Exhibit 10.5
Equity Transfer Agreement of
Jiangsu
Cold-Rolled Technology Co.,
Ltd.
Content
Article 2.
Equity Transfer
Article 3.
Conditions Precedent to Transfer
Article 4.
Price of Equity Transfer
Article 5.
Representations, Warranties and Undertakings
Article 6.
Liabilities for Breach of Agreement
EQUITY TRANSFER
AGREEMENT
The Equity
Transfer Agreement (the “Agreement”) was signed by
representatives from all the parties involved in Changshu City,
Jiangsu Province on August 18, 2006.
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Shanghai Huaye
Iron & Steel Group Co., Ltd.
Legal Address:
No.198, Gongyue Road, Yang Hang Industrial Park, Baoshan
District,
Legal
Representative: Feng Gao
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Huaye (Hong
Kong) International Group Co., Ltd.
Legal Address:
Unit A, 20/F, Empire Land Commercial Center, 81-85 Lockhart
Road,
Legal
Representative: Feng Gao
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Sutor Steel
Technology Co., Ltd
Registered
Address: P.O. Box 957, Offshore Incorporations Center, Road
Town,
Tcirtola ,
British Virgin Islands.
Legal
Representative: Lifang Chen
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The Transferor,
Shanghai Huaye Iron & Steel Group Co., Ltd., is a limited
liability company established and validly existing under the laws
of People’s Republic of China (“PRC”), and has
the necessary corporate power to sign the Agreement.
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The Transferor,
Huaye (Hong Kong) International Group Co., Ltd., is a limited
liability company established and validly existing under the laws
of Hong Kong Special Administrative Region of PRC, and has the
necessary corporate power to sign the Agreement.
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The Transferee
is a limited liability company established under the laws of
British Virgin Islands and has the corporate power to sign the
Agreement.
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Jiangsu
Cold-Rolled Technology Co., Ltd. is a Sino-Foreign Equity Joint
Venture established in PRC by the Transferor according to the Law
of PRC on Chinese-foreign Equity Joint Venture Enterprises and
other relevant laws. Jiangsu Cold-Rolled Technology Co., Ltd. has
registered capital of US $36,000,000, with the Shanghai Huaye Iron
& Steel Group Co., Ltd. and Huaye (Hong Kong) International
Group Co., Ltd. holding 75% and 25%, respectively.
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The Transferor
agrees to transfer all its equity in Jiangsu Cold-Rolled Technology
Co., Ltd. to the Transferee, and the Transferee agrees to purchase
such equity transferred by the Transferor.
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Therefore, both
parties agree as follows:
1.1 Unless
otherwise specified in the context, the following terms shall have
the meanings listed below:
Transferor:
Shanghai Huaye Iron & Steel Group Co., Ltd. and Huaye (Hong
Kong) International Group Co., Ltd.
Transferee:
Sutor Steel Technology Co., Ltd. established and existing under the
laws of British Virgin Islands.
Cold-Rolled
Technology: Jiangsu Cold-Rolled Technology Co., Ltd. legally
established under the PRC laws.
Original
Articles of Association: Articles of Association of Jiangsu
Cold-Rolled Technology Co., Ltd. and amendments thereof executed by
the Transferor before the signature of the Agreement.
Articles of
Association: Articles of Association of Jiangsu Cold-Rolled
Technology Co., Ltd to be executed by the Transferee for the
completion of the equity transfer under the Agreement.
Change of
Business Form: The Change of Cold-Rolled Technology from a
sino-foreign equity joint venture company to a wholly foreign owned
enterprise when the Transferor transfer to the Transferee all of
the equity in Cold-Rolled Technology.
Equity
Transfer: Transferor transfers all the equity to the Transferee,
and Transferee becomes the shareholder of Jiangsu Cold-Rolled
Technology with legally holding 100% of the equity in Jiangsu
Cold-Rolled Technology.
Transfer
Equity: Transferor transfers to Transferee 100% of the equity in
Jiangsu Cold-Rolled Technology legally held by the
Transferor.
Price of
Transfer: Hong Kong dollar/US dollar/ British pound equivalent to
RMB 1.204457 million Yuan. This price is determined by the net
capital value verified in Capital Verification Report with the
number of 93 rd Jingyongtuosu verified on 30
th , June 2006 issued by Beijing Yongtuo C.P.A. Co.,
Ltd.
Working days:
From Monday to Friday in each week, except for the statutory
holidays in People’s Republic of China as well as Hong Kong
Special Administrative Region of People’s Republic of
China.
Transfer
Effective Date: The date when the Agreement is executed by
Transferor and Transferee and the Agreement is approved by the
concerned governmental authority of foreign trade and
cooperation.
Transfer
Completion Date: The date when the Transferee pays off all the
transfer price to the Transferor and carries out the registration
procedure for the establishment of the new wholly owned foreign
enterprise.
PRC refers to
People’s Republic of China, excluding the following areas of
People’s Republic of China: Hong Kong Special Administrative
Region of People’s Republic of China, Marco Special
Administrative Region of People’s Republic of China and
Taiwan Province for the purpose of the Agreement.
1.2 Unless
otherwise specified, explanation of the Agreement is conducted as
follows:
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Title of
agreement is only for reference; it neither constitutes part of the
Agreement nor demonstrates any meaning of agreement.
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Annexes to the
Agreement are an integral part of the Agreement, having equal legal
effectiveness of the Agreement.
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If the deadline
of the period defined in the Agreement is in non-working days, then
the deadline will be automatically postponed to working days
following statutory holidays.
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Article
2. Equity Transfer
2.1 Subject to
satisfaction of conditions precedent to transfer provided in
Article 3, the Transferor hereby transfers 100% of equity in
Cold-Rolled Technology to Transferee. This Transfer will take
effect upon the date when the Agreement is approved by the
concerned governmental authority of foreign trade and
cooperation.
2.2 As of the
date for the Agreement taking effectiveness, Transferor will no
longer hold any equity in Cold-Rolled Technology.
2.3 Transferor
shall submit the following documents to Transferee prior to the
Transfer Effective Date:
(1) Board
resolution on the consent of Equity Transfer adopted by the Board
of Cold-Rolled Technology.
(2) All the
original and duplicate documents of Cold-Rolled Technology held by
the Transferor.
Transferor
shall fully comply with the above provisions and Article 3, or
otherwise Transferee shall not be obliged to complete the Agreement
or perform the obligation under Article 4.
Article
3. Conditions Precedent to Transfer
3.1 Transferor
and Transferee should cause the following conditions precedent to
Transfer to be met on the day of _______, 20
