URBAN GAS DEVELOPMENT AGREEMENT Party A: Construction Bureau of Changli Country Party B: Beijing Zhong Ran Wei Ye Gas Co., Ltd. Date: July 02, 2004
[Stamp
Tax]
Party
A: Construction
Bureau of Changli Country
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Date: July
02, 2004
Contract
SN:
Signatory
Location: Construction
Bureau of Changli Country
Party
A: Construction
Bureau of Changli Country
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Chapter
I
General Principles
|
1.1
|
WHEREAS,
(i) the Government of Changli Country agrees to authorize Party B
the
exclusive right to develop, construct and operate the pipeline gas
project
in the urban area of Changli Country (the “Pipeline
Project”),
(ii) based on the Contact
Law of the People’s Republic of China and
other relevant applicable laws and regulations, and (ii) after field
study
and friendly consultations, the Parties hereby agree as follows in
relation to the construction of the Pipeline Project in Changli Country
(the “Agreement”).
|
Chapter
II Parties
|
2.1
|
Construction
Bureau of Changli Country (hereinafter referred to as “Party
A”)
|
Legal
address:
Tel.:
| 2.2 |
Beijing
Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter referred to as “Party
B”)
Legal
address: Caizhiguoji Xxxxxxxx Xx.
00 Xxxxxxxxxxxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxx
Tel.:
(000) 00000000
|
Chapter
III Establishment of the Company
|
3.1
|
Party
A, authorized by and on behalf of the Government of Changli Country,
agrees that Party B will be responsible for the Pipeline Project
of
Changli Country and the total financing of the Pipeline
Project.
|
| 3.2 |
Name
of the Company: Changli
Wei Ye Gas Co., Ltd.
|
Chapter
IV Business Scope
| 4.1 |
Business
Scope of the Company: within the urban planned area of Changli Country,
to: design, construct, manage, develop and operate the pipeline network
of
natural gas and its auxiliary facilities, and provide relevant maintenance
and emergency repair services; construct and operate natural gas
stations;
supply natural gas and provide after-sale services to industrial
transmission, commercial construction, civic utility and public
transportation; exploit natural gas reserves, design for the
transportation and transmission thereof, construct and management
the
operation related thereto.
|
2
Chapter
V
Exclusive Operating Right
|
5.1
|
Party
A authorizes Party B to execute the pipe natural gas project within
Changli Country and guaranties that Party B has the exclusive right
to
develop and construct the pipe gas project within Changli Country
for 30
years; provided, that Party B strictly execute 6.4.2 in this
Agreement.
|
|
5.2
|
Party
A will consider extending the 30 year exclusive operation term; provided,
that Party B can ensure the normal supply of gas during such
period.
|
|
5.3
|
If
Party A breaches this Agreement during the term of this Agreement,
Party A
shall bear the losses resulting from such breach. If Party A or any
of its
agents or entrusted parties breach this Agreement during the term
of this
Agreement (which causes Party B to lose the exclusive operating right
granted hereunder), Party A shall compensate Party B for its projected
economic benefits for the term of this Agreement. If Party B breaches
this
Agreement or fails to accurately forecast the natural gas market,
or it
fails to conduct normal operation, which causes suspension of operation
or
bankruptcy, Party B shall compensate the customers for the initial
installation fees incurred by them, and Party A shall have the right
to
terminate this Agreement and engage new natural gas
suppliers.
|
Chapter
VI Rights & Obligations of the Parties
|
6.1
|
The
Parties shall construct the Pipeline Project based to the high standards
and principles. The Pipeline Project is designed for supplying gas
to an
aggregate of 50,000 units. The first stage of the Pipeline Project
is to
supply for 3000 units (the “First Stage”). Party B agrees that it shall
complete the First Stage and start gas supply to the first customers
within 6 months, provided, that the actual number of the households
is not
lower than 1000. Party B agrees that it shall construct and improve
the
pipeline network in stages according to users’ requests after the First
Stage completes.
|
|
6.2
|
Party
A shall be responsible for the coordination with the local government
and
relevant departments of the government and shall provide the following
warranties to Party B in the form of official government
documents:
|
| 6.2.1 |
to
grant Party B the exclusive right to construct and operate pipe natural
gas project within the urban planned area of Changli Country for
30 years
and ensure the legality thereof; not to approve any new pipe gas
project
during such time; to guarantee that the pipeline network constructed
by
Party B in Changli Country pursuant to this Agreement accept natural
gas
when the long natural gas pipeline reaches Changli Country, and the
continual operation of the pipeline network; not to authorize any
other
company to operate;
|
3
| 6.2.2 |
to
guarantee that the initial residential installation fee shall be
no higher
than RMB 2,000/unit for a household and the residential gas price shall be
no higher than RMB 2.3 per cubic meter. The final gas price shall
be
approved by the government departments in charge of
pricing.
|
|
6.2.3
|
to
ensure that Party B shall enjoy the relevant government preferential
policies relating to business investment and raising of capital,
urban
infrastructure construction and land grant in Changli County. Considering
that the Pipeline Project is an urban infrastructure project, any
government fees to be incurred by Party B for the destruction of
municipal
roads for the construction of the condensed gas station and pipeline
network shall be deducted or
exempted;
|
|
6.2.4
|
to
require the inclusion of construction of pipe gas project as part
of any
new real estate development project and any renovation or expansion
projects related thereto in order to obtain the required government
approval; The government departments that are in charge of urban
construction, planning, public utilities, real estate must supervise
closely to ensure that pipe gas projects are designed, constructed
and
inspected simultaneously and together with the principal
projects.
|
| 6.3 |
Party
A shall be responsible for assisting Party B in the following
matters:
|
|
6.3.1
|
the
procedures for land use, planning, fire protection and commencement
of
project construction;
|
|
6.3.2
|
making
available water, electricity and transportation and handle other
infrastructure related matters and assisting Party B to organize
the
design and construction of the
project;
|
|
6.3.3
|
application
of all potentially available tax and administrative fee waivers and
deductions;
|
|
6.3.4
|
timely
provision of the municipal planning and relevant materials to Party
B upon
its request;
|
|
6.3.5
|
implementation
of warranties in appendices to this
Agreement.
|
| 6.4 |
Party
B’s Responsibilities
|
| 6.4.1 |
raising
funds for the Pipeline Project;
|
| 6.4.2 |
contriving
the scheme of the Pipeline Project in accordance with the general
urban
planning of Changli Country; implementing in stages, operating and
managing upon completion thereof after having been approved by the
Department of Development Planning;
|
4
|
6.4.3
|
ensuring
the continuous and safe gas supply except in the case of force
majeure;
|
|
6.4.4
|
periodic
inspection, repair and maintenance of gas stations and pipelines
inside
and outside residential buildings according to the PRC rules to ensure
year-round safe operation;
|
|
6.4.5
|
guaranteeing
that the quality of gas supplied hereunder complies with the relevant
PRC
rules;
|
|
6.4.6
|
organizing
project inspection by the relevant parties upon completion of the
Pipeline
Project;
|
|
6.4.7
|
signing
specific gas supply contracts with the
customers.
|
Chapter
VII Miscellaneous Provisions
| 7.1 |
Any
modification to this agreement and its supplemental agreement(s)
shall not
be valid and effective unless such modification is in writing and
signed
by both parties to this Agreement.
|
| 7.2 |
Should
any Party fail to perform any of its obligations under this agreement
or
materially breach the provisions of this agreement, which causes
the
project company to discontinue its operation or be unable to meet
the
operational purposes of the Pipeline Project as provided under this
agreement, the breaching Party shall be deemed to have unilaterally
terminated the agreement, and the non-breaching Party shall have,
in
addition to any right to and claim for damages, the right to apply
to the
original approving government authority for the termination of this
Agreement in accordance with this
Agreement.
|
| 7.3 |
Should
any Party be prevented from performing its obligations under this
agreement due to the occurrence of any event of Force Majeure such
as
earthquake, windstorm, flood, fire, war and any other unforeseeable
event
whose occurrence and consequences are beyond control, such Party
shall
immediately notify the other Party, and within 15 days [following
the
occurrence of such event], provide documents stating the details
of such
event, the reasons for complete or partial nonperformance by such
Party
and documents evidencing the occurrence of such events. Such documents
shall be issued by a notary public institution located at the place
where
such event occurs. The Parties shall negotiate whether to cancel
the
entire Agreement or to discharge certain obligations of the non-performing
party under this agreement based on the extent to which the performance
of
this Agreement has been affected.
|
| 7.4 |
Any
and all disputes arising out of or relating to the performance of
this
Agreement shall be settled by the Parties through friendly consultations.
If the disputes are not resolved through friendly consultations,
then each
party agrees to be subject to the jurisdiction of the People’s Court of
the locality where this Agreement is
executed.
|
| 7.5 |
In
the course of judicial procedures, the Parties shall continue to
perform
their respective obligations under this Agreement, with the exception
of
those parts of this Agreement which are under
dispute.
|
5
| 7.6 |
The
Parties may negotiate and execute documents to supplement this Agreement.
Such supplemental agreements shall have the same force and effect
as this
Agreement.
|
| 7.7 |
This
Agreement and any of its supplemental agreements shall not be binding
upon
any Party unless signed and sealed by the
Parties.
|
| 7.8 |
There
are four originals of this agreement. Each party holds two
originals.
|
|
Party
A (Seal): Sealed
|
Party
B (Seal): Sealed
|
|
Representative
(Signature): Signed
|
Representative
(Signature): Signed
|
|
Date:
July 2, 2004
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6
