JOINT VENTURE Zhejiang Baitai Bioengineering Corp. CONTRACT
JOINT
VENTURE
Zhejiang
Baitai Bioengineering
Corp.
CONTRACT
Xxxx
Xxxxxxxxx Xxxx Real Estate Corp
NIUSULE
BIOTECH CORP. (AMERICA)
ZHEJIANG,
CHINA 2008
TABLE
OF
CONTENTS
|
Chapter
I.
|
GENERAL
PROVISIONS
|
|
Chapter
II.
|
PARTIES
TO THE JOINT VENTURE
|
|
Chapter
III.
|
ESTABLISHMENT
OF THE JOINT VENTURE COMPANY
|
|
Chapter
IV.
|
PURPOSE,
SCOPE AND SCALE OF PRODUCTION AND
OPERATIONS
|
|
Chapter
V.
|
TOTAL
AMOUNT OF INVESTMENT AND THE REGISTERED
CAPITAL
|
|
Chapter
VI.
|
RESPONSIBILITIES
OF EACH PARTY TO THE JOINT VENTURE
|
|
Chapter
VII.
|
CONSTRUCTION
OF FACTORY
|
|
Chapter
VIII.
|
SALES
OF PRODUCTS
|
|
Chapter
IX.
|
THE
BOARD OF DIRECTORS
|
|
Chapter
X.
|
OPERATION
AND MANAGEMENT ORGANISATION
|
|
Chapter
XI.
|
PURCHASE
OF EQUIPMENT
|
|
Chapter
XII.
|
LABOUR
MANAGEMENT
|
|
Chapter
XIII.
|
TAXES,
FINANCE AND AUDITING
|
|
Chapter
XIV.
|
TERM
OF THE JOINT VENTURE
|
|
Chapter
XV.
|
THE
DISPOSAL OF PROPERTIES UPON THE EXPIRATION OF THE JOINT VENTURE
TERM
|
|
Chapter
XVI.
|
THE
AMENDMENT, ALTERATION AND DISCHARGE OF THE
CONTRACT
|
|
Chapter
XVII.
|
LIABILITIES
FOR BREACH OF CONTRACT
|
|
Chapter
XVIII.
|
FORCE
MAJEURE
|
|
Chapter
XIX.
|
APPLICABLE
LAW
|
|
Chapter
XX.
|
SETTLEMENT
OF DISPUTES
|
|
Chapter
XXI.
|
LANGUAGE
|
|
Chapter
XXII.
|
EFFECTIVENESS
OF THE CONTRACT AND MISCELLANEOUS
|
CHAPTER
I
GENERAL
PROVISIONS
In
accordance with the “Law of the People’s Republic of China on Joint Ventures
Using Chinese and Foreign Investment” and other relevant Chinese laws and
regulations, ANJI MEIBODENG XXXX REAL ESTATE CORP and NIUSULE BIOTECH
CORP.(AMERICA) adhering to the principle of equality and mutual benefit and
through friendly consultations, agree to jointly invest to set up a joint
venture in Anji, Zhejiang Province of the People’s Republic of China and enter
into the contract hereunder.
1
CHAPTER
II
PARTIES
TO THE COOPERATION PROJECT
ARTICLE
1
The
Parties to this contract are:
Party
A
Name: XXXX XXXXXXXXX XXXX REAL ESTATE CORP
Place
of
Incorporation: China
Legal
Address: 14th
Floor,
Development Building,0 xxxx xxxxx xx Xx,Xx xx Xxxx, Xxxx, Xxxxxx
Legal
representative: Xxxxxxx Xxxx
Business
Registration Certificate No:
Party
B
Name: NIUSULE BIOTECH CORP.(AMERICA)
Place
of
Incorporation: U.S.
Legal
Address: 0000 X XXXXXX XX XXX 0-X, XXXXXX XXXX XX 00000
Legal
representative: Xxxxxxxxx
Xxxxx
Business
Registration Certificate No
CHAPTER
II
ESTABLISHMENT
OF THE COOPERATIVE PROJECT
ARTICLE
2
In
accordance with the “Law of the People’s Republic of China on Joint Ventures
Using Chinese and Foreign Investment” and other relevant Chinese laws and
regulations, party A and party B agree to set up ZHEJIANG BAITAI BIOENGINEERING
CORP
(hereinafter referred to as the “Joint Venture Company”) within the territory of
China.
2
ARTICLE
3
The
name
of the Joint Venture Company shall be: ZHEJIANG BAITAI BIOENGINEERING
CORP.
The
legal
Address of the Joint Venture Company: Bi men Village, Di pu Town, Anji, Huzhou,
Zhejiang Province, People’s Republic of China
ARTICLE
4
All
activities of the Joint Venture Company must be in compliance with the laws,
decrees and pertinent rules and regulations of the People’s Republic of
China.
ARTICLE
5
The
form
of organization of the Joint Venture Company shall be a limited liability
company. Party A and Party B shall be liable to the debts of the Joint Venture
Company within the limit of the investment contribution subscribed by each
respectively. The profit shall be shared by the Parties in proportion to
their
respective actual investment contribution to the total investment contribution
and the risks and losses shall be shared by the Parties in proportion to
their
respective amount of investment contribution payable to the total registered
capital.
CHAPTER
IV
PURPOSE,
SCOPE AND SCALE OF PRODUCTTION AND OPERATIONS
ARTICLE
6
The
purpose of the joint venture between Party A and Party B is :in conformity
with
the desire to strengthen economic cooperation and technology exchange, to
adopt
advanced and appropriate technology and scientific methods of operation and
management to raise the market competitiveness so as to raise beneficial
economic results to enable the investing parties to obtain satisfactory economic
benefits.
ARTICLE
7
The
scope
of production and operation of the Joint Venture Company shall be:: manufacture
and sell fiber diet functional foods, bamboo
leaf flavones,
rose
essence and rose water,vitamin etc.
ARTICLE
8
The
production scale of the Joint Venture Company shall be as follows: The annual
production level of fiber diet functional foods is 10 million kgs in total,
the
annual production level of bamboo
leaf flavones
is 0.05
million kgs in total, the annual production level of rose
essence is 1000 kgs in total, the
annual production level of rose
water is 4 million kgs. The annual sell of all products is 80% of the production
level.
3
CHAPTER
V
TOTAL
AMOUNT OF INVESTMENT AND THE REGISTERED CAPITAL
ARTICLE
9
The
total
amount of the investment of the Joint Venture Company shall be :RMB Fifteen
Million (RMB 14,000,000.00).
.
ARTICLE
10
Investment
contributed by Parties shall be RMB ten Million (RMB 10,000,000.00) which
will
be the registered capital of the Joint Venture Company.
|
1.
|
Party
A’s total contribution to the registered capital shall be RMB one
Million,
representing 10% of the registered capital; Party B’s total contribution
shall be RMB nine Million, representing 90% of the registered
capital;
|
|
2.
|
Each
Party may borrow through their respective banks to meet the
requirements.
|
ARTICLE
11
Party
A
and Party B shall make their respective contribution to registered capital
as
follows:
Party
A:
RMB 1 million (RMB 1,000,000.00)
Party
B:
RMB 9 million (RMB 9,000,000.00)
ARTICLE
12
The
registered capital of the Joint Venture Company shall be paid by Party A
and
Party B in accordance with their respective proportion of contribution as
follows:
|
1.
|
the
first payment should be unless 15% of the total contribution of
each
Party, and should be paid within 3 months of the issuance of the
business
license of the Joint venture
Company.
|
|
2.
|
the
other payment of the remain contribution of each party should be
paid
within 2 years after issuance of the business license of the Joint
venture
Company.
|
ARTICLE
13
In
the
event that either Party A or Party B intends to assign all or part of his
capital contribution to a third party, consent must be obtained from the
other
party to the joint venture. When one party to the joint venture assigns all
or
part of his capital contribution, the other party shall have the rights of
preemption. The terms and conditions of offer to assign all or part of its
capital contribution to a third party shall not be more preferential than
those
offered to the other party.
4
CHAPTER
VI
RESPONSIBILITIES
OF EACH PARTY TO THE JOIINT VENTURE
ARTICLE
14
Party
A
and Party B shall be respectively responsible for completing the following
matters:
Responsibilities
of Party A:
| 1. |
To
handle applications for approval, registration, business license
and other
matters concerning the establishment of the Joint Venture Company
from
relevant Chinese departments in
charge;
|
| 2. |
To
go through applications procedures at the department in charge
of land to
obtain the right to the use of
land;
|
| 3. |
To
organize the design and construction of the factory premises and
other
engineering facilities of the Joint Venture
Company;
|
| 4. |
To
provide contribution in accordance with the stipulations in Article
11;
|
| 5. |
Go
through import customs declaration procedures for the machinery
and
equipment and arrange for transportation within the Chinese
territory;
|
| 6. |
To
assist the Joint Venture Company in purchasing fixed assets within
the
Chinese territory.
|
| 7. |
To
assist the Joint Venture Company in coordinating and ascertaining
the
infrastructural facilities such as water, electricity, transportation,
etc;
|
| 8. |
To
assist the Joint Venture Company in recruiting local Chinese operation
and
management personnel, technical personnel, workers and other personnel
required;
|
| 9. |
To
assist foreign,Hong Kong, Macau and Taiwan workers and staff in
going
through necessary procedures for obtaining entry visas, work permits
and
making travel arrangements;
|
| 10. |
To
be responsible for handling other matters entrusted by the Joint
Venture
Company.
|
Responsibilities
of Party B:
| 1. |
To
assist Party A to handle applications for approval, registration,
business
license and other matters concerning the establishment of the Joint
Venture Company from relevant Chinese departments in
charge;
|
| 2. |
To
assist Party A to go through applications procedures at the department
in
charge of land to obtain the right to the use of
land;
|
| 3. |
To
assist Party A to organize the design and construction of the factory
premises and other engineering facilities of the Joint Venture
Company;
|
5
| 4. |
To
provide contribution in accordance with the stipulations in Article
11;
|
| 5. |
To
assist Party A in going through import customs declaration procedures
for
the machinery and equipment.
|
| 6. |
To
assist the Joint Venture Company in purchasing fixed assets within
the
Chinese territory.
|
| 7. |
To
assist the Joint Venture Company in coordinating and ascertaining
the
infrastructural facilities such as water, electricity, transportation,
etc;
|
| 8. |
To
assist the Joint Venture Company in recruiting local Chinese operation
and
management personnel, technical personnel, workers and other personnel
required;
|
| 9. |
To
assist Party A for the production of the whole the Joint Venture
Company
and to assist the necessary technology and advanced
management.
|
| 10. |
To
handle matters entrusted by the Joint Venture Company relating
to the
selection and purchase of machinery and equipment outside
China.
|
| 11. |
To
provide assistance to the Joint Venture Company for installing,
testing
and trial production etc. of the imported
equipments.
|
| 12. |
To
train the technical personnel, management personnel and workers
of the
Joint Venture Company
|
| 13. |
To
manage the finance and movements of funds.
|
| 14. |
To
be responsible for introducing advanced products and technology
into the
Joint Venture Company.
|
| 15. |
To
be responsible for the distribution outside China and guarantee
the
quality of the products.
|
| 16. |
To
be responsible for handling other matters entrusted by the Joint
Venture
Company.
|
CHAPTER
VII
CONSTRUCTION
OF FACTORY
ARTICLE
15
The
Joint
Venture Company shall go through application procedures at the relevant
departments to obtain the assignment of the land necessary for the factory
site.
The Joint Venture Company shall construct the factory on its own. (The details
are specified in Annex 1: the Factory Plan)
CHAPTER
VIII
SALES
OF
PRODUCTS
ARTICLE
16
The
Products of the Joint Venture Company shall be varied according to the market
demands. Party B shall assist for the technological management of the Joint
Venture Company.
6
ARTICLE
17
The
products sold outside China by the Joint Venture Company shall not make use
of
any quota of China.(when the exporting procedures require quota)
ARTICLE
18
In
order
to sell products outside China, upon the approval of the relevant Chinese
department, the Joint Venture Company authorizes Party B as exclusive sales
in
distribution agent in all areas of the world expect China.
ARTICLE
19
The
trademark used in the Procedures of the Joint Venture Company shall be
determined by the Board of Directors
CHAPTER
IX
The
Board
of Directors
ARTICLE
20
The
date
of the registration of the Joint Venture Company shall be the date of the
establishment of the Board of Directors of the Joint Venture
Company.
ARTICLE
21
The
Board
of Directors shall consist of three directors, one of which should be appointed
by Party A, one by Party B, and the other one shall be appointed by the Board
of
Directors. The Chairman and Vice Chairmen of the Board shall be appointed
by the
Board of Directors. The Directors and Chairman and Vice Chairmen shall have
a
term of office of FOUR years, and their term of office may be renewed if
they
are reappointed by the relevant party and reappointed by the Board of
Directors.
ARTICLE
22
The
Board
of Directors shall be the highest authority of the Joint Venture Company.
It
shall decide all major issues concerning the Joint Venture Company. Resolutions
of major issues and other related matters shall be made upon an affirmative
vote
by more than half of the directors in the Board of Directors.
ARTICLE
23
In
the
event that the Chairman of Joint Venture Company cannot perform his duties
for
any reason, he may temporarily authorize the Vice Chairman or any other Director
to act as his representative. The legal representative of the Joint Venture
Company shall be appointed by the Board of Directors.
ARTICLE
24
The
Board
of Directors shall convene at least one meeting every year. Such meetings
shall
be called and presided over by the Chairman of the Board. The Chairman may
convene an interim meeting of the Board of Directors based on a proposal
made by
more than one-third of the Directors. Minutes of meetings shall be kept on
file
in the Joint Venture Company.
7
CHAPTER
X
OPERATION
AND MANAGEMENT ORGANIZATION
ARTICLE
25
The
Joint
Venture Company shall establish an operation and management organization
which
shall be responsible for its daily operation and management. The operation
and
management organization shall have one General Manager, who shall be nominated
by Party A. The General Manager shall be appointed by the Board of Directors
for
a term of 4 years.
ARTICLE
26
The
responsibility of General Manager is to carry out the various resolutions
of the
meetings of the Board of Directors, and organize and direct the daily operation
and management work of the Joint Venture Company. The operation and management
organization may have several department managers who shall be respectively
responsible for the work of the various departments of the enterprise, handle
matters delegated to them by the General Manager and be responsible to the
Board
of Directors.
ARTICLE
27
In
the
event of graft or serious dereliction of duty on the part of the General
Manager
and other high ranking officers, they may be removed and replaced at any
time
upon a resolution passed at a meeting of the Board of Directors.
CHAPTER
XI
PURCHASE
OF EQUIPMENT
ARTICLE
28
In
the
purchase of required raw materials, fuel, parts, means of transportation
and
office supplies, etc., the Joint Venture Company shall give first priority
to
purchase in China where conditions are the same.
ARTICLE
29
In
the
event of fulfillment of advanced technology, suitability and reasonable price,
the Joint Venture Company can entrust Party B with the selection and purchase
of
equipment from markets outside China. During the purchase of equipment, the
price range shall be determined by the operation and management organization
of
the Joint Venture Company.
8
CHAPTER
XII
LABOR
MANAGEMENT
ARTICLE
30
After
the
Board of Directors has studied and formulated plans with regard to matters
concerning the recruitment, employment, resignation and dismissal, wages,
labor
insurance, welfare, rewards and punishments, etc. of the staff and workers
of
the Joint Venture Company in accordance with the Regulations of the People’s
Republic of China on Labor Management in Joint Ventures Using Chinese and
Foreign Investment and its implementation measures, the Joint Venture Company
and the trade union organization of the Joint Venture Company shall collectively
or individually enter into labor contracts covering such matters. After the
labor contracts have been executed, they should be filed with the local labor
management department for the record.
ARTICLE
31
The
appointment of senior management personnel recommended by Parties A and B
as
well as the standard of their wages and remuneration, social insurance, welfare
and travel expenses, etc. shall be discussed and determined in meeting of
the
Board of Directors.
CHAPTER
XIII
TAXES,
FINANCE AND AUDITING
ARTICLE
32
The
Joint
Venture Company shall pay taxes in accordance with the stipulations of relevant
Chinese laws and regulations.
ARTICLE
33
Staff
members and workers of the Joint Venture Company shall pay individual income
tax
in accordance with the “Individual Income Tax Law of the People’s Republic of
China.”
ARTICLE
34
The
Joint
Venture Company shall set aside the reserve funds, the development funds
of the
venture and bonus and welfare funds for staff and workers in accordance with
the
stipulations in the “Law of the People’s Republic of China on Joint Ventures
Using Chinese and Foreign Investment”. The proportion to be set aside annually
shall be discussed and decided by the Board of Directors according to the
business situations of the company. When the Joint Venture Company get its
profit after the production, each party may get little management fees, the
proportion of it to be set aside annually shall be discussed and decided
by the
Board of Directors according to the business situations of the company. During
the construction period, the travel and sundry fees of all persons of both
parties should be undertaking by the Joint Venture Company.
9
ARTICLE
35
The
fiscal year of the Joint Venture Company shall be from January 1 to December
31.
All accounting vouchers, bills, statements and reports, and books of accounts
shall be written in Chinese and English.
ARTICLE
36
An
accountant registered in China shall be engaged to examine and verify the
financial and auditing matters of the Joint Venture Company and the results
thereof shall be reported to the Board of Directors and the General Manager.
If
either Party deems it necessary to engage an auditor from another country
to
examine the annual financial matters, the other Party shall give its consent.
All expense required shall be borne by the requesting Party.
ARTICLE
37
During
the first three months of each business year, the General Manager shall organize
and prepare the balance sheet, profit and loss statement and profit distribution
plan for the preceding year and submit the same for examination and approval
at
the meeting of the Board of Directors.
CHAPTER
XIV
TERM
OF
THE JOINT VENTURE
ARTICLE
38
The
term
of Joint Venture Company shall be 10 years. The date of establishment of
the
Joint Venture Company shall be the date on which the business license of
Joint
Venture Company is issued. At the proposal of one party and upon unanimous
approval in a meeting of the Board of Directors, an application may be filed
with the original examination and approval authority six (6) months prior
to the
expiration of the joint venture term for an extension of the joint venture
term.
Such extension shall be agreed by Party A and B and allowed by the regulatory
authorities.
CHAPTER
XV
THE
DISPOSAL OF PROPERTIES UPON
THE
EXPIRATION OF THE JOINT VENTURE COMPANY TERM
ARTICLE
39
Upon
the
expiration of the joint venture term or early termination of the joint venture,
the Joint Venture Company carry out liquidation in accordance with law. The
properties after liquidation shall be distributed in proportion to the
respective investment of Party A and Party B.
10
CHAPTER
XVI
THE
AMEDNMENT, ALTERATION AND
DISCHARGE
OF THE CONTRACT
ARTICLE
40
Any
amendment to this Contract and the annexes hereof may enter into effect only
after a written agreement is signed by both Parties and approved by the original
examination and approval authority.
ARTICLE
41
In
the
event that the Contract cannot be performed due to force majeure or that
the
Joint Venture Company is unable to continue operations due to successive
years
of losses, the term of the joint venture may be brought to an early termination
and Contract discharged upon the unanimous adoption of such a resolution
by the
Board of Directors and approval by the original examination and approval
authority.
ARTICLE
42
Should
the Joint Venture Company be unable to continue its operations or achieve
the
business purpose stipulated in the Contract duet to the fact that one of
the
contracting parties fails to fulfill the obligations prescribed under the
Contract or the Articles of Associations, or seriously violates the stipulations
of the Contract or the Articles of Associations, such defaulting party shall
be
deemed to be unilaterally terminating the Contract. The other party, in addition
to having the rights to claim compensation from the defaulting party, shall
also
have the rights to terminate the Contract upon approval by the original
examination and approval authority in accordance with the provisions of the
Contract. In the event that Party A and Party B agree to continue the operation
the defaulting party shall be liable to compensate the Joint Venture Company
for
its economic losses.
CHAPTER
XVII
LIABILITIES
FOR BREACH OF CONTRACT
ARTICLE
43
Should
either Party A or Party B fail to make the capital contribution on schedule
and
in the amount as stipulated in Chapter V of this Contract, the defaulting
party
shall pay an overdue fine to the other party, for every month in arrears,
at 5%
of the amount of contribution due starting from the first month payment is
overdue. Should the defaulting party fail to pay after 3 months, in addition
to
payment by the defaulting party of the accumulated overdue fine at 15% of
the
amount of contribution due, the other party shall also have the rights to
terminate the Contract according to the provisions in the Contract and to
claim
damages from the defaulting party.
ARTICLE
44
In
the
event that this Contract and its annexes cannot be performed or fully performed
due to fault of one party, the party at fault shall bear the responsibility
for
default, Should it be the fault of both parties, the parties shall bear their
respective responsibilities for default based on the actual
situation.
11
CHAPTER
XVIII
FORCE
MAJEURE
ARTICLE
45
In
the
event that the performance of the Contract is directly affected or that the
Contract cannot be performed in accordance with the terms and conditions
agreed
upon as a result of earthquake, flood, fire, war or any other event of force
majeure that is unforeseeable and the occurrence and consequence of which
is
unpreventable or unavoidable, the party that encounters the above said event
of
force majeure shall immediately notify the other party of the conditions
of the
event by cable and shall, within fifteen days, provide details of the event
and
valid certifying documents evidencing the reasons as to why the Contract
cannot
be performed in full or in part or the performance of which needs to be
postponed. Such certifying documents should be issued by a notary organization
in the place where the event occurred. Based on the extent of the effect
such
event has on the performance of the Contract the parties shall consult and
decide whether or not the Contract should be discharged, or part of the
responsibilities for the performance of the Contract should be relieved,
or the
performance of the Contract should be postponed.
CHAPTER
XIX
APPLICABLE
LAW
ARTICLE
46
The
execution, validity, interpretation, performance and settlement of disputes
of
this Contract shall be governed by the laws of the People’s Republic of China.
CHAPTER
XX
SETTLEMENT
OF DISPUTES
ARTICLE
47
Any
disputes arising from the performance of, or in connection with this Contract
shall be settled through consultation friendly consultations between two
parties. In case no settlement can be reached through consultation,
the disputes shall be submitted to China International Economic and Trade
Arbitration Commission for arbitration in accordance with its provisional
rules
of arbitration procedures. The award of such arbitration shall be final and
binding upon both parties.
ARTICLE
48
During
the course of arbitration, this Contract shall continue to be performed except
for the part which the Parties are disputing and which is undergoing
arbitration.
12
CHAPTER
XXI
LANGUAGE
ARTICLE
49
This
Contract has been written in Chinese and English. The efficiency of both
versions are the same.
CHAPTER
XXII
EFFECTIVENESS
OF THE CONTRACT AND MISCELLANEOUS
ARTICLE
50
The
following ancillary agreements and documents concluded in accordance with
the
principles stipulated under this Contract including the Articles of Association
of the Joint Venture Company shall all be an integral part of this
Contract.
ARTICLE
51
This
Contract and its annexes shall be subject to the approval of the Bureau of
Foreign Economic Relations of Zhejiang, and shall become effective as of
the
date of approval.
ARTICLE
52
With
respect to the methods by which Parties A and B send notices, all notices
given
by cable or telex should be followed by a notice in the form of a written
letter
if the contents of such notices involve the rights and obligations of the
Parties. The legal
13
15
Annex
1:
the Factory Plan
16
