ASSET TRANSFER AGREEMENT
THIS AGREEMENT (this "Agreement") is made and executed in Wuxi, Jiangsu
Province, P. R. C. on the 31st day of January, 2007 by and between:
Asset Transferor (Party A): HAILONG DRILL PIPE (WUXI) CO., LTD.
Address: Xxx X, Xxxxxxxx Xxxx, Xxx Xxxxxxxx, Wuxi
Legal representative: Zhang Jun
Telephone: 000-00000000
Fax: 000-00000000
Asset Transferee (Party B): WUXI SEAMLESS OIL PIPES COMPANY LIMITED
Address:
Legal representative: Xxxxx Xxxxx Bin Harun
Telephone:
Fax:
Whereas:
1. Party A is a Sino-foreign joint venture duly organized and validly
existing under the laws of the People's Republic of China. Based on the
demands of production and operation and with the approval of its Board of
Directors, Party A intends to conditionally transfer to Party B its own
assets - the equipment comprising a drill pipe production line
(hereinafter referred to as the "Drill Pipe Production Line") owned by
Party A.
2. Party B fully acknowledges the risk of the transferred assets, accepts
the terms and conditions offered by Party A and with the approval of its
Board of Directors, intends to receive the transfer of the Drill Pipe
Production Line owned by Party A on the basis of agreed terms and
conditions.
NOW, THEREFORE, after friendly consultation in all aspects, the Parties hereby
agree as follows:
ARTICLE 1 DEFINITIONS
1.1 Transfer of assets. The "transfer of assets" in this agreement means the
Drill Pipe Production Line and its relevant materials (including but not
limited to the purchase contracts, drawings, users' manual, qualification
certificate, maintenance cards and acceptance materials) listed in
Appendix 1 of this Agreement, which Appendix includes details regarding
the equipment of the Drill
Pipe Production Line.
1.2 Risks. The "risks" in this agreement means the economic losses of Party B
caused by the purchase of such transferred assets due to changes in the
actual situation, or a failure to bring the expected economic benefits
for Party B, including but not limited to the following situations: (1)
technical upgrades in the industry that result in the transferred assets
becoming obsolete; (2) the transferred assets have various technical
defects that negatively impact the production process; (3) the
transferred assets are partially or completely damaged or destroyed due
to unforeseen and uncontrollable causes such as natural disasters,
national requisitions or war.
1.3 Reference date of transfer. The "reference date of transfer" means the
date on which Party A transfers ownership and risk of ownership in the
transferred assets to Party B.
1.4 Legal and valid commercial invoices. Party A shall issue to Party B legal
and valid commercial invoices specifying the same assets as listed in
Appendix 1.
ARTICLE 2 TRANSFER PRICE AND PAYMENT TERMS OF TRANSFERRED ASSETS
2.1 Party A shall transfer the assets to Party B at the agreed price of RMB
thirty-eight million ((yen)38,000,000.00).
2.2 Party B shall fully accept the above-mentioned price and agree to pay to
Party A as follows:
2.2.1 Party B shall pay XXX 00 million to Party A by February 3, 2007.
2.2.2 On the day of asset delivery, Party B shall pay the remaining XXX 00
million to Party A.
2.3 Both parties agree that the transferred assets in this agreement refer
only to the Drill Pipe Production Line, not including raw materials,
semi-finished products, finished products, spare parts or other
production equipment related to the Drill Pipe Production Line. If Party
B needs raw materials, semi-finished products, finished products, spare
parts or other production equipment, it may negotiate with Party A
regarding purchase prices based on the above-mentioned market prices.
ARTICLE 3 CONDITIONS OF ASSETS TRANSFER
Both parties agree that Party A shall transfer the assets subject to the
following preconditions:
1. Party B agrees that, after the successful transfer of assets, it shall
rent the transferred assets to Party A for production purpose.
2. The rental period of transferred assets shall not exceed 7 months, which
shall be April 1, 2007 to October 31, 2007.
3. The rental fee for transferred assets during such rental period shall be
RMB 3 million.
4. Upon the expiry of the rental period, in case Party A intends to extend
the
rental period, it shall notify Party B of this intent two months in
advance; under this circumstance, Party B shall consider the rental
requirements of Party A as a priority and the rental fee shall be
determined through friendly negotiation.
ARTICLE 4 RIGHTS AND OBLIGATIONS OF THE PARTIES
4.1 Rights and obligations of Party A
4.1.1 Party A undertakes that it has full ownership of the transferred assets
and there are no co-ownership relationships with any third party, no
guaranty has been provided to a third party and no other issues exist
that may impact this asset transfer.
4.1.2 From the signing date of this agreement to the completion date of the
asset takeover, Party A shall not engage in any activities that may
damage the transferred assets.
4.1.3 Party A shall have the right to receive the agreed price for transferred
assets in accordance with this Agreement.
4.1.4 Party A shall have the right to continue to rent such assets for
production purposes in accordance with this Agreement after the asset
transfer.
4.2 Rights and obligations of Party B 4.2.1 Party B shall undertake to make
the agreed payments to Party A at the agreed prices and times specified
by this Agreement.
4.2.2 Party B shall assist Party A with the formalities of the asset takeover.
4.2.3 Party B shall undertake to rent the transferred assets to Party A for
production purposes in accordance with this agreement.
ARTICLE 5 REFERENCE DATE OF TRANSFER AND TAKEOVER OF TRANSFERRED ASSETS
5.1 The reference date of transfer is March 31, 2007.
5.2 Immediately after Party A delivers the assets to Party B, Party B shall
pay to Party A the remaining XXX 00 million.
5.3 Delivery method of transferred assets by Party A: authorized
representatives from both Parties shall check the transferred assets on
site; after making sure that there are no errors, the authorized
representatives from Party A shall transfer the takeover formalities to
their counterparts at Party B, and the signing of takeover confirmation
letters by the authorized representatives from both Parties shall
conclude the takeover process. Prior to the takeover, the ownership and
risks of the transferred assets shall be borne by Party A; after the
takeover, the ownership and risks of the transferred assets shall be
borne by Party B.
5.4 At the time of takeover, Party A shall transfer to Party B the commercial
invoices and technical materials of the transferred assets in accordance
with this agreement.
5.5 Party B shall endeavor to assist Party B in the takeover.
ARTICLE 6 BREACH
6.1 In case Party B fails to make the agreed payment to Party A in accordance
with Article 2 in this Agreement, Party A shall have the right to charge
Party B 0.3% of the payable but unpaid balance each day as a penalty
until the date when the payment is finally made.
6.2 In case Party B fails to make the agreed payment to Party A for over 30
days, Party A shall have the right to cancel the Agreement. If Party A
cancels this Agreement, Party B shall pay to Party A 5% of the transfer
price as a penalty.
6.3 In case Party B has made full payment to Party A, but Party A fails to
deliver the assets to Party B in accordance with Articles 4 and 5 in this
Agreement, Party A shall pay to Party B 0.3% of the agreed price of the
Drill Pipe Production Line each day as a penalty. In case Party A delays
in delivering the assets and relevant documents (including but not
limited to technical materials and legal and valid commercial invoices)
for over 30 days, Party B shall have the right to cancel this Agreement.
If Party B cancels this agreement, Party A shall pay to Party B 5% of the
transfer price as a penalty. In case Party A fails to deliver the assets
to Party B in accordance with Articles 4 and 5 in this Agreement due to
the actions of Party B, the takeover date shall be extended and the risks
shall be borne by Party B from 12 o'clock noon of the referenced transfer
date.
6.4 In case Party B violates Article 3 in this agreement, i.e., Party B
refuses to rent the transferred assets to Party A for production
purposes, or the rental period is less than 6 months, or within the
rental period specified by this agreement, Party B requests to increase
the rental price without the approval of Party A, Party A shall have the
right to cancel this agreement. If Party A cancels this Agreement, Party
B shall return the transferred assets to Party A in good condition within
3 days from the cancellation date and pay to Party A 5% of the transfer
price as a penalty.
6.5 Unless otherwise specified by this Agreement, in case either Party
cancels this Agreement without the approval of the other Party after the
signing of this agreement, such Party shall pay RMB 2 million to the
other party as a penalty.
ARTICLE 7 DISPUTE RESOLUTION
7.1 Any disputes arising from or in connection with this Agreement shall be
settled by both Parties through friendly consultations.
7.2 If the Parties fail to settle any disputes through friendly
consultations, such disputes shall be submitted to the Shanghai
Arbitration Commission for arbitration. The arbitration results shall be
final and binding on both parties.
ARTICLE 8 EFFECTIVENESS
8.1 The Parties hereto have caused this Agreement to be executed by their
legal representatives or authorized representatives on the signing date.
8.2 The appendixes to this agreement shall be of equal force with this
Agreement.
8.3 The Parties hereto may have additional consultations about affairs not
mentioned herein.
Party A: HAILONG DRILL PIPE (WUXI) CO., LTD.
(Seal)
Authorized Representative: /s/
--------------------
Party B: WUXI SEAMLESS OIL PIPES COMPANY LIMITED
(Seal)
Authorized Representative: /s/
--------------------
UFPm20070109152559
--------------------------------------------------------------------------------
Appendix: List of Product Equipment in Hilong Drill Pipe (Wuxi) Co.,Ltd
Asset name Size and Model Original Value
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 22500
Steel stack 22500
Steel stack 22500
Steel stack 20180
Steel stack 22500
Steel stack 22500
Steel stack 22500
Steel stack 22500
Steel stack 22500
Machine equipment 22500
Steel stack 22500
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Steel stack 20180
Sawing machine SHARK280 29000
Magnetic powder detection machine SMT-CEW-4000GZL 184000
NC Lathe QK1319 349000
NC Lathe QK1319 348813.12
NC Lathe CK7840 868000
NC Lathe CK7840 868000
Xxxxx Industries Furnaces 4953216.2
Pressure straightening machine Y32-250T 242081.14
Pressure straightening machine Y32-250T 242081.14
Pressure straightening machine Y32-250T 242081.14
Magnetic powder detection machine SMT-CEW-2000ZZ 122000
Crossing electric flat machine and 5T 128743.15
installation
Metal band sawing machine GW4028B 12500
Metal band sawing machine GW4028B 12500
Wire Cutting Discharge Electric Cutting 30C 18000
Machine
Common lathe + front air spider Q1319 223788.12
NC large-sized-bore spindle lathe + 346870
large-stroke air spider (2 sets)
Lathe CA6140A/1000 00000
Xxxx-xxx upsetting machine 800T 7862773.17
Drilling machine Z3040*13 44500
Self priming pumps 2.4T100WFB-CD 19000
Flat belt grinding machine M7130H 70500
10KV transformer station 2968138
Common lathe + front air spider Q1319 223788.12
Internal scrap-absorbing equipment 245000
Pipe thread lathe Q1319-1A 158991.45
Pipe thread lathe Q1319-1A 158991.45
Pipe thread lathe Q1319-1A 158991.45
Pipe thread lathe Q1319-1A 158991.45
Pipe thread lathe Q1319-1A 158991.45
Friction welder CG-160 8706309.51
Grinder and auxiliary machines 196369.17
Grinder and auxiliary machines 244689.6
Power distribution box 0.4KV 150156
Friction welding spindle CG-1600 460000
Medium-frequency induction 154000
annealing furnace in the welding area
Milling machine X5032 68000
Temperature regulating device of oil 89000
liquid cooling
Pipe thread lathe + front air spider Q1319-1A 241000
Medium-frequency induction quenching 213000
furnace
Medium-frequency induction quenching 213000
furnace
Medium-frequency induction tempering 111305
furnace
Medium-frequency induction tempering 111305
furnace
Simple NC lathe (improved) QK1319 257011.07
Internal weld boring machine + front air Q1319 268000
spider + mobile bores
Bellow support 230087.12
Internal scrap-absorbing equipment 269590.36
Vibration bag filter 6500
Bellow support 190000
Bellow support 190000
Hydraulic machine (bending tester) Y41-160T 327909.9
Automatic sorting machine of steel 18800
materials
Single instrument 0
Laser marking machine JMJB-100 125000
Pneumatic marking machine JMQD-120 55000
Length and weight operating station 28000
Display card of working machine 12493.6
Ultrasonic detector XTX-9002PLUX 45816
Ultrasonic detector CF-IX 310000
Magnetic powder detection machine SMT-CZD-ZZ 92000
Weight-measuring equipment 1T 66000
Electromagnetic xxxxx (auxiliary 75660
equipment for gantry crane)
Injection equipment XX-XX 460000
Painting equipment 40000
Crane for packaging 2T 68100
Portable analyzer LT1000 9000
Screw compressor LGD-10/0.8-X 86000
Vertical single-stage pump KQL100/315-11/4 11400
Vertical single-stage pump KQL50/160-3/2 3700
LV switchgear GCK 46203
Controlling box 32000
Screw compressor LGD-10/0.8-X 86000
Gas storage tank 1/0.8/0.6/0.8 6650
Gas storage tank 1/0.8/0.6/0.8 6650
Gas storage tank 1/0.8/0.6/0.8 6650
Gas storage tank 1/0.8/0.6/0.8 6650
Cooling tower 15T 4800
Cooling tower 30T 7600
Cooling tower 50T 12000
Crane 345219.65
Balance crane PDJ125 7000
Balance crane PDJ125 7000
Balance crane PDJ125 7000
Balance crane PDJ125 7000
Balance crane PDJ125 7000
Electric fork FB16 114000
Nitrogen filling vehicle CDZ-35Y1 13500
Drilling pipe power tongs 209800
Crane 345219.65
Crane 345219.65
Crane 345219.65
Crane 345219.65
Crane 345219.65
Crane 345219.65
Crane 345219.65
Balance crane PDJ125 7000
Platform system of production line 3521180.18
Steel clipper station 7000
Total 43095053.26
