
the Agreement will continue to be enforceable
notwithstanding termination, rescission or expiration. This
applies in any event for this clause 12.6 and clauses 7, 8,
12.5, 27 and 28 hereof.
12.7. In the event that FY also provides domicile to the Client
Entity, the Client Entity shall change its business address as
soon as possible after the notice of termination of the
Agreement has been given, although no later than the date
of termination. FY is entitled to take appropriate
measures in the event that such change of domicile is not
effected within 30 (thirty) calendar days after FY has sent a
written notice, including registering the Client Entity with
the applicable register at an address to be decided by FY at
its sole discretion. In case of termination of the
Agreement, the Client Entity irrevocably authorises FY, and
as far as necessary, gives a power of attorney to FY, to
register a new business address for the Client Entity. FYis
not liable for any damages that may result from the change
of domicile of the Client Entity.
13. Non-solicitation
13.1. Neither party nor any of its affiliates, shall during the term of
the Agreement and for a period of 12 (twelve) months
thereafter, solicit or employ directly or indirectly any
employee of another party to the Agreement, other than
with the prior written consent of such party. Any party
acting in breach of this clause will forfeit a penalty of HKD
100,000 (Hong Kong Dollar one hundred thousand).for
each event and each employee thus employed.
14. Use of Electronic Communication
14.1. AlthoughFY aims to maintain high IT security standards, FY
shall not be liable for the incorrect or incomplete
transmission of the information contained in e-mail
communications or for any delay in reception of e-mail.
14.2. The Client Entity acknowledges that internet is inherently
insecure and that data can become corrupted,
communications are not always delivered promptly (or at
all) and that other methods of communication may be
appropriate. The Client Entity accepts full responsibility for
the possible negative consequences of the use of e-mail
and internet as a means of communication, as well as for
the retrieval of data.
14.3. The Client Entity acknowledges that electronic
communications can be prone to contamination by viruses.
Each party will be responsible for protecting its own
systems and interests and, to the fullest extent permitted
by Applicable Law, will not be responsible to the other
party or parties on any basis (whether in contract, statute,
tort, negligence or otherwise) for any loss, damage or
omission in any way arising from the use of oraccessby FY
to internet or networks, applications, electronic data or
other systems.
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14.4. FY may rely upon written requests, instruments or
documents of any kind, which appear to have been signed
(inoriginal, facsimile or scan copy) endorsedorpreparedby
the Client Entity. FY reserves the right to refuse to accept
any instructions by facsimile or e-mail if FY has any
reasonable doubt about the validity or authenticity of such
instructions. If a request from the Client Entity is rendered
to FYby telephone, facsimile or e-mail,FYis not liable in
connection with any misunderstanding or transmission
error resulting from this method of communication,
including any mistake by FY on the identity of the Client
Entity.
15. Notices
Except as otherwise required by Applicable Law, all
announcements, notices and other communications
pursuant to the Agreement shall be delivered to the
addresses mentioned in the Agreement (or such other
address as a party has communicated to the other party or
parties in accordance with this clause) by registered post,
courier, facsimile, or e-mail.
16. Assignment
16.1. Subject to clause 16.2 and 16.3, none of the rights created
by theAgreement shall be assignable to a third party by any
of the parties without the prior written consent of the
other party or parties.
16.2. FY shall be entitled to assign any rights and/or obligations
resulting from any Agreement to any other entity which is
part of the Fung Yu, whether a direct or indirect parent,
subsidiary or affiliate, or other, provided that this does not
jeopardize the provision of the Services in any way.
16.3. FY is entitled to transfer or assign its receivables resulting
from any Agreement inter alia for collection, factoring or
security purposes.
17. Intellectual Property
17.1. FY retains all rights to the intellectual property which FY,
its affiliates, directors, officers and/or employees have
developed or provided in the performance of the
Services. The Client Entity shall only have the right to use
such intellectual property as expressly granted in the
Agreement or by Applicable Law. Any right of use shall be
non-exclusive, for the term of the Agreement and nontransferable.
17.2. If any documents or information are provided by the Client
Entity to FY, the Client Entity shall ensure that such
documents or information shall not infringe any intellectual
property rights or other legal rights of any third party. The
Client Entity shall indemnify FY in this respect against any
Claim of a third party.
18. Severability
If any part of these Terms shall be held to be illegal,invalid,
void or unenforceable, in whole or in part, under
Applicable Law, such provision or part shall be deemed
not to form part of these Terms and the legality, validity
and enforceability of the remainder of these Terms shall
not be affected. Parties agree to replace such part of these
Terms with a legal, valid and enforceable provision
which provisionwill approach the original intention of the
parties as much as possible.
19. Third Party Account
Where funds belonging to the Client Entity are held in a FY
third party account on a temporary basis to make
payments on behalf of the Client Entity including, but not
limited to local expenses or adviser costs (the “Funds”), the
following conditions shall apply:
(a) the Funds will be held to the order of the Client
Entity and will be administered as such;
(b) subject to the appropriate invoices or other proof
of payment obligation of the Client Entity being
submitted to FY, FY is authorised to make the
respective payments out of the Funds held on the
Client Entity’s behalf;
(c) the Funds will bear no interest. Any costs related
to the Funds and transfers thereto will be for the
ClientEntity’s account and settled from the Funds;
(d) the Funds, or as the case may be, the remaining
balance thereof, are repayable to the Client Entity
upon request; and
(e) FY has the right to return the (remaining balance of
the) Funds to the Client Entity at any time by bank
transfer or cheque and any costs associated which
such return shall be for the account of the Client
Entity.
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Part B – Additional Terms for Directorship
Services
In addition to Part A of these Terms, this Part B applies when
DirectorshipServicesare provided.Forthe avoidanceofdoubt,Part
B of these Terms does not replace PartA, but supplements it. If any
provision of Part B of these Terms is inconsistent with any provision
of Part A of these Terms, the provisions of Part B will prevail.
20. Definitions for Part B
In Part B of these Terms the following definitions apply:
(a) Authorised Person: the person who is expressly
authorised to give instructions to FY relating to the
Client Entity;
(b) Director(s): a personal director or officer, a
corporate director or officer, a statutory
representative, an attorney or other
representative who acts on behalf of the Client
Entity for specific purposes, a board member, a
company secretary or a treasurer of the Client
Entity provided by FY or its affiliates;
(c) Directorship Services: the services whereby FY
or its affiliates provides Director(s) to the Client
Entity, with all powers, duties and obligations of
that office as are provided for by Applicable Law
and the articles of association of the Client Entity;
(d) Outside Director: as defined in clause 26.1; and
(e) Principal: the shareholder(s) of the Client Entity
and/or the (legal) entity or group of (legal) entities
or individual(s) who ultimately own(s) and
control(s) the Client Entity and who is/are the
ultimate beneficial owner(s) of the Client Entity as
party to the Agreement.
21. Obligationsand ResponsibilitiesoftheClient Entity
and thePrincipal
21.1. The Principal and the Client Entity shall promptly provide
FY with or make available to FY all such information,
documents and instructions as are requested by FY to fulfil
its obligations under the Agreement.
21.2. The Principal acknowledges that FY enters into the
Agreement in reliance upon the information provided by
and/or made available by the Principal to FY and
undertakes to promptly notify FY of any change of
situation leading to such information no longer being
correct, complete or true.
21.3. The Principal and the Client Entity are jointly and severally
liable for the obligations arising out of the Agreement and
Part A and Part B of these Terms.
21.4. The Principal guarantees as its own independent and
separate obligation that it shall procure that the Client
Entity will duly perform its obligations, including but not
limited to the payment of any outstanding Fees and
Expenses, under the Agreement and Part A and Part B of
the Terms.
21.5. The Client Entity guarantees that it will retain such internal
and such external professional advisers as will be required
to ensure that the transactions of the Client Entity are
made on the basis of adequate advice, and after due and
careful consideration of all relevant business and risk
factors as are commensurate with the volume and nature
of the transactions.
21.6. External professional advisers will be retained in mutual
consultation between the Client Entity and FY, unless
given the urgency of the matter, external professional
advisers need to be retained without delay. In such case, the
party retaining external advisers, whether it is the Client
Entity or FY, will inform the other party or parties
immediately, providing details of the external
professional adviser who has been retained. For the
avoidance of doubt, external adviser fees will be for the
settlement of the Client Entity.
21.7. The Client Entity and the Principal will inform FY of any
dispute, law suit or judicial procedure, either actual or
contingent, inwhich the Client Entity is or may be involved,
or any litigation to which the Client Entity may be a party,
which might affect the Directorship Services and/or the
reputation of FY or the Directors.
21.8. The Client Entity and the Principal jointly and severally
ensure and guarantee to FY that the Client Entity will at all
times have sufficient funds available to meet its financial
obligations towards FY and towards third parties,
including but not limited to FY’s Fees and Expenses, fees of
external professional advisers such as the auditor of the
Client Entity and any tax obligations.
21.9. FY, at its sole discretion, shall be entitled to require the
Client Entity and the Principal to have a bank account in the
name of the Client Entity and to maintain a minimum credit
balanceforwhichFYactsassoleauthorisedsignatory.At the
first request of FY, the Principal and/or the Client Entity
will immediately arrange for the transfer of sufficient funds
to the Client Entity’s bank account to enable the Client
Entity to fulfil its payment obligations when due.
22. Obligations and Responsibilitiesof thePrincipaland
authorisations by the Principal
22.1. The Principal shall inform FY in writing and in a timely
manner of any anticipated transfer, sale, pledge,
encumbrance, right of usufruct, assignment or disposal in
whole or in part of the direct or indirect ownership of the
shares or ownership rights in the Client Entity and/or rights
to control the Client Entity. The Principal shall inform FY of
any potential changes in voting rights on the shares in the
Client Entity.
22.2. The Principal hereby ratifies and confirms any and all acts
and other things whatsoever that FY or any of its
affiliates, directors, officers or employees shall have
performed and/or done in the name of or on behalf of the
Client Entity prior to the date of the Agreement.
22.3. The Principal hereby expressly authorises FY and its
affiliates, directors, officers and employees to release any
information relating to the Principal or the Client Entity in its
Know Your Client file to third parties for the purpose of
opening bank accounts for the Client Entity or engaging any
other service provider for the Client Entity.
22.4. In the event FY or any of its affiliates receives mail on
behalfofthePrincipal orClientEntity,FYand its affiliates are
authorised and retain the right to open that mail in
compliance with Applicable Law or as good practice
dictates.
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23. Obligationsand ResponsibilitiesofFY
23.1. FY shall discharge its duties in good faith and with due
professional care, in the best interests of the Client Entity
and in accordance with Applicable Law. Neither FY nor
any of its affiliates, directors, officers or employees shall do
or omit to do anything which it/he/she:
(a) considers to be in conflict with the lawful interests
of the Client Entity; and/or
(b) deems to trigger or enhance his/her/its liability as
Director vis-à-vis the Client Entity or third parties.
23.2. FY is authorised to take whatever action or refrain from
any action it deems necessary to keep the Client Entity in
good standing and fulfilling its statutory obligations.
23.3. FY is authorised to use any of its affiliates, directors,
officers, employees or other persons to act as a Director. In
as far as FY or any of its affiliates, directors, officers,
employeesorotherpersonsareappointedasDirector, they
shall have all rights and obligations allocated to this office
by Applicable Law and the Client Entity’s articles of
association. FY can substitute the Director at any time at
FY’s sole discretion.
23.4. Each such affiliate, director, officer and/or employee or
other person involved in the performance of the
Directorship Services, may at all times rely upon the
provisions of these Terms for his/her/its own benefit as a
third party beneficiary.
23.5. FY is entitled to send its invoice in respect of Fees and
Expenses for Directorship Services in its own name and
letterhead to the Client Entity, even if the Directorship
Services are provided by a director, officer, employee,
other person or an affiliate.
23.6. In the performance of the Directorship Services, FY may
communicate or discuss the affairs of the Client Entity with
the tax and legal advisers of the Client Entity as well as the
auditors of the Client Entity and may do so free from any
obligation of confidentiality.
23.7. Any rights and obligations set out in clauses dealing
with Confidentiality and Use of Data included in Part A
shall equally apply in respect of the Principal. For the
avoidance of any doubt, the directors, officers and
employees of the Principal, its affiliates and, to the
extent applicable, its customers shall additionally be
consideredDataSubjects.
24. Bookkeeping of the Client Entity and (Tax)
Reporting
24.1 If FY has not been, or will not be, entrusted with the
bookkeeping of the Client Entity, the Client Entity and the
Principal hereby jointly and severally warrant and
guarantee that the administrative organisation and the
internal control procedures of the party entrusted with
this task are such that unusual transactions will
immediately be queried and that all the Directors will be
informed of such transactions immediately upon
discovery of their unusual nature. If it appears that the
internal controls as applied by the party entrusted with
the bookkeeping do not meet the standards as required
under Applicable Law, the Client Entity and the Principal
shall immediately take all action necessary to rectify this
situation in close cooperation with FY. If FYis not satisfied
with the actions taken, FY shall be entitled to terminate
the provision of Directorship Services to the Client Entity
with immediate effect.
24.2. In case FY has not been, or will not be, entrusted with the
bookkeeping of the Client Entity, the Client Entity and/or
the Principal shall provide FY with the monthly, quarterly
and annual reporting of the Client Entity on a timely basis.
Any time spent in reviewing or questioning these financial
reports will be charged on a time spent basis at the
prevailing hourly rate, or for an agreed fee amount.
24.3. The Principal shall take all necessary measures to ensure
that the financial statements of the Client Entity are
approved and can be submitted for adoption or approval
and filed on time as per Applicable Law.
24.4. The Principal and the Client Entity shall promptly and
fully comply with all taxation and other reporting
obligations in respect of the Client Entity or the
Principal’s interest in the Client Entity to the relevant tax
authorities or regulatory authorities in any relevant
jurisdiction. If necessary, FY may require the Principal
and/or the Client Entity to produce satisfactory evidence
of compliance with this clause.
25. Activities of the Client Entity
The Principal guarantees that each transaction that
concerns the Client Entity and/or that the Client Entity is a
party to or is involved with, is legitimate under Applicable
Law. The Principal represents that neither the Client Entity
nor the Principal is or will be engaged, directly or indirectly,
in any illegal activities including but not limited to money
laundering, terrorism financing and tax fraud.
26. Directors other than FY
26.1. If, in addition to FY, its affiliates or any of its directors,
officers or employees, one or more additional directors or
officers are appointed to the board of the Client Entity
(each such director being an “Outside Director”), the
Principal warrants and guarantees that the reputation and
integrity of any such Outside Director is reputable beyond
doubt and does not disqualify him/her/it to act as director
under Applicable Law. FY may require each Outside
Director to submit a statement to that effect. The Client
Entity and the Principal jointly and severally warrant and
guarantee that no Outside Director will engage in any
transaction on behalf of the Client Entity which is
illegitimate or corrupt under Applicable Law.
26.2. The Client Entity and the Principal will ensure that each
Outside Director shall inform FYin a timely manner of any
and allenvisagedactivitiesand transactions to enable FY to
verify the nature thereof and to request any information
and/or documentation related thereto.
26.3. The Principal and/or the Client Entity shall inform FY
forthwith with respect to the resignation or dismissal of
each Outside Director of the Client Entity and rescission of
each power of attorney issued for and on behalf of the
Client Entity.
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27. Liability
Neither FY nor any of its affiliates, directors, officers or
employees shall be liable for any damages, costs or
expenses sustained or incurred by the Client Entity or the
Principal as a result of or in connection with any act or
omission by FY or any of its affiliates, directors, officers or
employees in the provision of Directorship Services,
irrespective of the legal basis of the Claim, such as, but not
limited to director’s liability, except in the event of gross
negligence, deliberate recklessness, wilful misconduct or
fraud of FY or its directors.
28. Indemnity
28.1. During and after termination of the Agreement, the Client
Entity and the Principal, jointly and severally, shall
indemnify and hold FY and any of its affiliates, directors,
officers, employees or other persons appointed as Director
harmless from and against any and all Claims from third
parties (including but not limited to any trustee in
bankruptcy acting on behalf of the Client Entity), relating to
or arising from the Directorship Services, and waive, in as
far as legally possible, the right to claim in respect of
director’s liability, except in the event of gross negligence,
deliberate recklessness, wilful misconduct orfraud ofFY or
any of its directors.
28.2. During and after termination of the Agreement, the Client
Entity and the Principal, jointly and severally, shall
indemnify and hold FY and any of its affiliates, directors,
officers, employees or other persons harmless against any
and all Claims from third parties (including but not limited
to any trustee in bankruptcy acting on behalf of the Client
Entity), relating to or arising from the fact that Outside
Directors have acted or omitted to act and as such have
given rise to a Claim, as far as FY and/or any of its
affiliates, directors, officers, employees or other persons is
or was a Director and as suchwas not a party to the action
or omission that has led to the Claim.
28.3. Insofar as FY has not been entrusted with the
bookkeeping of the Client Entity, the Client Entity and the
Principal, jointly and severally, shall at all times during and
after termination of the Agreement, indemnify and hold
FYand any of its affiliates, directors, officers, employees or
other persons harmless against any and all Claims from
third parties (including but not limited to any trustee in
bankruptcy acting on behalf of the Client Entity), relating to
or arising from incorrect, incomplete, misleading, untimely
or improper bookkeeping by or on behalf of the Client
Entity.
28.4. The Principal warrants and guarantees that neither the
Principal nor the employees northe representatives of both
the Client Entity and the Principal engage or have engaged
in acts of bribery. The Principal warrants and guarantees
that adequate procedures have been put in place and will
be maintained by the Client Entity and the Principal to
prevent them, their employees and representatives from
engaging in bribery. The Client Entity and the Principal are
obliged to report to FY any (suspected) violations by their
employees or representatives of the prohibition to engage
in acts of bribery.
29. Termination
29.1. FY is entitled to terminate the Agreement with
immediate effect and to immediately resign from any
position which it or any of its affiliates, directors, officers,
employees or other persons holds as a Director and to take
any other action appropriate to the circumstances, without
any compensation being due to the Client Entity or the
Principal, if and when the state of affairs of the Client Entity
or the Principal is such that FY or any of its affiliates,
directors, officers, employees or other persons cannot
reasonably be expected to continue to act as a Director,
including but not limited to the following events:
(a) a resolution to wind up the Client Entity;
(b) any material change in the ownership of the share
capital of the Client Entity or in the composition of
the board of directors of the Client Entity, or any
other change of control in respect of the Client
Entity;
(c) the commencement of criminal proceedings
against the Client Entity and/or the Principal;
(d) the occurrence of a material breach under
Applicable Law by the Client Entity and/or the
Principal;
(e) non-payment of Fees and Expenses;
(f) material circumstances which include a continued
impairment of the moral, legal or financial integrity
of either the Client Entity, its shareholder(s) or the
Principal, in each case to be determined at the sole
discretion of FY;
(g) in case the information on the ultimate ownership
of the Client Entity proves to be inaccurate,
untrue, or incomplete, or if the Principal fails to
notify FY of the change in the ownership in a
promptly manner; or
(h) attachment of (all or part of) the assets of the Client
Entity and/or the Principal.
29.2. In case of termination of the Agreement by FY, the
Principal and the Client Entity hereby authorise FY to
appoint the Principal and/or the Authorised Person(s) to
replace the Director. The Principal and the Client Entity
hereby appoints FY as its attorney for the purpose of
signing on its behalf all such documents which are
necessary to give effect to the termination of the
Agreement and/or resignation and/or appointment
referred to above and including, without limiting the
generalityofthispower,suchdocumentsasarenecessary to
appoint the Principal and/or the Authorised Person(s) as a
director(s) of the Client Entity.
29.3. FYmayrequire the Principal and/or Client Entity to execute
documents in blank to give effect to the termination of the
Directorship Services. FY is hereby expressly authorised to
date, complete and utilize these documents upon
termination of the Agreement.
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29.4. The Directors shall be immediately and fully discharged by
the Client Entity and the Principal upon termination of
the Agreement by FY following an event as described
in clause29.1.TheClientEntitywillregisterthe resignation
of the Directors with the local relevant register
immediately, failing which FY shall be unconditionally
authorised to register such resignation(s).
29.5. If it has been decided to put the Client Entity into voluntary
liquidation, the Director will never be obliged to act as
liquidator of the ClientEntity. However, in case the Director
is automatically appointed as liquidator by operation of
Applicable Law or the articles of association of the Client
Entity, the Client Entity shall, at first request of FY, dismiss
the Director as liquidator in accordance with
Applicable Law.
29.6. Suspension of a Director will be considered as a notice of
termination of the Agreement with immediate effect
without waiving any of the financial obligations of the
Client Entity and/or the Principal towards FY or such
Director.
August 2022