合资合同-en.doc

HK 16856 1 i Draft JOINT VENTURE CONTRACT for INVESTMENT IN AND OPERATION OF PARTY C between and HK 16856 1 ii TABLE OF CONTENTS Page CHAPTER 1DEFINITIONS 1 CHAPTER 2ESTABLISHMENT AND LEGAL FORM OF THE JOINT ENTURE 3 CHAPTER 3PARTIES TO THE CONTRACT 5 CHAPTER 4PURPOSE SCOPE AND SCALE 6 CHAPTER 5TOTAL INVESTMENT REGISTERED CAPITAL AND ITS TRANSFER 6 CHAPTER 6FINANCING OF THE JOINT VENTURE 11 CHAPTER 7RESPONSIBILITIES OF THE PARTIES 11 CHAPTER 8 TRADEMARKS 13 CHAPTER 9 BOARD OF DIRECTORS 13 CHAPTER 10 OPERATION AND MANAGEMENT OF THE JOINT VENTURE 21 CHAPTER 11 ANNUAL BUSINESS PLAN 25 CHAPTER 12 LABOR MANAGEMENT 26 CHAPTER 13 PROFIT DISTRIBUTION ACCOUNTING AND AUDIT 28 CHAPTER 14 TAXATION AND INSURANCE 31 CHAPTER 15 CONFIDENTIALITY 32 CHAPTER 16 NON COMPETITION 32 CHAPTER 17 TERM OF JOINT VENTURE EARLY TERMINATION AND LIQUIDATION 33 CHAPTER 18 BREACH OF CONTRACT 36 CHAPTER 19 FORCE MAJEURE 36 CHAPTER 20 SETTLEMENT OF DISPUTES 37 CHAPTER 21 APPLICABLE LAW 38 CHAPTER 22 REPRESENTATIONS AND WARRANTIES 38 CHAPTER 23 MISCELLANEOUS 39 APPENDIX 1ARTICLES OF ASSOCIATION OF THE JOINT VENTURE APPENDIX 2 REGISTERED TRADEMARKS Comment DX1 Page 1 Tentative English name Comment DX2 Page 1 Agreement in the Chinese original as is the case in many other places HK 16856 1 THIS JOINT VENTURE CONTRACT Contract is entered on 2004 in between 1 an enterprise legal person established and existing under the laws of the People s Republic of China with its legal address at Party A and 2 a legal person established and existing under the laws of with its legal address at Party B Party A and Party B may be collectively referred to as the Parties or the Shareholders and individually as a Party or a Shareholder RECITAL In accordance with the laws and regulations of the People s Republic of China the Equity Sale and Subscription Agreement as defined below dated 2004 among Party A Party B and Party C a limited liability company established and existing under the laws of the People s Republic of China and this Contract and following friendly consultations the Parties have agreed to reorganize Party C into a Sino foreign equity joint venture jointly owned by the Shareholders the Joint Venture in which Party A shall have of the equity interests and Party B shall have of the equity interests The Parties are desirous to enter into this Contract to set out the rights and obligations between them in respect of the reorganization of Party C into an equity joint venture company The Parties have hereby agreed as follows CHAPTER 1DEFINITIONS 1 1Unless otherwise provided herein the following terms when used herein shall have the following meanings Affiliate in relation to a Party means an entity that directly or indirectly controls or is controlled by or is under common control with that Party For the purpose of this definition control means the ownership directly or indirectly of 50 or more of the voting shares registered capital or other interests in such entity or the possession directly or indirectly of the power to appoint a majority of the members of the management management committee or board of directors or similar decision making body of such entity whether through the ownership of voting shares by contract or otherwise Appendix means any appendix of this Contract Articles of Association means the articles of association of the Joint Venture attached hereto as Appendix 1 Party C means before its reorganization into the Joint Venture a limited liability company established and existing under the laws of the People s Republic of China Board means the board of directors of the Joint Venture Business Licence means the amended enterprise legal person business licence issued to the Joint Venture by the Industry and Commerce Administration HK 16856 1 2 Approval means the approval reply issued to the Joint Venture by the competent Authority of the government approving the change of Party C into a Sino foreign equity joint venture enterprise China means the People s Republic of China For the purposes of this Contract only China refers to the parts of China other than Hong Kong Macao and Taiwan Establishment of the Joint Venture means the change of Party C as a wholly state owned limited liability company into a Sino foreign equity joint venture enterprise in accordance with the relevant laws and regulations the approval of the Authority the Equity Sale and Subscription Agreement and this Contract Change Date means the date on which Party C receives from the industry and commerce registration authority its enterprise legal person business licence that changes it into the Joint Venture Confidential Information includes a all information of a confidential nature disclosed directly or indirectly by a Party the Disclosing Party to another Party the Receiving Party in written oral or any other form or by the Company to any Party including its Affiliates in such forms before or after the date of this Contract including any information concerning the organization operation technical processes plans or ideas products know how intellectual properties design rights trade secrets market opportunities or business affairs of the Disclosing Party or the Company and b the negotiations and consultations between the Parties in connection with the transaction contemplated in the Equity Sale and Subscription Agreement and this Contract and the existence and details of such agreements Force Majeure means all events which cannot be controlled or foreseen or even if foreseeable cannot be avoided by the Parties and which prevent the total or partial performance by any Party including without limitation any act of God sabotage accident industrial strike war unavailability of means of transport government act and other similar unexpected events Joint Venture means the Sino foreign equity joint venture enterprise resulting from the change of Party C in accordance with the laws and regulations of China and this Contract which has been established with the approval of the competent Authority of the government and to which the Industry and Commerce Administration has issued a business licence Joint Venture Equity means the equity interests owned by Party A and the equity interests owned by Party B in the Joint Venture as adjusted from time to time according to the change of the registered capital of the Joint Venture Senior Officers means the General Manager Deputy General Managers Chief Financial Officer Chief Accountant and other employees of the Company so designated by the Board except otherwise provided herein Officers means the Senior Officers and other employees of the Company so designated by the Board Authority means all government departments of China having the authority to approve the HK 16856 1 3 transactions relating to the Establishment of the Joint Venture including without limitation the foreign investment administration authority RMB means Renminbi the legal currency of China Industry and Commerce Administration means the State Administration for Industry and Commerce or its authorized branches Equity Sale and Subscription Agreement means the agreement dated among Party A Party B and Party C for the sale and purchase of and the subscription for the equity interests in Party C Working Day means any week day from Monday to Friday excluding any legal holiday specified by the governments of China and 1 2In this Contract 1 2 1a reference to subsidiary shall be interpreted as a reference to an entity that is controlled by another entity through the ownership of shares or equity interests or through other arrangements The term control means the possession of the power to direct the affairs of such entity through the ownership of 50 or more of the voting shares or other equity interests in such entity or although without such voting shares through the voting rights and other means or by contract or otherwise 1 2 2a reference to controlling company shall be so interpreted that when an entity is a subsidiary of another entity such another entity shall be deemed its controlling company 1 2 3a reference to entity shall include any individual firm company or any joint venture consortium or partnership consisting in two or more of the preceding entities whether with or without independent legal person status 1 2 4a reference to any clause paragraph and Appendix shall be a reference to the relevant clause paragraph and Appendix of this Contract unless otherwise provided 1 2 5a reference to any time of the day shall mean Beijing time and 1 2 6the headings herein shall not affect the construction of this Contract CHAPTER 2ESTABLISHMENT AND LEGAL FORM OF THE JOINT VENTURE Establishment Comment DX3 Page 4 This is another reference to the Joint Venture but is not defined HK 16856 1 4 2 1The Joint Venture shall be established on the date on which the industry and commerce registration authority issues an enterprise legal person business licence in which it is changed into a Sino foreign equity joint venture enterprise 2 2The Parties shall be jointly responsible for taking all actions necessary for the Joint Venture 2 3After signing this Contract the Parties shall promptly submit this Contract the Articles of Association the Equity Sale and Subscription Agreement and any other required document to the Authority for examination and approval The Parties shall inform each other of the status of the examination and approval within a reasonable time and unless otherwise restricted by the applicable laws and regulations of China promptly fax to the other Party any communication received from the Authority including the approval reply and approval certificate 2 4Within one month of obtaining the approval of such Authority the Parties shall as soon as possible take action to cause the Joint Venture to complete the registration of the Joint Venture in accordance with the applicable joint venture laws and regulations and other relevant laws and regulations of China The Parties shall keep each other reasonably informed of the progress and the relevant evidence if any 2 5Unless otherwise agreed by the Parties if a payment is required to be made to a third party in the performance of any obligation under Clauses 7 1 and 7 2 the Party required to make the payment shall first make such payment on behalf of the Company and then receive reimbursement from the funds of the Joint Venture after the Change Date provided however that the Party required to make any payment is able to provide a receipt for such payment and that such payment is of a reasonable amount and has been approved by the Company or the other Party such approval not to be unreasonably withheld Name Address and Branch of the Joint Venture 2 6The Chinese name of the Joint Venture shall be in Chinese and in English 2 7The address of the Joint Venture shall be China 2 8Subject to the consent of the Board and the approval of the Authority the Joint Venture may establish branches in China in accordance with the needs of its business Legal Form The form of the Joint Venture shall be a limited liability company Unless otherwise provided herein or required by a resolution of the Board a Party shall not be required to provide further funds to the Joint Venture or to a third party on behalf of the Joint Venture in the form of capital contribution loan advance or guarantee or in other forms once it has paid its capital contribution to the registered capital of the Joint Venture The Parties shall be liable for the losses and debts of the Joint Venture only to the extent of their respective capital contributions The creditors of the Joint Venture shall have recourse only to the assets of the Joint Venture and unless any Party has provided a guarantee to the creditors in respect of the debts of the Joint Venture shall not require any Party to assume additional liability for the HK 16856 1 5 debts of the Joint Venture The Parties shall share the profits and losses of the Joint Venture in accordance with their respective paid capital contributions to the Joint Venture 2 9The Joint Venture shall be an independent legal person as provided under the laws and regulations of China The activities of the Joint Venture shall be governed and protected by the relevant laws and regulations of China The business of the Joint Venture shall be controlled by the Board at all times Unless expressly delegated or authorized by the Board neither Party shall engage in any transaction or carry on any other activities on behalf of the Joint Venture 2 10The Joint Venture shall comply with all applicable laws at all times 2 11During the period between the date of this Contract and the Change Date Party A shall cause Party C and its Affiliates to conduct their business as it was generally duly and customarily conducted before the conclusion of this Contract CHAPTER 3PARTIES TO THE CONTRACT 3 1The Parties to this Contract shall be 3 1 1 established in accordance with the laws and regulations of China with its registered address at The legal representative of Party A Name Position Nationality 3 1 2 The legal representative of Party B Name Position Nationality Change of Representative 3 2Each Party shall have the right to change its legal representative or authorized representative as the case may be In the event of such change the other Party shall be promptly notified of the name position and nationality of the new representative CHAPTER 4PURPOSE SCOPE AND SCALE 4 1Purpose of the Joint Venture To diversify the investments of the Company and ultimately privatize the capital and internationalize the business of the Company to strengthen the ability of the Company to compete in the international market to enlarge its share and boost its strength in the construction machinery industry to establish as an internationally known brand name to establish a permanent construction machinery base in and to provide an above average return to the Shareholders HK 16856 1 6 4 2Business Scope of the Joint Venture 4 3Business Scale of of the Joint Venture CHAPTER 5TOTAL INVESTMENT AND REGISTERED CAPITAL AND ITS TRANSFER Total Investment 5 1The total investment of the Joint Venture shall be RMB million Total Investment Registered Capital and Financing 5 2The registered capital of the Joint Venture shall be RMB million Registered Capital Contribution to the Registered Capital upon the Establishment of the Joint Venture 5 3The Parties shall contribute to the Registered Capital in the following manner 5 3 1The contribution to the Registered Capital of the Joint Venture by Party A shall be RMB representing of the Registered Capital Party A has completed will complete the above contribution to the Registered Capital prior to the change of Party C into an equity joint venture 5 3 2The contribution to the Registered Capital of the Joint Venture by Party B shall be the US Dollar Hong Kong Dollar equivalent of RMB representing of the Registered Capital Party B shall complete its contribution to the Registered Capital of the Joint Venture in such manner and time as provided in the Equity Sale and Subscription Agreement 5 4Capital Verification and Certificate of Capital Contribution After Party B has completed its contribution to the Registered Capital in accordance with Clause 5 3 2 hereof the capital contributions of Party A and Party B shall be verified and a capital verification report shall be issued by a legal capital verification institution The legal capital verification institution shall verify the relevant capital contributions and issue a capital verification report at the expenses of the Joint Venture Thereafter as soon as it receives such capital verification report the Joint Venture shall issue to Party A and Party B certificates of capital contribution which shall be signed by the Chairman of the Board and affixed with the seal of the Joint Venture The Joint Venture shall keep a file of the copies of all capital verification reports and all certificates of capital contribution issued to the Parties Expenses and Capital Contribution HK 16856 1 7 5 5For the avoidance of doubt the Parties expressly agree that the obligation of a Party to contribute to the Registered Capital of the Joint Venture shall be reduced in any way by virtue of its incurrance of expenses for the benefits of the Joint Venture Increase of the Registered Capital 5 6Any change in the Registered Capital of the Joint Venture must be approved unanimously by the directors present in person or by proxy in a validly convened meeting of the Board and shall be submitted to the Authority for approval if required by law Upon receipt of the approval of the Authority the Joint Venture shall register the change in registered capital with the Industry and Commerce Administration 5 7Subject to the preceding clause if the Board resolves to approve an increase in the Registered Capital each Party shall have the right to subscribe for the additional Registered Capital in proportion to its equity interests in the Joint Venture or with the consent of the other Party in a proportion agreed to by the Parties Each Party may waive its right to subscribe for such additional Registered Capital If any Party waives in whole or in part its right to subscribe for such additional Registered Capital the other Party shall have the right to subscribe with the same conditions for the additional Registered Capital under such waiver If the Registered Capital is increased as a result of a capital contribution to the Joint Venture by a third party other than an existing Shareholder such third party shall subscribe for such additional Registered Capital at such price as agreed to by the existing Shareholders Restriction on the Joint Venture Equity 5 8Without prior written consent of the other Party a Party shall not 5 8 1pledge mortgage or otherwise create any security interest over against in the Joint Venture Equity 5 8 2grant to any third party any purchase option with respect to the Joint Venture Equity 5 8 3