EXHIBIT 10.1
 

Cooperative Contract on Coke-oven Gas Power Generation
 
Project of Xi’an TCH Energy Technology Co., Ltd. and
 
Shenmu County Jiujiang Trading Co., Ltd.

2009

 
 

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Cooperative Contract on Coke-oven Gas Power Generation Project

Party A: Xi’an TCH Energy Technology Co., Ltd. (hereinafter referred to as Party
A)
Address: No. 86, Gaoxin Road, Hi-tech Zone, Xi’an, Shaanxi Province
Legal Representative: Ku Guohua

Party B: Shenmu County Jiujiang Trading Co., Ltd. (hereinafter referred to as
Party B)
Address: Shagoumao Village, Xigou Office, Shenmu County
Legal Representative: Hao Ziwei

Through friendly negotiation, based on the principle of equality and
voluntariness, both Party A and Party B conclude the following clauses on the
relevant cooperation matters that Party A invests and constructs
auxiliary coke-oven gas power generation device to the coke-oven plant of Shenmu
County Jiujiang Trading Co., Ltd. which is wholly owned and controlled by Party
B.

Article 1: Definition of investment construction
1. By mutual consent, Party A shall invest, construct and manage the tail gas
power generation project for the coke-oven plant of Party B ( hereinafter
referred to as “power generation project”) and supply energy saving and
emissions reduction service for Party B.

2. The “power generation project” belongs to Party A, Party A shall be
responsible for the design, equipment selection, equipment procurement
and manufacture, construction work, project installment and test/adjustment,
formal synchronization power generation of the whole project and the project
management, maintenance, operation and safety after put into production,
and Party B shall provide active cooperation.
 
 

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Article 2: Party A's term
1. The term of Party A supplying energy saving service to Party B is 10 years
from the date of signing this contract and the power generation project is
formally built and put into operation.

Article 3: Rights, obligations and guarantee of the both parties
1. Party B shall guarantee the coke-oven plant is its wholly owned holding
company, and the coke-oven plant is established legally and a China enterprise
legal person that continues to exist effectively and can operate and produce
normally.
2. Party B guarantees to urge coke-oven plant to sign written gas supply
agreement with Party A with a term not less than 10 years.
3. Party B shall be responsible for all the procedures including project
proposal, review and approval, and environment evaluation etc. for the project
construction which are required by state laws and regulations and bear the
expense. Party B shall be responsible for synchronization power generation
procedure of “power generation project”, which should be done after the signing
date of this contract and before the date of power generation project is
formally built and put into operation.
4. Party A promises that the construction of the “power generation
project” shall be finished within 90 days after this agreement becomes effective
and both parties confirm the commencement condition for the project is
available. However, if  the project cannot proceed successfully due to Party B's
reason (including, but not limited to its activities that affect
normal construction, installation, test/adjustment or safety work etc.), Party
A's construction period shall be extended accordingly and Party B
shall compensate relevant losses caused to Party A hereof.  If the project
cannot proceed successfully due to Party A's reason (including, but not limited
to its activities affect normal construction, installation, testing or safety
work etc.), Party A shall compensate relevant losses caused to Party B hereof.
 
 

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5. Party A shall be responsible for the design, equipment
order, construction, installation and test/adjustment of the “power generation
project”, etc. Party B shall be responsible for completing the connection of
utilities and level the ground of the land before the commencement
of construction of the project, and provide necessary utility facilities to the
project.
6. Party B shall provide a lien with sufficient value as its guarantee for
this cooperative “power generation project” and sign a Lien Agreement with Party
A within 10 working days after signing this contract. Party B shall complete
the lien/mortgage registration process within 15 working days after signing this
contract. The Lien Agreement shall take effect along with this contract on “the
effective day”.
7. Party B shall urge its top five individual shareholders to assume an
unlimited joint liability guarantee for Party B for the implementation of this
contract and urge the individual shareholders to sign Unlimited and Joint
Liability Guarantee Agreement with Party A within 15 working days after signing
this contract. The Unlimited and Joint Liability Guarantee Agreement shall
become effective along with this contract on “the effective day”.
8. Party B shall have a third party that is approved by Party A to provide joint
liability guarantee and sign Joint Liability Guarantee Agreement with Party A
within 15 working days after signing this contract. Joint Liability Guarantee
Agreement shall take effect along with this contract on “the effective day”.
9. Party B shall be responsible for all the relevant procedures for construction
and operation of “power generation project”, including, but not limited to the
procedures, such as project proposal, review and approval, and synchronization
etc., Party B shall complete the above relevant procedures within 90 days from
the date of signing this contract.
10. Party B shall guarantee that the normal supply time of coke-oven gas shall
be no less than 7200 hours a year.
 
 

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11. Party B shall guarantee to cooperate with Party A for its due
diligence work, provide materials required by Party A in order to do the due
diligence work, and guarantee the provided materials to be true and reliable
without any false, error or omission.

Article 4: Consumption raw material and expense of “power generation project”
1. During the construction process of “power generation project”, Party B shall
be responsible for introducing electric power to the construction site at 1
meter away from the site line, and Party B shall supply the electricity for
construction free of charge.
2. Party A shall pay RMB 50,000 Yuan/year to Party B at the beginning of year
for renting the land of “power generation project”.
3. Party B shall guarantee to supply the power generation project with the
amount of coke-oven gas needed to support 7200 hours power generation
annually. When the above condition is satisfied, Party A’s energy saving service
charge standard is:
1. Provided that the on-grid price is regulated at RMB 0.31 Yuan per kilowatt
hour, .
Party B shall be refunded for RMB 0.01 Yuan per kilowatt hour from the energy
saving service fee charged by Party A
2. Provided that the on-grid price is regulated at RMB 0.315 per kilowatt hour,
Party B shall be refunded for RMB 0.015 Yuan per kilowatt hour from the energy
saving service fee charged by Party A.
3. Provided that the on-grid price is regulated at RMB 0.38 per kilowatt hour,
Party B shall be refunded for 50% of the premium part plus RMB 0.01 Yuan per
kilowatt hour from the energy saving service fee charged by Party A.

If Party B breaches the contract and fails to supply sufficient gas
required, Party A should deduct the part that should be distributed to Party B
from the energy saving service charge standard calculation for that year as
a compensation.
 
 

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Party B shall supply necessary and effective assistance during the construction
process of “power generation project”.

Article 5: The ownership and intellectual property of “power generation project”
1. The ownership of “power generation project” belongs to Party A.
2. The intellectual property related to the “power generation project” belongs
to Party A, Party B shall not disclose the intellectual property to any third
party without Party A's approval.

Article 6: CDM profit
Both Party A and Party B shall cooperate to apply for CDM together, the earned
profit after deducting the necessary expenses such as commission etc. shall be
shared by the both parties 50% each.

Article 7: Liability for breach of contract
1. Unless agreed by both parties in writing otherwise, neither party shall
modify or terminate the contract during the term of this contract without the
written consent of the other party.  Either party who breaches this contract
shall compensate the losses caused to the other party.
2. If any situation occurs to Party A or Party B that affects its ability of
continue operation, including but not limited to bankruptcy, cease operation,
merger, transfer and spin-off etc, such party shall notify the other party
within 5 working days and provide relevant certification/proof documents.  If
this contract can not be performed due to above situation, the party that
suffers losses shall be entitled to compensate for the losses from the other
party.
3. If Party B breaches its guarantee obligation under article 3 of this contract
or any other obligations, Party A has the right to give certain extension.  If
Party B still cannot correct or take relevant measures to cure its
breach during such extension period, Party A shall have the right to terminate
the contract and Party B shall compensate all the losses caused to Party
A, including , but not limited to the whole expense that Party A paid
for investing and constructing power generation project.
 
 

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4. Party B shall have the right to terminate this contract if Party A breaches
its guarantee obligation in article 3 of this contract.

Article 8: Force majeure
If the “power generation project” cannot be constructed or completed on schedule
or supply power normally due to force majeure (force majeure scope as defined by
the law) under this contract, Party A and Party B shall be exempted from
liability partially or wholly that caused by force majeure based upon the
facts.  Each party shall notify the other party if it fails to perform this
contract due to force majeure, and it shall provide certification/proof of force
majeure within 15 days, and it should try to retrieve/control loss with
reasonable effort.

Article 9: Settlement of disputes
All of dispute arising from this contract shall be settled by Party A and Party
B through friendly negotiation. In case no settlement can be reached, either
party may bring it to the people’s court where plaintiff is located for
judgments.

Article 10: Contract, appendix and miscellaneous
1. This contract shall be established upon signed and sealed by both Party A and
Party B.
2. This contract shall take effect on the effective day, which is the last day
when Party A has completed its due diligence for its internal risk control
procedures, and Party B has completed the relevant procedures of synchronization
and the relevant parties have signed Unlimited and Joint Liability Guarantee
Agreement, Joint Liability Guarantee Agreement and Lien Agreement.
3. Lien Agreement, Unlimited and Joint Liability Guarantee Agreement, Joint
Liability Guarantee Agreement and Technical Appendix of this Contract are an
integral part of this contract and have the same effect of this contract.
 
 

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4. If this contract has to be terminated, Party A and Party B shall discuss and
consult with each other to reach an agreement to determine the relevant
conditions and terms of termination in writing.
5. Place of signing this contract: Xi’an City
6. Through negotiation, Party A and Party B may reach a Supplement Contract for
other matters not covered by this contract, and Supplement Contract shall have
the same legal effect to this contract. If there is any conflicts between this
contract and the supplement contract,  the supplement contract prevails.
7. This contract has four original copies, and both Party A and Party B shall
keep two copies that all have the same legal effect.

Party A: Xi’an TCH Energy Technology Co., Ltd. (seal)
Authorized agent: Zhou *
May 14, 2009

Party B: Shenmu County Jiujiang Trading Co., Ltd. (seal)
Authorized agent: He *
May 14, 2009
 

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