Translation of Qujing Gas Co. Ltd. Sponsors’ Agreement Parties:
Translation
of Qujing Gas Co. Ltd. Sponsors’ Agreement
Parties:
(1)
Yunnan Investment Group
(3)
Qujing Development Investment Co. Ltd.
According to PRC Company Law
(Company Law) and
PRC
Contract Law (Contract Law), three parties found Gas Co. (Company) ,in accordance with the
principles of equality and mutual benefit, in Qujing City, Yunan Province, China.
After negotiation, three Parties reach
the agreement.
Chapter 1
Parties of Investment
Section 1
Parties of the agreement
The
following three parties will be bound by this agreement:
(1)
Yunnan Investment Group, Chinese Corporate is established according to the laws
of the Peoples’ Republic of China
Representative:
Bao Xxxx Xx
Position:
Sole Board of Director
Address:
Xx. 00 Xxxxxxx Xx, Xxxxxxx, Xxxxxx
Tel:
0000-0000000
Fax:
0000-0000000
(2) Sino
Gas International Holdings, Inc., Foreign Corporate is established according to
the laws of the Peoples’ Republic of China
Representative:
Xxx Xx Chuan
Position:
Sole Board of Director
Address:
Area X Xxxxxx Xxxxxxxx, Xx. 00 Xxxxxxxxxxxx Xxxx Xx, Xxxxxxx,
Xxxxxxx
Tel:
000-0000000
Fax:
000-0000000
(3)
Qujing Development Investment Co. Ltd., Chinese Corporate is established
according to the laws of the Peoples’ Republic of China
Representative:
Zhan Hong Bin
Position:
Sole Board of Director
Address:
Xx. 000 Xxxxx Xxxxx Xx, Xxxxxx
Tel:
0000-000000
Fax:
0000-0000000
Section 2
Parties of Investment
Three
parties decide to invest in Qujing, Yunnan together, and found Gas Company. The
share held by Party (1) will be resolved and separate to the other parties.
After the separation, each shareholder’s total shares held can not excess the
shares hold by Party (2).
Chapter 2
Summary of the Company
Section 3
Name and Address
Chinese
Name: 曲靖燃气有限公司
English
Name: Qujing Gas Co. Ltd
Address:
Qujing, Yunnan
Section 4
Legal Form of Company
The legal
form of company is Co., Ltd. be response to liabilities as company’s assets. The
parties of the agreement are response to liabilities as the investment amount or
equivalent.
Chapter 3
Registration Capital of Company
Section 5
Registration Capital
The
registration capital is ￥30,000,000.00.
The
registration fund is ￥30,000,000.00 and
is 100% of the total registration capital
Section 6
Investment of Shareholders
The
followings are the name of shareholders, the amount of registration fund, the
manner of investment, the amount of first investment and the due date of
promised investment:
|
shareholders
|
registration
fund
|
percentage
|
first
investment
|
manner
of investment
|
due
date
|
|
Yunnan
Investment Group
|
￥15,300,000
|
51%
|
￥15,300,000
|
cash
in RMB
|
in
60 days after sign the agreement and get the promise of open bank accounts
from Trade and Industry Bureau
|
|
￥11,700,000
|
39%
|
￥11,700,000
|
cash
in RMB
|
||
|
Qujing
Development Investment Co. Ltd.
|
￥3,000,000
|
10%
|
￥3,000,000
|
cash
in
RMB
|
Section 7
Responsibility about Breach of Contract for Registration
Fund
The shareholders will pay certain amount of fine if do not follow the Section 6 of
this agreement. The party breach of contract
will pay the fine to the
other parties follow this agreement. The amount is calculate by the
formula, fine = the amount should be invest but
does not * 5‰ per day * days of late. If that party does not pay the investment
in 30 days after due date, the other parties have right to end this agreement
and have right to require the party breach of contract to compensate all the
losses.
2
Chapter 4 Company’s Scale of Investment and Source of
Company’s Capital
Section 8 Company’s Scale of
Investment
The company should satisfy the increasing demand of gas in Qujing.
The project needs three terms investment. The total amount of three terms
investment is ￥399,990,000, which include ￥88250000 in first term, ￥99190000 in second term and ￥219750000 in third term
Section 9 Source of Company’s Capital
The
investment required for the project will be invested by shareholders base on the
percentage of shares owned according to the requirement of the project’s
construction. The excess part will be solved by company’s loan and each
shareholder will provide the warrants base on the percentage of shares
owned.
Section
10 Founding of Shareholders’ Commitment
Shareholders’
Commitment is the authorization of the company.
When
shareholders meeting held, shareholders’ representative by law or by special authorization will
attend the meeting. However, the resolution should be available after stamped by each shareholder.
Section
11 Responsibility of Shareholders’ Commitment
The
following are the responsibilities of shareholders’ commitment:
|
1.
|
decide
company’s strategies , investment plans and significant
adjustments
|
|
2.
|
elect
and replace the directors and supervisors, decide the payments to
directors and supervisors
|
|
3.
|
examine
and approve the report of board of
directors
|
|
4.
|
examine
and approve the report of board of supervisors or
supervisors
|
|
5.
|
examine
and approve company’s annual financial budget, actual plan and related
significant adjustment
|
|
6.
|
examine
and approve the plan about company’s distribution of profit and recovery
of loss
|
|
7.
|
decide
the decision about increase or reduce the registration capital of the
company
|
|
8.
|
decide
the decision about issue of company’s
bond
|
|
9.
|
decide
the decision about the add or deduct the shareholders, merger, separate,
discrete, liquate or change the
company
|
|
10.
|
decide
the decision about the company’s
rule
|
3
|
11.
|
examine
and approve the warrants of Section
23
|
|
12.
|
consider
the purchasing and selling of company’s asset, which exceeds 30% of the
company’s audited net asset in the current period within one
year
|
|
13.
|
consider
CSOP (Compensation Stock Option
Plan)
|
|
14.
|
consider
administrative regulations, departmental rules and regulations, and other
matters should be decide by board of directors set by the
regulations
|
No
meeting for shareholders’ commitment is required if shareholders unanimously
agree the item listed above in written form. Decision can be decided directly,
and signed or stamped by all shareholders on the decision.
Section
12 Rules for Shareholders’ Commitment discussion
|
1.
|
First
meeting for shareholders’ commitment will be called and held by the
shareholder who invests the most.
|
|
2.
|
Meetings
for shareholders’ commitment include scheduled meeting and temporary
meeting. Scheduled meeting should be held on time according to the
schedule set based on company’s regulation. Temporary meeting should be
held when Representatives of more than one-tenth of the shareholders the
right to vote, more than one third of the directors, the board of
supervisors proposal to temporary
meetings
|
|
3.
|
Shareholders
meeting convened by the board of directors. Sole board of directors will
hold. If sole board of directors cannot performing his duties or do not
performing his duties, vice sole board of directors will hold. If vice
sole board of directors cannot perform his duties or do not performing his
duties, the director who appointed by more than half of directors will
hold. The board of directors cannot or does not performing their duties,
the board of supervisors will host the meeting. If board of supervisors do
not host, representatives of more than one-tenth of the shareholders the
right to vote, more than one third of the directors can
host.
|
|
4.
|
The
annual meeting for shareholders’ commitment should be announced to all the
shareholders’ 20 days before the meeting. The temporary meeting should be
announced to shareholders 15 days before the
meeting.
|
|
5.
|
Shareholders’
commitment should record all the decision about contains discussed during
the meeting. All the participated shareholders’ should have signature on
the record.
|
|
6.
|
the
decision discuss on meeting, about changing on the company’s regulation,
increasing or decreasing the registration capital, and company’s merging,
separating, or changing the format of company, and issuing company’s loan,
must have 2/3 and above to agree.
|
Section
13 Board of Directors’ Number of People and Appointment
The board
of directors will have 5 people. 2 people from Party (1), 3 people from Party
(2).
Board of
directors has one sole board of directors, and one vice sole board of directors.
The sole board of directors will be appointed by Party (1). Vice sole board of
directors will be appointed by Party (2).
The day
company register will be the day of founding of board of directors.
4
Section
14 Duties of Board of Directors
Board of
directors is responsible to shareholders’ commitment and is responsible for the
following duties:
|
1.
|
Call
for the shareholders’ commitment meeting and report the
work.
|
|
2.
|
Executive
the decision of shareholders’ commitment
meeting.
|
|
3.
|
Decide
company’s operation plan and investment
plan.
|
|
4.
|
Make
company’s annual budget and actual financial
plan.
|
|
5.
|
Make
company’s plan about the separation of profit and coverage of
loss.
|
|
6.
|
Make
company’s plan about increasing or decreasing registration capital and
issuing company’s loan.
|
|
7.
|
Make
company’s plan about separating, merging, diluting, and changing company’s
format.
|
|
8.
|
Decide
the setting of company’s internal
authorizations.
|
|
9.
|
Appoint
general manager of the company. According to managers’ require to appoint
or dismiss vice general manager.
|
|
10.
|
Develop the company's basic
management system.
|
|
11.
|
Develop
charter amendment proposal.
|
|
12.
|
Listen to reports on the work of manager, and
inspect manager’s
work
|
|
13.
|
Laws and administrative
regulations, departmental rules and regulations or the statute of the
other powers conferred.
|
Section 15 Board of Directors’ Rules for Procedure
|
1.
|
Board
of directors should have meeting at least twice per year. Sole board of
directors will call, announce to all the directors and supervisors 10 work
days before the meeting and deliver contains for the meeting. Representative of 1 / 3 or more than the right to vote,
the shareholders, 1 /
3 or more than the directors or board
of supervisors can propose to hold temporary Board of Directors
meeting. Sole board of directors should call and hold the meeting in 10
days from the day gets the
proposal.
|
|
2.
|
Board of directors meeting will be called and held by
sole board of directors. If sole board of directors cannot
performing his duties or do not performing his duties, vice sole board of
directors will hold. If vice sole board of directors cannot perform his
duties or do not performing his duties, the director who appointed by more
than half of directors will hold.
|
|
3.
|
Board
of directors should record items for discussion should be on the meeting
made the decision.
|
|
4.
|
voting
for board of directors’ decision is one vote per
person
|
|
5.
|
Board
of directors’ decision will be available after more than half of the
directors agree.
|
|
6.
|
The meeting for board of directors
will be announcing 10 work days before the meeting
and deliver contains for the
meeting.
|
5
Section 16 Duties for General Manager
1. Company management implemented under the
leadership of the board of directors, general manager responsibility system.
General Manager is responsible for
company’s regular operation and
management.
|
2.
|
General Manager for company will be
appointed by Party (2).
|
|
3.
|
General Manager is responsible to the
following duties:
|
|
a)
|
Host company’s production, operation and
management. Organize and executive the decision
of the board of directors.
|
|
b)
|
Organize and executive
company’s annual operation plan and investment
plan.
|
|
c)
|
Develop internal management authorizations set up plan.
|
|
d)
|
Develop company’s internal basic management
rules.
|
|
e)
|
Set company’s
regulation.
|
|
f)
|
Require
to appoint or dismiss vice manager, CFO, and chief
accountant
|
|
g)
|
Decide
to appoint or dismiss the other managers not decide by board of
directors
|
|
h)
|
The other duties given by this
agreement or board of
directors.
|
Section 17 Managers for Finance
|
1.
|
Company set CFO and chief accountant as
mangers for finance.
|
|
2.
|
Chief accountant will be appointed by
Party (1), CFO will be appointed by Party (2).
|
|
3.
|
When party (2) needs to provide
financial statement according to the requirement of foreign authorization,
CFO will be sign and be responsible as managers for finance; otherwise, chief accountant will
be responsible for company’s regular financial job.
|
Section 18 Board of Supervisors’ Number of people and
Appointment
Board of supervisors will have 5
supervisors. Party (1) appoints 2 supervisors, Party (2) appoint 1, and Party
(3) appoints 1
Board of supervisors will have one
president, which will be appointed by Party (3) and will bee
voted more than half supervisors. President will call and hold meetings for board of supervisors.
If president cannot or do not perform his
duties, another supervisors who appointed by more than half of supervisors will
call and hold meetings for
board of supervisors.
Section 19 Duties for Board of
Supervisors
Board of supervisors performs the
following duties:
|
1.
|
Check company’s finance.
|
|
2.
|
Monitor
directors and senior managers in the execution of the duties of the
company. Recall directors and senior managers who are in violation of the law,
Administrative regulations, this agreement and
shareholders’ commitment’s
decision.
|
6
|
3.
|
When directors and senior managers’ action harm the company, require them to correct
it.
|
|
4.
|
Propose the convening of temporary
shareholders’ meeting. When the board of directors
does not perform
their duties set by Company’s
Law, hold and call
for the shareholders’
meeting.
|
|
5.
|
Xxx directors and senior managers
according to Company’s
Law.
|
|
6.
|
Do the research when
they find abnormal
operation of the company. Require accounting firm and lawyer
firm to provide
assistance, the cost will be paid by
company.
|
Section 20 Board of Supervisors’
Rules of Procedure
|
1.
|
Board
of supervisors will call for a meeting at least every 6 months.
Supervisors can propose for temporary supervisors’
meeting.
|
|
2.
|
Board
of supervisors will set board of supervisors’ rules of procedure, clear the board of supervisors of
procedure and voting procedures and make sure work
efficiency and scientific decision-making of the board of
supervisors.
|
|
3.
|
Board of supervisors under the
rules of procedure of the board of supervisors held and voting procedures
will be approved by shareholders as annex of this
section.
|
|
4.
|
Board of supervisors should record all the decision
discussed during the meeting.
All the supervisors who
participated should sign on the
record.
|
|
5.
|
Supervisors have right to require a
described record for his speak during the
meeting on the record. Board of supervisors’ meeting record will be saved as
company’s document for at least 10
years.
|
|
6.
|
announcements for board of supervisors’ meeting should include the
following items:
|
|
(1)
|
date, place and meeting
deadline
|
|
(2)
|
subject and
topic
|
|
(3)
|
date of issue the
notice
|
Chapter 6 Finance, Accounting, Auditing and Separation of Profit of the Company
Section 21
Company will pay the tax and expense according
to the law
Section 22
The financial years for the company begin
on January 1st each year until year end December
31st.
Section 23
Net profit of the company will
separate at
January of next year
according to shareholders’ share percentage.
Section 24
The company’s financial audit request outsourcing,
and audited by the accounting firm appointed by board of
directors.
One month before financial year end of
each year, general manager
will organize to prepare balance sheet and income statement of the year, and
provide to accounting firm for auditing. After getting the auditors’ report from accounting firm, it will be
provide to directors with balance sheet and income statement for pre-auditing, and in the review by the
board of directors.
7
Section 25
All the shareholders have right to audit and check
company’s account and
operation.
Chapter 7 Set up Limited
Section 26 Company Preparatory
Committee
|
1.
|
In 3 days of sign this agreement,
Party (1), Party (2)
and Party (3) agree to found “Qujing Gas Co. Ltd
Preparatory Committee”.
|
|
2.
|
Preparatory committee’s member will be appointed by
Party (1), Party (2) and Party
(3).
|
|
3.
|
Preparatory committee is responsible to all
the services relate to found company.
|
|
4.
|
The expenses related to found company
will borrow from Party (1), Party (2) and Party (3), and will be
committed by company after found. If the company cannot found, the
expenses will be committed by Party (1), Party (2) and Party (3) according
to the shares
percentage.
|
|
5.
|
Members of preparatory committee do not count wages,
after company set up will give appropriate subsidies.
|
|
6.
|
When the company meets resistance for
set up, preparatory committee bring to Party (1), Party (2) and Party
(3)’s resolution. Only when Party (1), Party (2) and
Party (3) agree to do not set up the company, the company preparatory
committee can stop set up the
company
|
|
7.
|
When company get license, the preparatory committee will
dissolute.
|
Section 27 Security of Registration
Fund
|
1.
|
Since the formal signing of this
Agreement after the entry into force, Party (1), Party (2) and Party
(3) or their representatives will open a
common bank account after reach the agreement.
If all the shareholders or their
representatives do not sign, no one allow using the funds in the bank
account.
|
|
2.
|
Party (1), Party (2) and Party (3)
should follow Section 6 of this agreement, and put first payment into the
bank account
|
|
3.
|
In 3 days of the company set up,
Party (1), Party (2) and Party (3) or their representatives
will dissolute manage
the common account. People from company preparatory
committee will transfer registration fund to company’s basic
account
|
|
4.
|
If Limited Co. cannot set up, in 2
days Party (1), Party (2) and Party (3) decide not to set up the company,
Party (1), Party (2)
and Party (3) or their representatives will dissolute manage the common
account. People from company preparatory
committee will return registration fund to Party (1), Party (2) and Party
(3)’s basic
account.
|
8
Section 28 Privacy
Each party of this agreement has obligation to keep
the privacy due to knowing the secret of the business
Section 29 Change and
disarmament
|
1.
|
This agreement can be changed
according to
changes in existing
laws, sets in new
laws, new local regulations and agreement reached by parties after equal
negotiation. If one party proposes to change this agreement, it
should announce other parties in written documents in 30 days, only after Party (1),
Party (2) and Party
(3)’s negotiation and reach agreement,
this agreement can be
changed.
|
|
2.
|
this agreement can be disarmament
before the Limited Co. because of the following
situation:
|
|
a)
|
the parties reach agreement after
negotiation, disarm the
agreement
|
|
b)
|
any parties cannot
perform their duties
and obligations In accordance with the manner and timing of this
agreement
|
|
c)
|
After
disarmament of this agreement, each party’s duties and obligations under
this agreement ended immediately, however, the parties which cause the
disarmament of this agreement will be responsible for
defaulting.
|
Section 30 Irresistible Factors
|
1.
|
“Irresistible factors” mean the factors cannot be
avoided causing any parties cannot fully
or partially perform their duties set by this agreement before sign this
agreement. This kind of factors include
earthquake, typhoon, flood, fire, war, domestic or international traffic accident, government or public authority’s behaviors, disease, civil unrest, strike, and
unpredictable, unavoidable, unfeasible
situation.
|
|
2.
|
When irresistible factors happen, the
party’s duties is affected by the
irresistible
factors and causing
delay of the duties. The duties should be extension automatically. The
party will not be responsible for breach of contract
responsibility.
|
|
3.
|
The party relates to irresistible
factors should announce to the other parties
immediately in
written form, and provide the proof of causing and period of irresistible
factors.
|
|
4.
|
When irresistible factors happen, each
party should
negotiate for find fair plan of solution in time, and try best to reduce
the effect to the lowest
level.
|
Section 31 Dispute Resolution and Applicable Law
|
1.
|
This agreement applies the law in the
People’s Republic of China.
|
|
2.
|
In the course of the agreement to
the dispute, the parties should first be resolved through
consultation.
If the consultation is
not
successful, any
parties can propose arbitration to China International Economic and Trade
Arbitration Commission. The outcome of arbitration have the force of
law to all investment
parties
|
|
3.
|
The result of arbitration will be executive by
People’s
court.
|
9
Section 32 Notice and Service
|
1.
|
The
parties to this agreement due to the implementation of this agreement is
made or to provide each other all the notice, documents, data, are send to
the address and fax list on Section 1 of this agreement. If one party
change address and phone number, the party should notice to other parties
in 3 days in written form. The loss due to delaying notice, the party made
mistake will be responsible for the
mistake.
|
|
2.
|
Personally delivered the document
considered in the delivery of service. Served in a fax served as by facsimile. Service delivered by mail will be
considered at when registered sent or post for the
day.
|
Section
33 Agreement’s Validation
This
agreement will be valid since the day sign by all parties and will be end when
stop set up the company or when lifting of this agreement.
Section
34 Appendix Agreement
The
contain does not cover in this agreement, can be signed an appendix agreement by
Party (1), Party (2) and Party (3), and has equal force of law as this
agreement.
Section
35 Text
This
agreement has 6 copies, and each party has 2 copies. All of 6 copies has equal
force of law.
Dated:
April 22, 2008
/s/ Yuannan Investment
Group
Yunnan
Investment Group
/s/ Qujing Development
Investment Co. Ltd.
Qujing
Development Investment Co. Ltd.
10
