Exhibit 10.4 

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EXCLUSIVE OPTION AGREEMENT

BETWEEN

ANYANG SHUNCHENG ENERGY TECHNOLOGY CO., LTD.

AND

WANG XINSHUN

WANG XINMING

CHENG JUNSHENG

HENAN SHUNCHENG GROUP COAL COKE CO., LTD.

ANYANG, CHINA
 
 

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Exclusive Option Agreement

This Exclusive Option Agreement (the “Agreement”) is entered into as of March
19, 2010 between the following Parties in Anyang.

Party A:                                Anyang Shuncheng Energy Technology Co.,
Ltd.
Registered Address: Tongye Town, Anyang County
Legal Representative: Wang Jiankai

Party B:
1   Wang Xinshun, a citizen of PRC with ID Card number of , owns 60% shares of
Henan Shuncheng Group Coal Coke Co., Ltd. ;

2           Wang Xinming, a citizen of PRC with ID Card number of , owns 20%
shares of Henan Shuncheng Group Coal Coke Co., Ltd. ;

3           Cheng Junsheng, a citizen of PRC with ID Card number of , owns 20%
shares of Henan Shuncheng Group Coal Coke Co., Ltd. ;

Party C:                      Henan Shuncheng Group Coal Coke Co., Ltd.
Registered Address: 410522110001012
Legal Representative: South Gongye Road, Tongye County, Anyang City, Henan
Province

In this Agreement, Party A, Party B, Party C are called collectively as the
“Parties” and each of them is called as the “Party”.

WHEREAS:

1.           Party A is a wholly foreign-owned enterprise incorporated under the
laws of the People’s Republic of China (the “PRC”);

2.           Party C is a limited liability company and with business license
issued by the Anyang Administration for Industry and Commerce;

3.           As of the date of this Agreement Party B are shareholders of Henan
Shuncheng Group Coal Coke Co., Ltd. (hereinafter referred to as “Opco”) and
collectively legally hold all of the shares interest of Opco.

NOW, THEREFORE, the Parties through mutual negotiations hereby enter into this
Agreement according to the following terms and conditions:
 
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1.           THE GRANT AND EXERCISE OF PURCHASE OPTION

 
1.1
Grant: Party B hereby grant Party A an irrevocable exclusive purchase option to
purchase all or part of the shares of Opco, currently owned by any of Party B;
Opco further hereby grant Party A an irrevocable exclusive purchase option to
purchase all or part of the assets and business of Opco, in each case in
accordance with Article 1.3 of this Agreement (the “Option”). The aforesaid
purchase options are irrevocable and shall be exercised only by Party A (or the
qualified persons appointed by Party A). The term “person” used herein shall
include any entity, corporation, partnership, joint venture and non-corporate
organizations.

 
1.2
Exercise Procedures:

1.2.1  Party A shall notify Party B in writing prior to exercising its option
(the “Option Notice” hereinafter).

1.2.2  The next day upon receipt of the Option Notice, Party B and Opco,
together with party A (or the qualified person appointed by Party A), shall
promptly compile a whole set of documents (the “Transfer Documents”) to be
submitted to the government bodies for approving the shares or assets and
business transfer in connection with the Option exercise so that the shares or
assets and business transfer can be transferred, in whole or in part.

1.2.3  Upon the completion of the compilation of all the Transfer Documents and
the Transfer Documents being confirmed by Party A, Party B and Opco shall
promptly and unconditionally obtain, together with Party A (or the qualified
person appointed by Party A), all approvals, permissions, registrations,
documents and other necessary approvals to effectuate the transfer of the shares
and remaining assets and business of Opco in connection with the Option
exercise.

 
1.3
Exercise Condition: Unless otherwise agreed, Party A may at anytime on or after
May   , 2010, exercise the option of acquiring the shares or remaining assets
and business of Opco whenever Party A considers it necessary to acquire Opco and
it is doable in accordance with PRC laws and regulations.

2.           PRICE OF ACQUISITION

 
2.1
The total Transfer Price shall be the minimum price permitted under the PRC Law
then applicable.  All Transfer Price received by Party B shall be refunded to
Party A or Opco at no consideration or the minimum consideration permitted under
the PRC Law then applicable, whichever is more.  Refund of the Transfer Price
shall be made by Party B by an appropriate manner decided by Party A.  Transfer
Price means all the considerations which Party A or its designated entity or
individual is obliged to pay to Party B or the Opco for the Option in each
exercise.

 
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2.2
Party A has the discretion to decide the time and arrangement of the
acquisition, provided that the acquisition will not violate any PRC laws or
regulations then in effect.

3.           REPRESENTATIONS AND WARRANTIES

 
3.1
Each party hereto represents to the other Parties that: (1) it has all the
necessary rights, powers and authorizations to enter into this Agreement and
perform its duties and obligations hereunder; (2) Party B warrant, represent and
guarantee that this Agreement, the Restructuring Exercise or the Listing shall
be in compliance with any and all applicable PRC laws and shall indemnify,
defend and hold harmless Party A and Opco for all fines, penalties, damages or
claims sustained by Party A or Opco arising out of Party B’s violation of this
section; and (3) the execution or performance of this Agreement shall not
violate any contract or agreement to which it is a party or by which it or its
assets are bounded.

 
3.2
Party B and Opco hereto represent to Party A that: With respect to the shares
interest held by Party B in Opco, (1) Party B are legally registered
shareholders of Opco and have paid Opco the full amount of their respective
portions of Opco's registered capital required under the PRC laws; (2) except
Pledge of Shares Agreement, signed by and between Party B and Party A on March
19,2010 in Anyang, none of Party B, has mortgaged or pledged his shares of Opco,
nor has either of them granted any security interest or borrow against his
shares of Opco in any form; and (3) none of Party B has sold or will sell to any
third party its shares in Opco.

With respect to the assets of Opco which may be transferred to Party A at Party
A’s option hereunder, (1) Opco owns all such assets and has not mortgaged or
pledged or otherwise encumber such assets; and (2) Opco has not sold or will
sell to any third party such assets.

 
3.3
Opco hereto represents to Party A that: (1) it is a limited liability company
duly registered and validly existing under the PRC law; and (2) its business
operations are in compliance with applicable laws of the PRC in all material
aspects.

 
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4.           COVENANTS

The Parties further agree as follows:

 
4.1
Before Party A has acquired all the shares/assets and business of Opco by
exercising the purchase option provided hereunder, Opco shall not:

4.1.1                 sell, assign, mortgage or otherwise dispose of, or create
any encumbrance on, any of its assets, operations or any legal or beneficiary
interests with respect to its revenues (unless such sale, assignment, mortgage,
disposal or encumbrance is relating to its daily operation or has been disclosed
to and agreed upon by Party A in writing);

4.1.2                 enter into any transaction which may materially affect its
assets, liability, operation, shareholders’ shares or other legal rights (unless
such transaction is relating to its daily operation or has been disclosed to and
agreed upon by Party A in writing); and

4.1.3                 distribute any dividend to its shareholders in any manner.

 
4.2
Before Party A has acquired all the shares/assets/business of Opco by exercising
the purchase option provided hereunder, Party B and Party C shall not:

4.2.1                 sell, assign, mortgage or otherwise dispose of, or create
any encumbrance on, any of the shares held by them in Opco, except for the
pledge of such shares made according to the Shares Pledge Agreement, signed by
and between Party B and Party A on March 19, 2010in Anyang.

 
4.3
Before Party A has acquired all the shares/assets/business of Opco by exercising
the purchase option provided hereunder, Party B and/or Opco shall not
individually or collectively:

4.3.1                 supplement, alter or amend the articles of association of
Opco in any manner to the extent that such supplement, alteration or amendment
may have a material effect on Opco's assets, liability, operation, shareholders’
shares or other legal rights;

4.3.2                 cause Opco to enter into any transaction to the extent
such transaction may have a material effect on Opco's assets, liability,
operation, shareholders’ shares or other legal rights (unless such transaction
is relating to Opco's daily operation or has been disclosed to and agreed upon
by Party A in writing); and

 
4.4
Party B shall entrust Party A to manage Opco in accordance with Entrusted
Management Agreement, signed by and between Party B, Opco and Party A on March
19, 2010 in Anyang.

 
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4.5
Non Competition:

When Party A exercises the Option, each of Party B and Opco irrevocably and
unconditionally agree and undertake to Party A that it will not without the
prior written consent of Party A:-

a.      be directly or indirectly engaged or concerned (whether as an employee,
agent, independent contractor, consultant, advisor or otherwise) in the conduct
of any business competing with Party A’s Business (the “Business”);

b.      carry on for his/its own account either alone or in partnership or be
concerned as a director or shareholder in any company engaged in any business
competing with the Business;

c.      assist any person, firm or company with technical advice or assistance
in relation to any business competing with the Business;

d.      solicit or entice away or attempt to solicit or entice away the custom
of any person, firm, company or organization who shall at any time have been a
customer, client, distributor or agent of Party A or in the habit of dealing
with Party A;

e.      solicit or entice away or attempt to solicit or entice away from Party A
any person who is an officer, manager or employee of Party A whether or not such
person would commit a breach of his contract of employment by reason of leaving
Party A;

f.      in relation to any trade, business or company, use any name in such a
way as to be capable of or likely to be confused with the name of Party A and
shall use all reasonable endeavors to procure that no such name shall be used by
any other person, firm or company;

g.      otherwise be interested, directly or indirectly, in any business
competing with the Business.

5.           ASSIGNMENT OF AGREEMENT

 
5.1
Party B and Opco shall not transfer their rights and obligations under this
Agreement to any third party without the prior written consent of Party A.

 
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5.2
Each of Party B and Opco hereby agrees that Party A shall have the right to
transfer all of its rights and obligation under this Agreement to any third
party whenever it desires. Any such transfer shall only be subject to a written
notice sent to Party B and Opco by Party A, and no any further consent from
Party B and Opco will be required.

6.           CONFIDENTIALITY

The Parties acknowledge and confirm that any oral or written materials exchanged
by the Parties in connection with this Agreement are confidential. The Parties
shall maintain the secrecy and confidentiality of all such materials. Without
the written approval by the other Parties, any Party shall not disclose to any
third party any relevant materials, but the following circumstances shall be
excluded:

 
6.1
The materials is known or will be known by the public (except for any materials
disclosed to the public by the Party who receives such materials);

 
6.2
The materials are required to be disclosed under the applicable laws or the
rules or provisions of stock exchange; or

 
6.3
The materials disclosed by each Party to its legal or financial consultant
relate to the transaction contemplated under this Agreement, and such legal or
financial consultant shall comply with the confidentiality set forth in this
Section. The disclosure of the confidential materials by an employee of any
Party shall be deemed disclosure of such materials by such Party, and such Party
shall be liable for breaching the contract. This Article 6 shall survive this
Agreement even if this Agreement is invalid, amended, revoked, terminated or
unenforceable by any reason.

7.           BREACH OF CONTRACT

Any violation of any provision hereof, any incomplete or mistaken performance of
any obligation provided hereunder, any misrepresentation made hereunder, any
material nondisclosure or omission of any material fact, or any failure to
perform any covenants provided hereunder by any Party shall constitute a breach
of this Agreement. The breaching Party shall be liable for any such breach
pursuant to the applicable laws.

8.           APPLICABLE LAW AND DISPUTE RESOLUTION

 
8.1
Applicable Law

 
The execution, validity, interpretation and performance of this Agreement and
the disputes resolution under this Agreement shall be governed by the laws of
PRC.

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8.2
Dispute Resolution

The Parties shall strive to settle any dispute arising from the interpretation
or performance of this Agreement through friendly consultation. In case no
settlement can be reached through consultation within thirty (30) days after
such dispute is raised, each party can submit such matter to China International
Economic and Trade Arbitration Commission (the “CIETAC”) in Beijing in
accordance with its rules. The arbitration shall take place in Beijing. The
arbitration award shall be final, conclusive and binding upon both Parties.

9.           EFFECTIVENESS AND TERMINATION

 
9.1
This Agreement shall be effective upon the execution hereof by all Parties
hereto and shall remain effective thereafter.

 
9.2
This Agreement may not be terminated without the unanimous consent of all the
Parties except that Party A may, by giving thirty days prior notice to the other
Parties hereto, terminate this Agreement.

10.           MISCELLANEOUS

 
10.1
Amendment, Modification and Supplement

Any amendment and supplement to this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed an integral part of this Agreement and shall have the same legal effect
as this Agreement.

 
10.2
Entire Agreement

The Parties acknowledge that this Agreement constitutes the entire agreement of
the Parties with respect to the subject matters therein and supersedes and
replaces all prior or contemporaneous agreements and understandings in oral or
written form.

 
10.3
Severability

If any provision of this Agreement is adjudicated to be invalid or
non-enforceable according to relevant PRC laws of the PRC, such a provision
shall be deemed invalid only to the extent the PRC laws are applicable in China,
and the validity, legality and enforceability of the other provisions hereof
shall not be affected or impaired in any way. The Parties shall, through
consultation based on the principal of fairness, replace such invalid, illegal
or non-enforceable provision with valid provision so that any substituted
provision may bring the similar economic effects as those intended by the
invalid, illegal or non-enforceable provision.

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10.4
Headings

The headings contained in this Agreement are for the convenience of reference
only and shall not in any other way affect the interpretation, explanation or
the meaning of the provisions of this Agreement.

 
10.5
Language and Copies

This Agreement is written in Chinese and English and both the English version
and Chinese version shall have the same effect. This Agreement is executed in
five copies for each version; each Party holds one and each original copy has
the same legal effect.

 
10.6
Successor

This Agreement shall bind and benefit the successor or the transferee of each
Party.
 
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IN WITNESS HEREOF, the Parties hereof have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.

PARTY A: Anyang Shuncheng Energy Technology Co., Ltd.
(seal)

Legal Representative/Authorized Representative (Signature): /s/ Wang Jiankai

PARTY B:
Wang Xinshun
(signature):  /s/ Wang Xinshun

Wang Xinming
(signature):  /s/ Wang Xinming

Cheng Junsheng :
(signature):  /s/ Cheng Junsheng

PARTY C:
Henan Shuncheng Group Coal Coke Co., Ltd.

(seal)

/s/ Wang Xinshun
Legal Representative/Authorized Representative
(Signature):                                                                                                                                

 
 
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