Contract
Exhibit
10.18
Beijing
World Trade Center Club
CONTRACT
1
Beijing
World Trade Center Club
CONTRACT
Chapter
I General
Provisions
In
accordance with the Sino-foreign
Cooperative Venture Law of PRC
and
other relevant laws, rules and regulations of PRC, and based on the principle
of
equality and mutual benefit, Beijing Wanlong Economic Consulting Ltd. (a
subsidiary body of Beijing World Trade Center) and Canada Xxxxxxx Enterprises
Ltd. hereby agree to jointly found a cooperative venture in Beijing, China
after
amiable consultations. In light of this, this Contract is hereby
formulated.
Chapter
II Cooperative
Parties
|
Article
1.
|
Both
cooperative parties are as follows:
|
Party
A: Beijing
Wanlong Economic Consulting Ltd.
Registered place: Beijing, China
Legal
address: Floor 5, Section 0, Xxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxx,
Beijing.
Legal representative: Duan
Zemin
Post: General
Manger
Nationality: China
Nationality: China
Party
B: Canada
Xxxxxxx Enterprises Ltd.
Registered
place: Canada
Legal
address: 000-0000 Xxxxxxxxxxx XXX, Xxxxxxxx, X.X. Xxxxxx X0X 0X0.
Legal representative: Xx
Xxxxxxx
Post: President
Nationality: UK
Nationality: UK
Chapter
III Establishment
of Cooperative Venture
| Article 2. |
In
accordance with the Sino-foreign Cooperative Venture Law of PRC
and other
relevant laws, rules and regulations of PRC, both parties hereby
agree to
jointly found a cooperative venture (hereinafter referred to
as
åCooperative Ventureæ) in Beijing, China.
|
| Article 3. |
Name
of the Cooperative Venture:
|
–k‹ž㊥垏³ⅰⅰ妷¾惹倎²¿ěⅰ牊窘¹«槜¾(in
Chinese)
Beijing
World
Trade Center Club (in English)
Legal
address
of the Cooperative Venture: Floor 0, Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx
District, Beijing.
2
| Article 4. |
The
Cooperative Venture shall take and behave any or all its acts in
accordance with the laws, rules and regulations of the People’s Republic
of China and shall be protected by the
latter.
|
| Article 5. |
The
organization form of the Cooperative Venture shall be a limited
liability
company.
|
Chapter
IV Purpose
of Cooperation, Business Activities and Scale
of Operation
| Article 6. |
The
purpose of the Cooperative Venture shall be: to provide integrated
and
full range of services to the members of World Trade Center Association
and the members of Beijing World Trade Center, so as to enhance
the
economic communication and cooperation and to promote the development
of
international trade. The Cooperative Venture also aims at attaining
economic return for both parties through scientific
management.
|
| Article 7. |
The
business activities of the Cooperative Venture shall
be:
|
| 1. |
Providing
integrated and full range of services to the members of World
Trade Center
Association and the members of Beijing World Trade Center, including
scriptorium, meeting room, restaurant, entertainment and business
center,
etc.
|
| 2. |
Providing
information and consulting services, including holding periodic
information release, members reception, seminar, and technical
information
exchange meeting, etc.
|
| 3. |
Mini-products
display service.
|
| 4. |
Miscellaneous
services.
|
| Article 8. |
The
operating scale of the Cooperative Venture shall be bound in: based
on the
existing facility in Beijing, to rent or purchase the business
place of
2,000 - 3,000 m2, falling into meeting hall, banqueting hall &
restaurant, computer network center, reference library, reception
room and
business center, etc.
|
Chapter
V Gross
Investment and Registered Capital
| Article 9. |
The
gross investment of the Cooperative Venture shall be USD 3,000,000
(USD
three million) and all of this investment shall be treated as the
registered capital.
|
| Article 10. |
Party
A and Party B shall start the cooperation under the following
premises:
|
Party
A
shall, with the consent of Beijing World Trade Center, obtain the relevant
service items involved by World Trade Center Organization for the Cooperative
Venture to operate. Party A shall also be in charge of the earlier-stage
work of
the project as well as the inquiring work.
Party
B
shall subscribe the capital of USD 3,000,000 (USD three million).
3
| Article 11. |
Subscribing
method of the registered capital shall be as
follows:
|
USD
300,000 (USD three hundred thousand) shall be subscribed within three (3)
months
after the issuing of business license of Cooperative Venture. The rest capital
of USD 2,700,000 (USD two million seven hundred thousand) shall be subscribed
with the next nine (9) months. All the registered capital of Cooperative
Venture
shall be paid in full within one (1) year.
| Article 12. |
Upon
Party B subscribes the capital, a certified public accountants
firm
invited by the Cooperative Venture shall commence the verification
on the
capital and shall issue a report on verification of capital. Accordingly,
the Cooperative Venture shall issue the certificate of capital
subscribed,
testifying the name of cooperative venture, date of establishment,
name of
investors and their capital subscribed, date of subscription, as
well as
the issuing date of the certificate
herein.
|
| Article 13. |
The
registered capital of Cooperative Venture shall not be reduced
during the
period of cooperation.
|
| Article 14. |
Without
the consent of the other party and the approval of original approval
authority, any party shall not assign all or part of his capital
subscribed to outsider, nor such assignment be deemed as effective.
As to
any party’s assignment acceded, on an equal footing, other party shall
have preemptive right.
|
Chapter
VI Liabilities
of Both Parties
| Article 15. |
Party
A is liable for the following
affairs:
|
| 1. |
To
handle the project declaration and the feasibility study,
etc.
|
| 2. |
To
apply to the relevant authorities of PRC for the approval of Cooperative
Venture, to handle the registration and to get the business license
for
Cooperative Venture.
|
| 3. |
To
handle the earlier-stage work and inquiring work of the
project.
|
| 4. |
To
obtain the consent from Beijing World Trade Center so as to endow
the
Cooperative Venture with the name of "Beijing World Trade Center
Club"
both in Chinese and in English.
|
| 5. |
To
handle the other affairs entrusted by the Cooperative
Venture.
|
| Article 16. |
Party
B is liable for the following
affairs:
|
| 1. |
To
ensure the registered capital of USD 3,000,000 be subscribed smoothly
as
per the Contract.
|
| 2. |
To
provide any or all the necessary certificates and legal instruments
to the
Cooperative Venture.
|
| 3. |
To
settle the business place of the Cooperative
Venture.
|
| 4. |
To
handle the earlier-stage preparation, promotion and management
of the
Cooperative Venture.
|
| 5. |
To
handle the other affairs entrusted by the Cooperative
Venture.
|
4
Chapter
VII Board
of Directors
| Article 17. |
The
board of directors of Cooperative Venture shall be setup in the
even date
as of the registration of Cooperative Venture.
|
| Article 18. |
The
board of directors shall be consisted of 5 directors, in whom,
2 directors
shall be appointed by Party A and 3 by Party B. At the same time,
one
chairman of board shall be appointed by Party B and Party A shall
appoint
the only vice-chairman.
|
| Article 19. |
The
tenures of the chairman and the vice-chairman shall be 3 years
respectively and may be renewed upon the appointment
hereinafter.
|
| Article 20. |
The
board of directors shall be the highest authority and will decide
all the
important matters of the Cooperative Venture. However, the following
matters shall be approved by all the members of board of
directors:
|
1.
Modification
to the Contract and the Articles of Association of Cooperative
Venture.
2.
Termination,
dissolution and liquidation of the Cooperative Venture.
3.
Increase
of registered capital and mortgage and assignment of assets of the Cooperative
Venture.
4.
Merging
the Cooperative Venture with other business entity.
5.
Other
important matters, in the views of both parties, necessary to be approved
by all
the members of board of directors.
As
to
other matters of the Cooperative Venture, it can be decided based on the
approval by more than three fifth of total number of the directors.
| Article 21. |
The
chairman of board shall be the legal representative of Cooperative
Venture. In the case that the chairman fails to execute his duties
due to
any reason, he may temporarily authorize the vice-chairman or other
director to execute his duties.
|
| Article 22. |
At
least one regular board meeting shall be held each year, convened
and
presided over by the chairman of board. The chairman may convene
an
interim meeting based on a proposal made by more than one third
of total
number of the directors. All the cahiers shall be well
filed.
|
Chapter
VIII Management
Organization
| Article 23. |
The
Cooperative Venture shall setup its management organization to
manage the
daily business. Instructed by the board of directors, the management
organization shall adopt the system of manager assuming the chief
responsibility. The management organization shall employ one general
manager, nominated by Party B, and shall employ two deputy general
managers, nominated by Party A and Party B respectively. The general
manager and the deputy general managers shall be invited by the
board of
directors and shall enjoy 3-year tenure. Upon the approval of board
of
directors, their tenures herein can be
renewed.
|
| Article 24. |
Upon
the invitation of board of directors, a man who takes the post
of chairman
of board, vice-chairman or director may also take the post of general
manager, deputy general manager or other senior post in the Cooperative
Venture.
|
| Article 25. |
The
duties of general manager shall be to implement the resolutions
of board
meetings and to deploy and organize the daily management of the
Cooperative Venture. The deputy general managers shall assist the
general
manager.
|
The
management organization may be divided into subordinate departments. Those
departments shall be responsible for the management of different areas, and
shall fulfill and responsible to the tasks entrusted by the general manager
and/or the deputy general manager.
5
| Article 26. |
Should
the general manager or the deputy general manager fail to execute
the
resolution of board of directors, or be subject to any jobbery
behavior or
any gross misfeasance, he may be dismissed at any time upon the
decision
of board meeting and may be held responsible for any economic and
legal
liabilities.
|
Chapter
IX Procurement
of Equipment
| Article 27. |
As
to the raw material, equipment, transportation means or office
supplies,
on an equal footing, it should be preempted at home.
|
| Article 28. |
In
the case when the Cooperative Venture entrusts Party B to procure
the
equipment aboard, the representative from Party A shall also be
invited.
|
Chapter
X Preparation
and Construction
| Article 29. |
During
the preparation and construction of the Cooperative Venture, a
preparation
office shall be attached to the board of directors. Director and
deputy
director of the preparation office may be nominated by the general
manager
and be appointed by the board of directors. These positions also
can be
co-taken by the general manager and the deputy general
manager.
|
| Article 30. |
The
preparation office shall examine the engineering design, sign the
construction contraction, organize the procurement and acceptance
of
equipment and goods, draw up the overall scheme for construction
progress,
schedule the expenditure plan, control the project financial expenditure
and final account, formulate the relevant management rules, and
shall keep
and arrange the documents, drawing, files, materials during the
construction.
|
| Article 31. |
The
Cooperative Venture shall employ the technicians to form a technical
group. Instructed by the preparation office, this technical group
shall be
responsible for the examination, supervision and inspection over
the
design, construction quality, equipment, and imported and exported
materials, etc.
|
| Article 32. |
The
organization, wage and expenses of the staff of preparation office
shall
be incorporated into the construction budget upon the approval
of
Cooperative Venture.
|
| Article 33. |
The
preparation office shall be cancelled under the approval of board
of
directors upon the completion of construction and the hand
over.
|
Chapter
XI Financial
Accounting and Audit
| Article 34. |
The
Cooperative Venture shall pay in full any or all the due and payable
taxes
and duties in accordance with the laws, rules and regulations of
the
People’s Republic of China.
|
| Article 35. |
The
employees of Cooperative Venture shall pay in full any or all the
individual income tax in accordance with the Individual Income
Tax Law of
PRC.
|
6
| Article 36. |
As
per the Sino-foreign Cooperative Venture Law of PRC, the Cooperative
Venture shall take out each year reserve fund, venture expansion
fund,
employee incentive fund and employee welfare fund in the proportion
decided by the board of directors in consideration of actual
situation.
|
| Article 37. |
The
Cooperative Venture shall employ one chief accountant, to be responsible
for the accounting work of the Cooperative Venture. The chief accountant
shall be invited by the board of
directors.
|
| Article 38. |
Fiscal
year of the Cooperative Venture shall be calendar year, starting
from
January 1 and ending on December 31 of the same year. All the accounting
vouchers, bills, account books and financial statements of the
Cooperative
Venture shall be made both in Chinese and in
English.
|
| Article 39. |
The
Cooperative Venture adopts Chinese Yuan (Renminbi) as the standard
money
unit of account. As to converting from Renminbi into other currency,
the
exchange rate issued by State Administration of Exchange Control,
PRC on
the current day of conversion will be
adopted.
|
| Article 40. |
The
Cooperative Venture shall keep its accounts in accordance with
the
worldwide-customized accrual system and debit-credit accounting
system. At
the same time, monthly, quarterly and annual accounting statement
system
shall be well executed.
|
| Article 41. |
The
Cooperative Venture shall employ one chief auditor, invited by
the board
of directors. The chief auditor shall examine and check the financial
receipts and expenditures and the accounts, and submit the auditing
report
to the board of directors, general manager and both parties. Each
party
shall be entitled, at his own expense, to invite an auditor to
examine all
the account books of the Cooperative Venture. The Cooperative Venture
shall render the necessary assistance during the
examination.
|
| Article 42. |
The
financial department of the Cooperative Venture shall, within the
first
three months of each fiscal year, prepare the balance sheet, income
statement and scheme for profit distribution of previous fiscal
year. All
the balance sheet, income statement and scheme for profit distribution
of
previous fiscal year shall be audited and signed by the chief auditor,
and
shall be submitted to the board meeting for approval.
|
Chapter
XII Period
of Cooperation
| Article 43. |
The
period of cooperation of Cooperative Venture shall be 20 years,
counting
from the date on which the business license is
issued.
|
| Article 44. |
Upon
the proposal of any party and upon the approval of all the members
of
board meeting, an application may be submitted six (6) months prior
to the
expiration of cooperation to the original approval authority for
renewing
the cooperation. At the same time, upon the approval of all the
members of
board of directors and the approval of original approval authority,
this
Contract can be terminated
prematurely.
|
7
Chapter
XIII Foreign
Exchange
| Article 45. |
Any
or all the foreign exchange of the Cooperative Venture shall be
handled in
accordance with the Provisional Regulations on Foreign Exchange
Control,
PRC and the other relevant
stipulations.
|
| Article 46. |
The
Cooperative Venture shall open RMB accounts and foreign currency
accounts
in Bank of China or in other banks approved by Bank of China, and
shall
accept the supervision of deposit
bank(s).
|
Any
or
all the foreign earnings of Cooperative Venture shall be deposited in the
foreign currency accounts of deposit bank, while any or all the foreign exchange
disbursements shall be remitted from the same foreign accounts
hereof.
| Article 47. |
The
Cooperative Venture shall try its best to keep the balance of exchange.
In
the case that the foreign exchange is insufficient, it shall be
used in
the following orders:
|
1.
Maintaining
the necessary balance for daily business.
2.
Repaying
the principle of foreign exchange loan with interest.
3.
Importing
the necessary equipment, goods and materials.
4.
Profit
distribution for both parties.
Chapter
XIV Labor
Management
| Article 48. |
As
to the employee’s recruitment, training, dismiss, wage, labor insurance,
welfare or reward and penalty, it should be handled and conducted
in
accordance with the Labor Management Provisions on Sino-foreign
Cooperative Venture, PRC and its enforcement regulations. At the
same
time, the above-mentioned items shall be decided by the board of
directors
and shall be stipulated in detail in the personal labor contract
or
collective labor contract signed by the Cooperative
Venture.
|
The
signed labor contract shall be submitted to the local labor authority for
record.
| Article 49. |
The
Cooperative Venture is entitled to sign the labor contract with
the
employee in person or to sign a collective labor
contract.
|
| Article 50. |
In
the case when the Cooperative Venture plans to recruit a Chinese
employee,
the candidate shall be assessed from his education, foreign language
level, know-how and technical skill, health condition and professional
ethics. Only the qualified and outstanding candidate can be recruited.
|
| Article 51. |
The
employment, wage, labor insurance, welfare, standard of travelling
expenses of the senior management staff nominated by both parties
shall be
decided by the board meeting after
discussion.
|
Chapter
XV Profit
Distribution and Loss Share
| Article 52. |
As
to the profit or loss after income-tax-paid and funds-taken-out,
it should
be allocated or shared in proportion to 25% for Party A and 75%
for Party
B.
|
8
| Article 53. |
The
profit Cooperative Venture obtained shall be used in priority as
an
imbursement of Party B’s investment. At the same time, in order to
compensate Party A’s costs and expenses in providing service to the
Cooperative Venture hereof, Party B hereby agrees that from the
issuing
date of business license, the Cooperative Venture shall pay Party
A RMB
150,000 (RMB one hundred and fifty thousand) each year, up to the
time
when the profit Party A obtained from the Cooperative Venture exceeds
RMB
150,000 (RMB one hundred and fifty
thousand).
|
Chapter
XVI Confidentiality
| Article 54. |
Both
parties and their employees shall, during and for a period of five
(5)
years after the termination or expiration of this Contract, keep
strict
secret against the data or any other materials obtained from the
other
party and shall not disclose to outsider or the third party unless
for the
necessary of execution of the Contract.
|
Chapter
XVII Termination
and Liquidation
| Article 55. |
In
either of the following cases, the Cooperative Venture can be
terminated:
|
| 1. |
The
cooperation expires.
|
| 2. |
The
Cooperative Venture can not maintain normal operation for more
than six
(6) months due to the great losses caused by force majeure set
forth in
Chapter XX hereof.
|
| 3. |
The
Cooperative Venture can not continue the operation due to any party
fails
to execute his duties under the Contract and the Articles of Association,
and such failure is subject to the breach set forth in Chapter
XIX hereof
and furthermore, the party in breach fails to remedy the loss in
an
effective way within sixty (60) days upon the receipt of written
notice
from the other party.
|
| 4. |
The
Cooperative Venture sustains losses for successive five (5) years
during
the period of operation and is disable to repay the mature
debts.
|
| 5. |
The
Cooperative Venture can not meet its main business objectives while
is
disable to repay the mature debts.
|
| 6. |
The
Cooperative Venture can not meet its main business objectives while
is
uncertain in the future’s
development.
|
As
to the
Sub-clauses 2, 4, 5 and 6 herein, it shall be approved by all the members
of
board of directors and shall be reported to the original approval authority
for
termination of the cooperation and dissolution of the Contract.
As
to the
Sub-clause 3 herein, the observant party, apart from being entitled to claim
to
the party in breach, is also entitled to declare to the arbitration authority
described hereinafter for termination of the cooperation and dissolution
of the
Contract.
| Article 56. |
In
the case that the Cooperative Venture is terminated, the board
of
directors shall immediately propose a procedure and principle for
liquidation and the composition of liquidation committee, and shall
submit
to the competent authority for examination.
|
| Article 57. |
During
the liquidation, the liquidation committee shall act for the Cooperative
Venture to prosecute and respond to any prosecution.
|
| Article 58. |
The
liquidating expenses and the compensation to the members of liquidation
committee shall be paid in priority from the existing financial
account of
the Cooperative Venture. Upon all the debts of the Cooperative
Venture are
discharged by the liquidation assets, the residual assets shall
be
allocated in proportion to the amount of capital both parties described.
In the case that the Contract is terminated prematurely, all the
properties of Cooperative Venture shall be liquidated as per the
value on
the date of termination, and shall be allocated in proportion to
the
amount of capital both parties described after all the debts of
Cooperative Venture are discharged.
|
9
Chapter
XVIII Liabilities
for Breach the Contract
| Article 59. |
Should
Party A fail to execute his duties under Chapter V and Chapter
VI of this
Contract, the observant party shall be entitled to claim indemnity
from
the party in breach and may terminate the Contract as per Article
55
hereof.
|
| Article 60. |
Should
Party B fail to subscribe the capital on the date and in the amount
described in Chapter V hereof, a penalty of 0.03 percent of the
total
payable capital shall be paid by the party in breach to Party A
for each
day’s delay. Should such delay exceed three (3) months, then apart
from
the total penalty, the observant party is also entitled to terminate
the
Contract as per Article 55 hereof and to claim indemnity from the
party in
breach.
|
Chapter XIX Force
Majeure
| Article 61. |
Should
any force majeure circumstance arise preventing any party to fulfill
his
respective obligations under the Contract or under any other stipulations,
including but not limited to, earthquake, typhoon, flood, war and/or
any
other matters beyond the prevision and control of the parties,
the party
who suffered from these circumstances shall immediately inform
the other
party by telex, and shall render the valid certificates issued
by the
notary body where such circumstance arisen with fifteen (15) days,
testifying such circumstance in detail and the reason impossible
to
execute part or all the Contract, or the reason delaying the execution
of
the Contract. According to the severity, both parties shall decide
either
to terminate the Contract, or to exempt part obligations under
the
Contract, or to delay the execution of the
Contract.
|
Chapter XX Insurance
| Article 62. |
Any
or all the insurance of Cooperative Venture shall be procured within
the
People’s Republic of China. The insuring method, type of risks, value
of
insurance and period of insurance shall be decided by the board
of
directors in accordance with the relevant regulations of
PRC.
|
Chapter
XXI Modification,
Alteration and Termination of the Contract
| Article 63. |
No
modification to this Contract and its attachment shall be valid
unless in
writing and signed by both parties and approved by the original
approval
authority.
|
| Article 64. |
During
the period of validity, should the Contract can not be executed
due to
force majeure hereof, or should the Cooperative Venture sustain
successive
losses and disable to continue the operation, the Contract may
be
terminated or cancelled upon the approval of all the members of
board of
directors and original approval
authority.
|
10
| Article 65. |
Should
the Cooperative Venture can not continue the operation or can not
meet its
business purpose due to any party fails to execute his duties under
the
Contract and/or the Articles of Association, or due to his breach
against
the Contract and/or the Articles of Association hereof, the Contract
may
be deemed as terminated by the party in breach unilaterally. In
this case,
the observant party shall be entitled to lodge a claim against
the party
in breach and shall be entitled to terminate the Contract upon
approval of
the original approval authority. If both parties agree to continue
the
operation hereinafter, the party in breach shall indemnify any
or all the
losses imposed on the Cooperative
Venture.
|
Chapter
XXII Governing
Laws
| Article 66. |
This
Contract shall be governed by and constructed in accordance with
the laws
of the People’s Republic of China. Its effectiveness, interpretation and
settlement of disputes shall also be governed by the laws of the
People’s
Republic of China.
|
Chapter
XXIII Settlement
of Disputes
| Article 67. |
Any
dispute which arise out or in connection with the Contract or its
execution shall be settled by means of amicably negotiations. If
the
parties cannot reach a settlement amicably within a period of sixty
(60)
days, then such dispute shall be submitted for settlement to Beijing
Arbitration Commission, in accordance with its arbitration rules
hereof.
The awards of Beijing Arbitration Commission are final and binding
up both
parties.
|
During
the arbitration proceedings, performance of other parts out of disputes of
the
Contract shall continue.
Chapter
XXIV Language
of the Contract
| Article 68. |
This
Contract shall be made both in Chinese and in English, in the case
where
there is any discord in both versions, the version in Chinese shall
prevail.
|
Chapter
XXV Coming
into Force and Miscellaneous
| Article 69. |
The
Articles of Association of Cooperative Venture, formulated in accordance
with the principles and requirements of this Contract, shall be
as
attached to this Contract as its
attachment.
|
| Article 70. |
This
Contract, together with its attachment, shall come into force as
of the
date approved by Beijing Foreign Trade and Economics
Committee.
|
| Article 71. |
Any
notice sent by either party to the other party by telex or fax,
if it
involves any rights and liabilities of any party, shall be sent
subsequently in the form of writing letter. The addresses for notice
shall
be the legal addresses of both parties set forth in this
Contract.
|
| Article 72. |
This
Contract is made in quadruplication, both in Chinese and in English.
Party
A and Party B shall hold each two in Chinese and in English with
equal
force therewith.
|
| Article 73. |
In
witness whereof, both parties have caused this Contract to be executed
by
their respective legal representative or authorized representative
on May
9, 1997 in Beijing, China.
|
Beijing
Wanlong Economic Consulting
Ltd.
Canada
Bxxxxxx Enterprises Ltd.
Legal
Representative: Duan
Zemin
Legal
Representative: Jxxx Xxx
May
9,
1997
11
