EXHIBIT 10.21
Agreement on the Division of Technical Information and
Personnel and Other Issues
Party A: Liuzhou Construction Machinery General Factory (the "Factory")
Party B: Liuzhou OVM Construction Machinery Co., Ltd. ("Liuzhou OVM")
After friendly negotiation, Party A and Party B hereby reach agreement on the
following issues:
I. Personnel Division
1. Party A and Party B have agreed: after determining respective
intermediate-level personnel, both parties issued a joint notice on
January 5, 2000, and have decided the working personnel working in Party
A and Party B, respectively, according to actual requirements for human
resources and based on the personal xxxxx. The list of these personnel
shall be finalized before 15:00 of January 6. After confirming the
personnel, the management personnel shall not be changed before March 1.
2. The personnel of Operating Company and Import & Export Company shall be
divided according to the joint notice issued by both parties on December
26, 1999.
3. The contracts entered by the Operating Company and Import & Export
Company in the name of the Factory and the files and information of the
Factory shall be handed over to the Factory; and the contracts entered by
Liuzhou OVM and file and information of Liuzhou OVM shall be handed over
to Liuzhou OVM. The above hand-over work shall be started on January 7
and be responsible by the respective appointing personnel. The hand-over
of files and information for fiscal year 1999 shall be completed before
January 7, and the hand-over of other files and information shall be
completed before January 12.
4. The originals of files and information of the production & manufacturing
department, quality control department, information center, purchasing
department and host secretary system of Liuzhou OVM shall be handed over
to Party A if such originals are handled and registered in the name of
Party A and Party B shall keep copies of such originals; or handed over
to Party B if such originals are handled and registered in the name of
Party B and Party A shall keep copies of such originals. The original of
policy documents of human resources department shall be handed over to
Party A, with copies kept by Party B. The personnel records, contracts,
graduation certificates and professional title certificates of the
personnel transferred to the Factory shall be handed over to Party A. The
hand-over work shall be commenced on January 7 and completed by January
12, 2000. Information of other departments not mentioned above shall be
handed over, where necessary, according to above-mentioned Clauses.
5. The list of personnel working in Party A or Party B shall be determined
before 3:00 P.M. on January 6, 2000,. January 7 to 8 is a period for work
hand-over and take-over. On January 9, the personnel of each party shall
return to the offices of respective parties and no personnel
intercrossing shall happen any more since then. Any personnel who have
changed the party to work for shall hand over the documents, files
information and business related to his previous job to his ex-employer
before January 8 before leaving.
6. After this personnel division, Party A and Party B warrant that the
year-end salary calculation and bonus of all personnel, no matter they
work for Party A or Party B, shall not be affected (those for sales and
marketing personnel
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shall be handled in accordance with the joint notice issued on December
26, 1999 by both parties).
7. After this personnel division, all pensions, risk securities, housing
loans and individual borrowing, etc. handled by Liuzhou OVM before
December 31, 1999 shall be transferred in accordance with their new
employment relationships. The settlement shall be made through offsetting
the current accounts between both parties which shall be completed before
January 31, 2000.
8. After this personnel division, the personnel departments of both parties
shall manage their own personnel respectively and no intercrossing is
allowed. Afterwards, any personnel turnover shall be handled in
accordance with the regulations of the State.
II. Technical Information
1. The originals of technology patents and information materials of the
Factory shall be kept in the Factory and Liuzhou OVM shall keep a copy
for each document.
2. The originals of technology patents and information materials which were
generated after the establishment of Liuzhou OVM shall be kept in Liuzhou
OVM and the Factory shall keep a copy for each document.
3. Both parties may continue to use the documents on technical patents and
technical design (including product inspection certificates and test
reports) developed by either party before January 31, 2000 without
charges. One party may give priority to the other on the use of its
technical patents developed after February 1, 2000, either at a charge or
free of charge, upon mutual negotiation.
4. From January 6, 2000 onwards, Party A and Party B shall send their
respective staff to handle the change over formalities in the technical
information room and original drawing room, and both parties shall try
their best to finish such formalities before January 31, 2000.
5. Borrowing, using or copying is allowed for production purpose and shall
be conducted through normal channel, with the presentation of signatures
by Xxxx Xxxx, Head of the Factory, or Xxxx Xxxxxxx, Secretary, for Party
A, or, with presentation of signature by Xxxx Xxxx Gui, Deputy-general
Manager, for Party B.
III. Equipment
1. The equipment shall be arranged on the basis of respective ownership. The
tools that are used with the equipment shall be owned by the Factory if
such tools are manufactured before September 1995, or owned by OVM Joint
Company if manufactured after October 1, 1995. If there are two sets of
the same equipment owned by Party B, Party B could sell one set to Party
A at an agreed price by offsetting the current account between both
parties. If there is only one set of equipment, the party who holds its
ownership shall decide whether to transfer it or not.
2. Party A shall agree to keep the three cranes owned by Party B for its use
as the structure of Party B's new factory building is unsuitable to use
them. Party B shall transfer the three cranes to Party A at agreed prices
based on their net values and shall be settled by offsetting the current
accounts.
3. Party B shall guarantee not to purchase the same kind of paint coating
equipment for production of same kind of products in the future. Party A
shall agree to buy, at the actual purchasing price, the paint coating
equipment of
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Party B which has been using in the Cable Company, by offsetting
respective party's current account.
4. Party B shall transfer No.3 multi-functional heat treatment plant to
Party A, by presenting the copy of the original invoice and expense
details, as is required by Party A, of which amount shall be offset
through the current account after verification.
5. In the process of relocating its equipment related with its production
and management, Party B shall transfer those equipment to Party A, at
agreed prices by offsetting the current account, if Party B is of the
opinion that such equipment is difficult to move or moving such equipment
shall incur heavy losses and Party A also needs such equipment its
production.
IV Party A shall agree to move the Import & Export Company out of the
original office building, and shall leave the sales department of Party A
to work in the previous office of the Trading Company of Party B, and
Party B shall move its Trading Company to other place. This change of
office place shall be completed before January 12.
V Raw materials and finished products
One third of each specification of raw materials and finished products
(including the goods used or delivered by Party A during the transition
period) shall be left to Party A based on the inventory ledger of Party B
as at December 31, 1999. All the rest shall be moved out by Party B
before February 29. For the one third of raw materials and finished
products left for Party A, of which the raw materials are based on book
prices and finished products are based on agreed prices. For those raw
materials and goods which are not recorded in the ledger shall be
allocated after verification and counted by both parties.
VI For all the above-mentioned equipment, raw materials and finished
products transferred to Party A by Party B, Party B shall prepare an
invoice based on the checklist signed by Party A after its receipt and
the agreed prices for settlement with Party A.
VII Current account issue
1. Concerning the current accounts between Party B and Party A (including
Party A' subsidiaries, Rubber Company, Liuzhou Wireless Factory, Cable
Company, Light Material Factory, Orient Company, Prestress Material
Company, Heat Treatment Branch Factory and other independent-accounting
units), both parties shall enter into an offsetting agreement before
January 31, 2000 after accounts verification by both parties to transfer
all current accounts with Party A's subsidiaries which are
independent-accounting units to a centralized account of Party A.
2. Concerning the returning of rental for leasing Beijing Office, a rental
of Rmb1,300,000 has been paid according to the lease agreement (of which:
the Factory paid Rmb400,000 and Liuzhou OVM paid Rmb900,000), with lease
period of fifty years and annual rental of Rmb26,000. Liuzhou OVM has
used it for 4 years and 6 months with total rental of Rmb117,000. Now
Party A shall agree to lease Beijing Office and pay Rmb320,000 as rental
to Party B by offsetting the current account between the two parties. The
Beijing Office shall be in use by Party A thereafter.
3. Concerning the commercial retirement insurance purchased previously by
Party B for the staff of Party A, respective parties' personnel
departments shall determine the amounts payable for them and shall settle
these amounts by
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offsetting the current account after determination of respective parties'
personnel before January 1, 2000.
4. Party A shall verify the payment by Liuzhou OVM on its behalf under the
house-purchasing scheme for awarding Wang Shanqing, Xxxxx Xxxxxxx and Xx
Xxxxxx amounted to Rmb700,000 before January 31, 2000, and the amount
shall be settled through offsetting current account.
VIII No.3 mechanical workshop and finished product warehouse
1. The equipment, tools, clipping devices, materials and semi-finished
products in No.3 mechanical workshop and finished product warehouse which
are owned by Liuzhou OVM shall be transferred to Party B's new premise as
soon as possible.
2. After Party B has moved out the equipment in the No.3 mechanical workshop
and finished product warehouse, the two vacant buildings which are owned
by Liuzhou OVM shall be taken over by Party A at an agreed price or at a
price after valuation. The price shall be settled by offsetting through
current account that shall be finished before the transfer of the factory
buildings.
3. Party B shall transfer the two buildings to Party A after Party B has
completed all the removal work.
IX Loan
1. Concerning the loans borrowed by Party B from Party A, Liuzhou OVM shall
agree to repay by installments on the condition that the above
settlements of current account be cleared and the exact loan amount be
verified.
2. One party shall agree to enter into guarantee agreement for the other
party in respect of working capital needed for the latter party's
production by separate agreement between both parties.
X. Moving work
Party B shall move to the new premise, Shuangma Factory, as soon as
possible, and Party A shall provide supports and cooperation to expedite
that moving work.
XI. Thereafter, both parties shall support each other, and neither party
shall defame the other as to its enterprise, products and trademarks.
XII. Party A and Party B shall comply the above-said clauses strictly. If
either party does not comply the above clauses strictly or even violates
these clauses, the relation coordination group appointed by the City
Committee of the Communist Party and City People's Government shall be
responsible for the coordination and arbitration. If either party
breaches the Agreement seriously, the breaching party shall bear related
responsibilities for its breaching of the agreement.
Party A: Party B:
Liuzhou Construction Machinery Liuzhou OVM Construction Machinery
General Factory Co., Ltd.
/s/ Xxxx Xxxx /s/ Ching Lung Po
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Xxxx Xxxx Ching Lung Po
January 6, 2000
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