Consigned Management Service Agreement by and among Tianjin Shengkai Industrial Technology Development Co., Ltd. Shengkai (Tianjin) Ceramic Valve Co., Ltd. and The Shareholders of Tianjin Shengkai Industrial Technology Development Co., Ltd. May 30th, 2008
by
and among
Tianjin
Shengkai Industrial Technology Development Co., Ltd.
Shengkai
(Tianjin) Ceramic Valve Co., Ltd.
and
The
Shareholders of Tianjin Shengkai Industrial Technology Development Co.,
Ltd.
May
30th,
2008
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Consigned
Management Agreement
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This
Consigned Management Service Agreement (“this Agreement”) is executed on May
30th,
2008 in
Tianjin, PRC, among the following Parties:
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(1)
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Tianjin
Shengkai Industrial Technology Development Co., Ltd. (hereinafter
called
“Party A”) is a limited liability company, duly incorporated in Tianjin,
People’s Republic of China (“PRC”), whose legal address is: Xxxx000, 0/X,
0xxXxxxxx, Xxxxxxx Economic-Technological Development
Area.
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(2)
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Shengkai
(Tianjin) Ceramic Valve Co., Ltd. (hereinafter referred to as “Party B”)
is a wholly foreign-owned enterprise (“WFOE”) duly incorporated in
Tianjin, PRC, whose legal address is: Xxxx
X0-000, Xx.000 Xxxxxxxx, Xxxxxxxx Logistics Processing Zones,
Tianjin.
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| (3) |
All
of the shareholders of Tianjin Shengkai Industrial Technology Development
Co., Ltd. (hereinafter collectively called the
“Shareholders”).
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Name of Each
Shareholder
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Shareholding
Ratio (%)
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ID Card No.
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Contact Address
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Xxxx
Xxxx
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71.39%
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120103196412022118
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000-000,Xxxx
0,Xxxxxxxxx Xxxxxxxxxxx,Xx.0 Xxxx, Xxxxxxxx, Heping District,
Tianjin
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Xxx
Xxx
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13.33%
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120103196607222128
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000-000,Xxxx
0,Xxxxxxxxx Xxxxxxxxxx,Xx.0 Xxxx, Xxxxxxxx, Heping District,
Tianjin
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Xxxx
Xxxxxx
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6.55%
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2310851197903050762
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Tuanjie
Wei, Muleng Town, Muleng City, Helongjiang Province
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Ji
Haihong
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6.55%
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140102197002012349
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Xx.0,Xxxx0,0xx/X,Xx.00,Xxxxxx
Xxxxxxxx,Xxxxxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx,Xxxxxx
Xxxxxxxx
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|||
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Xxxxx
Xxxx
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0.48%
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51010319740824628X
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Xx.0,0xx/X,
Xxxx 000, Xxxxxxxxx Xxxxx 0xx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx
Xxxx
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|||
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Xxxx
Xxxx
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0.48%
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110108197106111811
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No.1905,No.1Building,
Yangguang 100 Xxxxxxxxxxxxx Xxxxxxxxxx, Xx.0, Xxxxxxxx Xxxx,Xxxxxxxx
Xxxxxxxx, Xxxxxxx
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Xxxx
Xxxx
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0.48%
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440402197211205769
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Room
401, Xxxx 0, Xxxx 0,Xx.0000,Xxxxxxxxx Xxxxxxxxx Xxxxx Xxxx Xiangzhou
District,Zhuhai City,Guangzhou Province
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Xx
Xxxxxxx
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0.37%
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120106196505060526
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Xx.000,Xxxx
0,Xx.00 Xxxxxxxx,Xxxxxxxxx,Xxxxxxx Xxxxxx,Xx Xxxx
Xxxxxxxx,Xxxxxxx
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|||
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Liu
Naifan
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0.37%
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372832196010257414
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Dormitory
District,Yinan Gold Mine,Yinan County,Shandong
Province
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Consigned
Management Agreement
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(Party
A,
Party B
and the
Shareholders are referred to collectively in this agreement as the “Parties” and
individually as “a Party” or “each Party”.)
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(1)
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Party
A’s business scope is as follows:
The design, manufacturing and marketing of Environmental pollution
control
equipments (including flue gas desulphurization governance, de-dusting
equipment); the production and manufacturing of industrial control
systems
of its transportation systems and equipments; the design, manufacturing
and marketing of ceramic valves; the manufacturing environmental
dedicated
instrumentation electronic equipments; the manufacturing of ceramic
coatings; the manufacturing and sale of high-tech ceramics;
electromechanical products (except cars), chemical products (flammable,
explosive, dangerous goods except prone to cause toxicity); technical
consultation; technical services; operating the enterprise home-grown
products as well as related technology import and export
business;
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| (2) |
Party
B is engaged in researching, developing, technology consulting service
of
ceramic valves and ceramic
materials;
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(3)
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The
Parties agree that Party A shall consign to Party B the management
of all
of its business, finances and human
resources;
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| (4) |
The
Shareholders hold 100% of the equity interests in Party
A.
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NOW
THEREFORE,
the
Parties hereby agree through friendly negotiation as follows:
Article
1 Definition
1.1
“PRC”
refers to the People’s Republic of China, excluding the Hong Kong Special
Administrative Region, Macao Special Administrative Region and Taiwan
Province
1.2
“PRC
Laws” refers to all PRC laws, administrative regulations and government rules in
effect;
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1.3
“RMB”
refers to the legal currency within the PRC;
1.4
“Party A Staff” refers to the senior management staff of Party A and the manager
of each supermarket or store;
1.5
“Consigned Management Service Fee” or “Consideration” refers to the
consideration as defined in Article 3.1 and paid to Party B by Party
A.
2.1
Accounting Management Service
2.1.1
Goal
Achieve
scientific management of the accounting system of Party A.
2.1.2
Contents of the Services
2.1.2.1
Provide
information on financial and economic achievement
analysis;
2.1.2.2 Conduct
business instruction to improve budget management and counsel on business
operation;
2.1.2.3
Coordinate the use of operating cash, adjust the capital structure, accelerate
the turnover of cash flow, and effectively control financial risks;
2.1.2.4
Arrange internal and outside audit services;
2.1.2.5
Pursuant to the requirements of the class-evaluation system, provide optimal
management proposals and consulting services as to financial
management;
2.1.2.6
Provide working cost management consulting services.
2.2
Business Management Services
2.2.1
Goal
Provide
services relating to the management of ceramic products and staff training
so as
to enhance the professional management and eventually promote the economic
achievements of Party A.
2.2.2
Contents
2.2.2.1
Training to Party A Staff
(1)
Training Duration
Training
shall be conducted every month within the consigned term, and Party B shall
notify Party A of the timetable, contents of services, and lecturers of training
fifteen days (15) prior to the training. In the event of the staff members
of
Party A failing to take part in the training and to designate another employee
to attend the class, Party A shall present the written proof five days before
the training to Party B for such absence; otherwise it shall be treated as
attendance of training class and Party A shall bear the relevant training cost.
Both Party A and Party B shall be entitled to adjust the frequency of the
training according to the business operations of Party A.
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(2)
Contents of Training
A.
Corporate
culture training
Help
trainees to establish a correct outlook on life and values, combine their own
interests and business interests together and require trainees to write his
career planning after the training.
B.
The
basic
knowledge of products training Ensure
all students can master all the knowledge of products, in order to allow the
business staff in the market to meet market demand and fundamental changes,
increase sales and continue to create higher profits for the company.
C.
The
basic
marketing knowledge training Improve
the basic business skills and common sense of sales through systematic training
from the basic strange visit, negotiation, networks and terminals sales to
the
systematic integrated marketing communication knowledge in actual
sales.
D.
The
sales
policy training Focus
on
the training strengthen of corporate sales policies from the systematic lessons
to the actual case of learning to enable students to clear market rules, ensure
the adaptability to the market.
E.
The
team
construction and management training Fundamentally
solve the phenomenon of negative and inaction in the work of frontline
operational staff through the good work of the individual to promote others
to
work well, a resolution of work in the negative, the of inaction,.
F.
The
time
management planning training Develop
good time management habits for every operational staff in the
class.
G.
The
potential development and adjustment training Increase
the firm confidence of all participants to the future and the work.
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2.2.2.2
Management of the Company
2.2.2.2.1
High efficient use of senior management and bring new concepts and new capacity
for the company.
2.2.2.2.2
Enhance the overall effectiveness and efficiency of operations to the
company.
2.2.2.2.3
Comprehensively improve the operator's management level and the concept of
operation.
2.2.2.2.4
Comprehensively enhance the management capacity of the management team and
working ability of the related staff.
2.2.2.2.5
Clear the way for the change of management in the level of concept and
awareness.
2.2.2.2.6
Assist in the development of enterprise development strategies and operational
tactics.
2.2.2.2.7
Establish scientific and rational management basis, process and
system.
2.3
Advertising and Development Services
2.3.1
Target
Through
the participation and assistance of Party A’s actual operation and provide
training of management expertise to staff and further enhance the management
level and professionalism of ceramic products for Party A and eventually reach
and enhance operational efficiency.
2.3.2
Contents of Service
2.3.2.1
Advertising Services
(1)
Provide detailed and practical marketing plans for Party A and adjust from
time
to time based on the effects of such plans;
(2)
Assist Party A in selecting suitable advertising companies for the promotion
and
advertising of its brand image;
(3)
Assist Party A in communications with advertising companies on behalf of Party
A, and determine the details of the advertising plan;
(4)
Promptly report to Party A in detail with respect to the achievement and effect
of the advertising.
2.3.2.2
Development Services
(1)
Conduct research on the market and provide suggestions on the selection of
location of new stores and the distribution of supermarkets;
(2)
Conduct research on the competitors of Party A, and provide related competition
strategies;
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Management Agreement
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(3)
Conduct research on the impressions of customers, and provide suggestions for
perfection of customer services in accordance with the results of that
research.
2.4
Human
Resources Management Services
2.4.1
Target:
Achieve
the proper distribution of human resources, maintain the stability of the
management team, and stimulate the employees to positively work so as to
increase economic achievement.
2.4.2
Contents
2.4.2.1
Recommend
and nominate candidates for senior management staff positions of Party
A, its
wholly-owned supermarkets and all subsidiaries. Party A shall appoint such
candidates in accordance with the requirement of each
position;
2.4.2.2 Assist
in
perfecting organizational structure to improve management;
2.4.2.3 Establish
a labor management system for Party A, including without limitation employment
policies, training, a system of leaves and vacations, overtime work,
resignation, dismissal, etc.;
2.4.2.4 Complete
the employee salary system including for senior management staff;
2.4.2.5 Assist
in
completing the working effectiveness assessment system for employees and perfect
the salary incentive system;
2.4.2.6 Provide
training of labor management to the workers in the human resources department
of
Party A;
2.4.2.7 Provide
consulting services to Party A relating to labor policies and social
insurance;
2.4.2.8 Assist
Party A in standardizing the management of human resources and establishment
of
related systems.
2.5
Internal Control Services
Party
B
shall assist Party A in establishing internal control systems and provide
counseling on the following systems:
(1)
System for use of company seals;
(2)
System for collection of bills and checks;
(3)
Budgeting management system;
(4)Asset
management system;
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Management Agreement
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(5)Quality
management system;
(6)
Authorization and agency system;
(7)
Management system of subsidiaries of Party A.
Article
3 Consigned Management Service Fee
3.1
Party
A shall pay the Consigned Management Service Fee, equal to 2% of its total
revenue as the Consideration for services provided by Party B as set forth
in
Article 2 hereof.
3.2
Party
A shall pay to Party B the last year’s Consigned Management Services Fee before
January 31st
of each
year.
3.3
Whereas the business relationship between Party A and Party B has been
established through the Technical Services Agreement and the daily business
operations of Party A shall bear a material impact on its capacity to make
the
payments due to Party B, the Shareholders of Party A jointly agree that they
will immediately and unconditionally pay or transfer to Party B any bonus,
dividends or any other incomes or benefits (regardless of the forms) obtained
from Party A as the shareholders of Party A at the time when such payables
occur
and provide all necessary documents or take all necessary actions required
by
Party B to realize such payment or transfer .
3.4
Party
B shall be entitled to request in writing that Party A adjust the Consideration
in accordance with the quantity and quality of the consigned services. The
Parties shall positively negotiate with each other in respect of the Consigned
Management Service Fee, and Party A shall agree with such
adjustment.
Article
4 Warranties and Undertakings by Party A
4.1
Within the term of this Agreement, Party B shall be the entity exclusively
appointed by Party A to provide the services as set forth in Article 2
hereunder, and Party A shall not appoint any other entities to provide to Party
A (including its branches and subsidiaries) any services the same as or similar
to those services described in Article 2 hereof.
4.2
Without the prior written consent of Party B, Party A (including its branches
and subsidiaries) shall not change its business target.
4.3
Without the prior written consent of Party B, Party A (including its branches
and subsidiaries) shall not change its systems and policies regarding business
operations, management and finance.
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Management Agreement
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4.4
Without the prior written consent of Party B, Party A shall not change its
internal control system.
4.5
Without the prior written consent of Party B, Party A shall not change its
internal organization.
4.6
Without the prior written consent of Party B, Party A shall not replace any
senior management staff (including the senior management staff of its branches
and subsidiaries).
4.7
Party
A will provide information to Party B regarding the business operations,
management and finances of Party A (including its branches and subsidiaries).
4.8
Party
A will promptly and proactively notify Party B of any matters that adversely
affect Party A.
4.9
Party
A will give full cooperation to Party B, and provide assistance and convenience
to Party B for its on-site work, and shall not hinder Party B from providing
services as set forth in Article 2 hereof.
4.10
Party A will promptly make full payment of the Consigned Management Services
Fee
to Party B in accordance with the provisions hereof.
4.11Without
the prior written consent by Party B, Party A shall not commit any act or
omission that would materially affect Party B’s rights and interests
hereunder.
Article
5 Warrants and Undertakings by Party B
5.1
Party
B shall take advantage of its capacity and resources to provide the services
as
stipulated in Article 2 hereunder.
5.2
Party
B shall timely adjust and complete the services in accordance with practical
requests from Party A.
5.3
In
the event that Party B intends to provide services to any other entities engaged
in business similar to that of Party A, it shall give prior notice to Party
A
and strictly keep the confidential information obtained during the course of
providing services to Party A.
5.4
Party
B shall accept any reasonable suggestions from Party A during the course of
providing services to Party A.
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Article
6 Guaranty
6.1
To
secure the performance of the obligations assumed by Party A hereunder,
Shareholders agree to pledge all their equity interests in Party A to Party
B,
and the Parties agree to execute an equity pledge agreement with respect
thereto.
Article
7 Taxes and Expenses
7.1
The
Parties shall pay, in accordance with relevant PRC laws and regulations, their
respective taxes arising from the execution and performance of this
Agreement.
Article
8 Assignment of the Agreement
8.1
Party
A shall not transfer part or all its rights and obligations under this Agreement
to any third party without the prior written consent of Party B.
8.2
The
Parties agree that Party B shall be entitled to transfer, at its own discretion,
any or all of its rights and obligations under this Agreement to any third
party
upon six (6) days’ written notice to Party A.
Article
9 Liability of Breach
9.1
If
Party A fails to duly pay the Consigned Management Service Fee in accordance
with the provisions of Article 3 hereunder, then Party A shall pay liquidated
damages per day equal to 0.03% of the unpaid Consideration which falls due;
if
any delay of payment amounts to sixty (60) days, then Party B shall be entitled
to exercise the right of pledge under the equity pledge agreement.
9.2
If
Party A violates its representations and warranties hereunder and fails to
redress such violation within sixty (60) days upon receipt of written notice
from Party B, Party B shall be entitled to exercise the right of pledge under
the equity pledge agreement.
9.3
If
Party B is in non-performance, or incomplete performance, of this Agreement,
or
is otherwise in default of any of its representations and warranties hereunder,
Party A shall be entitled to request Party B to redress its
default.
Article
10 Effect, Modification and Cancellation
10.1
This
Agreement shall take effect on the date of execution hereof, and the valid
term
hereof shall be expired upon the date of completion of the acquisition of the
assets or the equity of Party A by Party B or its designated third
party.
10.2
The
modification of this Agreement shall not be effective without written agreement
through negotiation. If the Parties do not reach an agreement, this Agreement
remains effective.
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Management Agreement
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10.3
This
Agreement shall not be discharged or canceled without written agreement through
negotiation, provided that Party B may, by giving thirty days’ prior notice to
the other Parties hereto, terminate this Agreement.
10.4
If
Party B fails to provide the loan in accordance with the Loan Agreement signed
between Party B and the Shareholders on May 30th,
2008,
this Agreement shall be automatically terminated.
Article
11 Confidentiality
11.1
Any
information, documents, data and all other materials (herein “Confidential
Information”) arising out of the negotiation, signing, and implementation of
this Agreement, shall be kept in strict confidence by the Parties. Without
the
written approval of the other Parties, no Party shall disclose to any third
party any Confidential Information, but the following circumstances shall be
excluded:
(1)
Material that is known or may be known by the Public (but not including
materials disclosed by each Party receiving the Confidential
Information);
(2)
Materials required to be disclosed subject to applicable laws or rules or
provisions of a stock exchange; or
(3)
Materials disclosed by each Party to its legal or financial consultant relating
to the transaction of this Agreement, and this legal or financial consultant
shall comply with the confidentiality set forth in this Section. The disclosure
of the Confidential Information by staff or a consignee of any Party shall
be
deemed the disclosure of such Confidential Information by such Party, and such
Party shall bear the liabilities for breaching the contract. This Clause shall
survive whether this Agreement is invalid, amended, revoked, terminated or
unable to be implemented for any reason.
11.2
If
this Agreement is terminated or becomes invalid or unenforceable, the validity
and enforceability of Article 11 shall not be affected or impaired.
Article
12 Force Majeure
12.1
“Force Majeure” refers to any event that could not be foreseen, and could not be
avoided and overcome, which includes among other things, but without limitation,
acts of nature (such as earthquakes, floods or fires), government acts, strikes
or riots.
12.2
If
an event of force majeure occurs, any of the Parties that is prevented from
performing its obligations under this Agreement by an event of force majeure
shall notify the other Parties without delay and within fifteen (15) days of
the
event provide detailed information about and notarized documents evidencing
the
event, shall take appropriate measures to minimize or remove the negative
effects of force majeure on the other Parties and shall not assume the
liabilities for breaching this Agreement. The Parties shall continue performing
this Agreement after the event of force majeure disappears.
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Article
13 Governing Law and Dispute Resolution
13.1
The
effectiveness, interpretation, implementation and dispute resolution related
to
this Agreement shall be governed under PRC Laws.
13.2
Any
dispute arising out of this Agreement shall be resolved by the Parties through
mutual negotiation. If the Parties cannot reach an agreement within thirty
(30)
days from the date on which the dispute is brought forward, each Party may
submit the dispute to the Beijing Arbitration Commission for arbitration under
its applicable rules, and the language of arbitration proceedings shall be
Chinese. The arbitration award shall be final and binding upon both
parties.
13.3
During the process of dispute resolution, the Parties shall continue to perform
other terms under this Agreement, except for the provisions subject to the
dispute resolution.
Article
14 Miscellaneous
14.1
The
Parties acknowledge that this Agreement constitutes the entire agreement of
the
Parties with respect to the subject matters hereof and supersedes and replaces
all prior or contemporaneous oral or written agreements and understandings.
14.2
This
Agreement shall bind and benefit the successor of each Party and any transferee
permitted hereunder with the same rights and obligations as if such successor
or
transferee were an original party hereto.
14.3
Any
notice required to be given or delivered to the Parties hereunder shall be
in
writing and delivered to the address as indicated below or such other address
or
as such party may designate, in writing, from time to time. All notices shall
be
deemed to have been given or delivered upon by personal delivery, fax and
registered mail. It shall be deemed to be delivered upon: (1) registered air
mail: 5 business days after deposit in the mail; (2) personal delivery and
fax:
2 business days after transmission. If the notice is delivered by fax, it should
be confirmed by original through registered air mail or personal
delivery:
Party
A:
Contact
person: Xxxx Xxxx
Address:
Room324, 0/X, 0xxXxxxxx, Xxxxxxx Xxxxxxxx-Xxxxxxxxxxxxx Development
Area
Tel:
00-00-00000000 Fax:
00-00-00000000
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Party
B:
Contact
person: Xxxx Xxxx
Address:
Xxxx
X0-000,
Xx.000 Xxxxxxxx, Xxxxxxxx Logistics Processing Zones, Tianjin
Tel:
00-00-00000000
Fax:
00-00-00000000
The
Representative designated by the Shareholders
Contact
person: Xxxx Xxxx
Address:
Shengkai
Ind. Park Wanggang R.d Jinnan (Shuanggang) Dev. Area Tianjin
Tel:
00-00-00000000 Fax:
00-00-00000000
14.4
This
Agreement is executed in eleven originals with each party holding one original,
and each of the originals shall be equally valid and authentic.
[Signature
Page Follows]
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IN
WITNESS WHEREOF,
the
Parties hereto have caused this Agreement to be executed and delivered as of
the
date first written above.
Party
A Tianjin Shengkai Industrial Technology Development Co., Ltd.
Legal
Representative: Xxxx Xxxx
Signature
and Company seal:
Party
B Shengkai (Tianjin) Ceramic Valve Co., Ltd.
Legal
Representative: Xxxx Xxxx
Signature
and Company Seal:
Shareholders
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Name of the
Shareholders
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Signature
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Name of the
Shareholders
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Signature
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|||
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Xxxx
Xxxx
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/s/
Xxxx Xxxx
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Xxx
Xxx
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/s/
Xxx Xxx
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Xxxx
Xxxxxx
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/s/
Xxxx Xxxxxx
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Ji
Haihong
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/s/
Ji Xxxxxxx
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|||
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Xxxxx
Xxxx
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/s/
Xxxxx Xxxx
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Xxxx
Xxxx
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/s/
Xxxx Xxxx
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Xxxx
Xxxx
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/s/
Xxxx Xxxx
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Xx
Xxxxxxx
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/s/
Wu Xxxxxxx
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|||
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Xxx
Naifan
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/s/
Liu Naifan
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14