Partnership Agreement

Beijing Hongyuan Recycling Energy Investment Center (Limited Partner)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July, 2013

Beijing, China

 

 

 

 

 

 

 

Contents

1. Definition 5 2. Name and Location of Business for the Partnership Enterprise
7   2.1 Name 7   2.2 Location of Business 7 3. Purpose of Partnership and Scope
of Business 8   3.1 Purpose of Partnership 8   3.2 Scope of Business 8   3.3
Investment Direction and Method 8 4. Term of Partnership 8   4.1 Term of Fund 8
  4.2 Term of Partnership 8 5. Name and Location of Partners 8   5.1 General
Partner 9   5.2 Limited Partner 9 6. Method, Amount, and Term of Investment 9  
6.1 Subscription 9   6.2 Actual Capital Contribution 9   6.3 Register for
Partners 10 7. General Partner 10   7.1 Requirement, Selection and Removal of
Executive Partner 10   7.2 The Execution of Partnership Affairs 10   7.3 General
Partner Acts on Behalf of the Partnership Enterprise 10   7.4 Responsibilities
and Rights of General Partner 11   7.5 Termination of the General Partner by the
Partnership Enterprise 12   7.6 Unlimited Joint Liability and Breach of Contract
of General Partner 12   7.7 Property Transfer of General Partner 13   7.8
Withdraw by General Partner 13   7.9 Authorization and Change of Business
Registration 13 8. Limited Partners 14   8.1 Limited Liability of Limited
Partner 14   8.2 Limited Partner Shall not Execute Partnership Affairs 14   8.3
Property Transfer of Limited Partners 14   8.4 Rights of Limited Partners 16  
8.5 Liability and Breach of Contract by Limited Partners 16 9. Partner Meeting
17   9.1 Partners Annual Meeting 17   9.2 Prohibited Acts 18

 

 

 

 

  9.3 Fund Custodian 18 10. Distribution of Profits and Losses 18   10.1 Capital
Account 18   10.2 Distribution of Profit 18   10.3 Distribution and Allocation
of Non-cash Assets 19   10.4 Assume the Losses 19 11. Taxation 20 12. Fee
Payment 20   12.1 Management Fees of General Partner 20   12.2 Custodian Fees 20
  12.3 Operating Cost of Partnership Enterprise 20 13. Accounting, Auditing and
Other Financial Matters 20   13.1 Accounting 20   13.2 Fiscal Year 20   13.3
Auditing and Financial Statement 21   13.4 Information Disclosure 21 14.
Admission, Withdraw and Removal 21   14.1 Admission 21   14.2 Withdraw 21   14.3
Removal 22   14.4 Property to be received upon exit of partnership 22   14.5
Property to be received upon removal 22 15. Non-competition and Exemption 23 16.
Transformation between Limited Partner and General Partner 23 17. Dissolution
and Liquidation 23   17.1 Dissolution 23   17.2 Liquidation 24   17.3
Responsibility of Trustee 25   17.4 Priorities in the Liquidation 25 18.
Indemnification 25 19. Miscellaneous 26   19.1 Amendment to the Agreement 26  
19.2 Reservation of Rights 26   19.3 Notice 26   19.4 Severability 27   19.5
Titles 27   19.6 Confidentiality 27   19.7 Law Application and Dispute
Resolution 27

 

 

 

 

  19.8 Force Majeure 28   19.9 Effectiveness of the Agreement 28   19.10
Execution Copies 28   19.11 Effective Date of the Agreement 28   19.12 Where the
Agreement Is Signed 28

 

 

 

 

 

 

 

 

In accordance with the Partnership Business Law of the People's Republic of
China (hereinafter referred to as “Partnership Business Law”) and applicable
laws, Beijing Hongyuan Recycling Energy Investment Center (limited partner)
(hereinafter referred to as the “partnership enterprise”), Hongyuan Recycling
Energy Investment Management (Beijing) Co., Ltd. (general partner), and other
limited partners (hereinafter referred to as “partners” together with the
general partner) in Exhibit 1 of the agreement signed the partnership agreement
(hereinafter referred to as “the agreement”) on the date as shown on the
signature page.

 

1.Definition

Unless otherwise specified in the agreement, the following terms shall
respectively have the following meaning: (Agreements defined or specified herein
shall include their amendments, revisions, and supplements.)

 

Partnership Business Law: the Partnership Business Law of the People's Republic
of China, which is passed on August 27, 2006 at the No. 23 conference of the
Standing Committee of the 10th National People’s Congress, and implemented from
June 1, 2007

 

Partnership Enterprise/Fund: Beijing Hongyuan Recycling Energy Investment Center
(limited partner)

 

The Agreement: Partnership Agreement of Beijing Hongyuan Recycling Energy
Investment Center (limited partner) and valid revisions and supplements

 

Establishment Date: the date when the business license of the partnership
enterprise is obtained

 

Term of Partnership: as described in 4.2

 

Project Company: Xi’an Zhonghong New Energy Technology Co., Ltd

 

Investment: investment from the partnership enterprise on the project company

 

Owner: purchasers of the CDQ waste heat generated power, which are Jiangsu
Tianyu Energy and Chemical Group Co., Ltd. and Boxing Chengli Gas Supply Co.,
Ltd.

 

Partners: general partner and limited partners

 

Enterprise Registration Office: industry and commerce administration authorities
that could accept the registration of the partnership enterprise according to
the law

 

General Partner: Hongyuan Recycling Energy Investment Management (Beijing) Co.,
Ltd.

 

Preferred Limited Partner: China Orient Asset Management Corporation

 

 

 

 

General Limited Partner: Hongyuan Huifu Venture Capital Co., Ltd.

 

Secondary Limited Partner: Xi’an TCH Energy Technology Co., Ltd.

 

Xi’an TCH: Xi’an TCH Energy Technology Co., Ltd.

 

Subscription: the amount next to the name of partners in Exhibit 1, and
revisions to the amount are valid

 

Actual Capital Contribution: sum of capital paid by partners up to any date

 

Percentage of Actual Capital Contribution: percentage of capital paid by each
partner among all partners up to any date

 

Executive Partner: the only general partner, executive partner of the
partnership enterprise, which is Hongyuan Recycling Energy Investment Management
(Beijing) Co., Ltd.

 

Intermediaries: institutes or personnel, including but not limited to
accountants, auditors, appraisers, lawyers, supervision banks (if any), and
technical experts, providing professional services employed during the
establishment of the partnership enterprise and investments

 

Share of Property: all rights and interests, including but not limited to rights
obtained from the partnership enterprise, of partners according to applicable
laws and the agreement

 

Default Partner: partner breaches the agreement due to its performance or
non-performance

 

Non-defaulting Partner: partner abides by the agreement

 

Succeeded Limited Partner: limited partner succeeded according to the way of
transfer in the agreement

 

Estimated Expenses: possible expenses incurred during the partnership and
assumed by the partnership enterprise, including but not limited to operation
costs, trustee fee, clearing fee, and other related fees

 

Breach of Contract in Respect of Transfer: breach of contract because the
transfer was not made in accordance with the agreement

 

Supervision Bank: supervision bank for the capital of the partnership enterprise
specified in the agreement

 

Trust Agreement: the agreement signed between the partnership enterprise and the
supervision bank that all capital of the partnership enterprise is under the
trusteeship of the supervision bank

 

 

 

 

Capital Account: as described in 10.1

 

Affiliated Person: any specified person who is directly or indirectly controlled
by one or more agencies or controls others or any person jointly controlled with
the specified person; the project company cannot be taken as the “affiliated
person” for the partnership enterprise or the general partner

 

Operating Cost of Partnership Enterprise: as described in 12.3

 

Distributable Assets: cash and other distributable assets received by the
partnership enterprise for selling or dealing with invested projects, or cash or
non-cash dividends, interest, and other income deducted taxes and fees

 

Entities: any legal or economic entities, such as natural persons, partnership
enterprises, or companies

 

Applicable Laws: any applicable laws, rules, regulations, ordinances, and other
legal documents, including but not limited to Partnership Business Law of the
People's Republic of China, Contract Law of the People's Republic of China, and
Measures for the Administration of Registration of Partnership Businesses of the
People's Republic of China

 

Business Days: business days of financial institutions regulated by the State
Council of the People’s Republic of China

 

Fiscal Year: from January 1 to December 31, the first fiscal year starts from
the establishment date of the partnership enterprise to December 31 of the year

 

2.Name and Location of Business for the Partnership Enterprise

2.1Name

The name of the partnership enterprise is Beijing Hongyuan Recycling Energy
Investment Center (limited partnership). The enterprise name and identification
are owned by the general partner. In the duration of the partnership enterprise,
the partnership enterprise and limited partners could use the enterprise name
and identification for free in advertisement, promotion and public disclosure,
but they don’t have ownership or other rights over the enterprise name and
identification. If (1) the partnership enterprise is terminated, or (2) the
general partner termination event occurs as specified in the agreement, or (3)
the general partner transfers their assets (except for assets transferred to
affiliated persons of the general partner), then use of enterprise name and
identification by the partnership enterprise and limited partners shall be
terminated, and the ownership of the enterprise name and identification still
belongs to the general partner or assigned affiliated persons.

 

2.2Location of Business

The location of business for the partnership enterprise is Room 09, Floor 6,
Building 1, No. 43, A, North Street, Xizhimen, Haidian District, Beijing.

The general partner could change the location of business based on operational
needs, but must change the registration at the Administration for Industry and
Commerce, and notify limited partners in written within 30 days after the
registration change. Under this clause, the general partner has rights to sign
or represent limited partners signing legal documents and completing
registration change. If the law or government authorities require limited
partners to sign legal documents for registration change in person, limited
partners shall sign required legal documents in person.

 

 

 

 

3.Purpose of Partnership and Scope of Business

3.1Purpose of Partnership

The purpose is to invest in the project company. Investments will be in the form
of equity, debt, and/or other forms approved by applicable laws and the
agreement. The interest payment will be distributed as investment return to all
of the partners. Unless all of the partners (except for Xi'an TCH) approve, the
purpose shall not be amended.

 

3.2Scope of Business

Project investment, investment management, asset management, investment
consultation (subject to the final business scope registered at the
Administration for Industry and Commerce); the scope of business could be
changed with unanimous consent from all partners, and the general partner shall
change the registration at the registration authority.

 

3.3Investment Direction and Method

The investment shall be used for the project company’s the construction and
operation of two coke dry quenching (“CDQ”) waste heat power generation stations
with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. ("Tianyu") and one CDQ
waste heat power generation station with Boxing County Chengli Gas Supply Co.,
Ltd. ("Chengli").

 

The investment is in the form of equity and debt. RMB 3 million is used for 10%
of the stock equity of the project company, the rest of the investment is
provided to the project company as entrusted loan.

 

4.Term of Partnership

4.1Term of Fund

The term of the Fund is 6 years from the date of its establishment.

 

4.2Term of Partnership

Term of partnership means the partnership duration for the preferred and
ordinary limited partner and general partner. Upon the expiration of their
respective terms, each partner shall exit from the partnership automatically and
obtain properties according to 14.4. The term for the preferred limited partner
is 3 years from the date of its contribution and for the ordinary limited
partner is 4 years from the date of its contribution, unless otherwise approved
by the general partner.

 

5.Name and Location of Partners

There are four partners of the partnership enterprise.

 

 

 

 

5.1General Partner

The general partner is Hongyuan Recycling Energy Investment Management (Beijing)
Co., Ltd. The legal representative is Zhang Zhong, and the address is 201, No.
19, Taipingqiao Street, Xicheng District, Beijing.

 

5.2Limited Partner

Please see Exhibit 1 for names of limited partners and their capital
contributions.

 

Limited partners shall assume responsibilities to their respective subscription
amount.

 

6.Method, Amount, and Term of Investment

6.1Subscription

Total amount of the fund is RMB 460 million. Exhibit 1 lists the subscription
and actual capital contribution for each partner.

 

The general partner shall make a subscription of RMB 5 million; the preferred
limited partners shall make a subscription of RMB 280 million; the general
limited partner shall make a subscription of RMB 100 million; the secondary
limited partner shall make a subscription of RMB 75 million.

 

6.2Actual Capital Contribution

Please see Exhibit 1 for actual capital contributions. The general partner shall
make capital contribution in full upon the establishment of the partnership
enterprise. The limited partners shall make their respective capital
contributions to the Fund according to Notice of Capital Contributions based
upon the satisfaction of the following conditions:

 

(1)Tianyu and Chengli have signed agreements with the project company and making
commitments for power purchases;

 

(2)Xi'an TCH has completed the pledge of account receivables of its Shenqiu
biomass project phase I and phase II power generation systems;

 

(3)Xi'an TCH has completed the pledge of the fixed assets of its Shenqiu project
phase I and phase II power generation system;

 

(4)Xi'an TCH has provided an unlimited joint liability guarantee;

 

(5)Mr. Guohua Ku has provided an unlimited joint liability guarantee;

 

(6)Xi'an TCH has issued a promissory letter to the partnership enterprise in the
event that the project company is unable to repay fully the loan and accrued
interest (Xi'an TCH will pay the unpaid amount);

 

(7)The partnership enterprise, the project company and the supervision bank have
signed a capital supervision agreement.

 

 

 

 

Capital contributions are completed when all partners transferred their capitals
into the bank account of the partnership enterprise that is opened by the
general partner at the supervision bank. The partnership enterprise and the
general partner shall issue the confirmation for capital contributions to all
partners after the completion of capital contribution.

 

6.3Register for Partners

The general partner shall provide the partnership enterprise the register for
partners (Exhibit 1), including names, addresses, subscriptions, capital
contributions, and other necessary information.

 

If any information is changed during the partnership, the general partner shall
update the information accordingly. If there is any changes to limited partners,
Exhibit 1 and registration at the Administration for Industry and Commerce shall
be updated. Under this clause, the general partner has rights to sign or
represent limited partners to sign legal documents and complete registration
changes. If the law or government authorities require limited partners to sign
legal documents for registration change in person, limited partners shall sign
required legal documents in person.

 

7.General Partner

7.1Requirement, Selection and Removal of Executive Partner

The only requirement for the executive partner is that the executive partner
shall be the general partner of the partnership enterprise .

 

By signing this agreement, all partners confirm that the general partner is
selected to be the executive partner of the partnership enterprise.

 

Unless otherwise specified by applicable laws and regulations, the rights,
removal or replacement of the executive partner is subject to terms of this
agreement relating to the general partner.

 

7.2The Execution of Partnership Affairs

With unanimous consent of all partners, the general partner shall execute the
partnership business and represent the partnership enterprise. The general
partner shall assign representatives to execute partnership business and has the
right to replace representatives. The general partner has the right to employ a
third party other than any partner as the management personnel for the
partnership enterprise. The general partner shall be fully responsible for
operation and management of the management personnel.

 

7.3General Partner Acts on Behalf of the Partnership Enterprise

Unless otherwise specified in the agreement, with the resolution or
authorization from the board of the general partner, the general partner has the
right to enter into any agreement and proposal, make any commitment, or manage
properties (including real estate, intellectual properties, and others) of the
partnership enterprise according to its own discretion to be necessary,
beneficial or convenient in order to reach the goal of this partnership.

 

When the general partner acts on behalf of the partnership enterprise, the
general partner does not have to show any authorization from the partnership
enterprise.

 

 

Any acts of the general partner or its representatives in execution of the
partnership enterprise business, including any cooperation and negotiation with
any third party are binding for the partnership enterprise.

 

7.4Responsibilities and Rights of General Partner

The general partner executes full management of the partnership enterprise. The
general partner shall fulfill its responsibilities and executes its rights under
principle of good faith and fairness and according to the requirement of this
agreement. It shall invest its time into the business and operation of the
partnership enterprise to make sure the partnership is well managed. The general
partner has the rights of management and operation of the partnership
enterprise, invested projects, withdraw, and others according to the terms of
this agreement.

 

According to the Partnership Business Law and this agreement, the general
partner has following rights, including but not limited to:

 

(1)Changing the location of business for the partnership enterprise;

 

(2)Dissolving the partnership enterprise in accordance with the agreement;

 

(3)Employing a third party other than partners as management personnel of the
partnership enterprise (if any);

 

(4)Dispose the properties of the partnership enterprise for distribution
purpose;

 

(5)Authorizing limited partners to transfer its shares to a third party in
accordance with the agreement;

 

(6)Executing investments on behalf of the partnership enterprise;

 

(7)Employing service providers to provide services to the partnership
enterprise;

 

(8)Engage activities for partnership to maintain it existence, operation and
fulfill its goal;

 

(9)Provide daily operational and investment management service to the
partnership enterprise;

 

(10)Initiate legal proceedings, defense lawsuits, conduct arbitration on behalf
of the partnership enterprise, to take actions to protect safety of the
properties of the partnership enterprise, and reduce risks to the partnership
enterprise, general partner, and properties;

 

 

 

 

(11)Sign documents on behalf of the partnership enterprise;

 

(12)Handle taxes for the partnership enterprise according to national laws and
regulations;

 

(13)Protect lawful rights and interests of the partnership enterprise;

 

(14)Others items authorized by the laws and regulation or items not require
partnership meeting decisions according to the laws and regulations.

 

All acts of the general partner in accordance with the Partnership Business Law
and this agreement are binding for the partnership enterprise.

 

7.5Termination of the General Partner by the Partnership Enterprise

According to the dispute resolution procedure of this Agreement, if the dispute
resolution institute agreed by all limited partners confirms that losses are
incurred due to intended acts or material negligence of the general partner, or
acts violating the Partnership Business Law, or the general partner does not
make capital contributions within 30 days after the execution of the agreement,
all limited partners could choose an eligible entity as the successor of the
general partner. Before the successor of the general partner is chosen, the
general partner shall continue fulfilling its responsibilities.

 

The successor general partner shall change the registration at the
Administration of Industry and Commerce within 15 calendar days of the new
appointment described above.

 

Once the appointment described above takes effect, the replaced general partner
becomes a limited partner automatically, and has no liable for making further
capital contributions. Under this circumstances, properties (including but not
limited to it shares of income from investment in the partnership enterprise) of
the replaced general partner before its replacement still belongs to the general
partner. The general partner and its successor shall assume unlimited joint
liability for the debts of the partnership enterprise occurred before the
replacement, but the replaced general partner is liable to pay compensation to
its successor for the debts mentioned above.

 

After signing of documents, the successor general partner is regarded as the
“general partner” even before the departure of the replaced general partner
without further approval or voting requirement from other partners. The
successor general partner is responsible for investments and others
responsibilities of the partnership enterprise without the need to terminate the
partnership enterprise.

 

For the purpose of compensation for losses, the original general partner and its
affiliates can still receive reimbursements under section 18 of this agreement
for: 1) compensation for damages to the original general partner and its
affiliates for projects conducted before the replacement; 2) compensation for
damages to the original general partner and its affiliates for other activities
related to the partnership enterprise before the replacement.

 

 

 

 

7.6Unlimited Joint Liability and Breach of Contract of General Partner

When assets of the partnership enterprise cannot pay for all its debts, the
general partner shall assume unlimited joint liability of the partnership
enterprise and other partners.

 

The general partner shall seek great profits for the partnership enterprise in
good faith and honest ways, and the general partner shall pay compensation for
any losses to the partnership enterprise or limited partners due to its intended
acts or material negligence.

 

Unless losses occurred due to intended acts or material negligence of the
general partner, the general partner and the management personnel are not
responsible for compensation of the losses.

 

7.7Property Transfer of General Partner

The general partner cannot transfer all or part of its assets in the partnership
enterprise unless with written consent of all partners in writing. If the
general partner transfers all assets according to the agreement to a transferee,
the transferee will be regarded as the successor of the general partner upon the
execution of this Agreement. The limited partner shall assist in changing
registration at the Administration of Industry and Commerce. Limited partners
shall sign legal documents in person if it is required by laws or the
government. The successor could continue the business of the partnership
enterprise without terminating the partnership enterprise. The general partner
and its successor shall assume unlimited joint liability for the debts of the
partnership enterprise before the change, but the replaced general partner is
liable to pay it back to its successor for the debts.

 

7.8Withdraw by General Partner

If 1) the legal withdrawal events for the general partner occur according to the
Partnership Business Law (including under the business license of the general
partner is cancelled, ordered to shut down or the general partner announces
bankruptcy); or 2) the general partner termination event occurs and the
successor has not appointed, then the partnership enterprise shall be dissolved
and cleared according to section 17 of the agreement. Nonetheless, the general
partner cannot take actions to actively terminate, dissolve or withdraw from the
partnership enterprise, unless otherwise agreed by all partners.

 

7.9Authorization and Change of Business Registration

All limited partners make this irrecoverable special authorization to general
partner through the execution of the agreement that general partner is
authorized to sign following documents on behalf of all or any of the limited
partners:

 

(1) Execution of the amendment or revision to this agreement (including partners
exiting, withdrawing, ownership transfer, decreasing total capital contribution
of the partnership enterprise according to partnership conference or
arrangements of this agreement) by general partner on behalf of limited
partners; When the revision is made according to partnership meeting
resolutions, general partner can sign the revision/amendment on behalf of all
limited partners pursuing to the partnership resolutions.

(2) Industrial and commercial registration / the change of industrial and
commercial registration of the partnership enterprise;

 

 

 

When the change of industrial and commercial registration is required according
to the condition and procedure of this agreement (partner exiting, ownership
transfer, decreasing total capital contribution of the partnership, etc.), the
change takes effect to all partners from date when the condition is met or
procedure is completed. The general partner shall update the relative
information of partners name list and change the registration; all partners
should coordinate for any necessary changes to the Industrial and Commerce
Registration.

 

8.Limited Partners

 

8.1Limited Liability of Limited Partner

Limited partner shall liable for the debts of the company in accordance with
their contribution amount.

8.2Limited Partner Shall not Execute Partnership Affairs

Limited partner shall not execute partnership affairs, shall not action behalf
of the partnership. Any limited partners shall not participate in management or
investment affair of partnership enterprises or undertake any action,
transaction or business in the name of the enterprise, shall not sign documents
on behalf of the enterprise, shall not bind the enterprise.

 

Limited partners exercise power in accordance with the “Partnership Enterprise
Law” shall not be considered as participate in management or investment affair
of partnership enterprises. To avoid ambiguity, the aforementioned act of the
exercise of powers includes:

 

(1) Matters in this agreement need to be proposed or approved by limited
partners;

(2) Matters in this agreement need unanimous consent by limited partners;

(3) Make suggestion of the operation and management of enterprises;

(4) Obtain audited financial reports of partnership enterprise;

(5) In the event involved self- interest, check the financial information of the
partnership enterprise;

(6) In the event business interests have been materially infringed, claiming
rights or proceedings to the responsible partners;

(7) Provide guarantee for the partnership enterprise;

(8) Exercise voting rights at partnership meeting.

 

For resolutions approved in partnership meeting according to this agreement
and/or resolutions by the general partners made by its own according to this
agreement and/or change of business registration by general partners according
to this agreement, limited partners shall sign relevant legal document in
accordance with the law or requirements of government departments. In the event
limited partners refuse to sign the relevant legal document, general partner
shall issue summon notice to limited partners. If the signed document is not
received within five days after the notice, it shall be deemed the limited
partners approved the general partner to sign the relevant legal document on its
behalf. All partners agreed the effective date of resolution is the passing day
of the resolution according to this agreement, resolutions of general partner
made by its own according to this agreement becomes effective since the day the
decision is made, and will be effective to all the partners and its validity is
not affected by the on-going process of the change of business registration.

 

8.3Property Transfer of Limited Partners

8.3.1In the duration of preferred limited partner, ordinary limited partners
shall not transfer, pledge or withdrawal all or part of their property share of
the partnership enterprise.

 

 

 

 

8.3.2Preferred limited partners can transfer their property share of the
partnership enterprise; general partner shall assist preferred limited partners
to transfer their property share of the partnership enterprise on Beijing
Property Exchanges to list its property shares. Preferred limited partners shall
not transfer their property share of the partnership enterprise without the
general partner’ permission.

 

8.3.3In the duration of partnership enterprise, secondary limited partners shall
not transfer, pledge or withdrawal all or part of their property share of the
partnership enterprise.

 

8.3.4Unless otherwise stipulated in agreement, the following conditions shall be
met when limited partners (hereinafter referred to as the transferor) transfer
their property shares to third party other than the partners of the partnership
enterprise:

(1) The transferor shall submit written notice of transfer to general partners
ten calendar days in advance.

(2) Transfer of property shares will not violate the relevant “Partnership
Enterprise Law” or other relevant regulations or industry oversight policy, or
cause the business activities of the partnership to be otherwise receiving
additional restrictions.

(3) The transferor shall send transfer invitation to the other partners for the
transferred property shares, other partners have the priority rights to purchase
the transfer property shares in accordance with the percentages of their paid
capital contribution to the total contribution to the partnership, and the
transfer price to other partners shall not be higher than the price proposed to
the outside third party, excluding the situation the transfer is done through
the listed public trading); for the property share other partners do not
purchased, transferor has the right to transfer it to the third party with a
transfer price no less than the proposed price to the other partners.

(4) The transferor or the transferee shall promise to pay all the reasonable
cost of the transfer to the partnership enterprise and the general partner,
include but not limited to the relevant cost to register and file with the
enterprise registration authority.

(5) The transferee is qualified to be a party of this agreement and a partner of
the partnership enterprise, and its capital contribution shall be in is in
compliance with this agreement and applicable laws;

(6) The transferor and transferee shall submit the following documents to
partnership enterprise: (1) transfer agreement or other document which can prove
the transferee accept this agreement, and (2) Other document, opinion, paper or
certification that reasonable requested by the general partner, include but not
limited to materials necessary for registration or filing to Enterprise
registration authority and Record management authority.

General partner can propose other appropriate conditions based on their own
judgment, to guarantee the transfer is compliance with the applicable law and in
the meanwhile will not have negatively effect to the enterprise tax treatment
and other partners. If general partner thinks there is possibility of the above
events happened based on their independent judgment, then general partner shall
have right to terminate this transfer, the transferor shall have No objection to
this.

 

 

 

 

8.3.5When transferee is accepted and succeed the limited partners, all
conditions applicable to the transferor in this agreement shall applicable to
the succeeding partner, and the succeeding partners shall inherit all rights and
obligations based on the transferred property shares. The person is considered
as the succeeding partner only on the condition that all the terms in this
agreement are satisfied and the person is listed on the partner roster.

 

 

8.3.6Any transfer breaches the agreement shall be deemed invalid transfer. In
such event, the enterprise does not recognize the transferee’s right to the
shares. The transferor shall continue to fulfill its responsibilities and
obligations of this agreement.

 

8.3.7The general partner shall make necessary amendments to Annex I to reflect
the relevant change of partners and investment subscribed for any transfer made
based on this term.

 

8.4Rights of Limited Partners

8.4.1Limited partners have the rights to know the operation of the partnership
enterprise. Limited partners have the rights to check the investment record and
obtain financial and operation information (include but not limited to
accounting books) in order to understand the business and investment position of
the enterprise and the operation of the invested enterprises.

 

8.4.2The right to obtain income according to this agreement.

 

8.4.3The right to supervise general partner to execute the partnership affairs.

 

8.4.4In the event partnership enterprise’s interests are materially violated,
limited partners have the right to claim rights or file law suits against
responsible partners.

 

8.4.5Other rights listed in “Partnership Enterprise Law” and relevant
regulations, or stated in this agreement.

 

8.5Liability and Breach of Contract by Limited Partners

If a third party has the reason to believe limited partner is a general partner
and makes transaction with it, then the limited partner shall take same
responsibility as general partners.

 

In the event limited partners make unauthorized transaction with third party on
behalf of the partnership enterprise, the limited partners shall assume full
liability to any costs happened to the enterprise or other partners.

 

If (1) any limited partner failes to pay all or part of the capital contribution
according to this agreement (breach of payment); or (2) any limited partner
breaches the agreement to transfers all or part of its property shares of the
enterprise (breach of transfer), the general partner can announce such limited
partner is “a breaching partner”. For limited partner who is considered as “a
breaching partner”, the general partner has the right to take remedy actions to
protect other partners.

 

 

 

 

In the event of above breach, the general partner has right to require the
breaching partner to pay penalty of one tenth of its capital contribution, in
the meanwhile, the breaching partner can be terminated after consent by the
general partner.

 

The breaching partner has no right to vote, resolution or decision under this
agreement or “Partnership Enterprise Law” or other relevant regulations.

 

The general partner has right to seek any other legal remedies for breach of
agreement by the breaching partner. During the implementation of this agreement,
any cost and fees (including legal fees) incurred due to breach behavior by
breaching partner shall be borne by the breaching partner. Any such payment by
limited partners does not constitute as payment of its capital contribution to
this partnership enterprise.

 

9.Partner Meeting

 

9.1Partners Annual Meeting

General partner shall urge partners to hold partners’ meeting annually from the
first full calendar year upon the enterprise established (Partners annual
meeting). Special meeting can be held if proposed by the general partner or
limited partners represent who has more than 50% of the paid capital of the
partnership. General partner shall be responsible for convening the meeting and
inform each partner about the conference time, location and agenda at least 10
days early. On the annual meeting, general partner shall report the historic
investment performance of the enterprise and communicate fully with each limited
partner. Limited partner can ask the general partner questions about the
partnership affairs; the general partner shall answer questions to the extent
permitted by law and this agreement. The annual meeting costs are the operation
expenses of this partnership enterprise.

 

Partners’ meeting is responsible for decision-making of project investment and
other matters not related to the main business. Participating the annual meeting
doesn't provide limited partners right to involve in the investment activities
or other activities. Partners exercise voting rights in accordance with their
paid capital percentages.

 

Partners' meeting to discuss and decide the following matters:

(1) Change the partnership name proposed by general partner;

(2) Merger, division or organization changes of partnership enterprise;

(3) Dissolution and liquidation of the partnership enterprise (except to the
events authorized to the general partner stated in this agreement);

(4) Removal and replacement executive partner (general partner);

(5) Extension of the term of this partnership;

(6) Change of partners goal or change invest project;

(7) Other matters according to law and regulation and this agreement.

 

 

 

 

The above matters shall be approved by partners represent more than two thirds
of the paid capital contribution (except as otherwise agreed in this agreement).

 

Matters such as potential project investment or implementation of the relevant
partnership affairs shall not be proposed for resolution in partners’ meeting,
and limited partners shall not try to impact the management of enterprise or
other matters through partners’ meeting.

 

Upon the approved of general partner, the partners’ annual meeting may be held
by written consent.

 

9.2Prohibited Acts

The partnership enterprise shall not make guarantees for outside third parties.

 

9.3Fund Custodian

The partnership enterprise shall commission a nationwide commercial bank with
qualification for custody of cash in the account of partnership enterprise. All
partners sign this agreement shall be deemed to have authorized general partner
to choose the custodian bank.

 

All cash payment in the partnership enterprise shall comply with the agreed
procedures in “Escrow Agreement” made with custodian bank.

 

10.Distribution of Profits and Losses

 

10.1Capital Account

General partner shall establish ledger for each partner (“Capital account”).
General partner shall adjust each partner’s account on the last day of each
calendar year according to the following standards.

 

At the end of each year, the increases in each partner’s capital account are :(
1) paid capital contribution within the year; (2) benefits of the year. The
decreases in each partner’s capital accounts are: (3) the cash, other securities
and assets that have been distributed to the partner within the year; (4) Costs
and losses partners should bear. Further adjusted shall be made according to any
special amortization or adjustment in this agreement.

 

10.2Distribution of Profit

General partner shall not make minimum income guarantees for the investment
return. Any items in this agreement shall not be considered as a fixed income
guarantee to limited partners.

 

Within 3 working days upon receipt of each interest payment from the Project
Company on the 20th of the last month of each quarter after the entrusted loan
has been released to the borrower, the distribution of the cash interest income
shall be made according to income distribution principle of this partnership
enterprise, and the last distribution is the expiration day of the partnership
term.

 

 

 

 

The distribution of the income (after deduction of necessary operating costs of
the partnership) shall be as follows:

(1) distribute to the preferred limited partner until it has reached its cap
amount (its capital contribution × 13% ÷4) ; however, for the first income
distribution--i.e. the first interest payment by the Project Company to the
Fund. The cap should be: its capital contribution × 13% × the number of days
from the actual capital contribution to the interest payment ÷360;

 

(2) distribute to the ordinary limited partner until it has reached its cap
amount (its capital contribution × 13% ÷4); however, for the first income
distribution--i.e. the first interest payment by the Project Company to the
Fund--the cap should be: its capital contribution × 13% × the number of days
from the actual capital contribution to the interest payment ÷360;

 

(3) distribute to the general partner until it has reached its cap amount (its
capital contribution × 13% ÷4); however, for the first income distribution--
i.e. the first interest payment by the Project Company to the Fund--the cap
should be: its capital contribution × 13% × the number of days from the actual
capital contribution to the interest payment ÷360;

 

(4) The remaining distributable cash income is owned by partnership enterprise.

 

Xi'an TCH will not be entitled to participate in any distributions until the
Project Company fully repays all principal and interest owed to the Fund.

 

For other income (other than interest income from the Project Company), if it
needs to be distributed, the distribution method shall be decided by the general
partner, preferred limited partner and ordinary limited partner.

 

10.3Distribution and Allocation of Non-cash Assets

For the distribution of non-cash assets: if it is prior to the liquidation of
the partnership, then Xi'an TCH has the obligation to purchase such non-cash
distributable assets of the Fund at fair market value and the general partner
shall also use its best efforts to try to sell such assets to avoid the
distribution of non-cash assets. If such assets cannot be timely realized into
cash, general partner shall choose to set this assets as owned by all partners.

 

For non-cash distribution, if non-cash assets are public traded securities, the
value of securities is based on the average transaction price of 15 trading days
prior to the distribution decision making day; for other non-cash assets,
general partner has right to hire an independent agency to assess and determine
its value.

 

During the distribution process of non-cash assets of the partnership
enterprise, general partner shall assist partners on their registration of the
assets transfer.

 

10.4Assume the Losses

All the losses after partnership liquidation priority orders according to this
agreement is borne by all or part of the partners.

 

 

 

 

Limited partners’ liability is limited to their paid capital contribution,
general partner has unlimited liability to the partnership enterprise.

 

When enforcement of the assets of the partnership is taken by the people's
court, all partners shall be informed. Other partners have the right of first
refusal for such assets under the same conditions.

 

Profit distribution and losses sharing within the duration of enterprise can be
adjusted upon agreement by all partners.

 

11.Taxation

Partners shall pay tax according to “Partnership Enterprise Law” and the
relevant tax provisions of the nation.

 

12.Fee Payment

12.1Management Fees of General Partner

During the existence of the enterprise, general partner shall not ask for
partnership enterprise management fees from limited partners.

 

12.2Custodian Fees

The partnership enterprise shall choose a commercial bank as custodian bank.
Payment and its terms for custodian fees shall be subject to the agreement
signed between partnership enterprise and the custodian bank.

 

12.3Operating Cost of Partnership Enterprise

All the following operation expense (partnership enterprise operation costs)
shall be paid by partnership enterprise from it revenue, which shall include but
not limited to:

 

(1) Partnership establishment costs, which is the agent fees and other costs
relevant to the establishment of the enterprise in the set up stage, include
government fees and so on (business registration and change fees);

(2) Service agent costs involved in the investment project;

(3) Referral fees and commissions fees for project referrals;

(4) Taxation and fees for to obtain, acquire, hold and sell the enterprise’s
assets;

(5) Special report preparation costs for limited partners;

(6) Annual audit fees (include audit firm business travel expense);

(7) Attorneys' fees and related travel expenses for legal service provided to
partnership enterprise;

(8) Financial advisory fees and related travel expenses for financial service
provided to partnership enterprise;

(9) Litigation, arbitration and public announcements fees for which enterprises
as the mainstay;

(10) Partners’ annual meeting fees, include travel expense for general partner
to attend or organize such meeting;

(11) Custodian Fees, entrusted loan fees, bank accounts regulatory fees and so
on;

(12) Other reasonable costs relevant to the valid and subsisting of partnership
enterprise.

 

 

 

 

13.Accounting, Auditing and Other Financial Matters

13.1Accounting

General partner shall maintain the accounting statement during the duration of
enterprise and keep three years after the dissolution and such statement shall
be the basis of financial statements submitted to the partners in accordance
with relevant regulation.

 

13.2Fiscal Year

The fiscal year of partnership enterprise is the same with calendar year; the
first fiscal year starts from the establishment of the enterprise and ends at
December 31 of the same year.

 

13.3Auditing and Financial Statement

Auditor shall audit the financial reports of the enterprise at the end of each
fiscal year. The change of auditor shall be decided by general partner.

 

General partner shall submit the following financial statement (annual financial
reports) to limited partners within 120 days after the fiscal year ends, in the
form of mail, fax, email or other way.

(1) Balance sheet;

(2) Profit and loss account;

(3) Cash flow statement;

(4) Change of balance in capital account of each partner during the reporting
period.

 

13.4Information Disclosure

If limited partner has any objections to the report submitted by general
partner, limited partner has the right to review the accounting books of
enterprise in personal or by its authorized personnel during the working hours
of general partner and custodian bank.

 

14.Admission, Withdraw and Removal

14.1Admission

If a new partner wants to join the partnership, it shall be approved by general
partner and enter into written agreement. When entered the written agreement,
general partner shall notify the operation and financial condition of the
partnership to new partner.

 

New partner shall have same rights and same responsibility as the old partners.
New partner shall have unlimited liability to partnership enterprise; new
limited partner shall bear the liabilities of enterprise according to their
percentage of capital contribution.

 

14.2Withdraw

(1) Partners can withdraw under the following circumstance:

a) The event for withdrawal stated in the agreement occurs;

 

 

 

 

b) Approved by all partners except secondary limited partner;

Limited partner shall not withdraw before the partnership dissolution unless
otherwise stated in the agreement. Losses shall be compensated to other partners
caused by unauthorized withdraw.

(2) Partners are considered withdrawal under the following circumstance:

a) Natural death or declaration of death of partners;

b) Insolvency;

c) As a legal entity or other organization of partners, the business license is
revoked, closure or bankruptcy;

d) Loss of relevant qualification of such partner that is required by law or the
partnership agreement;

e) All its property shares owned by such partner in enterprise are enforced by
the people's court;

f) Expiration of the partnership term.

 

14.3Removal

The removal of executive partners (general partner). When executive partner (1)
fails to fulfill its capital contribution obligations; (2) intentional or gross
negligence cause the company suffered heavy losses, or suffer substantial
indebtedness, or (3) material breach of agreement and cause heavy losses.

 

The removal of executive partner shall be carried out under the following
procedure:

(1) In the circumstance limited partner representing more than one third of the
paid capital contribution proposes and provides sufficient evidence of the above
conditions, the removal of executive partners shall be discussed at partners’
meeting or special partner meeting;

(2) The resolution of removal of executive partner shall be made after approved
by all limited partners;

(3) If the partners haven't reached a resolution to appoint a new executive
partner when they remove the current executive partner, then the enterprise
shall go into liquidation process.

 

Under the following circumstance, the limited partners can be removed after
written consent by general partner:

(1) Fails to fulfill its capital contribution obligations;

(2) Intentional or gross negligence that cause the company suffered heavy
losses;

(3) Breach of agreement and laws.

The removed partner shall be informed by a written notice for the removal. The
removal is effective from the date notice received by removed person.

 

14.4Property to be received upon exit of partnership

(1) If a partner exits from the partnership due to the expiration of the term
under section 4.2, the exiting partner shall settle the payment with the other
partners according financial conditions of the partnership when it exits.
Considering the complexity of determining the value of the partnership at
certain specific time point, all parties agree that the fair value for the
exiting partner shall be: its capital contribution ×(1 + m x n). After deducting
the payments already received from the partnership and other payment
responsibilities of such partner to other partners if any, the exiting partner
shall be paid at the fair value for any unpaid portion.

 

 

 

 

m=the term for such partner in this partnership

n= the number indicated in the exhibit I

 

(2) If a partner exits before the expiration of its term but with unanimous
consent of the other partners, all parties agree that fair value for the exiting
partner is: its capital contribution × [1+ the number of the completed full
years that it stayed in the partnership × 13%] + its capital contribution × (the
additional number of days that it stayed in the partnership for the uncompleted
final year ÷360)× 13%. After deducting the payments already received from the
partnership and other payment responsibilities of such partner to other partners
if any, the exiting partner shall be paid at the fair value for any unpaid
portion.

 

14.5Property to be received upon removal

If a partner is removed pursuing to the agreement, unless there is other
specific arrangement in this agreement, the removed partner shall settle the
payment with the other partners according financial conditions of the
partnership when it exits. In consideration of the complication regarding
valuing the partnership enterprise, all parties agree the fair value for the
exiting partner will be his actual paid capital contribution. After deducting
the payments already received from the Fund as well as any reimbursement to
other partners, if any, the exiting partner shall be paid at the fair value for
any unpaid portion.

 

15.Non-competition and Exemption

Unless otherwise specified in this agreement, limited partner is allowed to
engage in or cooperate with others the business which is competing with the
partnership enterprise.

 

Unless otherwise specified in this agreement, partner can have transaction with
the partnership enterprise.

 

All the partners particularly acknowledge that the situations described below
are not regarded as competitive behaviors with the partnership:

 

(1) General partner or its affiliated parties provide consultant and management
services to other enterprises;

(2) General partner make other investment with its own capital;

(3) Other partnership enterprise managed by General partner or its affiliated
parties engage in similar business or behavior;

(4) General partner or its affiliated parties raise offshore foreign currency
fund to make investment.

 

The involvement in above mentioned situations by the affiliated parties of
general partner are not regarded as competitive business operated by general
partner itself or cooperated with others on such competitive business.

 

16.Transformation between Limited Partner and General Partner

Unless otherwise specified in this agreement, general partner cannot be
transformed into limited partner and limited partner cannot be transformed into
general partner.

 

 

 

 

17.Dissolution and Liquidation

17.1Dissolution

When any of the following situations occurs, the partnership enterprise shall be
dissolved:

(1) it doesn't receive the contribution from the limited partners within 12
months of its establishment;

(2) expiration of the term of the partnership ;

(3) the partners (excluding partners who violate the agreement) meeting
determines to dissolve;

(4) the event of termination of general partner has occurred and parties cannot
reach an agreement as to the replacement of the general partner;

(5) the partnership loses its business license or is ordered to close or
terminate by a government agency with the authority;

(6) any other dissolution event pursuant to the Partnership Enterprise Law of
China or the partnership agreement.

 

When above item (1) or (2) occurs, the dissolution of the partnership enterprise
can be decided by general partner without partners meeting. Under such
circumstance, general partner should send out dissolution notice to all limited
partners within five business days after it makes dissolution decision.

 

17.2Liquidation

After the decision of dissolution of partnership enterprise is made, the trustee
shall handle all liquidation and settlement of the credit and debt of the
partnership, as well as handling all unresolved affairs and make corresponding
notice and announcement to creditor.

 

All partners will be the trustee. All partners agree that the general partner
will be designated to deal with liquidation affairs after above mentioned
dissolution occurs.

 

After the confirmation of trustee, all non-cashed assets of the partnership
enterprise will be managed by the trustee.

 

However, if the trustee is not the general partner, the general partner is
obliged to assist the trustee cashing the non-cash assets or disposing them
pursuing to the agreement.

 

Upon request and trustee’s approval in advance, some of limited partners may
accept the non-cashed equity shares in the project company of the partnership
instead of cashing it. The premise of the trustee to approve such request is
that it conforms to the applicable laws and does not affect the interests of the
other partners.

 

Upon dissolution, the assets of the partnership enterprise shall go through the
liquidation process and shall be distributed to the partners according to the
following sequence:

 

 

 

 

(1) to the preferred limited partner (if any) until it receives its full
contribution amount;

(2) to the ordinary limited partner until it receives its full contribution
amount;

(3) to the preferred limited partner until its annual investment return for its
contribution reaches its annual return cap indicated in this agreement (the cap
is the value of n stated in the exhibit I of the agreement);

(4) to the ordinary limited partner until its annual investment return for its
contribution reaches its annual return cap indicated in this agreement (the cap
is the value of n stated in the exhibit I of the agreement);

(5) if there are any assets remaining after steps 1 through 4, then they shall
be distributed to the secondary limited partner and the general partner
according to their percentage of capital contribution.

 

The annual investment return percentage in this agreement refers to the
percentage of the income the partner receives from the partnership enterprise
against its actual capital contribution amount on an annual basis from the date
when the partner contributed capital to the fund raising account. The formula is
just used for interpreting a business definition of the annual investment return
percentage and shall not constitute the commitment by the partnership or certain
partners to other partners that certain things definitely will happen in a legal
fact matter .

 

17.3Responsibility of Trustee

(1) Liquidate the assets of the partnership enterprise and prepare the balance
sheet and the assets list;

(2) Handle unresolved affairs related to liquidation of the partnership
enterprise;

(3) Pay off tax owed by the partnership enterprise;

(4) Manage all credits and debts of the partnership enterprise;

(5) Manage the remaining assets after settlement of debts of the partnership
enterprise;

(6) Participate in litigation or arbitration on behalf of the partnership
enterprise;

(7) Prepare liquidation report and have the report to be signed and sealed by
all partners and submit it to the enterprise register agent within 15 business
days to cancel the registration of the partnership.

 

17.4Priorities in the Liquidation

Upon liquidation, the assets of the partnership enterprise shall be liquidated
and distributed in following sequence:

(1) liquidation cost;

(2) employee salaries and social securities, as well as statutory compensation
(if applicable);

(3) tax owed (if applicable);

(4) debt of the partnership enterprise;

(5) distribution among partners pursuing to item 17.2 of the agreement

 

Above mentioned step (1)、(2) and (3) must be paid in cash; if there is no enough
cash, other assets should be cashed out to make such payment; payment method of
above step (4) should be negotiated with the creditors; step (5) should be
distributed according to the varieties of the remaining assets pursing to the
agreement.

 

18.Indemnification

If general partner and its affiliates (including but not limited to its
officers, directors, shareholders, partners and employers) or any third party on
behalf of the partnership upon the request of the general partner in business,
investment or other activities of the partnership suffer or may suffer any loss,
liabilities or expenses resulted from the involvement in the affairs of the
partnership enterprise, the partnership should make its best effort to reimburse
such parties within the maximum limit pursuing to the applicable laws.

 

 

 

 

The general partner may have the partnership enterprise to set up certain
reserve fund, trust account or similar arrangements at a reasonable amount for
the purpose of this section, if it considers as appropriate and necessary. The
general partner may also buy some reasonable insurance for part or all of above
mentioned persons for its obligations under this section.

 

The protection to the above mentioned persons shall be continuous no matter
whether they still keep their original positions as they first acquire the
rights under the agreement. Any amendment or revision to the agreement will not
reduce or limit any reimbursement to above mentioned persons for the activities
conducted before the amendment. The obligation under this section shall continue
until the partnership enterprise completes its liquidation.

 

Despite of otherwise said in the agreement, if the assets of the partnership
enterprise are not enough for the partnership enterprise to perform its whole or
partial 1) obligation under this section; 2) other express obligations under the
agreement, the general partner may request partners return sufficient amount of
money that have been distributed to them, no matter such obligation occurred
before or after the last day of the term of the partnership. However, the
returning amount of each limited partner shall be limited to the money that has
been distributed to it as to the date when the general partner makes such crawl
back request. The crawl back amount for each partner shall be made according to
their contribution percentage to the partnership.

 

19.Miscellaneous

19.1Amendment to the Agreement

Unless otherwise agreed in this agreement, any amendments to this agreement must
be approved by all partners. Any matters uncovered in the agreement and any
amendment of this agreement shall be discussed and agreed by all parties and
signed in a written amendment agreement. If there is any conflict between
amendments and this agreement, the amendments shall prevail.

 

19.2Reservation of Rights

(1) Any partner who has not exercised its rights or take any actions against the
breach of agreement by other partners shall not be considered as abandon its
rights or waive it claims for the liabilities of the breaching party. Any party
who waives any rights or claims against the other party on certain matters shall
not be considered as abandon its rights or claims against such party on any
other matters. Any waiver should be made in writing.

 

(2) If some terms in this agreement are determined to be invalid or cannot be
implemented according to current law, other provisions of the agreement shall
continue to be valid. In that event, the legality, validity, and enforceability
of other provisions of the agreement are still exist and all parities shall
replace invalid terms with other effective terms which should be as close as
possible to the original purposes and principles of the term.

 

 

 

 

19.3Notice

(1) Unless otherwise stipulated in this agreement, all notices under this
agreement among all parties should be in Chinese and delivered by
specially-assigned person, or sent in registered mail, facsimile or EMS.

 

(2) If the correspondence address or contact address of a partner is changed,
the partner should make written notice to the general partner within 3 days
since the change. Any party violates such requirement, unless it says otherwise
in the law, the party who has address changed should be responsible for all
possible losses incurred by the change.

 

Any notice, request or information under the agreement should all be in written
format and sent or delivered to below address to be considered as a complete
delivery:

 

For delivering to partnership enterprise:

Address: 201, No. 19 Tai Ping Qiao Avenue, West City District, Beijing

Fax: 010-88085340

Tele: 010-88013701

Attendance: Zeng Jian

 

For delivering to general partner:

Address: 201, No. 19 Tai Ping Qiao Avenue, West City District, Beijing

Fax: 010-88085340

Tele: 010-88013701

Attendance: Zeng Jian

 

For delivering to each limited partner, the contact information shall be
provided in written by each limited partner later.

 

Any limited partner may change its correspondence address any time by making
written notice to the partnership enterprise and the general partner.

 

General partner and partnership enterprise may change its correspondence address
any time by making written notice to limited partners.

 

19.4Severability

If any provision of the agreement or any application to any person or
circumstance is determined invalid, other provisions or validity of the
application to other person or other circumstance shall not be affected.

 

 

 

 

19.5Titles

Each title of the agreement is for convenient reference only. The title shall
not otherwise define, limit or extent the provision of the agreement.

 

19.6Confidentiality

All parties agree that all materials and information provided by one party to
other parties of this agreement or for the transactions mentioned in this
agreement shall be kept confidential and cannot be disclosed to any other party
(except for the employees and directors of disclosing party that need to know
such information) without written consent of the other party, except for (1) to
investors for the potential transactions; (2) to attorneys, accountants,
counselors, or advisors related to the transaction; (3) to relevant governments
or authorities as applicable law and regulations require.

 

19.7Law Application and Dispute Resolution

The formation, effectiveness, interpretation, performance and dispute of the
partnership agreement are subject to current Chinese law and administrative
regulations and policies (excluding Hong Kong special administrative region,
Macao special administrative region and Taiwan region).

 

Any dispute that cannot be solved by negotiation shall be submitted to the court
where this agreement is executed. The losing party should assume the court fees.

 

During legal proceedings, all parties should continue to perform its other
obligation except for the disputed part.

 

19.8Force Majeure

“Force Majeure” refers to the unforeseeable, uncontrollable or unavoidable
issues which interfere with, affect or delay all or partial performance of the
agreement, which includes but not limited to earthquake, typhoon, flood, fire,
pestilence, other natural disaster, war, coup, riot, strike, etc.

 

19.9Effectiveness of the Agreement

The agreement will be effect on each party and its heirs, successor, assignee or
procurator, as well as its consigner, trustee or nominee if any.

 

19.10Execution Copies

The agreement has in 10 duplicates and each has same legal effect. General
partner holds two copies. Each limited partner holds one copy. Other copies will
be used to carry out relevant procedure for the partnership enterprise.

 

19.11Effective Date of the Agreement

The agreement becomes effective when it is signed and sealed by all parties. Any
amendment to the agreement will become effective according to the requirement of
the agreement.

 

19.12Where the Agreement Is Signed

The agreement is signed in Beijing.

 

 

 

 

 

 

 

Exhibit I

 

 

 

Name

Subscribed Capital Contribution (RMB: yuan) Paid Capital Contribution (RMB:yuan)

 

Date of Payment

 

Value of n

 

Classification

Hongyuan Recycling Energy Investment Management (Beijing) Co., Ltd. 5 million  
2013 13%/annual General Partner China Orient Asset Management Co., Ltd. 280
million   2013 13%/annual Preferred Limited Partner Hongyuan Huifu Venture
Capital Co., Ltd. 100 million   2013 13%/annual Ordinary Limited Partner Xi’an
TCH Energy Technology Co., Ltd. 75 million   2013 ------ Secondary Limited
Partner

 

 

 

[Signature page to follow]

 

 

 

 

Hongyuan Recycling Energy Investment Management (Beijing) Co., Ltd. (Sealed)

Executed Date:

 

Hongyuan Huifu Venture Capital Co., Ltd. (Sealed)

Executed Date:

 

Xi’an TCH Energy Technology Co., Ltd. (Sealed)

Executed Date: