EQUITY INTEREST PURCHASE AGREEMENT
Transferors:
Xxxxxxx Xxx and the other shareholders, totaling 29 people (please refer to
Annex)
ID:
Address:
Transferee:
Deli Solar Technology Development (Beiing) Co., Ltd.
Address:
28 Feng Tai North Road, Feng Tai District, Beijing
Representative:
Deli Du
Tianjin
Huaneng Group Energy Equipment Co., Ltd. (hereinafter referred to “Tianjin
Huaneng Corporation”)
is a limited liability company, incorporated under PRC Corporation Law, with
registered (paid in full) capital of RMB 5.94 million, with good standing within
the effective period permitted by laws. The Transferors and Transferee are
currently shareholders of Tianjin Huaneng Corporation. In order to promote
the
sustainable development of Tianjin Huaneng Corporation, the Transferors has
agreed to subject to and accordance with the terms and conditions of this
agreement to transfer their 29.97% of the equity interest in Tianjin Huaneng
Corporation. Both parties, under the principles of voluntary, equality,
fairness, and integrity, after negotiation, agree as follows:
Article
1: The Subject Transfer, the Purchase Price and the Payment Method
1.
The
Transferors hereby agree to transfer 29.97% of the equity interest in Tianjing
Huaneng Corporation (the “Equity
Interest”)
to the Transferee, for RMB 10.68 million (the “Cash
Purchase Price”).
The Transferee hereby agrees to such price and consideration to purchase the
shares. Transferee hereby agrees that within seven days from the signing of
this
Agreement, the Cash Purchase Price shall be paid to the Transferors in full
in
cash.
2.
The
Transferee herby agrees that upon the effectiveness of this Agreement and the
payment of the Cash Purchase Price by the Transferee pursuant to this Agreement,
the Transferee shall be entitled the Equity Interest, and the rights and
interest of shareholders held by the Transferors shall be
terminated.
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3.
In
consideration of the rights and interests of the Transferors as shareholders
and
upon the effectiveness of this Agreement and the payment of the Cash Purchase
Price by the Transferee pursuant to this Agreement, the Transferee hereby agrees
to issue to the Transferors or their designated beneficiaries a total of 1
million warrants to purchase shares of common stock of China Solar & Clean
Energy Solutions, Inc., (symbol: “CSOL”) (the “Common
Stock”),
with a term of five years (the “Warrants”).
The exercise price of the Warrants shall be $1.10 US Dollars per
share.
Article
2: Representations and Warranties
1.
The
Transferors covenant that the Equity Interest is part of the Transferors’
paid-in capital of Tianjin Huaneng Corporation, and the Transferors are the
legal owners of the Equity Interest and entitled to the right of disposal of
Equity Interest. The Equity Interest is not subject to any judgment, lien,
pledge, guaranty or any other encumbrances that may be against the Transferee’s
interest. And before the closing of the aforesaid Equity Interest transfer,
the
Transferors shall not transfer, gift, pledge the Equity Interest or take any
action that may result in any encumbrance or restrictions on the Equity
Interest. The Transferors covenant that no material indebtedness or pending
or
existing litigation against Tianjin Huaneng Corporation that has not been
disclosed to the Transferee. The Transferors shall be liable for the
consequences of the nondisclosure of any of the aforesaid indebtedness or
litigation.
2.
The
Transferors covenant that all other shareholders of Tianjin Huaneng Corporation
have waived their preemptive rights to the Equity Interest.
3.
The
Transferee, upon the transfer of the Equity Interest, shall be entitled to
the
shareholders rights and obligations pursuant to the Articles of Incorporation
and Bylaws of Tianjin Huaneng Corporation.
4.
Upon
the closing of the transfer of the Equity Interest, the Transferee shall amend
the original Articles of Incorporation, organizational agreement and other
related documents and undertake the registration procedures for such changes.
5.
Tianjin Huaneng Corporation shall be entitled to the rights as a creditor for
the loans that it made before the Equity Interest transfer or those it will
make
after the closing. Tianjin Huanneng Corporation shall also be liable for any
indebtedness incurred before or after the aforesaid closing. The Transferee
shall be liable for any damages or indemnification which the Transferors shall
be jointly liable before the closing. The Transferors shall be entitled to
their
own right as a creditor or be liable for their personal
indebtedness.
2
Article
3: Profits and Losses Sharing
1.
The
Transferee hereby agrees that the Transferors shall be entitled to dividends
of
RMB 1.6 per share in the undistributed profits as of June 30, 2008 (the
“Dividends”).
The Dividends shall be paid to the Transferors in the following three
installments: (i) on the first anniversary of the effectiveness of this
Agreement, pay to the Transferors RMB 0.5 per share; (ii) on the second
anniversary of the effectiveness of this Agreement, pay to the Transferors
RMB
0.5 per share; and (iii) on the third anniversary of the effectiveness of this
Agreement, pay to the Transferors RMB 0.6 per share. The payment of personal
income taxes caused by such distribution of Dividends shall be subject to the
PRC tax laws and regulations.
2.
The
profits that have not been distributed before the Equity Interest transfer
(i.e.
June 30, 2008), shall be held by Transferee and other shareholders of Tianjin
Huaneng Corporation on a pro rata basis.
3,
The profits and losses of Tianjin Huaneng Corporation shall be shared by the
Transferee and other shareholders on a pro rata basis pursuant to the Articles
of Incorporation and Bylaws of Tianjin Huaneng Corporation on and after July
1,
2008.
Article 4:
Expenses of Equity Interest Transfer
The
costs and expenses incurred as a result of the Equity Interest transfer
(including fees, taxes, etc.), shall be borne by both parties, respectively,
in
accordance with the laws and regulations.
Article
5: Modification and Amendment
Before
the change in registration as a result of the Equity Interest transfer has
been
filed, both parties shall have the right to amend or terminate this Agreement
by
written agreement, in event of any of the following:
1.
Force majeure, or any unpreventable event where either party has no fault which
makes it impossible to perform this Agreement.
2.
Loss of legal capacity to perform this Agreement by either party.
3.
Breach of contract by either party, which has seriously affected the economic
interests of the non-defaulting party, therefore makes it unnecessary to perform
this Agreement.
4.
Change in circumstances, the Agreement shall be amended or terminated by
negotiation and mutual consent between both parties.
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Article
6: Liability of Default
The
Agreement shall have equal legal effects on both parties. If any party is in
default of the obligations or representations and warranties hereunder (the
“Default”), except for the exemptions provided by laws and regulations, the
defaulting party shall pay the non-defaulting party damages in the amount of
10
percent of the Purchase Price (the “Damages”). In the event that the economic
losses of the non-defaulting party caused by the Default are greater than the
Damages, the defaulting party shall be liable for the difference between the
actual losses and the Damages.
Article
7: Dispute Settlement
1.
Any dispute with respect of the effectiveness, performance, default or
termination of the Agreement shall be resolved through friendly negotiation
between both parties.
2.
If any provision or any content of this Agreement is held to be invalid, the
remaining provisions of this Agreement shall remain in full force and effect
and
shall not be affected by the invalid provision. .
3.
If no consensus can be reached with respect to any dispute, either party may
apply for arbitration or file a claim in people's courts.
Article
8 : Applicable Laws
This
agreement and related documents and all the rights and obligations, the validity
and the performance thereunder shall be governed and interpreted in accordance
with the laws of People’s Republic of China.
Article
9: The Date and Venue of Entry of the Agreement
This
Equity Interest Transfer Agreement is fully executed by both parties on October
27, 2008 at 119 Xx Xxxx Road, Tianjin, North China (the third floor conference
room of Tianjin Huaneng Energy Equipment Co., Ltd.,).
Article
10: Effectiveness of the Agreement
The
Agreement shall come into effect on the date of the execution.
Article
11: This
Agreement shall be executed in four copies. Each party shall hold one
respectively. One will be filed with the Administrative Bureau of Industry
and
Commerce, and another will be kept for the record of Tianjin Huaneng
Corporation. Such four copies shall have equal force and effect.
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Representative(s)
of the Transferors (signature or seal):
Transferee
(Seal): Deli Solar Technology Development (Beijing) Co., Ltd.
(Beijing)
Co., Ltd.
Legal
Representative
or
Authorized Agent: /s/ Mr. Deli Du
October
27, 2008
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ANNEX
6
