Equity Transfer Agreement (this “Agreement”)
Exhibit
10.1
(this
“Agreement”)
Transferor
(Party A): Hunan Zhaoheng Hydropower Co., Ltd.
Address:
Power Station Road, Chujiang Town, Shimen County, Hunan Province
Legal
Representative: Xxxx Xxx
Title:
Chairman of Board
Transferee
(Party B): Hunan Jiuli Hydropower Construction Co., Ltd.
Address:
Xx.0, Xxxxx Xxxxx Xxxxxxx Xxxx, Xxxxxxxx Town, Shimen County, Hunan
Province
Legal
Representative: Xxxxxxx Xxxxx
Title:
Chairman of Board
In
accordance with the relevant PRC laws and regulations, and adherence to the
principles of willingness, fairness and honesty, Party A and Party B agree on
the following terms.
WHEREAS:
Zhaoheng
Winner (Shimen) Tungsten Company Limited., a joint venture (“Winner”,) was
incorporated in 2006. As of the date this Agreement was signed, the registered
capital of Winner was US$1 million of which, Wanqi Taibao China Tungsten Co.,
Ltd. contributed US$260,000, or 26% equity interests, Shenzhen Weileda
Technology Development Co., Ltd. contributed US$250,000, or 25%
equity interests, and Party A contributed US$490,000 (equivalent to
RMB3.92 million at the exchange rate when the contribution was made), or 49%
equity interests.
1:
Objects Transferred:
Party A
agrees to sell and Party B agrees to purchase 49% equity interests of Winner,
(the “Equity Transfer”) and all creditors’ rights in Winner that are
legitimately owned by Party A (the “Creditors’ Rights”).
2:
Consideration and Mode of Payment
2.1:
Party A and Party B agree that the consideration for the Equity Transfer is
RMB5,618,666.67, which includes the original capital contribution of RMB3.92
million equivalent at the exchange rate when the contribution was made and fixed
investment returns of RMB 1,698,666.67 as of June 30, 2009.
2.2:
Party A and Party B agree that the consideration for the transfer of the
Creditors’ Rights is RMB6,900,000.06, which includes the principal of RMB6
million and accumulated interests of RMB 900,000.06 as of June 30,
2009.
2.3:
Party A and Party B agree that, within 15 business days after this Agreement
takes effect, Party B shall pay Party A the total amount of RMB 12,518,666.73.
Party B shall pay Party A interests on overdue payment at the interest rate of
120% of the bench xxxx rate of the People’s Bank of China.
3. Rights
and Obligations of Both Parties
3.1:
Party A shall obtain the Board Resolution from the directors of Winner regarding
the Equity Transfer. After this Agreement takes effect, Party A shall provide
all relevant documents to assist Party B in amending the Register of
Shareholders and the articles of association of Winner and registering the
Equity Transfer with the Industrial and Commercial Administrative
Department.
3.2:
Since July 1, 2009, Party A shall no longer enjoy any equity and shareholder
interests in Winner. Party B shall become the legitimate owner of all equity
interests and Creditors’ Rights in Winner and bear all obligations attached to
the equities.
4. Taxes
and Fees in relation to the Transfer
Party A
and Party B shall bear their respective fees and taxes in relation to the Equity
Transfer and Creditors’ Rights transfer according to the laws and
regulations.
5.
Liabilities for Breach of this Agreement
5.1: If
Party B fails to make payment to Party A in accordance with article 2.3 of this
Agreement, Party B shall pay Party A penalty at a rate 0.5% of the overdue
balance per day. If the payment is overdue for more than 30 days, Party A is
entitled to terminate this Agreement unilaterally.
5.2: If
this Agreement is terminated due to force majeure or agreed upon by both
parties, Party A shall, within three days after such termination, refund the
payment, together with any interests calculated at the bench xxxx rate of the
People’s Bank of China, to Party B.. Party A shall pay Party B penalty on
overdue payment at the rate of 0.5% of the overdue balance per day.
6.
Dispute Settlement
Both
parties shall try to settle the disputes through amicable negotiations. If no
agreement can be reached, either party may submit the case to the People’s Court
where this Agreement was entered into. This Agreement is signed in Changde City
of Hunan Province.
7: The
Modification or Termination of this Agreement
7.1: This
Agreement may be modified or terminated under the following
situations:
7.1.1:
both parties agree to modify or terminate this Agreement without harm to
national and social interests;
7.1.2:
all obligations under this Agreement may not be fulfilled due to force majeure;
and
7.1.3:
either party fails to fulfill its obligations during contractual period, which
has been recognized by the other party.
Should
Party A and Party B agree to terminate this Agreement, Party A shall refund all
payment to Party B.
7.2:
Should any of the following conditions are met, either party is entitled to
terminate this Agreement in written notice without any legal
liabilities:
7.2.1:
the warrants and statements made by either party under this Agreement are false
and untrue; or
7.2.2:
either party violates this Agreement and damages the interests of the other
party.
8. The
Effectiveness of this Agreement
This
Agreement takes effect after being signed and sealed by both
parties.
9:
Miscellaneous
9.1:
Party A and Party B may sign supplementary agreements if there are issues not
covered in this Agreement.
9.2: If
the Agreement cannot be performed due to force majeure, liability is partially
or wholly exempted depending on the effect of the event of force majeure. An
event of force majeure occurring after a party has defaulted on his performance
does not exempt him from liability. If either party is unable to perform the
Agreement as a consequence of force majeure, he shall timely notify the other
party in order to mitigate the loss potentially incurred by that party, and
shall provide proof within a reasonable period of time.
9.3: This
Agreement is in 6 copies. Party A, Party B, Winner, the Industrial and
Commercial Administrative Department of Changde City, the Administration of
Foreign Exchange of Changde City, and the Bureau of Commerce of Changde City
shall each keep one copy.
Transferor
(Party A) (seal): Hunan Zhaoheng Hydropower Co., Ltd
Legal
Representative (or representative duly authorized): Xxxx
Xxx
Transferee
(Party B) (sealed): Hunan Jiuli Hydropower Construction Co., Ltd.
Legal
Representative (or representative duly authorized): Xxxxxxx
Xxxxx
Signed
on: June 29, 2009
