Section 2: Market Conditions
| | 1. | In light of the rapid expansion for municipal waste-to-energy development, the parties shall combine their respective strengths and agree to the goal of becoming the leader in the relevant domestic market. |
| | 2. | The deployment and use for waste-to-energy technology is dependent on both the maturity of the technology and the support of sufficient funding. |
| | 3. | Although the market for waste-to-energy is rapidly expanding, the parties must optimally realign their respect resources in order to maintain a high level of development. |
Article 3: Purpose of the Parties’ Cooperation
The parties are establishing the strategic partnership in order to:
| | 1. | Allow Party A to build waste-to-energy plants based on Party B’s patented technology, and to enjoy exclusive manufacturing rights upon achieving national design standards; and |
| | 2. | Allow Party B to share in any derived profits based upon the patents and technology services that it will provide. |
Article 4: Basis of Cooperation
Section 1: Framework for Cooperation
Based on the parties’ respective business development and relevant market conditions, each party shall take the steps necessary for the strategic partnership, and establish a framework for their cooperation.
Section 2: Each Party’s Development Direction
| | 1. | Party A shall focus on early-stage business development, use of funds and manufacturing and production. |
| | 2. | Party B shall focus on research and development, patents and plant management. |
Section 3: Basis of Strategic Partnership
| | 1. | Party A shall provide early-stage business development, and all relevant funding. |
| | 2. | Party B shall provide the results of its research efforts, as well as supervision of plant construction and management. |
Section 4: Other Basis.
| | 1. | Party A agrees and acknowledges that the waste-to-energy system that is the subject of this Agreement shall be based on Party B’s technology. |
| | 2. | Party B agrees and acknowledges that Party A shall have investment right of first refusal, and shall not negotiate with other investors. If Party A abandons its investment or does not provide funding in accordance with agreed schedule, Party B shall have the right to seek out other investors. |
Article 5: Patent and Technology Services
Section 1: Patent Protection
Party A respect Party B’s technology patents, and has the obligations to maintain in confidence all of Party B’s information relating to its technology, including both open and closed technologies. Party B shall be responsible for providing technology information as required in accordance with customer specifications. Party A shall not furnish Party B’s technology information to a third party without the Party B’s consent.
Section 2: Patent Licensing Fee
Party B shall have the right to receive licensing fees for its patents, to be paid by the joint-venture entity established by the parties, which amount shall be mutually determined by the parties and which shall be to the benefits of its strategic partner.
Section 3: Services Relating to Plant Construction Management
With respect to the construction of waste-to-energy plants, Party B shall have the responsibility to supervise and to make necessary adjustments, and shall guarantee their effectiveness.
Article 6:
Section 1: Testing
Testing of the waste-to-energy plants shall be conducted in accordance with national testing standards, to be conducted by Party B 72 hours after completion of construction, with the testing period between 60 to 90 days.
Section 2: Start of Operation
Because Party B has management expertise, the joint-venture entity shall retain Party B for construction of the waste-to-energy plant. Party B shall have the obligation to be retained, on terms favorable to its strategic partner.
Article 7: Pace of Cooperation
The parties agree to cooperate in accordance with the framework laid out in this Agreement to achieve their mutual goal.
This Agreement shall have four copies, and the effective period shall be from November 17, 2006 to November 17, 2010. At expiration, this Agreement shall automatically renew for three years unless objected to by one of the parties.
| Party A: | | Wuxi Huayang Electrical Power Equipment Co., Ltd. |
| | | |
| | | By: | /s/ Tang Lihua | |
| | | |
| | | [COMPANY SEAL] |
| | | |
| | | Dated: November 20, 2006 |
| | | |
| Party B: | | Beijing China Sciences General Energy & Environment Co., Ltd. |
| | | |
| | | [COMPANY SEAL] |
| | | |
| | | Dated: November 20, 2006 |
