Equity Transfer Agreement of Qingdao Sinogas Yuhan Chemical Equipment Co., Ltd.
Exhibit
10.3
of
Qingdao
Sinogas Yuhan Chemical Equipment Co., Ltd.
Assignor: |
Qingdao
Kangtai Machinery Equipment Manufacture Co., Ltd. (hereinafter referred
to
as Party A)
|
Assignor: |
Xxx
Xxxxx (hereinafter referred to as Party B)
|
Assignee: |
Qingdao
Sinogas General Machinery Limited Corporation (hereinafter referred
to as
Party C)
|
Assignee: |
Sinoenergy
Holding Limited (hereinafter referred to as Party
D)
|
In
view
of these facts:
1.
|
Qingdao
Sinogas Yuhan Chemical Equipment Co., Ltd. (hereinafter referred
to as
Yuhan) is a domestic-funded
company founded by party A, party B and Party C. Party A holds 20%
of the
share of Yuhan, Party B holds 25% of the share Yuhan, and Party C
holds
55% of the share Yuhan.
|
2.
|
Party
A and Party B intend to transfer the share they hold to Party C and
Party
D. And Party C and Party D intend to accept the share of Yuhan held
by
Party A and Party B.
|
After
negotiation, the four parties
have
agreed to enter into this agreement, which they will follow
altogether.
1.
|
Party
A agrees to transfer the 20% share of Yuhan
in according to the provisions of the agreement to Party C. Party
C agrees
to accept the share in according to the provisions of the agreement.
The
share transferring payment is $1,125,000 US dollars (9 million RMB).
Party
B
agrees to transfer the 25% share of Yuhan
in according to the provisions of the agreement to Party D. Party
D agrees
to accept the share in according to the provisions of the agreement.
The
share transferring payment is $375,000 US dollars (3 million RMB).
Party
A, Party B and Party C confirm to give up the right of pre-emption.
|
2.
|
Share
transfer is conducted by phases:
|
1)
|
The
first phase:
|
Party
C
should pay the share transferring fee of $375,000 US dollars to Party B by
the
end of July, 2006. After Party C pays the share transferring fee, the four
parties (Party A, Party B, Party C and Party D) will go through the relative
examination, approval and registration procedure regarding share transferring
and Yuhan will change from a domestic-funded
company into a Sino-Foreign
Joint Equity Venture.
The
four
parties (Party A, Party B, Party C and Party D) agree to transfer the daily
management of Yuhan to Party C gradually. In case of Party D fails to pay the
share transferring fee to Party B by the due date due to objective causes,
the
transferring deadline of the daily management of Yuhan should be put off in
turn.
2)
|
Party
C pays the share transferring fee of $500,000 US dollars (4 million
RMB)
to Party A by the end of September, 2006. Party A transfers 10% of
the
share of Yuhan to Party C as consideration. After Party C pays all
of the
transferring fees, the four parties (Party A, Party B, Party C and
Party
D) will go through the relative examination, approval and registration
procedure regarding share
transferring.
|
3)
|
Party
C pays the share transferring fee of $625,000 US dollars (5 million
RMB)
to Party A by the end of September, 2008. Party A transfers the remaining
10% of the share of Yuhan to Party C as consideration. After Party
C pays
all of the transferring fees, the four parties (Party A, Party B,
Party C
and Party D) will go through the relative examination, approval and
registration procedure regarding share
transferring.
|
4)
|
Considering
that the transferring is conducted in phases, each party agrees to
sign
share transferring agreement in each stage to reflect new share structure,
in order to go through the relative examination, government approval
and
registration procedure regarding share transferring. The share
transferring agreements in each phase are components of this
agreement.
|
Each
party agrees that Party A and Yuhan enter into a strategic partnership.
Party A will give his hearty
supports to Yuhan in market, performance and listing. Party A and Party B agree
that Party C and Party D have priority to consider purchasing all the land,
factories and equipments of Party A in ChenYang Economic Development Zone before
Party A sells to others. The purchase price should be less than $5 million
US
dollars (40 million RMB).
5)
|
As
regarding to the undistributed
profit of Yuhan between the July, 2005 to May 31th, 2006, and the
current
funds Party A has invested in Yuhan, after deducting the historical
arrear, the remaining part will be paid to Party A by the end of
December,2006 in two times, each
50%.
|
6)
|
Party
A and Party B promised that after finishing the share transferring
of
first phase, Party A and Party B and their relative shareholders
promise
that the business orders they receive will not conflict with Party
C. If
the orders receive by Party A conflict with that of Party C, Party
A
agrees that the contract be signed by Party C and be manufactured
by Party
A, and after calculating the costs, Party C will pay all the profits
to
Party A in the form of rent fees.
|
7)
|
Party
A promises that all the managing, operating and technical staff of
Yuhan
(not including quitting job due to personal reasons, but party A
should
not recruit the corresponding new employees )except Shi Guiqiang,
Li
Zuoxian should stay in their posts, to ensure the normal operation
and
continual normal management.
|
8)
|
Party
A, party c, Party D agrees to employ Xxx Xxxxx as the president of
Yuhan
for two years from the day when the fist transferring phase ended,
with a
salary of not less $62,500 US dollars (500,000 RMB) per year (at
the same
time, party A will not insist on the dividends from the day the agreement
is signed to the end of the third share transferring
period).
|
9)
|
As
to the obligatory right and debts now existing in Yuhan, part A,
and Party
B should clear them actively. As to the part that involving both
Part A
and Part C, both parties should commit their best efforts and should
the
responsibility to keep the interest of the
company.
|
10)
|
Party
A promises that he will not use any capital of company to pay the
cost for
share transferring of each phases in order to ensure the healthy
operation
and continual development of the
company.
|
11)
|
Disputes
arising in reading to implementing the agreement and the share
transferring agreements of various phases should be solved by negotiation.
If the negotiation fails, any party can put it to the local
court.
|
12)
|
Unaccomplished
matter
regarding this agreement, parties will negotiate at each stage and
sign
supplementary agreements to predetermine
them.
|
13)
|
The
agreement will come
into effect from the day it is signed, in quadruplicate, and each
party
holds one of them.
|
Signed
by:
Qingdao
Kangtai Machinery Equipment Manufacture Co., Ltd.
Xxx
Xxxxx
Qingdao
Sinogas General Machinery Limited Corporation
Sinoenergy
Holding Limited