Technology Service Agreement by and among Tianjin Shengkai Industrial Technology Development Co., Ltd. Shengkai (Tianjin) Ceramic Valve Co., Ltd. and
by
and among
Tianjin
Shengkai Industrial Technology Development Co., Ltd.
Shengkai
(Tianjin) Ceramic Valve Co., Ltd.
and
The
Shareholders of Tianjin Shengkai Industrial Technology Development Co.,
Ltd.
May
30th,
2008
This
Technology Service Agreement (“this Agreement”) is executed by the following
Parties on May 30th,
2008 in
Tianjin, PRC:
| (1) |
Tianjin
Shengkai Industrial Technology Development Co., Ltd. (hereinafter called
“Party A”) is a limited liability company, duly incorporated in Tianjin,
People’s Republic of China (“PRC”) whose legal address is: Room324, 3/F,
1stStreet, Tianjin Economic-Technological Development
Area.
|
| (2) |
Shengkai
(Tianjin) Consulting Company Limited (hereinafter referred to as “Party
B”) is a wholly
foreign owned enterprise (“WFOE”) duly incorporated in Tianjin, PRC, whose
legal address is:Room
▇▇-▇▇▇,▇▇.▇▇▇ ▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇▇ Logistic Processing
Zones,Tianjin.
|
| (3) | All of the shareholders of Tianjin Shengkai Industrial Technology Development Co., Ltd. (hereinafter collectively called the “Shareholders”). |
|
Name
of Each Shareholder
|
|
Shareholding
Ratio (%)
|
|
ID
Card No.
|
|
Contact
Address
|
|
▇▇▇▇
▇▇▇▇
|
|
71.39%
|
|
120103196412022118
|
▇▇▇-▇▇▇,▇▇▇▇
▇,▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,▇▇.▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, Heping District,
Tianjin
|
|
|
▇▇▇
▇▇▇
|
|
13.33%
|
|
120103196607222128
|
▇▇▇-▇▇▇,▇▇▇▇
▇,▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,▇▇.▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, Heping District,
Tianjin
|
|
|
▇▇▇▇
▇▇▇▇▇▇
|
|
6.55%
|
|
2310851197903050762
|
Tuanjie
Wei, Muleng Town, Muleng City, Helongjiang Province
|
|
|
Ji
Haihong
|
|
6.55%
|
|
140102197002012349
|
▇▇.▇,▇▇▇▇▇,▇▇▇/▇,▇▇.▇▇,▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇
|
|
0.48%
|
|
51010319740824628X
|
▇▇.▇,▇▇▇/▇,
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇
|
|
0.48%
|
|
110108197106111811
|
No.1905,No.1Building,
Yangguang 100 ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇
|
|
0.48%
|
|
440402197211205769
|
▇▇▇▇
▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇ ▇,▇▇.▇▇▇▇,▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ RoadôXiangzhou
District,Zhuhai City,Guangzhou Province
|
|
|
▇▇
▇▇▇▇▇▇▇
|
|
0.37%
|
|
120106196505060526
|
▇▇.▇▇▇,▇▇▇▇
▇,▇▇.▇▇ ▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇ ▇▇▇▇▇▇,▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇
|
|
|
Liu
Naifan
|
|
0.37%
|
|
372832196010257414
|
Dormitory
District,Yinan Gold Mine,Yinan County,Shandong
Province
|
(Party
A,
Party B and
the
Shareholders are referred to collectively in this agreement as the “Parties” and
individually as “a Party” or “each Party”.)
2
WHEREAS:
| (1) |
Party
A’s business scope is as follows:
The design, manufacturing and marketing of Environmental pollution
control
equipments (including flue gas desulphurization governance, de-dusting
equipment); the production and manufacturing of industrial control
systems
of its transportation systems and equipments; the design, manufacturing
and marketing of ceramic valves; the manufacturing environmental dedicated
instrumentation electronic equipments; the manufacturing of ceramic
coatings; the manufacturing and sale of high-tech ceramics;
electromechanical products (except cars), chemical products (flammable,
explosive, dangerous goods except prone to cause toxicity); technical
consultation; technical services; operating the enterprise home-grown
products as well as related technology import and export
business;
|
| (2) |
Party
B is engaged in researching, developing, technology consulting service
of
ceramic valves and ceramic materials;
|
| (3) |
The
Parties agree that Party B shall provide Party A with technology services,
such as is
researching, developing, technology consulting, technology service
of
ceramic valves and ceramic materials;
|
| (4) | The Shareholders hold 100% of the equity interests in Party A. |
NOW
THEREFORE,
the
Parties hereby agree through friendly negotiation as follows:
Article
1 Definitions
1.1
“PRC”
refers to the People’s Republic of China, for the purpose of this Agreement,
excluding the Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan Provinceå
3
1.2
“PRC
Laws” refers to all PRC laws, administrative regulations and government rules in
effect;
1.3
“RMB”
refers to the legal currency within the PRC;
1.4
“Technology Service Fee” or “Consideration” refers to the consideration as
defined in Article 3.1 and to be paid to Party B by Party A.
Article
2 Contents of Technology Services
2.1
Select, purchase and update the proper software on finance management in
accordance with practical requirements with respect thereto and conduct training
on the use of such software, and provide relevant consulting
services.
2.2
Select, purchase and update the proper software on human resource management
in
accordance with practical requirements with respect thereto and conduct training
on the use of such software, and provide relevant consulting
services.
2.3
Select, purchase and update the proper software on the management of
supermarkets in accordance with practical requirements with respect thereto
and
conduct training on the use of such software, and provide relevant consulting
services.
2.4
Assist with other related systems and software in accordance with the specific
requirements of Party A.
2.5
Seek
qualified network service companies to provide services to Party A with respect
to its application for the domain name and design of website, assist Party
A in
communication with the network service company on matters relating to the domain
name and website.
2.6
Assist with the computers, server and other facilities in accordance with the
requirements of Party A, and make periodic maintenance on aforesaid facilities.
2.7
Conduct training of the technical employees of Party A.
2.7.1
Conduct Party A to the research of new formulations of ceramics, increase the
toughness and machinability of ceramics, raise manufacturing ceramic materials
burn rate and lower sintering temperature, significantly lower production costs,
fulfill precision match between ceramic pieces and the metal valve
bodies.
2.7.2
Conduct Party A to the research and development of the new product of ceramic
valves, further improve the resilience and corrosion-resistant of industrial
ceramics and other fine performance, increase the caliber of ceramic valves,
pressure and temperature range, wider application of ceramic valves, fulfill
the
bigger large-scale replacement of metal valves.
4
2.7.3
Strengthen the training of Party A’s staff to use new equipments, quickly create
productivity of the new equipments and improve the company production
capacity
2.8
In
the event of occurrence of technical problems of Party A, Party B shall
designate with 12 hours relevant staff to perform on-site research for assisting
Party A to resolve such problems.
2.9 Party
B
shall be the sole and exclusive owner of all rights, title, interests and
intellectual property rights arising from the performance of this Agreement
(including but not limited to, any copyrights, patent, know-how, commercial
secrets and otherwise), regardless developed independently by Party B or by
Party A based on Party B’s intellectual property or by Party B based on Party
A’s intellectual property. Party A shall not claim against Party B on any
rights, ownership, interests or intellectual property.
If
such
development is conducted on the basis of Party A’s intellectual property, Party
A shall ensure that such intellectual property is clear and free from any lien
or encumbrance or license, or Party A shall indemnify Party B any and all
damages incurred thereby. In case Party B shall be liable to any third party
by
reason thereof, Party B shall be compensated in full by Party A as long as
Party
B has compensated the third party.
Article
3 Technology Service Fee
3.1
Party
A shall pay the Technology Service Fee annually, equal to 1% of its total
revenue as the Consideration for services provided by Party B as set forth
in
Article 2 hereof.
3.2
Party
A shall pay to Party B the last year’s Technology Service Fee before January
31st
of each
year.
3.3
Party
B shall be entitled to request in writing that Party A adjust the Consideration
in accordance with the quantity and quality of the technology services. The
Parties shall positively negotiate with each other in respect of the Technology
Service Fee, and Party A shall agree with such adjustment.
3.4 Both
Parties agree that any losses incurred during the performance of this Agreement
shall be jointly burden by both Parties.
Article
4 Warranties and Undertakings by Party A
4.1
Within the term of this Agreement, Party B shall be the entity exclusively
appointed by Party A to provide the services as set forth in Article 2
hereunder, and Party A shall not appoint any other entities to provide to Party
A (including its branches and subsidiaries) any services the same as or similar
to those services described in Article 2 hereof.
5
4.2
Party
A will provide Party B with all information related to the content of service
as
set forth in Article 2.
4.3
Party
A will give full cooperation to Party B, and provide assistance and convenience
to Party B for its on-site work, and shall not hinder Party B from providing
services as set forth in Article 2 hereof.
4.4
Party
A will promptly make full payment of the Consigned Management Service Fee to
Party B in accordance with the provisions hereof.
4.5
Without the prior written consent of Party B, Party A shall not commit any
act
or omission that would materially affect Party B’s rights and interests
hereunder.
Article
5 Warrants and Undertakings by Party B
5.1
Party
B shall take advantage of its capacity and resources to provide the services
as
stipulated in Article 2 hereunder.
5.2
Party
B shall timely adjust and complete the technology services in accordance with
practical requests from Party A.
5.3
In
the event that Party B intends to provide services to any other entities engaged
in business similar to that of Party A, it shall give prior notice to Party
A
and strictly keep the confidential information obtained during the course of
providing services to Party A .
5.4
Party
B shall accept any reasonable suggestions regarding hardware, software and
staff
training from Party A during the course of providing services to Party
A.
Article
6 Guaranty
6.1
To
secure the performance of the obligations assumed by Party A hereunder,
Shareholders agree to pledge all their equity interests in Party A to Party
B,
and the Parties agree to execute an equity pledge agreement with respect
thereto.
Article
7 Taxes and Expenses
7.1
The
Parties shall pay, in accordance with relevant PRC laws and regulations, their
respective taxes arising from the execution and performance of this
Agreement.
6
Article
8 Assignment of the Agreement
8.1
Party
A shall not transfer part or all its rights and obligations under this Agreement
to any third party without the prior written consent of Party B.
8.2
The
Parties agree that Party B shall be entitled to transfer, at its own discretion,
any or all of its rights and obligations under this Agreement to any third
party
upon six (6) days’ written notice to Party A.
Article
9 Liability of Breach
9.1
If
Party A fails to duly pay the Technology Service Fee in accordance with the
provisions of Article 3 hereunder, then Party A shall pay liquidated damages
per
day equal to 0.03% of the unpaid Consideration which falls due; if any delay
of
payment amounts to sixty (60) days, then Party B shall be entitled to exercise
the right of pledge under the equity pledge agreement.
9.2
If
Party A violates its representations and warranties hereunder and fails to
redress such violation within sixty (60) days upon receipt of written notice
from Party B, Party B shall be entitled to exercise the right of pledge under
the equity pledge agreement.
9.3
If
Party B is in non-performance, or incomplete performance, of this Agreement,
or
is otherwise in default of any of its representations and warranties hereunder,
Party A shall be entitled to request Party B to redress its
default.
Article
10 Effectiveness, Modification and Cancellation
10.1
This
Agreement shall take effect on the date of execution hereof, and the valid
term
hereof shall be expired upon the date of completion of the acquisition of the
assets or the equity of Party A by Party B or its designated third
party.
10.2
The
modification of this Agreement shall not be effective without written agreement
through negotiation. If the Parties do not reach an agreement, this Agreement
remains effective.
10.3
This
Agreement shall not be discharged or canceled without written agreement through
negotiation, provided that Party B may, by giving thirty (30) days’ prior notice
to the other Parties hereto, terminate this Agreement.
10.4
If
Party B fails to provide the loan in accordance with the Loan Agreement signed
between Party B and the Shareholders on May 30th,
2008,
this Agreement shall be automatically terminated.
7
Article
11 Confidentiality
11.1
Any
information, documents, data and all other materials (herein “Confidential
Information”) arising out of the negotiation, signing, and implementation of
this Agreement, shall be kept in strict confidence by the Parties. Without
the
written approval of the other Parties, no Party shall disclose to any third
party any Confidential Information, but the following circumstances shall be
excluded:
(1)
Material that is known or may be known by the Public (but not including
materials disclosed by each Party receiving the Confidential
Information);
(2)
Materials required to be disclosed subject to applicable laws or rules or
provisions of a stock exchange; or
(3)
Materials disclosed by each Party to its legal or financial consultant relating
to the transaction of this Agreement, and this legal or financial consultant
shall comply with the confidentiality set forth in this Section. The disclosure
of Confidential Information by staff or a consignee of any Party shall be deemed
the disclosure of such Confidential Information by such Party, and such Party
shall bear the liabilities for breaching the contract. This Clause shall survive
whether this Agreement is invalid, amended, revoked, terminated or unable to
be
implemented for any reason.
11.2
If
this Agreement is terminated or becomes invalid or unenforceable, the validity
and enforceability of this Article 11 shall not be affected or
impaired.
Article
12 Force Majeure
12.1
“Force Majeure” refers to any event that could not be foreseen, and could not be
avoided and overcome, which includes among other things, but without limitation,
acts of nature (such as earthquakes, floods or fires), government acts, strikes
or riots.
12.2
If
an event of force majeure occurs, any of the Parties that is prevented from
performing its obligations under this Agreement by an event of force majeure
shall notify the other Parties without delay and within fifteen (15) days of
the
event provide detailed information about and notarized documents evidencing
the
event, shall take appropriate measures to minimize or remove the negative
effects of force majeure on the other Parties and shall not assume the
liabilities for breaching this Agreement. The Parties shall continue performing
this Agreement after the event of force majeure disappears.
Article
13 Governing Law and Dispute Resolution
13.1
The
effectiveness, interpretation, implementation and dispute resolution related
to
this Agreement shall be governed under PRC Laws.
8
Technology Service Agreement
13.2
Any
dispute arising out of this Agreement shall be resolved by all the Parties
through mutual negotiation. If all the Parties cannot reach an agreement within
thirty (30) days from the date on which the dispute is brought forward, any
Party may submit the dispute to the Beijing Arbitration Commission for
arbitration under its applicable rules. The arbitration award shall be final
and
binding upon both parties.
13.3
During the process of dispute resolution, all the Parties shall continue to
perform under the other terms of this Agreement, except for the provisions
subject to the dispute resolution.
Article
14 Miscellaneous
14.1
The
Parties acknowledge that this Agreement constitutes the entire agreement of
the
Parties with respect to the subject matters hereof and supersedes and replaces
all prior or contemporaneous oral or written agreements and understandings.
14.2
This
Agreement shall bind and benefit the successor of each Party and any transferee
permitted hereunder with the same rights and obligations as if such successor
or
transferee were an original party hereto.
14.3
Any
notice required to be given or delivered to the Parties hereunder shall be
in
writing and delivered to the address as indicated below or such other address
or
as such party may designate, in writing, from time to time. All notices shall
be
deemed to have been given or delivered upon by personal delivery, fax and
registered mail. It shall be deemed to be delivered upon: (1) registered air
mail: 5 business days after deposit in the mail; (2) personal delivery or fax:
2
business days after transmission. If the notice is delivered by fax, it should
be confirmed by original through registered air mail or personal
delivery:
Party
A:
Contact
person: ▇▇▇▇ ▇▇▇▇
Address:
Room324, ▇/▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇▇ Development
Area
Tel:
▇▇-▇▇-▇▇▇▇▇▇▇▇ Fax:
▇▇-▇▇-▇▇▇▇▇▇▇▇
Party
B:
Contact
person: ▇▇▇▇ ▇▇▇▇
Address:
▇▇▇▇ ▇▇-▇▇▇, ▇▇.▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Logistics Processing Zones,
Tianjin
Tel:
▇▇-▇▇-▇▇▇▇▇▇▇▇
Fax:
▇▇-▇▇-▇▇▇▇▇▇▇▇
The
Representative designated by the Shareholders
Contact
person: ▇▇▇▇ ▇▇▇▇
Address:
Shengkai Ind. Park Wanggang R.d Jinnan (Shuanggang) Dev. Area
Tianjin
Tel:
▇▇-▇▇-▇▇▇▇▇▇▇▇ Fax:
▇▇-▇▇-▇▇▇▇▇▇▇▇
9
Technology Service Agreement
14.4
This
Agreement is executed in eleven originals with each party holding one original,
and each of the originals shall be equally valid and authentic.
[Signature
Page Follows]
10
Technology Service Agreement
IN
WITNESS WHEREOF,
the
Parties hereto have caused this Agreement to be executed and delivered as of
the
date as written above.
Party
A Tianjin Shengkai Industrial Technology Development Co., Ltd.
Legal
Representative: ▇▇▇▇ ▇▇▇▇
Signature
and Company Seal:
Party
B Shengkai (Tianjin) Ceramic Valve Co., Ltd.
Legal
Representative: ▇▇▇▇ ▇▇▇▇
Signature
and Company Seal:
All
shareholders of Tianjin Shengkai Industrial Technology Development Co.,
Ltd.
|
Name
of the
Shareholders
|
|
Signature
|
|
Name
of the
Shareholders
|
|
Signature
|
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▇▇▇▇
▇▇▇▇
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/s/
▇▇▇▇ ▇▇▇▇
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▇▇▇
▇▇▇
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/s/
▇▇▇ ▇▇▇
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▇▇▇▇
▇▇▇▇▇▇
|
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
Ji
Haihong
|
|
/s/
Ji ▇▇▇▇▇▇▇
|
|
▇▇▇▇▇
▇▇▇▇
|
|
/s/
▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇
▇▇▇▇
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/s/
▇▇▇▇ ▇▇▇▇
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▇▇▇▇
▇▇▇▇
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/s/
▇▇▇▇ ▇▇▇▇
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▇▇
▇▇▇▇▇▇▇
|
|
/s/
Wu ▇▇▇▇▇▇▇
|
|
▇▇▇
Naifan
|
|
/s/
Liu Naifan
|
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11