Assets swap Agreement
Party
A: Shandong Haiwang Chemical Stock Co., Ltd (“Haiwang Chemical” or “Party
A”)
Address:
Yangzi Town, Hanting District, Weifang city
Legal
representative: Xxxx Xxxxxxx Chairman of the company
Party
B: Xxxxxxx Xxxxx Chemical Co., Ltd (“Haike Chemical” or “Party B”)
Address:
Yangzi Town, Hanting District, Weifang city
Legal
representative: Liu Shangxue Chairman of the company
Regarding：
1.
Shandong Haiwang Chemical Co., Ltd (“ Shandong Haiwang”) is a stock
Co., Ltd in accordance with Company Law of China, Shandong Haiwang invested
RMB12 million in Weifang Haitai Engineering Investment Co., Ltd (“Haitai”),
representing 60% ownership in the latter. Shandong Haiwang also invested RMB4.05
million in Shandong Haijing Photoelectricity Co., Ltd (“Haijing “), representing
60% ownership in the latter. Shandong Haiwang is the majority shareholder of
Haitain and Haijing. Shandong Haiwang is a large chemical enterprise, in the
business of manufacturing and selling chemical products, such as crude salt,
bromine and hydrobromic acid.
2.
Weifang Haike Chemical Co., Ltd (“Haike”) is incorporated in accordance with
Company Law of China as a limited liability company, with a registered capital
of RMB12.12 million. Haike is in the business of manufacturing and selling basic
materials, crude salt and coenzyme Q.
3.
Haitai’s shareholders include Shandong Haiwang and 4 individuals. It is engaged
in development and sale of real estate, and engineering project investment with
its own funds.
4.
Haijing’s shareholders include Shandong Haiwang and Shanghai Xinhai Industrial
Co., Ltd. Haijing is engaged in production and sales of photoelectric components
and sales of electric instruments.
In order
to consolidate Shandong Haiwang’s strength and boost its profitability, Part A
and Part B, on a negation basis, reaches an agreement to swap Party A’s equity
inteests in Haijing and Haitai with Haike’s assets as following:
Clause
1：Paraphrase
1．1 Definition
Except
otherwise refereed to, the following words has specific meaning as
following:
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Agreement：
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The
asset swap Agreement
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Haiwang
Chemcial：
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Haiwang
Chemical means Shandong Haiwang Chemical Stock Co.,
Ltd;
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Haike
Chemcial：
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Weifang
Haike Chemical Co., Ltd;
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Haitai：
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Weifang
Haitai Engineering Investment Ltd;
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Haijing：
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Shandong
Haijing Photoelectricity Co., Ltd;
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Swap-out
assets：
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60%
equity interest in Haitai and 60% equity interest in Haijing owned by
Haiwang Chemical(See affix 1, valuation report)
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Swap-in
assets：
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Operating
fixed assets for operating purpose owned by assets Haike Chemical
(breakdown See affix 2- valuation report)
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Swap
：
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Haiwang
Chemcial shall swap its equity interest in Haitai and Haijing’s operating
fixed asset
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Valuation
date：
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Oct.31st,2007.
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Signing
date:
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The
date Haike Chemical and Haiwang Chemcial sign the agreement after
competent decision-making bodies within Haiwang Chemcial, Haitai, Haijing
and Haike approve the agreement
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Effective
date：
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The
date when the requirement under item 1-4 under clause 1 of No.6 Articles
are met
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Settlement
day:
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Tenth
day after this agreement becomes effective.
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Valuer
of swap-out asset：
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Beijing
Dexiang Asset Valuation Co., Ltd;
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Valuer
of swap-in asset：
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Beijing
Dexiang Asset Valuation Co.,
Ltd;
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Valuation
report for swap-out asset:
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The
asset valuation report (Xxxx Xxxx Ping 2007. No. 43 and 45) in which the
valuer valued the swap-out assets
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Valuation
report for swap-in asset:
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The
asset valuation report (Xxxx Xxxx Ping 2007. No. 44) in which the valuer
valued the swap-in assets
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Subsidiary:
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Any
company of other forms of legal person that is controlled directly or
indirectly by either party of the Agreement. For this agreement purpose,
control is defined as 50% ownership held by either party in the Agreement,
or as the right, directly or indirectly, to appoint the majority of the
directors or other management staff, or control exerted in other ways such
as voting-rights shares, contract
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Limit
on rights:
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Pledge,
collateral, lien, option, preemptive rights, preference option, third
party’s rights or equity, other limit on rights or any form of guarantee,
or other preference arrangements with likewise effect
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China
:
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People’s
Republic of
China.
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1．2
Explanation
1．2.1 The attachment
of this agreement is a integral part of this agreement and has the same legal
effect as this agreement.
1．2．2 The agreement
refers to this agreement as a whole, not a particular clause, attachment or
other part. The clause herein refers to the clause or time of this
agreement.
1.2.
3 The title of each clause and attachment is set for convenience
purpose, and should be be misrepresented as the explanation or implication of
each particular clause.
1.2.4
Laws and regulations in the Agreement refers to the prevailing laws and
regulations in force except otherwise stated.
1.2.5 One
party refers to either party of the agreement. Both parties refer to both
parties that enter into this agreement
1.2.6Year,
month, day in this agreement means calendar year, month, day.
Clause
2：Pricing of
the Swap
2．1 According to
terms and conditons of this agreement, Haiwang Chemical agrees to transfer
designated assets and all accompanying interest to Haike Chemical; Haike also
transfer designated assets and all accompanying interest to to Haiwang
Chemical.
2．2 Both Parties
agree that the pricing of the asset swap is determined by :
2.2.1 The
value of swap-out assets should be determined at the value determined by October
31, 2007 by Beijing Dexiang Asset Valuation Co., Ltd on the valuation report
（Jingdelu
Ping No.(2007) No.043、045号）at
RMB19,026,991.85；
2．2．2 The value of
swap-IN assets should be determined at the value determined by October 31, 2007
by Beijing Dexiang Asset Valuation Co., Ltd on the valuation report （Jingdelu Ping
No.(2007) No.044）at
RMB14,386,581.73;
Clause 3
Treatment on the difference of prices of swap-in and swap-out
assets
The
difference between the above figures is RMB4,640,410.12, which is paid by Haike
Chemical to Haiwang Chemical within 1 moths after the effective date of this
agreement.
Clause
4：Treatment
on swap-in assets
4．1 Haike Chemical
must acquire the commitment letter that all creditors agree to transfer his
claim within 10 days after both parties enter into this agreement;
4．2 Land use right,
and the rights to buildings and affiliated facilities in this agreement are
delivered along with assets
4．3 Haike Chemical
agrees to deliver intangible assets, such as patents, proprietary technology,
trademarks, professional qualification and trade names along with
assets.
Clause
5：Precodition
of delivery of assets
Both
parties agree and confirm following pre-conditions are met prior to the asset
swap:
1.The
decision-making body in Haiwang Chemical, Haiting, Haijing, and Haike Chicla has
approved the agreemnt
2、The guarantees in
this agreement are truthful, true and are not misleading
Clause
6：Delivery
6．1 Both parties
agree that the delivery date should be the 10th day
since the validity of this agreement
6.2 Both
parties agree for the delivery of assets in this transactions ( especially the
delivery of ownership of assets, approval documents and filing with local State
Administration of Industry and Commerce), both parties shall closely coordinate
with each other to take necessary actions to complete the procedures regarding
the asset transfer as specified in this agreement.
6.3 This
agreement deems the asset swap-out delivery date as when the ownership of the
swap-out assets shall be transferred to Haike Chemical to the extent any legal
procedures regarding the asset ownership transfer shall be completed. The asset
swap-in date shall be the date when Haiwang has essentially control and has
obtained the documents supporting the ownership of swap-in assets, and is
entitled to the rights and obligations of swap-in assets.
6.4 If
any significant situations occurred between the agreement validity date and
asset delivery date that adversely impact the swap-in and swap-out assets, both
parties shall notify each party in written form. The situation herein includes,
but not limited to, any litigation, arbitration, investigation and any other
legal proceeding, or any government agencies’ approval documents or
instructions, or any matter that cause the target asset to be lost or be
destroyed.
If any of
above situations occurs, both parties would negotiate whether or not to proceed
with the asset transfer
Clause 7
Treatment on claims and debts on the swap-in assets
7.1 The
claims on the swap-in assets should be taken over by Haiwang Chemical or its
designated third-party.
7.2 The
liability on the swap-in assets should be taken over by Haiwang Chemical or its
designated third-party.
7.3 Any
pending contracts or agreements relating to swap-in assets should be taken over
by Haiwang Chemical or its designated third party;
Haike
Chemical assures and guarantees he shall notify the pending contracts or
agreements on the swap-in assets to Haiwang chemical.
Clause8 The
change in the asset between valuation date and asset delivery date
8.1
Swap-out sssets
8.1.1
Haiwang chemical shall maintain the status quo of swap-out assets and shall not
dispose of these assets.
8.1.2 If
Haiwang Chemical has to dispose of the swap-out assets, it shall obtain the
written consent of Haike Chemical.
8.1.3
Between the valuation date and actual delivery date, If there shall be any
immaterial change in the assets and the changes have been approved by Haike
Chemical, the asset value should be re-determined by both parties at the
delivery date.
8．2 Swap-in
assets
8.2.1
Haike chemical shall maintain the status quo of swap-in assets and shall not
dispose of these assets.
8.1.2 If
Haike Chemical has to dispose of the swap-in assets, it shall obtain the written
consent of Haiwang Chemical.
8.1.3
Between the valuation date and actual delivery date, If there shall be any
immaterial change in the assets and the changes have been approved by Haiwang
Chemical, the asset value should be re-determined by both parties at the
delivery date.
Clause 9
Representation, guarantee and commitment by Shandong Haiwang
The
following representation, guarantee and commitment are valid till the asset
delivery date
9．1 Haiwang Chemical
is a on-going operating legal person in accordance with Chinese
regulation.
9．2 Authorization
and validity
Haiwang
Chemcial shall make necessary actions to authorize and execute this agreement,
and Haiwang Chemical is entitled to rights and obligations under this agreement.
If this agreement is valid, it would be legally binding on Haiwnag.
9．3Compliance and
non-default
This
agreement shall not contravene Chinese laws, regulations and Chinese government
regulations.
9．4approval
Besides
authorization procedures within Haiwang Chemcial, the approval, permit,
authorization have been appropriately obtained.
9．5 Ownership and
unsecured real right
Haiwang
Chemical guarantees that it has full ownership to the swap-out assets, and has
the rights to own, operate and dispose of the assets. There shall be any legal
limitations on the swap-out assets.
9．6 No particular
changes
Between
valuation date and asset delivery date, Haiwang Chemical shall use the assets as
before in a legal way, and guarantees no significant loss, destroy caused to the
assets.
9．7 No
dispute
Except
for disclosed in written form, Haiwang Chemcial guarantees no lawsuits,
arbitration, disputes or other legal proceedings are ongoing on the swap-out
assets.
9．8
Claims
After the
asset delivery date, shall any third party has any objections or claims on the
swap-out assets due to circumstances occurring before asset delivery date,
Haiwang chemical would be liable to such objections or claims.
9．9 T ruthful
disclosure
Haiwang
chemical represents the information materials are truthful and
complete.
9．10
Validity
The
representations, guarantees are valid in this clause after the contract signing
date.
Clause 10
Representation, guarantee and commitment by Haike Chemical
The
following representation, guarantee and commitment are valid till the asset
delivery date
9．1 Haike Chemical
Chemical is a on-going operating legal person in accordance with Chinese
regulation.
9．2 Authorization
and validity
Haike
Chemical shall make necessary actions to authorize and execute this agreement,
and Haike Chemical is entitled to rights and obligations under this agreement.
If this agreement is valid, it would be legally binding on Haike
Chemical
9．3Compliance and
non-default
This
agreement shall not contravene Chinese laws, regulations and Chinese government
regulations.
9．4approval
Besides
authorization procedures within Haike Chemical, the approval, permit,
authorization have been appropriately obtained.
9．5 Ownership and
unsecured real right
Haike
Chemical guarantees that it has full ownership to the swap-in assets, and has
the rights to own, operate and dispose of the assets. There shall be any legal
limitations on the swap-out assets.
9．6 No particular
changes
Between
valuation date and asset delivery date, Haike Chemical shall use the assets as
before in a legal way, and guarantees no significant loss, destroy caused to the
assets.
9．7 No
dispute
Except
for disclosed in written form, Haike Chemical guarantees no lawsuits,
arbitration, disputes or other legal proceedings are ongoing on the swap-in
assets.
9．8
Claims
After the
asset delivery date, shall any third party has any objections or claims on the
swap-out assets due to circumstances occurring before asset delivery date, Haike
Chemical would be liable to such objections or claims.
9．9 T ruthful
disclosure
Haike
Chemical represents the information materials are truthful and
complete.
9．10
Validity
The
representations, guarantees are valid in this clause after the contract signing
date.
Clause
11：Taxation
11．1|The taxation
incurred on swap-out assets should be borne by Haiwang Chemcial
11．2 The taxation
incurred on swap-out assets should be borne by Haike Chemcial
11．3 Other
taxes would be borne by both parties in half
Clause
12：Liability
Any party
who breached this agreement or any representation or guarantees to bring any
damage to the other party, should compensate the other non-breaching
party.
Clause
13：Effect,
suspension and termination
13．1 The contract
shall be effective once the legal representative or authorized person signs off
and stamps.
13．1．2 The
decision-making body of each party approves；
13．2 Suspension or
termination：
13．2．1. Natural
disaster and other unforeseeable, non-preventable situation；
13. 2.
2Both parties agree to terminate this agreement.
13．2．3 If one party
beached this agreement, resulting in the other party cannot execute it, the
other party could be titled to terminate the agreement.
13．3 The termination
of this agreement shall not exempt the liability of the contract-breaching
party.
Clause
14：Dispute
settlement
14．1 This
agreement is governed by Law of the People’s Republic China and its
interpretations
14．2 Each party
should first settle all disputes related to this agreement on a friendly
negotiation basis. Otherwise any party can file legal lawsuit.
Clause
15：Others
15.1
Should any clause if judged to be non-effective, cancellable or
non-executable, the validity of other clauses shall not be
affected.
15.2 Each
party only shall make amendment, revision or changes to the agreement only if
the party has express his intention to do so in written form which are approved
by both parties in seal. If each party shall give up any rights under certain
clauses in the agreement, he shall provide an written waiver of such rights, and
the waiver is not deemed as waiver of other rights not mentioned.
15．3 Any party shall
not transfer all or part of the agreement without prior written consent of the
other party.
15．4 The titles of
terms of this agreement are for the purpose of reading conveniently. They are
not a part of this agreement and cannot affect the meaning or interpretation of
this agreement in any way.
15．5 This agreement
should be made in six copies
Shandong
Haiwang Chemical Stock Co., Ltd
/seal/
Legal
representative:
/s/
Xxxxxxx Xxxx
Weifang
Haike Chemical Co., Ltd
/s/
Legal
representative:
/s/
Shangxue Liu
Contract
Date:
December
8, 2007
