CONSULTING SERVICE AGREEMENT BETWEEN WUHAN BLOWER CO., LTD. AND STANDARD CHARTERED CORPORATE ADVISORY CO. (BEIJING), LTD.
Exhibit 10.20
BETWEEN
WUHAN
BLOWER CO., LTD.
AND
STANDARD
CHARTERED CORPORATE ADVISORY CO. (BEIJING), LTD.
CONTENT
1.
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SERVICE
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3
|
2.
|
UNDERTAKINGS
OF BORROWER
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3
|
3.
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ADVISORY
FEE
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4
|
4.
|
TERM
AND TERMINATION
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5
|
5.
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CONFIDENTIALITY
|
5
|
6.
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FORCE
MAJEURE
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7
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7.
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ENTIRE
AGREEMENT
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7
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8.
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AMENDMENT
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7
|
9.
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NOTICE
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7
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10.
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ASSIGNMENT
|
9
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11.
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GOVERNING
LAW
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9
|
12.
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DISPUTE
RESOLUTION
|
9
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13.
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HEADINGS
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9
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14.
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WAIVER
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9
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15.
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SEVERABILITY
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10
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16.
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COUNTERPARTS
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10
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2
This
Consulting Service Agreement (the “Agreement”) is entered into by and between
the following parties:
(1)
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Wuhan
Blower Co., Ltd., a company duly incorporated under the laws of the
People’s Republic of China with the registration address at Canglongdao
Science Park of Wuhan East Lake Hi-Tech Development Zone, Jiangxia
District, Wuhan, Hubei Province, People’s Republic of China (the
“Borrower”); and
|
(2)
|
Standard
Chartered Corporate Advisory Co. (Beijing), Ltd., a company duly
incorporated under the laws of People’s Republic of China with the
registration address at Xxxxx 00 Xx.0, Xxxxxx Xxxxx Xxxxx X0, The Towers,
Oriental Xxxxx Xx.0, Xxxx Xxxxx Xx Xxxxxx, Xxxx Xxxxx District, Beijing,
People’s Republic of China ( the
“Advisor”).
|
Each
party is referred as a “Party” and collectively as the “Parties.”
Whereas:
(1)
|
An
agreement (the “Loan Agreement”) for a loan facility of up to RMB
303,100,000 was entered into on November 11, 2009, by and among Standard
Chartered Bank (China) Limited, Guangzhou Branch (“Standard Chartered
Bank”) together with other banks or financial institutions listed therein
(collectively as the “Bank”), acting as the common lender, and Wuhan
Blower Co., Ltd., Wuhan Generating Equipment Co., Ltd. and Wuhan Xingelin
Machinery Equipment Manufacturing Co., Ltd. (collectively as the
“Borrower”), in which Standard Chartered Bank served as the facility agent
and security agent.
|
(2)
|
The
Borrower desires to get related advisory services regarding the financing
arrangement as specified in the Loan
Agreement.
|
(3)
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The
Advisor desires to provide such kind of service in according to the
following terms and conditions.
|
The
Parties agree as follows:
1.
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SERVICE
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1.1
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The
Advisor hereby agrees to provide the related business and management
consulting service regarding the loan arrangement under the Loan
Agreement, and any other related services which are agreed by the Parties
in the form of written amendment from time to time (collectively as the
“Service”).
|
2.
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UNDERTAKINGS
OF BORROWER
|
3
2.1
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The
Borrower hereby undertakes that it will provide the related documentations
and other information upon the reasonable request by the Advisor and
communicate and coordinate with the Advisor so that the Advisor can
provide the Service.
|
3.
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ADVISORY
FEE
|
During
the Term of this Agreement, in consideration for the Service provided, the
Borrower shall pay the Advisor RMB 24,248,000, which is equivalent to 8% of the
loan amount under the Loan Agreement (the “Business Consulting Fee”). The
payment methods for the Business Consulting Fee are as follows:
3.1.1
|
Pay
the Advisor the amount equivalent to 0.5% of the amount of the loan amount
under Loan Agreement, that being RMB 1,515,500, on the closing day under
the Loan Agreement or the execution date of the financing document,
whichever is earlier.
|
3.1.2
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Pay
the Advisor the amount equivalent to 7.5% of the first financing drawdown
amount, that being RMB 15,870,000, on the first drawdown date under the
Loan Agreement.
|
3.1.3
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Pay
the Advisor the amount equivalent to 7.5% of the second financing drawdown
amount, that being RMB 6,862,500, on the second drawdown date under the
Loan Agreement.
|
3.2
|
Any
advisory fee paid under Section 3.1 shall not be refunded even if this
Agreement or the Loan Agreement is terminated
earlier.
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3.3
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The
Borrower shall pay the Advisor annual management consulting fee (the
“Management Consulting Fee”), from the date of the execution of the Loan
Agreement to the scheduled maturity date of the loan under the Loan
Agreement or 365 days after all the loan are repaid, whichever is later
(the “Payment Term for the Management Consulting Fee”). The methods of
calculation and payment are as
follows:
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3.3.1
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Management
Consulting Fee shall be calculated as 1% of net total sales increase in
the corresponding year from the previous year’s sales, and 2009 shall be
the base year to calculate the following year’s annual sales
increase.
|
3.3.2
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Total
sales shall be total revenue, which appear on the Borrower’s audited
consolidated financial report at the end of each year during the Payment
Term for the Management Consulting Fee, including all the revenues the
Borrower achieved by production or service in the year before the direct
cost and expenses are deducted.
|
4
3.3.3
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The
advisory fee shall be paid within 15 business days after the issuance of
the audited report by the Borrower for the corresponding year, together
with the breakdown of calculation for such amount is
provided.
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3.4
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All
the payments for the Business Consulting Fee and Management Consulting Fee
shall be the net amount. The Borrower agrees to bear all the deduction or
withholding expense that may be imposed by the relevant laws or
regulations to the subject payments and shall not deduct such amount from
the service fee to ensure that the Advisor will receive the full amount of
payments pursuant to the Article 3.
|
3.5
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The
Advisor shall provide the Borrower an invoice within 5 business days after
the Borrower pays the relevant fees hereunder to the
Advisor.
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4.
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TERM
AND TERMINATION
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4.1
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Unless
the Loan Agreement is terminated or this Agreement is terminated earlier
according to this Article thereof, this Agreement shall be effective upon
the execution and remain valid until each Party has fully performed its
obligation hereunder.
|
4.2
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Notwithstanding
Article 4.1, if the Borrower breaches any agreements under the Loan
Agreement, the Advisor shall have the right to terminate this Agreement in
writing immediately, and request Borrower to pay any due Business
Consulting Fee and Management Consulting
Fee.
|
4.3
|
The
termination of this Agreement shall not affect the validity or
enforceability of any right or obligation that arises from the Agreement
before the date of such termination, including but not limited to any
right or obligation related to the breach of the Agreement which results
in the termination.
|
4.4
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In
the event that the representative of the Advisor is hindered or prevented
by the Borrower or any of its officer, employee or agent from assuming the
obligation or providing the Service under this Agreement, the Advisor
shall immediately notify the Borrower of such situation in writing. The
Borrower shall not request the Advisor to fulfill its responsibility and
obligation under this Agreement before the correction of such
situation.
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5.
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CONFIDENTIALITY
|
5
5.1
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Both
Parties agree to keep confidential all the files, documents,
correspondence or other kind of communication in relating to the business
or technology (the “Confidential Information”), which were acquired or
received during the negotiation or execution of this Agreement or for the
purpose of performing the obligation under this Agreement, except as
follows:
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5.1.1
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Information
in the public domain at the time of disclosure through no fault of either
Party hereto; and
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5.1.2
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Information
in lawful possession of the Party prior to its first receipt from the
discloser.
|
5.2
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Each
party (the “Disclosing Party”) shall not disclose the Confidential
Information except as each of the following
condition:
|
5.2.1
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Required
by the applicable law or by the order of the court of competent
jurisdiction or the order of arbitration court, subject to the content and
extent as required; or
|
5.2.2
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Required
by the competent regulatory authority or governmental
body.
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5.3
|
The
Advisor shall ensure that the Confidential Information is kept
confidential and the Borrower consents that the Advisor is entitled to
disclose the Confidential Information
to:
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5.3.1
|
Advisor’s
holding companies, each of its subsidiaries and each subsidiary, associate
or representative office of each of the holding companies, and branch
offices in any country or region (the “Permitted
Party”);
|
5.3.2
|
the
professional consultants or service providers engaged by the Permitted
Party, who owe the confidentiality obligation to the Permitted
Party;
|
5.3.3
|
Actual
or potential participants or sub-participants, assignee or surrogates (or
their agents or consultants), who are related to the rights and/or
obligation of the Bank under any agreement between the Borrower and the
Bank; and
|
5.3.4
|
the
credit rating agency, insurers and insurance brokers of the Permitted
Party, or the other third party who, directly or indirectly, provides
credit protection to the Permitted
Party.
|
5.4
|
Notwithstanding
the forgoing Article 5, both Parties are entitled to disclose the
Confidential Information to its legal counsel, accountant or other
professional agencies, and to their respective officer or senior
employee.
|
6
5.5
|
Article
5 shall survive and remain effective after the expiration or termination
of this Agreement.
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6.
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FORCE
MAJEURE
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6.1
|
Either
Party’s (hereinafter “Affected Party”) delay or failure in performing any
obligation under this agreement due to any Force Majeure shall not be
deemed as breach of any article of the Agreement or to be held liable for
any legal liability, and this Agreement shall be extended accordingly for
the Affected Party to complete its obligation. For the purpose of this
article, “Force Majeure” means unforeseeable and unavoidable causes beyond
the reasonable control, including but not limited to, floods, earthquakes,
storms, typhoons, landslides, epidemics or other natural disasters or
tragedies, wars or war threats, terrorist attacks, civil commotion,
invasion, riots, insurrection, any act or omission by the government of
competent jurisdiction, any violation of the articles hereunder or default
or insolvency by any third party, or non third party which is in the same
group with the Affected Party, or by the employee or officers of the
foresaid third party.
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6.2
|
The
Affected Party claiming Force Majeure shall notify the other party of the
nature, scope and possible duration of the Force Majeure event or
circumstance, and make all necessary efforts to eliminate or reduce the
adverse effects posed by such Force Majeure on the fulfilment of the
obligation hereunder. Whether to extend the period of or terminate this
Agreement shall be mutually agreed in writing by the Parties within 5
business days after the receipt of the foregoing
notice.
|
7.
|
ENTIRE
AGREEMENT
|
7.1
|
This
Agreement and every and each documentation referred hereto shall
constitute the entire and all understanding and agreement between the
Parties and supersede any other previous or existing written or
arrangements, agreements, covenants, undertakings, declaration or
memorandum with respect to the subject matter made by the
Parties.
|
8.
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AMENDMENT
|
8.1
|
Any
amendment or modification to this Agreement shall be made in writing and
be effective upon signing by each
Party.
|
9.
|
NOTICE
|
7
9.1
|
All
necessary or authorization notices required by or in connection with this
Agreement shall be prepared in writing in
Chinese.
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9.2
|
All
aforementioned notices shall be delivered to the address as specified in
Article 9.4 hereof or mailed to the recipients as specified in Article 9.4
hereof. Notices may be delivered by hand, mailed by certified or
registered mail, by a recognized courier service or by
facsimile.
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9.3
|
Notice
shall be deemed as given: on the day when arrived at the recipient’s
address if the notice is mailed by certified or registered mail or
courier; on the date of the facsimile according the transmission success
report if the notice is given by facsimile; if the fax is made after 5:30
pm (local time of the recipient’s place) during normal business day or if
on Saturday, Sunday or the public holiday (according to the jurisdiction
of the recipient), the notice is deemed given at 9 am on the next business
day.
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9.4
|
For
the purpose of the Article 9 and subject to Article 9.5 herein, the
address and other detail information for each Party shall be as
follows:
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For
the Borrower:
Address:
Canglongdao Science Park of Wuhan East Lake
Hi-Tech
Development
Zone, Wuhan, Hubei 430200, People’s Republic of China
Tel. No.:
000-00000000
Attention:
Xx. Xx Jie
For
the Advisor:
Address:
Xxxxx 0 Xx. 000, Xxxxx X0, Xxxxxxxx Xxxxx, Xx.0, Xxxx Xxxxx An
Avenue,
Xxxx Xxxxx District Beijing, People’s Republic of China
Tel. No.:
000-00000000
Attention:
Xxxx Xxx
9.5
|
Any
party hereto may from time to time change its address, fax number or
recipient and notify the other Party of such
change.
|
8
10.
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ASSIGNMENT
|
Neither
of the Parties hereto shall assign nor transfer any rights or obligation under
this Agreement to any third party without prior mutual written consent of the
both Parties.
11.
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GOVERNING
LAW
|
11.1
|
This
Agreement shall be governed by and interpreted in accordance with the laws
of the People’s Republic of China.
|
12.
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DISPUTE
RESOLUTION
|
12.1
|
Any
and all dispute arising from the interpretation or enforcement of this
Agreement shall first be settled through friendly
negotiation.
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12.2
|
Either
party hereby irrevocably consent to submit to the jurisdiction of the
Court where the Advisor is located any dispute arising out of or in
connection with this Agreement which can not be solved within sixty (60)
days commencing from the date of the negotiation. For the foresaid
purpose, both Parties are hereby irrevocably subject to the competent
jurisdiction of the said courts.
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12.3
|
The
Borrower hereby irrevocably and unconditionally waives any immunity to
which the Borrower or its property is entitled, regardless whether such
immunity is any indemnification or sovereign immunity or other similar
kind that is applicable in the People’s Republic of China or the other
countries or regions.
|
13.
|
HEADINGS
|
13.1
|
The
headings in this Agreement are for convenience only and shall not
constitute a part of this Agreement for the purpose of understanding or
interpretation of any articles
hereof.
|
14.
|
WAIVER
|
14.1
|
Except
otherwise expressly stipulated, failure or delay by either Party to
enforce any of the rights under this Agreement shall not be taken as or
deemed to be a waiver of such right; no partial exercise of any right
hereunder shall be deemed to impair further exercise of such right
thereafter. No waiver by either Party of any default with respect to any
article or provision of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any right under the above article or
provision or any other right under this
Agreement.
|
9
15.
|
SEVERABILITY
|
15.1
|
If
any article of this Agreement, for any reason, is determined by the
applicable law or regulations to be invalid, illegal or unenforceable in
any respect, such article shall not affect or impair the validity,
legitimacy and enforceability of any other article of this Agreement in
any manner, which shall remain in full force and effect. The parties shall
use their best efforts to substitute such article with a valid, legitimate
and enforceable one, the intent of which shall be as close as to the
original article.
|
16.
|
COUNTERPARTS
|
16.1
|
This
Agreement is executed in duplicate originals in Chinese, each held by both
parties.
|
10
IN WITNESS WHEREOF, the Parties hereto
have caused their duly authorized representatives to execute this Agreement as
of the day and year undersigned.
Wuhan
Blower Co., Ltd. (Corporate
Chop)
Authorized
Representative Signature: /s/ Xx
Xxx
Name: Xx.
Xx Jie
Date of
Signature: November 11, 2009
Standard
Chartered Corporate Advisory Co. (Beijing),
Ltd. (Corporate Chop)
Authorized
Representative Signature: /s/ Sun
Yonghong
Name:
Sun Yonghong
Date of
Signature: November 11, 2009
11