MUNICIPAL PUBLIC UTILITIES FRANCHISE AGREEMENT Party A: Construction Bureau of Yutian County Party B: Beijing Zhong Ran Wei Ye Gas Co., Ltd. Date: November 27, 2003
Party
A: Construction
Bureau of Yutian County
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Date: November
27, 2003
Contract
SN: 200301
Signatory
Location: Construction
Burea of Yutian
Party
A: Construction
Bureau of Yutian County
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Chapter
I General
Principles
| 1.1 |
To
improve the efficiency and quality of public utilities services and
to
protect the public interests and the legal rights and benefits of the
public utilities operators, in accordance with the Hubei
Public Utilities Franchise Administration Procedures
and the other relevant laws and regulations, the Parties hereby agree
as
follows in relation to the construction of pipeline
gas
project in the downtown of Yutian County.
|
Chapter
II Parties
| 2.1 |
Construction
Bureau of Yutian County (hereinafter referred to as “Party
A”)
|
Legal
representative: ▇▇▇▇
▇▇▇▇▇▇▇
Legal
address: ▇▇.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel.: (▇▇▇▇)
▇▇▇▇▇▇▇
| 2.2 |
Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
(hereinafter referred to as “Party
B”)
|
Legal
representative: ▇▇▇
▇▇▇▇▇▇▇
Legal
address: ▇▇.
▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Tel.: (▇▇▇)
▇▇▇▇▇▇▇▇
Chapter
III Business
Scope
| 3.1 |
Party
B accepts the authorization of Party A to be responsible for the
investment, design, construction and operation of certain pipeline
gas
projects.
|
| 3.2 |
Scope
of Franchise:within
the municipal planning area of the Yutian
County
|
| 3.3 |
Term
of Franchise: 50
years.
|
Chapter
IV Rights
& Obligations of the Parties
| 4.1 |
Party
A has the right to supervise Party B to fulfill its legal
obligations.
|
| 4.2 |
Party
A has the right to handle any public complaints against Party
B.
|
2
| 4.3 |
Party
A has the right to supervise and inspect the quality of products and
services provided by Party B.
|
| 4.4 |
Party
A has the right to temporarily take over Party B’s operation and
management [of pipe gas projects] in case of
emergency.
|
| 4.5 |
6
months prior to the expiration of the franchise term, Party A has the
right to solicit new investors and operators through public
bidding.
|
| 4.6 |
Party
A has the right to terminate the franchise right granted to Party B
hereunder upon approval by the People’s Government of Yutian County upon
occurrence of any of the following
situations:
|
| 4.6.1 |
Disposition
of the franchise by transfer, lease, lien and
etc.;
|
| 4.6.2 |
Becoming
disqualified as a franchisee due to transfer of equity in Party
B;
|
| 4.6.3 |
Failure
to meet the national standards and requirements applicable to the public
utilities industry that seriously affects the public
interest;
|
| 4.6.4 |
Mismanagement
that causes serious quality and safety accidents and seriously affects
the
public interest;
|
| 4.6.5 |
Mismanagement
that results in deteriorating financial conditions and seriously
jeopardize the public interest.;
|
| 4.6.6 |
Incompliance
with the overall municipal construction planning and refusal of Party
B’s
request for revision within the specified time
limit;
|
| 4.6.7 |
Unauthorized
and arbitrary termination and suspension of operation that affects
the
public interest and safety; and
|
| 4.6.8 |
Other
situations as specified under the applicable laws, regulations and
rules.
|
| 4.7 |
Party
A has the right to enforce the other powers and rights provided under
the
applicable laws, regulations and rules.
|
| 4.8 |
Party
A has the obligation to establish special institution and to designate
specific person(s) to assist Party B in the following
matters:
|
| 4.8.1 |
the
application and registration procedures to establish a
company;
|
| 4.8.2 |
the
land use, planning and commencement of project construction
procedures;
|
3
| 4.8.3 |
making
available water, electricity and transportation and other infrastructure
related matters;
|
| 4.8.4 |
organizing
the designing and construction of the
project;
|
| 4.8.5 |
timely
provision of the municipal planning and relevant materials to Party
B upon
its request;
|
| 4.8.6 |
application
of all potentially available tax and administrative fee waivers and
deductions.
|
| 4.9 |
Party
B has the right to operate and manage the pipeline
gas
project within the agreed term and scope. Party B may realize reasonable
returns through its operation and management of the project in compliance
with the law and taking of the corresponding business
risks.
|
| 4.10 |
The
setting up of the station and renovation of the pipelines shall comply
with the general planning by the municipal planning department. In
case of
emergency, Party B is authorized to undertake emergency repair; provided,
that Party B shall concurrently notify the relevant parties of the
municipal government and comply with the required procedures
retroactively.
|
| 4.11 |
Party
B shall cooperate with the government when the government, in the public
interest, exercise its eminent domain power over the public utilities,
and
shall have the right to request reasonable compensation from the
government.
|
| 4.12 |
Party
B further undertakes the following obligations and responsibilities
in
exchange for the municipal franchise right granted
hereunder:
|
| 4.12.1 |
compliance
with the applicable laws, regulations and
rules;
|
| 4.12.2 |
performance
of this agreement and provision of public utilities products and services
to the public in compliance with applicable
standards;
|
| 4.12.3 |
allowing
Party A’s supervision and inspection of the products and services, and
temporary takeover and other regulatory measures pursuant to laws,
regulations and rules;
|
| 4.12.4 |
timely
submission of accurate reports and other relevant materials to the
relevant governmental departments;
|
| 4.12.5 |
organizing
safe production and allowing supervision and inspection by the relevant
governmental departments in accordance with the safety production
regulations and industrial safety production
specifications;
|
| 4.12.6 |
timely
maintenance and renovation of production equipments and facilities
and
guarantee that the facilities are in good
condition;
|
4
| 4.12.7 |
guarantee
that the enterprise complies with the relevant qualification requirements
and are qualified thereunder.
|
| 4.12.8 |
Setting
and adjusting the prices of the products and services in accordance
with
laws, regulations and rules.
|
| 4.12.9 |
Accepting
public supervision.
|
Chapter
V Supervising
Mechanism
| 5.1 |
A
Municipal Public Utilities Franchise Operation Supervisory Commission
(the
“Commission”) will be established comprising of Party A, Party B, industry
experts and representatives of the public. The Commission will be
responsible for collecting opinions of the public and Party B,
periodically publishing reports and study results, providing suggestions
for improvements and better supervision, and supervising the municipal
public utilities franchise on behalf of the
public.
|
Chapter
VI Breach
Liabilities
| 6.1 |
If
Party A breaches this Agreement during the term of this Agreement,
Party
will bear the losses caused by its breach. Party B breaches this
Agreement
during the term of this Agreement, Party A will terminate the franchise
right granted to Party B hereunder. Party B will also bear the
corresponding economic consequence. Party A shall notify Party B
of Party
A’s decision to terminate the franchise right granted to Party B hereunder
in writing. Within 30 days following the receipt by Party B of such
written notice, Party B submit a written argument or request for
a
hearing. Party A shall organize the hearing, if so requested by Party
B.
Party B may apply for administrative review or bring administrative
suit
in accordance with the applicable law if it is not satisfied with
Party
A’s decision to terminate the franchise
right.
|
Chapter
VII Miscellaneous
Provisions
| 7.1 |
Party
B shall submit a deposit of RMB 100,000
to
Party A, which shall be refunded to Party B after the inspection
and
acceptance by Party with respect to the completion of the first-stage
milestones of the project. If Party B withdraw from the project because
of
its fault, or the project is not completed timely, Party A shall
keep the
deposit as compensation for
damages.
|
| 7.2 |
Any
modification to this agreement shall not be valid and effective unless
such modification is in written and signed by both parties to this
Agreement.
|
| 7.3 |
There
are four originals of this agreement. Each party holds two
originals.
|
5
| Party A (Seal): _Sealed | Party B (Seal): Sealed |
| Representative (Signature): | Representative (Signature): |
|
Date: November
27, 2003
|
Date: November 27, 2003 |
6