SINO-FOREIGN EQUITY JOINT VENTURE
Exhibit
10.1
SINO-FOREIGN
EQUITY JOINT VENTURE
WUHAN
SINOENERGY GAS COMPANY
CONTRACT
June,6th,2006,
Beijing
Contract
for Wuhan Sinoenergy Gas Company Joint Venture
Chapter
1 General Provisions
In
accordance with the Law of the People's Republic of China on Joint
Ventures
Using Chinese and Foreign Investment (the "Joint Venture Law")
and
other
relevant Chinese laws and regulations, Sinoenergy Holding Limited, with its
legal address at Akara Bldg.,00Xx Xxxxxx Xxxxxx, Xxxxxxxx Xxx , xxxx Xxxx,
xxxxxxxx. (hereinafter referred to as Party A) and Beijing Sanhuan Technology
Development Co., Ltd. (hereinafter referred to as Party B), and Wuhan Fukang
Automotive Cleaning Energy Company (hereinafter referred to as Party C), and
Wuhan Yixiang Industry Trade Company (hereinafter referred to as Party D),
in
accordance with the principle of equality and mutual benefit and through
friendly consultations, agree to jointly invest to set up a joint venture
enterprise in Wuhan Province of the People's Republic of China.
Chapter
2 Parties of the Joint Venture
Article
1
Parties
to this contract are as follows:
|
1.
|
Sinoenergy
Holding Limited (hereinafter referred to as Party A), registered
with
British Virgin Islands in England, and its legal address is at Xxxxx
Xxxx., 00Xx Xxxxxx Xxxxxx, Xxxxxxxx Xxx x,
xxxx Xxxx, xxxxxxxx.
|
Legal
representative: Name: Xxxx, Xxxxxxxx
Position:
Chairman
Nationality:
China
|
2.
|
Beijing
Sanhuan Technology Development Co., Ltd. (hereinafter referred to
as Party
B), registered with Haidian District of Beijing. Its legal address
at Room
B1011, Golden Mansion, XX.00 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx,
Xxxxx.
|
Legal
representative: Name: Xxxxx, Xx
Position:
Chairman
Nationality:
China
| 3. |
Wuhan
Fukang Automotive Cleaning Energy Company (hereinafter referred to
as
Party C), registered with Wuhan of Hubei Province. Its legal address
at
First Floor of XX.0 Xxxxxxxx Xxxxxxxx, Xxxxx 0, Xx-Xxx Industrial
Park,
Wuhan Economic and Technological Development Zone, Hubei, China.
|
Legal
representative: Name: Xxxx, Xxxxxx
Position:
Chairman
Nationality:
China
| 4. |
Xxxxx
Xxxxxxx Industry Trade Company (hereinafter referred to as Party
D),
registered with Wuhan of Hebei Province. Its legal address at X0-0-000,
Xxxxx Economic and Technological Development Zone, Hubei, China.
|
Legal
representative: Name: Xxx, Xxxxxx
Position:
Chairman
Nationality:
China
Chapter
3 Establishment of the Joint Venture Company
Article
2
In
accordance with the Joint Venture Law and other relevant Chinese
laws
and
regulations, the four parties of the joint venture agree to set up a joint
venture of Wuhan Sinoenergy Gas Company (hereinafter
referred
to as the joint venture company) in China.
Article
3
The
name
of the joint venture company is Xxxxx
Xxxxxxxxxx Gas Company
The
name
in Chinese is [Chinese characters fo Xxxxx Xxxxxxxxxx Gas Company].
The
legal
address of the joint venture company is at NO. 00 Xxxxxxxx Xxxxxx, Xxxxx
Economic and Technological Development Zone, Hubei, China.
Article
4
All
activities of the joint venture company shall be governed by the
laws,
decrees and pertinent rules and regulations of the People's Republic of
China.
Article
5
The
Organization form of the joint venture company is a limited liability company.
Each party to the joint venture company is liable to the joint venture company
within the limit of the capital subscribed by
it.
The
profits, risks and losses of the joint venture company shall be shared by the
parties in proportion to their contributions to the registered
capital.
Chapter
4 The Purpose, Scope and Scale of Production and Business
Article
6
The
goals
of the parties to the joint venture are to enhance economic
co-operation
technical exchanges, to improve the product quality, develop new products,
and
gain a competitive position in the world market in quality and price by adopting
advanced and appropriate technology and scientific management methods; develop
the products as well technology of CNG (Compressed Natural Gas) so as to so
decrease the pollution of the air caused by cars using petrol and raise economic
results and ensure satisfactory economic benefits for each
investor.
Article
7
The
productive and business scope of the joint venture company is to
produce
and sell converting devices of Gas Cars; to provide maintenance service after
the sale of the products; to process and sell CNG (Compressed Natural Gas)
for
cars; study and develop new products.
Article
8
The
production scale of the joint venture company is as follows:
1.
The
production and sales capacity after the joint venture is put into operation
is
100,000 sets of converting devices of Gas Cars and 70,000,000m3
of
natural gas per year.
Chapter
5 Total Amount of Investment and the Registered Capital
Article
9
The
total
amount of investment of the joint venture company is RMB
60,000,000.
Article
10
Investment
contributed by the parties is RMB30, 000,000, which
will
be
the registered capital of the joint venture company. Party A shall pay by US
dollars while Party B, C and D shall pay by RMB. Of which: Party A shall pay
RMB15,000,000Yuan, accounting for
50%;
Party B shall pay RMB12,000,000Yuan, accounting for
40%;
Party C shall pay RMB1,5 00,000Yuan, accounting for 5%; Party D shall pay RMB1,5
00,000Yuan, accounting for 5%.
2
Article
11
Party
A
shall pay by US dollars while Party B, C and D shall pay by RMB.
Article
12
The
registered capital of the joint venture company shall be paid by Party A
according to the sum it promises within three months after the issue of the
Business License, and by Party B, C, and D according to the sum they each
promises within three months after the issue of the Business License in one
time.
Article
13
In
case
any party to the joint venture intends to assign all or part
of
his
investment subscribed to a fifth party, consent shall be obtained from the
other
parties to the joint venture, and approval from the
examination
and approval authority is required. When one party to the joint venture assigns
all or part of his
investment,
the other two parties have preemptive right.
Chapter
6 Responsibilities of Each Party to the Joint Venture
Article
14
Party
A,
Party B, Party C and Party D shall be respectively responsible for the following
matters:
Responsibilities
of Party A:
Providing
investment in accordance with the provisions of Article 10 to Article
12;
Responsible
for handling other matters entrusted by the joint venture
company.
Responsibilities
of Party B:
Providing
investment in accordance with the provisions of Article 10 to Article
12;
Providing
resource support for the joint venture by signing Resource Protocols of natural
gas.
Responsible
for handling other matters entrusted by the joint venture
company.
Responsibilities
of Party C:
Providing
investment in accordance with the provisions of Article 10 to Article
12;
Handling
of applications for approval, registration, business license and other matters
concerning the establishment of the joint venture company from relevant
departments in charge of China;
Responsible
for handling other matters entrusted by the joint venture
company.
Responsibilities
of Party D:
Handling
of applications for approval, registration, business license and other matters
concerning the establishment of the joint venture company from relevant
departments in charge of China;
Responsible
for handling other matters entrusted by the joint venture
company.
Chapter
7 Selling of Products
Article
15
The
products of Joint Venture Company will be gas devices of cars and compresses
natural gas used for cars.
3
Article
16
Products
may be sold in Wuhan or on domestic markets through the following
channels:
1.
The
joint venture company may directly sell its products in Wuhan.
2.
The
joint venture company may sign sales contracts with sales managers all over
the
country, entrusting them to be the sales agencies.
3.
The
joint venture company may sign sales contracts with sales managers in Wuhan,
entrusting them to be the sales agencies.
4.
The
joint venture company may choose proper channels of selling products according
to its development.
Article
17
In
order
to provide maintenance service to the products sold both in Wuhan and its
peripheries, the joint venture company may set up sales branches for maintenance
service both in these areas to the approval of the relevant Chinese
department.
Chapter
8 The Board of Directors
Article
18
The
date
of registration of the joint venture company shall be the date of the
establishment of the board of directors of the joint venture
company.
Article
19
The
board
of directors is composed of 5 directors, of which 2 shall be appointed by Party
A, two by Party B, and 1 by Party C and Party D. The
chairman
of the board shall be appointed by Party A, and its vice-chairman by Party
B.
The term of office for the directors, chairman and vice-chairman is three years;
their term of office may be renewed if
continuously
appointed by the relevant party.
Article
20
The
highest authority of the joint venture company shall be its board of directors.
It shall decide all major issues concerning the joint venture company. Unanimous
approval shall be required for any decisions concerning major issues. As for
other matters, approval by majority or a simple majority shall be
required.
Article
21
The
chairman of the board is the legal representative of the joint venture company.
Should the chairman be unable to exercise his responsibilities for any reason,
he shall authorize the vice- chairman or any other directors to represent the
joint venture company temporarily.
Article
22
The
board
of directors shall convene at least one meeting every year. The meeting shall
be
called and presided over by the chairman of the board. The chairman may convene
an interim meeting based on a proposal made by more than one third of the total
number of directors. Minutes of the meetings shall be placed on
file.
Chapter
9 Business Management Office
Article
23
The
joint
venture company shall establish a management office which shall be responsible
for its daily management. The management office shall have a general manager
and
two deputy general managers, whose term of office is three years. They shall
be
appointed by the board of directors.
Article
24
The
responsibility of the general manager is to carry out the decisions of the
board
and organize and conduct the daily management of the joint venture company.
The
deputy general managers shall assist the general manager in his work. Several
department managers may be appointed by the management office, they shall be
responsible for the work in various departments respectively, handle the matters
handed over by the general manager and deputy general managers and shall be
responsible to them.
4
Article
25
In
case
of graft or serious dereliction of duty on the part of the general manager
and
deputy general managers, the board of directors shall have the power to dismiss
them at any time.
Chapter
10 Equipment Purchase
Article
26: The raw material, fuel, parts
and
auxiliary equipment, conveyance, and office supplies needed by the
joint
venture company should be purchased in China, until it is not available in
China.
Article
27: When the joint venture company consigns the equipment purchase, and the
parts
and
auxiliary equipment purchase to the part A, Party B, Party C and Party D should
be invited.
Chapter
11 Preparation and Establishment
Article28:
During the preparation and establishment of the joint venture, there should
be a
preparation division which is responsible for the preparation and establishment
of joint venture company, under the leadership of the
board of directors.
Article
29: The things that the preparation division should to do as follows: to acquire
the compulsory
land, and sign the engineering construction contract
in the
prophase;
to
organize the purchase and examination and acception of the related imported
equipment and material, and the domestic equipment and material; to set down
the
engineering construction plan, and work out of the plan for the arrangement
of
the fund; to master the engineering payout and engineering final
account, define the management method and pack up and maintain the files,
drawings, documents and other related materials of the engineering
construction.
Article
30: defining the management control plan of joint venture, setting up the
management control organization, employing the management control worker and
working out the annual budget of the operation.
Article
31: During the preparation for the construction, with the agreement of Party
A,
Party B, Party C and Party D, the cost of the establishment of the working
people, their payment and general
expenses will be listed into the engineering construction budget.
Article
32: After the completion of the preparation, the preparation division will
be
withdrawn, while the management control organization will execute it daily
management control function, after being examined and authorized by the board
of
directors.
Chapter
12 Labor management and Trade Union Organization
Article
32: In joint venture company workers’ recruitment,
employment, unemployment, payment and labor, insurance, life welfare, rewards
and punishment and other cases will be defined by the joint venture company
and
its labor union organization or by other separated labor contract, according
to
“PRC
Labor
Law” and its execution method, after the board of directors has studied and set
down the scheme. After the labor contract is made, it should be put on records
in the local labor management sector.
5
Article
33: the employment of chief executive officer recommended by Party
A,
Party B, Party C and Party D and his payment, social insurance, welfare,
standards for his travel expense and so on should be decided by the
board of
directors through the discussion.
Article
34: The employer of the joint venture company has the right to establish the
trade union organization and develop the trade union activities according to
“the PRC Trade Union Law”.
Article
35: The task of the trade union in the joint venture company is : to protect
the
worker’s civil right and material interest, according to the law; to cooperate
with the company to arrange and properly use the welfare, rewards fund; to
organize workers to study the knowledge of politics, operations, science and
technology and carry out some literature and physical training activities;
to
educate the workers to comply with the labor discipline and try to finish all
the economic task given by the joint venture company.
Article
36: The representatives of trade union sign the labor contract with the joint
venture company on behalf of the worker and also monitor the execution of the
contract.
Article
37: The director of trade union has the right to take part in the meeting held
by the board of directors about the company’s developing plan, and manufacturing
and operating activities and to reflect the worker’s opinions and
requirements.
Article
38: The trade union takes part in the intermediation of the conflicts between
the workers and the joint venture.
Article
39: The joint venture company monthly gives funds to the trade union, that
is,
two percent of the actual payment of the staffs of the joint venture. The trade
union use the funds according to “the Method for Management of the Trade Union
Fund” designed by the PRC’s general trade union.
Chapter
13: Taxes, Finance and Audit
Article
40
The
joint
venture company shall pay taxes in accordance with the provisions of Chinese
laws and other relative regulations.
Article
41
Staff
members and workers of the joint venture company shall pay individual income
tax
according to the Individual Income Tax Law of the People's Republic of
China.
Article
42
Allocations
for reserve funds, expansion funds of the joint venture company and welfare
funds and bonuses for staff and workers shall be set aside in accordance with
the provisions of the Joint Venture Law. The annual proportion of allocations
shall be decided by the board of directors according to the business situation
of the joint venture company.
Article
43
The
fiscal year of the joint venture company shall be from January 1 to December
31.
All vouchers, receipts, statistic statements and reports shall be written in
Chinese.
Article
44
Financial
checking and examination of the joint venture company shall be conducted by
an
auditor registered in China and reports shall be submitted to the board of
directors and the general manager.
Article
45
In
the
first three months of each fiscal year, the manager shall prepare the previous
year's balance sheet, profit and loss statement and proposal regarding the
disposal of profits, and submit them to the board of directors for examination
and approval.
6
Article
46: The finance and accounting system of the joint venture should be defined
according to the Chinese local finance and accounting system and the actual
situation of the joint venture. It must be reported to the local financial
and
taxi sector for being put on records.
Chapter
14 the Duration of Joint Venture
Article
47: The
duration of joint venture company is 2 years. The establishment of the joint
venture is the day when the business
license is released. With the proposal of one party, and the agreement of the
board of directors, the expiration, the joint venture can ask the examination
and approval authority to extend the duration within 6 months before the
expiration.
Chapter
15 the Disposal of Assets after the Expiration of the
Duration
Article
48
Upon
the
expiration of the duration, or termination before the date of expiration of
the
joint venture, liquidation shall be carried out
according
to the relevant laws. The liquidated assets shall be distributed, and Party
B.,
Party C and Part D..
Chapter
16 Foreign Exchange Control and Insurance
Article
49: All the foreign exchange controls of the joint venture should be dealt
with
according to “the PRC’s Foreign Exchange Control Regulations” and other
regulations
Article
50
Insurance
policies of the joint venture company on various kinds of risks shall be
underwritten with the insurance companies qualified in China. Types, value
and
duration of insurance shall be decided by the board of directors
Chapter
17 The Amendment, Alteration and Termination of the
Contract
Article
51
The
amendment of the contract or other appendices shall come into force only after
a
written agreement has been signed by four Parties and approved by the original
examination and approval authority.
Article
52
In
case
of inability to fulfill the contract or to continue operation due to heavy
losses in successive years as a result of force majeure, the duration of the
cooperative venture and the contract shall be terminated before the time of
expiration after being unanimously agreed upon by the board of directors and
approved by the original examination and approval authority.
Article
53 Should the cooperative venture company be unable to continue its operation
or
achieve its business purpose due to the fact that one of the contracting parties
fails to fulfill the obligations prescribed by the contract and articles of
association, or seriously violates the provisions of the contract and articles
of association, that party shall be deemed to have unilaterally terminated
the
contract. The other parties shall have the right to terminate the contract
in
accordance with the provisions of the contract after approval by the original
examination and approval authority, and to claim damages. In case four Parties
of the cooperative venture company agree to continue the operation, the party
who fails to fulfill its obligations shall be liable for the economic losses
caused thereby to the joint venture company.
7
Chapter
18 Responsibility of breach of faith
Article
54
Should
either Party A or Party B or Party C or Party D fail to provide on schedule
the
contributions in accordance with the provisions defined in Chapter 5 of this
contract, the party in breach shall pay to the other parties 1 % of the
contribution starting from the first month after exceeding the time limit.
Should the party in breach fail to provide after 3 months, 3% of the
contribution shall be paid to the other parties, who shall have the right to
terminate the contract and to claim damages from the party in breach in
accordance with the provisions of Article 53 of the contract.
Article
55
Should
all or part of the contract and its appendices be unable to be fulfilled owing
to the fault of one party, the party in breach shall bear the liability
therefore. Should it be the fault of other parties, they shall bear their
respective liabilities according to the actual situation.
Article
56
In
order
to guarantee the performance of the contract and its appendices, four Parties
shall provide each other with bank guarantees for performance of the
contract.
Chapter
19 Force majeure
Article
57
Should
either of the parties to the contract be prevented from executing the contract
by force majeure, such as earthquake, typhoon, flood, fire, war or other
unforeseen events, and their occurrence and consequences are unpreventable
and
unavoidable, the prevented party shall notify the other parties by telegram
without any delay, and within 15 days thereafter provide detailed information
of
the events and a valid document for evidence issued by the relevant public
notary organization explaining the reason of its inability to execute or delay
the execution of all or part of the contract. Four parties shall, through
consultations, decide whether to terminate the contract or to exempt part of
the
obligations for implementation of the contract or whether to delay the execution
of the contract according to the effects of the events on the performance of
the
contract.
Chapter
20 Applicable Law
Article
58
The
formation, validity, interpretation, execution and settlement of disputes in
respect of, this contract shall be governed by the relevant laws of the People's
Republic of China.
Chapter
21 Settlement of Disputes
8
Article
59
Any
disputes arising from the execution of, or in connection with, the contract
shall be settled through friendly consultations between four
parties.
Article
60
In
case
no settlement can be reached through consultations, the disputes shall be
submitted to Wuhan sub- commission for arbitration in accordance with its rules
of procedure. The arbitral award is final and binding upon four parties.
Article
61
During
the arbitration, the contract shall be observed and enforced by four parties
except for the matters in dispute.
Chapter
22 Language
Article
62
The
contract shall be written in Chinese.
Chapter
23 Effectiveness of the Contract and Miscellaneous
Article
63
The
contract shall come into force commencing from the date of approval of the
Ministry of Foreign Trade and Economic Cooperation of the People's Republic
of
China (or its entrusted examination and approval authority)
Article
64
The
Contract is signed for 11 copies, Each one of four parties has two copies.
Other
three copies are used as examining and approving and registering.
Article
65
The
Articles of Contract is signed in Beijing by the authorized representatives
of
four parties (A,B,C,D) on.
Party
AæSinoenergy
Holding Ltd.
Party
BæBeijing
Sanhuan Technology Development Co., Ltd.
Party
CæWuhan
Fukang Automotive Cleaning Energy Company
Party
DæWuhan
Yixiang Industry Trade Company
9
