Equity Ownership Transfer Agreement
Party
A：（First
Transferor）：
Shareholders
of Lingbao Yuxi Natural Gas Co., Ltd.：
Xxxxx
Xxxxx (99% ownership) and Xxxxxxx Xx (1% ownership)
Household
registered address： ID No.：
Household
registered address： ID No.：
Party
B：（Second
Transferor）：Lingbao Yuxi
Natural Gas Co., Ltd.
Address：
Legal
representative：
Party
C：（Transferee）：Xi’an Xilan Natural
Gas Co., Ltd. (“Xilan”)
Address：19th Floor,
Building B, Van Metropolis, Xxxx Xxx Xx., Hi-tech Zone, Xi’an
Legal
representatives：Xxxxx
Xx
According
to the Corporate Law of People’s Republic of China as well as other governing
laws and regulations, based on the principle of equality and mutual benefit,
Party A, B, and C have reached the following agreement (the “Agreement”)
regarding the joint transfer by Party A and B of the entire equity ownership and
the land use right in Lingbao Yuxi Natural Gas Co., Ltd. to Party C, Xi’an Xilan Natural
Gas Co., Ltd. (the “Transfer”)
Article
1 Content of
Transfer
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1.1
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Approved
by Shareholder Meeting of Yuxi, Party A, Xxxxx Xxxxx and Xxxxxxx Xx, agree
to transfer 99% and 1%, respectively, of their equity ownership in Yuxi to
Xilan.
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1.2
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Party
B agrees to transfer all assets of Xxxx to Xxxxx, including the land use
right, and acknowledges the appraised book value of ￥152,068,900
of Yuxi based on the following exhibited appraisal reports (collectively,
the “Appraisal Report”):
|
(1) “Summary
of Asset Appraisal Results” in “Summary of Asset Appraisal Report for Equity
Ownership Transfer of Lingbao Yuxi Natural Gas Co., Ltd.” (“Exhibit
(1)”);
(2) Part 10
of “Asset Appraisal Report for Equity Ownership Transfer of Lingbao Yuxi Natural
Gas Co., Ltd.”：the definition to
“appraisal results”(Exhibit (2) );
(3) “Categorized
Assets Appraisal Results” (Exhibit (3)).
|
1.3
|
Party
B agrees to transfer the land ownership of 3.042 Mu (0.44 acre) of Yuxi
and all local businesses’ exclusive
operation right to Party C.
|
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1.4
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Party
A simultaneously confirms that above-mentioned transfer excludes Xxxx’s total
liability of ￥144,534,400
as defined in Exhibits (1), (2), and (3), which will be assumed by Party A
on its own. Exhibit (3) of the Agreement exclusively defines the content
and coverage of the liability.
|
Article 2 Transfer Price and
Payment
The total
price of transfer under Article 1 of this Agreement is RMB 134 million
(“Transfer Compensation”), which will be paid to Party A by Party C according to
the following schedule:
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2.1
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Party
C will make the first payment of RMB 50 million to Party A within ten days
of the signing date of this
Agreement.
|
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2.2
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Party
C will make the second payment of RMB 70 million to Party A after Party A
and B complete the transfer of all tangible assets to Party C, subject to
the inspection and acceptance by Party
C.
|
|
2.3
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Party
C will make the third payment of RMB 14 million to party A after the
consummation of change in equity ownership registration of Yuxi at
regulatory government departments. In cases that the transferred assets is
less in value than in the appraisal report, appropriate amounts should be
deducted from the third payment subject to further negotiation between
Party A, B and C. In cases that the deduction brings the third payment
below zero, Party A and B agrees to return appropriate amount from
previous payments, subject to further negotiation between Party A, B and
C.
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2
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2.4
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Party
C will wire agreed payments to the bank account appointed by Party A.
Party A will distribute the payment according to their respective equity
ownership percentage. The accounts is: Industrial and Commercial Bank of
China, Sanmenxia Xiaoshan Ave. Branch, account holder:
Sanmenxia Yuxi Investment Co., Ltd.; account number:
1713022909200034327
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Article
3 Agreement
Implementation
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3.1
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Within
3 days of the receipt of the first payment, Party A will transfer all
equity ownership to Party C, and Party A and B will jointly, subject to
the interpretation and definition of Exhibit (1), (2) and (3), transfer
all assets and investment under Xxxx’s to Party C. Party A and B will
simultaneously submit to Party C the following documents, including but no
limited to: (1) Business License, Tax Registration Certificate,
Organization Code Certificate (annual inspection passed); (2) Official
seal, contract seal, treasury seal, bank account permit; (3) Accounting
records, documents and statements, tax documents; (4) Major construction
and engineering documents and blueprints will be based on the Appraisal
Report; (5) Other documents Party B deems necessary. The transfer of all
tangible assets is subject to inspection and acceptance of Party C, based
on the Exhibit (1) (2) and (3) of the Appraisal Report. Party C will
provide signature as acceptance upon complete of all necessary
procedures.
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3.2
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Yuxi
housing and land leases (collectively, the “Lease”). The lease period is
50 years for the land of 2.638 Mu (0.44 acre) with lease payment of RMB
4544 per year. The lease contract for the housing is 20 years with lease
payment of RMB 22000 per year. Payments are made annually. Party C will be
responsible for payments of the Lease starting 2009, and Party A have the
responsibility to assist Party C to renew and sublet the
Lease.
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3
Article
4 Party
B’s Debt and Liabilities
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4.1
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Party
A certifies that it has provided all of Party B’s debt and liabilities
(“Total Liability”) to Shaanxi Xinghua Fangzheng Asset Evaluation Co.,
Ltd. (“Xinghua”), the asset appraisal agency entrusted by Party C. Party A
agrees to the appraisal results provided by Xxxxxxx, attached here as
Exhibit (1), (2) and (3). Party A hereby certifies that Party B does not
have any other debt or liabilities besides the Total Liability, and there
exist no other outstanding claims against Xxxx’s
assets.
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4.2
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Party
A hereby guarantees the repayment of the Total Liability, including the
tax liabilities, as defined and interpreted in Exhibit (1), (2) and (3),
before the consummation of the transfer as mandated in Article 3 of this
Agreement. The Total Liability will be born jointly and exclusively by
shareholders of Party A, Party C will not be liable for the Total
Liability after the Transfer.
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4.3
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Party
C will be responsible for all liabilities, including tax liabilities
incurred after the change of equity ownership registration of Yuxi at
regulatory government departments.
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4.4
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Party
A hereby certifies that the equity ownership and the assets of Yuxi are
not pledged in any form, and no other material fact exists that prevent
the change of equity ownership registration. Party A will be responsible
for the change in equity ownership registration and the documentation in
shareholder record. Any liability resulted from disputes related to the
equity ownership before the registration change will be born jointly and
exclusively by shareholders of Party A; any liability resulted from
disputes related to the equity ownership after the registration change
will be born by Party C.
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4
Article
5 Breach
of Contract and Miscellaneous.
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5.1
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If
the equity ownership registration change is not fulfilled due to Party
A’s mistake,
misstatement, omission, or any other material breach of contract, Party A
will return all or part of the paid Transfer Compensation, together with
funds equal 10% of the total Transfer Compensation, as penalty of breach
of contract.
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5.2
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If
Party C didn’t make the
payments as mandated in this Agreement, Party A is entitled to 3‰ of the
due amount each day as penalty of delayed
payment.
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5.3
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The
exhibits are an integral part of this Agreement and bears the same legal
force as this Agreement.
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5.4
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In
cases of force majeure, Parties to this Agreement have right to rescind
the Agreement and their responsibilities under this Agreement
discharged.
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5.5
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Any
dispute over this Agreement will be negotiated by related parties, and any
unsolved dispute will be ruled by the local
government.
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5.6
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This
Agreement becomes effective when signed by relating parties and when Party
A provide the Shareholders Meeting Resolution. If any material matter is
not covered in this Agreement, related parties will sign (a) further
contract(s) as supplementary or superseding agreement governing this
Transfer.
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5.7
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This
Agreement has six duplicates with the same full legal force, three for
Party A and three for Party C.
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Party A:
Shareholders of Lingbao Yuxi Natural Gas Co., Ltd.：
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Xxxxx Xxxxx（Signature）：
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Dated：October 2,
2008
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Xxxxxxx
Xx（Signature）：
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Dated：October 2,
2008
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5
Party
B：Lingbao
Yuxi Natural Gas Co., Ltd.
Legal
Representatives（Signature）：
Company
Seal：
Dated：October 2,
2008
Party
C：Xi’an Xilan Natural
Gas Co., Ltd.
Legal
Representatives（Signature）：
Company
Seal：
Dated：October 2,
2008
6
