Equity Transfer Agreement
Exhibit
99.1
Transferor:
QINGDAO QINGQING ENVIRONMENTAL INDUSTRY CO., LTD. (“Party A”)
Registered
Office: Qingdao, China
Transferor:
JAPAN CHUBU DAICHI YUSO CO., LTD (“Party B”)
Registered
Office: Japan
Transferor:
JAPAN NEVERLANDCOPY(“Party C”)
Registered
Office: Japan
Transferor:
SANIX CO., LTD(“Party D”)
Registered
Office: Japan
Transferee:
SINOENERGY HOLDING LIMITED (“Party E”)
Registered
Office: British
Virgin lslands
Guarantor:
TRADE AND ECONOMIC SERVICE CENTER, SUB-DISTRICT OFFICE OF YINZHU, JIAONAN
(“Party F”)
Registered
Office: Qingdao, China
Whereas:
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1.
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Party
A, Party B, Party C, and Party D incorporated a joint-venture corporation
Qingdao Xxxx Xxxx Tai Chemistry Resourses Developement Co. Ltd.
(hereinafter referred to as “Target Company”)
at
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Qingdao
Lingang Industrial Park, Yinzhu Town, Qingdao. Registered capital is $6 million,
sino-foreign joint venture corporation. Party A, Party B, Party C, and Party
D
invested
$1,457,311 in
Target
Company up to the signature date of the Agreement.
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2.
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Party
A, Party B, Party C, and Party D, as Transferor, shall be pleased
to
transfer entire equity interest of Target Company to Party E. And
Party E,
as Transferee, shall agree to accept entire equity interest of
Target
Company owned by Party A, Party B, Party C, and Party D. Thereinto,
Party
A with 20% of the equity, Party B with 15% of the equity, Party
C with 15%
of the equity, and Party D with 50% of the
equity.
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3.
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All
the Parties shall thoroughly understand their rights and obligations
of
each party in the process of the equity transfer and shall agree
to
process of the equity transfer according to applicable laws..
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4.
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Party
E shall be an independent legal person which is registered in the
administer department, and shall take the responsibility and the
obligation caused of the transferred equity. And Party E shall
also get
the approval of transferred equity by the administer department
of the
company.
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Therefore,
in accordance with applicable laws and regulations of PRC, and through friendly
consultation, the parties come to the following Agreement on Equity Transfer
upon the principle of mutual benefits.
ARTICLE
1
DEFINITIONS
As
used
herein and unless otherwise expressly stipulated, the following terms shall
have
the following meanings:
| 1. |
“Target
Company” shall mean Qingdao Xxxx Xxxx Tai Chemistry Resourses Developement
Co. Ltd.;
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| 2. |
“Examination
and Approval Agency” shall mean Ministry of Foreign Trade and Economic
Cooperation of PRC or provincial governing departments of foreign
trade
and economic cooperation;
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| 3. |
“Registration
Administration Agency” shall mean State Administration of Industry and
Commerce of PRC or any other hereof authorized local administration
of
industry and Commerce;
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| 4. |
“Transition
Period” shall mean a period from the signature date of the Agreement
to
the date of completion of all requested approvals, alterations
and
registrations in accordance with applicable regulations and that
Party B
shall acquire ownership of transferred equity interest and become
shareholder of the Target Company.
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| 5. |
“Force
Majeure” shall mean any cause beyond the control of the Parties including,
but not limited to, typhoon, earthquake, flood, lockouts, strike,
fires,
riots, acts of war declared and compliance with any request,
ruling, order
or decree of any governmental authorities, and any other events
which
could not be expected, avoided and
overcome.
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ARTICLE
2
NECESSARY
PRECONDITIONS OF THE EQUITY TRANSFER
The
equity transfer under this agreement shall be implemented after the
preconditions are fulfilled, which include:
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1.
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All
guarantees and consents made by each party in the process of
equity
transfer shall be authentic.
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2.
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The
Equity Interest Transfer Agreement shall be approved by Examination
and
Approval Agency.
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3.
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All
Party A, Party B, Party C, Party D and Party E shall fulfil
their primary
obligations and secondary obligations.
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4.
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All
Party A, Party B, Party C, Party D and Party E shall sign up
“Confirmation
of Completion of Property
Transfer”;
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5.
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Party
A, Party B, Party C, and Party D have performed evaluation
procedure for
the transferred equity in accordance with relenvant laws and
regulations
of PRC;
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6.
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The
CNY 2 million of the ground paid by target Company, shall be
reflected in
the payment of the transferred equity, and shall not pay in
the other way.
The payment mentioned above shall belong to Party
E.
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ARTICLE
3
PRICE
OF TRANSFER AND PAYMENT
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1.
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Party
A, Party B, Party C, and Party D shall agree to transfer all
the shares
and options of Target Company to Party
E.
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2.
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Party
E agrees to accept the transfer of shares and options as well
as the
Target Company’s creditor’s rights and debts which shall be confirmed by
Party A, Party B, Party C and Party D in the Confirmation of
Debts.
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3.
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As
set out in Article 3 Term 1, Party A, Party B, Party C, Party
D, and Party
E hereto agree the transferring cost of entire equity interest
and entire
assets of Target Company which held by Party A, Party B, Party
C and Party
D shall be CNY TEN MILLION (¥10,000,000.00),
including CNY TWO MILLION (¥2,000,000.00) paid to Party A, CNY ONE MILLION
FIVE HUNDRED THOUSAND(¥1,500,000.00) paid to Party B, CNY ONE MILLION FIVE
HUNDRED THOUSAND(¥1,500,000.00) paid to Party C, and CNY FIVE
MILLION(¥5,000,000.00) paid to Party D. When the equity transfer
completed, Party E shall solely undertake and enjoy all rights,
obligations and liabilities in the Target Company and Party A,
Party B,
Party C, and Party D shall not carry through any activities in
the name of
Target Company.
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4.
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The
payment shall be in installments. After the Agreement is signed,
Party E
shall pay the transferring cost for thrice
from time to time to Party A, Party B, Party C, and Party
D.
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The
First
Payment: Party E shall pay 20%
of
equity interest transferring cost within the 5
days
from the date of this Agreement signed;
The
Second Payment: Party E shall pay the 50%
of the
equity interest transferring cost within
5
days
from
the settlement date that the Target Company finish all the related modifying
procedure;
The
Third
Payment: Party A, Party B, Party C, and Party D, shall pay the debt and provide
the agreement of making up the debt to Party E. Party E shall pay the rest
30%
within
5
days
from the date of receiving the capital and signing in the letter of confirmation
of the property transaction
ARTICLE
4
APPROVAL
AND REGISTRATION PROCEDURES
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1.
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Party
A, Party B, Party C, and Party D shall be responsible for transacting
approval procedures in relevant approval authorities and transacting
equity transfer procedures in registration authorities within comply
with
the examination and approval procedures of the equity interest
transfer in
the Examination and Approval Agency with corresponding jurisdiction
and
comply with the formality of industry and commerce registration
of equity
alteration. Party A, Party B, Party C, and Party D shall complete
the
foregoing procedures within 10
days from the date of this Agreement signed, the expense and cost
of
approval and registration shall be paid by Party E. Party E shall
assist
Party A, Party B, Party C, and Party D to transact above mentioned
procedures of approval of equity transfer and registration of equity
alteration.
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2.
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Party
A, Party B, Party C, and Party D shall provide all required documents
and
signatures for approval and registration of equity
transfer.
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ARTICLE
5
COMPLETION
AND WAY OF EQUITY TRANSFER
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1.
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The
equity transfer of Target Company shall be completed on the date
that
procedures of shareholder alteration are fulfilled under the verification
of departments of administration of industry and
commerce.
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2.
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With
respect to the rights and obligations and liability of Target Company
related to the equity interest, before the completion of equity
interest
transfer, all the debt of the target company, Party E shall pay
to the
entrusting payee appointed by Party A, Party B, Party C, and Party
D. And
Party A, Party B, Party C, and Party D shall pay to the debtee.
Any other
debt, due to, and owning by, shall all be undertook by Party A,
Party B,
Party C, and Party D; After the completion of equity transfer,
the debt
due to, and owning by, shall all be undertook by Party E unless
otherwise
expressly stipulated.
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ARTICLE
6
PROMISES
AND WARRANTIES
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1.
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Party
A, Party B and Party C and Party D have disclosed all agreements,
contracts, confirmation letters and other binding documents of
Target
Company to Party E and shall guarantee the authenticity and validity
of
these documents.
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2.
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Party
A, Party B, Party C, and Party D shall guarantee the transferred
equity
interest without any mortgage and warranty and entirely or partially
transferring to any other Affiliated Party, or transferring its
rights and
interests in the Target Company by any other ways, and guarantee
exemption
of claiming from any other Affiliated Party. Otherwise, any other
obligations arisen from such conditions shall be totally born
by Party A,
Party B, Party C and Party D.
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3.
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Party
A, Party B, Party C, and Party D shall guarantee to sign and
perform this
Agreement without prejudice to any other terms and conditions
under any
other agreements, contracts, confirmation letters and/or any
other
promissory documentations and files to Party A, Party B, Party
C, and
Party D which are signed in the name of Party A, Party B, Party
C, and
Party D and shall guarantee to transfer its equity interest in
the Target
Company without prejudice to any other warranties, mortgages,
pledges and
liens to assets of Target Company and/or any other forms of regulations,
without violating any other rules, regulations and decrees Transferors
have to comply with.
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4.
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Party
E shall guarantee to sign and fulfill the Agreement without prejudice
to
any other terms and conditions under any other agreements, contracts,
confirmation letters and/or any other promissory documentations
and files
to Party E which are signed in the name of Party E, and shall
guarantee to
not violate the Article of Incorporation of Party E and any other
rules
and regulations Party E shall comply
with.
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5.
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Party
A, Party B, Party C, and Party D shall guarantee that the Target
Company
has neither any other undisclosed litigations, arbitrations and
any other
actions disobeying laws and administrative formalities, nor any
other
evidences and circumstances may result in occurrence of above
mentioned
actions.
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6.
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Party
A, Party B, Party C, Party D and Party E all guarantee that provided
cases
proving the guarantees made hereof inauthentic and inaccurate
or
misunderstanding occur, each Party shall notify each other in
written form
immediately. In the event that any other Party default its guarantees
under this Agreement or its guarantees are inauthentic, inaccurate,
incomprehensive or misleading which result in that another Party
could not
enjoy any other interests stipulated in the Agreement or expense
and cost
increase to another Party, or bear extra obligations or other
economic
damages, the breach Party shall guarantee observe Party to indemnify
all
losses and damages caused by its breach and default and compensate
all
costs in the process of claiming
indemnity.
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7.
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Party
A, Party B, Party C, Party D and Party E shall all cooperate
to transact
the necessary procedures of administrative approval and registration
of
equity alteration, if it is necessary for Party A, Party B, Party
C, and
Party D to provide related documentations or certificates or
to sign and
stamp documents, Party A, Party B, Party C, and Party D shall
made
fulfillment within the team required by Party E.
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8.
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The
Target Company has no any other liability besides that disclosed
in this
Agreement. Before completion of equity alteration registration,
Party E
shall have right to appoint staffs to take part
in
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the
audit
of Target Company on financial status, Party A, Party B, Party C, and Party
D
shall be liable to repayment in the event of any liabilities and account
payable
and any obligations; additionally, Party A, Party B, Party C, and Party
D shall
guarantee to keep and maintain property of Target Company safely or take
measures to save interests of Target Company during the Transition Period
(property list and conditions shall be described in the attachments), shall
not
damage assets and any other interest of Target Company.
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9.
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On
the date that Party A, Party B, Party C, and Party D receive
the first
payment from Party E, the stamps including official stamp and
financial
stamp shall be handed over to the staff appointed by Party E,
after the
completion of equity interest transfer, Party A, Party B, Party
C, and
Party D shall hand over all integrate financial account book
and related
documents and files in original, replies and related archives
from
administrative departments in original and documents of rules
and
regulations on Company operation in original and employment information
within 2
days.
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10.
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Party
E shall guarantee to pay the price of the transfer to Party A,
Party B and
Party C and Party D according to stipulated form and term of
payment.
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11.
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The
equity interest transfer shall be guaranteed by Party F, whom
shall
confirm to guarantee the liabilities coming forth before completion
of
equity transfer and undisclosed liability by Party A, Party B,
Party C,
and Party D after completion of Target Company equity transfer;
the
guarantees include related obligations from above mentioned liabilities,
the indemnify, liquidated damage, interests arisen from foregoing
liabilities, the term of guarantee is 2 years from the date of
completion
of the equity interest transfer.
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ARTICLE
7
COVENANTS
ON TRANSITION PERIOD
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1.
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In
the Transition Period, Party A, Party B, Party C, and Party D
shall
guarantee to govern and operate business of Target Company taking
effective and active measures and operate the Company in good
and legal
standing.
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2.
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Party
A, Party B, Party C, and Party D shall not transfer its equity
interest to
the Affiliated Party or perform any other forms of guarantee
in the
Transition Period.
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3.
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Party
A, Party B, Party C, and Party D shall not implement any acts
which damage
to operation and financial status of Target Company with any
other
Affiliated Party.
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4.
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Party
A, Party B, Party C, and Party D shall recall its legal representatives
appointed to Target Company due Transition Period
expire.
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5.
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Party
A, Party B, Party C, Party D and Party E shall all have obligation
of
keeping confidential to all documents and information provided
in this
Agreement in the Transition Period.
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6.
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In
the Transition Period, Party A, Party B, Party C, and Party D
shall not
disturb the normal management activities of Party E. Party A,
Party B,
Party C, and Party D shall also not treat with, keep, transfer
and destroy
the properties of the Target Company. Party E shall not make
any contract
,or do some trade with the name of Party A or the Target Company
before
the equity transfer being finished.
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ARTICLE
8
BREACH
OBLIGATIONS
| 1. |
Unless
otherwise expressly stipulated in the Agreement, Each of the
Parties shall
use their best efforts to ensure due performance and observance
of all the
terms and guarantees of this Agreement, otherwise, breach party
shall have
to bear the breach obligations, provided Party A, Party B, Party
C, and
Party D breach the Item 5 and Item 8 of Article 6 and is sued
or punished
accordance with the administrative procedures, which of the actions
involve Party E, all cost of litigation (include but not limited
to
lawsuit claims, law case fee and counsel fee) or fine shall be
born or
paid to Party E by Party A, Party B, Party C, and Party D besides
breach
obligation. ( Provided prior payment by Party E, Party E shall
perform
recourse to Party A, Party B, Party C, and Party
D.)
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| 2. |
Each
party shall fulfill its obligations according to the term stipulated
in
this agreement, which shall not be changed
unilaterally.
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If
any
case of delaying performance the terms and conditions under this Agreement,
unless the observe Party agree to delay performance or otherwise expressly
stipulated in the Agreement, the breach party shall pay observe party liquidate
damages daily on the standard of 5/10000 of the transferring cost under
this
Agreement. The breach Party shall not exempt the obligations to perform
after
paying the liquidate damages.
| 3. |
This
Agreement shall be cancelled automatically if no approval can
be acquired
from the authorities and the transfer of equity can not be continued.
Party A, Party B, Party C and Party D shall repay the funds already
paid
by Party E within 7
days since cancellation of this agreement and pay interests according
to
current loan interest rate.
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| 4. |
Party
E can deduct equivalent fund from the account payable if Party
A, Party B
and Party C and Party D breach Item 8 of Article 6, which will
cause loss
of Target Company.
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ARTICLE
9
CONFIDENTIALITY
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1.
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All
Parties shall keep confidentiality from news and employee and
client and
other relate company or person before finishing the equity interest
transfer.
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| 2. |
For
business secret of all Parties gotten acquainted with, the all
Parties
shall not disclose confidentiality to any other Third Party without
prior
written consents from each Party.
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ARTICLE
10
FORCE
MAJEURE
| 1. |
Since
force majeure direct effect Party A, Party B, Party C, and Party
D or
Party E to perform the Agreement, the affected Party shall immediately
inform the other Party with written notification. At same time
the
affected Party shall provide the reason of failing performing
the
Agreement and availability certificate and detail things of force
majeure.
According to influencing of force majeure, the other Party decides
whether
continually perform the Agreement or terminate the
Agreement.
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| 2. |
The
affected Party can be exempt from obligations under the situation
that he
takes a necessary action to keep from damages or inform other
Party with
written notification duly.
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| 3. |
The
Party A, Party B, Party C, and Party D shall refund the transferring
cost
of equity interest to Party E within 5
days, which is received from Party E, provided force majeure
lead to the
Agreement termination. At same time, the Party E shall return
the
documentations about equity transfer to Party A, Party B, Party
C, and
Party D within 5
days from the date of receiving the transferring cost of equity
interest.
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ARTICLE
11
ALTERATIONS
AND CANCELLATION
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1.
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No
Party shall alter or cancel the Agreement without unanimous consultation
of all parties.
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2.
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The
written agreement made by all the parties to terminate this agreement
shall come into force after being signed and sealed by all the
parties.
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ARTICLE
12
DISPUTE
RESOLUTION AND APPLICATION OF LAW
| 1. |
The
Agreement is applicable for laws under People's Republic of China
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| 2. |
All
disputes due to performing the Agreement shall be resolved negotiation.
All the Parties shall choose the follows NO.2.1 to resolve the
disputes if
the disputes could not resolved:
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| 2.1. |
Any
Party could lawsuit in courts of which location the Target Company
located. .
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| 2.2. |
Instituting
an arbitration to Qingdao Arbitration
Commission
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ARTICLE
13
EFFECTIVENESS
OF THE CONTRACT AND MISCELLANEOUS
| 1. |
The
Agreement
shall come into force after being signed and sealed by all the
parties.
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| 2. |
The
Attachments of this Agreement
are inseparable parts of this Agreement
with the same force.
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| 3. |
The
Agreement shall have two versions with Chinese and English. Each
version
is eight originals with equal force.
Each of Party
A, Party B, Party C, Party D,
Party E and Party F hold one original and the rest of them shall
be
provide to Examination and Approval Agency. Chinese version shall
be
served as standard version if two versions are
contradictory.
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| 4. |
Other
terms are still effect if any other terms of the Agreement are
terminated
or invalid.
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| 5. |
The
Agreement is signed by Party A, Party B, Party C, Party D, Party
E and
Party F in Qingdao city, Shandong province, China on Dec. 17th,
2007.
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Attachments:
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1.
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Assets
Appraisal Report of Target Company
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2.
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List
of Properties of Target Company
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Party
A:
Transferor: QINGDAO QINGQING ENVIRONMENTALINDUSTRY CO., LTD.
Legal
Representative/ Authorized Representative: Xxx Xxxxxxx
Party
B:
JAPAN CHUBU DAICHI YUSO CO., LTD
Legal
Representative/ Authorized Representative: Mori Tosihiko
Party
C:
JAPAN NEVERLANDCOPY
Legal
Representative/ Authorized Representative: Xxxxx Xxxxxx
Party
D:
SANIX CO., LTD
Legal
Representative/ Authorized Representative: Umeta Yukiharu
Party
E:
SINOENERGY HOLDING LIMITED
Legal
Representative/ Authorized Representative: Xxxxx Xx
Party
F:
Guarantor: TRADE AND ECONOMIC SERVICE CENTER, SUB-DISTRICT OFFICE OF YINZHU,
JIAONAN
Legal
Representative/ Authorized Representative: Xui Kaiyuan
