EXHIBIT 10.81
JOINT VENTURE CONTRACT
FOR
TANGSHAN PAN-SINO HEAT CO., LTD.
TABLE OF CONTENTS
ARTICLE 1 General Principle
ARTICLE 2 Two Parties of the Joint Venture
ARTICLE 3 Name and Address of the Joint Venture Company
ARTICLE 4 Purpose and Business Scope of the Joint Venture Company
ARTICLE 5 Total Investment and Registered Capital
ARTICLE 6 Responsibilities and Duties of the Parties
ARTICLE 7 Board of Directors
ARTICLE 8 Business Administrative Organization
ARTICLE 9 Purchase of Materials
ARTICLE 10 Preparation Work
ARTICLE 11 Personnel Administration
ARTICLE 12 Foreign Currency Control
ARTICLE 13 Financing, Taxing and Auditing
ARTICLE 14 Terms of the Joint Venture
ARTICLE 15 Insurance
ARTICLE 16 Amendment, Termination and Release of the Contract
ARTICLE 17 Obligation of the Party Breaching the Contact
ARTICLE 18 Force Majeure
ARTICLE 19 Laws Applicable
ARTICLE 20 Arbitration
ARTICLE 21 Validity of the Contract
ARTICLE 22 Language of the Text
ARTICLE 1
GENERAL PRINCIPLE
1.1. In accordance with the stipulations of "The Law of the
People's Republic of China on Chinese-Foreign Equity Joint
Ventures" and other related laws and rules, and on the basis of
equality and mutual benefit, Luannan County Heat Company of
Tangshan City, Hebei Province, the People's Republic of China
(PRC), and Pan-Western Energy Corp., LLC (a subsidiary of Panda
Energy Corp. in Dallas, Texas, U.S.A) of Cayman Islands, British
West Indies, both agree to establish a Joint Venture Company with
joint investment and hereby sign this contract.
ARTICLE 2
PARTIES OF THE JOINT VENTURE
2.1. Luannan County Heat Company (hereinafter referred to as
Party A) is a registered company in PRC, its statutory address
being Benchengzhong Street Luannan County, Hebei Province, PRC
and statutory representative being Rong Taicheng, General Manager
of Party A with Chinese nationality. Pan-Western Energy Corp., LLC
(hereinafter referred to as Party B) is a registered company in
Cayman Islands, British West Indies with its statutory address being
Xxxxxx and Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxx Xxxxxx, P.O. Box
309, Xxxxxx Town, Grand Cayman, Cayman Islands, British West
Indies and statutory representative Xxxxxx X. Xxxxxx, Chairman and
President of Party B, with U.S.A. nationality.
ARTICLE 3
NAME AND ADDRESS
OF THE JOINT VENTURE COMPANY
3.1. Full Chinese name for the Joint Venture Company shall be:
[text written in Chinese]
3.2. Full English name for the Joint Venture Company shall be:
TANGSHAN PAN-SINO HEAT CO., LTD. (hereinafter referred to as
JVC).
3.3. The registered address of JVC shall be at Benchengzhong
Street, Luannan County, Tangshan City, Hebei Province, PRC.
ARTICLE 4
PURPOSE AND BUSINESS SCOPE
OF THE JOINT VENTURE COMPANY
4.1. The company shall be based and run on sound and lawful
business principles and principles of equality and mutual benefit
with the aim of selling its products and services at a profit
acceptable to the company.
4.2. The company shall distribute and sell hot water and steam to
the domestic Chinese industrial and commercial market through the
construction, management and operation of a local steam and hot
water network.
4.3. The total supply capacity of the company shall be
approximately:
(i) Steam supply of 184,200 million kcal. per year and hot
water sales equivalent of 112,000 million kcal. per year.
(ii) The supply capacity may be changed from time to time by
agreement of the Parties.
ARTICLE 5
TOTAL INVESTMENT AND REGISTERED CAPITAL
5.1. JVC shall be a limited liability company. The liability of
any Party to the company shall be limited to their amount of
capital investment.
5.2. The total investment of the company shall be US S29,715,000,
and the registered capital of the company shall be US
S11,886,000. The contribution made by Party A shall be US
$2,377,200, accounting for 20% of the registered capital; the
contribution made by Party B shall be US $9,508,800, accounting
for 80% of the registered capital.
The rest of the total investment exceeding the registered capital
shall be settled by international financing and JVC shall be
responsible for the payment of debt obligations, interests and
financing costs.
The Parties shall share the profits, losses and risks in
proportion to their investment contributed.
5.3. Party A and Party B shall invest in the following way:
Party A: With cash capital contributions made at or during the
times specified in Section 5.4.
Party B: With cash capital contributions made at or during the
times specified in Section 5.4.
5.4. The total investment shall be fully made by the Commercial
Operation Date of the power and steam production facility, (the
"Facility") to be owned by JVC (the "Commercial Operation Date),
with registered capital contributions to be made according to the
percentage ownership of each Party.
Each Party shall contribute fifteen percent (15%) of the
registered capital in their respective proportion within ninety
(90) days after the business license is issued. Each Party shall
guarantee the payment of the remaining eighty five percent (85%)
of the registered capital to be sufficient to meet the
requirements of the Joint Venture project progress and within two
years after the establishment of JVC.
5.5. The registered capital of JVC shall not be reduced during
the joint venture period, but can be increased if any Party
reinvest with their profits distributed.
5.6 In case any party to this JVC contract intends to transfer
its investment share in the JVC to a party which is not a party
to this JVC(Outside Party), it shall require the prior written
consent of all the existing parties hereto. If a Party desires to
transfer its capital investment to an Outside Party, whether
totally or partially, it should be agreed upon by the other
Parties and approved by the authorities concerned, and the other
Parties shall have the first right of refusal to purchase which
right must be exercised (if exercised), within thirty (30) days
after notice of such proposed transfer is received. The other
Parties may waive its first right of refusal to purchase, but
shall reserve the right to choose a subsidiary or affiliate Party
as the assignee. The conditions for such transfer from one Party
of JVC to an Outside Party shall not be more favorable than the
conditions given to any other Party of JVC.
5.7. During the preparation period of JVC project and before
formal start of production, no Party shall transfer its capital
investment.
5.8. Any increase, transfer of the registered capital of JVC
should be unanimously agreed upon by the Board of Directors and
approved by the authorities concerned, and must be registered
with the local industrial and commercia1 administration bureau.
5.9. The Parties shall agree upon a project development budget
and shall share all costs incurred pursuant to such budget
proportionately (in accordance with registered capital
contributions).
ARTICLE 6
RESPONSIBILITIES AND DUTIES OF THE PARTIES
6.1. Party A shall, in addition to its contribution of capital
investment, has responsibilities and duties to assist JVC in the
handling, of the following matters concerned:
(i) To assist the company in handling matters such as the
application for approval, registration and the obtaining of
business licenses from relevant Chinese departments;
(ii) To assist JVC and EPC in applying for and obtaining
all possible tax reductions and exemptions according to
Chinese law;
(iii) To assist JVC and EPC in matters concerning the
purchase of equipment and machinery, the customs
declaration of imported equipment and transportation of
supplies within China;
(iv) To assist JVC in contacting and implementing the basic
facilities of water, electricity, transportation and
communication, etc.
(v) To assist JVC in the employment of local Chinese staff,
technicians, workers and other required personnel;
(vi) To assist foreign personnel sent by Party B to work in
JVC obtaining necessary entry visas, work permits and
permit for travel on business with China;
(vii) To assist in other matters entrusted by JVC.
6.2. Party B shall, in addition to its contribution of capital
investment, have responsibilities and duties to assist JVC in
the handling of the following matters concerned:
(i) To assist JVC and the EPC Contractor to procure, per
specifications and instructions of JVC, the advanced and
applicable machinery and equipment from the international
market, and provide related information in that regard;
(ii) To assist technical personal to be responsible for the
check and test, installation and maintenance of the
machinery and equipment introduced, train technical
personnel and workers of JVC;
(iii) To assist JVC in arranging for financing of the
Facility,
(iv) Subject to the direction of JVC, to manage the
development, construction and operation of the Facility;
(v) To assist in other matters entrusted by JVC.
ARTICLE 7
BOARD OF DIRECTORS
7.1. The official date of obtaining the business license of JVC
is the date of the establishment of the Board of Directors. The
Board of Directors shall be the highest authority of JVC and
decide all major issues concerning JVC.
7.2. The Board of Directors shall be composed of
five(5)directors, one (1) of which shall be from Party A and four
(4) from Party B. From within the Board of Directors, Party B
shall appoint a chairman. There shall be two (2) vice chairmen to
be respectively appointed by Party A and Party B. The directors
shall hold the office for a period of four (4) years. The term of
office may be renewed by the nominating Party.
7.3. Issues which require unanimous decision of the Board of
Directors shall include:
(i) Amendment of the Articles of Association of JVC;
(ii) Increase or assignment of the registered capital
of JVC;
(iii)Merger of JVC with another corporation;
(iv) Extension, termination and dissolution of the Joint Venture
and the liquidation and wind-up thereof;
(v) Other major issues that the Board of Directors deems it
necessary to have unanimous affirmative votes.
All issues except for the above shall be decided by majority
vote of the directors then present at any board meeting
(including special board meeting) at which a quorum is present.
Unless waived by Party A's director or Party A, the quorum shall
include one Party A's director.
7.4. The chairman of the board is the statutory representative
of the JVC. When the chairman cannot carry out his obligations
for whatever reason, he can authorize a vice chairman to act on
his behalf.
7.5 The board meeting sha11 be convened at least once a year
and shall be sponsored by the chairman. At the request of at
least two (2) of the directors, the chairman shall convene a
special board meeting.
ARTICLE 8
BUSINESS ADMINISTRATIVE ORGANIZATION
8.1. JVC shall set up its business administrative organization
which shall be responsible for daily management of the company.
The business administrative organization shall have one (1)
general manager and two (2) deputy general managers. The
general manager shall be recommended by Party B, and Party A and
Party B shall each recommend one (1) deputy general manager.
General and deputy general managers shall be appointed by the
Board of Directors, and their tenures of office shall be four
(4) years.
The obligation of the general manager is to carry out all the
decisions of the Board of Directors, organize and be responsible
for the routine business administrative work of JVC. The deputy
general managers shall assist the general manager in his work.
Decisions of important issues in the day-to-day business of JVC
shall be valid only when they are signed by both the general
manager and Party A's deputy general manager. Issues requiring
joint signatures shall be stipulated by the Board of Directors.
8.2. The business administrative organization of JVC shall
consist of certain departments and the manager of each
department shall be directly responsible to the general manager
(or as otherwise specified by the general manager or the Board
of Directors).
8.3. The general manager and each deputy general manager can be
dismissed at any tune through the resolution passed at the board
meeting if they are found to practice graft or be seriously
derelict of their duties or with the approval of the Party
recommending such person for any reason.
ARTICLE 9
PURCHASE OF MATERIALS
9.1. As for the procurement of materials, fuels, fittings, means
of transport and office appliance (hereinafter referred to as
materials) required by JVC, priority should be given to China
under the same condition.
ARTICLE 10
PREPARATION WORK
10.1. During the preparation and construction period of the
Joint Venture, a preparation group should be set up directly
under the Board of Directors, which shall consist of three (3)
persons, one (1) from Party A and two (2) from Party B. A group
leader shall be recommended by Party B, and a deputy group
leader by Party A. The group leader and deputy group leader
should be appointed by the Board of Directors.
10.2. The preparation group shall be responsible for auditing of
engineering design, signing of contract project agreements,
organizing the procurement and checking of the related
equipment, materials and other goods, working out the general
schedule of the construction plan for the budget, controlling
financial payment and design-making on the construction;
responsible for the control and management of documents, blue
prints, files and data when the construction is in progress.
10.3. The preparation group shall be responsible for the
auditing, supervision, check and test of the project design,
quality, equipment and materials,
10.4. The staff organization of the preparation group and their
salaries and expenditures shall be entered into the construction
budget upon approval of the Board of Directors.
10.5. The preparation group shall be canceled upon the approval
of the Board of Directors after the construction is completed and
the procedure of transfer is implemented.
ARTICLE 11
PERSONNEL ADMINISTRATION
11.1. With regard to employment, dismissal, wages, labor
insurance, welfare and reward and penalty of the workers of JVC,
the Board of Directors should discuss and work out a labor
contract and then implement it in accordance with the "Provisions
of the People's Republic of China on Labor Management in Chinese-
Foreign Equity Joint Venture" and the methods of its
implementation. The Labor Contract, after its signing, should be
kept in the file of the local administration department.
11.2. Staff members of JVC have the right to establish their
trade union and take part in its activities in accordance with
the stipulations of the "Trade Union Act of the People's Republic
of China".
ARTICLE 12
FOREIGN CURRENCY CONTROL
12.1. Foreign currency of JVC shall be handled according to the
"Interim Provisions of People's Republic of China on the
Administration of Foreign Currency" and related stipulations.
12.2. JVC shall open a foreign currency account in the Bank of
China with its business license. All legal income of JVC may be
converted and all the foreign exchanges shall be deposited in
the foreign currency account of its opening bank, and all
expenses and financing payments in foreign currency of JVC shall
be paid out of the foreign currency account of its opening bank.
ARTICLE 13
FINANCING, TAXING AND AUDITING
13.1. Financial accounting of JVC shall be made in accordance
with the rules and regulations of financial accounting in PRC as
stipulated for joint venture enterprises using Chinese and
foreign investment.
13.2. The fiscal year of JVC starts from the 1st day of January
and ends on the 31st day of December of each year. All the
accounting certificates, documents, reports and account books
should be written both in English end Chinese.
13.3. JVC should pay all the taxes required according to the
related laws and stipulations of PRC.
13.4. JVC should draw reserve funds, enterprise development funds
and welfare and reward funds according to the stipulations of
"The Law of the People's Republic of China on Chinese-Foreign
Equity Joint Ventures", the ratio of which funds to be drawn each
year should be decided by the Board of Directors according to the
status of business of JVC.
13.5. For accounting and auditing, JVC should hire accountants
and auditors registered in PRC, and report these results to the
Board of Directors and the General Manager. If Party B is willing
to hire auditors of another country for auditing of the annual
fee, Party A should agree, but all charges shall be paid by Party
B.
13.6. Within the first three months of the business year, the
Debit/Credit accounts of the last business year, documents of
profit/loss accounts and profit sharing plan should be initiated
by the General Manager and submitted to the Board of Directors
for review and approval.
ARTICLE 14
TERMS OF THE JOINT VENTURE
14.1. The term of JVC shall be twenty-three(23) years commencing
on the date of establishment of JVC. The date of the acquisition
of the business license for JVC shall be the date of its
establishment. It is necessary to submit an application to the
department in charge for extension of the term of JVC twelve
(12) months prior to the expiration of the term of JVC provided
a motion is initiated by one of the Parties and approved
unanimously by the Board of Directors;
14.2 In accordance with the laws, JVC should be liquidated upon
the expiration of JVC or termination of the business in advance.
The liquidated properties should be distributed according to the
ratio of investment made by Party A and Party B. For purpose of
liquidation distributions, all contact rights, land use rights
and other tangible or intangible properties shall be valued on a
fair market value "going concern basis". The liquidation
appraisal shall be conducted by a public accountant registered
in PRC.
ARTICLE 15
INSURANCE
15.1. Each engineering project of JVC should be insured by the
People's Insurance Company of China. The procedures shall be
handled by the department in charge.
ARTICLE 16
AMENDMENT, TERMINATION AND RELEASE
OF THE CONTRACT
16.1. When amendment is made to this contract and its
appendixes, it shall not be valid unless a written agreement is
signed by all Parties and submitted to and approved by the
applicable governmental authorities (the "Authorities")
concerned.
16.2. With the unanimous agreement of the Board of Directors and
approval of the Authorities concerned, JVC can be terminated
prior to the original term or the contract be terminated in
advance if the JVC is incapable of going on with the business
for certain reasons.
ARTICLE 17
OBLIGATION OF THE PARTY
BREACHING THE CONTRACT
17.1. If any Party fails to contribute the amount of the
investment committed by the time stipulated in Article 5 of the
contract, the Party breaching the contract shall pay the Parties
observing the contract 0.3% of the total amount of investment
overdue each three (3) months counting from the 30th bank date
overdue, allocated based on registered capital contribution.
Should the Party breaching the contract fail to contribute the
amount of capital it committed for six (6) months, apart from
the total sum of 0.6% of above-mentioned fines, the Parties
observing the contract has the right to request the Party
breaching the contract to fully implement the contract within a
specified period or terminate the contract according to Article
16 of the contract and demand the Party breaching the contract
to compensate for its losses.
17.2. Obligation should go to the Party if it is that Party's
fault that effects the implementation or complete implementation
of the contract and it appendixes. Each Party shall be liable
for the breach of the contract, if the fault is due to all
Parties.
17.3. In order to guarantee its registered capital
contributions, Party B should provide a bank guarantee or
guarantee from Panda Energy Corp. of U.S.A. for its registered
capital contributions.
ARTICLE 18
FORCE MAJEURE
18.1. As the consequence of Force Majeure, such as war,
earthquakes, typhoons, floods, fires or other natural calamities,
which cannot be predicated, or the happening or consequence of
which cannot be prevented or avoided (such as prolonged strikes),
and directly affects the execution of the contract, or execution
of the contract according to the terms stipulated in the
contract, the Party that encounters the Force Majeure should
notify the other Parties by fax or other most immediate means
available of the incident. Valid documents to certify the
detailed happenings of the accident, and valid documents to
certify the reasons of its inability to fulfill or completely
fulfill, or the necessity to postpone the fulfillment of the
contract should be submitted to the other Parties within thirty
(30) days of the accident, and should be certified by the
notarization department of be region where the accident took
place. Disputes arising from cases of Force Majeure shall be
resolved through negotiations between the Parties as to whether
to terminate the contract or partially release the obligations of
the affected Party, or postpone the fulfillment of the contract
according to the effect of the accident on the fulfillment of the
contract. If the matter cannot be resolved within forty-five (45)
days through negotiation, at the request of a Party, it shall be
settled through arbitration.
ARTICLE 19
LAWS APPLICABLE
19.1. The signing, validity, explanation and implementation of
this contract should abide by the laws of the People's Republic
of China.
ARTICLE 20
ARBITRATION
20.1. Should any dispute arise from the implementation of or
relating to the contract, the Parties shall resolve them through
friendly negotiations. If the discrepancies cannot be solved by
negotiations, they should be submitted to the Arbitration
Committee of China Council for the Promotion of International
Trade for solution, whose decision shall be final and legally
binding on the Parties. The arbitration shall be conducted in
both Chinese and English with both languages having equal
weight.
20.2. During the process of arbitration, the contract should be
executed with no interruption, except for those parts relating
to discrepancies under arbitration.
ARTICLE 21
VALIDITY OF THE CONTRACT
21.1. All the articles of the contract including appendixes
(Articles of Association of JVC and list of equipment to be
imported) are indispensable parts of this contract.
21.2. The contract including its appendixes shall be valid only
when it has been approved by the Ministry of Foreign Trade and
Economic Cooperation or its entrusted inspection department.
21.3. Any communication relating to the rights and obligations
of the Parties should be made in written form, except notices,
telegrams and faxes. The addresses stated in Article 2 of the
contract are statutory addresses for correspondence between the
Parties. Any change in the statutory address should be notified
to the other Parties thirty (30) days in advance.
ARTICLE 22
LANGUAGE 0F THE TEXT
22.1 This contract is written both in English and Chinese. The
contract in both languages is of equal validity.
This contract for Tangshan Pan-Sino Heat Co., Ltd. is signed by
the authorized representatives of the Parties in Beijing China,
as follows:
Party A: Party B:
Luannan County Pan-Western
Heat Company Energy Corp.,LLC
Zhao Xiuchen Xxxxx X. Xxxxxxxx
Authorized by and on Senior Vice President
behalf of Party A
Witnessed by:
China National Machinery
Import & Export Corp.Yang Shengli
Deputy General Manager of
CMC Enterprises Dept
Dated on May 28, 1996
AMENDMENT
TO
JOINT VENTURE CONTRACT
FOR
TANGSHAN PAN-SINO HEAT CO., LTD.
This amendment is made and entered into only on July 19, 1996 by
and between Party A Luannan County Heat Company of Hebei
Province, China through its duly authorized agent and Party B Pan-
Western Energy Corp., LLC. of British Cayman Islands through its
duly authorized agent, both of which JV Parties to Tangshan Pan-
Sino Heat Co., Ltd.
WHEREAS, adjustments are required for amounts of capital
contributions, their respective proportion to registered
capital and means of such contributions by the Parties to
Tangshan Pan-Sino Heat Co., Ltd.;
NOW THEREFORE, through consultation, the Parties have agreed to
the following amendment to the Joint Venture Contract for
Tangshan Pan-Sino Heat Co., Ltd. executed by and between the
Parties on May 28, 1996:
1. Delete the original Article 5.2 in its entirety, to be
replaced by a new Article 5.2, which stipulates as follows:
"5.2 The total investment of the JVC shall be US$29,715,000,
and the registered capital of the Company shall be
US$11,886,000. The contribution made by Party A shall be
US$l,436,309.2, accounting for 12.08% of the registered
capital; the contribution made by Party B shall be
US$10,449,690.8, accounting for 87.92% of the registered
capital.
The rest of the total investment exceeding the registered
capital shall be made up by a shareholder loan provided by
Party B to the JVC. JVC shall be responsible for the payment of
debt obligations, interest and financing costs on such
shareholder loan.
The Parties shall share the profits, losses and risks in
proportion to their investment contributed."
2. Delete the original Article 5.3 in its entirety, to be
replaced by a new Article 5.3, which stipulates as follows:
"5.3 Party A and Party B shall each invest in the following
way:
Party A: With cash capital contributions made at or during the
times specified in Section 5.4;
Party B: With cash capital contributions made at or during the
times specified in Section 5.4.
3. The above-cited new Article 5.2 and Article 5.3 shall take
effect from the date upon which the amendment is approved by the
original examination and approval authority that approved the
above JV Contract. This amendment is made in both English and
Chinese, both of which shall be equally authentic.
IN WITNESS WHEREOF, the Parties, intending to be legally bound,
have caused their respective authorized agents execute this
amendment as of the date and year set forth hereinabove.
Party A:
Luannan County Heat Company
Hebei Province China
By: ____________
Position:
Party B:
Pan-Western Energy Corp., LLC.
British Cayman Islands
By: ____________
Position:
AMENDMENT
TO
JOINT VENTURE CONTRACT
FOR
TANGSHAN PAN-SINO HEAT CO., LTD.
This amendment is made and entered into this 18th November, 1996
by and between Party A Luannan County Heat Company of Hebei
Province, China through its duly authorized agent and Party B Pan-
Western Energy Corp., LLC. of British Cayman Islands through its
duly authorized agent, both of which JV Parties to Tangshan Pan-
Sino Heat Co., Ltd.
WHEREAS, certain amendments are required for capital
contributions, responsibilities and duties of the Parties
concerning land use right as well as procedures for extension of
term of joint venture for Tangshan Pan-Sino Heat Co., Ltd.;
NOW THEREFORE, through consultation, the Parties have agreed to
the following amendment to the Joint Venture Contract for
Tangshan Pan-Sino Heat Co., Ltd. executed by and between the
Parties on May 28, 1996:
1. Delete the original Article 5.2 in its entirety, to be
replaced by a new Article 5.2, which stipulates as follows:
"5.2 The total investment of the JVC shall be
US$29,715,000, and the registered capital of the
Company shall be US$1l,886,000. The contribution made
by Party A shall be US$1,436,309.2, accounting for
12.08% of the registered capital; the contribution
made by Party B shall be US$10,449,690.8, accounting
for 87.92% of the registered capital.
The rest of the total investment exceeding the registered capital
shall be made up by a shareholder loan provided by Party B to the
JVC. JVC shall be responsible for the payment of debt
obligations, interest and financing costs on such shareholder
loan.
The Parties shall share the profits, losses and risks in
proportion to their investment contributed."
2. Delete the original Article 5.3 in its entirety, to be
replaced by a new Article 5 3, which stipulates as follows:
"5.3 Party A and Party B shall each invest in the
following way:
Party A: With cash capital contributions made at or
during the times specified in Section 5.4;
Party B. With cash capital contributions made at or
during the times specified in Section 5. 4."
3. Add to Article 6.1 new sub-section (viii), which
stipulates as follows;
"(viii) for an initial 23 years of the JVC, to obtain
in its own name granted land use right for the land
to be used by JVC and make such granted land use
right available to JVC via transfer, lease or other
appropriate means."
4. Delete the original Article 14.1 in its entirety, to be
replaced with a new Article 14.1, which stipulates as follows:
"14.1 The term of JVC shall be for an initial period
of twenty-three (23) years commencing on the date of
establishment of JVC. The date of the acquisition of
the business license for JVC shall be the date of its
establishment. If Party B should notify Party A of
its intention to continue its participation in the
JVC beyond this initial 23 year term, then Party A
shall submit an application duly executed by
authorized representatives of the Parties to the
department in charge for an extension of the term of
the JVC for the lesser amount of time, as requested
by Party B, or the maximum period permitted by
applicable laws and regulations twenty-four (24)
months prior to the expiration of the term of the
JVC."
5. Add new Article 14.3, which stipulates as follows:
"14.3 Upon expiration of the initial twenty-three
(23) year term of JVC, if no extension is made of
such term of the JVC, then the assets of the JVC
(other than land use right) shall be valued as per
their remaining value at that time and distributed in
accordance with the investment share of the Parties
at liquidation, regardless whether such land use
right will expire or not. And such assets shall not
be under valued due to any such expiration of land
use right."
The above-cited new Article 5.2, Article 5.3, Article 6.1 (viii),
Article 14.1 and Article 14 3 shall take effect from the date
upon which the amendment is approved by the original examination
and approval authority that approved the above JV Contract. This
amendment is made in both English and Chinese, both of which
shall be equally authentic.
IN WITNESS WHEREOF, the Parties, intending to be legally bound,
have caused their respective authorized agents execute this
amendment as of the date and year set forth hereinabove.
Party A: Luannan County Heat Company
Hebei Province, China
By: __________
Position:
Party B: Pan-Western Energy Corp., LLC.
British Cayman Islands
By: __________
Position:
