Unassociated Document


     

    
      


      


      


      


      SHARE
TRANSFER AGREEMENT

      


      


      


      


      BETWEEN

      


      


      NINGHUA XU

      


      


      AND

      


      


      WENXIANG
DING (丁文祥)

      


      


      


      


      


      


      Date:
November 30, 2010

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      THIS
SHARE TRANSFER AGREEMENT (this "Agreement") is made on
November 30, 2010 by and among NINGHUA XU (the "Transferor") and WENXIANG DING
(the "Transferee"
).

       

      The
Transferor and the Transferees are collectively referred to as the "Parties" and each of them as a
"Party".

       

      WHEREAS,
the Transferor holds one thousand (1,000) ordinary shares in Fortune Place
Holdings Limited (福置控股有限公司) (the
“Company”) and is the
sole registered shareholder of the Company. The Company is one of the registered
stockholders of China Energy Corporation, a Nevada corporation, the common
stock of which is quoted on the date hereof on the OTC Bulletin Board (the “Public Company”;
and

       

      WHEREAS,
the Transferee has contributed to the wealth of the Transferor through the
growth of the Company, the Public Company, China Tehong Energy Corporation,
China Tehong Energy Corporation HK Limited (中国特弘能源香港有限公司)
and their PRC subsidiaries and affiliates (collectively with the Company, the
“Group”).  In
consideration of the Transferee’s contributions and as an incentive to the
Transferee to continue his  commitment to the Group, the Transferor
has agreed to grant to the Transferee, and the Transferee has agreed to accept
from the Transferor, an option (the “Option”) to purchase a certain
number of ordinary shares of the Company currently held by the Transferor (the
"Option Shares") as set
forth in Schedule
A hereto, on the terms and subject to the conditions set out in this
Agreement.

       

      NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

       

      
        
          	
                  1.  

                	
                  DEFINITIONS

                


        

      

      


      
        	
                1.1.  

              	
                Defined Terms :
      In this Agreement (including the Recitals and the Schedules), unless the
      context otherwise requires, the following words and expressions shall have
      the following meanings:

              


      

      


      
        	
                "Business Day" means a
      day (other than Saturdays, Sundays and public holidays) on which banks are
      generally open for business in the PRC and New York, New
York;

                 

              
	
                "China" or "PRC" means the People's
      Republic of China, and for purposes of this Agreement, excluding the Hong
      Kong Special Administrative Region, the Macao Special Administrative
      Region and the island of Taiwan;

                 

              
	
                "Completion Date" means
      the date falling seven (7) Business Days after the service of the Exercise
      Notice by the Transferee on the Transferor;

                 

              
	
                "Completion" means the
      completion of the sale to and purchase by the Transferees of the Option
      Shares under this Agreement;

                 

              
	
                "Distributions" means any
      cash proceeds arising from or in respect of, or in exchange for, or
      accruing to or in consequence of the Option Shares from the Effective Date
      to the Completion Date, including without limitation the
      Dividends.

                 

              
	
                "Dividends" means the
      dividends declared by the Company and accrued in respect of the Option
      Shares (whether or not such dividends shall have been paid and received by
      the Transferor);

                 

              
	
                "Effective Date" means
      the date of this Agreement;

                 

              


      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	
                "Exercise" means the
      exercise by a Transferee or his  Nominee(s) of the Option
      pursuant to the terms of this Agreement;

                 

              
	
                "Exercise Notice" means
      the notice substantially in the form set out in Part I of Schedule
      B;

                 

              
	
                "Exercise Price" means
      the exercise price to be paid by the Transferee to the Transferor in
      respect of the Option Shares issued to the Transferee as set forth
      opposite his/her name in Schedule
      A;

                 

              
	
                "Nominee" means such
      person nominated by the Transferee in the Transfer Notice to be the
      transferee of the Option or Option Shares;

                 

              
	
                "Option Effective Dates"
      have the meaning ascribed to them in Clause 2.3;

                 

              
	
                "Performance Targets"
      have the meaning ascribed to them in Clause 3;

                 

              
	
                "RMB" means the lawful
      currency of China;

                 

              
	
                "Transfer Notice" means
      the notice substantially in the form set out in Part II of Schedule
      B;

                 

              
	
                "US$" or "United States Dollar"
      means the lawful currency of the United States of America.

                 

              


      

      


      
        	
                1.2.  

              	
                Interpretation:
      Except to the extent that the context requires
  otherwise:

              


      

      


      
        	
                1.2.1     
        

              	
                words
      denoting the singular shall include the plural and vice versa;
      words denoting any gender shall include all genders; words denoting
      persons shall include firms and corporations and vice
      versa;

              


      

      


      
        	
                1.2.2     
        

              	
                any
      reference to a statutory provision shall include such provision and any
      regulations enacted relating from time to time modified or amended whether
      before or after the date of this Agreement and (so far as liability
      thereunder may exist or can arise) shall include also any past statutory
      provisions or regulations (as from time to time modified or amended) which
      such provisions or regulations have directly or indirectly been
      replaced;

              


      

      


      
        	
                1.2.3     
        

              	
                the
      words "written"
      and "in writing"
      include any means of visible
reproduction;

              


      

      


      
        	
                1.2.4     
        

              	
                any
      reference to "Clauses", "Recitals" and "Schedules" are to be
      construed as references to clauses and recitals of, and schedules to, this
      Agreement; and

              


      

      


      
        	
                1.2.5     
        

              	
                any
      reference to a time of day is a reference to China time unless provided
      otherwise.

              


      

      


      
        	
                1.3.  

              	
                Headings: The
      headings in this Agreement are included for convenience and reference only
      and shall be ignored in connection with the interpretation of this
      Agreement.

              


      

      


      
        
          	
                  2.  

                	
                  OPTION

                


        

      

      


      
        	
                2.1.  

              	
                Option: In
      consideration of the contributions which the Transferee has made to the
      Group and his continuing commitment to the Group, the Transferor hereby
      irrevocably and unconditionally grants to the Transferee the Option for
      the Transferee to acquire from the Transferor, at the Exercise Price, at
      any time during the Exercise Period (defined below) any or all of the
      Option Shares set forth opposite his name in Schedule
      A hereto, free from all claims, liens, charges, pledges, mortgages,
      trust, equities and other encumbrances, and with all rights attaching
      thereto on the Completion Date.

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	
                2.2.  

              	
                Vesting
      Schedule: Subject to the terms and conditions hereto, the Option
      may be exercised, in whole or in part, in accordance with the following
      schedule:

              


      

      


      The
Option Shares subject to the Option shall vest at the rate of one-third (1/3)
per Performance Period (as defined in Exhibit
A).

      


      
        	
                2.3.  

              	
                Exercise
      Period: The Option shall be exercisable in accordance with and on
      the dates set forth on Exhibit
      A (the “Option
      Effective Dates”). Subject to the vesting schedule set forth in
      Section 2.2 of this Agreement, the Option may be exercised by the
      Transferee (or his  Nominee on behalf of the Transferee) at any
      time following the Option Effective Date (the “Exercise
      Period”).

              


      

      


      
        	
                2.4.  

              	
                Nominees: The
      Transferee may, at any time during the Exercise Period, at his sole
      discretion, nominate one or more person(s) (each a “Nominee”) to be the
      transferee(s) of whole or part of his Option, who shall hold and/or
      exercise the transferred Option on behalf of the
    Transferee.

              


      

      


      
        	
                2.5.  

              	
                Exercise
      Notice: The Option may be exercised by the Transferee or
      his  Nominee(s), in whole or in part, at any time during the
      Exercise Period, by serving an Exercise Notice on the
      Transferor.

              


      

      


      
        	
                2.6.  

              	
                Exercise: The
      Transferor agrees that she shall, upon receipt of the Exercise Notice and
      payment of the Exercise Price, depending on whether the Performance
      Targets have been met, issue to the Transferee (or his Nominee(s), as the
      case may be) any and all of the Option Shares specified in the Exercise
      Notice, free from all claims, liens, charges, pledges, mortgages, trust,
      equities and other encumbrances, and with all rights now or hereafter
      attaching thereto.  Except as agreed by the parties hereto, the
      Option shall be exercisable in compliance with PRC laws and regulations
      and the Transferee (or his Nominee(s), as the case may be) shall complete
      any and all approval or registration procedures regarding the exercise of
      his  Option with PRC competent authorities in accordance with
      applicable PRC laws and
regulations.

              


      

      


      
        	
                2.7.  

              	
                Transfer
      Notice: If at any time the Transferee transfers any or all of his
      Option to one or more Nominee(s) in accordance with Clause 2.4 above, the
      Transferee shall serve a Transfer Notice on the
  Transferor.

              


      

      


      
        	
                2.8.  

              	
                Transfer to
      Nominees: The Transferor agrees that she shall, upon receipt of the
      Transfer Notice, take all actions necessary to allow the Nominee(s) to be
      entitled to any or all of the Options specified in the Transfer
      Notice.

              


      

      


      Upon
exercise by any Nominee(s) of the transferred Option on behalf of the
Transferee, the Transferee shall serve the Exercise Notice on the Transferor in
his name for the exercising Nominee(s).  Upon receipt of such Exercise
Option, the Transferor shall issue to such Nominee(s) any and all of the
relevant Option Shares in the same manner as specified in Clause
2.6.

      


      
        	
                2.9.  

              	
                Payment of Exercise
      Price: Upon Exercise of the Option in whole or in part, the
      Transferee (or his  Nominee(s), as the case may be) shall pay
      the Exercise Price to the
Transferor.

              


      

      


      
        	
                2.10.  

              	
                The Transferor’s
      Obligation upon Exercise: The Transferor agrees that upon the
      Exercise of any Option by the Transferee (or his Nominee(s)), the
      Transferor shall cause and procure the number of Option Shares provided in
      the Exercise Notice to be transferred to the Transferee (or
      his  Nominee(s)) within seven (7) Business Days after the date
      of the Exercise Notice.

              


      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  3.  

                	
                  PERFORMANCE
      TARGET AND CONDITION
PRECEDENT

                


        

      

      


      
        	
                3.1.  

              	
                The
      obligation of the Transferor to effect the Option and the transfer of the
      Option Shares at the Exercise Price to an exercising Transferee upon his
      Exercise of the Option shall be subject to the fulfilment of the
      conditions set forth in Exhibit
      A hereto (the “Performance
      Targets”).

              


      

      


      
        
          	
                  4.  

                	
                  INFORMATION,
      DISTRIBUTIONS AND ADJUSTMENTS

                


        

      

      


      
        	
                4.1.  

              	
                Information:
      The Transferee shall be entitled
      to request from the Transferor at any time before the Completion, a copy
      of any information received from the Group which may be in the possession
      of the Transferor and, upon such request, the Transferor shall provide
      such information to Transferee.

              


      

      


      
        	
                4.2.  

              	
                Distributions:
      The Transferor agrees that the Transferee shall be entitled to all the
      Distributions in respect of the Option Shares held by her.  In
      the event that any such Distributions have been received by the Transferor
      for any reason, the Transferor shall, at the request of the Transferee,
      pay an amount equivalent to the Distributions received by her to the
      Transferee at the time of the Option Exercise by the
      Transferee.

              


      

      


      
        	
                4.3.  

              	
                Adjustments:
      If, prior to the Completion, the Company shall effect any adjustment in
      its share capital (such as share split, share dividend, share combination
      or other similar acts), then the number of Option Shares to be issued to
      the Transferee upon Exercise shall be adjusted accordingly to take into
      account such adjustment.

              


      

      


      
        
          	
                  5.  

                	
                  COMPLETION

                


        

      

      


      
        	
                5.1.  

              	
                Time and Venue:
      Completion of the sale and purchase of the Option Shares pursuant to the
      Exercise shall take place on the Completion Date at such time and place
      decided by the Transferee.

              


      

      


      
        	
                5.2.  

              	
                Business at
      Completion: At Completion of each Exercise, all (but not part only)
      of the following shall be
transacted:

              


      

      


      
        	
                5.2.1     
        

              	
                the
      Transferee shall pay the Exercise Price to the Transferor in
      cash;

              


      

      


      
        	
                5.2.2     
        

              	
                the
      Transferor shall cause the Company, within seven (7) Business Days after
      the date of Exercise Notice, to deliver to the  Transferee (or
      his Nominee(s), same below) the following documents and take all corporate
      actions necessary to give effect to such
  delivery:

              


      

      


      
        	
                (a)    
            

              	
                a
      share certificate or share certificates in respect of the number of the
      Option Shares exercised by the Transferee;
and

              


      

      


      
        	
                (b)      
          

              	
                any
      other documents as the exercising Transferee may reasonably believe
      necessary to give effect to the issuance of the exercised Option
      Shares.

              


      

      
        


      

      
        
          	
                  6.  

                	
                  CONFIDENTIALITY

                


        

      

      


      The
transaction contemplated hereunder and any information exchanged between the
Parties pursuant to this Agreement will be held in complete and strict
confidence by the concerned Parties and their respective advisors, and will not
be disclosed to any person except: (i) to the Parties’ respective officers,
directors, employees, agents, representatives, advisors, counsel and consultants
that reasonably require such information and who agree to comply with the
obligation of non-disclosure pursuant to this Agreement; (ii) with the express
prior written consent of the other Party; or (iii) as may be required to comply
with any applicable law, order, regulation or ruling, or an order, request or
direction of a government agency; provided, however, that the foregoing shall
not apply to information that: (1) was known to the receiving Party prior to its
first receipt from the other Party; (2) becomes a matter of public knowledge
without the fault of the receiving Party; or (3) is lawfully received by the
Party from a third person with no restrictions on its further
dissemination.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      


      
        
          	
                  7.  

                	
                  TRANSFEROR’S
      UNDERTAKINGS

                


        

      

      


      Without
the prior written consent of the Transferee, the Transferor shall vote her
shares in the Company such that the Company and any other member of the Group
shall not (i) issue or create any new shares, equity, registered capital,
ownership interests, or equity-linked securities, or any options or warrants
that are directly convertible into, or exercisable or exchangeable for, shares,
equity, registered capital, ownership interests, or equity-linked securities of
any member of the Group, or other similar equivalent arrangements, (ii) alter
the capital structure of any member of the Group, (iii) cancel or otherwise
alter the Option Shares, (iv) amend the register of members or the memorandum
and articles of association of any member of the Group (with respect to , (v)
liquidate or wind up any member of the Group, or (vi) act or omit to act in such
a way that would be detrimental to the interest of the Transferee in the Option
Shares.  The Transferor shall cause the Company to disclose to the
Transferee true copies of all the financial, legal and commercial documents of
any member of the Group and the corporate minutes and written resolutions of the
stockholders and the board of directors of any member of the Group.

      


      
        
          	
                  8.  

                	
                  MISCELLANEOUS

                


        

      

      


      
        	
                8.1.  

              	
                Indulgence, Waiver
      Etc: No failure on the part of any Party to exercise and no delay
      on the part of such Party in exercising any right hereunder will operate
      as a release or waiver thereof, nor will any single or partial exercise of
      any right under this Agreement preclude any other or further exercise of
      it or any other right or remedy.

              


      

      


      
        	
                8.2.  

              	
                Effective Date and
      Continuing Effect of Agreement: This Agreement shall take effect
      from the Effective Date.  All provisions of this Agreement shall
      not, so far as they have not been performed at Completion, be in any
      respect extinguished or affected by Completion or by any other event or
      matter whatsoever and shall continue in full force and effect so far as
      they are capable of being performed or observed, except in respect of
      those matters then already
performed.

              


      

      


      
        	
                8.3.  

              	
                Successors and
      Assigns: This Agreement shall be binding on and shall ensure for
      the benefit of each of the Parties' successors and permitted assigns. Any
      reference in this Agreement to any of the Parties shall be construed
      accordingly.

              


      

      


      
        	
                8.4.  

              	
                Further
      Assurance: At any time after the date of this Agreement, each of
      the Parties shall, and shall use its best endeavors to procure that any
      necessary third party shall, execute such documents and do such acts and
      things as any other Party may reasonably require for the purpose of giving
      to such other Party the full benefit of all the provisions of this
      Agreement.

              


      

      


      
        	
                8.5.  

              	
                Remedies: No
      remedy conferred by any of the provisions of this Agreement is intended to
      be exclusive of any other remedy which is otherwise available at law, in
      equity, by statute or otherwise, and each and every other remedy shall be
      cumulative and shall be in addition to every other remedy given hereunder
      or now or hereafter existing at law, in equity, by statute or otherwise.
      The election of any one or more of such remedies by any Party shall not
      constitute a waiver by such Party of the right to pursue any other
      available remedies.

              


      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                8.6.  

              	
                Severability of
      Provisions: If any provision of this Agreement is held to be
      illegal, invalid or unenforceable in whole or in part in any jurisdiction,
      this Agreement shall, as to such jurisdiction, continue to be valid as to
      its other provisions and the remainder of the affected provision; and the
      legality, validity and enforceability of such provision in any other
      jurisdiction shall be unaffected.

              


      

      


      
        	
                8.7.  

              	
                Governing Law:
      This Agreement shall be governed by, and construed in accordance with, the
      laws of Hong Kong Special Administrative
Region.

              


      

      


      
        	
                8.8.  

              	
                Dispute
      Resolution: In the event of any dispute, claim or difference (the
      "Dispute") between
      any Parties arising out of or in connection with this Agreement, the
      Dispute shall be resolved in accordance with the
  following:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                Negotiation between Parties;
      Mediations.  The Parties agree to negotiate in good faith
      to resolve any Dispute.  If the negotiations do not resolve the
      Dispute to the reasonable satisfaction of all parties within thirty (30)
      days, subsection (b) below shall
apply.

              


      

       

      
        	
                 
      

              	
                (b)

              	
                Arbitration.  In
      the event the Parties are unable to settle a Dispute in accordance with
      subsection (a) above, such Dispute shall be referred to and finally
      settled by arbitration at Hong Kong International Arbitration Centre in
      accordance with the UNCITRAL Arbitration Rules (the “UNCITRAL
      Rules”) in effect, which rules are deemed to be incorporated by
      reference into this subsection (b).  The arbitration tribunal
      shall consist of three arbitrators to be appointed according to the
      UNCITRAL Rules.  The language of the arbitration shall be
      English.

              


      

      


      
        	
                8.9.  

              	
                Counterparts:
      This Agreement may be signed in any number of counterparts, all of which
      taken together shall constitute one and the same
      instrument.  Any Party hereto may enter into this Agreement by
      signing any such counterpart.

              


      

      


      [SIGNATURE
PAGE(S) FOLLOW]

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF the Parties
hereto have executed this Agreement on the date first above
written.

      


      The
Transferor

      


      


      


      By:   /s/ Ninghua Xu    

      NINGHUA
XU

      


      


      The
Transferee

      


      
        	
                 

                By:   /s/ Wenxiang
      Ding­­­­­­­­     

                Wenxiang
      Ding (丁文祥)

              	 
      


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        EXHIBIT
A

      

      


      PERFORMANCE
TARGETS

       

      A.           The
Group shall have generated a gross revenue of

       

      (i) at
least $6,000,000 for six months commencing from December 1, 2010 to May 31, 2011
(the “Performance Period I”);

       

      (ii) at
least $6,000,000 for six months commencing from June 1, 2011 to November 30,
2011 (the “Performance Period II”);

       

      (iii) at
least $6,000,000 for six months commencing from December 31, 2011 to May 31,
2012 (the “Performance Period III”).

       

      B.           The
Option Effective Date for each Performance Period shall be that date that is
forty five (45) days following the last day of each such Performance
Period.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      
        SCHEDULE
A

      

      


      Transferees
and Option Shares

      


      
        	
                Transferee

              	
                ID
      Card Number

              	
                Number
      of Option Shares

              	
                Exercise
      Price

              
	
                Wenxiang
      Ding (丁文祥)

              	
                152723195511153018

              	
                1,000

              	
                US$1.00

              


      

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
B

       

      


      Part
I

      


      Form of Exercise
Notice

      


      


      


      


      To          
:           NINGHUA XU
(the “Transferor”)

      


      From      
:           [  ]
(the “Transferee”)

      


      


      We refer
to the Share Transfer Agreement (the "Share Transfer Agreement")
dated [  ] made between you and the Transferee.  Terms
defined in the Share Transfer Agreement shall have the same meanings as used
herein.

      


      We hereby
give you notice that we require you to sell to us / [Nominees' names] in
accordance with the terms and conditions of the Share Transfer Agreement, the
following Option Shares at the Exercise Price set out below, subject to the
terms and conditions set out in the Share Transfer Agreement. Completion shall
take place at [    ] on
[                ]
at the office of [    ].

      


      


      
        	
                Transferee

              	
                Option
      Shares

              	
                Exercise
      Price

              
	 
      	 
      	 
      


      

      


      


      Dated
[     ]

      


      


      Yours
faithfully

      


      


      ___________________________

      Name:

      Title:

      For and
on behalf of

      [Transferee]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Part
II

      


      Form of Transfer
Notice

      


      


      


      To           :           NINGHUA
XU  (the “Transferor”)

      


      From      
:           [  ]
(the “Transferee”)

      


      


      We refer
to the Share Transfer Agreement (the "Share Transfer Agreement")
dated [  ] made between you and the Transferee.  Terms
defined in the Share Transfer Agreement shall have the same meanings as used
herein.

      


      We hereby
give you notice that we will transfer to [Nominee' name] the following
portion of the Option, expressed in terms of the number of Option Shares
represented by the portion of the Option transferred in accordance with the
terms and conditions of the Share Transfer Agreement,.

      


      


      
        	
                Transferee

              	
                Nominee

              	
                Option Shares
      Represented

              
	 
      	 
      	 
      


      

      


      


      Dated
[      ]

      


      


      Yours
faithfully

      


      


      ___________________________

      Name:

      Title:

      For and
on behalf of

      [Transferee]