English Translation] Agreement for Equity Swap
[English
Translation]
Agreement
for Equity Swap
Party
A:
Mr. Xiu Hai Tian
Party
B:
Tianjin SingOcean Public Utility Development Co., Ltd
Whereas:
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1.
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Mr.
Xiu Hai Tian is a PRC natural person and legally holds 49% equity
of
Qinhuangdao Chensheng Gas Ltd (“Chensheng Gas”).
|
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2.
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Tianjin
SingOcean Public Utility Development Co., Ltd is a Sino-foreign
joint-venture, established legally in China and legally holds 99%
equity
of Hunchun SingOcean Energy Ltd.
|
|
3.
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In
order to make full use of both Parties’ own advantages and resources in
operating the gas industry for development of the gas projects, the
parties hereto mutually agree as follows on the swap of the 49% equity
of
Chensheng Gas, hold by Party A, with the 99% equity of Hunchun SingOcean,
hold by Party B:
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|
1)
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Party
A represents that it has sole power to dispose of the equity that
is to be
swapped to Party B, that there exists no pledge or judicial attachment
on
the same equity, that the equity is free from any recourse from any
third
party. Otherwise Party A should be liable for all economic and legal
liabilities arising herefrom. Meanwhile the equity swap has been
consented
to by all the creditors.
|
Party
B
represents that it has sole power to dispose of the equity that is to be swapped
to Party A, that there exists no pledge or judicial attachment on the same
equity, that the equity is free from any recourse from any third party.
Otherwise Party B should be liable for all economic and legal liabilities
arising herefrom. Meanwhile the equity swap has been consented to by all the
creditors.
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2)
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The
value of the equity and the transfer becomes
effective
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According
to full investigations on each other by both parties, the net assets
corresponding to the 49% equity of Chensheng Gas hold by Party A are almost
equal to the net assets the 99% equity of Hunchun SingOcean hold by Party B,
and
the equipments and devices are in good operational condition. Both parties
confirm that the other party need not pay any asset or cash for any discrepancy
except the swapped equity (the final amount of the net assets is subject to
the
assets valuation report).
Both
parties should start the procedure of the registration for change at the
Administration for Industry and Commerce (“AIC”) as soon as the agreement has
been signed. Both parties will legally hold the equity of the other party after
the above procedure. After the registration for change, Party B will legally
hold the 49% equity of Chensheng Gas and Party A will legally hold the 99%
equity of Hunchun SingOcean.
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3)
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Allocation
of profits and losses of the swapped equity (rights and
debts)
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A.
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Both
parties should be entitled to the profits and share the corresponding
losses and risks of the companies in accordance with their respective
proportions in the swapped equity once the registration for change
at the
AIC has been completed after the effectiveness of this
agreement.
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B.
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When
one Party’s failure at its signing of this agreement to truthfully notify
the other party of the liabilities attaching to the swapped equity
brings
about losses to the other party after the latter becomes a shareholder
of
the company, the party that has incurred losses has the right to
claim for
compensation from the first party.
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4)
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Liability
for breach of the Agreement
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A.
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Both
parties should conscientiously perform the agreement as soon as the
agreement becomes effective. A party should be held liable under
relevant
laws and the agreement if it has not fully performed its obligation
pursuant to the agreement.
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|
B.
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When
any reason causes one party unable to complete the AIC registration
on
schedule or impacts materially on the fulfillment of the purpose
for
entering into the agreement, the other party should pay the liquidated
damage in the amount of one ten thousandth of the value of the equity.
When the amount of the liquidated damage is less than the actual
losses,
the delinquent party shall pay additional
damages.
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5)
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Amendment
and termination of the agreement
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Both
parties may amend and terminate this agreement through mutual agreement. Both
parties should sign a separate agreement for amendment and termination of this
agreement if they have agreed to amend or terminate the agreement through mutual
agreement.
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6)
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Expenses
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The
expenses incurred by the parties with respect to the equity swap process (such
as the fees for notarization, audit, asset appraisal, AIC registration and
so
on) shall be paid by each party respectively.
2
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7)
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Dispute
Resolution
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Any
dispute relating to or arising under this agreement shall be resolved through
friendly consultation by both parties. If such consultation fails, it may be
resolved by the following means (tick in the block before the one item that
is
chosen): □ submit the dispute to arbitration at Tianjin Arbitration Committee; □
institute legal proceedings in a people’s court with jurisdiction.
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8)
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Effect
of the agreement
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This
Agreement will be effective as soon as it is signed and sealed by both parties.
Both parties shall complete the registration procedure at the AIC within 3
days
after this Agreement comes into effect.
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9)
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This
Agreement is signed in six copies. Each party holds one copy, and
the
other copies shall be submitted to the relevant governmental departments.
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Party
A:
Mr. Xiu Hai Tian
Representative:
/s/ Xiu Hai Tian
Party
B:
Tianjin SingOcean Public Development Co., Ltd
Legal
representative: /s/ Chun Xxxx Xxx
(Seal
of
Tianjin SingOcean Public Development Co., Ltd)
Date:
September 16, 2008
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