Unassociated Document


    
      Exhibit
10.40

       

      [UNOFFICIAL
ENGLISH TRANSLATION SOLELY FOR REFERENCE]

       

    

    Equity
Transfer Agreement

     

    
      	
              Party
      A

               

            	(Transferor):


              (Transferor): 

            	
              YANG
      Baorong

              WU Yang

            
	 	 	 
	
              Party
      B

              Legal Representative:  

            	
              (Transferee)

               

            	
              Xi'an
      Baorun Industrial

              GAO Xincheng

            


    

     

    Parties A
and B have entered into the agreement as follows regarding the transfer of all
the equity interest held by Party A in Hanyang Jinzheng Petroleum Sales Co. Ltd
(“Hanyang”) to Party B:

    


    Article I    Definition of the
Object of this Agreement

    


    1. The
“Equity Transferred” hereunder means:

     

    (1) All the equity interest held by
Party A in Hanyang, including all of its gas stations, gas station ground and
structures, both above and under the ground, and operation facilities and
equipment.

     

    (2) All the certificates, land use
right permits and approvals regarding Hanyang and all of its gas stations that
are in Party A’s possession at the time of the signing of this Agreement and
that shall be provided to Party B pursuant to the provisions herein, copies of
contracts/agreements and all the rights and obligations under such
contracts/agreements, and the gas station projects constructed with Hanyang’s
investment and the land use right to the ground occupied by such projects and
all the structures, both above and under the ground, and operation facilities
and equipment (7 mu of
ground area occupied by gas stations, the type of land is state land with use
right period of 40 years; two-story gas station building to be constructed,
including a sanitation room and employee dormitory, of about 196 square meters;
12 electronic gas filling machines; 5 storage tanks; rain shed and operation
offices of about 988 square meters).

    


    2. The
“Transfer Price” hereunder means the transfer consideration of all the equity
that Party B shall, pursuant to the provisions herein, pay to Party A in the
total amount of RMB 68,000,000,00 even.

    


    Article II    Party A’s Disclosure
of Information Prior to Agreement Execution

    


    1. Prior
to the execution hereof, Party A has already shown to Party B the originals of
the foresaid certificates, land use right permits and approvals regarding
Hanyang.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2. Prior
to the execution hereof, Party A has truthfully informed Party B of the origin,
authenticity and performance status of the foresaid certificates, land use right
permits and approvals regarding Hanyang, the conditions of the structures, both
above and under the ground, within the ground area of the gas station, operation
facilities and equipment, and has no instances of concealment and fabrication;
Party A warrants that it has full ownership of the said assets.

    


    3. The
shareholder assembly and the board of directors of Party A’s enterprise have
made the resolution authorizing the transfer.

    


    Article IV    Payment Method
and Schedule of Transfer Price

    


    1. The
amount of RMB 68,000,000,00 that shall be paid by Party B to Party A must be
deposited by wire transfer into the personal bank account of one of the
shareholders designated jointly by both members of Party A.  Bank
holding the account: Hanyang Industrial Bank Renmin Road 3rd Branch;
account title: YANG Baorong; account number: 2604046001021314440.

    


    2. Within
10 days upon the execution hereof, Party B shall pay to Party A 70% of the
Transfer Price, i.e., RMB 47,600,000.00 even.

    


    3. Within
3 months after the initial payment, Party A must complete all the certification
and permit procedures regarding the gas stations and must have the conditions
ready for operation, and Party B shall pay the 25% of the Transfer Price, i.e.,
17,000,000.00 even; on the day of receiving the Transfer Price, Party A shall
hand over the gas stations for Party B to use.

    


    4. After
one year after the handover of the gas station to Party B for operation, Party B
shall pay Party A the remaining 5% of the Transfer Price, i.e., RMB 3,400,000.00
even.

     

    Article IV    Handover of Seals,
Documents and Assets

    


    1. Upon
receiving the 70% of the Transfer Price, i.e., RMB 47,600,000.00 even, from
Party B, Party A shall hand over all the original documents set forth herein to
Party B for its use; Party B shall sign and affix the seal on the handover list
and must at the same time confirm on the corresponding copies that there are no
discrepancies found in the verification between the originals and the copies of
the said documents and give the copies to Party A for record.

    


    2. Due to
the difficulty in separating Hanyang, its the gas station assets, all the
structures, both above and under the ground, within the ground area of the gas
station, operation facilities and equipment, Party A and Party B must dispatch
inspectors to audit/inventory, verify and ensure that there are no discrepancies
prior to executing this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. On the
day of receiving the 70% of the Transfer Price, i.e., RMB 47,600,000.00 even,
from Party B, Party A and Party B will confirm, on the set of two copies of seal
print sample, Hanyang’s seal mold currently used by Party A; Hanyang’s seal
currently used by Party A shall be placed in the joint custody of both Party A
and Party B until the completion of all the change registration procedures; at
such time it shall be destroyed jointly by Party A and Party
B.  Thereafter, Party B may start using the new Hanyang
seal.

     

    Article V    Assumption of Credit
and Debt Obligations Prior to and After the Execution of This
Agreement

    


    1. Prior
to the execution of this Agreement and the handover of the gas stations, Party A
shall be responsible for all the civil credit and debt obligations under Hanyang
and its gas stations; after the execution of this Agreement and the handover of
the gas stations, Party B shall be responsible for all the civil credit and debt
obligations under Hanyang and its gas stations.

    


    2. If,
before the change, the government agencies seek payment from, or assess penalty,
on Hanyang, the responsible party (the party actually in violation of laws and
regulations) shall handle the situation and bear the corresponding legal
consequences.

    


    3. The
company and its gas stations shall not sell, transfer, pledge or dispose of in
any other form the equity interest each holds to any third party.

    


    4. For
the purpose of this acquisition, Party A and Party B must actively assist each
other during the transition period and settle all the issues arising from Party
B’s operation.

    


    Article VI    Confidentiality
Obligation

    


    Party A
and Party B warrant that each shall have confidentiality obligation regarding
the financial, legal, corporate governance or all other information obtained in
connection herewith.  Neither party can reveal this Agreement to any
party other than the parties hereto; otherwise the party in violation of this
confidentiality obligation shall compensate the other party for all the
resulting economical loss.

    


    Article VII    Default

    


    1.
Failure on the part of Party A to fulfill the handover and change registration
obligations on time as set forth herein constitutes default; for each day in
default, Party A shall pay a default penalty equivalent to 0.02% of the Transfer
Price to Party B.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    2.
Failure on the part of Party B to make payment for the Transfer Price on time as
set forth herein constitutes default; for each day in default, Party B shall pay
a default penalty equivalent to 0.02% of the Transfer Price to Party
A.

    


    3. If one
party’s default causes economical loss that exceeds the foresaid default
penalty, then the party in default shall compensate the other party for actual
loss.

    


    4. If
Party B is not able to accept the handover within 30 days after the day on which
Party A completes all the relevant procedures and requests the acceptance of the
gas stations, Party A has the right to terminate this Agreement.  Once
Party B accepts the handover of the gas stations, Party A shall have not right
to demand termination hereof.

    


    Article VIII    Resolution of
Disputes

    


    Any
dispute arising from or in connection with this Agreement should be settled
through negotiation by the two parties.  If negotiation fails, it must
be submitted to the competent People’s Court.

    


    Article IX    Other
Provisions

    


    1. This
Agreement takes effect after it is signed and affixed seal by both
parties.

    


    2. The
two parties may negotiate and make amendments hereof and supplements hereto for
all matters not yet covered herein; all amendments and supplements hereto shall
have equal legal effect.

    


    3. This
Agreement has one set of 8 copies, with 4 copies to each party, and all of them
have the equal legal effect.

     

    
      	
              Party
      A

               

            	WU Yang (signature)
      

              YANG Baorong (signature)

              Hanyang
      Jinzheng Petroleum Sales Co. Ltd (seal)

            
	 	 	 
	
              Party
      B

              Representative:  

            	
              Xi'an Baorun Industrial (seal)

              XIANG Xiaoqiang
(signature)

            


    

    


    Date:
December 13, 2009

    


    Place:
Xi’an