URBAN NATURAL GAS PROJECT DEVELOPMENT AGREEMENT Party A: Construction Bureau of Sihong Country Party B: Beijing Zhong Ran Wei Ye Gas Co., Ltd. Date: July 23, 2004
[Stamp
Tax]
URBAN
NATURAL GAS PROJECT DEVELOPMENT AGREEMENT
Party
A: Construction
Bureau of Sihong Country
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Date: July
23, 2004
URBAN
GAS
DEVELOPMENT AGREEMENT
Contract
SN:
Signatory
Location:
Party
A: Construction
Bureau of Sihong Country
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Chapter
I General
Principles
|
1.1
|
WHEREAS,
(i) the development of Sihong Country requires the pipeline gas project
in
the urban area, (ii) based on the Contact
Law of the People’s Republic of China,
the
Cooperative Joint Venture Law of the People’s Republic of China
and
other relevant applicable laws and regulations, and (ii) after field
study
and friendly consultations, the Parties hereby agree as follows in
relation to the construction of the Pipeline Project in Sihong Country
(the “Agreement”).
|
Chapter
II Parties
|
2.1
|
Construction
Bureau of Sihong Country (hereinafter referred to as “Party
A”)
|
| 2.2 |
Beijing
Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter referred to as “Party
B”)
|
Chapter
III Establishment
of the Company
|
3.1
|
Party
A, authorized by and on behalf of the Government of Sihong Country,
agrees
that Party B will be responsible for the Pipeline Project of Sihong
Country and the total financing of the Pipeline
Project.
|
| 3.2 |
Name
of the Company: Xxxxxx
Xxx Ye Gas Co., Ltd.
|
|
3.3
|
The
registered capital of the Company is RMB 10 million and the total
investment for the Pipeline Project is RMB 100
million.
|
|
3.4
|
The
Company as a legal person under the PRC law: is subject to the
jurisdiction and protection of the PRC laws, regulations and relevant
rules (hereinafter referred to as “PRC
laws”),
and is authorized to conduct its business activities in compliance
with
the PRC laws.
|
Chapter
IV Business
Scope
| 4.1 |
Business
Scope of the Company: within
the urban planned area of Sihong Country, to: design, construct,
manage,
develop and operate the pipeline network of natural gas and its auxiliary
facilities, and provide relevant maintenance and emergency repair
services; construct and operate natural gas stations; supply natural
gas
and provide after-sale services to industrial transmission, commercial
construction, civic utility and public transportation; exploit natural
gas
reserves, design for the transportation and transmission thereof,
construct and management the operation related
thereto.
|
2
Chapter
V Exclusive
Operating Right
|
5.1
|
Party
A authorizes Party B to execute the pipe natural gas project within
the
urban planned area of Sihong Country and guaranties that Party B
has the
exclusive right to develop and construct the pipe gas project within
the
urban planned area of Sihong Country for 30
years.
|
|
5.2
|
Party
A will consider extending the 30 year exclusive operation term; provided,
that Party B can ensure the normal supply of gas during such
period.
|
|
5.3
|
If
Party A breaches this Agreement during the term of this Agreement,
Party A
shall bear the losses resulting from such breach. If Party A or any
of its
agents or entrusted parties breach this Agreement during the term
of this
Agreement (which causes Party B to lose the exclusive operating right
granted hereunder), Party A shall compensate Party B for its projected
economic benefits for the term of this Agreement.
|
Chapter
VI Rights
& Obligations of the Parties
|
6.1
|
The
Parties shall construct the Pipeline Project based to the high standards
and principles. Party B agrees that it shall construct a LNG gas
station
and pipeline network with the length of 7,000m and start gas supply
to the
first customers within 6 months after signing of this
Agreement.
|
|
6.2
|
Party
A shall be responsible for the coordination with the local government
and
relevant departments of the government and shall provide the following
warranties to Party B in the form of official government
documents:
|
| 6.2.1 |
to
grant Party B the exclusive right to construct and operate pipe natural
gas project within the urban planned area of Longyao Country for
30 years
and ensure the legality thereof; not to approve any new pipe gas
project
during such time; to guarantee that the pipeline networks constructed
by
Party B in Sihong Country pursuant to this Agreement accept natural
gas
when the long natural gas pipeline reaches Suqian, and the continual
operation of the pipeline network;
|
| 6.2.2 |
to
agree that the initial residential installation fee and the gas price
shall be charged according to bidding documents temporarily, and
shall be
no higher than the average price in the urban and surrounding areas
of
Suqian and approved by the department in charge of
pricing.
|
3
|
6.2.3
|
to
ensure that Party B shall enjoy the relevant government preferential
policies relating to business investment and raising of capital,
urban
infrastructure construction and land grant in Sihong Country. Considering
that the Pipeline Project is an urban infrastructure project, any
government fees to be incurred by Party B for the destruction of
municipal
roads for the construction of the condensed gas station and pipeline
network shall be charged according to the relevant
regulations.
|
| 6.3 |
Party
A shall be responsible for assisting Party B in the following
matters:
|
|
6.3.1
|
the
application and registration procedures to establish the gas project
company;
|
|
6.3.2
|
the
procedures for land use, planning, fire protection and commencement
of
project construction;
|
|
6.3.3
|
making
available water, electricity and transportation and handle other
infrastructure related matters and assisting Party B to organize
the
design and construction of the
project;
|
|
6.3.4
|
enjoying
favourable treatment;
|
|
6.3.5
|
timely
provision of the municipal planning and relevant materials to Party
B upon
its request;
|
|
6.3.6
|
implementation
of warranties in appendices to this
Agreement;
|
|
6.3.7
|
temporarily
taking over Party B’s operation and management [of the Pipeline Project]
in case of emergence;
|
|
6.3.8
|
handling
public complaints against Party B;
|
|
6.3.9
|
supervising
Party B to fulfill its legal
obligations;
|
|
6.3.10
|
investigating
the cost price of the company, and putting forward a proposal to
adjust
gas price.
|
| 6.4 |
Party
B’s Responsibilities
|
| 6.4.1 |
raising
funds for the Pipeline Project; starting to construct within 45 days
following the execution of this Agreement and ensuring a successful
connection between the gas station and customers of the first stage
within
6 months following the start of
construction;
|
|
6.4.2
|
project
design and construction, and operation management upon completion
of the
Pipeline Project;
|
4
|
6.4.3
|
ensuring
the continuous and safe gas supply except in the case of force majeure.
|
|
6.4.4
|
periodic
inspection, repair and maintenance of gas stations and pipelines
inside
and outside residential buildings according to the PRC rules to ensure
year-round safe operation; organizing safe production and allowing
supervision and inspection by the relevant governmental departments
in
accordance with the safety production regulations and industrial
safety
production specifications;
|
|
6.4.5
|
guaranteeing
that the quality of gas supplied hereunder complies with the relevant
PRC
rules;
|
| 6.4.6 |
organizing
project inspection by the relevant parties upon completion of the
Pipeline
Project;
|
| 6.4.7 |
The
deposit of XXX 000 xxxxxxxx xxxxx xx refunded to Party B after the
timely
completion of the first-stage milestones of the project. If Party
B
breaches this Agreement and the registered capital is not deposited
timely, Party A shall keep the deposit of RMB 500 thousand as an
amercement.
|
| 6.4.8 |
preventing
unauthorized and arbitrary termination and suspension of
operation;
|
| 6.4.9 |
timely
submission of organizational development plan, annual operational
plan,
annual report, and decisions of the
board;
|
| 6.4.10 |
timely
maintenance and renovation of production equipments and facilities
and
guarantee that the facilities are in good
condition;
|
| 6.4.11 |
If
Party B needs to change its name, address and legal representative,
it
shall inform Party A in written text in advance and obtain Party
A’s
approval first;
|
| 6.4.12 |
strictly
obeying the promises made in the bidding documents and submitting
tax in
accordance with the relevant regulations with no deduction
granted;
|
| 6.5 |
Party
A shall terminate the Exclusive Operating Right and take over it
upon
occurrence of any of the following behaviors of Party
A:
|
| 6.5.1 |
Disposition
of the franchise by transfer, lease, lien and
etc;
|
| 6.5.2 |
Pledging
the Company assets without
authorization;
|
| 6.5.3 |
Mismanagement
that causes serious quality and safety accidents and seriously affects
the
public interest;
|
5
| 6.5.4 |
Unauthorized
and arbitrary termination and suspension of operation that affects
the
public interest and safety; and
|
| 6.5.5 |
Other
situations as specified under the applicable laws, regulations and
rules.
|
Chapter
VII Miscellaneous
Provisions
| 7.1 |
Any
modification to this agreement and its supplemental agreement(s)
shall not
be valid and effective unless such modification is in writing and
signed
by both parties to this Agreement.
|
| 7.2 |
Should
any Party fail to perform any of its obligations under this agreement
or
materially breach the provisions of this agreement, which causes
the
project company to discontinue its operation or be unable to meet
the
operational purposes of the Pipeline Project as provided under this
agreement, the breaching Party shall be deemed to have unilaterally
terminated the agreement, and the non-breaching Party shall have,
in
addition to any right to and claim for damages, the right to apply
to the
original approving government authority for the termination of this
Agreement in accordance with this
Agreement.
|
| 7.3 |
Should
any Party be prevented from performing its obligations under this
agreement due to the occurrence of any event of Force Majeure such
as
earthquake, windstorm, flood, fire, war and any other unforeseeable
event
whose occurrence and consequences are beyond control, such Party
shall
immediately notify the other Party, and within 15 days [following
the
occurrence of such event], provide documents stating the details
of such
event, the reasons for complete or partial nonperformance by such
Party
and documents evidencing the occurrence of such events. Such documents
shall be issued by a notary public institution located at the place
where
such event occurs. The Parties shall negotiate whether to cancel
the
entire Agreement or to discharge certain obligations of the non-performing
party under this agreement based on the extent to which the performance
of
this Agreement has been affected.
|
| 7.4 |
Any
and all disputes arising out of or relating to the performance of
this
Agreement shall be settled by the Parties through friendly consultations.
If the disputes are not resolved through friendly consultations,
then each
party agrees to be subject to the jurisdiction of the People’s Court of
the locality where this Agreement is
executed.
|
| 7.5 |
In
the course of judicial procedures, the Parties shall continue to
perform
their respective obligations under this Agreement, with the exception
of
those parts of this Agreement which are under
dispute.
|
| 7.6 |
The
Parties may negotiate and execute documents to supplement this Agreement.
Such supplemental agreements shall have the same force and effect
as this
Agreement.
|
| 7.7 |
This
Agreement and any of its supplemental agreements shall not be binding
upon
any Party unless signed and sealed by the
Parties.
|
6
| 7.8 |
There
are four originals of this agreement. Each party holds two
originals.
|
| Party A (Seal): Sealed | Party B (Seal): Sealed |
| Representative (Signature): Signed | Representative (Signature): Signed |
| Date: July 23, 2004 | Date: July 23, 2004 |
7
SUPPLEMENTAL
PROVISIONS
Party
A: Construction
Bureau of Sihong Country
Party
B: Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Party
A
and Party B hereby execute the Supplementary Provisions to the Urban
Gas Development Agreement for
Pei Town Sihong County.
| 1. |
The
initial residential installation fees shall be charged in accordance
with
Urban
Gas Development Agreement for
Pei Town Sihong County,
and Party B agrees to pay Party A 5% of the initial residential
installation fee.
|
| 2. |
Party
B agrees to pay a fee on Exclusive Operating Right in accordance
with the
relevant regulations. (The fee on Exclusive Operating Right will
not be
paid temporarily if the PRC government does not propose any standard
thereof.)
|
| Party A (Seal): Sealed | Party B (Seal): Sealed |
| Representative (Signature): Signed | Representative (Signature): Signed |
| Date: July 23, 2004 | Date: July 23, 2004 |
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