Emission Reduction Purchase Agreement

Emission Reduction Purchase Agreement

Emission Reduction Purchase Agreement                                                                                                             Page 1 of 11

Exhibit 10.5

EMISSION REDUCTION PURCHASE AGREEMENT

between

(the "Purchaser")

UNITED BEST TECHNOLOGY LIMITED COMPANY
Address: Sui 1001 – 4 A, Champion building
287 – 291 Des Voeux Road, Central Hong Kong
Telephone: 852 – 2405 6999
Fax: 852 – 2492 3777
Email: trivutruong2004@yahoo.ca
President – General Director : Dr. Truong Tri Vu

and

(the " Tram Tau Hydro Power-CDM Project Proponent")., henceforth “Vietnam Project Proponent”

Sponsor: ThangLong Education Development and Construction Import Export
Investment Joint Stock Company.

Address: No. 116, Hoang Quoc Viet Street, Cau Giay District, Ha Noi, Vietnam.
Telephone: +84 4 7 544 341
Fax: +84 4 7 544 304

Chairman of the Board: Mr. Vu Nguyen Sang

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:

 


Emission Reduction Purchase Agreement                                                                                         Page 2 of 11

Interpretation and Definitions 
In this Agreement, unless otherwise required by the context, all capitalized terms shall have the 
meaning set forth in the definitions below. 
 
Additional  means any Certified Emission Reduction (CER) generated by the Project 
Emission  that is in excess of [50,000] Certified Emission Reductions (CERs) per 
Reduction:  annum. 
 
Agreement:  means this Emission Reduction Purchase Agreement. 
 
Annex B Countries:  means the countries listed in Annex B to the Kyoto Protocol having 
  committed themselves to reduce or limit their GHG emissions. 
 
Annex I Countries:  means the parties to the UNFCCC listed in Annex I thereto (Annex I 
  consists of industrial countries and countries in transition). 
 
Anticipated  means up to [50,000] Certified Emission Reductions (CERs) per annum 
Emission  during the Crediting Period, anticipated to be generated by the Project 
Reduction:  and calculated in accordance with the Kyoto Rules. 
 
Baseline:  means the scenario that reasonably represents the anthropogenic 
  emissions of GHG that would occur in the Host Country in the absence of 
  the Project, determined in accordance with the Kyoto Rules. 
 
Business Day:  means a day on which banks are open for general business in Vietnam. 
 
Carbon Dioxide  means a metric measure used to compare the emissions of various GHG 
Equivalent:  based upon their global warming potential. 
 
Certification:  means the written confirmation by an Operational Entity of an Emission 
  Reduction resulting from a CDM project and having passed the 
Verification procedure according to the Kyoto Rules.
 
Certified Emission  means a unit of Emission Reduction issued pursuant to Article 12 of the 
Reduction (CER):  Kyoto Protocol and the requirements of the Kyoto Rules (including 
  Certification), equal to one metric ton of Carbon Dioxide Equivalent 
  resulting from a CDM project. 
 
Clean Development  Means the flexible mechanism established by Article 12 of the Kyoto 
Mechanism (CDM) :  Protocol providing for Annex I Countries to implement projects that reduce 
  emissions in non-Annex I Countries in return for CERs and assist the non- 
  Annex I Countries in achieving sustainable development and contributing 
  to the ultimate objective of the UNFCCC. 
 
Crediting Period:  means, until December 31, 2026. 
 
Emission  means reduction in emission of GHG achieved, calculated in accordance 
Reduction:  with the Kyoto Rules. 
 
Executive Board:  means the international authority elected by the representatives of the 
  parties to the Kyoto Protocol responsible for monitoring the CDM process. 
 
First Commitment  means January 1, 2007 until December 31, 2026. 
Period:   
 
Force Majeure:  means any circumstance or condition beyond the control of either party to 
  this Agreement affecting the performance of its obligations under this 
  Agreement including in particular wars, insurrection, natural disaster or 
  equivalent circumstances. 

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:

 


Emission Reduction Purchase Agreement                                                               Page 3 of 11 
 
 
Greenhouse Gases  means the six gases listed in Annex A to the Kyoto Protocol. 
(GHG):   
 
Host Country:  Vietnam 
 
Kyoto Protocol:  means the protocol to the UNFCCC adopted at the third conference of the 
  parties to the UNFCCC in Kyoto, Japan, on December 11, 1997. 
 
Kyoto Rules:  means the UNFCCC, Kyoto Protocol, the Bonn agreement, the 
  Marrakesh Accords, any relevant decisions, guidelines, modalities and 
  procedures made pursuant to them and/or any succeeding international 
  agreements as amended and/or supplemented from time to time and 
  which include those rules specifically required to be met for the issuing 
  and transfer of CERs. 
 
Letter of Approval  means a binding approval of the Project by the Host Country together with 
(LOA):  an approval of the transfer of CERs. 
 
Monitoring Report:  means an annual report to be provided by Owner setting out the total 
  number of Emission Reductions generated by the Project during the 
  previous year according to the Kyoto Rules, international Monitoring rules 
  and the PDD. 
 
Monitoring:  means the collection and record of data allowing the assessment of 
  reductions in GHG emissions resulting from the Project conducted in 
  accordance with the Kyoto Rules. 
 
Operational Entity:  means an independent entity accredited by the Executive Board being the 
  executive body for CDM and inter alias responsible for determining 
  whether a project and the resulting Emission Reductions meet the 
  requirements of Article 12 of the Kyoto Protocol. 
 
Project Design  means a detailed description of the Project to be submitted for Validation 
Document (PDD):  prepared in accordance with the Kyoto Rules, the UFG and the Directive 
  and attached as Annex III. The Purchaser will be responsible for providing 
PDD development for Registration of the Project.
 
Project:  means the proposed CDM project described in the PDD and other 
  documents describing the implementation and economics of the Project 
  attached in Annex IV. 
 
Registration:  means the official registration of a CDM project by the Executive Board 
  according to the Kyoto Rules. 
 
UNFCCC:  means the United Nations Framework Convention on Climate Change 
  adopted in New York on May 9, 1992. 
 
Unit Price:  means the price payable by Purchaser to Project Proponent per Certified 
  Emission Reduction (CER) which is equal to: 
 
  The United Best Technology Limited Company will purchase certified 
  CER generated by this project for the year 2007 to 2012 with options of 
  extension for another 7 years plus 7 years under same terms and 
  conditions. The Project Proponent will be paid (85)% of net revenue from 
  sale of certified CER generated as received by Viet nam Project 
  Proponent from this project after initial one time $(75,000)USD of first 
  revenue payment to The United Best Technology Limited Company for 
  the funding the CDM process. The purchase price by The United Best 
  Technology Limited Company is fixed as (10)$US/CER minus tax and 
  sale commission. 

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:

 


Emission Reduction Purchase Agreement                                                                    Page 4 of 11 
 
 
Validation:  Means the assessment of the PDD, including the Baseline, by an 
      Operational Entity, determining its compliance with the Kyoto Rules. 
 
Verification:  means the periodic independent review and ex post determination of the 
      monitored reductions in GHG emissions that the Project has achieved 
      during a specified period of time by an Operational Entity in accordance 
      with the Kyoto Rules. The project's owner will be Responsible for 
      providing periodical monitoring. 
 
 
Unless otherwise specified, references to clauses are to clauses of this Agreement, references to 
legal provisions are references to such provisions as in effect from time to time, use of a gender 
includes any gender and use of the plural includes the singular and vice versa where the context 
requires.   
 
All headings and titles are inserted for convenience only and shall not be deemed part of this 
Agreement or taken into consideration in its interpretation. 
 
 
1. Preamble
 
  The Project is located on the territory of the Host Country. 
  
 
2. Contractual Obligations 
 
2.1. Anticipated Emission Reductions 
 
2.1.1.   Upon Registration of the Project, Purchaser shall endeavor to implement the Project in 
    accordance with the PDD and other documents describing the implementation and 
    economics of the project attached in Annex IV at its own risk and expense. It is hereby 
    acknowledged and agreed between the parties hereto that Purchaser does not warrant 
    the generation of, and is not obliged to generate, any CERs, whether by the Project or 
    otherwise.   
 
2.1.2.   If the Project generates CERs, Project Proponent shall, to the extent it is legally possible 
    and permissible, transfer or cause to be transferred to Purchaser all rights (and, to the 
    extent legally possible and permissible, legal title) which Project Proponent may have in 
    the Anticipated Emission Reductions generated during the Crediting Period to Purchaser. 
 
2.1.3.   Purchaser shall pay to Project Proponent the Unit Price for each Anticipated Emission 
    Reduction generated by the Project and in which the Project Proponent's rights are 
    transferred to Purchaser in accordance with clause 3 below. 
 
2.2.   Additional Emission Reductions 
 
2.2.1.   If Additional Emission Reductions are generated by the Project during the Crediting 
    Period, Project Proponent shall offer any Additional Emission Reductions to Purchaser 
    subject to the terms and conditions of this Agreement and at a price per Additional 
    Emission Reduction equal to the Unit Price. If Purchaser does not wishes to exercise the 
    purchase option then Project Proponent may deal with the Additional Emission 
    Reductions as it wishes. 
 
2.2.2. Additional Emission Reductions offer by the Purchaser shall be made as soon as possible 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                               Page 5 of 11 
  
  
    after such Additional Emission Reductions have been generated, but no later than 
    December 31 of the year subsequent to the calendar year in which such Additional 
    Emission Reductions have been generated. 
  
2.2.3.   Purchaser shall be entitled to accept such offer as a whole or in part and shall notify to 
    Project Proponent within one month after receipt of such offer, whether and to what 
    extent it accepts the offer. If Purchaser does not respond within this deadline the offer 
    shall be deemed to be rejected by Purchaser. 
  
2.2.4.   To the extent Purchaser accepts the offer, Project Proponent shall, to the extent it is 
    legally possible and permissible, transfer or cause to be transferred to Purchaser all 
    rights (and, to the extent legally possible and permissible, legal title) which Project 
    Proponent may have in those Additional Emission Reductions in respect of which 
    Purchaser has accepted such offer, within two months after acceptance of such offer by 
    Purchaser. 
  
2.2.5.   To the extent Purchaser rejects such offer of Additional Emission Reductions or such offer 
    is deemed rejected by Purchaser, Project Proponent shall be free to enter into contracts 
    with other parties for the sale of such Additional Emission Reductions or to otherwise 
    deal with such Additional Emission Reductions as Project Proponent wishes. 
  
2.2.6.   Purchaser shall pay to Project Proponent a price equal to the Unit Price for each 
    Additional Emission Reduction in respect of which Purchaser has accepted such offer. 
  
2.3.   Emission Reductions generated after the Crediting Period 
  
    If the Project generates any Certified Emission Reductions after the Crediting Period, 
    Purchaser shall enter into negotiations with Project Proponent with a view to concluding 
    an agreement on the purchase of such Certified Emission Reductions based on the 
    principles of this Agreement but amended in order to reflect the international and/or 
    national rules then applicable. 
  
   
   
3.   Transfer 
  
    Transfer to Purchaser of all the rights (and, to the extent legally possible and permissible, 
    legal title) which Project Proponent may have in a Certified Emission Reduction shall 
    have occurred upon the transfer of a CER from the register of the Executive Board to a 
    register in favor of Purchaser or such other account or register Purchaser has notified to 
    Project Proponent in writing. 
  
  
  
4.   Payment 
  
4.1.   Payment for Certified Emission Reductions 
  
4.1.1.   Payment by Purchaser to Project Proponent for the Certified Emission Reductions (the 
    rights in which are transferred pursuant to clause 3) shall be made on the last Business 
    Day of the month in which a 40 Business Day period, starting at the day on which 
    Purchaser has received satisfactory evidence of the transfer as provided for in Clause 3, 
    has elapsed. 
  
4.1.2.   All payments shall be made to the accounts specified in Annex [I] hereto or such other 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                                      Page 6 of 11 
 
 
    account as may from time to time be notified to the other party in writing. 
 
4.1.3. All payments shall be made in US Dollars. 
 
4.1.4. Subject to clause 4.1.5 below, all taxes, fees, costs or other expenses in connection with 
    the generation of CERs by the Project and their Registration and transfer (including VAT 
    in any jurisdiction Purchaser duly notifies Project Proponent to transfer CERs as in 
    Clause 3, if applicable) shall be borne by Project Proponent and purchaser. 
 
4.1.5. The share of the proceeds from CERs generated by the Project to be used to cover 
    administrative expenses according to the Kyoto Rules shall be borne by Project 
    Proponent and Purchaser in equal shares . 
 
    The share of the proceeds from CERs generated by the Project to be used to assist 
    developing countries that are particularly vulnerable to the adverse effects of climate 
    change to meet the costs of adaptation according to the Kyoto Rules shall be borne by 
    Project Proponent and Purchaser in equal shares. 
 
 
5.   Termination and Remedies 
 
5.1. Either party (the "Non-defaulting Party") shall be entitled to terminate this Agreement by 
    written notice to the other party with immediate effect if any of the following events 
    occurs: 
 
5.1.1.   the other party commits a breach of any of its obligations under this Agreement and, in 
    the case of a breach capable of being remedied, such breach remains unremedied for 
    more than 30 Business Days after it has been requested in writing by the Non-defaulting 
    Party to remedy the breach; or 
 
5.1.2.   the other party goes into liquidation (whether voluntary or otherwise), is unable to pay its 
    debts as they fall due, is wound up, makes any compromise, composition or other 
    arrangement with its creditors generally, or becomes subject to any administration order. 
 
5.2. Force Majeure 
 
    Should either party be impeded wholly or in part from fulfilling any of its obligations under 
    the Agreement for reasons of Force Majeure, such obligation shall be suspended to the 
    extent and for as long as such obligation is affected by Force Majeure and the impeded 
    party shall be entitled to such extension of time as may be reasonably necessary. 
 
    Either party shall notify the other party of the existence and date of beginning of an event 
    of Force Majeure that is likely to impede its performance under the Agreement within 5 
    Business Days after having obtained knowledge of any such event. Either party shall 
    likewise advise the other of the date when such event ended and shall also specify the 
    re-determined time by which the performance of its obligations hereunder is to be 
    completed. 
 
    Project Proponent and Purchaser shall consult with each other with a view of determining 
    any further appropriate action if a condition of Force Majeure is to continue after 20 
    Business Days from the date of giving notice thereof. 
 
    Neither party shall be liable for damages or have the right to terminate this Agreement for 
    any delay in performing hereunder if such delay is caused by Force Majeure; provided, 
    however, that the non-impeded party shall be entitled to terminate such part of the 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                            Page 7 of 11 
 
 
    Agreement that remains unfulfilled, if the condition of Force Majeure is to continue after 6 
    months from the date of giving notice thereof. 
 
 
6.   Change in Circumstances 
 
    If any change in circumstances (i.e. a change of scientific basics or applicable standards 
    relating to the Baseline methodology and/or the applicable criteria for Verification and 
    Certification of the resulting Emission Reductions) occurs which substantially affects the 
    Project, the parties to this Agreement shall enter into negotiations with a view to adapt 
    the Project and its implementation or any relevant provision of this Agreement, as may 
    be necessary or useful. A change in circumstances shall in no event be considered 
    substantially affecting the Project if at least 50% of the Anticipated Emission Reductions 
    can be generated. 
 
    The parties to this Agreement shall cooperate and make their best efforts to enable the 
    continuation of the Project in accordance with the new circumstances and to achieve the 
    generation and transfer of the Anticipated Emission Reductions. 
 
    If any of the documents related to the Project and submitted at any time during the term 
    of this Agreement fails to be approved by such authority whose approval is required 
    under the Kyoto Rules or otherwise appears to be non-compliant with any relevant 
    standards or conditions of the Kyoto Rules, Project Proponent and Purchaser shall 
    discuss whether or not the relevant documents are to be revised and resubmitted. 
 
 
7.   Conditions Precedent 
This Agreement shall enter into force upon satisfaction of the following conditions precedent: 
1. Conclusion of a binding agreement with the Host Country.
  
8.   Miscellaneous 
 
8.1.   Assignment and subcontracting 
    Neither party shall, without the written consent of the other party, assign or transfer the 
    Agreement or the benefits or obligations thereof or any part thereof to any other person. 
 
8.2.   Confidentiality and Disclosure 
    The parties shall treat as confidential all information obtained as a result of entering into 
    or performing this Agreement which relates to the provisions of this Agreement, the 
    negotiations relating to this Agreement and the subject matter of this Agreement. 
 
    No party shall disclose any such confidential information to any third party, except in 
    those circumstances where disclosure is required in order to comply with any laws or 
    regulations, including without limitations the Kyoto Rules. 
 
8.3.   Notices 
 
    Any communications to be made under or in connection with this Agreement shall be 
    made in writing (including by facsimile) to the address or facsimile number, from time to 
    time designated by the party to whom the communication is to be made to the other party 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                                     Page 8 of 11 
 
 
    for that purpose. The address and facsimile number so designated are set out in Annex 
    [I] hereto. A 
 
    Communication will only be effected, if sent by mail, when delivered to or rejected by the 
    recipient, if sent by facsimile, when a transmission report shows that the facsimile has 
    been sent.
 
8.4.   Entire Agreement
 
    This Agreement embodies the whole and only agreement of the parties with respect to 
    the subject matter hereof, and no prior or contemporaneous oral or written agreement or 
    understanding shall be deemed to constitute a part of this Agreement, unless expressly 
    referred to herein, or attached hereto, or specifically incorporated by reference herein. 
    The Annexes and schedules to this Agreement constitute integral parts of this Agreement 
    and shall therefore be deemed part of this Agreement.
 
8.5. Amendments
 
    This Agreement may only be amended with the written consent of the parties hereto. 
 
8.6. Costs and Expenses
 
    Each party shall bear its own costs and expenses in relation to the negotiation, 
    preparation, execution and carrying into effect of this Agreement.
 
8.7. Severability
 
    If any part or provision of the Agreement is or becomes illegal, void or unenforceable in 
    any respect, the remaining parts or provisions shall not be affected or impaired. Any 
    deficiency in the Agreement resulting there from shall be amended by way of 
    interpretation of the Agreement having due regard to the parties intent.
 
8.8. Governing law
 
    This Agreement shall be governed and construed in accordance with English law 
    excluding its rules on conflicts of laws.
 
8.9.   Jurisdiction
 
    The parties irrevocably submit to the exclusive jurisdiction of the courts having jurisdiction 
    in commercial matters for England with regard to all disputes arising out of or in 
    connection with this Agreement, its violation, termination or nullity.
 
8.10.   Counterparts
 
    This Agreement shall be executed in two counterparts with one copy for Project 
    Proponent and one for Purchaser. If there are any discrepancies between the English 
    and the Vietnamese version, the Vietnamese version will prevail.

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                                             Page 9 of 11

PARTIES TO THE AGREEMENT

WHEREOF the parties have agreed to the terms and conditions of this agreement as outlined above, this 18 day of 01, 2008, in the presence of:

Purchaser:   
   
   
 
                                                        DR. TRUONG TRI VU  
President-General Director : Dr. Truong Tri Vu
                                                         
Project Proponent:   
  
 
  
                                                         VU NGUYEN SANG 
Chairman of the Board: Mr. Vu Nguyen Sang
                                                         
  
Witness No 1  Witness No 2 
  
  
BUI THI LAN HUONG  LE QUOC HUNG 
Ms. Bui Thi Lan Huong  Le Quoc Hung, ME 
CERtech Inc Canada  Viet nam 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                                                                                           Page 10 of 11

ANNEX I:
1. The salient features of Tram Tau Hydro Power Project at Tram Tau district in Lang Son 
Province, Vietnam.       
 
No  Parameters  Symbols  Units Value 
1  Catchment area  F  km2 198 
2  Long-term average annual rainfall  Xo  mm 2436 
3  Average flow  Q0  m 3/s 10.39 
4  Total amount of average annual flow  W0  106 m3 327.7 
5  Specific runoff  M0  l/s.km2    
6  Normal water level  MNDBT  m 626 
7  Dead water level  MNC  m 620 
8  Surface area with normal water level  F  Km2 5 
9  Designed head  Htt  m 167.40 
10  Designed discharge  QTK  m3 16.87 
11  Installation capacity  Nlm  MW 24 
12  Firm capacity P=85%  Ndb  MW 3.74 
13  Number of unit  z     04 
14  Estimated Annual Electricity Generation  Eo  106 95.45 
15  Estimated Annual Operation Hours  hsd  h 3977 
16 Annual estimation of the emission
reduction, tCO2 eq 
CERs tCO2 eq 55,360
17  Resettlement     person 50 
18 Compensation (land, tree, farm, property, etc...)    106 USD    5
19  It is run off river hydropower plant        yes 
 20 New hydropower project with reservoirs
having power densities (installed capacity
devided by the surface area at full reservoir
level) greater than 4 W/m2 . 
    4.8

2. Project time schedule.
- -
Year of 2008: the feasibility study stage is planned to be completed by the 2nd quarter of 2008.
- -
Year of 2008: the technical design stage is planned to be completed by the 4th quarter of 2008.

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1:


Emission Reduction Purchase Agreement                                                                                          Page 11 of 11

- Year of 2009: Preparing work and opening ceremony of project is planned by the 1st quarter of 2009.

- Year of 2009 – 2010: Buying the equipments and construct some main items.

- Year of 2010: Operation of unit 1 by the 2nd quarter of 2010, completing of project by the 4th quarter of 2010.

- Preparing work and opening ceremony of project is planned by the 4th quarter of 2008.

- Year of 2009 – 2010: Buying the equipments and construct some main items.

- Year of 2011: Operation of unit 1 by the 1st quarter of 2011, completing of project by the 3rd quarter of 2011.

 

Initial VN Hydro Power CDM Project Proponent:______Initial United Best Technology Limited-1: