JOINT VENTURE CONTRACT OF ZHEJIANG TIANYUAN BIOTECH CO., LTD.
OF
ZHEJIANG
TIANYUAN BIOTECH CO., LTD.
This
contract has executed by the following parties on Xxxxx 0, 0000 xx Xxxxxxxx
Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxx:
Party
A: CHINA
BIOPHARMA LIMITED (hereafter as “CBL”)
Address:
Scotia Centre, 4th
Floor,
P.O. Box 2804, Xxxxxx Town,
Grand
Cayman, Cayman Islands
Legal
Representative: Xxxxx Xxxx Title:
Chairman
Party
B: ZHEJIANG
TIANYUAN BIOPHARMACEUTICAL CO., LTD. (hereafter as “Tianyuan
Biopharmaceutical”)
Address:
56 Tianhe Lu, Yuhang Economic Development Zone,
Xxxxxxxx,
Xxxxxxxx, 000000 Xxxxx
Representative:
Ding Xiaohang Title:
Chairman
1.
GENERAL PROVISION
1.1.
After friendly discussion in accordance with the principles of equality and
mutual benefit, China Biopharma Limited. and Zhejiang Tianyuan Biopharmaceutical
Co., Ltd. (hereinafter referred to as The Parties) have agreed to establish
an
equity joint venture (the “Joint Venture” or the “JV”) in Hangzhou, Zhejiang
Province in accordance with “Law of the People's Republic of China on Joint
Venture Using Chinese and Foreign Investment” and other relevant laws and
regulations of China.
The
Parties hereby have this contract:
2.
PARTIES OF THE CONTRACT
2.1.
Parties of Joint Venture as Follows:
1. CHINA
BIOPHARMA LIMITED (hereafter as “CBL”)
Address:
Scotia Centre, 4th
Floor,
P.O. Box 2804, Xxxxxx Town,
Grand
Cayman, Cayman Islands
Legal
Representative: Xxxxx Xxxx Title:
Chairman
2. ZHEJIANG
TIANYUAN BIOPHARMACEUTICAL CO., LTD.
Address:
56 Tianhe Lu, Yuhang Economic Development Zone,
Xxxxxxxx,
Xxxxxxxx, 000000 Xxxxx
Legal
Representative: Ding Xiaohang
Title:
Chairman
3.
ESTABLISHMENT OF THE JOINT VENTURE COMPANY
3.1.
Registered
Name of Joint Venture: Zhejiang Tianyuan Biotech Co., Ltd. (hereafter,
“JV”),
The
legal
address of the Joint Venture Company is: 56 Tianhe Lu, Yuhang Economic
Development Zone, Post Code: 311100.
3.2.
The
form
of organization of the Joint Venture Company shall be a limited liability Joint
Venture Company. The parties shall share the profits, risks and losses of the
Joint Venture Company in proportion to their respective contributions to their
registered capital of the Joint Venture Company. The liabilities are limited
to
the registered capital contributed by each party.
4.
PURPOSES, SCOPE AND SCALE OF OPERATION
4.1
The
purpose of the parties to the Joint Venture Company is in conformity with the
economical cooperation, technology exchange, and advanced management method,
to
focus on import biopharmaceutical technology, research and development,
distribution, and services, improve the efficiency to ensure satisfactory
economic returns for each party.
4.2
The
business scope of the Joint Venture Company is to develop, produce, sell, and
service of biopharmaceutical products.
5.
TOTAL INVESTMENTS AND REGISTERED CAPITAL
5.1
The
total
amount of investment of the Joint Venture Company is 12,000,000 U. S.
Dollars.
5.2
The
registered capital for the Joint Venture Company is 6,000, 000 U.S. Dollars.
The
capital structure as follows:
|
Shareholder
Name
|
Investment
|
Ownership
|
|
China
Biopharma Limited
|
3,900,000
|
65%
|
|
Tianyuan
Biopharmaceutical
|
2,100,000
|
35%
|
5.3
Both
parties shall contribute the capital as follows:
Party
A
shall contribute the capital in cash of U. S. Dollars.
Party
B
shall contribute the capital in RMB equivalent to 2,100,000 U. S. Dollars.
[The
exchange rate shall be the foreign exchange price publicized by The People’s
Bank of China as of the date of payment].
5.4
The
registered capital for Joint Venture Company shall be invested by Party A and
Party B 90 days after the date of issuance of the Joint Venture Company business
license.
5.5
A
party
may transfer all or part of their contribution to any third party only with
the
consent of the other party and the approval of the original approval authority.
If one party transfers all or part of equity, the other party has the right
of
first refusal.
6.
RESPONSIBILITIES OF THE PARTIES
6.1.
The
both parties shall have the following responsibilities:
Responsibilities
of Tianyuan Biopharmaceutical
Applying
to relevant authorities of China for approval, registration, permission,
business license, bank account and other matters concerning the establishment
of
the Joint Venture Company;
Submit
the applications to obtain the land usage right from relevant government
agencies, or lease necessary operational facility of JV;
Contribute
to the registered capital of the Joint Venture Company according to article
5
hereof;
Assist
in
purchasing machines, materials, resources, office supplies, transportation
and
communication facilities for the Joint Venture Company;
Assist
in
the implementation of associated water, electricity, transportation,
manufacturing plant construction, and other infrastructure project of the Joint
Venture Company;
Assist
in
recruiting local Chinese business managers, technicians, workers and other
staff;
Handle
other matters delegated by the Joint Venture Company.
Responsibilities
of China Biopharma
Make
its
contribution to the registered capital of the Joint Venture Company according
to
article 5 hereof;
Handle
other matters delegated by the Joint Venture Company.
7.
SALSE OF PRODUCTS
7.1
The
products of JV should be sold in domestic and international market.
7.2
JV
has right to decide on its product what percentage of sales should be on
domestic or international market, or it shall use distributor to sell its
products.
8.
THE BOARD OF DIRECTORS
8.1
The
board shall be formed on the Business License Issuance Date.
8.2
The
board
shall consist of five directors, three of directors shall be appointed by Party
A and two of directors shall be appointed by Party B. The Chairman of the Board
shall be appointed by Party A and the Vice Chairman shall be appointed by Party
B. And both the Chairman and Vice Chairman shall be appointed for a term of
three years and may serve consecutive terms if reappointed by the Party
originally appointing them.
8.3
The
board of directors shall be the highest authority of the Joint Venture Company,
deciding all the major issues, the duties of which are as follows:
8.3.1
Amendment of Article of Association and JV contract;
8.3.2
Stop,
terminate, and extend the term of Joint Venture Company;
8.3.3
Increase
or transfer of its registered capital of Joint Venture Company;
8.3.4
The
merger of Joint Venture Company with other organizations;
8.3.5
Collateral of the asset of Joint Venture Company;
8.3.6
Any
other matters which agreed by both parties and require the decision of board
of
directors;
Other
matters shall approve by majority of board of directors and stated in the
Article of Association of Joint Venture Company.
8.4
Chairman
of the JV is the authorized legal representative of JV. Represent the JV to
sign
all the document of the Board. In the case of the Chairman of the Board would
not be able to perform the duty, the Chairman can delegate other board member
to
act as Chairman of the Board.
8.5
The
Board Meeting shall be held at least once a year and generally shall be held
at
the Joint Venture Company. The chairman shall chair the Meeting. An interim
Board Meeting shall be scheduled upon the request of over 1/3 of the total
number of directors.
8.6
The
meeting notice shall include meeting time, location, and agenda. It should
be
distributed to all directors 10 days in advance. The Meeting minutes should
be
kept in record.
8.7
The
annual board meeting and interim board meeting shall have the entire directors
presented. Every director shall have a vote.
8.8
Both
parties shall make sure its director presented on the annual board meeting
and
interim board meeting. In the case a director could not able to attend the
meetings, the director should send his or her representative with written
delegation document to attend the meetings.
9.
THE SUPERVISORY BOARD
9.1
The
JV
does not establish a supervisory board. It has one supervisor, elected by the
stockholders for a term of three years and may serve consecutive terms if
reelected.
9.2
The
supervisor shall exercise his/her rights and responsibilities as
follows:
9.2.1
Inspect
the JV’s financial information;
9.2.2
Supervise
the action of directors and executive officers in performing their duties,
and
propose recalling any directors or executive officers from office in case they
are in breach of laws, regulations, company articles or resolutions of
stockholders’ meetings, etc.
9.2.3
Request
directors or executive officers to correct their actions which have or will
do
harm to the benefit of the JV;
9.2.4
Request
to or propose holding interim stockholders’ meeting, and shall call for and
chair the stockholders’ meeting if and when the Board of Directors fails to do
so to fulfill their duties hereunder;
9.2.5
Submit
proposals to the Stockholders’ Meeting;
9.2.6
Bring
lawsuit against the JV’s directors and executive officers pursuant to Clause 152
under the “Corporation Law”;
The
Supervisor may attend Board Meetings as a non-voting delegate.
10.
BUSINESS MANAGEMENT STRUCTURE
10.1
The
Joint Venture Company establishes a management structure that shall be
responsible for the daily operations and management of the Joint Venture
Company. The management structure shall have one General Manager and Deputy
General Manager as needed. The General Manager is appointed by the Board of
Directors. Term of general manager is three years and may be reappointed by
the
Board of Directors.
10.2
The
responsibility of the General Manger shall be to carry out resolutions of the
Board of Directors and to organize and conduct the daily operations and
management of the Joint Venture Company.
The
General Manager shall establish some departments. The department managers shall
report to the General Manger and Vice General Manger and will perform the duties
assigned to them. The appointing controller should have the consent of Party
B.
10.3
The
Chairman and directors can be appointed by the board to take the positions
as
General Manager or other high level managers.
10.4
When
General Manager or Deputy General Manager submit their resignation, they should
submit written resignation in advance. The General Manager may be dismissed
by
the Board of Directors at any time for abuse of power, seeking personal
interests, or serious negligent of duty.
10.5
To
support the sales and distribution in China or abroad, with approvals from
relevant government agency, JV shall open its subsidiaries in China or abroad.
11.
PURCHASE OF ASSETS
11.1
Provided
that all conditions being equal, the Joint Venture Company shall purchase its
raw materials, accessories, transportation tools and office supplies in
China.
12.
LABOR MANAGEMENT
12.1
Matters
relating to the recruitment, employment, dismissal, resignation, wages,
employee’s insurance, welfare, and rewards and punishments of the employees of
the Joint Venture Company shall be stipulated by the labor contract which is
executed by the Joint Venture Company and its labor union collectively or the
employees individually in accordance with Joint Venture Labor Management
Regulation and its practical regulations. The plan of such matters shall be
discussed and formulated by the Board.
Labor
contracts shall be filed to local labor management authority after they are
signed.
12.2
The
Board of Directors shall determine the compensation, benefits package, and
business trip allowances of senior officers.
13.
TAXES, ACCOUNTING, AND AUDIT
13.1
The
Joint Venture Company shall pay taxes in accordance with relevant Chinese laws
and regulations. The employees of the Joint Venture Company shall pay their
individual income tax and individual income adjustment tax in accordance with
Individual Income Tax Law.
13.2
The
Joint Venture Company shall set aside for reserve funds, expansion funds of
the
Joint Venture Company, and the bonus and welfare fund for the workers and the
staff, the proportion of which shall be determined by the Board according to
the
Joint Venture Company operation under Joint Venture Law of
China.
13.3
The
Joint Venture Company’s accounting year shall begin on January 1st and end on
December 31st
each
year, and all vouchers, accounting books, accounting statements and reports
of
Joint Venture Company shall be written in both Chinese and English.
13.4
The
Joint Venture Company shall engage auditors registered in China to audit the
annual financial report and the result shall be submitted to the Board of
Directors and the General Manager.
If
a
party requires engaging other auditors to audit the annual financial report,
the
Joint Venture Company shall support the request. The demand party shall pay
all
of the expenses incurred by the additional audit.
13.5
In the
first three months of every fiscal year, the previous year’s balance sheet,
profit and loss statement, and proposal regarding the distribution of profits
which is prepared by the General Manager shall be submitted to the Board Meeting
for review.
The
controller of JV should submit monthly financial statement to both
parties.
13.6
All
the foreign currency related matter should be conducted accordance with Foreign
Currency Management Regulation of China.
14.
JOINT VENTURE TERM
14.1
The term
of Joint Venture Company is thirty years. The establishment of Joint Venture
Company shall start from the date on which the business license of Joint Venture
Company is issued.
An
application for the extension of the term, proposed by a party and unanimously
approved by the board of directors, shall be submitted to the original approval
authority 180 days prior to the expiry date of the Joint Venture
Company.
15.
DISPOSAL OF PROPERTY
15.1
After the expiration of the Term or termination prior to the expiration of
the
Term, the Joint Venture Company shall liquidate its assets in accordance with
relevant laws. The assets after liquidation shall be distributed according
to
the proportion invested by each party.
16.
THE AMENDMENT, MODIFACATION AND DISSOLUTION OF THE
CONTRACT
16.1
This
contract and annexes shall be changed and thereafter be valid only by a written
instrument executed by the Parties, and, upon approval by the original Approval
Authority.
16.2
On
failure to fulfill the terms of this contract due to Force Majeure or failure
of
operation after consecutive operating losses, this contract shall be terminated
and dissolved prior to the expiration of the Term according to the resolution
of
the Board Meeting and approval by the original Approval Authority.
16.3
If one
Party fails to fulfill the obligations of this Contract or Articles of
Association, or materially violates the Contract or Articles of Association
in a
way which renders the Joint Venture Company inoperable or unable to operate
towards the Joint Venture Company objectives listed in the Contract or Articles
of Association, it may deemed that the breaching Party has terminated the
Contract unilaterally. The non-breaching Party shall have the right to claim
the
compensation from the breaching party for any incurred losses and to terminate
the Contract or enter into agreements with other parties approved by the
relevant Approval Authority according to the Contract. If both Parties agree
to
continue to operate, the breaching Party should compensate the Joint Venture
Company for losses resulting from its breach of contract.
17.
LIABILITIES FOR BREACH OF CONTRACT
17.1
If
any
Party fails to make its registered capital contributions according to the
provisions of Article 5 of this contract, the breaching Party shall make a
monthly payment of a breach of contract penalty to the non-breaching Party
which
is equal to one percent (1%) of the contribution in arrears commencing from
the
first month of arrears,. If a contribution is in arrears for 3 months, the
non-breaching Party shall have the right to terminate the contract in accordance
with Article 43 of this contract, to claim compensation from the breaching
party
for the losses as allowed by relevant laws, and the breaching Party shall make
a
payment of a breach of contract penalty to the non-breaching Party equal to
three percent (3%) of the contribution in arrears.
17.2
If
a
breach in contract by one party causes the contract or the Annexes hereto to
be
unable to be performed or performed incompletely, the breaching party shall
bear
liabilities for breaching the contract. If both Party breach the contract,
each
Party shall respectively bear its share of the liability for breaching the
contract according to the realities of the situation.
18.
FORCE MAJEURE
18.1
Upon
occurrence of any Force Majeure events such as earthquakes, typhoons, flood,
fire, war and other events which are unforeseen, unavoidable and insurmountable
and whose consequences affect the performance of the Contract or other terms
that is agreed upon, the Party affected shall promptly notify the other party
electronically within 15 days, provide details of the event, together with
a
valid certifying documents evidencing the reasons for which the Contract cannot
be performed or cannot be performed in part or for which performance needs
to be
delayed. Such certifying document shall be provided by the local notary office
where the Force Majeure event occurred. In accordance with the degree of impact
of the event on the performance of the Contract, the Parties shall discuss
and
decide whether there is to be full or partial exemption from responsibility
for
performing the Contract, or whether the performance of the Contract is to be
delayed.
19.
APPLICABLE LAWS
The
execution, validity, interpretation and implementation of this Contract shall
be
governed by the laws of the People's Republic of China.
20.
SETTLEMENT OF DISPUTES
20.1
Should
there be any dispute in connection with this Contract, both Parties shall intend
to resolve the dispute through friendly consultations; In case no settlement
can
be reached, the dispute shall be submitted to the China International Economy
and Trade Arbitration Commission for arbitration, and the commission shall
arbitrate the dispute according to its procedure. The arbitration award is
final
and binding upon all Parties.
20.2
In the
process of arbitration, the Parties shall continue to performance the Contract
except in respect of those matters under dispute.
21.
LANGUAGE
21.1
This
Contract is written in Chinese and English, both languages have equal
effectiveness. When a language has different interpretation then Chinese should
take lead.
22.
EFFECTIVENESS AND MISCELLANEOUS
22.1
This
Contract shall become effective after being approved by the Ministry of Commerce
of the People’s Republic of China or its authorized agency.
22.2
Any
notices dealing with any Party’s rights or obligations provided for in this
Contract by either Party to another, should be made by written
letter.
22.3
This
Contract should have five copies, each party has one copy, and other copies
will
submitted to different government agencies for application, file, and
record.
Party
A:
China Biopharma Limited
Legal
Representative: Xxxxx
Xxxx
Signature:
Party
B:
Zhejiang Tianyuan Biopharmaceutical Co., Ltd.
Legal
Representative: Ding
Xiaohang
Signature:
