Investment Trust Agreement
The
Agreement is made and entered into on October 28, 2006 in Xi’an, the PRC by and
between
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Trustor:
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Xi’an
Amorphous Alloy Science & Technology Co., Ltd.
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Address:
6F, Yasen Industrial Center Building, No. 15 Gaoxin 6th
Road,
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Hi-tech
Zone, Xi’an
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Legal
representative: Song Yongxing
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Trustees:
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1.
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Song
Yongxing
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ID
No.:
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Domicile:
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2.
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Mao
Junming
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ID
No.:
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Domicile:
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3.
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Xu
Zewei
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ID
No.:
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Domicile:
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4.
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Dai
Tao
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ID
No.:
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Domicile:
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5.
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Xxxx
Xxxxxxx
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ID
No.:
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Domicile:
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6.
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Xxx
Xxxx
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ID
No.:
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Domicile:
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7.
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Xxxxx
Xxx
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ID
No.:
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Domicile:
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8.
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Feng
Yarong
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ID
No.:
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Domicile:
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9.
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Shi
Sujun
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ID
No.:
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Domicile:
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10.
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Yu
Xinzheng
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ID
No.:
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Domicile:
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1
WHEREAS:
1.
The
Trustor is a joint stock limited company incorporated and legally existing
in
accordance with the laws of China, registered in Shaanxi Xi’an Administration
for Industry and Commerce, No. 6101012110931;
2.
The
Trustees are citizens of the People’s Republic of China and natural person
shareholders of the Trustor, and Song Yongxing is the legal representative
of
the Trustor..
3.
Xi’an
Amorphous Alloy Zhongxi Transformer Co., Ltd. (hereinafter referred to as
“AAZX”) is a limited liability company established by the Trustees with the
authorization of the Trustor on June 29, 2004 and registered in Shaanxi Xi’an
Administration for Industry and Commerce; the Trustees hold the shareholdings
of
AAZX and are registered as the shareholder on behalf of the Trustor. AAZX owns
RMB32 million as registered capital, among which the Trustees contributed
totally RMB30 million, holding 93.75% of the total shares of AAZX, and Xi'an
Zhongxi Zengliu Dianlu Transformer Factory, Ltd. contributed RMB2 million.
4.
The
Parties agree to make a formal trust investment agreement to specify the trust
relationship between the Parties and to realize Trustor’s aim of oversea
financing.
It
is
hereby agreed as follows through friendly negotiation concerning the matters
as
mentioned in the WHEREAS:
2
Article
1 Investment Trust and Escrow
1.1
The
Parties confirm that thirty million yuan (RMB30 million) of investment by the
Trustees in AAZX shall be the investment entrusted by the Trustor, who shall
be
the actual owner of 93.75% of the shareholdings of AAZX(hereinafter referred
to
as the “Warehoused Shareholding”) which is registered under the names of the
Trustees, and the Trustees are entrusted shareholders.
1.2
All
of the investment contributed by the Trustees with entrustment of theTrustor
shall include investment of money with amount to seven million and eight hundred
and sixty thousand yuan (RMB7,860,000), workshop, namely, workshop 1F and office
building 4F of Xx. 0, Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxxx, Xx. 00 Gaoxin 6th Road,
Hi-tech Zone, Xi’an, with amount to fourteen million two hundred thousand yuan
(RMB14,200,000), and equipment with amount to seven million nine hundred and
forty thousand yuan (RMB7,940,000), seeing Annex 1, the List of Material
Investment, and Annex 2, the List of Asset Handover.
1.3
Assets comtributed by the Trustees with entrustment have been verified by Shanxi
Zhongqing Certified Public Accountants, which issued the capital verification
report, No. Xxxx Xxxxx Qing Xxx Xx(2004)1112. The assets contributed with
entrustment and the proportion of shareholdings are as follows:
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Serial No.
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Name of Agent
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Amount of Capital
Contribution(RMB)
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Form of Capital
Contribution
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Proportion
of
Shareholding
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1
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Song Yongxing
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3,000,000
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Currency
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43.75
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%
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11,000,000
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Material
Objects (real estate)
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2
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Mao
Junming
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2,100,000
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Material
Objects (equipment)
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6.56
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%
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3
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Xu
Zewei
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2,000,000
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Material
Objects (equipment)
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6.25
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%
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4
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Xxxx
Xxxxxxx
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1,920,000
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Material
Objects (equipment)
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6
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%
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5
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Dai
Tao
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1,920,000
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Material
Objects (equipment)
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6
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%
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6
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Xxx
Xxxx
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1,660,000
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Currency
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5.19
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%
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7
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Xxxxx
Xxx
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1,600,000
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Currency
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5
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%
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8
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Feng
Yarong
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1,600,000
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Currency
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5
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%
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9
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Shi
Sujun
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1,600,000
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Material
Objects (real estate)
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5
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%
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10
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Yu
Xinzheng
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1,600,000
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Material
Objects (real estate)
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5
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%
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1.4
The
Trustor shall have the right to terminate the trust at any time with a notice
to
the Trustees. The Trustees shall, within the period given by the Trustor after
receipt the notice from the Trustor, make the Warehoused Shareholding registered
under the name of the Trustor or a third party appointed by the Trustor in
accordance with the method determined by the Trustor, including but not limited
to, gratuitous donations, consideration of RMB1, or gratuitous transfer.
1-5
The
Trustees shall be willing to accept the said trust of the Trustor, to make
capital contributions and hold the shares on behalf of the Trustor and to
exercise relevant shareholders’ rights subject to the Trustor’s instructions.
The Trustees shall agree to all arrangements under the Agreement.
Article
2 Scope of Authority
The
rights to be exercises by the Trustees with the trust of the Trustor shall
include:
2.1
The
Trustees shall register as the shareholders of AAZX, sign their names in the
shareholder book of AAZX and exercise the voting right as AAZX’s shareholders
subject to the instructions of the Trustor;
2.2
One
or several persons of the Trustees shall act as the director of AAZX, be elected
as the legal representative and exercise the voting right as the legal
representative and the director of AAZX;
2.3
The
Trustees shall make resolutions concerning recombination and listing of the
assets, shareholdings, rights and interestsof the Trustor and AAZX as the
shareholders of AAZX pursuant to relevant decisions of the Trustor, and execute
the agreements and legal documents concerning AAZX oversea financing and listing
as the legal representative or the authorized representative;
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2-4
The
Trustees shall, for interests of the Trustor, exercise other rights of the
shareholders conferred by the Corporation Law and the Articles of Association
of
AAZX.
Article
3 Term of Investment Trust
The
term
of trust investment shall be effective from the day of execution and
effectiveness of the Agreement to
1)
the
termination of AAXZ; or
2)
the
day of termination of the Agreement negotiated by and between the Parties;
or
3)
the
day of rescission of the Agreement notified in writing by the Trustor.
If
the
Trustor notifies one or several persons of the Trustees in writing of rescission
of the entrustment relationship, the Agreement shall remain in full force upon
the other Trustees who are not notified.
Article
4 Rights and Obligations of the Trustor
The
rights and obligations of the Trustor within the term of trust investment shall
include:
4.1
As an
actual investor and owner of the assets of investment entrusted, the Trustor
shall enjoy the actual and final right to own, dispose (including but not
limited to, assignment, donation or pledge etc.), and gain benefits from the
Warehoused Shareholding. The Trustor shall enjoy the actual shareholders’ rights
and assume corresponding obligations. The decisions upon operation and
management made by theTrustees shall meet the interests of the Trustor;
4.2
The
Trustor shall enjoy the right to, at its own discretion, give instructions
to
the Trustees at any time concerning entrustment of the Trustees’ exercise of the
rights as described in Article 2 hereof, and the Trustees shall carry out the
instructions unconditionally;
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4.3
The
Trustor shall enjoy the right to, at its own discretion, know the operation
of
AAZX and make decisions upon the Trustees at any time, and the Trustees shall
carry out the decisions unconditionally;
4.4
The
Trustor shall enjoy the right to, at its own discretion, at any time rescind
the
trust to the Trustees and require the Trustees to make the Warehoused
Shareholding registered under the name of the Trustor or a third party appointed
by the Trustor subject to the method determined by the Trustor, including but
not limited to, gratuitous donations, consideration of RMB1, or gratuitous
transfer. In case of necessary execution of relevant legal documents and
completion of corresponding legal procedures then, the Trustees shall consent
and undertake unconditionally;
4.5
The
Trustor shall enjoy the right to, pursuant to the Agreement, supervise and
correct improper acts of the Trustees and require the Trustees to compensate
for
losses due to such acts;
4.6
The
Trustor may authorize the Trustees to entrust a third party to be in charge
of
operation and management of the Company;
4.7
Instructions given by the Trustor to the Trustees shall not impair the
legitimate individual rights of the Trustees, nor conflict with the laws and
regulations of China.
Article
5 Rights and Obligations of the Trustees
The
rights and obligations of the Trustees within the term of trust investment
shall
include:
5.1
The
Trustees shall make investment in AAZX in their own names with entrustment
of
the Trustor and act as the dummy shareholders of AAZX;
5.2
The
Trustees shall operate AAZX in good faith for the interest of the Trustor;
5.3
The
Trustees shall have the right to, at the Trustor’s instruction, exercise the
rights hereunder as the dummy shareholders; however, the Trustees shall not
seek
for any private interests for themselves in the name of dummy shareholders,
nor
cause any adverse impacts on the Trustor or AAZX;
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5.4
If
the Trustor requires the Trustees to sub-entrust a third party to operate and
manage AAZX, the Trustees shall, at the Trustor’s requirements, make relevant
resolutions at the board meetings and the Shareholders’ meetings and execute
relevant contracts;
5.5
The
Trustees shall, at any time at the Trustors’ instructions, transfer the
Warehoused Shareholding to the Trustor or any third party appointed by the
Trustor pursuant to Article 4.4 hereof, and cooperate unconditionally with
the
Trustor or the third party in completing relevant legal procedures;
5.6
If,
during performance of the Agreement, one or several persons of the Trustees
resign from the Company, they shall disqualify for Trustees automatically,
and
the Trustor shall entrust others as substitute for trustee; however, the former
trustee shall perform his rights and obligations until the new trustee is
nominated;
5.7
The
Trustees shall have the right to refuse the issues which are violated Article
4.7 hereof.
Article
6 Effectiveness
6.1
The
Agreement shall become effective as of the day when the legal representative
or
authorized representative of the Trustor signs and stamps the common seal on
and
all the Trustees sign the Agreement.
6.2
In
the case where the Agreement becomes null and invalid due to amendment to the
laws, regulations and policies of the People’s Republic of China, government
regulation or others, neither party shall compensate each other; however, the
Parties shall take corresponding measures to avoid or minimize losses
immediately subject to the solutions of Trustor.
Article
7 Confidentiality
7.1
The
Parties agree and shall urge the persons who know about the trust investment
to
assume strict confidentiality liabilities concerning all terms of the Agreement
and all items with respect to the Warehoused Shareholding and not to disclose
to
any third party except with express provisions of laws, requirements of judicial
institutions or relevant governmental authorities or the consent of the Parties;
otherwise, corresponding legal liabilities shall be held.
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7.2
The
confidentiality obligation shall be permanent and survive the termination of
the
Agreement.
Article
8 Liability for Breach of Agreement
After
effectiveness of the Agreement, the acts of either party against the provisions
herein shall constitute a breach of the Agreement, and the breaching party
shall
compensate the losses to the non-breaching caused thereof.
Article
9 Settlement of Dispute
Any
and
all disputes arising from the Agreement shall be settled through amicable
negotiation. Where negotiation fails, either party may have the right to bring
a
lawsuit with the People’s Court with legal jurisdiction.
Article
10 Severability
10.1
If
any provision of the Agreement becomes null and invalid or unenforceable in
accordance with relevant laws and regulations, such provision shall be null
and
invalid merely, and the remainder of the Agreement shall still be in full force
and binding upon the Parties.
10.2
In
case of circumstances as mentioned in Article 10.1, the Parties shall make
a
supplementary provisions as soon as possible through friendly negotiation to
substitute for the null and invalid provision.
Article
11 Non-waiver
11.1
Either party’s non-performance or delay of performance of certain right as
provided herein shall not constitute the party’s waiver of such right.
11.2
Either party’s failure to require the other party to perform its obligations
hereunder shall not be deemed as the party’s waiver of further requirement.
11.3
Exemption of either party in breach of any of the terms of the Agreement from
liability by the other party shall not be deemed as further exemption from
liabilities from breach of the said term or other terms hereof.
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Article
12 Supplementary Provisions
12.1
Any
and all taxes and duties arising from execution and performance of the Agreement
and in the course of trust investment shall be borne by the Parties respectively
in accordance with the laws and regulations.
12.2
Relevant supplementary agreement made by and between the Parties concerning
the
trust investment after effectiveness of the present Agreement, if any, is part
of the Agreement and has equal legal force with the Agreement. In case of
conflict of the supplementary agreement with this Agreement, the former shall
apply. In case of several supplementary agreements, the latest one shall
prevail.
12.3
The
Agreement shall be in twelve originals, one for each party concerned and the
remaining shall be available for corresponding formalities.
(no
text
below)
Trustor: Xi’an
Amorphous Alloy Science & Technology Co., Ltd.
Legal
representative:
(or
authorized representative)
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Trustees:
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By:
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/s/
Song
Yongxing
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By:
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/s/ Mao
Junming
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Song Yongxing
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Mao
Junming
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By:
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/s/
Xu
Zewei
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By:
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/s/
Dai
Xxx
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Xx Xxxxx
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Xxx
Tao
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By:
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/s/
Xxxx
Xxxxxxx
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By:
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/s/
Xxx
Xxxx
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Xxxx Xxxxxxx
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Xxx
Xxxx
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9
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By:
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/s/
Xxxxx
Xxx
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By:
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/s/
Feng
Xxxxxx
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Xxxxx
Xxx
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Xxxx
Xxxxxx
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Xxx
Xxxxx
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Xx
Xinzheng
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Annexes:
1.
List
of Material Investment
2.
List
of Asset Handover
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