URBAN GAS DEVELOPMENT AGREEMENT Party A: Construction Bureau of Linzhang County Party B: Beijing Zhong Ran Wei Ye Gas Co., Ltd. Date: August 25, 2003
[Stamp
Tax]
Party
A: Construction
Bureau of Linzhang County
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Date: August
25, 2003
Contract
SN:
Signatory
Location:
Party
A: Construction
Bureau of Linzhang County
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Chapter
I General
Principles
|
1.1
|
WHEREAS,
(i) the Government of Linzhang County agrees to authorize Party B
the
exclusive right to develop, construct and operate the pipeline gas
project
in the urban area of Linzhang County (the “Pipeline
Project”),
(ii) based on the Contact
Law of the People’s Republic of China,
the
Cooperative Joint Venture Law of the People’s Republic of China
and
other relevant applicable laws and regulations, and (ii) after field
study
and friendly consultations, the Parties hereby agree as follows in
relation to the construction of the Pipeline Project in Linzhang
County
(the “Agreement”).
|
Chapter
II Parties
|
2.1
|
Construction
Bureau of Linzhang County (hereinafter referred to as “Party
A”)
|
Legal
address: Chengqujianan
Street
Tel.: (0000)
0000000
| 2.2 |
Beijing
Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter referred to as “Party
B”)
|
Legal
address: Caizhiguoji Building Xx.
00
Xxxxxxxxxxxxxxxx XxxxxxxXxxxxxx
Xxxxxxxx
Tel.:
(000) 00000000
Chapter
III Establishment
of the Company
|
3.1
|
Party
A, authorized by and on behalf of the Government of Linzhang County,
agrees that Party B will be responsible for the Pipeline Project
of
Linzhang Country and the total financing of the Pipeline
Project.
|
| 3.2 |
Name
of the Company: Linzhang
Country Wei Ye Gas Co., Ltd.
|
|
3.3
|
The
Company as a legal person under the PRC law: is subject to the
jurisdiction and protection of the PRC laws, regulations and relevant
rules (hereinafter referred to as “PRC
laws”),
and is authorized to conduct its business activities in compliance
with
the PRC laws.
|
2
Chapter
IV Business
Scope
| 4.1 |
Business
Scope of the Company: within
the urban planned area of Linzhang County, to: design, construct,
manage,
develop and operate the pipeline network of natural gas and its auxiliary
facilities, and provide relevant maintenance and emergency repair
services; construct and operate natural gas stations; supply natural
gas
and provide after-sale services to industrial transmission, commercial
construction, civic utility and public transportation; exploit natural
gas
reserves, design for the transportation and transmission thereof,
construct and management the operation related
thereto.
|
Chapter
V Exclusive
Operating Right
|
5.1
|
Party
A authorizes Party B to execute the pipe natural gas project within
the
urban planned area of Linzhang County and guaranties that Party B
has the
exclusive right to develop and construct the pipe gas project within
the
urban planned area of Linzhang County for 30
years.
|
|
5.2
|
Party
A will consider extending the 30 year exclusive operation term; provided,
that Party B can ensure the normal supply of gas during such
period.
|
|
5.3
|
If
Party A breaches this Agreement during the term of this Agreement,
Party A
shall bear the losses resulting from such breach. If Party A or any
of its
agents or entrusted parties breach this Agreement during the term
of this
Agreement (which causes Party B to lose the exclusive operating right
granted hereunder), Party A shall compensate Party B for its projected
economic benefits for the term of this Agreement.
|
Chapter
VI Rights
& Obligations of the Parties
|
6.1
|
The
Parties shall construct the Pipeline Project based to the high standards
and principles. The Pipeline Project is designed for supply gas to
an
aggregate of 12,000 units with the total investment of approximately
XXX
00 million. Party B agrees that it shall complete the first stage
and
start gas supply to the first customers within 4 months; provided,
that
the actual number of the households is not lower than 1000. Party
B agrees
that it shall construct and improve the pipeline network in stages
according to users’ requests after the First Stage
completes.
|
|
6.2
|
Party
A shall be responsible for the coordination with the local government
and
relevant departments of the government and shall provide the following
warranties to Party B in the form of official government
documents:
|
| 6.2.1 |
to
grant Party B the exclusive right to construct and operate pipe natural
gas project within the urban planned area of Linzhang County for
30 years
and ensure the legality thereof; not to approve any new pipe gas
project
during such time; to guarantee that the pipeline network constructed
by
Party B in Linzhang Country pursuant to this Agreement accept natural
gas
when the long natural gas pipeline reaches Linzhang Country, and
the
continual operation of the pipeline network; Party B shall pay all
the
fees that occur during the
connection;
|
3
| 6.2.2 |
to
agree that the initial residential installation fee shall be RMB
2,300/unit and the residential gas price shall be no higher than
RMB 2.5
per cubic meter. The initial installation fee for commercial customers
shall be the cost of gas consumption for one day at the price of
RMB 300
per cubic meter;
|
|
6.2.3
|
to
ensure that Party B shall enjoy the relevant government preferential
policies relating to business investment and raising of capital,
urban
infrastructure construction and land grant in Linzhang County. Considering
that the Pipeline Project is an urban infrastructure project, any
government fees to be incurred by Party B for the destruction of
municipal
roads for the construction of the condensed gas station and pipeline
network shall be deducted or
exempted.
|
| 6.3 |
Party
A shall be responsible for assisting Party B in the following
matters:
|
|
6.3.1
|
the
application and registration procedures to establish the gas project
company;
|
|
6.3.2
|
the
procedures for land use, planning, fire protection and commencement
of
project construction;
|
|
6.3.3
|
making
available water, electricity and transportation and handle other
infrastructure related matters and assisting Party B to organize
the
design and construction of the
project;
|
|
6.3.4
|
application
of all potentially available tax and administrative fee waivers and
deductions;
|
|
6.3.5
|
timely
provision of the municipal planning and relevant materials to Party
B upon
its request;
|
|
6.3.6
|
requiring
the inclusion of construction of pipe gas project as part of any
new real
estate development project and any renovation or expansion projects
related thereto in order to obtain the required government approval;
The
government departments that are in charge of urban construction,
planning,
public utilities, real estate must supervise closely to ensure that
pipe
gas projects are designed, constructed and inspected simultaneously
and
together with the principal projects, and can only be constructed
by Party
B.
|
|
6.3.7
|
gradually
increasing the ratio of natural gas in the urban energy consumption;
strictly controlling the amount of coal consumption and effectively
controlling the air pollution; not approving the industrial project
that
relies on coal as its energy source if natural gas is available in
the
urban area.
|
| 6.4 |
Party
B’s Responsibilities
|
4
| 6.4.1 |
raising
funds for the Pipeline Project;
|
|
6.4.2
|
project
design and construction, and operation management upon completion
of the
Pipeline Project;
|
|
6.4.3
|
ensuring
the continuous and safe gas supply except in the case of force majeure;
dealing with casualties and economic loss due to the gas
supply;
|
|
6.4.4
|
periodic
inspection, repair and maintenance of gas stations and pipelines
inside
and outside residential buildings according to the PRC rules to ensure
year-round safe operation;
|
|
6.4.5
|
guaranteeing
that the quality of gas supplied hereunder complies with the relevant
PRC
rules;
|
| 6.4.6 |
organizing
project inspection by the relevant parties upon completion of the
Pipeline
Project.
|
Chapter
VII Miscellaneous
Provisions
| 7.1 |
Any
modification to this agreement and its supplemental agreement(s)
shall not
be valid and effective unless such modification is in writing and
signed
by both parties to this Agreement.
|
| 7.2 |
Should
any Party fail to perform any of its obligations under this agreement
or
materially breach the provisions of this agreement, which causes
the
project company to discontinue its operation or be unable to meet
the
operational purposes of the Pipeline Project as provided under this
agreement, the breaching Party shall be deemed to have unilaterally
terminated the agreement, and the non-breaching Party shall have,
in
addition to any right to and claim for damages, the right to apply
to the
original approving government authority for the termination of this
Agreement in accordance with this
Agreement.
|
| 7.3 |
Should
any Party be prevented from performing its obligations under this
agreement due to the occurrence of any event of Force Majeure such
as
earthquake, windstorm, flood, fire, war and any other unforeseeable
event
whose occurrence and consequences are beyond control, such Party
shall
immediately notify the other Party, and within 15 days [following
the
occurrence of such event], provide documents stating the details
of such
event, the reasons for complete or partial nonperformance by such
Party
and documents evidencing the occurrence of such events. Such documents
shall be issued by a notary public institution located at the place
where
such event occurs. The Parties shall negotiate whether to cancel
the
entire Agreement or to discharge certain obligations of the non-performing
party under this agreement based on the extent to which the performance
of
this Agreement has been affected.
|
| 7.4 |
Any
and all disputes arising out of or relating to the performance of
this
Agreement shall be settled by the Parties through friendly consultations.
If the disputes are not resolved through friendly consultations,
then each
party agrees to be subject to the jurisdiction of the People’s Court of
the locality where this Agreement is
executed.
|
5
| 7.5 |
In
the course of judicial procedures, the Parties shall continue to
perform
their respective obligations under this Agreement, with the exception
of
those parts of this Agreement which are under
dispute.
|
| 7.6 |
The
Parties may negotiate and execute documents to supplement this Agreement.
Such supplemental agreements shall have the same force and effect
as this
Agreement.
|
| 7.7 |
This
Agreement and any of its supplemental agreements shall not be binding
upon
any Party unless signed and sealed by the
Parties.
|
| 7.8 |
There
are four originals of this agreement. Each party holds two
originals.
|
| Party A (Seal): _Sealed | Party B (Seal): Sealed | |
| Representative (Signature): Signed | Representative (Signature): Signed | |
| Date: August 25, 2003 | Date: August 25, 2003 |
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