Exhibit 4(a)(2) - Equity Transfer Agreement
(Translation of Chinese document)
Jilin Chemical Industry Company Limited
and
Allied Petrochemicals Inc.
Dated: August 30, 2002
Equity Transfer Agreement between Jilin Chemical Industry Company
Limited and Allied Petrochemicals Inc. ("Agreement")
Transferee [] [] [] [] [] [] [] [] [] [] [] [] []
English Name [] Jilin Chemical Industrial Company Limited
Address [] No. 9 Long Tan Road, Long Tan District, Jilin City, Jilin
Province, China.
Legal Representative [] XX Xx
Title[]Chairman
Nationality [] China
Transferor [] [] [] [] [] [] [] [] [] [] [] [] []
English Name [] Allied Petrochemicals Inc.
Legal Address [] Xxxxxxxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Legal Representative [] XXXXX Xxx-xxxxx
Title [] President
Nationality [] Hong Kong, China
Whereas [ ]
1. The Transferor is a limited company incorporated in British Virgin
Islands and, as the foreign part to the joint venture, holds a 35% equity
interest ("Transferred Interest") in Jilian (Jilin) Petrochemicals Limited
("Jilian Company"), and has full authority to dispose of its equity interest,
which can be legally transferred. The Transferor is a wholly-owned subsidiary of
Hong Kong Millennium Group Limited.
2. The Transferee is a joint stock limited company with legal person
status, duly incorporated and validly existing under the laws of China and, as
the Chinese party to the joint venture, holds 65% equity interest in Jilian
Company. The Transferee has full legal rights to transfer such equity interest.
3. Jilian Company is a Sino-foreign equity joint venture established
under the Law of the People's Republic of China on Sino-foreign Equity Joint
Venture.
4. After friendly negotiation, the Transferor agrees to transfer, the
Transferee agrees to accept, the 35% equity interest in Jilian Company held by
the Transferor.
Therefore, according to the Company Law of the People's Republic of China, the
Law of the People's Republic of China on Sino-foreign Equity Joint Venture, and
other relevant laws and regulations, and in the interest of mutual benefit,
the parties, with regard to such transfer of equity interest, after friendly
negotiation, agree as follows[]
Article 1 Equity Transfer
1.1 The Transferor agrees to transfer, subject to the terms and conditions
hereunder, its 35% equity interest in Jilian Company to the Transferee,
and the Transferee agrees to such transfer subject to the terms and
conditions hereunder.
1.2 Upon completion of the equity transfer, the Transferor shall not hold
any equity interest in Jilian Company, and the Transferee shall hold
100% equity interest in Jilian Company.
1.3 Upon completion of the equity transfer, the Joint Venture Contract for
Jilian (Jilin) Petrochemicals Limited entered into on April 14, 1994 by
the parties shall be automatically terminated, and the Transferor's
rights, liabilities or obligations thereunder or in connection with
Jilian Company shall be completely terminated.
Article 2 Transfer Price
After negotiation, the Transferor agrees to transfer, and the Transferee agrees
to accept[] 35% equity interest in Jilian Company held by the Transferor in
consideration for Renminbi One Hundred and Thirty-Five Million (RMB135,000,000).
Article 3 Currency and Payment of Transfer Price
3.1 The transfer price shall be denominated in RMB.
3.2 The agreed transfer price shall be paid by the Transferee in two
installments pursuant to the terms and conditions of this Agreement as
follows[]
First Installment[] The first installment in the amount of 60%
of the transfer price, being Renminbi Eighty-One Million
(RMB81,000,000) ("Initial Payment"), shall be paid within fifteen (15)
business days after this Agreement is approved by the original
approving authority for the Jilian Company. The Transferee shall duly
pay the Initial Payment by wire transfer to a bank account designated
in writing by the Transferor ("Transferor-Designated Account") .
Second Installment: The second installment in the amount of the
remaining 40% of the transfer price, being Renminbi Fifty-Four Million
(RMB54,000,000) ("Remaining Payment"), shall be paid within five (5)
business days after Jilian Company amends its registration information
with the State Administration for Industry and Commerce (provided that
in any event the payment shall be made within 65 business days after
obtaining approval from the original approving authority for the Jilian
Company). The Transferee shall duly pay the Remaining Payment by wire
transfer to the Transferor-Designated Account.
Article 4 Rights and Obligations of the Parties
4.1 Rights and Obligations of the Transferor:
(i) The Transferor shall transfer its 35% equity interest in
Jilian Company to the Transferee pursuant to the terms and
conditions hereunder.
(ii) The Transferor shall provide the Transferee with any materials
and documents necessary for completion of the equity transfer.
(iii) The transfer price shall be paid by wire transfer to the
Transferor-Designated Account as per Transferor's written
instructions. The Transferor may send such instructions to the
Transferee at least three (3) days prior to the Initial
Payment after execution of this Agreement and provide the
Transferee with information regarding the
Transferor-Designated Account established in China for the
purpose of receiving the Transfer Price. Such
Transferor-Designated Account is not required to be held in
the name of the Transferor, provided however, that the
Transferor shall, within two (2) days upon receipt of the
transfer price, issue a confirmation letter to the Transferee.
The Transferee's payment to the Transferor-Designated Account
shall constitute complete fulfilment of the Transferee's
obligations regarding payment of the transfer price.
(iv) In no event shall the Transferee be liable for any incidental,
indirect, special, consequential or punitive fees (if any)
arising from its payment by wire transfer to the
Transferor-Designated Account.
(v) The Transferor is obligated to strictly comply with the
confidentiality provisions hereunder.
(vi) The Transferor shall also perform other obligations provided
under this Agreement.
4.2 Rights and Obligations of the Transferee:
(i) The Transferee shall accept the transfer of the 35% equity
interest in Jilian Company held by the Transferor.
(ii) The Transferee shall make full payment to the Transferor
pursuant to the terms and conditions hereunder.
(iii) The Transferee shall disclose information relating to the
equity transfer hereunder according to relevant laws and
regulations and regulatory requirements.
(iv) The Transferee shall be responsible for effecting the equity
transfer in compliance with relevant laws and regulations.
(v) The Transferee is obligated to strictly comply with the
confidentiality provisions hereunder.
(vi) The Transferee shall also perform other obligations provided
under this Agreement.
Article 5 Transferor's Representations and Warranties
5.1 The execution, delivery and performance of this Agreement by the
Transferor do not contravene or conflict with any provisions of its
articles of association or bylaws, nor contravene any laws, regulations
or contractual restrictions binding on or affecting the Transferor.
5.2 There is no mortgage, lien, pledge, third-party preferential rights or
third-party trust interest on, over or affecting the Transferred
Interest, and the Transferor shall not, from the date upon which this
Agreement is executed until the date that the equity transfer becomes
effective, grant any mortgage, lien, pledge, third-party
preferential rights or third-party trust interest on, over or affecting
the Transferred Interest.
5.3 There exists no judgments, rulings or verdicts over the Transferred
Interest by the Transferor which have any restrictions on the
Transferred Interest.
5.4 The Transferor is the sole owner of, and has full authority to transfer
and dispose of, the Transferred Interest.
5.5 The Transferor has the full power and authority to execute this
Agreement. Upon its execution, this Agreement shall constitute legal,
valid and binding obligations of the Transferor and enforceable in
accordance with its terms.
5.6 The Transferor agrees to indemnify and hold the Transferee or Jilian
Company harmless from any losses, liabilities, claims, proceedings or
expenses (including costs and expenses in compensation for any claims
or defenses) resulting from or relating to the liabilities or likely
actions arising from making payment to the Transferor-Designated
Account by the Transferee or Jilian Company.
Article 6 Transferee's Representations and Warranties
The Transferee represents and warrants as follows:
6.1 The Transferee is a joint stock limited company duly incorporated and
validly existing under the relevant laws.
6.2 The Transferee has the full power or authority to execute this
Agreement. Upon its execution, this Agreement shall constitute legal,
valid and binding obligations of the Transferee and enforceable in
accordance with its terms.
6.3 The Transferee's execution and performance of this Agreement does not
contravene the provision of any law.
Article 7 Confidentiality
7.1 Both the Transferor and the Transferee acknowledge that, except for
required disclosure to relevant approving authorities or government
departments, or such disclosure pursuant to laws and regulations or
relevant provisions of any securities exchange commission, the
Transferor shall not use or disclose to any third party the
confidential materials set out in Article 7.2 hereof, and shall use its
endeavors to procure that none of its employees, representatives,
agents or consultants shall disclose or release any such confidential
materials.
7.2 For the purpose of this Agreement, confidential materials shall
include:
(i) this Agreement and other letter of intent and memos executed
by the parties for the execution of this Agreement;
(ii) such information recorded or represented in the communications
in oral, written or electronic forms between the parties to
this equity transfer, including without limitation technical,
marketing, management and operational information of the group
to which the Transferee and Jilian Company are affiliated.
Article 8 Conditions Precedent
Transferee's obligations to make payment arising from the equity
transfer hereunder shall be subject to the Transferor's representations
and warranties being accurate and not misleading as of the date
thereof, and the Transferee's receipt of satisfactory evidence
regarding items (i) and (ii) listed below:
(i) approval by the original approving authority of Jilian
Company;
(ii) compliance with procedures relating to the equity transfer
hereunder which are applicable to the Transferor or Transferee
under relevant listing rules;
(iii) Transferor's execution of relevant documents for the purpose
of amending registration information with the State
Administration of Industry and Commerce (if required).
Article 9 Termination
9.1 Force Majeure: Prior to obtaining the approval from the original
approving authority of Jilian Company and the completion of the
registration of the amendment with the State Administration Industry
and Commerce, if this Agreement cannot be performed in part or in whole
due to an event of force majeure, including without limitation
earthquake, typhoon, flood, fire or war, the party affected by such
force majeure event shall promptly notify the other party of such event
by phone or fax, and shall within fifteen (15) days provide via express
delivery details of the event and valid certificate testifying that
this Agreement cannot be performed in part or in whole and/or the
performance of which should be postponed. Depending on the extent of
the impact of such force majeure event on the performance of this
Agreement, the parties shall decide through consultations
whether to terminate this Agreement or waive the performance of this
Agreement in part or in whole, or postpone the performance of this
Agreement.
9.2 Upon the execution of this Agreement, in the event of any
non-performance caused by the change of laws and policies of the State
without any fault of the parties, the parties may terminate this
Agreement through consultation. Relevant fees so incurred shall be
borne by both parties respectively.
9.3 Upon the execution of this Agreement, if this Agreement cannot or need
not be performed due to any willful conduct or material negligence of
one party, the other party shall have the right to terminate of this
Agreement. Any loss arising therefrom shall be borne by the Defaulting
Party. If both parties are in default, such loss shall be shared by the
parties in proportion to the degree of each party's default.
9.4 With respect to the cause for termination under Article 9.2 and 9.3,
the party entitled to terminate this Agreement shall notify the other
party in writing within fifteen (15) days upon occurrence thereof, and
present valid certificate thereto.
This Agreement shall be automatically terminated seven (7) days after
the delivery of termination notice to the other party. If the other
party objects to such termination, it shall put forward its objection
within seven (7) days upon receipt of such termination notice and
certificate. If the parties cannot reach an agreement within thirty
(30) days upon receipt of the termination notice, either party may
refer such dispute for arbitration before an arbitration tribunal
having jurisdiction pursuant to this Agreement.
Article 10 Liabilities for Breach of Agreement
10.1 Any party who fails to perform its obligations hereunder shall
compensate the other party for the loss caused by such non-performance.
10.2 In case one party ("Defaulting Party") fails to perform its obligations
under this Agreement, the other party ("Non-Defaulting Party") may
suspend the performance of its obligations hereunder. In the event that
the Defaulting Party fails to remedy its default within fifteen (15)
days after the Non-Defaulting Party sends a written notice to the
Defaulting Party requesting remedy, the Non-Defaulting Party shall have
the right to cease the performance of its obligations hereunder, and
claim damages.
Article 11 Governing Law
This Agreement shall be governed by the laws of the People's Republic
of China.
Article 12 Resolution of Disputes
All disputes in connection with this Agreement shall be settled by
friendly consultations between both parties. In the event that no
agreement can be reached within thirty (30) days, any party may bring
such a dispute to China International Economic and Trade Arbitration
Commission for arbitration under the then current rules of the
commission. Any arbitration decision shall be final and binding on both
parties. The arbitration shall take place in Beijing.
Article 13 Notice
The parties shall send all the notices and written materials to the
following addresses by registered mail and express delivery:
Jilin Chemical Industrial Company Limited
Address[]No. 9 Long Tan Road, Long Tan District, Jilin City,
Jilin Province, China
Zip Code: 132021
Fax: 0000-0000000
E-mail:xxxx@xxxx.xxx.xx
Allied Petrochemicals Inc.
Address[]Room 2002 Xxxxxxxx Xxxxx, 0 Xxxxxx Xxxx Xxxxx, Xxxxxxx,
Xxxx Xxxx
(Attn: Millennium Group Limited)
Fax: 00000-00000000
E-mail:xxxxxxxxx@xxxxx.xxx
Each party shall immediately notify the other party of any change to
the address aforesaid.
Article 14 Supplementary Provisions
14.1 This Agreement shall be legally effective upon the execution and
affixing seals by both parties, which shall perform their obligations
in strict compliance with the provisions hereunder, and shall not
terminate this Agreement at discretion.
14.2 Various taxes involved in the performance of this Agreement shall be
borne by the parties respectively in accordance with relevant laws and
regulations.
14.3 For any issues not mentioned herein, the parties may execute
supplementary agreements, which shall constitute an integral part of
this Agreement.
14.4 Both parties agree to take actions for the purpose of satisfying the
reasonable requirements for the effective performance of this
Agreement, including further actions and execution and delivery of any
further documents.
14.5 Upon execution, this Agreement shall supersede any other written and
oral agreements between the parties relating to the equity transfer.
14.6 Any notice or written materials hereunder shall be sent through
registered mail or express delivery. In case of emergency, such notice
or materials may be sent via fax followed by a confirming registered
mail or express delivery that will prevail in case of any discrepancy.
14.7 This Agreement shall be made in six (6) originals, one for each party,
four of which will be submitted to relevant State authorities. Each of
the originals shall have the same legal effect.
14.8 This Agreement is executed by the parties on August 30, 2002, and
becomes effective upon the satisfaction of the conditions precedent
under Article 8.
Tranferee[]Jilin Chemical Industrial Company Limited
Legal Representative or
(Authorized Representative): \s\ XX Xx
--------------------------------------
XX Xx, Legal Representative
Transferor[]Allied Petrochemicals Inc.
Legal Representative or
(Authorized Representative): \s\ XXXXX Xxx-xxxxx
--------------------------------------------
XXXXX Xxx-xxxxx, Legal Representative
