Exhibit 10.37
Majority Partner: D.V.S. H.K., Limited ("DVS")
Legal Address: Xxxx 00-00X, Xxxxx 00, Xxxxxxxx, 00 Xxxx
Xxx Avenue, Sheung Shui, New Territories,
Hong Kong
Legal Representative: Dr. Edmund Sun
New Minority Partner: Panyu Kembo Electrical Manufacturing Co; Ltd.
Legal Representative: Yu Xxxx Xxx
WHEREAS, DVS and Panyu Tian Le Electrical Manufacturing Co.
("Tian Le") entered into a Joint Venture Contract in August 1997,
pursuant to which the Panyu D.V.S. Electrical Appliances Manufacturing
Co; Ltd. Was formed (the "Joint Venture"); and
WHEREAS, the Joint Venture was initially owned 51% by DVS and 49%
interest by Tian Le, and in December 1997, DVS purchased from Tian Le
its entire 49% interest in the Joint Venture, with the agreement that
Tian Le would hold a 10% interest in the Joint Venture for the benefit
of DVS's new Joint Venture Partner until DVS had identified a new Joint
Venture Partner; and
WHEREAS, Panyu Kembo Electrical Manufacturing Co; Ltd. Is a
company formed in Panyu, Guangdong Province, that is owned by Dr. An
Yueh Zehan and Yu Xxxx Xxx; and
WHEREAS, DVS and Panyu Kembo have agreed that Panyu Kembo will
acquire the 10% interest in the Joint Venture currently held by Tian
Le, subject to the terms and conditions set forth below:
NOW, THEREFORE, the parties hereto agree as follows:
1. DVS and Panyu Kembo agree that Panyu Kembo shall acquire the 10%
interest in the Joint Venture previously held by Tian Le for full
consideration of 000 XXX.
2. Panyu Kembo's 10% interest in the Joint Venture shall be subject
to repurchase by DVS at any time, at DVS's sole discretion, for
an agreement amount equal to 000 XXX.
3. Panyu Kembo agrees that the date of this agreement until such
time as DVS has recovered all of its contributed capital from the
Joint Venture (in addition to any profits from operation). DVS
shall receive all profits from the operation of and capital
distribution from the Joint Venture including (a) profits that
would otherwise be payable to Panyu Kembo as a return on his 10%
interest in the Joint Venture and (b) any return of Panyu
Kembo's capital contributed to the Joint Venture (which shall be
the capital contributed by Tian Le).
4. Panyu Kembo shall assist DVS in obtaining any required
governmental approvals necessary to complete the substitution of
Panyu Kembo for Tian Le as DVS's new Joint Venture Partner.
5. DVS shall be entitled to designate all of the directors, the
General Manager and all other personnel for the Joint Venture and
to otherwise direct the management of the Joint Venture.
6. Dr. An and Yu Xxxx Xxx are the sole owner of Panyu Kembo, which
is serving as a Joint Venture partner, and shall not transfer any
of their ownership interest in Panyu Kembo without the prior
written consent of DVS. Dr. An shall be appointed the General
Counsel for the Joint Venture during the period that he and Yu
Xxxx Xxx are the Joint Venture Partner. Dr. An shall not receive
any special compensation for his service as General Counsel, but
he shall be entitled to be compensated for his legal services
provided to the Joint Venture at his usual and customary rate or
as otherwise agreed to by Dr. An and the Joint Venture.
7. DVS agrees to pay the costs of completing the substitution of
Panyu Kembo for Tian Le.
8. DVS agrees to hold Panyu Kembo harmless and free of any
obligations, contingent liabilities, or other costs resulting
from any obligations or liabilities which have accrued, or may
accrue from the Joint Venture and its operations in connection
with Panyu Kembo's acquisition of the 10% interest in the Joint
Venture formerly held by Tian Le, including without limitation,
for the payment of taxes, legal fees or other costs resulting
from such acquisition. Panyu Kembo agrees to act in good faith
and in a timely manner to make all filings and obtain all
consents required to be filed or obtained by the Joint Venture or
Panyu Kembo in connection with Panyu Kembo's acquisition of the
10% interest in the Joint Venture.
9. Following the substitution of Dr. An's company Panyu Kembo for
Tian Le as a 10% holder in the Joint Venture, the Joint Venture
shall maintain its current form of organization as a limited
liability company and equity joint venture in accordance with the
Law of the People's Republic of China on Sino Foreign Equity
Joint Ventures and other relevant laws and regulations of China
and the province of Guangdong.
10. All issues not expressly covered by this agreement shall be
resolved by good faith negotiations between the parties. If
negotiations are unsuccessful, any dispute shall be submitted to
the China International Economic and Trade Arbitration Commission
for arbitration according to its provisional rules of arbitration
procedure. The arbitration award shall be final and binding on
both parties. The costs of such arbitration's (including
reasonable legal fees) shall be borne the DVS party. During the
arbitration proceeding, this agreement shall continue to be
performed except for the portion which is subject to the dispute
under arbitration.
11. All disputes arising in connection with this agreement shall
apply the rule of laws of China.
12. This agreement has been memorialized in both Chinese and English,
and each such version, when duly executed, shall be a valid and
binding legal document. There are two (2) original copies of
each version, and each party shall keep a copy of both the
Chinese and the English version.
13. This agreement is binding upon signing by the legal
representatives of both parties.
MAJORITY JOINT VENTURE PARTNER: MINORITY JOINT VENTURE PARTNER:
D.V.S. H.K. Limited Panyu Kembo Electrical
Manufacturing Co; Ltd.
By: /s/ Dr.Edmund Sun By: /s/ Yu Xxxx Xxx
Name: Dr.Edmund Sun Name: Yu Xxxx Xxx
Title: Chairman Title: General Manager
Dated: January 31, 1998 Dated: January 31, 1998
