DATED June 15, 2008 SINOENERGY HOLDING LIMITED, as Vendor, GREKA SNU LTD., as Purchaser, and SINOENERGY CORPORATION, as Guarantor
Exhibit
99.1
DATED
June 15, 2008
SINOENERGY
HOLDING LIMITED,
as
Vendor,
GREKA
SNU LTD.,
as
Purchaser,
and
SINOENERGY
CORPORATION,
as
Guarantor
relating
to the sale and purchase
of
the
whole of the issued share capital of
GIANT
POWER INTERNATIONAL INVESTMENT LTD
-1-
This Agreement is dated June 15, 2008 and made
BETWEEN:
(1)
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Sinoenergy
Holding Limited,
a
company organized and existing under the laws of the British Virgin
Islands,
having
its registered office at Akara
Building, 00 Xx Xxxxxx Xxxxxx, Xxxxxxxx Cay I, Road Town, Tortola,
British
Virgin Islands
(the "Vendor");
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(2)
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Greka
SNU Ltd.,
a
company organized and existing under the laws of the British Virgin
Islands, having its office is at Suite 3308, 33rd
Fl, Xxxxxxxx Xxxxxx Xxx, Xxxxxxx, Xxxx Xxxx (the "Purchaser");
and
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(3)
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Sinoenergy
Corporation,
a
company organized and existing under the laws of the state of Nevada
in
the United States of America, having its principal executive office
at
000-0000 Xxxxxxx Xxxxx Xxxx., XX, Xxxxx 000, Xxxxxxx, Xxxxxxx, Xxxxxx
X0X
0X0 (the “Guarantor”).
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WHEREAS
A.
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The
Vendor lawfully owns 100% of the issued share capital of GIANT POWER
INTERNATIONAL INVESTMENT LTD (the “Company”),
a company organized and existing under the laws of Hong Kong (with
registration details listed in Part I of Schedule 1).
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B.
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The
Company lawfully owns 35% of the equity shares of Zhengzhou PetroChina
Hengran Petro-Gas Company Limited and 26.2% of the equity shares
of Anhui
PetroChina Hengran Petro-Gas Company Limited (with details of these
two
affiliates of the Company listed in Part II of Schedule
1).
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C.
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The
Vendor has agreed to sell and the Purchaser has agreed to purchase
and pay
for (or procure the purchase and payment for) the Shares, on the
terms and
subject to the conditions of this
Agreement.
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IT
IS AGREED
as
follows:
1.
|
INTERPRETATION
|
In
this
Agreement, unless the context otherwise requires, the following words and
expressions shall have the following meanings:
1.1.
|
Definitions
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"Affiliate"
|
means
in relation to the Purchaser, the Vendor, and the Company, any legal
entity directly or indirectly controlled by, or under the direct
or
indirect control of the Purchaser, the Vendor or the Company, as
applicable. The term "control" (as well as the terms "controlling"
and
"controlled"), as used herein, means the direct or indirect possession
of
the power to direct or cause the direction of the management and
policies
of an entity, whether by voting rights, contract or otherwise, provided,
however, the direct or indirect possession of more than 25% of the
equity
shareholding in such entity shall always be deemed to be
"control"
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-2-
"Agreed
Form"
|
means,
in relation to any document, such document in the terms agreed between
the
parties and signed by or on behalf of them for the purposes of
identification;
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"Balance
Sheet Date”
|
means
December 31, 2007;
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"Business
Day"
|
means
a day on which banks are open for ordinary banking business in Hong
Kong
SAR (excluding Saturdays, Sundays and public holidays);
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"Completion"
|
means
the completion of the sale and purchase of the Shares in accordance
with
Clause 6;
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"Completion
Date"
|
means
the date set for Completion in accordance with Clause 6.1;
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"Consideration"
|
has
the meaning given in Clause 3.1;
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"Continuing
Director(s)"
|
means
those Directors identified with an asterisk as continuing directors
in
Schedule 1;
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"Directors"
|
means
the directors of the Company and its Subsidiaries named in Schedule
1;
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"Disclosure
Bundle"
|
means
the documents annexed to, delivered with and forming part of the
Disclosure Letter, as briefly described in the index annexed to the
Disclosure Letter and which are referred to in the specific disclosures
set out therein;
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"Disclosure
Letter"
|
means
the letter dated the same date as this Agreement written and delivered
by
or on behalf of the Vendor to the Purchaser before the execution
of this
Agreement;
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-3-
"Encumbrance"
|
means
any interest or equity of any person (including, without limitation,
any
right to acquire, option or right of pre-emption) and any charge,
mortgage, security interest, pledge, lien (including retention of
title
claims), assignment, power of sale or hypothecation and any rental,
hire
purchase, creditor, conditional sale or other agreement for payment
on
deferred terms or any other third party right or encumbrance of any
nature
whatsoever (whether or not perfected) and the term "encumber" shall
be
construed accordingly;
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"Financial
Accounts"
|
means
the unaudited consolidated financial statements of the Company and
the
audited financial statements of the Subsidiaries for the accounting
reference period ending on the Balance Sheet Date, in each case comprising
a balance sheet as at the Balance Sheet Date and a profit and loss
account
and a cash flow statement for the financial year ended on that date
including, in each case, the notes thereto and with respect to the
audited
financial statements of the Subsidiaries, the auditors' reports
thereon;
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"Hardware"
|
means
any information technology, communication or computer system (other
than
the Software) licensed to, or networked, used or owned by, the Company
or
any of its Subsidiaries in connection with the business of the Company
and
its Subsidiaries (including, without limitation, computer equipment
such
as microprocessors, terminals, keyboards, screens, servers, disks,
telephone equipment and firmware and all other cabling, peripheral
and
associated electrical and electronic equipment);
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"Hazardous
Substances"
|
means
any substance including any natural or artificial matter whether
in solid
or liquid form or in the form of a gas or vapour whether alone or
in
combination (chemically or physically) with any other substance causing
or
capable of causing harm to any living organism or damage to the
environment including, without limitation, any waste substance,
radioactive matter, oil, ozone depleting substances and genetically
modified organisms;
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-4-
"HIBOR"
|
means,
in relation to any amount outstanding during a calendar month, the
one (1)
month Hong Kong Interbank Offered Rate for US$ quoted on Telerate
Page
9898 (or its equivalent) at 11:00a.m. for the first Hong Kong SAR
banking
day of that calendar month;
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“Hong
Kong Dollars”
|
means
the lawful currency of Hong Kong SAR;
|
|
means
the Hong Kong Special Administrative Region of the People’s Republic of
China;
|
"Indebtedness"
|
means,
in respect of any person, any obligation (whether present or future,
actual or contingent and whether as principal or surety) for the
payment
or repayment of money (whether in respect of interest, principal
or
otherwise) incurred in respect of monies borrowed or raised; any
bond,
note, loan stock, debenture or similar instrument; any acceptance
credit,
xxxx discounting, note to purchase, factoring or documentary credit;
any
finance lease, bond, letter of credit or other instrument issued
in
connection with the performance of any contract; any interest rate
or
currency swap agreement or any other hedging or derivative instrument
or
agreement; any indemnity or similar insurance against financial loss
in
respect of the obligation of any other person falling within any
of the
foregoing;
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"Information
Technology"
|
means
Hardware and Software;
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"Intellectual
Property"
|
means
all intellectual property owned, used or required to be used by the
Company or any of its Subsidiaries including without limitation,
patents,
trade and service marks (whether or not registered), registered and
unregistered design rights and applications and rights to apply for
any of
the foregoing; Know-How; copyrights and topography rights; data base
rights; trade, business, company names, get-up, logos, slogans, internet
domain names and e-mail addresses, and Information Technology / Software;
formulae, inventions, rights under licences (including, without
limitation, Intellectual Property Licences), consents, orders, statutes
or
otherwise in relation to any of the foregoing and all rights and
forms of
protection of a similar or analogous nature or having similar effect
to
any of the foregoing anywhere in the world, which now or in the future
may
subsist including the right to xxx for past infringements of any
of the
foregoing rights;
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-5-
"Intellectual
Property Licences"
|
means
any agreements, contracts or arrangements entered into prior to the
Completion Date by or on behalf of the Company or any of its Subsidiaries
relating in any way to Intellectual Property used by the Company
and its
Subsidiaries.
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"Know
How"
|
means
all industrial and commercial information and techniques, (wherever
situated) relating to the activities of the Company or any of its
Subsidiaries and in any form (including paper, electronically stored
data,
magnetic media, film and microfilm) including, without limitation,
discoveries, improvements, designs, techniques, computer programmes
and
test responses and other processes and information (including that
comprised in or derived from formulae, techniques, designs,
specifications, drawings, component lists, manuals, instructions
and
catalogues);
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"Management
Accounts"
|
means
the unaudited management accounts relating to Company and its Subsidiaries
for any period, or drawn up as at any date, since the Balance Sheet
Date;
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"Material
Adverse Change"
|
means
any material adverse change in the business, assets or position
(financial, trading or otherwise), profits or prospects of the Company
and
its Subsidiaries taken as a whole or any of the Company’s Subsidiaries or
any event or circumstance that would or could reasonably be expected
to
result in such a material adverse change, including, in each case,
any
such change resulting from or arising out of or in connection with
(i)
economic, industry or market events, occurrences, developments,
circumstances or conditions (including any changes in financial,
commodities, securities or banking markets), whether general or regional
in nature or limited to any area in which the Company or its Subsidiaries
operate, (ii) changes in applicable Laws or regulatory policies after
the
date hereof, (iii) changes in generally accepted accounting standards
after the date hereof and (iv) changes in political conditions (including
acts of war, whether or not declared, armed hostilities and
terrorism);
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-6-
"Payment
Account Details"
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means,
in relation to any payment to be made under or pursuant to this Agreement,
the name, account number, account location and other details specified
by
the payee and necessary to effect payment (whether by cheque, banker's
draft, telegraphic or other electronic means of transfer) to the
payee;
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"Permits"
|
means
any permit, licence, authorisation, consent or other approval required
by
any laws for the operation of the business the Company or any of
its
Subsidiaries the occupation or use of any of the Properties;
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"Prior
Agreement"
|
means
that certain share purchase agreement, dated as of January 11, 2008,
by
and between the Vendor, Xxxx Xxxx Hung, Xxx Xxxxx-Fuu and Shi Jie,
pursuant to which the Vendor acquired the Shares.
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"Properties"
|
means
the properties, particulars of which are set out in the Disclosure
Letter
and includes any part thereof and "Property" means any one of
them;
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"Purchaser's
Group"
|
means
the Purchaser and any Affiliate of the Purchaser from time to
time;
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-7-
"Shareholder
Loans"
|
means
all shareholder loans made by the Vendor to the Company;
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"Shares"
|
means
the entire issued share capital of the Company (i.e., 100,000 shares),
par
value HK$1.00 per share;
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"Software"
|
means
all computer software, used, owned or licensed to the Company or
any of
its Subsidiaries, in connection with the business of the Company
and its
Subsidiaries, including in respect of such owned computer software
all
visual expressions, screen formats, report formats and other design
features and algorithms used in developing or incorporated into such
computer software and all versions (current and prior) of the source,
object and machine code for such computer software;
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"Subsidiaries"
|
means
the subsidiaries and/or the associated companies of the Company,
including
those subsidiaries the details of which are contained in Part 2 of
Schedule 2;
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“US$”
|
means
United States dollars, the lawful currency of the United States of
America;
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"Warranties"
|
means
the warranties and representations of the Vendor set out in Clause
7.1 and
"Warranty"
means any one of them.
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1.2.
|
Construction
of certain references
|
In
this
Agreement where the context admits:
1.2.1.
|
any
reference to any statute or statutory provision shall include:
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1.2.1.1.
|
all
subordinate legislation made from time to time under that provision
(whether or not amended, modified, re-enacted or consolidated)
which is in
force at the date of this
Agreement;
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1.2.1.2.
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such
provision as from time to time amended, modified, re-enacted or
consolidated (whether before or after the date of this Agreement)
to the
extent such amendment, modification, re-enactment or consolidation
applies
or is capable of applying to any transactions entered into under
this
Agreement prior to the Completion Date and (to the extent liability
thereunder may exist or can arise) shall include any past statutory
provision (as from time to time amended, modified, re-enacted or
consolidated) which the provision referred to has directly or indirectly
replaced;
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-8-
1.2.2.
|
any
reference to the singular shall include the plural and
vice-versa;
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1.2.3.
|
any
references to the masculine, the feminine and the neuter shall include
each other;
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1.2.4.
|
any
reference to a "person"
includes any individual, firm, partnership, body corporate wherever
incorporated or registered, corporation sole or aggregate, state
or agency
of a state, joint
venture, partnership and
any unincorporated
association, in each case, whether having separate legal personality
or
not;
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1.2.5.
|
any
references to a "company"
shall include a body corporate;
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1.2.6.
|
the
recitals, schedules and exhibits form part of this Agreement and
shall
have the same force and effect as if expressly set out in the body
of this
Agreement, and any reference to this Agreement shall include any
recitals,
schedules and exhibits to it. Any references to clauses and schedules
are
to clauses of and schedules to this Agreement. Any references to
parts or
paragraphs are, unless otherwise stated, references to parts or paragraphs
of the schedule in which the reference
appears;
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1.2.7.
|
any
reference to books, files, records or other information or any of
them
means books, files, records or other information or any of them in
any
form or in whatever medium held including paper, electronically stored
data, magnetic media, film and
microfilm;
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1.2.8.
|
any
reference to a time of day is to Hong Kong SAR
time;
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1.2.9.
|
headings
to clauses, parts and paragraphs of schedules and schedules are for
convenience only and do not affect the interpretation of this
Agreement;
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1.2.10.
|
any
reference to any Hong Kong SAR legal term for any action, remedy,
method
of judicial proceedings, legal document, legal status, act of Parliament,
ordinance, court, official or legal concept shall, in respect of
any
jurisdiction other than Hong Kong, be deemed to be to that which
most
nearly approximates to the Hong Kong legal term in that
jurisdiction.
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2.
|
AGREEMENT
TO SELL THE SHARES
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Subject
to the terms and conditions of this Agreement, the Vendor as the legal and
beneficial owner shall sell, and
the
Purchaser, relying on (amongst other things) the representations, warranties
and
undertakings contained in this Agreement, shall purchase, the Shares (and any
Shareholder Loans) on the Completion Date free from all Encumbrances and
together with all rights and advantages now and hereafter attaching thereto
including, without limitation, the right to receive all dividends, distributions
or any return of capital declared, paid or made on or after the Completion
Date.
-9-
3.
|
CONSIDERATION
|
3.1.
|
Amount
|
The
aggregate consideration payable at Completion for the purchase of the Shares
(and any Shareholder Loans) (the "Consideration")
shall
be US$10,680,000 which will be payable in the amounts and on the dates specified
in the following provisions of this Clause.
3.2
|
Method
of Payment
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3.2.1
|
The
Consideration shall be paid by the Purchaser to the Vendor in cash
in
immediately available funds at the times and in the amounts specified
in
Clause 3.2.2.
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3.2.2
|
Subject
to Clause 3.2.1, any payments made to a party to this Agreement pursuant
to this Agreement shall be made in cash in either RMB or US$, in
accordance with the payment schedule specified in Clause 3.3. Any
payment
made in RMB will be calculated based on the rate of the mid-point
spot
exchange for US$ against RMB on the Completion Date by Bank of China,
and
effected by crediting the account specified in the Payment Account
Details
of the payee(s) by way of electronic means of transfer in immediately
available funds on or before the due date for payment (unless the
party
required to make payment and the payee agree otherwise in writing)
which
shall fully discharge and satisfy the obligations of the party required
to
make such payment.
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3.3
|
Payment
Schedule
|
3.3.1
|
The
Purchaser shall pay 50% of the amount of the Consideration, i.e.
US$5,340,000, to an account(s) designated by the Vendor on
the Completion
as
defined in Clause 6.
Payment of the entire amount of US$5,340,000
shall be made in RMB.
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3.3.2
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The
Purchaser shall pay the remaining 50% of the amount of the Consideration,
i.e. US$5,340,000, to an account(s) designated by the Vendor on the
later
of (i) 5 days after the date of Completion as defined in Clause 6
or (ii)
the satisfaction of the Purchaser, in its reasonable discretion,
that all
representations and warranties set forth in Clause 7 of this agreement
are
true and correct, including, without limitation, the representation
of the
Vendor in relation to the payment of the registered capital increase
set
forth in Clause 7.1.24 and that the directors’ resignations described in
Clause 6.2.1(i) have been delivered. The parties further agree that
there
will be a dollar-for-dollar reduction in the payment of the Consideration
under this Clause 3.3.2 in relation to the failure of any representation
or warranty to be true to the extent identified by the Purchaser
prior to
the payment of such Consideration.
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-10-
4.
|
CONDITIONS
|
4.1
|
Conditions
for
Completion
|
Completion
of this Agreement is conditional upon (and accordingly the Consideration
will
not be paid to the Vendor and beneficial ownership in the Shares will not
pass
until) satisfaction or waiver by the Purchaser pursuant to Clause 4.2.4 of
the
following conditions, or their satisfaction subject only to Completion of
this
Agreement:
4.1.1.
|
the
passing at a duly convened and held board meeting by the directors
of the
Purchaser of resolutions in the Agreed Form to approve the purchase
of the
Shares pursuant to this Agreement;
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4.1.2.
|
there
having occurred no Material Adverse Change in the period between
the date
of this Agreement and Completion, or any event, change, effect
or
development that would, individually or in the aggregate, have,
or
reasonably be expected to have, a Material Adverse
Change;
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4.1.3.
|
on
or before the Completion Date, nothing shall have occurred or been
omitted
which is, or had it occurred or been omitted on or before the date
of this
Agreement would have constituted, a material breach of the Warranties
except for those facts and circumstances already disclosed to the
Purchaser in the Disclosure Letter;
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4.1.4.
|
no
legal proceeding shall have been instituted or threatened or claim
or
demand made against the Vendor, the Company or any of its Subsidiaries
or
the Purchaser seeking to restrain or prohibit or to obtain substantial
damages with respect to the consummation of the transactions contemplated
hereby, and no order or judgment of any court or governmental,
statutory
or regulatory body having been issued or made prior to Completion,
which
has the effect of making unlawful or otherwise prohibiting the
purchase of
the Shares by the Purchaser;
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4.1.5.
|
the
Vendor having performed or complied with, in all material respects,
all
covenants, obligations and agreements contemplated by this Agreement
to be
performed or complied with by it at or prior to Completion;
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4.1.6.
|
all
necessary notification and filings having been made, the expiry,
lapsing
or termination of all applicable waiting periods (including extensions
thereof) under any applicable legislation or regulations and all
the
licences, authorisations, orders, grants, confirmations, permissions,
registrations and other approvals necessary or desirable for or
in respect
of the proposed acquisition of the Company and its Subsidiaries
by the
Purchaser having been obtained from appropriate governments, governmental,
supranational or trade agencies, courts or other regulatory bodies
on
terms satisfactory to the Purchaser and such licences, authorisations,
orders, grants, confirmations, permissions, registrations and other
approvals remaining in full force and effect;
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-11-
4.1.7.
|
on
or prior to the Completion Date, the Vendor shall have made or
caused to
be made all deliveries required to be delivered by the Vendor in
accordance with clause 6.2;
provided, however, that prior to Completion, each of the deliverables
set
forth in Clauses 6.2.1(a) to 6.2.1(e) shall be delivered prior
to such
Completion Date and the directors’ resignations described in Clause
6.2.1(i) shall be delivered within seven days of the Completion
Date;
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4.1.8.
|
the
Company shall be in compliance in all material respects with all
laws of
any authority applicable to its business or
operations.
|
4.1.9.
|
all
corporate actions heretofore taken by the Company shall have been
authorized and approved to the reasonable satisfaction of the Purchaser.
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4.1.10.
|
the
Purchaser shall have completed its satisfactory business, legal
and
accounting due diligence
review of the Company and its
Subsidiaries.
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4.2
|
Responsibility
for Satisfaction
|
4.2.1
|
The
Vendor hereby undertakes to use its best endeavours to ensure the
satisfaction of the conditions set out in Clauses 4.1.2 to 4.1.9
as soon
as possible after the date of this
Agreement.
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4.2.2
|
The
Purchaser shall use its best endeavours to procure satisfaction
of the
conditions set out in Clause 4.1.1 and 4.1.6 as soon as possible
after the
date of this Agreement but provided that this shall not give rise
to an
obligation on the part of the Purchaser to assume material expenditure
to
achieve the same.
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4.2.3
|
Without
prejudice to the foregoing, it is agreed that all requests and
enquiries
from any government, governmental, supranational or trade agency,
court or
regulatory body shall be dealt with by the Vendor and the Purchaser
in
consultation with each other and each of the Vendor and the Purchaser
shall promptly co-operate with and provide all necessary information
and
assistance reasonably required by such government, agency, court
or body
upon being requested to do so by the
other.
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4.2.4
|
In
the event that the Purchaser decides to proceed to Completion,
notwithstanding the failure of the Vendor to satisfy the conditions
in
Clauses 4.1.2 to 4.1.9, then the right of the Purchaser to make
a claim in
respect of such failure will not be prejudiced by a decision to
waive the
condition and proceed to
Completion.
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4.2.5
|
The
party responsible for the satisfaction of each condition as specified
in
Clause 4.1 shall promptly give notice to the other party of the
satisfaction of the relevant conditions immediately upon becoming
aware of
the same. Should the Vendor or the Purchaser become aware of anything
which will or may prevent any of the conditions set out in Clause
4.1 from
being satisfied by the time and date
required by Clause 4.3.1 the relevant party shall forthwith notify
the
other in writing.
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-12-
4.3
|
Non-Satisfaction
|
4.3.1
|
If
any of the conditions in
Clause 4.1 is
not satisfied or (waived by the Purchaser) on or before June
30, 2008, or
such other date as the parties may agree or the Purchaser becomes
aware of
any fact that would prevent any of the conditions in Clause 4.1
from being
satisfied, the Purchaser or the Vendor may terminate this Agreement;
provided, however, that the right to terminate this Agreement under
this
Clause 4.3.1 shall not be available to any party whose failure
to take any
action required to fulfill any of such party’s obligations hereunder shall
have been the cause of, or shall have resulted in, the failure
of such
conditions to be satisfied prior to such date.
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4.3.2
|
In
the event that the Purchaser shall terminate this Agreement in
accordance
with Clause 4.3.1, all
obligations of the Purchaser and the Vendor under this Agreement
shall,
unless otherwise expressly stated, cease other than the obligations
in
Clause 10 and 12.2, which shall continue indefinitely.
But, for the avoidance of doubt, all rights and liabilities of
the parties
which have accrued before termination shall continue to
exist.
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5.
|
Undertakings
up to COMPLETION
|
5.1
|
Vendor's
General Assistance
Obligations
|
The
Vendor undertakes to procure that from the date of this Agreement until
Completion:
5.1.1
|
The
Vendor will take all possible efforts to procure that the Company
and each
of its Subsidiaries carry on business only in the ordinary and
usual
course and in the manner and scope carried on as at the date of
this
Agreement, save insofar as agreed in writing by the Purchaser;
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5.1.2
|
Upon
reasonable notice from the Purchaser, the Vendor will take all
possible
efforts to help the Purchaser access to the employees and premises
of the
Company and its Subsidiaries and access to, and to take copies
of, the
books and records of the Company and its Subsidiaries including,
without
limitation, the statutory books, minute books, leases, licences,
contracts, details of receivables, Intellectual Property, tax records,
supplier lists and customer lists in the possession or control
of the
Company and its Subsidiaries;
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5.1.3
|
Such
representatives and advisers as the Purchaser requests may be designated
to work with the Vendor with regard to the management and operations
of
the Company and its Subsidiaries. The Vendor will consult, and
will cause
the Company and its Subsidiaries to consult, with such representatives
and
advisers with respect to any action which may materially affect
the
business of the Company and its Subsidiaries taken as a whole.
The Vendor
will furnish and will cause the Company and its Subsidiaries to
provide to
such representatives and advisers such information as they may
reasonably
request for this purpose;
|
-13-
5.1.4
|
The
Vendor will take all possible efforts to procure that the Company
and its
Subsidiaries shall take all reasonable steps to preserve its property
and
assets;
|
5.1.5
|
The
Vendor will take all possible efforts to procure that the Company
and its
Subsidiaries take all reasonable steps to preserve the validity
of its
Intellectual Property;
|
5.1.6
|
Save
only as may be necessary to give effect to this Agreement, the
Vendor,
with all possible effort, shall not, and shall procure that the
Company
and its Subsidiaries shall not, commit or procure any act or omission
which would render any of the Warranties untrue, inaccurate or
misleading
in any respect or would do so if they were also to be given at
any and all
times until Completion; and
|
5.1.7
|
The
Vendor will take all possible efforts to procure that the Company
and its
Subsidiaries shall
in
time provide to the Purchaser monthly management accounts in the
usual
form.
|
5.2
|
Vendor’s
Standstill Undertaking
|
5.2.1
|
From
the date of signing this Agreement until the Completion Date, the
Vendor
expressly undertakes that it shall cause the Company and its Subsidiaries
to:
|
(a)
|
maintain
their business and operations in accordance with past practices
but
refraining from making any strategic decisions, or causing any
material
changes to the structure and normal business operations of the
Company or
its Subsidiaries,
that may have a materially or detrimental effect on Purchaser’s
implementation of the sale and transfer of the Shares. Any necessary
decisions or actions by the Company or its Subsidiaries
that may have to be made and that may have a material or detrimental
effect on the Purchaser during the relevant period should be fully
disclosed immediately and in writing by the Vendor to the Purchaser
prior
to the execution of such decision or
action;
|
(b)
|
continue
to meet their contractual obligations incurred in the ordinary
course of
business in accordance with past practices;
|
(c)
|
pay
all of their obligations as they mature in the ordinary course
of
business, in accordance with past practices;
|
-14-
(d)
|
preserve,
in accordance with past practices, their current relations with
their
existing employees; and
|
(e)
|
preserve,
in accordance with past practices, their current relations with
their
suppliers, customers, distributors and others with whom they
have business
relations.
|
5.2.2
|
At
the request of Purchaser, the Vendor shall ensure that Purchaser
is
provided with all of the Company’s and its Subsidiaries’ board of
directors and shareholder meeting minutes and resolutions, and
decisions
made at management level meetings concerning any and all of the
Company’s
and its Subsidiaries’ strategic or operational decisions taken during this
period;.
|
5.2.3
|
Provide
access to facilities and records of the Company and its Subsidiaries
to
Purchaser’s representatives, including reasonable access during normal
business hours to inspect the operations of the Company and its
Subsidiaries and any records of the assets of the Company or its
Subsidiaries;
|
5.2.4
|
The
Vendor agrees that it shall and shall cause the Company and its
Subsidiaries to advise on a regular and frequent basis any representative
of the Purchaser regarding material operational developments of
the
Company and its Subsidiaries, including the entering into or the
termination of any material customer or vendor contract and the
general
status of ongoing operations as reasonably requested by any representative
of the Purchaser.
|
5.2.5
|
The
Vendor shall, and shall cause the Company and its Subsidiaries,
to
promptly provide Purchaser’s representative with all information it
reasonably requests in respect of the Company and its Subsidiaries,
their
operations or their assets.
|
5.2.6
|
The
Vendor shall not cause the Company and its Subsidiaries to pay
any
dividends or
make any other distribution of profits of assets during this
period.
|
6.
|
COMPLETION
|
6.1
|
Date
and Place
|
Subject
to Clause 4, Completion shall take place at the offices of the
Purchaser on
the
later of (i) June
18,
2008 or (ii) within 2 Business Days following fulfillment (or waiver thereof
by
the party entitled to waive that condition) of the conditions set out in
Clause
4.1, other than any condition which, by its nature, shall occur at the
Completion, subject to their occurrence at the Completion.
6.2
|
Vendor’s
obligations on Completion
|
6.2.1
|
On
Completion, the Vendor shall deliver or procure the delivery to
the
Purchaser of:
|
-15-
(a)
|
duly
executed instruments of transfer executed by the Vendor in favour
of the
Purchaser (or as the Purchaser shall direct) in relation to all
of the
Shares, together with the original certificate(s) representing
the Shares
(or an indemnity in a form satisfactory to the Purchaser in the
case of
any certificate found to be missing) and such waivers and consents
and
such other documents as the Purchaser may require to enable the
Purchaser
or its nominee(s) to be registered as the holder of the Shares,
including
the delivery to the Purchaser of the stamp duty payable by the
Vendor in
connection with the transfer as reasonably determined by the
Purchaser;
|
(b)
|
a
certified copy of the register of members of the Company showing
the
Purchaser as the registered owner of the Shares on the Completion
Date
(together with all required board and shareholder consents required
to
give effect thereto);
|
(c)
|
duly
executed powers of attorney or other authorities under which any
of the
transfers referred to in Clause 6.2.1(a) have been executed
;
|
(d)
|
certified
copies of the board resolutions of the Company in respect of the
transactions contemplated under this
Agreement;
|
(e)
|
certified
copies of the board resolutions of the Vendor in respect of the
transactions contemplated under this Agreement, including the sale
of the
Shares held by the Vendor and the execution of the transfers in
respect of
it;
|
(f)
|
a
certificate executed by a director of the Company dated as of the
Completion Date (in form and substance reasonably satisfactory
to the
Purchaser), certifying the following matters: (i) resolutions of
the board
as to the matters described in paragraph (d) above, (ii) a copy
of the
organizational documents of the Company; and (iii) incumbency
matters;
|
(g)
|
a
certificate executed by a director of the Vendor dated as of the
Completion Date (in form and substance reasonably satisfactory
to the
Purchaser), certifying the following matters: (i) resolutions of
the board
as to the matters described in paragraph (e) above, (ii) a copy
of the
organizational documents of the Vendor; and (iii) incumbency
matters;
|
(h)
|
common
seal, minute book, statutory register and share certificate books
of the
Company and each of its
Subsidiaries;
|
(i)
|
the
resignations by way of deed, in the Agreed Form, of all Directors,
other
than the Continuing Directors, and the Company Secretary of the
Company
and its Subsidiaries, in each case acknowledging that such Director
has no
claim against the Company or its Subsidiaries whether for loss
of office
or otherwise;
|
-16-
(j)
|
an
acknowledgement from the Vendor to the Purchaser and the Company,
executed
as a deed, to the effect that save in relation to remuneration
or
reimbursement of expenses properly incurred in relation to his
or her employment,
details of which are specified in such deed, there is no outstanding
indebtedness or other liability owing at Completion from the Company
or
its Subsidiaries to such Vendor or to any such Vendor's
Affiliate;
|
(k)
|
the
Disclosure Letter duly executed by the Vendor;
and
|
(l)
|
the
assignment agreement relating to the assignment of the Shareholder
Loans
from the Vendor to the Purchaser.
|
(m)
|
other
items as the Purchaser may reasonably request, including, without
limitation, certificates of title, evidence that arrangements with
connected parties have been terminated,
etc.
|
6.2.2
The
Vendor shall procure that the Company use its best efforts to procure that
a
board meeting of each Subsidiary is held at which it is resolved
that:
(a)
|
the
auditor nominated by the Purchaser are appointed as auditors;
and
|
(b)
|
its
bank mandates are revised in such manner as the Purchaser may
require.
|
6.3
|
Purchaser's
obligations on Completion
|
On
Completion, and subject to compliance by the Vendor with the foregoing
provisions of Clause 4.1 and this Clause 6, the Purchaser shall pay
the
Consideration in the manner specified in Clause 3.2. Receipt of
funds
in
accordance with Clause 3.2 shall constitute full discharge and satisfaction
by
the Purchaser in respect of the payment of the Consideration.
Following
Completion but prior to the payment of the second installment of the
Consideration as described in Clause 3.3.2, the Vendor shall ensure that
the
bank account holding proceeds designated for contribution as registered capital
of Anhui PetroChina Hengran Petro-Gas Company Limited (“Anhui”) is contributed
and that it contributes additional funds so that sufficient proceeds are
in the
account to make the payment to increase such registered capital. Such
contributions will be deemed for all purposes as a shareholder loan by the
Purchaser to the Company. If the full amount required to pay such registered
capital increase is not contributed prior to the payment of the second
installment of the Consideration (or to the extent such funds do not come
from a
source outside of the Company), the Purchaser shall be entitled to deduct
an
amount equal to any such shortfall from the payment of the second installment
of
the Consideration and such deduction shall be deemed a reduction in the
Consideration payable hereunder.
-17-
6.4
|
Right
to Terminate
|
If
the
conditions set forth in Clause 4.1 are not fully complied with on or prior
to
the date set forth in Clause 4.3.1, the Purchaser shall be entitled (in addition
to and without prejudice to all other rights or remedies available to it
including the right to claim damages) by written notice to the Vendor served
on
such date:
6.4.1
to
defer Completion to a new date (not being more than 20 Business Days after
the
agreed date for Completion) in which case the provisions of this Clause 6.4
shall apply to Completion as so deferred; or
6.4.2
to
proceed to Completion so far as practicable without limiting its rights under
this Agreement; or
6.4.3
to
elect to terminate this Agreement without liability on the part of the
Purchaser.
7.
|
Representations
& WARRANTIES
|
7.1
|
Representations
and Warranties of the Vendor.
|
In
connection with the sale and transfer of the Shares to Purchaser, and except
as
otherwise disclosed in the information provided to the Purchaser as contained
in
Disclosure Bundles, the Financial Statements and other written disclosures
provided to the Purchaser in writing, the Vendor represent and warrant
as of the
date hereof, and as of the Completion Date, as follows:
7.1.1
|
Authorization
and enforceability of the Agreement;
Capacity
|
(i)
|
the
execution, delivery and performance of this Agreement has been
duly
authorized by all necessary action on the part of the Vendor
and Company;
|
(ii)
|
this
Agreement constitutes the legal, valid and binding obligation
of the
Vendor and is enforceable against it in accordance with its terms
(assuming due execution and delivery by Purchaser), subject to
applicable
bankruptcy, solvency and other laws effecting creditors’ rights generally;
and
|
(iii)
|
the
Vendor has all requisite power and authority to execute and deliver
the
Agreement and each of the Contractual Documents and any other
certificate
delivered by it pursuant to the Agreement (to which it is a party),
and to
perform its obligations hereunder or thereunder.
|
7.1.2
|
Good
title to the shares subject to the sale and transfer of the
Shares
|
(i)
|
the
particulars of the Company and its Subsidiaries, including the
ownership
structure, as set out in Schedule 1 are true and complete as
of the date
hereof and as of the Completion
Date;
|
-18-
(ii)
|
neither
the Company nor any of its Subsidiaries have outstanding any
stock or
securities convertible or exchangeable for any shares of its
capital
stock, nor does it have outstanding any rights or options to
subscribe for
or to purchase its capital stock or any stock or securities convertible
into or exchangeable for its capital stock and the Vendor has
not entered
into any agreements or made any commitments with any person or
entity for
the sale, donation, transfer or assignment of the of any of their
equity
share in the Company, other than as provided for in this Agreement;
and
|
(iii)
|
as
of the Completion Date, all of the outstanding shares of the
capital stock
or registered capital, as applicable, of the Company and its
Subsidiaries
will be validly issued, fully paid and nonassessible, meaning
that no
further sums are required to be paid by the holders thereof in
connection
with the issuance thereof, and upon the completion of the sale
and
transfer of the Shares, the Purchaser shall have good and marketable
title
to the transferred Shares, free and clear of all Encumbrances
and adverse
claims;
|
(iv)
|
as
of the Completion Date, the Vendor shall have no interests in
any shares,
options or other securities issued by the Company or any of its
Subsidiaries or in any indebtedness of the Company or any of
its
Subsidiaries;
|
7.1.3
|
Organization,
permits and licenses of the Company and its
Subsidiaries
|
(i)
|
the
Company and its Subsidiaries are duly organized, validly existing
and in
good standing under the laws of Hong Kong SAR and the PRC respectively
and
have all licenses, approvals, permits and qualifications required
to own
their assets and carry on their business as the same is presently
carried
on;
|
(ii)
|
the
Company and its Subsidiaries have all requisite power and authority
necessary to own and operate its properties, to carry on its
business as
now conducted and presently proposed to be conducted and to carry
out the
transactions contemplated by this Agreement and they have conducted
their
business and operations within the scope permitted by their business
licenses and relevant laws and
regulations;
|
(iii)
|
the
Company and its Subsidiaries have made all filings and registrations
with
the public authorities required in respect of Company and its
operations
under relevant laws and regulations;
and
|
(iv)
|
the
Company and its Subsidiaries have not received any current written
notices
from any government authority except as disclosed to the Purchaser
in the
Disclosure Letter, ordering compliance or revoking any permits
or licenses
issued to it for non-compliance in respect of the activities
of Company
and its Subsidiaries where such order or revocation would have
a Material
Adverse Effect on the business or operations of the Company as
currently
conducted.
|
-19-
7.1.4
|
Material
Adverse Change
|
Since
the
date of the completion of the transactions contemplated by the Prior Agreement
and since the Balance Sheet Date there has been no event or occurrence
or
omission which has had or which could reasonably be expected to result
in a
Material Adverse Change.
7.1.5
|
Financial
statements of the Company and its
Subsidiaries
|
(i)
|
the
Company has provided true, correct and complete copies of the
audited and
non-audited financial statements of the Company and its Subsidiaries
since
their establishment to Purchaser, copies of which are attached
hereto as
Exhibit A (hereafter the "Financial
Statements"),
which represent an accurate and complete description of the current
financial status of the Company and its Subsidiaries in all
respects;
|
(ii)
|
any
omission by the Vendor to provide information concerning the
financial
status of the Company and its Subsidiaries could not reasonably
be
expected to have a Material Adverse Effect on the financial status
of the
Company;
|
(iii)
|
the
Financial Statements have been consistently prepared in accordance
with
International
Accounting Accepted Principles (IAAP) and
fairly present the financial position of the Company and its
Subsidiaries
and the results of their operations, changes in shareholder's
equity and
cash flows in all material respects at the times and for the
periods
indicated;
|
(iv)
|
the
Financial Statements do not contain any items of special or non-recurring
income or any other income not earned in the ordinary course
of business
except as specified therein;
|
(v)
|
the
Company and its Subsidiaries have no material disagreements with,
or has
received financial or corporate misconduct warnings from, any
auditor,
accounting firm, law firm or other professional or government
authority
with respect to the financial status of the Company and its Subsidiaries
and with respect to the whole of the Financial Statements (audited
and
un-audited) since its
establishment;
|
-20-
7.1.6
|
Business
of the Company and its Subsidiaries
|
In
relation to the Company’s and its Subsidiaries’ operations, neither the Company
nor its Subsidiaries have since their establishment:
(i)
|
entered
into any contract, commitment or transaction other than in the
ordinary
course of business;
|
(ii)
|
declared,
accrued, set aside or paid any dividends or made any distribution
in
respect of its capital stock to any shareholder, other than as
disclosed
in the Financial Statements;
|
(iii)
|
increased
the compensation or other benefits payable or to become payable
to, or
paid or agreed to pay any bonus or similar payment to, any employee,
officer, director or shareholders, except as consistent with
past practice
or as required by applicable law or
regulation;
|
(iv)
|
purchased
or otherwise acquired or leased or licensed any asset that is
material to
the operation of the business of Company or its Subsidiaries,
as it is
currently conducted, from any other person or entity, other than
in the
ordinary course of business;
|
(v)
|
sold
or otherwise transferred, leased, licensed, pledged or mortgaged
any asset
that is material to the operation of the business of Company
or its
Subsidiaries as it is currently conducted to any other person
or entity;
|
(vi)
|
as
of the date of this Agreement, written off as uncollectible,
or
established any extraordinary reserve with respect to, any account
receivable or other indebtedness in excess of US $500,000 or
its RMB
equivalent;
|
(vii)
|
made
any loan to any other person or entity or assumed or guaranteed
any
liability of any other person or
entity:
|
(viii)
|
changed
any of its methods of accounting or accounting practices in any
material
respect (other than any changes required to conform to current
changes in
IAAP);
|
(ix)
|
entered
into any agreements regarding any merger or consolidation of
or by Company
with any other corporation or any acquisition of all or any part
of the
stock equity interest of any other corporation or business organization
or
substantially all of the business or assets of, any other person,
firm,
association, corporation or business
organization;
|
(x)
|
implemented
any change affecting the banking arrangements or powers of attorney
or
grants of agency currently in effect or opened any new bank accounts
for
the Company or its Subsidiaries;
|
(xi)
|
failed
to perform any of its obligations in any material respect with
respect to
any contract to which the Company or its Subsidiaries is a party
and which
is material to Company's or its Subsidiaries’ business or operations or to
which any of Company's or its Subsidiaries’ real property is
bound;
|
-21-
(xii)
|
closed
any facility or terminated any operations;
|
(xiii)
|
as
of the date of this Agreement, had any employees terminate, or
give
written notice to Company of their intent to terminate, their employment
with the Company;
|
(xiv)
|
failed
to comply with applicable filing and registration requirements
in respect
of corporate or other documents and licenses imposed under relevant
published and publicly available laws, or failed to conduct its
business
and corporate affairs in compliance with their organizational documents
and applicable published and publicly available laws and regulations;
and
|
(xv)
|
carried
on business under a name other than their own
names.
|
7.1.7
|
Related
party agreements (conflict of
interest)
|
In
relation to related party agreements:
(i)
|
neither
the Company nor any of its Subsidiaries is a party to any contract,
commitment or transaction (including by way of loan) with any officer,
director of the Company or its Subsidiaries or the Vendor or any
of its
Affiliates or associates, except for as disclosed in the Disclosure
Letter
or the Financial Statements and employment contracts established
in the
ordinary course of business;
|
(ii) |
the
Vendor is not a party to any contract, commitment or transaction
(including by way of loan) with the Company or any officer, director
of
the Company, or any of the Company’s Subsidiaries or associates, except
for as disclosed in the Disclosure Letter or the Financial Statements
and
employment contracts established in the ordinary course of business;
|
(iii) |
the
Vendor is not a party to any contract, commitment or transaction
(including by way of loan) with any other company or the shareholders
of
other companies (or their Affiliates) in which the Vendor has a
direct or
indirect equity interest, family interest, or other substantial
personal
commercial interest in, except for as disclosed in the Disclosure
Letter
or the Financial Statements and employment contracts established
in the
ordinary course of business.
|
7.1.8
|
Assets
|
-22-
(i)
|
the
Company and its Subsidiaries own and have good and marketable title,
free
and clear of all Encumbrances (except as disclosed in the Financial
Statements), and subject to the interests of landlords and lessors
with
respect to the leased real property, leasehold improvements and
leased
personal property assets), to all assets used in business, including
all
assets reflected on the balance sheet included in the Financial
Statements or
acquired by it after the date of such balance sheet, except for
changes in
such assets in the ordinary course of business subsequent to that
date;
and
|
(ii)
|
the
Company and its Subsidiaries have not disposed of any tangible
movable
property or real estate owned or leased by Company or its Subsidiaries,
other than in the ordinary course of business and on a basis consistent
with past practices.
|
7.1.9
|
Tax
|
In
relation to the tax matters of the Company and its Subsidiaries
that:
(i)
|
true
and complete copies of all corporate income tax, business tax and
value
added tax returns filed by the Company and its Subsidiaries since
their
establishment dates (hereafter the "Company
Tax Returns")
have been provided to Purchaser;
|
(ii)
|
the
Company has delivered to Purchaser true and complete copies all
audit
reports relating to Company Tax Returns since the establishment
of the
Company and its Subsidiaries;
|
(iii)
|
any
tax required to have been withheld or collected by the Company
and its
Subsidiaries have been duly withheld and collected, and (to the
extent
required) each such tax has been duly paid to the appropriate Approval
Authority with there being no outstanding tax liabilities of the
Company;
|
(v)
|
the
Vendor, the Company and its Subsidiaries have paid all stamp duty
taxes
when they have become liable to pay such tax, together with any
penalty or
interest due thereon, and no stamp duty tax is owed by the Vendor,
the
Company and its Subsidiaries as of the date hereof or as of the
Completion
Date;
|
(vi)
|
there
is no claim or other administrative or litigation action pending
or
threatened against or with respect to the Company or its Subsidiaries,
in
respect of any tax.
|
7.1.10
|
Litigation,
claims and other disputes
|
(i)
|
the
Company and its Subsidiaries are not currently a party to any legal
action, litigation or other legal proceeding, and there is no legal
action, litigation or other legal proceeding in progress, or threatened
against the Company and its Subsidiaries by any party whatsoever,
and
there are no facts likely to give rise to the same, including with
regard
to the authorized capital stock or equity interest (including capital
contributions to the registered capital) of the Company or its
Subsidiaries. The Company and its Subsidiaries have not received
any
current and applicable notice from any Approval Authority of any
investigation, inquiry or enforcement proceedings or process and
there is
no unsatisfied judgment, order, arbitration award or decision of
any
court, tribunal or arbitrator against
Company;
|
-23-
(ii)
|
With
respect to any contract to which the Company or its Subsidiaries
are a
party and related to the business or operations of the Company
or its
Subsidiaries or to which any of the real property of the Company
or its
Subsidiaries is bound, the Company and its Subsidiaries have not
received
any current written notice from the other party or parties thereto
terminating, or purporting to terminate, such contract or alleging
or
asserting a breach or default by Company thereof, or of any material
claims to be made by the other party or
parties.
|
7.1.11
|
Organizational
Documents
|
The
copies of the organizational
documents
of the
Company and its Subsidiaries provided to the Purchaser are true and correct
and
has embodied therein or annexed to it a copy of every resolution or agreement
as
is required by applicable law to be embodied in or annexed to it, and sets
out
completely the rights and restrictions attaching to each class of authorized
share capital of the Company and its Subsidiaries.
7.1.12
|
Employee
and labor matters
|
(i)
|
the
Company and its Subsidiaries complied with all applicable laws
and
regulations relating to the employment of its employees, including
without
limitation laws and regulations pertaining to welfare funds, housing
funds, social benefits, medical benefits, insurance, retirement
benefits,
pensions or the like;
|
(ii)
|
the
Disclosure Letter accurately sets forth, with respect to each employee
of
Company and its Subsidiaries (including any employee of the Company
who is
on a leave of absence or on layoff status): the name of such employee,
the
date as of which such employee was originally hired by the Company
or its
Subsidiaries, such employee's title, and each current benefit plan
in
which such employee participates or is eligible to
participate;
|
-24-
(iii)
|
no
former employee of Company or its Subsidiaries, or spouse or other
dependent of any such former employee, is receiving or is currently
scheduled to receive any benefits, directly or indirectly, from
the
Company or its Subsidiaries relating to such former employee's
employment
with the Company or its
Subsidiaries;
|
(iv)
|
neither
the Company nor its Subsidiaries is not a party to or bound by
any
collective bargaining agreement and that there is no current or
threatened, slowdown, work stoppage, or labor
dispute;
|
(v)
|
the
employment of each of the Company's and its Subsidiaries’ employees is
terminable by the Company and/or its Subsidiaries at will, subject
to the
giving of the statutory requisite notice period and the payment
of any
applicable severance or other payments under the relevant
law;
|
(vi)
|
no
person or entity (including, but not limited to, relevant public
authorities) has made any claim against the Company or its Subsidiaries
arising out of any legal requirement relating to un-accrued wages
or
salary, social benefits, employment and health benefits or
compensation.
|
7.1.13 |
Employee
benefit schemes
|
The
Company’s and its Subsidiaries’ employee benefit schemes are set out in the
Disclosure Letter. No other currently effective plans, schemes or agreements
have been adopted by the Company or its Subsidiaries or to which the Company
or
its Subsidiaries may be bound in respect of such employee benefit scheme
and the
Company and its Subsidiaries has made available to the Purchaser documents
and
descriptions of all employee benefit schemes currently in effect.
7.1.14
|
Affiliate
equity holdings
|
In
relation to the Vendor’s and the Company’s Affiliate holdings, before the
completion of the share transfer on the Completion Date:
(i)
|
the
Vendor and the Company shall have good and marketable title to
their
direct and indirect equity holdings in their Affiliates described
in the
Disclosure Letter, free and clear of all liens, charges, encumbrances
and
adverse claims;
|
(ii)
|
the
Vendor and the Company have not entered into any agreements or
made any
commitments with any person or entity for the sale, transfer or
assignment
of its direct or indirect equity holdings in its Affiliates described
in
the Disclosure Letter;
|
-25-
(iii)
|
the
Company’s Subsidiaries have good title to their subsidiary equity holdings
in other entities, have duly obtained all permits required by law
to carry
on their business, have good and marketable title to their assets
free and
clear of all liens, charges and encumbrances, and current contracts
with
suppliers or customers are free of any substantial claim or
dispute;
|
(iv)
|
the
Company does not hold or beneficially own any equity interest of
any
corporation and has not agreed to acquire any equity interest of
any
corporation other than the Subsidiaries set forth on Schedule 1,
Part 2 of
this Agreement.
|
7.1.15
|
Agreements
with other Parties
|
Neither
the Company nor any of its Subsidiaries is a party to any agreement that
entitles any other party to the agreement to terminate or vary the agreement
by
reason
of
the transfer to Purchaser of the shares subject to the sale and transfer
of the
Shares or compliance with any provision of this Agreement.
The
execution and delivery by the Vendor of the Agreement, the other Contractual
Documents and any other certificates or documents delivered by the Vendor
pursuant to the Agreement, the offering and sale of the Shares hereunder
do not
and will not conflict with:
(1)
|
the
organizational documents of the Vendor, the Company or any of its
Subsidiaries;
|
(2)
|
any
contract or permit to which the Vendor, the Company or any of its
Subsidiaries is a party or by which any of the properties or assets
of the
Vendor, the Company or any of its Subsidiaries are
bound;
|
(3)
|
any
order of any court, authority or arbitrator applicable to the Vendor,
the
Company or any of its Subsidiaries or any of the properties or
assets of
the Vendor, the Company or any of its Subsidiaries as of the date
hereof;
or
|
(4) |
any
applicable law;
|
and,
to
the best of the Vendor’s knowledge, the relationships between and among members
of the Company and its Subsidiaries and clients, customers, suppliers and
employees will not be adversely affected thereby and the Vendor is not aware
of
any circumstances (whether or not connected with the Purchaser or the sale
of
the Shares) indicating that, nor has it been informed or is otherwise aware
that
any person who now has business dealings with the Company or its Subsidiaries
would or might cease to do so from and after Completion.
-26-
(B)
|
No
consent, waiver, approval, order, permit or authorisation of, or
declaration or filing with, or notification to, any person or authority,
other than the consents set forth in the Disclosure Letter is required
on
the part of the Vendor, the Company or its Subsidiaries in connection
with
(i) the execution and delivery of the Agreement or the compliance
by the
Vendor, the Company or its Subsidiaries with any of the provisions
thereof, the consummation of the transactions contemplated hereby
or the
taking of any other action contemplated hereby, or (ii) the continuing
validity and effectiveness immediately following the Completion
Date of
any permit or contract of any member of the Company or its
Subsidiaries.
|
7.1.16
|
Insurance
matters:
|
(i)
|
all
material policies of insurance for the benefit of the Company and
its
Subsidiaries are set forth in the Disclosure
Letter;
|
(ii)
|
all
such insurance policies are currently in full force and effect
and nothing
has been done or omitted to be done by the Company or its Subsidiaries
which could make any policy of insurance void or voidable or materially
increase the premiums payable under any
policy;
|
(iii)
|
no
claim filed by the Company or its Subsidiaries is outstanding under
any
past or present policy of the Company or its Subsidiaries;
and
|
(iv)
|
neither
the Company nor its Subsidiaries has not been notified by any insurer
that
it is required or advised to carry out any maintenance, repairs
or other
works in relation to any of its
assets.
|
7.1.17
|
Real
estate
|
With
respect to the Properties listed in the Disclosure Letter:
(i)
|
the
Properties are the only real estate owned, leased or occupied by
the
Company and its Subsidiaries and the Company and its Subsidiaries
are in
possession of same and all documents necessary to prove title or
leasehold
interest to each of the Properties are in the possession of the
Company
and its Subsidiaries;
|
(ii)
|
there
are no disputes regarding boundaries, easements, undertakings or
other
matters relating to any Properties or its use;
|
(iii)
|
to
the Vendor’s knowledge, there are no notices or proposals on the part of
any relevant approval authority which would materially affect any
of the
Properties including those relating to preservation, compulsory
purchase
or highways works; and
|
-27-
(iv)
|
payments
of all land use fees due to any relevant approval authority on
or before
the date of this Agreement in relation to the Properties have been
made in
full.
|
7.1.18
|
Improper
payments
|
Neither
the Company nor its Subsidiaries is a party to any agreement, arrangement
or
understanding which involves either directly or indirectly either of the
following:
(i)
|
any
offer or payment to any official of a Approval Authority to influence
him
or her or to assist in the obtaining or retaining of any business;
or
|
(ii)
|
any
offer or payment to any other person or entity while knowing, or
having
reason to know, that all or part of the matter offered or the payment
would be made available or paid to any official of a Approval Authority
to
assist in the obtaining or retaining of any
business.
|
7.1.19
|
Intellectual
property matters
|
Neither
the Company nor its Subsidiaries have received any current written notice
that
the operation of the business of the Company or its Subsidiaries in the ordinary
course:
(i)
|
have
infringed any intellectual property rights of any third party;
or
|
(ii)
|
have
given rise to any commission, royalty or like fee or require any
consent
or license to be obtained for any unlicensed or unauthorized use
of any
intellectual property.
|
7.1.20
|
Company
receivables:
|
The
Company and its Subsidiaries’ receivables (including customer deposits,
indebtedness, and major customers) are described in the Disclosure Letter
and
Financial Statements and which provide an accurate and complete description
of:
(i)
|
the
current status of the accounts payable and all such accounts receivables
represent valid obligations of customers of the Company and its
Subsidiaries arising from bona fide transactions entered into in
the
ordinary course of business and such receivables are enforceable
and have
realized or in the aggregate will realize the nominal amount thereof
and
all such receivables will be collectible in
full;
|
(ii)
|
all
current customer deposits and other deposits held by the Company
and its
Subsidiaries;
|
(iii)
|
the
long term debt status of the Company and its Subsidiaries as of
the date
of this Agreement; and
|
-28-
(iv)
|
the
revenues received from each of the 10 largest customers of Company
and its
Subsidiaries (measured by revenue) since their establishment.
|
7.1.21
|
Other
Liabilities
|
(A) As
of the
date of this Agreement, the Company and its Subsidiaries have no liabilities,
except for:
(i)
|
the
liabilities shown on the balance sheet dated as of May 31,
2008;
|
(ii)
|
liabilities
that have arisen since May 31, 2008 in the ordinary course of business
(but excluding indebtedness) and are similar in nature and amount
to the
liabilities that arose during the comparable period of time in
the
immediately preceding fiscal period; and
|
(iii)
|
liabilities
(but excluding indebtedness) which, individually and in the aggregate,
would not have a Material Adverse Effect on the Company or its
Subsidiaries. For purposes of this Article, "Liabilities" shall
mean
liabilities of the type required to be reflected as current liabilities
on
a balance sheet prepared in accordance with the
IAAP.
|
(B) |
The
Company and its Subsidiaries have not incurred any Indebtedness
since the
completion of the transactions contemplated by the Prior Agreement
or
since the Balance Sheet Date.
|
7.1.22
|
Loans
|
Save
as
disclosed in the Financial Statements, there are at the date of this
Agreement:
(A) |
no
loans, guarantees, material undertakings, material commitments
on capital
account or unusual liabilities, actual or contingent, made, given,
entered
into or incurred by or on behalf of the Company or any of its
Subsidiaries;
|
(B) |
no
mortgages, charges, liens or other similar encumbrances on the
assets of
the Company or any of its Subsidiaries or any part thereof;
and
|
(C) |
no
outstanding loan capital or other loans to the Company or any of
its
Subsidiaries.
|
7.1.23
|
Environmental
|
(A)
|
The
Vendor, the Company and its Subsidiaries have complied at all times
with
applicable environmental laws.
|
-29-
(B)
|
The
Vendor, the Company and its Subsidiaries have obtained all necessary
environmental Permits (all of which are valid and subsisting) and
the
Vendor, the Company and its Subsidiaries have complied at all times
with
all terms, conditions and limitations in all environmental
Permits.
|
(C)
|
No
environmental Permit may be revoked, modified or suspended as a
result of
the acquisition by the Purchaser of the
Shares.
|
(D)
|
No
circumstances exist, nor so far as the Vendor is aware are likely
to arise
which could make it impossible, difficult or require material expenditure
other than in the normal course of business for the Company and
its
Subsidiaries to comply with the conditions or limitations in any
environmental Permits in the future or may result in any such
environmental Permit not being extended, renewed, granted or (where
necessary) transferred and the Vendor, the Company and its Subsidiaries
have received no communication revoking, suspending, alleging
non-compliance, modifying or varying any of the environmental Permits
and
is not aware of any circumstances which might give rise to any
such
communication being received.
|
(E)
|
Neither
the Vendor, the Company nor its Subsidiaries is engaged in any
litigation,
arbitration, administrative or criminal proceedings or negotiations
with
any person or authority relating to environmental law or its enforcement
and so far as the Vendor is aware no litigation, arbitration,
administrative or criminal proceedings or negotiations with any
person or
authority relating to any actual or potential liability under or
non-compliance with environmental law are pending, threatened or
envisaged
by or against the Vendor, the Company or its
Subsidiaries.
|
(F)
|
There
are no Hazardous Materials present at, on, in or under the Premises
save
where stored or used in full compliance with environmental
law.
|
(G)
|
Neither
the Vendor, the Company nor its Subsidiaries is responsible (wholly
or in
part) for any clean up or other corrective action in relation to
any
Premises or former Premises or activities or operations undertaken
or
formerly undertaken by the Vendor, the Company or its Subsidiaries
and is
not subject to any investigation or inquiry by any authority and
has not
received any communication regarding clean up of any Premises or
former
Premises.
|
(H)
|
All
reports resulting from all environmental or health and safety
investigations, audits, appraisals, policies or assessments undertaken
or
commissioned by the Vendor, the Company or its Subsidiaries or
of which
the Vendor is aware relating to the Company’s or its Subsidiaries’
operations, plant, equipment, Premises or former Premises have
been
provided to the Purchaser and, so far as the Vendor is aware, any
such
investigation, audit or appraisal or assessment was carried out
competently and the contents of any such reports are correct in
all
material respects, do not contain material omissions and where
recommendations have been made, these have been complied with in
all
material respects.
|
-30-
(I)
|
The
Vendor, the Company and its Subsidiaries have complied with any
internal
or published statements of corporate environmental policy and operating
procedures.
|
(J)
|
Neither
the Vendor, the Company nor its Subsidiaries has not assumed or
retained,
by contract, any liability arising under environmental law of any
third
party.
|
7.1.24
|
Registered
Capital Increase
|
The
registered capital of Anhui
has
been increased from XXX 00 xxxxxxx xx XXX 12.2 million and the full amount
of
the increase is to be for the benefit of the Company. In connection with
such
increase, the Company is required to make a contribution to Anhui’s registered
capital as the sole action required in order to complete the transactions
that
will increase its direct ownership from 10% to 26.2% and its overall ownership
to 50.59%. The full amount of the funds required by the Company to pay its
portion of such capital contribution have been previously contributed to
the
Company by way of a (i) shareholder loan made by the Vendor to the Company
and
(ii) the proceeds from the sale of the shares of Nanjing PetroChina.
7.2 |
Representations
and Warranties of
Purchaser
|
The
Purchaser represents and warrants to the Vendor that:
7.2.1
The
Purchaser is only duly organized and validly existing under the laws of the
British Virgin Islands;
7.2.2
The
execution, delivery and performance of this Agreement has been duly authorized
by all necessary corporate actions on the part of Purchaser;
7.2.3 This
Agreement will be binding and enforceable in accordance with its terms, subject
to applicable bankruptcy, solvency and other laws effecting creditors’ rights
generally;
7.2.4 The
Purchaser has the capacity to pay for the sale and transfer of the Shares
and
will pay according to the provisions in this Agreement.
7.3 |
Further
Assurances of the Vendor
|
7.3.1 Between
the date of this Agreement and the Completion Date, the Vendor shall, and
shall
cause the Company or its Subsidiaries, to promptly notify the Purchaser in
writing if the Vendor becomes aware of any fact or condition that causes
or
constitutes a breach of any of the Vendor’s representations and warranties
contained in this Agreement, or if the Vendor becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would (except
as
expressly contemplated by this Agreement) cause or constitute a breach of
any
such representation or warranty had such representation or warranty been
made as
of the time of occurrence and discovery of such fact or condition.
-31-
7.3.2 Should
any such fact or condition require any change in the Disclosure Letter or
the
Financial Statements, the Vendor will promptly deliver to Purchaser a supplement
to the Disclosure bundles and Financial Statements and specifying and dating
such change. Notwithstanding the foregoing, no such change or further disclosure
shall affect the Warranties made as of the date of this Agreement.
7.3.3 During
the same period, the Vendor shall, and shall cause the Company or its
Subsidiaries to promptly notify Purchaser of the occurrence of any breach
of any
undertaking of the Vendor listed in this Agreement or if the occurrence of
any
event that may make the satisfaction of the conditions for Completion in
Article
4 impossible or unlikely.
8.
|
ACTIONS
AFTER COMPLETION
|
8.1 |
Business
Information
|
For
a
period of 1 year from Completion, the Vendor shall retain any books and records
which contain information relating to the business of the Company which are
not
in the possession of the Company or are not delivered to the Purchaser at
Completion, and shall make or procure to be made available such books and
records
for inspection and copying by representatives of the Purchaser or any other
member of the Purchaser's Group during business hours on reasonable advance
notice.
8.2 |
Transitional
Services
|
The
Vendor undertake to procure that all services and facilities (other than
the
provision of credit, financing or treasury services which utilise the balance
sheet of the Vendor) that have been provided to the Company within three
months
prior to the date of Completion shall, unless the Purchaser otherwise directs
in
writing, continue to be made available to the Company for a period of three
months from Completion and the Purchaser shall pay for such services at the
rates previously charged.
9.
|
Collaborations
between the purchaser and THE VENDOR
|
9.1 |
Supply
Priority
|
After
the
Completion, the Purchaser agrees to consider giving the Vendor and its
affiliates the priority to purchase products from the mother stations of
the
Company’s Subsidiaries at the fair market price within the Priority
Period.
9.2 |
Purchase
Priority
|
After
the
Completion, the Purchaser agrees to consider giving the Vendor and the
affiliates of the Vendor the priority to sell their products to the Purchaser
at
the fair market price within the Priority Period. Consistent with the foregoing,
the
Purchaser acknowledges that the Vendor is the manufacturer of non-standard
pressure containers, compressed natural gas (CNG) filling station equipment
and
transportation vehicles, and vehicle fuel conversion kits. Accordingly, without
creating any legal obligation, the Purchaser will use its commercially
reasonable efforts to offer the Vendor the opportunity to bid for the
opportunity to be the provider of such services during the Priority Period
on
such terms and conditions as may be agreed.
-32-
9.3 |
Priority
Period
|
“Priority
Period” is the 3-year period following the Completion Date.
10.
|
CONFIDENTIALITY
|
10.1
The
Vendor
acknowledges that it has knowledge of or has had access to information about
the
Company and its Subsidiaries which is either a trade secret, confidential
or
commercially sensitive and which may not be readily available to others engaged
in a similar business to that of the Company or its Subsidiaries or to the
general public and which if disclosed may cause harm to the Company, its
Subsidiaries or the Purchaser. The Vendor further acknowledges that it may
in
the future have knowledge of or obtain access to such information pursuant
to
this Agreement.
In light
of the foregoing, the
Vendor undertakes that it shall not, and shall procure that no Affiliate
of the
Vendor nor any
person, firm or company carrying on with the consent or privity of the Vendor
any business in succession to the Vendor will,
disclose to any other person any information of a secret or confidential
nature
relating to the businesses of the Company or its Subsidiaries save for any
such
information which:
10.1.1
is
in or becomes part of the public domain other than through a breach by the
Vendor, its
Affiliates
or any
employees, directors or agents of the obligations set out in this Clause
10;
10.1.2
may be required to be disclosed by applicable law or by any relevant regulatory
authority.
11.
|
ENTIRE
AGREEMENT AND REMEDIES
|
11.1
|
Entire
Agreement
|
This
Agreement together with any other documents in the Agreed Form referred
to in
this Agreement (together the "Contractual
Documents")
contains the whole agreement between the parties relating to the subject
matter
of this Agreement at the date of this Agreement to the exclusion of any
terms
implied by law which may be excluded by contract and except to the extent
repeated in this Agreement or any Contractual Document, supersedes any
previous
written or oral agreement between the parties in relation to the matters
dealt
with in this Agreement.
11.2
|
Acknowledgement
|
Each
party acknowledges that it has not been induced to enter into this Agreement
by
any representation, warranty or undertaking not expressly incorporated
into the
Contractual Documents.
-33-
11.3
|
Remedies
|
So
far as
permitted by law and except in the case of fraud, or any dishonest, reckless
or
willful misstatement or omission by or on behalf of any Vendor, each party
agrees and acknowledges that following Completion its only right and remedy
in
relation to any Warranty or undertaking made or given in connection with
this
Agreement or any of the Contractual Documents shall be for indemnification
in
relation to a breach of the terms of this Agreement or any of the Contractual
Documents to the exclusion of all other rights and remedies (including
those in
tort or arising under statute).
11.4
|
Indemnification
|
The
Vendor hereby agrees to indemnify the Purchaser, its Affiliates and their
respective directors, officers, employees, agents, successors and assigns
(including any transferee of the Shares) (collectively, the “Purchaser
Indemnified Parties”)
against and agrees to hold each of them harmless from any and all reasonable
cost and damage (including incidental and consequential damages), loss,
liability, obligation and expense (including without limitation expenses
of
investigation and attorneys’ fees and expenses in connection with any action,
suit or proceeding) or diminution of value, whether or not involving a
third
party claim (“Damages”),
incurred or suffered by a Purchaser Indemnified Party arising out
of:
(i)
|
any
breach of Warranty made by the Vendor pursuant to this Agreement
or any
Contractual
Documents;
|
(ii)
|
any
breach of a covenant or agreement to be performed by the Vendor,
the
Company or its Subsidiaries pursuant to this Agreement or any
Contractual
Documents,
save and except as a result of a default hereunder of a Purchaser
Indemnified Party; or
|
(iii)
|
any
breach of any representation, warranty covenant or agreement
by the seller
under the Prior Agreement that gives the Vendor the right to
claim any
remedy against such seller, provided that such indemnification
is limited
to the amount actually recovered from such
seller.
|
The
Purchaser hereby agrees to indemnify the Vendor, its Affiliates and their
respective directors, officers, employees, and agents (collectively, the
“Vendor
Indemnified Parties”)
against and agrees to hold each of them harmless from any and all Damages
incurred or suffered by a Vendor Indemnified Party arising out of:
(i)
|
any
breach of warranty made by the Purchaser pursuant to Clause 7.2
of this
Agreement; or
|
(ii)
|
any
breach of a covenant or agreement to be performed by the Purchaser
pursuant to this Agreement, save and except as a result of a
default
hereunder of a Vendor Indemnified
Party.
|
-34-
11.4
|
Procedures
|
11.4.1 The
party
seeking indemnification under this clause 11 (the “Indemnified
Party”)
for
Damages arising from the breach of any Warranties or the failure to perform
any
covenant or agreement hereunder agrees to give prompt notice to the party
against whom indemnity is sought (the “Indemnifying
Party”)
of the
assertion of any claim relating to such Damages, or the commencement of
any
suit, action or proceeding in respect of which indemnity may be sought
under
this clause 11 and will provide the Indemnifying Party such information
with
respect thereto describing (to the extent reasonably possible) the facts
giving
rise to the claim for indemnification hereunder and shall include in such
notice
(if then known) the amount or the method of computation of the amount of
such
claim. Subject to clause 6.4, the failure to so notify the Indemnifying
Party
shall not relieve the Indemnifying Party of its obligations hereunder,
except to
the extent that the Indemnifying Party demonstrates that the defense of
such
claim is prejudiced by the Indemnified Party’s failure to give such
notice.
11.4.2 The
Indemnifying Party shall be entitled at its expense to control and appoint
lead
counsel reasonably satisfactory to the Indemnified Party for any claim,
unless
(i) the Indemnifying Party is also a party to such claim and the Indemnified
Party determines in good faith that joint representation would be inappropriate,
or (ii) the Indemnifying Party fails to provide reasonable assurance to
the
Indemnified Party of its financial capacity to defend such claim and provide
indemnification with respect to such claim.
11.4.3 The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld), settle any
such
claim, unless the settlement (i) releases the Indemnified Party from all
liabilities and obligations with respect to such claim, (ii) involves only
money
Damages and does not seek an injunction or other equitable relief and (iii)
in
the good faith judgment of the Indemnifying Party, settlement of, or an
adverse
judgment with respect to, such claim is not likely to establish a precedential
custom or practice materially adverse to the continuing business and the
interests of the Indemnified Party.
11.4.4 The
Indemnified Party shall be entitled at its expense to participate in the
defense
of such claim and to employ separate counsel of its choice for such purpose.
So
long as the Indemnifying Party is conducting a diligent defense of the
Indemnified Party, the Indemnified Party shall not settle any claim (or
make any
admission or concession in connection therewith) without the prior written
consent of the Indemnifying Party.
11.4.5 Each
party shall cooperate, and cause their respective Affiliates to cooperate,
in
the defense or prosecution of any such claim and shall furnish or cause
to be
furnished such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials or appeals, as may be reasonably
requested in connection therewith.
-35-
11.4.6 For
the
purposes of this clause 11, the Vendor hereby consents to the non-exclusive
jurisdiction of any court in which a claim is brought against any Indemnified
Party for purposes of any claim that an Indemnified Party may have under
this
Agreement with respect to such claim or the matters alleged therein, and
agree
that process may be served on the Vendor with respect to such claim anywhere
in
the world.
11.5
|
Reasonableness
of this Clause
|
Each
party to this Agreement confirms it has received independent legal advice
relating to all the matters provided for in this Agreement, including the
provisions of this Clause, and agrees, having considered the terms of this
Clause and the Agreement as a whole, that the provisions of this Clause
are fair
and reasonable.
12.
|
GUARANTEE
|
12.1
|
Guarantee
Obligations
|
In
consideration of the Purchaser entering into this Agreement, the Guarantor
shall, as primary obligations:
12.1.1 procure
that the Vendor shall duly observe and promptly perform all of its obligations
under this Agreement and all other Contractual
Documents;
12.1.2 if
and
whenever the Vendor shall be in default in the payment when due of any
amount
payable under this Agreement or any other Contractual
Document
or of
any damages for breach of the same or of any of the representations or
warranties or undertakings contained herein or therein and within seven
(7)
Business Days after being given notice to that effect by the Purchaser,
pay all
such amounts then payable by the Vendor as though the Guarantor instead
of the
Vendor were expressed to be the principal debtor in respect of such amounts
and
not merely as surety, without any requirement for the Purchaser first to
have
recourse against the Vendor or any other person; and
12.1.3 indemnify
the Purchaser against the reasonable cost of collecting any amount payable
by
the Vendor and referred to in Clause 11.
12.2 |
Indemnity
|
Any
amount not paid by the Vendor and not recoverable from the Guarantor on
the
basis of a guarantee (whether because of any legal limitation, disability
or
incapacity on the part of the Vendor or any other matter or thing whether
known
to the Purchaser or not) shall nevertheless be recoverable from the Guarantor
on
the basis of an indemnity.
12.3
|
Indulgence
etc.
|
The
Guarantor acknowledges that its liability under this Clause 12 shall not
be
discharged or affected in any way by time being given to the Vendor or
by any
other indulgence or concession being granted to the Vendor or by any other
act,
omission, dealing, matter or thing whatsoever (including any change in
the
memorandum or articles of association of the Vendor, any amendment to this
Agreement or the liquidation, dissolution, reconstruction or amalgamation
of any
of the Company or the illegality or enforceability of this Agreement) which
but
for this provision might operate to release the Guarantor from its obligations
under this Clause 12.
-36-
12.4
|
Continuing
Guarantee
|
The
guarantee contained in this Clause 12 is a continuing guarantee and shall
remain
in full force and effect until all obligations of the Vendor hereby guaranteed
have been discharged in full. It is in addition to and shall not prejudice
nor
be prejudiced by any other guarantee, indemnity or other security or right
against any other person which the Purchaser may have for the due performance
of
the obligations concerned.
12.5
|
Set
Off
|
The
Guarantor shall not be entitled to set off against the obligations hereby
guaranteed any liabilities or obligations which are due from the Purchaser
to
the Vendor under any provision of this Agreement or any other agreements
entered
into pursuant hereto.
13 |
OTHER
PROVISIONS
|
13.1
|
Vendor’s
Liability
|
No
failure to exercise, and no delay in exercising, on the part of the Purchaser
any right or remedy under this Agreement shall operate as a waiver of such
right
or remedy nor shall any single or partial exercise of any right or remedy
preclude the exercise of any other right or remedy.
13.2
|
Announcements
|
No
announcement or circular concerning the existence of this Agreement or
the sale
of the Shares or other terms of the transaction contemplated by this Agreement
shall be made or issued by or on behalf of the Vendor or the Purchaser
without
the prior written approval of the Vendor and the Purchaser (such approval
not to
be unreasonably withheld or delayed); provided, however, that this restriction
shall not apply to any announcement or circular required by law or any
regulatory body or the rules of any relevant stock exchange so long as
the party
with an obligation to make an announcement or issue a circular shall to
the
extent practicable consult with the other party
insofar
as is reasonably practicable before complying with such an
obligation.
13.3
|
Successors
and Assigns
|
13.3.1
The Vendor agrees that the benefit of every provision in this Agreement
is given
to the Purchaser for itself and its successors in title and assigns.
Accordingly, the Purchaser (and its successors and assigns) may at any
time,
without the consent of the Vendor, assign all or any part of the benefit
of, or
its rights and benefits under, this Agreement, to its successor in title,
any
purchaser from the Purchaser, or any Affiliate of the Purchaser.
-37-
13.3.2
The Vendor agrees that, upon the request of the Purchaser or its successors
in
title or assigns, this Agreement may be novated (in whole or in part) in
favour
of the beneficial owner for the time being of the Shares, and the Vendor
shall
execute a novation agreement in the form reasonably required by the Purchaser.
If the Vendor fails to execute any such Agreement within 14 days of the
request
by the Purchaser, the Purchaser may execute it on behalf of the Vendor
and for
such purpose the Vendor hereby irrevocably appoint the Purchaser as the
Vendor’s
attorney for the purpose of executing any such novation agreement. The
Vendor
agrees to ratify and confirm any action taken by the Purchaser by virtue
of this
power of attorney.
13.4
|
Variation
|
No
variation of this Agreement shall be effective unless in writing and signed
by
or on behalf of each of the parties to this Agreement.
13.5
|
Time
of the Essence
|
Time
shall be of the essence for this Agreement as regards any dates, times
and
periods fixed by this Agreement for the performance of any obligation by
any of
the parties whether as originally fixed or as altered in accordance with
this
Agreement or by agreement in writing between the parties.
13.6
|
Further
Assurance
|
The
Vendor shall execute or, so far as it is able, procure that any necessary
third
party shall execute, all such deeds and documents and do all such things
as the
Purchaser may require from time to time for perfecting the transactions
intended
to be effected under or pursuant to this Agreement and for vesting in the
Purchaser or its nominee the full benefit of the Shares, including without
limitation paying any stamp duty that is payable in connection with the
transactions contemplated hereunder. Without limiting the generality of
the
foregoing, the Vendor hereby irrevocably appoints, with effect from Completion,
the Purchaser or any person nominated by the Purchaser to be its attorney,
in
such Vendor's name and on its behalf, to execute and complete any transfers
or
other documents which the Purchaser may require for perfecting its title
to or
for vesting the Shares in the Purchaser or its nominees and otherwise generally
to sign, seal and deliver and otherwise perfect any such transfers or other
documents and deal with any distributions, property and rights deriving
from the
Shares, including without limitation the voting rights attached to the
Shares,
and otherwise do all such acts and things as may be required for the acquisition
of the full benefit of the Shares in accordance with the terms hereunder
in the
event of a failure of the Vendor to perform its obligations hereunder and/or
pending registration of the transfer of the Shares. The Vendor hereby covenants
with the Purchaser to ratify and confirm any such deed, document, act and
thing
and all transactions which any such attorney may lawfully and properly
execute
or do pursuant to this Clause 12.6.
-38-
13.7
|
Costs
|
The
Vendor shall bear all costs incurred by it and the Company and the Company’s
Subsidiaries in connection with the preparation, negotiation and entry
into of
this Agreement and the sale of the Shares. The Purchaser shall bear all
such
costs incurred by it. Any
stamp
duty chargeable upon the execution and performance of this Agreement and
the
other Contractual Documents shall be borne by the Vendor and the Purchaser
in
equal shares.
13.8
|
Interest
|
Save
as
otherwise provided in this Agreement, if
the
Vendor or the Purchaser default in the payment when due of any sum payable
under
this Agreement, the liability of the Vendor or the Purchaser (as the case
may
be) shall be increased to include interest on such sum from the date when
such
payment is due until the date of actual payment
at the
rate of 4 times of HIBOR per annum.
13.9
|
Notices
|
13.9.1
Any notice, claim or demand in connection with this Agreement shall be
in
writing in English (a "Notice")
and
shall be sufficiently given or served if delivered or sent:
In
the case of the Vendor to
|
Sinoenergy
Holding Limited
1603-1604,
Tower B Xxxxxxx Xxxxxx Xx Xxxx, Xxxxxxx Xx, Xxxxxxxx Xxxxxxxx,
Xxxxxxx,
Xxxxx
|
Fax:
x00 00 00000000
|
|
Attention:
Xx. Xxx Xxx Xxxx
|
|
In
the case of the Purchaser to
|
Greka
SNU Ltd.
|
Suite
3308, 33rd
Fl, Xxxxxxxx Xxxxxx Xxx Xxxxxxx, Xxxx Xxxx
|
|
Fax:
x000 0000 0000
|
|
Attention:
Xx. Xxxxxxx Xxxxxx
I
|
|
In
the case of the Guarantor to
|
Sinoenergy
Corporation
1603-1604,
Tower B Xxxxxxx Xxxxxx Xx Xxxx, Xxxxxxx Xx, Xxxxxxxx Xxxxxxxx,
Xxxxxxx,
Xxxxx
Fax:
x00 00 00000000
Attention:
Xx. Xxx Xxx Xxxx
|
-39-
13.9.2
Any Notice may be delivered by hand or sent by messenger, fax or prepaid
post.
Without prejudice to the foregoing, any Notice shall conclusively be deemed
to
have been received on the next working day in the place to which it is
sent, if
sent by fax, or 60 hours from the time of posting, if sent by post, or
at the
time of delivery, if delivered by hand or by messenger.
13.9.3
If
any party to this Agreement dies, until the party giving notice has received
notice in writing of the grant of probate of his will or letters of
administration of his estate (or equivalent) any Notice so given shall
be as
effectual as if he were still living.
13.10
|
Invalidity
|
Without
prejudice to Clauses 10.2 or 10.3 if at any time any provision in this
Agreement
is or becomes illegal, invalid or unenforceable, in whole or in part, under
any
enactment or rule of law, such provision or part shall to that extent be
deemed
not to form part of this Agreement but the legality, validity or enforceability
of the remainder of this Agreement shall not be affected.
13.11
|
Counterparts
|
This
Agreement may be entered into in any number of counterparts, all of which
taken
together shall constitute one and the same instrument. Any party may enter
into
this Agreement by executing any such counterpart but the Agreement shall
not be
effective until each party has executed at least one counterpart.
13.12
|
Governing
Law and Submission to
Jurisdiction
|
13.12.1
This Agreement and the documents to be entered into pursuant to it, shall
be
governed by and construed in accordance with Hong Kong SAR law.
13.12.2
All the parties irrevocably agree that the courts of the
Hong
Kong SAR are to have exclusive jurisdiction to settle any dispute which
may
arise out of or in connection with this Agreement and the documents to
be
entered into pursuant to it. All the parties irrevocably submit to the
jurisdiction of such courts and waive any objection to proceedings in any
such
court on the ground of venue or on the ground that proceedings have been
brought
in an inconvenient forum.
13.12.3
The Vendor irrevocably agrees that a judgment of the courts of the
Hong
Kong SAR in connection with a dispute over this Agreement and the documents
to
be entered into pursuant to it is conclusive and binding upon it and may
be
enforced against it in the courts of any other jurisdiction.
13.13
|
Specific
Performance
|
The
parties hereto acknowledge and agree that a failure to comply with the
provisions of this Agreement shall cause irreparable harm to the other
party
that could not be adequately compensated by the payment of money damages
and
that, accordingly, without prejudice to any other rights or remedies of
the
parties, each party shall be entitled, without proof of special damages
or the
necessity of posting any bond or surety, to the remedies of injunction,
specific
performance or other equitable relief for any threatened or actual breach
by the
other party of any of the terms and conditions hereunder.
-40-
13.14
|
Service
of Process
|
13.14.1
|
Each
of the Vendor and the Guarantor hereby irrevocably appoints Giant
Power
International Investment Limited of Xxxx 0000, Xxxx Xxx Xxxxxx,
Xxxxx
Merchants Tower, 000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxx Xxx, Xxxx
Xxxx to
accept service of all legal process arising out of or connected
with this Agreement and service on the Vendor or the Guarantor,
as
applicable, at the above address (or such substitute) shall be
deemed to
be service on the Vendor or the Guarantor, as applicable. If
for any
reason the process agent ceases to be able to act as process
agent, or no
longer has an address in Hong Kong, each of the Vendor and the
Guarantor
irrevocably agrees to appoint a substitute process agent with
an address
in Hong Kong and to deliver to the Purchaser a copy of the substitute
process agent’s acceptance of that appointment within 20 Business
Days.
|
13.14.2
|
The
Purchaser hereby irrevocably appoints Green Dragon Gas Limited
of Xxxxx
0000, Xxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx to
accept service of all legal process arising out of or connected
with this
Agreement and service on the Purchaser at the above address (or
such
substitute) shall be deemed to be service on the Purchaser. If
for any
reason the process agent ceases to be able to act as process
agent, or no
longer has an address in Hong Kong, the Purchaser irrevocably
agrees to
appoint a substitute process agent with an address in Hong Kong
and to
deliver to the Vendor a copy of the substitute process agent’s acceptance
of that appointment within 20 Business
Days.
|
-41-
IN
WITNESS WHEREOF this Agreement has been executed by the duly authorised
representatives of the parties on the date first above written.
VENDOR:
Executed
and delivered as a deed by
|
|
Sinoenergy
Holding Limited acting by
|
|
director
and director or secretary
|
/s/
Xx
Xxxxx
|
(Signature
of director)
|
|
/s/
Tianzhou
Deng
|
|
(Signature
of director/secretary)
|
PURCHASER:
Executed
and delivered as a deed by
|
|
Greka
SNU Ltd. acting by
|
|
director
and director or secretary
|
/s/
Xxxxxxx X. Xxxxxx
|
(Signature
of director)
|
|
|
|
(Signature
of director/secretary)
|
GUARANTOR:
Executed
and delivered as a deed by
|
/s/
Xx
Xxxxx
|
Sinoenergy
Holding Limited acting by
|
(Signature
of director)
|
director
and director or secretary
|
|
/s/
Tianzhou
Deng
|
|
(Signature
of director/secretary)
|
-42-