EMISSION REDUCTION PURCHASE AGREEMENT (ERPA) [Chinese translation] Huangdan Hydro-station Technical Expansion & Automation Retrofit [Chinese translation]

EX-10.26 27 exhibit1026.htm EXHIBIT 10.26 exhibit1026.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Emission Reduction Purchase Agreement Page 1 of 18

Exhibit 10.26

EMISSION REDUCTION PURCHASE AGREEMENT (ERPA)

[Chinese translation]

Huangdan Hydro-station Technical Expansion & Automation Retrofit

[Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 2 of 18

between

(The "Purchaser") [Chinese translation]

ECOLOCAP SOLUTIONS (CANADA) INC (ECOLOCAP)
[Chinese translation]

740 St. Maurice suite 102
Montreal, QC H3C 1L5
Canada
Tel: 5148763907 Fax: 5148764080
Email: ***@***

President-CEO: Dr. Tri Vu Truong

and

(the " Seller"), henceforth “PROJECT PROPONENT”
[Chinese translation]

LESHAN KINGSSUN GROUP CO., LTD. (“Owner”)
[Chinese translation]

Address:
[Chinese translation]

Telephone [Chinese translation] : 13881317050
Fax ([Chinese translation])
Email [Chinese translation] :
President [Chinese translation]) / GAO JIE

Both parties have agreed to sign the Reduction Emission Purchase Agreement (Agreement) with the following terms and conditions:
[Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 3 of 18

Interpretation and Definitions /[Chinese translation]

In this Agreement, unless otherwise required by the context, all terms shall have the
meaning set forth in the definitions below.
[Chinese translation]

Agreement:	Means this Emission Reduction Purchase Agreement. [Chinese
[Chinese translation]	translation]

Annex B	Means the countries listed in Annex B to the Kyoto Protocol having
Countries:	committed themselves to reduce or limit their GHG emissions.
[Chinese translation]	[Chinese translation]

Annex I	Means the parties to the UNFCCC listed in Annex I thereto (Annex I
Countries:	consists of industrial countries and countries in transition). [Chinese
[Chinese translation]	translation]

Anticipated	Means up to ( ) Certified Emission Reductions (CERs) per annum
Emission	during the Crediting Period, anticipated be generating by the Project
Reduction:	and calculating in accordance with the Kyoto Rules. [Chinese
[Chinese translation]	translation]

Baseline:	Means the scenario that reasonably represents the anthropogenic
[Chinese translation]	emissions of GHG that would occur in the Host Country in the
	absence of the Project, determined in accordance with the Kyoto
	Rules. [Chinese translation]

Business Day:	Means a day on which banks are open for general business in China.
[Chinese translation]	[Chinese translation]

Carbon Dioxide	Means a metric measure used to compare the emissions of various
Equivalent:	GHG based upon their global warming potential. [Chinese
[Chinese translation]	translation]

Certification:	Means the written confirmation by an Operational Entity of an
[Chinese translation]	Emission Reduction resulting from a CDM project and having passed
	the Verification procedure according to the Kyoto Rules. [Chinese
	translation]

Certified	Means a unit of Emission Reduction issued pursuant to Article 12 of
Emission	the Kyoto Protocol and the requirements of the Kyoto Rules (including
Reduction (CER):	Certification), equal to one metric ton of Carbon Dioxide Equivalent resulting
Chinese translation]	from a CDM project. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 4 of 18


Clean	Means the flexible mechanism established by Article 12 of the Kyoto Protocol providing for
Development	Annex I Countries to implement projects that reduce emissions in non-Annex I Countries
Mechanism	in return for CERs and assist the non-Annex I Countries in achieving sustainable
(CDM):	development and contributing to the ultimate objective of the UNFCCC. [Chinese translation]
[Chinese
translation]

Crediting	Means, until December 31, 2026.
Period:
[Chinese
translation]

Emission	Means reduction in emission of GHG achieved, calculated in accordance with the Kyoto
Reduction:	Rules. [Chinese translation]
[Chinese
translation]

Executive	Means the international authority elected by the representatives of the parties to the Kyoto
Board: [Chinese	Protocol responsible for monitoring the CDM process. [Chinese translation]
translation]

First	Means, from 23 , October, 2008 until 31 December, 2012.
Commitment	[Chinese translation]
Period:
[Chinese
translation]

Force Majeure:	Means any circumstance or condition beyond the control of either party to this Agreement
[Chinese	affecting the performance of its obligations under this Agreement including in particular
translation]	particular wars, insurrection, natural disaster or equivalent circumstances.
	[Chinese translation]

Greenhouse	Means the six gases listed in Annex A to the Kyoto Protocol.
Gases (GHG):	[Chinese translation]
[Chinese
translation]

Host Country:	China [Chinese translation]
[Chinese
translation]

Kyoto Protocol:	Means the protocol to the UNFCCC adopted at the third conference of the parties to the
[Chinese	UNFCCC in Kyoto, Japan, on December 11, 1997
translation]	[Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 5 of 18

Kyoto Rules:	Means the UNFCCC, Kyoto Protocol, the Bonn agreement, the
[Chinese translation]	Marrakech Accords, any relevant decisions, guidelines, modalities
	and procedures made pursuant to them and/or any succeeding
	international agreements as amended and/or supplemented from time
	to time and which include those rules specifically required to be met
	for the issuing and transfer of CERs. /UNFCCC [Chinese translation]

Letter of	Means a binding approval of the Project by the Host Country together
Approval	with an approval of the transfer of CERs. [Chinese translation]
(LOA):
[Chinese translation]

Monitoring	Means an annual report to be provided by Owner setting out the total
Report:	number of Emission Reductions generated by the Project during the
[Chinese translation]	previous year according to the Kyoto Rules, international Monitoring
	rules and the PDD. [Chinese translation]

Monitoring:	Means the collection and record of data allowing the assessment of
[Chinese translation]	reductions in GHG emissions resulting from the Project conducted in
	accordance with the Kyoto Rules. [Chinese translation]

Designated	Means an independent entity accredited by the Executive Board being
Operational	the executive body for CDM and inter alias responsible for
Entity: [Chinese	determining whether a project and the resulting Emission Reductions
translation]	meet the requirements of Article 12 of the Kyoto Protocol. [Chinese translation]

Project Design	Means a detailed description of the Project to be submitted for
Document	Validation prepared in accordance with the Kyoto Rules, the UFG
(PDD) [Chinese	and the Directive and attached as Annex [iv]. The Purchaser will be
translation]	responsible for providing PDD development for Registration of the
	Project. [Chinese translation]

Project:	Means the proposed CDM project described in the PDD and other
[Chinese translation]	documents describing the implementation and economics of the
	Project attached in Annex [iii]. [Chinese translation]

Registration:	Means the official registration of a CDM project by the Executive
[Chinese translation]	Board according to the Kyoto Rules. [Chinese translation]

UNFCCC:	Means the United Nations Framework Convention on Climate
	Change adopted in New York on May 9, 1992. [Chinese translation]

Unit Price:	Means the price payable by Purchaser to Project Proponent per
[Chinese translation]	Certified Emission Reduction (CER) unit: [Chinese translation]:

	The purchase unit price paid by EcoloCap Solutions Canada Inc to
	Chinese Project Proponent for the CER is fixed at 9 Euro/CER for the

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 6 of 18


	year 2008 to 2012 and a new agreement for purchase unit price will
	be negotiated for the next two periods of extension. [Chinese
	translation]

	For the first payment, a one time amount of 50, 000 Euro will be paid
	to Ecolocap Solutions Inc for the reimbursement to Ecolocap for its
	advance cash for the costs relating to CDM process. Other expenses
	will be paid by EcoloCap. [Chinese translation]

Term:	Ecolocap Solutions Inc will purchase certified CERs generated by
[Chinese translation]	this project for the year 2008 to 2012 with options of extension for
	two other periods of 7 years, the period 2013-2026, with the same
	terms and conditions except for the price which will be renegotiated.
	[Chinese translation]

Validation:	Means the assessment of the PDD, including the Baseline, by an
[Chinese translation]	Operational Entity, determining its compliance with the Kyoto Rules.
	[Chinese translation]

Verification:	Means the periodic independent review and ex post determination of
[Chinese translation]	the monitored reductions in GHG emissions that the Project has
	achieved during a specified period of time by an Operational Entity in
	accordance with the Kyoto Rules. The project's owner will be
	Responsible for providing periodical monitoring. [Chinese
	translation]


Unless otherwise specified, references to clauses are clauses of this Agreement,
references to legal provisions are references to such provisions as in effect from time to
time, use of a gender includes any gender and use of the plural includes the singular and
vice versa where the context requires.
[Chinese translation]

All headings and titles are inserted for convenience only and shall not be deemed part of
this Agreement or taken into consideration in its interpretation. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 7 of 18

1.	Preamble [Chinese translation]

	The Project is located on the territory of the Host Country.
	[Chinese translation]

2	Contractual Obligations [Chinese translation]


2.1	Anticipated Emission Reductions [Chinese translation]

2.1.1	Upon Registration of the Project, Purchaser shall endeavor to implement the
	Project in accordance with the PDD and other documents describing the
	implementation and economics of the project attached in (Annex iv) at its own
	risk and expense (Annex ii). It is hereby acknowledged and agreed between the
	Parties hereto that Purchaser does not warrant the generation of, and is not obliged
	to generate, any CERs, whether by the Project or otherwise.
	[Chinese translation]

2.1.2	If the Project generates CERs during the crediting period, Project Proponent shall,
	to the extent it is legally possible and permissible, exclusively transfer to
	Purchaser all rights (and, to the extent legally possible and permissible, legal title)
	which Project Proponent may have in the Anticipated Emission Reductions.
	[Chinese translation]

2.1.3	Purchaser shall pay to Project Proponent the Unit Price for each Anticipated
	Emission Reduction generated by the Project and in which the Project Proponent's
	rights are transferred to Purchaser in accordance with clause 3 below.
	[Chinese translation]

2.2	Emission Reductions generated after the Crediting Period [Chinese translation]

	If the Project generates any Certified Emission Reductions after the Crediting
	Period, Purchaser shall enter into negotiations with Project Proponent with a view
	to concluding an agreement on the purchase of such Certified Emission
	Reductions based on the principles of this Agreement but amended in order to
	reflect the international and/or national rules then applicable.
	[Chinese translation]

3	Transfer [Chinese translation]

	Transfer to Purchaser of all the rights (and, to the extent legally possible and
	permissible, legal title) which Project Proponent may have in a Certified Emission
	Reduction shall have occurred upon the transfer of CER’s certificate from the
	register of the Executive Board to a register in favor of Purchaser. This transfer
	shall be made immediately as soon as the EB officially approve the Project
	registration. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 8 of 18

4.	Payment [Chinese translation]

4.1.	Payment for Certified Emission Reductions [Chinese translation]

4.1.1.	Payment by Purchaser to Project Proponent for the Certified Emission Reductions
	shall be made within 50 Business Days after the CER’s certificate are delivered to
	Purchaser. Purchaser shall transfer money into the account of Project Proponent,
	after the CER certificate is issued by the EB following each monitoring realized
	by the DOE. [Chinese translation]

4.1.2.	All payments shall be made through the account of Ecolocap which has been
	registered for the Project when the PDD is submitted to EB for approval. This
	account is in the EB’s common account [Chinese translation]

4.1.3.	All payments shall be made in US Dollars [Chinese translation]

4.2.	Costs and Expenses [Chinese translation]

4.2.1.	Subject to clause 4.2.2 below, all fees, costs or other expenses in connection with
	the Registration and the transfer of CERs shall be borne by Purchaser including
	VAT, if any, according to VAT law applied in China.
	[Chinese translation]

4.2.2.	The share of the proceeds from CERs generated by the Project to be used to cover
	administrative expenses and to assist developing countries that are particularly
	vulnerable to the adverse effects of climate change to meet the costs of adaptation
	according to the Kyoto Rules shall be borne by the Project Proponent.
	[Chinese translation]

4.2.3.	The Project Proponent should provide necessary information to the Purchaser for
	the preparation of documents required for PIN (project idea note), PDD (project
	design document), the validation, the verification/certification, and the
	registration with CDM Executive Board (Annex i). All costs accrued to each of
	the Parties in negotiating, preparing, executing and carrying into effect of this
	Agreement, shall be borne by each of the Parties themselves.
	[Chinese translation]

5.	Termination and Remedies [Chinese translation]

5.1.	Either Party (the "Non-defaulting Party") shall be entitled to terminate this
	Agreement by written notice to the other Party with immediate effect if any of
	the following events occurs: [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 9 of 18

5.1.1.	In case the Project is not register as a valid CDM Project activity with the CDM
	EB within eighteen (18) months upon execution of the ERPA, (which will be
	signed not later than three (3) months after the signature of this term sheet), either
	party shall have the right to terminate its rights and obligations under the ERPA.
	[Chinese translation]

5.1.2.	In any given Contract Period, if the verification of the Project’s CERs is delayed
	by 90 days or more due to the Project Proponent ’s or Purchaser’s fault and/or
	misconduct, each of the non-defaulting parties shall have the right to terminate its
	rights and obligations under the ERPA.
	[Chinese translation]

5.1.3.	In case the project is not commissioned within eighteen (18) months following
	the date of the ERPA, each Purchaser shall have the right to terminate its rights
	and obligations under the ERPA.
	[Chinese translation]

5.1.4.	Upon occurrence of an event of default or any other termination event in respect
	of the Project Proponent or of Purchaser as provided in the ERPA, each of the
	non-defaulting parties shall have the right to terminate its rights and obligations
	under the ERPA.
	[Chinese translation]

5.2.	Force Majeure [Chinese translation]

	Should either Party be impeded wholly or in part from fulfilling any of its
	obligations under the Agreement for reasons of Force Majeure, such obligation
	shall be suspended to the extent and for as long as such obligation is affected by
	Force Majeure and the impeded Party shall be entitled to such extension of time
	as may be reasonably necessary.
	[Chinese translation]

	Either Party shall notify the other Party of the existence and date of beginning of
	an event of Force Majeure that is likely to impede its performance under the
	Agreement within 20 business days after having obtained knowledge of any such
	event. Either Party shall likewise advise the other of the date when such event
	ended and shall also specify the re-determined time by which the performance of
	its obligations hereunder is to be completed.
	[Chinese translation]

	Project Proponent and Purchaser shall consult with each other with a view of
	determining any further appropriate action if a condition of Force Majeure is to
	continue after 20 business days from the date of giving notice thereof. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 10 of 18


	Neither Party shall be liable for damages or have the right to terminate this
	Agreement for any delay in performing hereunder if such delay is caused by
	Force Majeure; provided, however, that the non-impeded Party shall be entitled to
	terminate such part of the Agreement that remains unfulfilled, if the condition of
	Force Majeure is to continue after 6 months from the date of giving notice
	thereof. [Chinese translation]

6	Change in Circumstances [Chinese translation]

	If any change in circumstances (i.e. a change of scientific basics or applicable
	standards relating to the Baseline methodology and/or the applicable criteria for
	Verification and Certification of the resulting Emission Reductions) occurs which
	substantially affects the Project, the Parties to this Agreement shall enter into
	negotiations with a view to adapt the Project and its implementation or any
	relevant provision of this Agreement, as may be necessary or useful. A change in
	circumstances shall in no event be considered substantially affecting the Project if
	at least 50% of the Anticipated Emission Reductions can be generated.
	[Chinese translation]

	The Parties to this Agreement shall cooperate and make their best efforts to
	enable the continuation of the Project in accordance with the new circumstances
	and to achieve the generation and transfer of the Anticipated Emission
	Reductions. [Chinese translation]

	If any of the documents related to the Project and submitted at any time during the
	term of this Agreement fails to be approved by such authority whose approval is
	required under the Kyoto Rules or otherwise appears to be non-compliant with
	any relevant standards or conditions of the Kyoto Rules, Project Proponent and
	Purchaser shall discuss whether or not the relevant documents are to be revised
	and resubmitted. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 11 of 18

7.	Conditions Precedent [Chinese translation]

	This Agreement shall enter into force upon satisfaction of the following condition
	precedent: [Chinese translation]

	Conclusion of a binding agreement with the Host Country.
	[Chinese translation]


8.	Miscellaneous [Chinese translation]


8.1.	Assignment and Subcontracting [Chinese translation]
	Because the interests of Project Proponent is paid by Purchaser, Project Proponent
	shall not, without the written consent of Purchaser, assign or transfer the
	Agreement or the benefits or obligations thereof or any part thereof to any other
	person.
	[Chinese translation]

	Purchaser may transfer any of its rights or obligations under the ERPA to any
	third party (“assignee”) without consent of Project Proponent. However,
	Purchaser shall inform Project Proponent for these transfers if any. Rights and
	obligations between Purchaser and Project Proponent remain the same after the
	transfer.
	[Chinese translation]

	Within 90 business days before the first commitment period come to an end, both
	Parties shall renegotiate to continue the agreement. If over 30 days, starting the
	day on which the first commitment period ends, both Parties can not come to an
	agreement, Project Proponent has full power to assign the Agreement to any other
	person without legal ties from Purchaser.
	[Chinese translation]

8.2.	Confidentiality and Disclosure [Chinese translation]

	The Parties shall treat as confidential all information obtained as a result of
	entering into or performing this Agreement which relates to the provisions of this
	Agreement, the negotiations relating to this Agreement and the subject matter of
	this Agreement.
	[Chinese translation]

	No Party shall disclose any such confidential information to any third party,
	except in those circumstances where disclosure is required in order to comply
	with any laws or regulations, including without limitations of the Kyoto Rules. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 12 of 18

8.3.	Notices [Chinese translation]

	Any communications to be made under or in connection with this Agreement
	shall be made in writing (including by facsimile) to the address or facsimile
	number, from time to time designated by the Party to whom the communication is
	to be made to the other Party for that purpose. [Chinese translation]

	A communication shall only be considered as legal effect if it is posted and
	confirmed by both Parties.

8.4.	Entire Agreement [Chinese translation]

	This Agreement embodies the whole and only agreement of the Parties with
	respect to the subject matter hereof, and no prior or contemporaneous oral or
	written agreement or understanding shall be deemed to constitute a part of this
	Agreement, unless expressly referred to herein, or attached hereto, or specifically
	incorporated by reference herein. The Annexes and schedules to this Agreement
	constitute integral parts of this Agreement and shall therefore be deemed part of
	this Agreement. [Chinese translation]

8.5.	Amendments [Chinese translation]

	This Agreement may only be amended with the written consent of the Parties
	hereto. [Chinese translation]

8.6.	Severability [Chinese translation]

	If any part or provision of the Agreement is or becomes illegal, void or
	unenforceable in any respect, the remaining parts or provisions shall not be
	affected or impaired. Any deficiency in the Agreement resulting there from shall
	be amended by way of interpretation of the Agreement having due regard to the
	Parties intent. [Chinese translation]

8.7.	Governing law [Chinese translation]

	This Agreement shall be governed and construed in accordance with Chinese law
	excluding its rules on conflicts of laws. [Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 13 of 18

8.8.	Jurisdiction [Chinese translation]
	Any dispute, claim or controversy arising out of or relating to this agreement will
	be settled by arbitration at Hong Kong International Arbitration Center
	(“HKIAC”) in Hong Kong under the UNCITRAL Arbitration Rules. The number
	of arbitrators will be three and the arbitrators will be appointed in accordance with
	the UNCITRAL Rules and the HKIAC Procedures for the Administration of
	international Arbitration (the “HKIAC Procedures”).The arbitration proceeding
	will be administered by HKIAC in accordance with the HKIAC Procedures. The
	legal place of the arbitration will be Hong Kong and the language to be used in
	the arbitral proceedings will be English. All arbitration costs (including legal
	costs) will be borne by the unsuccessful party unless otherwise determined by the
	arbitration tribunal. [Chinese translation]


8.9.	Counterparts [Chinese translation]

	This Agreement shall be executed in two counterparts with one copy for Project
	Proponent and one for Purchaser. If there are any discrepancies between the
	English and the Chinese version, the English version will prevail.
	[Chinese translation]

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 14 of 18

PARTIES TO THE AGREEMENT [Chinese translation]

WHEREOF the parties have agreed to the terms and conditions of this agreement as outlined above,
this 23 (Day) of Oct, 2008, in the presence of: [Chinese translation]

Purchaser:




	DR. TRI VU TRUONG
	President-CEO: Dr. Tri Vu Truong
Project
Proponent:

	[Signature illegible]
	General Director:



Witness No 1	Witness No 2

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 15 of 18

ANNEX i:

1. The salient features of Huangdan Hydro-station Technical Expansion & Automation Retrofit Project

2. Project time schedule:

- The year 2008:
- - The year 2009:
- The year 2009 – 2010:;
- The year 2011:

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 16 of 18

ANNEX ii:

WORK FLOW OF CDM ACTIVITY

Initial: Project Proponent:____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 17 of 18

ANNEX iii:

SUMMARY OF FEASIBILITY STUDY (FS) AND
ENVIRONMETAL IMPACT ASSESSMENT (EIA)

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____

Emission Reduction Purchase Agreement Page 18 of 18

ANNEX iv:

PROJECT DEVELOPMENT DOCUMENT (PDD)

Initial: Project Proponent:_____Initial: Ecolocap Solution (Canada) Inc. :_____