EXHIBIT 10.15
JOINT VENTURE AGREEMENT
JILIN LIANLI (CBR) BREWING COMPANY LTD.
JOINT VENTURE AGREEMENT
JILIN LIANLI (CBR) BREWING COMPANY LTD.
CHAPTER 1 : GENERAL
Clause 1 Whereas in accordance with the "Law of the People's Republic
of China for the Joint Ventures Enterprises with Chinese and
Foreign Investments", "Company Law of the People's Republic of
China" and other relevant legislations and regulations of
China, Jilin Province Juetai City Brewery, Jilin Province
Xxxxxx Xxxxx Xxx Xxx Ltd. and March International Group
Limited agree, on the basis of equality and procuring mutual
benefits, friendly co-operation and mutual development, to
sign this joint venture agreement to establish a joint
venture company designated as "Jilin Lianli (CBR) Brewing
Company Ltd." in Juetai City, Jilin Province of China.
CHAPTER 2 : INTERPRETATION
Clause 2 In this Agreement, unless the context otherwise requires, the
following terms and words have the interpretations as follow:
1. "Agreement" means this Joint Venture Agreement and
all its appendices.
2. "Joint Venture Company" means Jilin Lianli (CBR)
Brewing Company Ltd.
3. "Party A" means Jilin Province Juetai Brewery.
"Party B" means March International Group Limited.
"Party C" means Jilin Province Xxxxxx Xxxxx Xxx Xxx
Ltd.
4. "China" means the People's Republic of China ("PRC").
5. "PRC Laws" means all the central, provincial and
local laws, legislations, regulations, rules,
procedures, and judicial interpretation documents
(including transient and provisional), but excludes
all the internal documents which are not disclosed to
foreign investors.
6. "Board of Directors" means the Board of Directors of
the Joint Venture Company.
7. "Directors" means the members in the Board of
Directors as appointed by the Joint Venture Parties
in accordance with this Agreement.
8. "Articles of Association" means the articles of
association of the Joint Venture Company prepared in
accordance with the terms and
conditions specified in this Agreement, which is
signed by all the Joint Venture Parties, and is
approved by the relevant governmental authorities.
9. "Third Party" means any legal person or legal entity
in China other than the Joint Venture Parties.
10. "Joint Venture Law" means the Law of the People's
Republic of China for the Joint Venture Enterprises
with Chinese and Foreign Investments, and other
legislation and regulations applicable to
Sino-foreign joint venture enterprises.
11. "Company Law" means the Company Law of the People's
Republic of China.
12. "Joint Venture Period" means the period commencing
from the date of issuance of the business license of the
Joint Venture Company and terminating on the date as
specified in this Agreement and Articles of
Association in compliance with the PRC laws.
13. "Yuan" means the unit of currency denominated in this
Agreement. Unless otherwise indicated, the currency
means the Renminbi ("RMB").
14. "Foreign Currency" or "Foreign Exchange" means the
legal currency, as stipulated by the laws of that
foreign country, which can be freely exchanged and
transacted outside the vicinity of China.
Clause 3 The attached appendices are an integral and non-segregated
part of this Agreement, and possess the same legal efficacy
as this Agreement.
Appendix I : List of assets and liabilities transferred
from Party A to the Joint Venture Company,
and such list shall be signed by all
three Joint Venture Parties.
Appendix II : Land use right certificate, red-lined
diagram, and the property deeds.
Appendix III : The certificates issued by the relevant
governmental authorities certifying the
property ownership documents contained in
Appendix I and Appendix II.
Appendix IV : The trademarks registration certificates of
Party B, and the relevant identification
documents.
Appendix V : The documents in relation to the packaging line
transferred from Party B to the Joint Venture
Company.
Appendix VI : List of assets transferred from Party C to the
Joint Venture Company, and such list shall be
signed by all the three Joint Venture Parties.
CHAPTER 3 : PARTIES TO THE JOINT VENTURE
Clause 4 The parties of this Agreement are :
Party A :
Name : Jilin Province Juetai Brewery
Legal Address : Juetai City, Jilin Province, China
Legal Representative : Mr. Sun Xxxxx Xxxx
Party B :
Name : March International Group Limited
Legal Address : 23rd Floor, Hang Seng Causeway Bay
Building, 00
Xxx Xx Xxxxxx, Xxxxxxxx Xxx,
Xxxx Xxxx
Legal Representative : Xx. Xxxx Zi Shou
Party C :
Name : Jilin Province Xxxxxx Xxxxx Xxx
Xxx Ltd.
Legal Address : Xx. 00 Xxxx Xxx Xxxxxx, Xxxxx Xxxx
Xxxx, Xxxxx Xxxxxxxx, Xxxxx
Legal Representative : Mr. Xx Xxx
Clause 5 In accordance with Chapter 25 of this Agreement, all Parties
have the rights and responsibilities to inform the other
Parties in any change of the legal address or the legal
representative.
CHAPTER 4 : ESTABLISHMENT OF THE JOINT VENTURE COMPANY
Clause 6 All Parties have agreed to establish a Joint Venture Company
in China in accordance with the Joint Venture Law, the Company
Law and other PRC Laws. The Joint Venture Company will be
established as an independent legal person under the laws of
the PRC and will subject to the jurisdiction and protection of
the laws of China, as well as the associated rights and
benefits thereto.
Clause 7 Name of the Joint Venture Company:
Jilin Lianli (CBR) Brewing Company Ltd.
Legal address of the Joint Venture Company:
Juetai City, Jilin Province, China
Clause 8 All activities of the Joint Venture Company shall comply with
the legislations, regulations, orders and relevant rules
prevailing in the PRC.
Clause 9 The Joint Venture Company shall be a company with limited
liability. Parties to the Joint Venture Company shall assume
liability up to the limit of their respective capital
contributions. All Parties shall share the profit and loss and
undertake the risk according to the ratio of their capital
contribution towards the registered capital. The Joint Venture
Company shall use all its assets to undertake all the
liabilities of the Joint Venture Company.
Clause 10 Unless with written consent and agreement, all the
liabilities, responsibilities, and debts created in any forms,
for any reasons, and in any circumstances by an individual Joint
Venture Party shall be borne and undertaken by such Party.
CHAPTER 5 : OBJECTIVES, SCALE AND SCOPE OF BUSINESS
Clause 11 The objectives of the Joint Venture Parties in forming the
joint venture business are:
Basing on the wishes to strengthen economic cooperation and
technology exchange, by adopting advanced but practical
technique and scientific management method, by expanding the
synergy of joint venture advantage, to improve quality of the
products, to establish the production facilities up to 30,000
metric tons annual capacity, in order to actively explore the
domestic and international market, to continuously expand the
scale of operation, so as to increase the production capacity
to 200,000 metric tons in five years, and to procure
satisfactory economic benefits for all Parties.
Clause 12 The scope of business of the Joint Venture Company is:
The production, sale, research and development and other
technology consultation activities in relation to beer,
beverage and other auxiliary products.
CHAPTER 6 : TOTAL INVESTMENT, INVESTMENT RATIO AND REGISTERED CAPITAL
Clause 13 The total investment of the Joint Venture Company is RMB
25,000,000. Party A shall contribute RMB 10,000,000, which
amounts to 40% of the total registered capital of the Joint
Venture Company. Party B shall contribute RMB 12,750,000,
which amounts to 51% of the total registered capital of the
Joint Venture Company. Party C shall contribute RMB 2,250,000,
which amounts to 9% of the total registered capital of the
Joint Venture Company.
Clause 14 The registered capital of the Joint Venture Company is RMB
25,000,000.
Clause 15 Party A shall contribute its existing net assets to the Joint
Venture Company as its capital contribution.
Clause 16 Party A hereby guarantees that, in pursuant to Clause 15 of
this Agreement, all the assets injected by Party A which
represents its capital contribution to the
Joint Venture Company are legally owned by Party A itself, and
all these assets do not bear or attach with any guarantees,
charges or collateral of debts. In case of any Party
subsequently claiming right or ownership of those assets
injected by Party A to the Joint Venture Company, all such
responsibilities shall be borne by Party A. The values of the
relevant assets will be deducted from the total capital
contribution by Party A. Party A shall then deduce other means
to pay up its capital contribution to the Joint Venture
Company.
Clause 17 Party B shall use its US "CBR" brandname (Chinese name:
"Lianli"), one bottle packaging line for beer with the
annual capacity of not less than 30,000 metric tons, and the
relevant brewing technology, craftsmanship, formula, and yeast
as its capital contribution to the Joint Venture Company. The
value of the aforesaid assets is valued at RMB 12,750,000.
Clause 18 Party C shall inject the assets and the distribution
networks of its Shengyang sales office, Cheungchun sales
office, Jilin sales office and Haribun sales office into the
Joint Venture Company. The value of the aforesaid assets is
valued at RMB 2,250,000.
Clause 19 Other capital required by the Joint Venture Company besides
the registered capital shall be resolved by the Joint Venture
Company through loan financing.
Clause 20 The assets injected by all the Joint Venture Parties shall be
completed within 90 days after the effective date of this
Agreement.
Clause 21 The registered capital of the Joint Venture Company cannot be
reduced at any time during the Joint Venture Period.
Clause 22 The Parties cannot withdraw their contributed capital at
any time during the Joint Venture Period.
Clause 23 If the registered capital is increased during the Joint
Venture Period, it shall be approved and adopted by the Board
of Directors and all relevant registration procedures shall be
completed.
CHAPTER 7 : TRANSFERENCE OF EQUITY AND ASSETS OF THE JOINT VENTURE COMPANY,
CHARGES, GUARANTEES, LENDING AND BORROWING FROM OUTSIDE PARTIES,
INVESTMENTS AND LOANS
Clause 24 After the establishment of the Joint Venture Company, if any
Party intends to transfer its portion of capital contributions
or equity, notwithstanding partially or entirely, such Party
shall report in written form to the Board of Directors as well
as communicate to the other Parties. Under the same
conditions, the other Parties have the preemptive right to
acquire such share or equity interest. Unless all the
Parties to the Joint Venture Company forfeit the rights
of acquisition, the solicitor cannot transfer its equity
interest to other third parties.
After the counter-parties receive the written notice, they
must reply to the soliciting party within 30 days explicitly
stating whether they will acquire the equity interest. If
no reply is received within 30 days, it is assumed that the
counter-parties will not acquire the relevant equity interest.
All the activities in connection with the transference of
equity and assets of the Joint Venture Company, executing
charges against the assets of the Joint Venture Company,
making guarantees in the name of the Joint Venture Company,
lending and borrowing from outside parties, making investments
and obtaining loans, shall be agreed and approved by the Board
of Directors. If the representatives from any Parties
execute the aforesaid activities without the authorization
from the Board of Directors, the ultimate liability and
responsibility shall be borne by that Party.
CHAPTER 8 : RESPONSIBILITIES OF THE PARTIES TO THE JOINT VENTURE
Clause 25 All Joint Venture Parties shall accomplish their respective
responsibilities as follows:
Responsibilities of Party A:
1. To be responsible for obtaining approvals, permits,
business registrations, business licenses for
establishing and operating the Joint Venture Company
from relevant governmental authorities in China. The
related expenses will be paid by the Joint Venture
Company.
2. To be responsible for negotiating with the relevant
governmental authorities in order to enable the Joint
Venture Company to obtain all the privileges as
granted by law.
Responsibilities of Party B:
1. To assist the Joint Venture Company in the import of
raw materials, equipment, office utilities,
transportation facilities and communication devices.
2. To assist the Joint Venture Company in promoting sales
and building up sales network of its products
overseas.
3. To assist the Joint Venture Company in recruiting
managerial, operational, technical and other
functional personnel from overseas.
4. To assist the Joint Venture Company in dealing with
financing activities overseas for future development.
5. To be responsible for other matters entrusted by the
Joint Venture Company.
Responsibilities of Party C:
To assist the Joint Venture Company in relation to all the
marketing and distribution affairs, and to assist both Parties
A and B to fulfill their responsibilities.
CHAPTER 9 : SALE AND DISTRIBUTION OF PRODUCTS
Clause 26 The products produced by the Joint Venture Company are mainly
sold in the China market, and may be progressively developed
and sold to the overseas market.
Clause 27 The trademark used by the Joint Venture Company is mainly the
"Lianli CBR" brandname. Basing on the prevailing market
conditions, the Joint Venture Company can also use other
trademarks under sublicensing arrangements.
Clause 28 The Joint Venture Company can explore other international
famous brandnames and trademarks, and employ sophisticated
technologies in order to enhance its competitive position and
profitability.
CHAPTER 10 : BOARD OF DIRECTORS
Clause 29 The date of registration of the Joint Venture Company is the
same as the date of the setting up of the Board of Directors.
Clause 30 The Board of Directors is composed of five directors. Two of
them are appointed by Party A and three of them are appointed
by Party B. The chairman of the Board is appointed by Party B,
and the vice-chairman is appointed by Party A. The tenure of
office of the directors, chairman and vice-chairman is four
years. The period of the tenure of office can be extended by
the appointing Party. Any vacancy in the Board of Directors
will be filled and appointed by the designated Party. Both
Parties have the right to appoint and change their respective
directors. A written notice for any appointments or changes in
directors shall be delivered 14 days in advance to the Board
of Directors.
Clause 31 The chairman who is unable to attend a meeting has to
appoint an alternative or substitute director in writing to
hold the meeting. In case of not having a written letter of
entrustment, it is assumed that the vice-chairman will be
entrusted to hold the meeting. The resolutions passed by the
Board of Directors meeting which fall within the agendas
previously circulated will become effective after being signed by
the chairman.
Clause 32 The chairman has to send agendas to all the directors 15 days
before the meeting in order to inform them about the topics
concerned and also the date and place where the meeting will
be held.
Clause 33 The quorum of a meeting of the Board of Directors shall be
two-thirds of the number of directors. If there are less than
two-thirds of the number of directors attending the meeting after
half an hour of the meeting commencing at the predetermined
place, then the chairman shall issue another notice to all
directors in order to inform them that the meeting will be
held again after 5 days. During the second call of a meeting,
if there are still less than two-thirds of the number of
directors attending the meeting, then the meeting can commence
with more than one-half of the number of directors attending.
Clause 34 A director who is unable to attend a meeting has to appoint
an alternative or substitute director in writing. A substitute
can represent one or more than one directors to attend the
meeting. However, a director who is unable to attend a meeting
and does not appoint any person to represent him will be
regarded as giving up the vote.
Clause 35 The Board of Directors is the highest authority of the
Joint Venture Company. The following decisions shall be
passed with the unanimous agreement of all directors on the
Board:
1. Amendment of the articles of association of the Joint
Venture Company.
2. Termination and dissolution of the Joint Venture
Company.
3. Increase in, or transfer of, the registered capital
or equity of the Joint Venture Company.
4. Acquisition of subsidiary or amalgamation with other
economic organizations by the Joint Venture Company.
The following decisions shall be passed with the agreement of
more than one-half of the number of votes by the directors on
the Board:
1. The appointments of general manager, deputy general
manager, financial controller and other key
positions.
2. The approvals of the financial budget, financial
statements and distribution of profit.
3. The approvals of important policies and system
procedures of the Joint Venture Company.
4. All other affairs that need to be decided by the
Board of Directors, except for item 1 of this Clause.
Clause 36 The chairman is stipulated by laws to be the representative
of the Joint Venture Company. If the chairman cannot fulfill
his duties due to acceptable reasons, he can temporarily
entrust the vice-chairman or another director to represent him.
Clause 37 The Board of Directors shall hold a meeting at least once a
year. The Board of Directors meeting shall be called by the
chairman, and the place of meeting in principle shall be the
registered address of the Joint Venture Company. When it is
proposed by more than one-third of the number of directors on
the Board, the chairman can call for a temporary meeting of
the Board of Directors. Minutes of the Board of Directors
meetings shall be prepared and kept safely.
CHAPTER 11 : MANAGEMENT
Clause 38 The Joint Venture Company has to establish a management team
to handle the daily affairs of the Joint Venture Company. The
management association consists of a general manager who is
appointed by the Board of Directors; two deputy general
managers who are nominated by the general manager and
appointed by the Board of Directors; and one financial
controller who is appointed by the Board of Directors. The
tenure of the offices of general manager, deputy general
managers and financial controller is four years, and they can be
re-elected.
Clause 39 The duty of the general manager is to execute the decisions of
the Board of Directors, and to lead the daily management
activities of the Joint Venture Company. The duty of the
deputy general managers is to assist the general manager. The
duty of the financial controller is to organize and monitor
the financial operations of the Joint Venture Company. The
general manager and financial controller are directly
accountable to the Board of Directors. The management
association can employ several department managers, who are
responsible for the operations of their respective functional
departments, and accomplish the assignments from general
manager and deputy general managers. The department managers
are accountable to the general manager and deputy general
managers.
Clause 40 If the general manager, deputy general managers and financial
controller have abused their positions for personal interest,
corruption, or committed severe mistakes due to negligence,
they will be laid off by the consent of the Board of
Directors. The general manager can terminate the employment of
other department managers with the approval of the Board of
Directors. The Board of Directors can also dismiss any
department manager as necessary.
CHAPTER 12 : PURCHASE OF REQUIRED MATERIALS AND EQUIPMENT
Clause 41 All the raw materials, equipment, fuels and energy,
auxiliary components, transportation facilities and office
utilities needed by the Joint Venture Company have to be
preferentially procured in China under the same conditions
offered by different suppliers.
Clause 42 If the Joint Venture Company desires to purchase equipment
overseas, the Board of Directors shall discuss and agree on the
models, prices, terms and specifications of such equipment.
CHAPTER 13 : FOREIGN EXCHANGE CONTROL
Clause 43 The Joint Venture Company has to open bank accounts for RMB
and foreign currencies with Bank of China or any other banks
which have been approved by the State Exchange Administration
Bureau to transact foreign currencies. The Board of Directors
of the Joint Venture Company has to decide on the cheques
issuing system. If necessary, the Joint Venture Company can
also open a foreign exchange account overseas after obtaining
approval from the Board of Directors and permission from the
State Exchange Administration Bureau.
Clause 44 All the foreign exchange received by the Joint Venture
Company has to be deposited in the foreign exchange account
and those payments in foreign exchange shall also be paid from
this account.
Clause 45 The foreign exchange has to be used by the Joint Venture
Company in according with the following sequences or as
decided by the Board of Directors:
1. Payments for the compensation of the employment of
foreign employees.
2. Principle and interest of foreign currency loans and
any other related debts that must also be paid by
foreign exchange.
3. Payments for the materials, facilities, spare parts
and services that are needed by the Joint Venture
Company and are required to be settled by foreign
exchange.
4. Payments for some administrative expenses that are
related to the business of the Joint Venture Company and
are required to be settled with foreign currencies.
5. To pay for the dividends distributable to Party B
according to its investment ratio.
Clause 46 The profit appropriations by the Joint Venture Company shall
be decided by the Board of Directors, and distributed to all
Parties in accordance with their respective capital
contribution ratios. Profits distributable to Party B shall
have priority in utilizing the foreign exchange for payments.
If the foreign exchange is insufficient, the remaining portion
can be paid by RMB. The Joint Venture Company shall assist
Party B to convert and remit the dividends denominated in RMB
to foreign currency through the exchange SWAP centers or
banks.
CHAPTER 14 : LABOR ADMINISTRATION
Clause 47 The recruitment, hiring, dismissal, wages, labor insurance,
employees welfare, bonuses and punishments of employees of the
Joint Venture Company shall be implemented in accordance with
the Company Law, Sino-foreign Joint Venture Enterprises
Employment Law of China, Employment Law and other employment
regulations prevailing in Jilin Province. The employment
policy of the Joint Venture Company shall be determined and
enacted by the Board of Directors. The Joint Venture Company
will conclude the employment contracts with individual
employees and shall file the contracts with the local labor
department. The employees currently hired by Party A will be
preferentially employed by the Joint Venture Company under the
same terms and conditions. Employee not recruited by the Joint
Venture Company will be handled by the local government and
Party A, the Joint Venture Company will not assume any
responsibilities thereon.
Clause 48 Any labor disputes occurring with the Joint Venture Company shall
first be settled through bilateral negotiations. If the
problems remain to be unresolved after negotiation, either
party can seek arbitration from the local or provincial labor
department. If any party is not satisfied with the arbitration
results, legal proceedings can be instituted through the local
court.
Clause 49 The salaries, social welfare, benefits and travelling
reimbursement standards of the senior managerial personnel
recommended by all the Joint Venture Parties shall be
discussed and ratified by the Board of Directors.
CHAPTER 15 : TAXATION, FINANCIAL AND AUDITS
Clause 50 The Joint Venture Company must pay those taxes which are
applicable to its businesses in accordance with the relevant
laws of the PRC. The Joint Venture Company can benefit from
the preferential tax treatments and concessions applicable to
all Sino-foreign joint venture enterprises. In accordance
with the requirements of the relevant laws in the PRC, the
Joint Venture Company shall prepare and submit its financial
statements and tax information to the relevant government
departments, local financial administration bureau and local
tax bureau.
Clause 51 All the staff and workers of the Joint Venture Company must
pay personal income taxes in accordance with the Personal
Income Tax Laws of the PRC.
Clause 52 In accordance with the Joint Venture Law, the Joint Venture
Company shall appropriate reserve fund, staff welfare and
bonus fund, and enterprise development fund. With reference to
the operating results of the Joint Venture Company, the Board
of Directors will decide the proportions of these funds to be
appropriated in each year.
Clause 53 The financial year of the Joint Venture Company is the same as
the calendar year which commences on 1st January and ends on
31st December. All the vouchers, supportings records,
accounting ledgers and financial statements shall be
documented in Chinese. The Joint Venture Company shall also
prepare another set of financial statements which comply with
the International Accounting Standards in English. The first
financial year of the Joint Venture Company begins from the
date of the business license to 31st December of the same
year. The last financial year of the Joint Venture Company
will be from 1st January to the last day of business.
Clause 54 The financial statements of the Joint Venture Company shall
be prepared in accordance with both PRC Accounting Standards
and International Accounting Standards.
Clause 55 At the end of each fiscal year, the Joint Venture Company
shall employ China Certified Public Accountants to audit the
accounts and financial statements, and the auditors' report
shall be submitted to the Board of Directors within three
months after the year end date.
All Parties have the right to appoint independent auditors in
China or overseas to audit the financial statements of the
Joint Venture Company. The Joint Venture Company shall assist
the audit in a cooperative manner and submit all the necessary
information, and shall pay for the audit fees accordingly.
CHAPTER 16 : PROFIT APPROPRIATIONS
Clause 56 After paying all the profit taxes, the Joint Venture Company
can distribute its profit according to the following sequence:
1. Covering all the losses of assets and properties
arising from confiscation. Settling all the tax
detention monies and penalties.
2. Offsetting any losses incurred in prior years.
3. Appropriation of statutory reserve fund.
4. Appropriation of staff welfare and bonus fund.
5. Appropriation of enterprise development fund.
6. Distribution to the Parties to the Joint Venture
Company in accordance with their respective capital
contribution ratios.
CHAPTER 17 : JOINT VENTURE PERIOD, TERMINATION AND DISSOLUTION
Clause 57 The duration of the Joint Venture Company is 30 years.
The date of establishment of the Joint Venture Company is the
same as the date of issuance of the business license.
The Joint Venture Period can be extended if the Board of
Directors has unanimously consented and filed application to
the relevant governmental authorities at least six months
before the expiry date.
Clause 58 The Joint Venture Company will be dissolved under the
following circumstances :
1. The Joint Venture Period has expired.
2. The business of the Joint Venture Company cannot
continue due to substantial loss.
3. The business cannot be operated due to one of the
Parties being unable to fulfill the responsibilities as
specified in this Agreement and the Articles of
Association.
4. The business of the Joint Venture Company cannot be
operated due to serious natural disasters, wars and
other force majeure.
5. In accordance with relevant laws and relevant clauses
specified in this Agreement, one of the Parties has
already acquired all the equity owned by another of
the Parties.
6. If any policies, rules or regulations formulated by
any local government department have caused serious
unfavorable effects to the Joint Venture Company or
either of the Parties, and all Parties are unable to
complete the required changes and adjustments in
accordance with the original terms and conditions of
the Agreement.
7. During the Joint Venture Period, if any Party to the
Joint Venture Company has been discovered to have
the following behaviors, the other Parties can obtain
written approvals from relevant governmental
authorities to terminate this Agreement.
(a) If any Party violates the regulations of
this Agreement to transfer its investment in
the Joint Venture Company, either partially
or entirely.
(b) In case of any Party involved in legal
dispute with third party, and the dispute is
having severe effects on the business
operations of the Joint Venture Company, the
Joint Venture Company or other Parties can
request in writing to terminate this
Agreement if the dispute remains
unresolved for more than six months.
(c) If any Party seriously violates this
Agreement, the Joint Venture Company or
other Parties can request in writing for
remedies. If the Party who has breached this
Agreement fails to correct the situation or
provide compensations to the suffering
Parties, this Agreement can be terminated
after three months of the written request.
Under the above circumstances, except for items 1 and 7, the
application for dissolution shall be initiated and approved by
the Board of Directors, and filed with the relevant governmental
authorities.
Clause 59 If the Joint Venture Company is dissolved due to those reasons
specified in Clause 58 above, all the assets of the Joint
Venture Company shall be estimated and valued according to
guidelines set up by the liquidation committee which is
established according to relevant rules and laws. During the
counting and valuation of the assets, the liquidation
committee shall try its best to obtain the highest price of
the asset. If necessary, the liquidation committee shall put
the asset, either wholly or partly, up for auction sale in
China. Any Party to the Joint Venture Company, either
individually or associated with another third party, can make
a bid offer in the auction sale. The proceeds from liquidation
of assets will be used to pay off the liabilities of the Joint
Venture Company, including liquidation expense, employees
salaries, labor insurance, tax liability, bank loans,
debentures and other corporate debts. The residual amount will
be repaid to all Parties in accordance with their respective
capital contribution ratios.
CHAPTER 18 : INSURANCE
Clause 60 The Joint Venture Company can purchase different kinds of
insurance coverage from local and overseas insurance companies.
The Board of Directors shall discuss and determine the types
of insurance to be obtained, the amount insured and the period
covered by such insurance policies.
CHAPTER 19 : AMENDMENT, RECTIFICATION AND TERMINATION OF THE AGREEMENT
Clause 61 In respect of any amendments to this Agreement or its
supplementary agreements, Party A, Party B and Party C
shall all sign on the written agreement. All the amendments will
be validated only with the approvals from relevant
governmental authorities.
If the terms of this Agreement cannot be carried out due to
force majeure or if the business of the Joint Venture Company
cannot be continued due to occurrence of substantial loss, the
Board of Directors can unanimously resolve to cease the
operations of the Joint Venture Company and terminate this
Agreement. Approval for such termination shall be obtained from
relevant governmental authorities.
Clause 62 If any Party violates the regulations specified in this
Agreement or the Articles of Association, or any Party does
not fulfill the responsibilities as stipulated in
this Agreement or the Articles of Association of the Joint
Venture Company, and consequentially causes the Joint
Venture Company to be unable to attain its business objective,
such Party is regarded as breaching the Agreement.
Besides seeking remedies and compensation, the other
Parties can obtain approvals from the relevant governmental
authorities to terminate this Agreement. If all the Joint
Venture Parties ultimately consent to continue the
business, the Party who has breached the Agreement shall
provide remedies and compensation to the other Parties for
their economic losses.
CHAPTER 20 : RESPONSIBILITIES OF VIOLATION OF AGREEMENT
Clause 63 All the three Joint Venture Parties must contribute their
portions of capital in accordance with the time schedules as
specified in this Agreement. Any Party who fails to contribute
its portion of capital will constitute a breach of this
Agreement.
If any Party violates the Agreement and consequentially causes
this Agreement to not be executed, that Party needs to
compensate the other Parties for their losses. If all Parties
violate the Agreement, each Party has the responsibility to
bear the loss caused by the violation.
CHAPTER 21 : FORCE MAJEURE
Clause 64 When one Party to the Joint Venture Company encounters
earthquake, typhoon, flooding, war, embargo, diplomatic
cessation, chaos, nationalization, or other unpredictable and
unavoidable events, which consequentially causes the Party to
be unable to execute and accomplish its obligations under this
Agreement, that Party must inform the other Parties
immediately through telex. Within 15 days, such Party must
also furnish the evidence and information about the details of
the force majeure to the other Parties, together with the
reasons for the inability to entirely or partially fulfill or
accomplish the Agreement or request an extension of the
period to fulfill the obligation under this Agreement. All
Parties will then discuss and negotiate the magnitude of such
unpreventable events, and determine whether the Agreement
shall be invalidated in part or as a whole, or to agree to an
extension of this Agreement. All Parties and the Joint Venture
Company cannot claim compensation for any losses caused by
force majeure.
CHAPTER 22 : APPLICABLE LEGISLATION
Clause 65 The conclusion, efficacy, interpretation, execution and
resolution for dispute of this Agreement is governed by the
PRC laws.
Clause 66 During the Joint Venture Period, when the prevailing laws
and regulations at the place where any of the Parties resides
have been amended or new laws and regulations have been
enacted, and such alteration will cause a substantial adverse
effect on the economic benefit of any Parties, all Parties
shall
immediately discuss and negotiate with each other in order to
decide on any necessary adjustment or amendment so as to
minimize any potential loss.
Clause 67 In accordance with Rule 40 of the PRC foreign-related economic
contract laws, if the existing laws and regulations in China
have been modified or new laws and regulations have been
enacted, and such alteration will cause a substantial or
adverse effect, either directly or indirectly, to the economic
benefit of the Parties or any one party, the Agreement should
continue to be effectively implemented under the original
terms and laws, as far as it is allowed by laws and not
hurting any Parties' interest. If the laws do not permit, all
Parties must discuss together in order to minimize the
potential loss to the affected Parties through amendments on
the existing Agreement and Articles of Association.
CHAPTER 23 : THE RESOLUTION OF DISPUTES
Clause 68 When there is a dispute arising from the execution of this
Agreement or related to this Agreement, all Parties should
communicate with the other Parties to clarify and resolve the
dispute in a friendly manner. If all Parties fail to reach a
resolution, the dispute can be forwarded to the Beijing office
of the China International Economic & Trade Arbitration
Committee and be arbitrated in accordance with the committee's
rules and regulations. The judgements obtained from that
arbitration committee will be final and have restrictions to
all Parties.
Clause 69 During the arbitration process, except for those parts
involving in the dispute, the rest of this Agreement is still
valid and executable.
CHAPTER 24 : LANGUAGE
Clause 70 This Agreement is written in Chinese with twelve original
copies. Each Party shall keep two copies. Other copies will be
filed with relevant governmental authorities.
Clause 71 This Agreement and its supplement must be approved by the
International Trade & Economic Department of the PRC or any
organization designated by that department, and will be
effective upon the date of approval.
Clause 72 When all Parties use telex or fax to circulate notices, and
when the contents of such notices involve the rights and
responsibilities of all Parties, these notices shall also be
served in written by mail. The correspondence addresses of all
Parties as specified in this Agreement are also the mailing
addresses of these Parties. The correspondence addresses or
legal addresses of all Parties, or notices of changes in
correspondence addresses or legal addresses of all Parties
will be regarded as their mailing addresses.
Clause 73 When any clauses contained in this Agreement are judged by
court or other arbitration institutes to be illegal, other
clauses contained in this Agreement
are still considered to be lawful. All Parties and the
Joint Venture Company must continue to execute other
clauses in this Agreement.
Clause 74 This Agreement was signed by the representatives from Party
A, Party B and Party C on 18th October, 1999 in Juetai City,
Jilin Province, China.
Party A : Jilin Province Juetai Brewery
Representative : Mr. Sun Xxxxx Xxxx /s/
Party B : March International Group Limited
Representative : Mr. Xx Xxxx /s/
Party C : Jilin Province Xxxxxx Xxxxx Xxx Xxx Ltd.
Representative : Mr. Xx Xxx /s/
