FORM 8-K
Exhibit 10.2
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CONTRACT TO DESIGN AND CONSTRUCT TRT SYTEM
This
Contract to Design and Construct TRT System (`Contract") is entered
on
this 26th Day of September, 2006 by and between
Xingtai Iron and Steel Co., Ltd ("Xingtai"), locate at No.262 Steel South
Road, Xingtai City,
Hebei Province,
People's Republic of
China, Postal
Code:
054027
and
Xi'an Yingfeng Science&Technology Co.,Ltd ("Yingfeng"), located
at Chang'an
International Square,
Suite B, Room 909, No. 88, Nan-Guan-Zheng Street, Xi'an
City, Shaanxi Province, People's Republic of China, Postal Code:
710068
(Xingtai and Yingfeng shall individually be referred to as a
"Party", and
collectively as the "Parties".)
In
accordance with the
Contract Law of the People's Republic of China and
other pertinent
laws and regulations of China, both Parties enter into the
following sections and
terms on the
principles of equality and mutual benefit
and through friendly negotiations:
Section 1. TRT Project
----------------------
This
is a Blast Furnace Top Gas Recovery Turbine Unit Project
(hereinafter
referred to as "TRT
Project") and will be
constructed
based on No.4 and
No.5
blast furnace owned by Xingtai.
Section 2. Cooperation Method
-----------------------------
(1)
The fund for designing and constructing the TRT Project will
be raised
by Yingfeng. A third
party, China Foreign
Economy and Trade Trust & Investment
Co.,Ltd ("FOTIC"),
which shall be capable
of fulfilling the qualifications for
capital lease,
will be invited by
Yingfeng. FOTIC will provide the capital
leasing service
for TRT Project. Xingtai and FOTIC will enter a Contract
of
Capital Lease.
(2)
Yingfeng agrees to
make payments of
deposit, commission
charges and
other fees associated with the financial affairs of TRT Project.
Xingtai agrees
to pay the monthly
rental to Yingfeng and FOTIC after the TRT Project is
completely constructed and relegated by Yingfeng.
Section 3. Technology Requirements
----------------------------------
Yingfeng designs the
project according to
the technology
documents and
plans ("Plan") attached to this Contract signed by Xingtai and
Yingfeng and such
design should be accepted by Xingtai. Yingfeng constructs the project
according
to the above-mentioned
Plan. The completed project should comply with such plan
and other industrial
standards and fulfill the requirement of connecting to
public electrical
wire in XingTai.
The appendices to this
Contract, such as
construction
technology agreement
entered in
accordance
with the Plan,
are
integral parts of this Contract and equally effective.
Section 4. Necessary Condition
------------------------------
Xingtai shall:
(1)
Apply for and acquire all the necessary license, approval and
certificates for land use and construction of the TRT project.
<PAGE>
(2)
Ensure that
the
pipeline
of
Blast
Furnace
Gasi(cent)wateri(cent)nitrogen and eletricity will be linked to construction
site of the TRT Project.
Section 5. Fund and Payment
---------------------------
(1) The total amount
of fund for the TRT Project is Thirty Million RMB Yuan
((pound)*30,000,000), which
include
the cost
of
design,
constructioni(cent)equipments and financial affairs.
(2)
Project rental:
Base on the
investment
forecast, Xingtai will make
monthly rental payment of Nine Hundred Thousand RMB Yuan
((pound)*900,000)
to
Yingfeng and FOTIC for total 60 months.
As the actual
investment
is
confirmed by
both Parties, monthly rental payment will be adjusted
accordingly. The
formula of adjustment is: Monthly Rental Payment(RMB Yuan
in
10
Thousands)=(pound)*900,000 x Actual Investment (RMB Yuan in 10
Thousands)/(pound)*30,000,000.
(3)
Project fund payment: Yingfeng will relegate the TRT project to
Xingtai
when
it is completed
and under working order. Xingtai shall make the
monthly rental
payment set forth in Section 5 (2) of this Contract to
Yingfeng and FOTIC,
starting from either
the first day or the 16th day of
the
month following the
relegation. Xingtai
shall make the monthly rental
payment to Yingfeng and FOTIC within three business days following the
end
of
the prior month.
(4)
Within the term of this Contract, Xingtai may redeem all the
remanent
payment of principal
under the Contract.
If the Xingtai
terminates
the
Contract for cause of redemption, at any time, Xingtai may purchase
all the
assets of TRT Project.
The amount of payment
should be discussed
between
both
Parties.
Section 6. Constructing Peri
