Xinlong Holdings'S Legal Opinion On The Implementation Of Employee Stock Ownership Plan

Hainan Fangyuan law firm

About Xinlong holding (Group) Limited by Share Ltd

Implementation of employee stock ownership plan

Legal opinion: Xinlong holding (Group) Limited by Share Ltd

　　 FangYuan Lawyers Office (hereinafter referred to as the "local") accept the Commission of the Limited by Share Ltd (hereinafter referred to as "Xinlong Holdings" or "company") as a special legal adviser for the implementation of this ESOP, and issue a legal opinion on the employee stock ownership plan.

In accordance with the legal opinion issued by this Council, the Institute and the solicitor specifically made the following statement:

The Securities Law (hereinafter referred to as the "Securities Law"), the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"), "the guiding opinions on the pilot implementation of the employee stock ownership plan for listed companies" (hereinafter referred to as the "guiding opinions"), the Shenzhen stock exchange's "information disclosure Memorandum No. forty-second - Employee Stock Ownership Plan" (hereinafter referred to as the "information disclosure memorandum") and other relevant laws, regulations and normative documents, verify the approval and authorization, qualification, legal compliance, performance procedures and information disclosure of the employee stock ownership plan of Xinlong holding company. 1. The Institute and its solicitors are based on the company law of the People's Republic of China (hereinafter referred to as the company law) and People's Republic of China.

2. The Institute and its solicitors shall abide by the provisions of the securities law, the law on the management of securities legal business of law firms, and the practice rules for securities law business of law firms.

1 / 12 and the facts that have occurred or existed before the date of issuance of this legal opinion, have strictly fulfilled the statutory duties, followed the diligence and conscientiousness and good faith principle, and conducted sufficient verification and verification to ensure that the facts identified in this legal opinion are truthful, accurate and complete. The concluding observations are legitimate and accurate, and there are no false records, misleading statements or major omissions, and assume corresponding legal responsibilities.

3. Xinlong Holdings The guarantee has provided all the information and information necessary for the issuing of this legal opinion by the Institute and the solicitors, and to ensure that the information provided is true and accurate, without any false record, misleading statement or major omission, and the photocopy and copy are identical with the original and the original.

4. This legal opinion is only used by Xinlong holding company for the purpose of implementing the employee stock ownership plan. It can not be used for any other purpose without the written consent of the Institute and the solicitor.

5, the Institute and the solicitor agree to make the legal opinion as the statutory document of the employee stock ownership plan of Xinlong holding company, and be responsible for the legal opinions issued in accordance with the law.

Based on the above statement, the Institute and its solicitors have verified and verified the relevant documents and related facts provided by Xinlong holdings in accordance with the business standards, moral standards and diligence and responsibility of the lawyers profession.

1. Approval and authorization of ESOP.

1, Xinlong holding held the fifth session of the twenty-seventh meeting of the board of directors in March 12, 2015. It deliberated and adopted the motion on shareholders' commitment to change, the company employee stock ownership plan (Draft) and summary, and the motion to invite shareholders' meeting to authorize the board of directors to handle matters related to the employee stock ownership plan of the company, and the motion related to the second extraordinary shareholders meeting held in 2015. When considering the above motion, the company's associated directors avoid voting.

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2, Xinlong holdings held the sixteenth meeting of the fifth supervisory board in March 12, 2015, and deliberated and adopted the motion on Shareholder's commitment to change, and the employee stock ownership plan (Draft) of the company.

3, Xinlong holding this employee stock ownership plan related bills still need to submit the company's second extraordinary shareholders' meeting in 2015 to consider and pass.

Two. The main qualification of the company to implement ESOP.

1, Xinlong holding (formerly Hainan Xinlong nonwoven Limited by Share Ltd) is approved by the Hainan Provincial People's Government Qiong Fu letter [1999]62, approved by Hainan Xinlong nonwoven Industrial Co., Ltd. to change the Limited by Share Ltd established according to law.

2. Hainan Xinlong nonwoven Industrial Co., Ltd. is a Joan joint venture company established by Hainan Provincial Economic Cooperation Office in July 16, 1993 with the approval of Qiong Jing he [1993]2095. It was registered in the Hainan Administration for Industry and Commerce (hereinafter referred to as the Hainan industrial and commercial bureau) and obtained a business license with a registered capital of RMB 28 million yuan. It was approved by the Hainan people's Government Qiong Fu letter [1999]62 and changed to Limited by Share Ltd in March 1999.

3, approved by the CSRC's [1999]114 document, the company publicly issued 55 million ordinary shares of the Renminbi for the first time in September 8, 1999, and was listed on the Shenzhen stock exchange in December 9th 1999.

In 4 and April 6, 2005, the name of the company was changed from Hainan Xinlong nonwoven Limited by Share Ltd to Xinlong holding (Group) Limited by Share Ltd, which was examined and put on record by the Hainan provincial industry and Commerce Bureau, and a new business license was issued.

5, the company now holds the "business license" issued by the Hainan Administration for Industry and Commerce in August 21, 2013 on the registration number 460000000158045. The residence is Chengmai old town industry.

3 / 12 Development Zone, the legal representative Guo Kaizhu, the registered capital of 538 million 395 thousand yuan, business scope: Manufacture and sale of all kinds of non-woven fabrics and their deep-processing products; phosphorus chemical products research and production and operation; biotechnology products research and production and operation; import and export business; technical advisory services; tropical efficient agricultural development; building materials, communications equipment, non-ferrous metals, ferrous metals, stationery, paper, chemical raw materials and products (except dangerous goods), agricultural products (pesticides), decorative materials, mechanical and electrical equipment and accessories, foreign investment business.

6, according to the company's confirmation and the lawyer's reasonable verification, the company does not exist in accordance with the provisions of laws, regulations and normative documents, has been revoked business license, ordered to close or be revoked or disbanded. There is no need to terminate the provisions of the articles of association and there is no case of suspension or termination of the listing by the Shenzhen stock exchange.

Based on the above, the Institute and the solicitors think that Xinlong holding company is a listed company established in accordance with the law and is valid for existence.

Three. The legal compliance of the ESOP.

In comparison with the relevant provisions of the company law, the securities law, the guiding opinions, and other laws, regulations, regulations and normative documents, our lawyer compares the basic conditions for Xinlong holding to apply for this ESOP in accordance with the law.

1, according to the company's confirmation and the lawyer's access to the relevant notice of the company, the company has carried out the procedures strictly in accordance with the provisions of laws and administrative regulations in the implementation of the employee stock ownership plan, and has implemented the information disclosure in a truthful, accurate, complete and timely manner. There is no other person's advantage of using the employee stock ownership plan to conduct insider trading or manipulate the securities market, and so on, which is in line with the requirements of the first part (1) of the guiding opinions on compliance with the law.

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2, according to the company's confirmation and the statement issued by the participants of the ESOP, the ESOP follows the principle of the company's independent decision and voluntary participation by employees. There is no company's compulsory participation in the employee stock ownership plan in the form of apportionment and forced distribution. It is in line with the requirements of the principle of voluntary participation in the first part (two) of the guiding opinions.

3, according to the Limited by Share Ltd employee stock ownership plan (Draft) of the Xinlong holding (Group) Company (hereinafter referred to as the company's employee stock ownership plan), participants participating in the ESOP will be self financing and at risk, equal to other investors' rights and interests, in line with the requirements of the first part (three) of the guiding opinions on the principle of risk bearing.

4. According to the company's employee stock ownership plan (Draft), the participants of the ESOP are the full-time employees of the directors, supervisors, senior managers, companies and subordinate subsidiaries of the company. They participate in the full-time work of the company or their subsidiaries, receive paid salaries and sign labor contracts, and comply with the second part (four) of the guiding opinions on the participation of employees in the ESOP.

5, according to the company's employee stock ownership plan (Draft), the total amount of the total amount raised by the employee stock ownership plan is 90 million yuan, the source of which is the legitimate salary and self raised funds of the employees, which is in line with the second part (five) item first of the guiding opinions.

6, according to the company's employee stock ownership plan (Draft), after the establishment of the employee stock ownership plan, we entrusted the finance securities limited liability company (hereinafter referred to as "financial securities"), and fully subscribed to the secondary share of the financial assets management and financial management system (hereinafter referred to as "finance and finance group 1"), which is set up by financial securities. "" The fiscal ceiling of the CAS group 1 is 27000, and the priority share and secondary share are set up according to the ratio of 2:1. The main investment scope is the purchase and holding of Xinlong holding stock. The company's controlling shareholder, Hainan, is building HUAWEI's fortune 1, and the priority share is guaranteed.

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The source of the underlying stocks of the fund is 1: first, acquire and hold the underlying stock in the way of laws and regulations such as the purchase of the two market; second, the Hainan stock exchange, which is promised by the shareholder of the company, in the company's share splitting reform, 7 million shares, which are changed to the stock source of the employee stock ownership according to law (the change must be implemented after the shareholders' meeting is deliberated and passed).

The lawyer believes that it is in line with the provisions of the second part (five) of the second part of the guiding opinions on the stock source of ESOP.

7, according to the company's employee stock ownership plan (Draft), the lock up period of the stock of the target group is 12 months, starting from the date when the last stock of the company's notice is spanferred to the current shareholding scheme, and is in line with the second part (six) item second of the guiding opinions on the period of the employee stock ownership plan.

8. According to the company's employee stock ownership plan (Draft), the total number of stocks held by dhdhl 1 is not more than 10% of the total share capital of the company; the number of shares in which any holder holds the share of the employee stock ownership plan is not more than 1% of the total share capital of the company, which is in accordance with the provisions on the size of the employee stock ownership plan in item second of the second part (six) of the guidance.

9, according to the company employee stock ownership plan (Draft), the participants of the ESOP will become the holder of the scheme after the share of ESOP is subscribed. The holder's meeting is the internal management authority of the employee stock ownership plan, and all holders have the right to participate in the holder's meeting. This employee holds