Technology License and Supply Agreement between Zibo Jiazhou Chemical and Davy Process Technology Limited

Summary

Zibo Jiazhou Chemical entered into an agreement with Davy Process Technology Limited, a British company, to license technology and receive technical documentation, equipment, catalyst, services, and training for building a plant to produce up to 55,000 metric tons of 1,4-butanediol annually. The total contract price is €16,650,000 (about $20.3 million as of June 30, 2010), with payments scheduled based on delivery milestones. Initial payments for software and equipment were made in July 2009. Davy is responsible for supplying the agreed materials and services, while Zibo Jiazhou Chemical must make payments as invoiced.

EX-10.7 8 ex107.htm EXHIBIT 10.7 AGREEMENT WITH DAVY ex107.htm

Exhibit 10.7

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Summary of Material Terms of Davy Agreement

On February 16, 2009, Zibo Jiazhou Chemical entered into an agreement with Davy Process Technology Limited, a British company (“Davy”), pursuant to which Davy licensed certain technology and know-how, technical documentation, contract equipment, contract catalyst, technical service and technical training to be supplied by Davy for the construction of a plant for Zibo Jiazhou Chemical to manufacture products, up to a maximum of 55,000 metric tons of 1,4-butanediol equivalent, on an annual basis (the “Davy Contract”).

The total contract price is Euro 16,650,000 or US$20,326,320 as of June 30, 2010 and is fixed, including (i) a fee for license of technology and know-how of Euro7,700,000 or US$ 9,400,160 as of June 30, 2010 ; (ii) a fee for contract equipment and contract catalyst of Euro 4,750,000 or US$5,798,800 as of June 30, 2010 ; (iii) a fee for technical documentation of Euro3,600,000 or US$4,394,880 as of June 30, 2010 ; (iv) a fee for technical service at Euro 471,240 or US$575,290 as of June 30, 2010 ; and (v) a fee for technical training at Euro 128,760 or US$157,190 as of June 30, 2010 . According to the payment schedule provided in the Davy Contract, the initial payment (20%) of the fees for the license of technology and know-how and the fee for technical documentation of Euro2,260,000 or US$ 3,190,888 as of July 17, 2009 (the “Initial Software Fee”) shall be made within 20 days after receipt of corresponding invoice issued by Davy; the initial payment (50%) of fee for contract equipment and contract catalyst of Euro2,375,000 or US$ 3,3353,257 as of July 27, 2009 (the “Initial Equipment Fee”) shall be made within 20 days after receipt of corresponding invoice issued by Davy; payments of subsequent installments and/or other fees shall be made after corresponding technical documentation, services and/or training been delivered. Zibo Jiazhou Chemical fully paid the initial software fee and the initial equipment fee on July 17, 2009 and July 27, 2009, respectively.