Exhibit 10.19
(English Translation)

Contract Name: Subcontract of Gezhouba Inner  Date: October 20, 2010 Mongolia
Wind Tower Tube Manufacturing Project  

 

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Subcontract of Gezhouba Inner Mongolia Wind Tower Tube Manufacturing Project
 
Contract No. XXJFD-10-020

Party A: Gezhouba Inner Mongolia Wind Power Equipment Co., Ltd.
Party B: Liaoning Creative Wind Power Equipment Co., Ltd.

This Contract is made between Party A and Party B in Kailu Town, Tongliao, Inner
Mongolia on October 20, 2010.
    Whereas Party A is desirous that Party B should take the subcontracted
project, that is, the Manufacturing Contract of Wind Tower Tube of Inner
Mongolia Huade Cheliwusu Wind Power Plant. The contract machine models comprise
33 sets of 1.5MW Gold Wind Power Machines, 33 sets of 1.5MW Sinovel Wind Power
Machines. The total amount of Wind Power Machines is 66.
Party A has accepted the fixed and tax-included material unit price of 898,400
YUAN (EIGHT HUNDRED NINETY-EIGHT THOUSAND FOUR HUNDRED YUAN) per set for Gold
Wind Machine (7020 YUAN per ton) and the fixed and tax-included manufacturing
unit price of 395,000 YUAN (THREE HUNDRED AND NINETY-FIVE THOUSAND) per set;
fixed and tax-included material unit price of 930,600 YUAN (NINE HUNDRED AND
THIRTY-THOUSAND SIX HUNDRED YUAN) per set for Sinovel Machine (7020 YUAN per
ton) and fixed and tax-included manufacturing unit price of 395,000 YUAN (THREE
HUNDRED AND NINETY-FIVE THOUSAND YUAN) per set as the project quoted price for
manufacturing, completion and defect treatment of the subcontracted project. The
total contract price is estimated to be 86,427,000.00 YUAN (EIGHTY-SIX MILLION
FOUR HUNDRED TWENTY-SEVEN THOUSAND YUAN). The completed quantities of the
subject are subject to Party A’s approval.
    Regarding the Contract, Party A and Party B hereby agree as follows:
1.  
Technical Terms shall be strictly observed (Design Specification and Technical
Agreement);

2.  
Commercial Terms shall be carried out to the letter;

3.  
The above mentioned documents are considered to complement and explain each
other. If ambiguity or contradiction arises, one should follow the
first-mentioned terms; if the two are in the same order, one shall observe the
after-mentioned terms.

4.  
After both parties have signed the contract, Party A is expected to pay 20% of
material purchase expense to Party B. Party A pays 10% of manufacturing expenses
when materials are on site, and pays the remaining 60% expenses after delivery.
The residual 10% is retained as quality deposit.

5.  
If no dispute is raised, the quality deposit, which takes up 10% of the total
contract price, will be refunded to Party B.

6.  
The contract shall come into effect as soon as it is duly signed by both
parties.

7.  
Party A and Party B both agree that the hereby subcontract (including all
contract documents) has encompassed all of their agreement, understanding,
commitment and covenant, and that the hereby subcontract has collected, combined
and substitute all previous negotiations, understanding and agreement. Both
Parties assent that, other than the persons who perform the same procedure of
the subcontract beyond any written form, anyone that make any revision or change
to the hereby subcontract (except for the special provisions in the contract)
shall not be effective or binding.

 
 
 

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Contract Name: Subcontract of Gezhouba Inner  Date: October 20, 2010 Mongolia
Wind Tower Tube Manufacturing Project  

 

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Commercial Terms
Article 1
1.1 Party B shall submit documents of manufacturing schedule and process.
Party B is expected to submit a detailed aggregate manufacturing schedule to
Party A for record and investigation within five days after the contract is
signed. Meanwhile, after the manufacture goes into operation, Party B should
submit a scheduled plan every seven days.
1.2 Material Documents that shall be submitted by Party B
In conformity with the Contract, Party B shall provide effective test documents
in order to act in concert with the equipment acceptance inspection of Party A
and shall supply onsite technical services of equipment installation.
1.3 Transfer: the hereby project must not be transferred or subcontracted
(except for anticorrosion and transportation procedures).

 
Article 2
2.1 Responsibilities of Party B on the subcontracted project
2.1.1 General Responsibilities of Party B
(1) To perform strictly to contract requirements.
Following the contract requirements, Party B should organize the manufacture
carefully to meet the schedule, and supply Party A with relevant service and
quality assurance.
Party A is entitled to suspend or terminate the contract according to the
satisfactory degree of manufacturing schedule, quality and delivery on the basis
of contract requirements. The resulting responsibilities and economic loss
should be taken by Party B.
(2) To assure the quality of products
All aspects of Party B’s manufacture should be in strict accordance with
contract, manufacturing drawings and technology documents to meet the
requirements on project quality and schedule.
Supervision engineers and Party A are in charge of overall manufacturing process
management of the subcontracted project, including time schedule, material,
manufacturing techniques, manufacturing schedule, quality accidents management
and the approval of quality inspection. However, none of Party B’s liabilities
and responsibilities towards the hereby subcontract project is exempted or
reduced.
After each batch of project equipments is inspected to be satisfied by Party B,
Party B has to apply for the inspection from Party A’s Technology and Quality
Administration Department. It is Party A’s Technology and Quality Administration
Department who is in charge of acceptance inspection and staff arrangement for
patrol and random inspections during the manufacturing process.
(3) Safe and Civil Manufacture
Party B shall implement the national regulations about safe and civil
manufacture, and organize the manufacture according to civil manufacturing
measures.
2.1.2 Usage of Main Materials
The materials of tower tube mentioned in this contract are purchased by Party B.
Party A provides no materials.
 
 
 

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Contract Name: Subcontract of Gezhouba Inner  Date: October 20, 2010 Mongolia
Wind Tower Tube Manufacturing Project  

 

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If damage or deficiency of material or components occurred due to the improper
use of Party B, Party B has to purchase the licensed materials required by the
contract to make up the deficiency. Equipped with ex-factory certification and
quality certificates, the makeup materials cannot be used until the approval of
Party A is gained. Welding tests of welding test piece are carried out by Party
B while the third party performance tests are launched by Party A. Other
materials (such as anticorrosive material, transport Mi-brace materials, wrap
materials, etc.) shall be purchased by Party B, when painting materials should
bear ex-factory certification and quality certificates.
2.1.3 Party B shall offer and present relevant acceptance investigation forms to
Party A for approval, and to provide self-inspection record as required.
Acceptance investigation on completion investigation materials should also be
submitted.
2.1.4 Technical Service
Upon receipt of Party A’s notice, Party B shall send qualified personnel to
conduct on-site technical service.
2.2 Possible consequence if Party B breaches the Subcontract Responsibility
Letter
        If acceptance investigation or usage cannot be achieved due to the
deferred manufacturing schedule or failure in project quality, Party B must bear
the corresponding responsibility and economic loss as prescribed in Article 4.2.
 
Article 3
3.1 Commencement of the Subcontracted Project; Time of Completion of Party B
3.1.1 Once the subcontract is mutually signed, manufacture should be prepared.
According to the time schedule prescribed by Party A, delivery should be gained
by October 31, 2011.
3.1.2 Party B should organize the manufacture in accordance with the controlled
manufacturing schedule or the manufacturing scheme revised by Party A, for which
Party B shall not claim for indemnity.
3.2 Breach Penalty
(1) Failure by one Party to perform the obligation under this contract
constitutes breach. The defaulting Party is liable to sustain the losses of the
other party.
(2) If Party B fails to deliver the contract equipments on the specified date or
before the deferred deadline approved by both parties through negotiation, Party
B shall pay 5% of the total contract price per day, which will be deducted from
the project settlement accounts of Party B. If the delivery of contract
equipments is deferred for more than one month, Party A has the right to revoke
part or the whole contract. In addition, Party B will suffer the breach penalty
and compensate Party A’s loss.
(3) Penalty of Quality Breach
If the manufacturing quality fails to meet the requirements of the contract
because of Party B, Party B should take immediate actions and pay 5% of the
project price as penalty according to the degree of loss.
(4) The total amount of the breach penalty shall not be more than 10% of the
project price.

(5) Party A can deduct the aforementioned breach penalty from other payments at
maturity of Party B. None of Party B’s liabilities and other responsibilities
required in the subcontracted project shall be terminated due to the payment or
deduction of this breach penalty.
(6) If Party B achieves completion on schedule, Party A should contact the
Wind-Power Plant to deliver the products within the prescribed time. If delivery
is deferred, Party B will receive a certain amount of indemnities. (The total
amount of indemnities shall not excess 10% of the project price.)

Article 4 Change Directive

Party B should obtain all the change directives of subcontracted project only
from Party A. Party B shall not lodge an indemnity claim due to Party A’s change
directives.
 
 
 

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Contract Name: Subcontract of Gezhouba Inner  Date: October 20, 2010 Mongolia
Wind Tower Tube Manufacturing Project  

 

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Article 5 Obligation
5.1 Obligations of Party B before Transfer
Before transfer, Party B is responsible for necessary preservation, storage and
defect treatment, to make sure that the subcontracted project remains in a
satisfactory state as required in the project by Party A
5.2 Obligations of Party B after Transfer
5.2.1 Party B shall ensure the project manufacturing quality. Party B is
supposed to take immediate actions towards unsuitable fittings or measurements
upon Party A’s installation of tower tubes. Party B should manufacture the
products according to the usage standard of the equipment with fine quality.
Besides, Party B shall guarantee that there is no default in his work according
to the contract due to any activities conducted by Party B.
5.2.2 Party B shall ensure the project manufacturing quality and meet the
requirements of the project demanded by Party A.
5.2.3 Party B shall provide with the relevant technical services during the
period of warranty.
5.2.4 If any quality defects arise during the period of warranty, Party B shall
launch an on-site treatment within 24 hours after the receipt of Party A’s
notice. If the defects or damages are produced by Party B, the quality warranty
period of the project under treatment will be prolonged to 18 months after
investigation acceptance.
5.2.5 Party A has the right to claim for indemnities if there is damages lead by
any project quality defects and/or damages caused by Party B, and/or works that
is not in compliance with the manufacturing drawings and technical requirements
of Party A, and/or misdirection of Party B’s technical personnel or Party B’s
technical documents during the process of manufacture, usage and acceptance
investigation and within the period of quality warranty.

This Subcontract is in quadruplicate, two for each party.
This Subcontract shall come into effect after it is duly signed by the legal
representatives or the entrusted agents of both parties and is stamped by
contract seals.

Note: Party A claims that the Appendix of the Contract constitutes an integral
part of the hereby Contract, which is legally of equal effect.
 

Party A: Gezhouba Inner Mongolia Wind Power Equipment Co., Ltd. (Seal)
Address: Recycling Economy Industrial Park, Kailu Town, Tongliao, Inner Mongolia
Legal Representative:
Contact Person: Shaopei Zhu
Tel: 0475-2332995    15004989678
Fax: 0475-2332998
Opening Bank: Kailu Branch of ICBC
Account No.:
Tax ID:
Party B: Liaoning Creative Wind Power Equipment Co., Ltd (Seal)
Address: Maoshan Industrial Park, Yinzhou District, Tieling, Liaoning
Legal Representative:
Contact Person: Zhang Chi
Tel: 13841007798
Fax: 0410-6129933
Opening Bank: Tieling Southern-City Branch of Construction Bank
Account No.:
Tax ID:

 
 

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