f8k081809ex10i_chinavalve.htm


    Exhibit
10.1

    


     EQUITY TRANSFER
AGREEMENT

    


    Party A:
Guichun Xie

    Party B:
Lizhen Huang

    Party C:
Lanzhou Sufa Technology Co., Ltd.

    Party D:
Henan Tonghai Fluid Equipment Co., Ltd.

    


    Whereas
upon friendly consultation, Party A, B and C agree to sell all of their equity
ownership in Yangzhou Rock Valve Lock Technology Co., Ltd. (“Yangzhou Rock”) to
Party D. The parties hereby reach the following agreement (the “Agreement”) on
August 14, 2009:

    


    Section
1. Transfer Price and Method of Payment

    


    
      	
              1.  

            	
              Party
      A, B and C agree to sell all of their equity ownership in Yangzhou Rock to
      Party D for a consideration of RMB 49,500,000 (approximately $7.3 million)
      (the “Purchase Price”).

            


    

    
      	
              2.  

            	
              The
      payment shall be made within one month after the execution of the
      Agreement by the parties.

            


    

    


    Section
2. Representations and Warranties

    


    
      	
              1.  

            	
              Party
      A, B and C represent that they are the legal owners of the equity in
      Yangzhou Rock and that they have complete disposition right of the equity
      they own. They further represent that the equity is not subject to any
      collateral, pledge, lien or any third party claims. Party A, B and C will
      take all responsibilities arising out of any claims if the representations
      are not accurate.

            


    

    
      	
              2.  

            	
              As
      the legal representative of Yangzhou Rock, Party A represents that
      Yangzhou Rock is not or has not been the subject of any action, claim,
      arbitration or mediation or any judicial or administrative proceedings.
      Party A will take all responsibilities arising out of any claims if the
      representations are not accurate.

            


    

    
      	
              3.  

            	
              Party
      A represents that Yangzhou Rock’s tangible and intangible assets
      (including but not limited to land, buildings, equipment and intellectual
      property rights) are not subject to any collateral, pledge, lien or any
      third party claims. Party A will take all responsibilities arising out of
      any claims if the representations are not accurate. Party A will assist
      Party D to obtain property ownership certificates of the
      buildings.

            


    

    
      	
              4.  

            	
              Party
      A will unconditionally transfer his patents to Yangzhou Rock with
      exclusive ownership. The patents include a patent for a 90 degree rotating
      valve lock device (Patent Registration No. ZL200710022824.9), a patent for
      a key management control device (applied on May 23, 2007, Application No.
      200710022825.3), a patent for a type of mechanical valve interlock (Patent
      Registration No. ZL200620079784.2) and all other valve lock-related
      patents applied on or before July 31, 2009. If any of the representations
      is not accurate, Party A will return to Party D RMB 25,000,000
      (approximately $3.7 million) of the Purchase
  Price.

            


    

    
      	
              5.  

            	
              Party
      A, B and C represent that they will not be directly or indirectly engaged
      in any business that may be competitive with Yangzhou Rock, its technology
      or products in ten years from the execution of the Agreement. However,
      they can be sales agents fro Yangzhou
Rock.

            


    

    
      	
              6.  

            	
              Party
      A, B and C will assist Party D in equity transfer registration with
      pertinent industrial and commercial administrative
    agencies.

            


    

    
      	
              7.  

            	
              Any
      cash in Yangzhou Rock’s accounts before the execution of the Agreement
      belongs to Party A. Party D shall be responsible for all the expenses and
      costs related to the equity transfer and obtaining the property ownership
      certificates.

            


    

    
      	
              8.  

            	
              Party
      A will provide the Research and Development Office located at Room 1307,
      No. 181 Qiuhong Road, Hongkou District, Shanghai to Party D without any
      rent until December 31, 2009. Party A will discuss with Party D regarding
      rent payment starting from January 1,
2010.

            


    

    
      	
              9.  

            	
              The
      parties will further discuss any matters not covered in this
      Agreement.

            


    

    


    Section
3. Execution.

    


    The Agreement becomes effective upon
execution by the parties.

    


    Party A:
/s/ Guichun Xie

    Party B:
/s/ Lizhen Huang

    Party C:
/s/ Lizhen Huang

    Party D:
/s/ Qizhong Xiang