Pucheng 12,000 KW Biomass Power Generation Asset Transfer Agreement by and between Xueyi Dong and Xi’an TCH Energy Technology Co., Ltd. on June 29, 2010 in Xi’an City of Shaan Xi Province of
Pucheng
12,000 KW Biomass Power Generation Asset Transfer Agreement
by
and
between
Xueyi
Dong
and
Xi’an
TCH Energy Technology Co., Ltd.
on
June
29, 2010
in
Xi’an
City
of
Xxxxx
Xi Province
of
P.R.
China
1
Pucheng
12,000 KW Biomass Power Generation Asset Transfer Agreement
Transferor:
Xueyi Dong (hereinafter as “Party A”)
ID
Number:
Transferee:
Xi’an TCH Energy Technology Co., Ltd (hereinafter as “Party B”)
Legal
Representative: Xxxxxx Xx
This
Agreement is the formal agreement from the Technical Reconstruction Letter of
Intent by Parties on January 20, 2010.
Whereas:
1.
Transferor is a natural person with Chinese citizenship;
2.
Transferee is a limited liability company legally incorporated and exists under
the laws and regulations of China;
3. After
friendly discussion, the Parties have entered into a Technical Reconstruction
Letter of Intent that Party A agrees to transfer its thermoelectricity
generation plant to Party B and cooperate and coordinate on technical
reconstruction for the thermoelectricity generation plant to cause the transfer
of the assets described in this Agreement to be completed smoothly.
4.
Parties have completed improvement and reconstruction of raw material
feeding system, furnace system, steam turbine system based upon the technical
designs and requirements by Party B and it meets the requirement for
biomass power generation, and the system is running stably.
Article
1. Definition
Unless
otherwise agreed or specified in this Agreement, meaning of following words in
this Agreement is defined as follows:
1. transfer
assets: all the assets transferred from transferor to transferee listed on the
Exhibit A of this Agreement.
2.
working day: from Monday to Friday each week, except for the legal holidays in
China.
3.
effective date of this Agreement: the date of which this Agreement takes
effect.
2
4.
signature date of this Agreement: the date when Parties sign or seal the
Agreement.
5,
closing date: the date when all the assets listed in this Agreement and their
ownership are transferred from transferor to transferee, which will be the
effective date of this Agreement.
6.
Chinese laws: all the effective laws, regulations and other legally enforceable
orders, notices, policies, measures and documents from Chinese government and
its departments and divisions that are issued and valid before or on the
effective date of this Agreement.
Article
2 Asset Transfer
1.
Transferor agrees to transfer and move all the assets on the Exhibit A—Transfer
Assets List of the Agreement and their ownership to Transferee and to have
Transferee take possession of all the assets according to the terms of this
Agreement.
2.
Transferee agrees to accept all the assets transferred by the Transferor
according to the terms of this Agreement.
3. The
assets transfer under this Agreement is closed all at once on closing
date.
4. Upon
the closing, the Transferee becomes the legal owner of the transfer assets and
have all the rights and responsibilities of the transfer assets, and Transferor
doesn’t have any rights of the transfer assets and doesn’t have any liabilities
or responsibilities of the transfer assets unless otherwise agreed in this
Agreement.
Article
3 Transfer Assets
The
Parties agree the scope of the transfer assets covers only the assets and their
ownership listed on the exhibit of this Agreement. Any contracts, agreements,
rights and responsibilities in the agreements between Transferor and any third
parties that relate to the transfer assets and their debt and credit
relationship are not included. The Transferor shall assume such responsibilities
to the third party by itself and protect and ensure Transferee is free from
these liabilities and responsibilities. Parties agree, the Transferee
will not assume any debt, liability, account receivable, bank loan, government
tax or fee or any other mortgages on the transfer assets.
Article 4
Others
1. If
Transferor has purchased any type of insurance for the transfer assets, and such
insurance is still valid upon the closing date, then Transferor shall change the
insurer and beneficiary person on the insurance policy to Transferee within 5
working days of the closing date, and provide the original insurance policy to
Transferee. The Transferee shall receive all the benefit and income from the
insurance policy from the closing date.
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2.
Transferor promise, upon and after the closing date, if Transferor acknowledges
any business information directly relates to the business that Transferee is
operating, Transferor shall first and immediately provide such business
information to the Transferee.
Article 5
Transfer Price, Payment Term and Time
According
to the original value of the thermoelectricity generation plant and the
reconstruction cost as well as Parties’ negotiation, the transfer assets price
is XXX 000 xxxxxxx xxxxxxx. Parties agree, the Transferee will pay such price by
cash and stock.
1. Cash
payment
Within
three working days of the closing date, Transferee shall make its first payment
of RMB 5 million to the Transferor by bank wire;
Within 30
working days of the closing date, Transferee shall make another payment of RMB 5
million to the Transferor by bank wire;
Within 6
months of the closing date, Transferee shall make a payment of XXX 00 million to
the Transferor by bank wire.
2. The
rest XXX 00 xxxxxxx xxxxx xx paid by common stocks of and issued by China
Recycling Energy Corporation (“XXXX”), the parent company of the Transferee. The
stock price will be the same price as the Company’s first public offering price
per share which occurs in 2010 or 2011, but in no circumstance
(regardless of the price of the public offering) will the price be less than
US$4 per share. The exchange rate between U.S. Dollar and RMB in
connection with the stock issuance will be 1:6.8. Other than
indicated in section 9.2 of this Agreement, these shares of common stock shall
be issued within 10 working days of the completion of 2010-2011 public offering
with piggy back registration rights. These stocks when issued shall be subject
to a one year lock-up period.
Article 6
Representation, Warrant and Covenants of the Transferor
Transferor
represents and warrants to the Transferee:
1.
Transferor is a natural person with Chinese citizenship and has all necessary
authorities and abilities to execute and perform all the obligation and
responsibilities of this Agreement.
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2.
Transferor has lawful and full ownership rights to the transfer assets and has
the rights to execute this agreement and transfer the assets. The transfer
assets or their related rights and beneficiaries are free of any mortgage, lien,
pledge, restrictions or claims from any third parties as well as free from any
court judgment or verdict by arbitration commissions or any other
defects. Transferee shall have all the lawful ownership rights of the
transfer assets upon the effective date of this Agreement, including but not
limited to possession, use, beneficial and disposal rights of the transfer
assets. The transfer assets are not to be confiscated or detained under Chinese
law or by any third person or be imposed with any mortgage, lien, pledge or any
other forms of obligations.
3.
Transferor warrants, as to the effective date of this Agreement, Transferor has
not infringed any third party’s patents, copy rights, trademark intellectual
property rights or any other property rights with regard to the transfer assets,
and there is no third party has made any claims for these
rights. Upon and after the closing date, the exercise of the transfer
assets rights by Transferee will not infringe any third party’s patents, copy
rights, trademark intellectual property rights or any other property
rights.
4. As to
the effective date of this Agreement, Transferor has notified all third parties
that are related to the transfer assets with regard to the
transfer.
5.
Transferor didn’t make any promises, agreements or arrangements that could
create or cause any mortgage, lien, pledge or any other rights on the transfer
assets which will benefit any third party on or after the closing
date,.
6. As to
the closing date of this Agreement, Transferor hasn’t acknowledged any claims or
requests from any third party regarding to any part of the transfer assets which
could have negative impact on Transferee’s rights, nor has it had any direct or
indirect disputes, litigation or arbitration related to the transfer
assets.
7.
Transferor has disclosed to Transferee all the information related to the
transfer assets that Transferee needs to know for the daily operation of the
transfer assets, and hasn’t withheld any information the disclosure of which
might affect the execution of this Agreement.
8.
Transferor shall deliver the transfer assets list to Transferee on the date of
signature date of this Agreement.
The above
representations, warrants and covenants have the effect of tracing to the
effective date of this Agreement and will keep effect after the signature date
of this Agreement.
Article 7
Representations, Warrants and Covenants of the Transferee
1.
Transferee is a legally incorporated and existing legal entity under Chinese
Laws.
2.
Transferee has the full rights to conduct the assets transfer under this
Agreement and has obtained any authorization to execute and perform this
Agreement. Transferee’s board of directors have approved the assets transfer
under this Agreement by its resolution.
3. Make
the payments to Transferor according to the terms of this
Agreement.
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Article
8 Other Items
1.
Parties agree, based upon the principle of honesty and trust, Transferor shall
complete the assets transfer process within three working days of the signature
date of this Agreement.
2.
Transferor agrees to complete any other matters, including but not
limited to sign or have any third party to sign any documents or application, or
obtain any approval consent or permit, or complete any registration or filing
before the closing date. Parties further agree, upon the execution of this
Agreement, to make supplement agreements before the closing date, so the
transaction could be completed. The supplement agreement shall be an integrated
part of this Agreement.
Article 9
Liabilities for Breach
1.
Any party’s breach of its representation, warrants and covenants or any other
terms of this Agreement will be consider as a breach of the Agreement. The
breaching party shall pay full and adequate compensation to the other party,
including but not limited to the legal fees of another party due the breach
(including but not limited to the professional consulting fees) and lawsuits
with any third party or compensation to any third party (including but not
limited to the professional consulting fees).
2. On and
after the closing date, if there are any disputes or debts related to the
transfer assets which Transferor didn’t disclose to Transferee on or before the
closing date, Transferor shall try its best to solve it to avoid any damages to
the Transferee and the transfer assets. If such disputes or debts
cause any loss to the Transferee or the transfer assets, Transferor shall
compensate Transferee for all losses, and the Transferee has the right to reduce
at least 30% of the shares of XXXX common stock that it is required to issue to
the Transferor by this Agreement.
Article
10 Dispute Resolution
1. Any
disputes in connection with or arising out of this Agreement, Parties shall
solve it by friendly consultation. If it can not be solved by consultation, each
party will submit the dispute to China International Economic and Trade
Arbitration Commission in Beijing for arbitration which shall be conducted in
accordance with the Commission's arbitration rules in effect at the time of
applying for arbitration. The arbitral award is final and binding upon both
parties.
2. During
the arbitration, except for the disputed items or obligations, Parties shall
continue to perform other undisputed obligations under this
Agreement.
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Article
11 Entire Agreement
According
to Chinese law, if any terms are considered invalid by Arbitration Commission,
the validity of other terms of this Agreement shall not be
affected.
Article
12 Applicable Law
Any
issues relating to the execution, effectiveness, interpretation, performance and
disputes of this Agreement shall be governed by Chinese laws.
Article
13 Agreement Rights
Without
written consent by another party, no party shall transfer its rights and
obligations under this Agreement to any other party.
Article
14 Tax and Foreign Exchange
Parties
agree any taxes or fees required for each party by the Chinese laws due to its
performance of this Agreement shall be assumed by such party itself. If the
taxes or fees are required to be assumed by both parties, the parties shall
split it equally. If the Chinese Law requires any foreign exchange or
foreign debt registration or permit from government for Chinese citizen holding
shares of oversea’s company, Transferor shall comply with the Chinese law at its
own cost or arrange its own personnel to meet such requirements of the
laws.
Article
15 Force Majeure
1. Force
Majeure is the event that could not be controlled, foreseen or even is foreseen
but could not be avoided, and such event prevents, delays or affects any party
of the Agreement to perform all or part of its obligation. Such event includes
but not limited to earthquake, typhoon, flood, fire or any other natural
disaster, war, riot, strike or serious epidemic decease or other similar
events.
2. If
there is a force majeure event, the party suffering such event shall notify the
other party by the fastest possible measure, and it shall provide supporting
evidences within 15 days with details and reasons why such party cannot perform
all or part of its obligation or needs to delay its performance, then the
Parties shall consult whether to delay the performance of this Agreement or
terminate this Agreement.
Article
16 Exhibits
All the
exhibits of this Agreement are integrated parts of this Agreement and have same
legal effect.
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Article
17 Copies
This
Agreement is written in Chinese. There are two original copies and each party
holds one copy. Each original copy has same legal
effect.
Article
18 Others
1. Any
notice from one party to another in connection with this Agreement
shall be in written format and sent by personal delivery, fax, telex or
mail. If the notice is sent by personal delivery, it is considered as
delivered when it is sent to the other party’s mailing address and signature
demonstrating receipt has been obtained. If it is sent by fax or telex, it is
considered as delivered when the sender received the sent answer report from the
machine; if it is sent by registered mail, it is considered as delivered on the
5th working days after the mailing out date.
2. Any
change to this agreement shall be agreed upon in writing by both parties before
it could take effect. Any change and supplement to this Agreement is an
integrated part of this Agreement.
3. Any
party fails to or delays to exercise its rights or benefits under this Agreement
should not be considered as the waiver of such rights. Also, the partial
non-exercise of such rights should not prevent such party from exercising such
rights or benefits in the future.
4. The
rights or remedies under this Agreement are cumulative and don’t eliminate other
rights and remedies provided by Chinese Laws or provided by laws, regulations or
other legally enforceable measures and documents from Chinese government after
the closing date.
5.
Parties confirm that this Agreement will take effect upon the Parties or their
representatives’ execution of this Agreement.
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Transferor:
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Authorized
Representative:
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Transferee:
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Authorized
Representative:
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8
Exhibit
A
Transfer
Assets List
9
