Document:

sbrd8k20100924ex10-a.htm

SHARE EXCHANGE AGREEMENT

AGREEMENT dated as of September 24, 2010 by and among Sabre Industrial, Inc., a Delaware corporation (“Sabre Industrial”) and Zhang Dingyou and C. Mark Tang (together, the “Shareholders”).

WHEREAS, the Shareholders own all of the issued and outstanding capital stock of Tsingyuan Holding, Inc., a Delaware corporation (“Tsingyuan Holding”); and

WHEREAS, Tsingyuan Holding is the registered owner of the capital stock of Tsingyuan Group (Hong Kong) Co., Ltd. (“Tsingyuan Hong Kong”), a Hong Kong corporation; and

WHEREAS, Tsingyuan Hong Kong is the registered owner of the registered capital of Beijing Qingyuan Hengchang Consulting Co., Ltd.  (“Beijing Consulting”), a Wholly Foreign Owned Entity organized under the laws of the People’s Republic of China; and

WHEREAS, Beijing Consulting has control over the business of both Linyi Hengchang Brewer’s Malt Co., Ltd. (“Linyi Malt”) and Shandong Qingyuan Beer Co., Ltd. (Shandong Beer”), both of which are limited liability companies organized under the laws of The People’s Republic of China, the relationship between them being generally identified as “entrusted management”; and

WHEREAS, the Shareholders desire to transfer the capital stock of Tsingyuan Holding to Sabre Industrial, and Sabre Industrial desires to acquire said shares.

NOW, THEREFORE, it is agreed:

1.           Definitions.  As used herein, the following terms shall have the meanings set forth below:

	
  

	
a.

	
“Applicable Law” means any domestic or foreign law, statute, regulation, rule, policy, guideline or ordinance applicable to the businesses or corporate existence of Sabre Industrial, Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting,  Linyi Malt or Shandong Beer.

	
  

	
b.

	
“GAAP” means generally accepted accounting principles in the United States of America as promulgated by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board or any successor institutes concerning the treatment of any accounting matter.

	
  

	
c.

	
“Lien” means, with respect to any property or asset, any mortgage, Lien, pledge, charge, security interest, claim, encumbrance, royalty interest, any other adverse claim of any kind in respect of such property or asset, or any other restrictions or limitations of any nature whatsoever.

  

  

  

	 	
d.

	
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means:

	
  

	
(i)    any income, alternative or add-on minimum tax, gross receipts tax, sales tax,  use tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,   withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp tax, occupation tax, property tax, environmental or windfall profit tax, custom, duty or other tax, impost, levy, governmental fee or other like assessment or charge of any kind whatsoever together with any interest or any penalty, addition to tax or additional amount imposed with respect thereto by any governmental or Tax authority responsible for the imposition of any such tax (domestic or foreign), and

	
  

	
(ii)  any liability for the payment of any amounts of the type described in clause (i) above as a result of being a member of an affiliated, consolidated, combined or unitary group for any Taxable period, and

	
  

	
(iii)  any liability for the payment of any amounts of the type described in clauses   (i) or (ii) above as a result of any express or implied obligation to indemnify any other person.

	
  

	
e.

	
“Tax Return” means any return, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

2.           Share Exchange.

a.           On the Closing Date (defined herein), the Shareholders shall transfer and assign to Sabre Industrial all of the issued and outstanding capital stock of Tsingyuan Holding.  The Shareholders represent and warrant that upon delivery to Sabre Industrial of certificates for said shares, duly endorsed for transfer, all right, title and interest in said shares will be transferred to Sabre Industrial free of Liens, claims and encumbrances.

b.           On the Closing Date, Sabre Industrial shall deliver certificates for a total of 65,107,671 shares of its common stock (the “Exchange Shares”) as follows:

	
  

	
·

	
46,820,000 shares to Zhang Dingyou or his assignees;

	
  

	
·

	
18,287,671 shares to C. Mark Tang or his assignees

Sabre Industrial warrants that the Exchange Shares, when so issued, will be duly authorized, fully paid and non-assessable.

c.            The parties intend that the exchange of shares described above shall qualify as a tax-free exchange under Section 351 of the United States Internal Revenue Code.  The parties further intend that the issuance of the common stock by Sabre Industrial to the Shareholders shall be exempt from the provisions of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of said Act.

  

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3.           Closing.  The Closing of the transactions contemplated by this Agreement ("Closing") shall take place at the offices of Robert Brantl, counsel for Sabre Industrial, simultaneously with the execution of this Agreement (the “Closing Date”).

4.           Warranties and Representations of the Shareholders.   In order to induce Sabre Industrial to enter into this Agreement and to complete the transaction contemplated hereby, the Shareholders, jointly and severally, warrant and represent to Sabre Industrial that:

a.           Organization and Standing – Tsingyuan Holding .  Tsingyuan Holding is a corporation duly organized, validly existing and in good standing under the laws of the Delaware and has full power and authority to carry on its business as now conducted. The copies of the Certificate of Incorporation and Bylaws of  Tsingyuan Holding previously delivered to Sabre Industrial are true and complete as of the date hereof.

b.           Capitalization – Tsingyuan Holding .  Tsingyuan Holding’ entire authorized capital stock consists of twenty million (20,000,000) shares of common stock, $.0001 par value, of which 65,107.671 shares are issued and outstanding.  There are no other voting or equity securities authorized or issued, nor any authorized or issued securities convertible into equity securities, and no outstanding subscriptions, warrants, calls, options, rights, commitments or agreements by which Tsingyuan Holding or the Shareholders are bound, calling for the issuance of any additional equity securities of Tsingyuan Holding.  All of the outstanding shares of Tsingyuan Holding have been duly authorized and validly issued and are fully paid and non-assessable and were not issued in violation of any preemptive rights or any Applicable Law.

c.           Ownership of Tsingyuan Holding Shares. The Shareholders are the sole owners of the outstanding shares of Tsingyuan Holding common stock.  By the transfer of the shares of Tsingyuan Holding common stock to Sabre Industrial pursuant to this Agreement, Sabre Industrial will acquire good and marketable title to 100% of the capital stock of Tsingyuan Holding, free and clear of all Liens, encumbrances and restrictions of any nature whatsoever, except by reason of the fact that the Tsingyuan Holding shares will not have been registered under the Securities Act of 1933, or any applicable state securities laws.

d.           Business Operations and Liabilities – Tsingyuan Holding and Tsingyuan Hong Kong. Tsingyuan Holding has conducted no business operations other than the acquisition of 100% ownership of the capital stock of Tsingyuan Hong Kong.  Tsingyuan Hong Kong has conducted no business operations other than the acquisition of 100% ownership of the registered capital of Beijing Consulting.  Neither Tsingyuan Holding or Tsingyuan Hong Kong has any liabilities other than liabilities incurred in the ordinary course that will not exceed $ 1,000 on the Closing Date.

e.           Business Operations and Liabilities – Beijing Consulting.  Prior to June 26, 2010, Beijing Consulting had conducted no business operations. Since June 26, 2010, Beijing Consulting has conducted business operations described in the Entrustment Management Agreements between Beijing Consulting and Linyi Malt and the Entrustment Management Agreements between Beijing Consulting and Shandong Beer.

  

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f.           Organization and Standing – Linyi Malt and Shandong Beer.  Linyi Malt and Shandong Beer are limited liability companies duly organized, validly existing and in good standing under the laws of the People’s Republic of China.  Each of Linyi Malt and Shandong Beer has all of the government licenses and permits necessary to carry on its business as now conducted, to own and operate its assets, properties and business, and to carry out the transactions contemplated by this agreement.

g.           Entrusted Management Agreements between Beijing Consulting and Linyi Malt and Shandong Beer.  On June 26, 2010 Beijing Consulting, Linyi Malt and the registered equity holders in Linyi Malt signed four agreements, including Exclusive Technical Service and Business Consulting Agreement, Share Pledge Agreement, Call Option Agreement, and Proxy Agreement.  On the same day Beijing Consulting, Shandong Beer and the registered equity owners in Shandong Beer signed similar agreements.  The eight agreements are collectively referred to as the “Entrusted Management Agreements.”  The purpose of these agreements is to transfer to Beijing Consulting full responsibility for the management of Linyi Malt and Shandong Beer, as well as the financial benefits and liabilities that arise from the business of Linyi Malt and Shandong Beer.  Each of the Entrusted Management Agreements is and will be effective with no term limitation unless both parties to the agreement unanimously agree in writing to terminate it in advance. Neither Linyi Malt and Shandong Beer nor Beijing Consulting has defaulted in any of the agreements, and all of the agreements remain in full force and effect.

h.           Financial Statements.  The Shareholders have delivered to Sabre Industrial (i) the consolidated financial statements of Tsingyuan Holding for the two years ended December 31, 2009 and 2008 (the “Audited Financial Statements”), and (ii) the financial statement of Tsingyuan Holding for the six month periods ended June 30, 2010 and 2009 (the “Interim Financial Statements”).  The Audited Financial Statement and the Interim Financial Statements (collectively, the “Tsingyuan Financial Statements”) have been prepared in accordance with U.S. GAAP and present fairly in all material respects the consolidated financial condition of Tsingyuan Holding as of the dates thereof.   The Audited Financial Statements have been reported on by an independent accountant registered with the PCAOB.

i.           Absence Of Certain Changes Or Events.  Since June 30, 2010, there has not been (A) any material adverse change in the business, operations, properties, assets, or condition of Linyi Malt or Shandong Beer or Beijing Consulting or Tsingyuan Holding, (B) any damage, destruction, or loss to Linyi Malt or Shandong Beer or Beijing Consulting or Tsingyuan Holding (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets, or condition of Linyi Malt or Shandong Beer, Beijing Consulting and Tsingyuan Holding; and neither Linyi Malt nor Shandong Beer nor Beijing Consulting or Tsingyuan Holding have become subject to any law or regulation which materially and adversely affects, or in the future is substantially likely to have a material adverse effect on Linyi Malt, Shandong Beer, Beijing Consulting or Tsingyuan Holding.

  

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j.           Ownership of Assets.  Except as specifically identified in the Tsingyuan Financial Statements, each of Linyi Malt and Shandong Beer has good, marketable title, without any Liens or encumbrances of any nature whatever, to all of the following, if any:  its assets, properties and rights of every type and description, including, without limitation, all cash on hand and in banks, certificates of deposit, stocks, bonds, and other securities, good will, customer lists, its corporate name and all variants thereof, trademarks and trade names, copyrights and interests thereunder, licenses and registrations, pending licenses and permits and applications therefor, inventions, processes, know-how, trade secrets, real estate and interests therein and improvements thereto, machinery, equipment, vehicles, notes and accounts receivable, fixtures, rights under agreements and leases, franchises, all rights and claims under insurance policies and other contracts of whatever nature, rights in funds of whatever nature, books and records and all other property and rights of every kind and nature owned or held by  Linyi Malt or Shandong Beer as of this date.  Except in the ordinary course of its business, neither Linyi Malt nor Shandong Beer has disposed of any such asset since June 30, 2010.

k.           Governmental Consent.  No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other non-U.S., U.S., state, county, local or other foreign governmental authority, instrumentality, agency or commission is required by or with respect to Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt or Shandong Beer in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

l.           Taxes.  Each of Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt and Shandong Beer has filed all Tax Returns that it is required to file with all governmental agencies, wherever situate, and has paid or accrued for payment all Taxes as shown on such returns except for Taxes being contested in good faith or as reflected on the Tsingyuan Financial Statement.  There is no material claim for Taxes that is a Lien against the property of Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt or Shandong Beer other than Liens for Taxes not yet due and payable.

 

m.           Pending Actions.  There are no legal actions, lawsuits, proceedings or investigations pending or threatened, against or affecting Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt or Shandong Beer, or against Linyi Malt’s or Shandong Beer’s Officers or Directors or the Shareholders that arose out of their operation of Linyi Malt or Shandong Beer.  Neither Tsingyuan Holding, nor Linyi Malt or Shandong Beer, or  the Shareholders are subject to any order, writ, judgment, injunction, decree, determination or award of any court, arbitrator or administrative, governmental or regulatory authority or body which would be likely to have a material adverse effect on the business of Linyi Malt or Shandong Beer.

n.           Intellectual Property And Intangible Assets.  To the knowledge of the Shareholders, each of Linyi Malt and Shandong Beer has full legal right, title and interest in and to all of the intellectual property utilized in the operation of its business.  Neither Linyi Malt nor Shandong Beer has received any written notice that the rights of any other person are violated by the use by Linyi Malt and Shandong Beer of the intellectual property.  None of the intellectual property has ever been declared invalid or unenforceable, or is the subject of any pending or, to the knowledge of the Shareholders, threatened action for opposition, cancellation, declaration, infringement, or invalidity, unenforceability or misappropriation or like claim, action or proceeding.

  

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o.           Validity of the Agreement.  This Agreement has been duly executed by the Shareholders and constitutes their valid and binding obligation, enforceable in accordance with its terms except to the extent limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws relating to or effecting generally the enforcement of creditors’ rights.  The execution and delivery of this Agreement and the carrying out of its purposes will not result in the breach of any of the terms or conditions of, or constitute a default under or violate, the Articles of Association of either Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt or Shandong Beer, or any material agreement or undertaking, oral or written, to which Tsingyuan Holding, Tsingyuan Hong Kong, Beijing Consulting, Linyi Malt or Shandong Beer or the Shareholders is a  party or is bound or may be affected by, nor will such execution, delivery and carrying out violate any order, writ, injunction, decree, law, rule or regulation of any court, regulatory agency or other governmental body; and the business now conducted by  Linyi Malt and Shandong Beer can continue to be so conducted after completion of the transaction contemplated hereby.

p.           Compliance with Laws.  Linyi Malt’s and Shandong Beer's operations have been conducted in all material respects in accordance with all applicable statutes, laws, rules and regulations.  Neither Linyi Malt nor Shandong Beer is in violation of any law, ordinance or regulation of the People’s Republic of China or of any other jurisdiction.  Each of Linyi Malt and Shandong Beer holds all the environmental, health and safety and other permits, licenses, authorizations, certificates and approvals of governmental authorities necessary or proper for the current use, occupancy or operation of its business, all of which are now in full force and effect.

5.           Warranties and Representations of Sabre Industrial.  In order to induce the Shareholders to enter into this Agreement and to complete the transaction contemplated hereby, Sabre Industrial warrants and represents to the Shareholders that:

a.           Organization and Standing.  Sabre Industrial is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full power and authority to carry on its business as now conducted. The copies of the Articles of Incorporation and Bylaws of Sabre Industrial previously delivered to the Shareholders are true and complete as of the date hereof.

 

b.           Capitalization.  Sabre Industrial’s entire authorized capital stock consists of 300,000,000 shares of common stock, 1,000 shares of Series B Preferred Stock, and 9,989,000 shares of Preferred Stock. At the Closing, prior to the issuance of the Exchange Shares to the Shareholders, there will be 60,607,902 shares of Sabre Industrial common stock issued and outstanding and 1,000 shares of Series B Preferred Stock issued and outstanding.  At the Closing, there will be no other voting or equity securities outstanding, and no outstanding subscriptions, warrants, calls, options, rights, commitments or agreements by which Sabre Industrial is bound, calling for the issuance of any additional shares of common stock or preferred stock or any other voting or equity security.

  

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c.           Corporate Records.  All of Sabre Industrial’s books and records, including, without limitation, its books of account, corporate records, minute book, stock certificate books and other records are up-to-date, complete and reflect accurately and fairly the conduct of its business in all material respects since its date of incorporation.

d.           SEC Filings.  Sabre Industrial has filed all reports required by the Rules of the Securities and Exchange Commission, and each report filed within the past twelve months conforms in content to said Rules and is complete and accurate in all material respects.

e.            Absence Of Certain Changes Or Events.  Since June 30, 2010, there has not been (A) any material adverse change in the business, operations, properties, assets, or condition of Sabre Industrial or (B) any damage, destruction, or loss to Sabre Industrial (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets, or condition of Sabre Industrial; and Sabre Industrial has not become subject to any law or regulation which materially and adversely affects, or in the future is substantially likely to have a material adverse effect on Sabre Industrial.

f.           Taxes.  Sabre Industrial has filed all Tax Returns that it is required to file with all governmental agencies, wherever situate, and has paid or accrued for payment all Taxes as shown on such returns except for Taxes being contested in good faith.  There is no material claim for Taxes that is a Lien against the property of Sabre Industrial other than Liens for Taxes not yet due and payable.

g.           Pending Actions.  There are no legal actions, lawsuits, proceedings or investigations, either administrative or judicial, pending or threatened, against or affecting Sabre Industrial or against Sabre Industrial’s former Officers or Directors that arose out of their operation of Sabre Industrial.  Sabre Industrial is not subject to any order, writ, judgment, injunction, decree, determination or award of any court, arbitrator or administrative, governmental or regulatory authority or body.

h.           Validity of the Agreement.  All corporate and other proceedings required to be taken by Sabre Industrial in order to enter into and to carry out this Agreement have been duly and properly taken.  This Agreement has been duly executed by Sabre Industrial, and constitutes a valid and binding obligation of Sabre Industrial, enforceable against it in accordance with its terms except to the extent limited by applicable bankruptcy reorganization, insolvency, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights.  The execution and delivery of this Agreement and the carrying out of its purposes will not result in the breach of any of the terms or conditions of, or constitute a default under or violate, Sabre Industrial's Articles of Incorporation or Bylaws, or any agreement, lease, mortgage, bond, indenture, license or other document or undertaking, oral or written, to which Sabre Industrial is a party or is bound or may be affected, nor will such execution, delivery and carrying out violate any order, writ, injunction, decree, law, rule or regulation of any court, regulatory agency or other governmental body.

  

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i.           Trading Status.  Sabre Industrial’s common stock is listed for quotation on the OTC Bulletin Board, with the symbol “SBRD.”  To the knowledge of Sabre Industrial, Sabre Industrial has not been threatened and is not subject to removal of its common stock from the OTC Bulletin Board.

j.           SEC Status.  The common stock of Sabre Industrial is registered pursuant to Section 12(g) of the Securities and Exchange Act of 1934.  Sabre Industrial has filed all reports required by the applicable regulations of the SEC.

k.           Compliance with Laws.  Sabre Industrial’s operations have been conducted in all material respects in accordance with all applicable statutes, laws, rules and regulations.  Sabre Industrial is not in violation of any Applicable Law.

6.           Restriction on Resale. The Exchange Shares to be issued by Sabre Industrial to the Shareholders hereunder at the Closing will not be registered under the Securities Act of 1933, or the securities laws of any state, and cannot be transferred, hypothecated, sold or otherwise disposed of within the United States of America until:  (i) a registration statement with respect to such securities is declared effective under the Securities Act of 1933, or (ii) Sabre Industrial receives an opinion of counsel for the stockholders, reasonably satisfactory to counsel for Sabre Industrial, that an exemption from the registration requirements of the Securities Act of 1933 is available.

The certificates representing the shares which are being issued to the Shareholders pursuant to this Agreement shall contain a legend substantially as follows:

“THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR SABRE INDUSTRIAL, INC. RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SABRE INDUSTRIAL, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.”

7.           Applicable Law.    This Agreement shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof, as applied to agreements entered into and to be performed in such state.

8.           Assignment; Binding Effect.  This Agreement, including both its obligations and benefits, shall inure to the benefit of, and be binding on the respective heirs and successors of the parties and on their respective permitted assignees and transferees.  This Agreement may not be assigned or transferred in whole or in part by any party without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed.

  

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9.           Counterparts.  This Agreement may be executed in multiple facsimile counterparts.   Each of the counterparts shall be deemed an original, and together they shall constitute one and the same binding Agreement, with one counterpart being delivered to each party hereto.

IN WITNESS WHEREOF, the parties hereto have set their hands as of the date and year written on the first page.

SABRE INDUSTRIAL, INC.

By: /s/ Zhang Dingyou

       Zhang Dingyou, Chief Executive Officer

/s/ Zhang Dingyou                                    

ZHANG DINGYOU

/s/ C. Mark Tang                                         

C. MARK TANG

 

 

9sbrd8k20100924ex10-b.htm

Exclusive Technical Service and Business Consulting Agreement

This Exclusive Technical Service and Business Consulting Agreement (the “Agreement”) is entered into by and between the following two parties on June 26, 2010:

	
1.

	
Linyi Hengchang Brewery&Malt Co., Ltd ( hereafter referred to as Party A)

Address:Hengyuan Economic Development Zone, Linyi County, Shandong Province, P.R.C

	
2.

	
Beijing Tsingyuan Hengchang Consulting Co., Ltd. (hereafter referred to as Party B)

Address:Room 1004, 10th Floor, Building 9, No.1 Zhongguancun East Road, Haidian District, Beijing

Preface

Whereas Party A is a limited company legally registered and existing in Linyi County, Shandong Province, P.R.C,with the main business scope of Production and Sales of  Malt.

Whereas Party B is a wholly foreign-owned limited company legally registered and existing in Beijing, P.R.C, with the main business scope of Business Consulting and Services;

Whereas Party A needs Part B’s technical services and technical consulting related to Party A’s business (see the definition below) and Party B agrees to provide the aforesaid services to Party A.

Through friendly negotiation, the two parties enter into the terms of the agreement as follows:

Article 1 Definitions

1.1  Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

  

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Business of Party A

	
means the business in the field of Production and Sales of Malt.

	  	  
	
Service

	
means the service exclusively provided by Party B to Party A related to the business of Party A, including but not limited to:

	
 

	
 
(1) Technical support related to the business of Party A;

	
 

	
 
(2) Technical consulting related to the business activities of Party A;

	
 

	
 
(3) Training of the technical personnel and market development personnel from Party A;

	
 

	
 
(4) Assistance with Party A in related information collection and market research;

	
 

	
 
(5) Business consulting related to the business of Party A (including but not limited to strategy planning, marketing, content-making, client management and etc.);

	
 

	
 
(6) Business consulting service related to daily management, exploration and development of advertisement business, advertising marketing and so on upon Party A’s request;

	
 

	
 
(7) Other related technical services and consulting services supplied upon the request of Party A from time to time.

	  	  
	
Annual Business Plan

	
means annual business development plan and budget report of Party B for next calendar year made by Party A with the assistance of Party B before January 10 of each year.

	  	  
	
Service Fees

	
means all the fees Party A shall pay to Party B for the service provided according to Article 3 of this Agreement.

	  	  
	
Equipment

	
means any or all the equipment purchased by Party B from time to time for the purpose of providing Party A with service.

  

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Techniques Related to Business

	
means any or all the techniques related to the business of Party A and developed on the basis of the service provided under this Agreement.

	  	  
	
Client Information

	
has the same meaning as the one stipulated by Article 6.1 under this Agreement.

	  	  
	
Confidential Information

	
has the same meaning as the one stipulated by Article 6.2 under this Agreement.

	  	  
	
Breach Party

	
has the same meaning as the one stipulated by Article 11.1 under this Agreement.

	  	  
	
Breach

	
has the same meaning as the one stipulated by Article 11.1 under this Agreement.

	  	  
	
This Party’s Rights

	
has the same meaning as the one stipulated by Article 13.5 under this Agreement.

	
1.2

	
To invoke any laws and regulations (the “Laws”) under this Agreement means:

	
  

	
(1)

	
to invoke at the same time the content of the amendments, adjustments, complements and revisions of the Laws no mater it comes into effect before or after the conclusion of this Agreement, and

	
  

	
(2)

	
to invoke at the same time other decisions, notices and rules made or taking effect according to the Laws.

	
1.3

	
Unless there is other stipulation in the context of this Agreement, all the articles, paragraphs and subparagraphs mean the corresponding content under this Agreement.

Article 2 Service

  

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2.1

	
Party B shall provide Party A with service under this Agreement since the date of this Agreement and continue to provide the service during the term of the agreement stipulated by Article 8.1 of this agreement.

	
  

	 

	
2.2

	
Party B shall equip itself with all kinds of equipment reasonably needed for providing services,and purchase,lease or obtain new equipment to meet the need to provide satisfactory service.

	
2.3

	
Party B shall provide Party A with good consulting service (including but not limited to strategic planning, marketing, content-making, client management and etc.) to assure the fine operation of Party B.

	
  

	 

	
2.4

	
Party B shall timely provide service to Party A and communicate with Party A the information related to the business and/or clients of Party A.

Article 3 Service Fees and Party B Reimbursement Obligation

	
3.1

	
Party A agrees to pay the fees for the service provided by Party B according to Article 2 of this Agreement, including:

	
  

	
(1)

	
RMB【10,000】 Yuan for fixed service fees and depreciation expenses per month;

	 	 	 
Sales service fees equivalent to 100% of the total annual gross profit or loss of Party A;

 

	
  

	
(2)

	
Fees for other related technical service and consulting service required by Party A from time to time and stipulated by additional agreements by both parties.

	
3.2

	
Party A shall pay the service fees to Party B monthly. Party A shall, before the tenth work day of each month, pay Party B the fixed service fees as stated in Article 3.1(1). In case there are less than 30 days of a certain month, Party A shall pay Party B the fixed service fees based on actual days. After each fiscal year, both parties shall calculate the sales service fees stipulated by Article 3.1(2) according to Party A’s total gross profit of last fiscal year reported by the audit report issued by a Chinese certified accounting firm recognized by both parties, and Party A shall pay Party B the aforesaid sales service fees within 15 days after the issuance of the related audit report. Party A agrees to provide the related Chinese certified accounting firm with all the materials and assistance necessary to assure the Chinese certified accounting firm can complete the audit report of last fiscal year and issue it to both Party A and Party B within 30 days after the end of last fiscal year. Party A shall pay Party B the related technical service fees and business consulting service fees stipulated by Article 3.1(3) according to the provisions of other additional technical service agreements or consulting service agreements concluded by both parties from time to time.

  

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3.3

	
Party A shall transfer all the service fees to the bank account designated by Party B according to the provisions of this Article. In case Party B changes its bank account, it shall notify Party A the change seven (7) Working Days in advance.

	
  

	 

	
3.4

	
The two parties, after mutual negotiation, may make adjustments to the detailed charge ratio of sales service fees stipulated by Article 3.2(1) and Article 3.2(2).

	
  

	
3.5

	
In the event that the audit report referred to in Section 3.2 above shows that Party A realized a net loss during a fiscal year while subject to this agreement, then Party B will be required to reimburse Party A for the amount of the net loss.  Party B shall pay the amount of reimbursement within 15 days after the issuance of the related audit report.

Article 4 Obligations of Party A

	
4.1

	
The service supplied by Party B under this Agreement is exclusive. During the term of this Agreement, Party B shall not,without prior written consent of Party B, enter into any other agreements with a third party to hire the third party to provide service the same as or similar to that provided by Party B.

	
4.2

	
Party A shall provide Party B with the final copy of the annual business plan for next year before January 10 of each year, to facilitate Party B to make related service plan and add equipment and technical service power needed.  In case Party A requires Party B to add new equipment beyond the aforesaid plan, Party A shall negotiate with Party B fifteen (15) days in advance to enter into mutual agreements.

	
4.3

	
To facilitate Party A to provide service, Party A shall provide Party B with related materials truly and timely upon Party B’s request.

	
4.4

	
Party A shall pay Party B the service fees timely and fully based on the provisions of Article 3 of this Agreement.

  

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4.5

	
Party A shall sustain its good reputation, explore the business actively and take every effort to maximum the benefits.

	
4.6

	
To promote the business of Party A, both parties agree that Party A may,upon Party B’s request and entrust,research and develop techniques needed for Party B’ service provided under this agreement. Party A has to accept the offer of the aforesaid entrust. The ownership of rights and interests of the foresaid technical fruits shall be decided by the provisions of Article 5.2(1) of this Agreement.

Article 5 Intellectual Rights

	
5.1

	
The intellectual property rights of the products created during the process of providing service by Party B belong to Party B.

	
5.2

	
Whereas the operation of the business of Party A relies on the service provided by Party B under this Agreement,Party A agrees to make the following arrangements regarding the business-related techniques developed from Party A’s service:

	
  

	
(1)

	
If the business-related technique is developed by Party A through its further development upon the entrust of Party B, or it is developed corporately by both parties, then the ownership and related rights to apply for patent all belong to Party B.

	
  

	 

	
  

	
(2)

	
If the business-related technique is independently developed by Party A, the ownership of the business-related technique may belong to Party A under the following circumstances: (A) Party A shall timely notify the details of the related technique to Party B and provide Party B with the related materials required by Party B; (B) If Party A is going to license or transfer the related technique, Party B may, without the conflicts with Chinese compulsory law regulations, enjoy the priority to purchase the related technique or be licensed to use the technique exclusively, or Party B may use the related technique to the same extent that Party A specifically transfer to or license others (however, Party A has the right to decide whether or not to accept the offer of the transfer or the license); Party A may, upon Party B’s waiver of the priority to purchase the ownership of the related technique and the exclusive right to use the related technique, transfer or license the related technique to a third party with conditions offered no better than that offered to Party B (including but not limited to the transfer price or license fee), and shall guaranty the third party will fully abide by and perform the duties and obligations of Party A under this Agreement. (c)With the exception of the situations in Article 5.3(2)(B), Party A enjoys the right to purchase the related technique within the term stipulated by Article 8.1 of this Agreement; At the appointed time, Party A shall, without the conflict with the Chinese compulsory law regulations, accept Party B’s foresaid offer with price of RMB 1.00 or other lowest prices allowed by the concurrent laws.

  

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5.3

	
If  Party B is licensed to use the business-related technique exclusively according to Article 5.3(2), the foresaid license shall be carry out according the following provisions in this paragraph:

	
  

	
(1)

	
the term of the license shall no shorter than ten (10) years (counting from the effective date of the related license agreement);

	
  

	
(2)

	
the scope of the rights licensed shall be defined as wide as possible;

	
  

	
(3)

	
Within the term and the scope of the license, no other party (including Party A) except Party B may in any way use or license others to use the related technique;

	
  

	
(4)

	
Without the breach of Article 5.3(3), Party A enjoys the right to independently decide to license any other third party to use the related technique;

	
  

	
(5)

	
After the expiration of the license, Party B may resume the license and Party A has to agree. At the appointed time the provisions of the license shall be sustained unless Party B confirms the adjustments.

	
5.4

	
Despite the provisions of Article 5.2(2), the patent application of any related technique described by the foresaid subparagraph shall be carried out according to the following provisions:

	
  

	
(1)

	
If Party A is going to apply for patent of any related technique described by the foresaid subparagraph, it shall obtain prior written approval from Party B.

  

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(2)

	
Party A may apply for patent of any business-related technique independently or transfer such right to a third party only upon the waiver of such rights of Party B. Before Party A transfer such right of applying for patent to a third party, Party A shall guaranty that the third party will fully abide by and perform the duties and obligations of Party A under this Agreement; Meanwhile, the conditions (including but not limited to the transfer price) Party A offers to the third party shall not be better than that Party A offers to Party B.

 

	
  

	
(3)

	
Within the term of this Agreement, Party B may at any time require Party A to apply for the patent of the foresaid business-related technique and decide independently whether or not to purchase such patent application right.  As long as Party B makes such requirement, Party A shall, without the conflicts with Chinese compulsory law regulations, transfer the foresaid patent application right to Party B with the price of RMB 1.00 or other lowest prices allowed by the concurrent laws; After the transfer to the foresaid patent application right of the business-related technique to Party B and the actual application for and authorization of the foresaid patent, Party A will legally become the owner the foresaid patent rights.

	
5.5

	
Upon Party B’s written request, Party A shall, without the conflicts of Chinese compulsory legal law regulations, transfer all business-related trademark rights, internet domain name, patent rights and know-how owned by or may be owned in the future by Party A to Party B with the price of RMB1.00 or other lowest prices allowed by the concurrent laws.

	
5.6

	
Both parties promise to each other that it will compensate any and all economic losses caused by its infringement of any other third party’s intellectual rights (including but not limited to publish rights, trademark rights, patent rights and know-how).

Clause 6 Confidentiality

	
6.1

	
Within the term of this Agreement, all the client information and other related materials (the “Client Information”) related to the business of Party A and the service provided by Party B belong to both parties.

	
6.2

	
Both parties shall keep strict confidential each party’s business secrets, proprietary information, Client Information and related materials owned by both parties and any nonpublic information of each party (collectively the “Confidential Information”). Unless there is prior written approval from the other party or disclosure requirements from the legal regulations or IPO procedures, the reception party shall not disclose the Confidential Information or any part of the Confidential Information to a third party; The reception party shall not directly or indirectly utilize the Confidential Information or any part of the Confidential Information, unless with the purpose of performing this Agreement.

  

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6.3

	
The limitation stipulated in Section 4 shall not apply to:

	
  

	
(1)

	
any information that the reception party has been proved by written materials to know previously;

	
  

	
(2)

	
any information coming into the public field without the reception party’s fault or known by the public resulted by other reasons;

	
  

	
any information the reception party obtains through other legal channels thereafter .

	
6.4

	
The reception party may disclose the Confidential Information to its employees, agencies and experts hired and guaranty the foresaid people to abide by this Agreement,keep the Confidential information in secrecy and only use the foresaid Confidential Information with the purpose of performing this Agreement.

Clause 7 Promises and Warranties

	
7.1

	
Party A shall promise and warranty that Party A is currently not and will not be in the future constrained from or limited to performing all or part of the liabilities under this Agreement by any other agreements, contracts, promises and arrangement of rights or obligations.

Clause 8 Terms of Agreement

	
8.1

	
Both parties hereby agree that this Agreement be executed upon two parties’ formal signature and will keep effective without time limitation unless both parties’ written agreement to terminate it in advance.

	
8.2

	
Article 8.2 and Article 6 of this Agreement shall survive if the Agreement is terminated.

  

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Article 9 Remedy

Party A shall fully compensate Party B’s losses that are caused by or may be caused by Party B’s act of supplying service,including but not limited to any losses caused by legal suits, recovery, arbitration, claims and administrative investigation and penalties,with the exceptions of the losses caused by Party B’s intentional misconduct or gross negligence.

Article 10 Notice

	
10.1

	
Any communications between parties pursuant to this Agreement including notice, requirement, offer and other correspondence shall be delivered in written form.

	
10.2

	
In the case of transmission by facsimile, the transmission shall be deemed delivered upon delivery; In case of delivering face to face, the transmission shall be deemed delivered upon delivery; all notices or communications sent by registered mail shall be deemed delivered five (5) Business Days from the time of posting.

Article 11 Breach of Agreement

	
11.1

	
Both Parties agree and confirm that if any party (the “Breaching Party”) materially breach any terms of this Agreement or unable to perform any obligation under this Agreement, it will constitute a “Breach” act. Other party (the “Observant Party”) may ask for remedy measures in reasonable time. If the Breaching Party does not perform any remedy measures in the reasonable time required by the Observant Party or within 10 days after the written notice of the Observant Party, the Observant Party may choose one of the following remedy ways,then (1)if the Breach Party is Party A, Party B may terminate this Agreement and require full compensation from the Breach Party; or require Party A ’s compulsory performance of the liabilities under this Agreement as well as the full compensation from Party A; (2)if the Breach Party is Party B, Party A may require Party B’s compulsory performance of the liabilities under this Agreement as well as the full compensation from Party B.

	
11.2

	
Both parties agree and confirm that Party A shall under no circumstances terminate this agreement with whatever reasons.

  

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11.3

	
The rights and remedies designated by this Agreement are accumulative, and do not exclude other rights or remedies under laws and regulations.

	
11.4

	
Article 11 shall survive after the Agreement is ceased or terminated, regardless of other Articles under this agreement.

Article 12 Force Majeure

The force majeure under this agreement means earthquake, typhoon, flood, fire, war, computer virus, design leaks of implemental software, hacker attacks on internet, changes of policies and laws and other situations which cannot be foreseen, avoided or overcame. The party,which might not perform this agreement fully or timely as a result of the direct influence caused by the force majeure, shall immediately notify by fax the other party and provide within 30 days the other party the details of the force majeure and the certificate documents proving the reasons that it is unable to perform this agreement or the performance of this agreement will be delayed. The foresaid certificate documents shall be issued by the notarization institutions located in the area where the force majeure takes place. The two parties shall, based on the extent of the influence the force majeure imposes on the performance of this contract, negotiate whether the obligations under this agreement should be partly exempted or postponed. Both parties are exempted from the compensation liability for the economic losses caused by the force majeure.

Article 13 Miscellaneous

	
13.1

	
This Agreement shall be executed in two (2) original copies in Chinese and is hold respectively by each Party.

	
13.2

	
The conclusion,execution, validity, interpretation, performance, amendment and termination of this Agreement are governed by the laws of PRC.

	
13.3

	
The Parties shall strive to settle any dispute, conflicts, or compensation claims arising from the interpretation or performance (including any issue relating to the existence, validity and termination) in connection with this Agreement through friendly consultation. In case no settlement can be reached within  thirty (30) day after one party ask for the settlement, each party can submit such matter to China International Economic and Trade Arbitration Commission (the “CIETAC”) in accordance with its rules. The arbitration award shall be final and conclusive and binding upon the Parties.

  

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13.4

	
Any right, power or remedy granted to a party by one term of this agreement does not exclude the party from any right, power or remedy granted by other terms or laws and regulations. And one party’s performance of its right, power and remedy does not exclude the party from performing other right, power and remedy.

	
13.5

	
No failure or delay by any Party in exercising any right or remedy provided by law or under this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.

	
13.6

	
The headings are for convenience and under no circumstances the headings shall affect the interpretation of the articles of the agreement.

	
13.7

	
This Agreement is severable. If any Article of this Agreement is judged as invalid or non-enforceable according to relevant PRC Laws, such Article shall be deemed invalid only within the applicable area of the PRC Laws, and without affecting other Articles hereof in any way.

	
13.8

	
The Parties may amend and supply this Agreement with a written agreement. The amendment and supplement duly executed by the Parties shall be a part of this Agreement and shall have the same legal effect as this Agreement.

	
13.9

	
Without prior written approval of Party A, the Borrowers can not transfer, pledge or assign any right, benefit or obligation under this agreement. Party A can transfer, pledge or assign any right benefit or obligation under this agreement upon notice of the other parties.

	
13.10

	
This agreement is binding to all the parties herein and their respective lawful successors and assignees.

  

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IN WITNESS THEREOF the Parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first set above in Beijing, China.

Linyi Hengchang Brewery&Malt Co., Ltd(seal)

Signature______________

Legal Representative/Authorized Representative

Beijing Tsingyuan Hengchang Consulting Co., Ltd.(seal)

Signature______________

Legal Representative/Authorized Representative

 

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