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EQUITY
TRANSFER AGREEMENT
(English Translation)
This Equity Transfer Agreement (the " Agreement
") is entered into by and among the following
parties on June 12, 2008 at Kaili City, Guizhou Province of
China:
Transferors:
(1) Huizong Zhang (hereinafter referred to
as " Transferor ");
Address: No. 164, Zhanghangou
Huilong Village Mihe Town Gongyi City, Henan Province.
ID: 410124196808250011
(2) Yuanwei Zhang (hereinafter referred to as "
Transferor ") ;
Address: No. 95 Xingzheng Road Mihe
Town Gongyi City, Henan Province.
ID: 41018119530103514
(3) Shuqin Yu (hereinafter referred to as "
Transferor ");
Address: No. 164, Zhanghangou
Huilong Village Mihe Town Gongyi City, Henan Province.
ID: 410181196901010108
The above three transferors are hereinafter
collectively referred to as the " Transferors ".
Transferee (the "Transferee"):
Henan GengSheng Refractories Co., Ltd.
Address: No. 88 Gengsheng Road Dayugou Town Gongyi City, Henan
Province.
The Transferors and the Transferee are
hereinafter referred to as the " Party " respectively and
the " Parties " collectively.
WHEREAS
The Transferors are the
shareholders of Xin Yu Abrasive Limited (the "Xin Yu"),
collectively holding 100 % shares of the Xin Yu (the "Shares"),
among which 56.8% equity held by Huizong Zhang, 26.6%equity held by
Yuanwei Zhang, and 16.6% equity held by Shuqin Yu
respectively.
WHEREAS
The Transferors agree to transfer all the
equities they hold to the Transferee.
NOW, THEREFORE , the
Parties hereby agree to enforce the Agreement as follows based on
the principle of good faith and mutual benefit:
Article 1 Share
Transfer
1.1 As per stipulations in this Agreement, the
Transferor, as the owner of all shares of the Xin Yu, shall
transfer such Shares to the Transferee (the "Transfer").
1.2 After the Transfer, the Transferee will own
100% shares of the Xin Yu and becomes the sole shareholder of the
Xin Yu.
Article 2 Transfer Price and
Payment
2.1 The Parties agree that the
total value of this Transfer is RMB6,000,000 (approximately
US$869,565), among which RMB3,408,000 (approximately US$493,913) to
be transferred to Huizong Zhang, RMB 1,596,000 (approximately
US$231,304) to be transferred to Yuanwei Zhang, and RMB 996,000
(approximately US$144,347) to be transferred to Shuqin Yu
respectively.
2.2 The Parties agree to pay the value of the
Transfer as follows:
(1) Upon the execution of this
Agreement, the Transferee will pay RMB 5,400,000 (approximately
US$782,608) to the Transferors to commence the transfer procedure
then the management team of Transferee shall start to operate the
Xin Yu.
(2) The
Transferee will repay the balance of RMB 600,000 (approximately
US$86,957) to the Transferors within 30 days after completing the
transfer registration with Commerce Department.
2.3 The Transferors shall provide the receipts to the Transferee
after receiving the payment.
Article 3 Transfer Procedure
3.1 Upon the execution of this Agreement, the
Transferors will transfer all the related documents including
original business certificate, tax registration certificate,
corporate code, corporate seals, financial approval stamp, contract
seal, and all the approved documents from government and contracts
upon the establishment of company. The procedures of the Transfer
shall be agreed by the Parties in written. The date of completion
of all the paperwork transfer is the date of the Transfer.
3.2 Upon the execution of this Agreement and the
completion of the Transfer, the Transferee shall be responsible for
all the procedures of registration of ownership transfer and the
Transferors shall provide all needed assistance.
3.3 The closing date of this Transfer is the date of the
registration of ownership to be approved by the Commerce
Department.
Article 4 Assets Disposal & Price of
Equity Transfer
4.1 The Xin Yu shall manage its assets prior to the Transfer as
follows:
(1) The Xin Yu shall continue to have rights of
use for all the tangible and intangible assets it owned before the
Transfer including smelting and abrasive production lines. The
Transferee will possess the ownership and the price of Transfer
will be concluded under Article 2 in this Agreement.
(2) The Transferors will enjoy all the rights
and interests of the raw materials, semi-finished products,
finished products and tools and parts listed on the book prior to
the Transfer. The Parties shall negotiate the price of the Transfer
if the Xin Yu will continue to have rights of u
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