JOINT VENTURE AGREEMENT
EXHIBIT
10.3
This
Joint Venture Agreement (JVA) made and entered into effective as of
the
day of April, 2008, by and between
TECHNICAL
INDUSTRIES, INC., a
Louisiana corporation having its principal
place of business in Lafayette Parish, Louisiana (Technical) and SHENGLI
OILFIELD HIGHLAND
PETROLEUM EQUIPMENT (USA) and
SHENGLI
OILFIELD HIGHLAND PETROLEUM EQUIPMENT
CO., LTD., (collectively referred to as Shengli), hereinafter referred to
collectively as Parties, where applicable.
WHEREAS,
Technical is the owner and/or operator of facilities in Texas and
Louisiana which are suitable for the storage, inspection, maintenance and other
services of pipe and equipment products used in connection with the exploration
and production of oil, gas and other minerals; and
WHEREAS,
Technical has agreed to receive, unload, store, maintain, market, inspect
and certify OCTG pipe provided to it by Shengli; and
WHEREAS,
Shengli is the manufacturer and/or importer of Tubular and Equipment
Products, including, but not limited to, OCTG pipe, to be marketed to companies
in the United States of America, and other parts of the world including, without
limitation, companies engaged in the exploration and/or production of oil, gas
and other minerals; and
WHEREAS,
the Parties wish to enter into a Joint Venture Agreement (JVA) to define
their respective roles and responsibilities and thus satisfy the objectives of
developing pipe threading operations and services at Technical's Houston
facility; and
The
foregoing considered, the Parties agree as follows:
1. The Joint
Venture (JV) shall be implemented through a newly created, closed joint stock
company (Company), whose name is to be determined by agreement of the Parties.
Each Party is responsible for meeting its committed cost share throughout the
duration of the Company in accordance with the Company's approved budget. No
Party is responsible for the cost-share commitment of any other Party. However,
with the written consent of the other Party, a Party that has exceeded its
cost-share commitment may allow its excess cost share to be applied to the
cost-share deficit of another Party.
2. Fifty
percent (50%) of the stock of the Company shall be held by Shengli and fifty
percent (50%) shall be held by Technical.
3. Full
operations of the JV shall be conducted on a dollar basis.
4. Shengli
declares that it is owner of and agrees to deliver OCTG pipe to Technical's
Houston facility during the term of this JVA and for the purposes of conducting
pipe threading operations thereon. Shengli shall deliver not less than 2,000
(Two thousand) tons per month. Goods delivered to Technical shall be new, and
shall be delivered in clean and undamaged condition. Shengli's Products that are
not pre-sold shall be stored at Technical's facility.
5.
Shengli shall, within 60 days of the signing of this JVA, make the following
contributions, which shall not constitute paid-in-capital for its 50 percent
equity stake of the JV:
· Production
line
· Two
sawers
· NC pipe
threading lathe for tubulars with OD from 2" to 7"
· Buckling
on equipment
· Xxxx
jetting machine
· Tools and
gauges
· Spare
parts
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Two
Shengli employees to assist in operating and maintaining the pipe
threading facility
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Monthly
Rental will be charged by Technical to the new JV Company for the space
used by the new JV Company
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6. Technical shall,
within 60 days of the signing of this JVA, make the following
contributions, which shall not constitute paid-in-capital or its 50 percent
equity stake of the JV:
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·
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Office
space at Technical's Sales department to adequately accommodate two
personnel provided by Shengli
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1
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·
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A
space of the physical plant of Technical's Houston facility to conduct
threading operations
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7. A Board
of Directors shall be agreed upon by the Parties. Technical is to manage at its
discretion and handle day-to-day operations of the Company.
8. Each of
the Parties agrees that it will not, either during the term of the JVA or at any
time after its termination, divulge Technical's patents, methods, software or
any proprietary information.
9.
Each of the Parties agrees that it will not, either during the term of the JVA
or at any time after its termination, use technical information, whether or not
generated in the course of the JV, of another Party for any purpose except the
JVA and the commercial exploitation of the results of the development work of
the JV and will not divulge such technology to any person without the prior
written consent of the disclosing Party; provided, however, technology shall not
be considered proprietary which:
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a.
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Is in the public
domain at the time of disclosure or thereafter enters
the public domain other than through a breach of this JVA; or
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b.
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Is in the possession of the receiving Party prior to its receipt from the disclosing Party; |
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c.
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Is lawfully obtained
from a third party under circumstances permitting the receiving Party to
use or disclose the information without
restrictions; or
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d.
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Is independently developed by the receiving Party; or |
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e.
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Is required to be disclosed as a result of government or judicial action. |
10. This JVA shall continue in full force and effect until the Company has been
dissolved.
11. Each
Party acknowledges that it shall be responsible for any loss, cost, damage,
claim, or other charge that arises out of or is caused by the actions of that
Party or its employees or agents. No Party shall be liable for any loss, cost,
damage, claim, or other charge that arises out of or is caused by the actions of
any other Party or its employees or agents. Joint and several liability will not
attach to the Parties; no Party is responsible for the actions of any other
Party, but is only responsible for those tasks assigned to it. The Parties agree
that in no event will consequential or punitive damages be applicable or awarded
with respect to any dispute that may arise between or among the Parties in
connection with this JVA.
12. No Party
shall be liable, in respect to any delay in completion of work hereunder or of
the non-performance of any term or condition of this JVA directly or indirectly
resulting from delays by Acts of God; acts of the public enemy; strikes;
lockouts; epidemic and riots; power failure; water shortage or adverse weather
conditions; or other causes beyond the control of the Parties. In the event of
any of the foregoing, the time for performance shall be equitably and
immediately adjusted, and in no event shall any Party be liable for any
consequential or incidental damages from its performance or non-performance of
any term or condition of this JVA. The Parties shall resume the completion of
work under this JVA as soon as possible subsequent to any delay due to force
majeure.
13. Technical
agrees to obtain and maintain general liability insurance relating to its
business activities in amounts that are reasonably and customary, and to have
Shengli named as an additional insured under said policies.
14. Shengli
agrees to maintain worker's compensation insurance with respect to their
personnel working on Technical's premises, as well as maintain product liability
insurance, general liability insurance, and all other required insurance with
respect to its personnel, assets, pipes and/or materials with limits and with an
insurer reasonably acceptable to industry and to Technical and to have Technical
named as an additional named insured under said policies.
15. Shengli
agrees to defend, indemnify and hold Technical harmless from and against any and
all claims arising out of the condition of any equipment, machinery, and/or
materials as delivered to Technical, as well as the conduct of any Shengli
personnel, including, without limitation, any and all product liability claims,
as well as any and all pollution claims.
16. Technical
agrees to defend, indemnify and hold Shengli harmless from and against any and
all claims arising out of the failure of Technical to properly install, operate,
and maintain the Equipment and Materials delivered to it.
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17. Shengli
agrees that all risk and responsibilities of ownership related to the machinery
and equipment it contributed to the JV will be covered under insurance paid for
by the JV. Shengli agrees to accept and maintain all risk and responsibilities
of ownership related to any materials, machinery, and equipment after delivery
to Technical. This shall include any and all losses resulting from acts of God
or other causes which are not the fault and wrongdoing of Technical, and shall
further include liabilities for property taxes or other charges assessable
against Shengli or the Materials and Equipment based upon said
ownership.
18. Shengli
agrees to accept and maintain all risk and responsibilities related to the
conduct of its personnel conducting activities on Technical's facilities.
Shengli further agrees that all Shengli personnel working on Technical's
premises shall follow Technical's safety and ISO rules and Technical's policies
and regulations.
19. No
amendment or modification of this JVA, or any additional terms and conditions,
shall be valid unless evidenced in writing and signed by duly authorized
representatives of both Parties and approved by the Board of Directors of the
Company.
20. This JVA
shall not be assigned by any Party without the express written consent of the
other Party, which consent shall not be unreasonably withheld. This provision
shall not apply in the event a Party changes its name or as part of the sale of
the Party's business.
21. The
Parties agree that each has had an opportunity to review this JVA and to seek
advice of counsel, that both parties have participated in the drafting of this
JVA, and that this JVA shall not be construed against one party or the other as
the draft of the JVA.
22. Each of
the persons executing this JVA represents and warrants that they have full right
and authority to execute this instrument on behalf of the Parties whom they
purport to represent, and to legally such party to the fulfillment of all
provisions hereof.
23. In the
event any provision or any portion of any provision of this JVA is inconsistent
with or contrary to applicable law, rule or regulation, said provision shall be
deemed to be amended to partially or complete modify such provision to the
extent necessary to make it comply with said law, rule or regulation, and this
JVA, so modified, shall remain in full force and affect.
24. In the
event of any dispute between the parties, the Parties agree that if said dispute
cannot be resolved by negotiations within fifteen (15) days of notice given by
one party to the other of the intent to arbitrate said dispute, the Parties
shall resort to arbitration in Lafayette, Louisiana. Arbitration shall be
conducted in accordance with the rules of the American Arbitration Association.
If the parties can agree upon a single arbitrator, the arbitration shall be held
before one arbitrator. If the parties cannot agree upon a single arbitrator,
arbitration shall be held before three (3) arbitrators, one to be selected by
Shengli, one to be selected by Technical, and a third to be selected by the two
arbitrators which have been chosen by the respective parties. The Parties agree
that they shall endeavor to select arbitrators and complete arbitration within
forty-five (45) days after the first notice of intent to arbitrate. The decision
of the arbitrator(s) shall be binding on both parties, and shall not be subject
to any appeal or review except for the limited reasons as set forth by
applicable Louisiana law.
25. This JVA
shall be governed by the laws of the State of Louisiana. The Parties agree that
the proper venue for any dispute between them to be settled in a court of law
shall be the 15th Judicial District Court in and for the Parish of Lafayette,
Louisiana, and the Parties agree to submit to the jurisdiction of said
court.
26. Any and
all notices required or permitted to be given under this JVA shall be considered
to be properly given when received by the party to be notified; provided,
however, the notices shall be deemed constructively received three (3) days
after being deposited in the United States Mail, postage prepaid, to the
following addresses:
Technical:
Technical
Industries, Inc. Attn:Xxxxxx X. Xxxxx P. 0. Xxx 00000
Xxxxxxxxx,
XX 00000
With Copy
to: Xxxxxx X. xxXxxxxx
Perrin,
Landry, deLaunay, Xxxxxx & Xxxxxxx P. 0. Xxx 00000
Xxxxxxxxx,
XX 00000
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Shengli:
Shengli
Oilfield Highland Petroleum Equipment Co., Ltd. Attn: Xxxx Xxxxxxxx
000
Xxxxxx Xxxx, Xxxxxxxx Xxxx
Xxxxxxxx
Xxxxxxxx, P.R. China P.C. 257091
Shengli
Oilfield Highland Petroleum Equipment (USA)
Attn:
Xxxxxxx Xxxx
7520
Hornwood 1101
Xxxxxxx,
XX 00000
With Copy
to:
THUS DONE AND SIGNED in
Lafayette, Louisiana by the Parties hereto after due reading of the whole.
WITNESSES:
| TECHNICAL INDUSTRIES, INC. | ||
| Printed Name | BY: | |
| XXXXXX X. XXXXX | ||
|
Printed
Name
|
| SHENGLI OILFIELD HIGHLAND PETROLEUM EQUIPMENT (USA) | ||
| Printed Name | BY: | |
| XXXXXXX XXXX | ||
|
Printed
Name
|
| SHENGLI OILFIELD HIGHLAND PETROLEUM EQUIPMENT CO., LTD. | ||
| Printed Name | BY: | |
| XXXX XXXXXXXX | ||
|
Printed
Name
|
