EXHIBIT 10.15
JOINT VENTURE AGREEMENT
JILIN LIANLI (CBR) BREWING COMPANY LTD.
JOINT VENTURE AGREEMENT
JILIN LIANLI (CBR) BREWING COMPANY LTD.
CHAPTER 1 : GENERAL
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Clause 1 Whereas in accordance with the "Law of the People's Republic of
China for the Joint Ventures Enterprises with Chinese and Foreign
Investments", "Company Law of the People's Republic of China" and
other relevant legislations and regulations of China, Jilin
Province Juetai City Brewery, Jilin Province Xxxxxx Xxxxx Xxx Xxx
Ltd. and March International Group Limited agreed, on the basis of
equality and procuring mutual benefits, friendly co-operation and
mutual development, and signed this joint venture agreement to
establish a joint venture company designated as "Jilin Lianli
(CBR) Brewing Company Ltd." in Juetai City, Jilin Province of
China.
CHAPTER 2 : INTERPRETATION
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Clause 2 In this Agreement, unless the context otherwise requires, the
following terms and words have the interpretations as follow:
1. "Agreement" means this Joint Venture Agreement and all its
appendices.
2. "Joint Venture Company" means Jilin Lianli (CBR) Brewing
Company Ltd.
3. "Party A" means Jilin Province Juetai Brewery. "Party B"
means March International Group Limited. "Party C" means
Jilin Province Xxxxxx Xxxxx Xxx Xxx Ltd.
4. "China" means the People's Republic of China ("PRC").
5. "PRC Laws" means all the central, provincial and local laws,
legislations, regulations, rules, procedures, and judicial
interpretation documents (including transient and
provisional), but excludes all the internal documents which
are not disclosed to foreign investors.
6. "Board of Directors" means the Board of Directors of the
Joint Venture Company.
7. "Directors" means the members in the Board of Directors as
appointed by the Joint Venture Parties in accordance with
this Agreement.
8. "Articles of Association" means the articles of association
of the Joint Venture Company prepared in accordance with the
terms and conditions specified in this Agreement, which is
signed by all the Joint Venture Parties, and is approved by
the relevant governmental authorities.
9. "Third Party" means any legal person or legal entity in
China other than the Joint Venture Parties.
10. "Joint Venture Law" means Law of the People's Republic of
China for the Joint Ventures Enterprises with Chinese and
Foreign Investments, and other legislations and regulations
applicable to the Sino-foreign joint venture enterprises.
11. "Company Law" means Company Law of the People's Republic of
China.
12. "Joint Venture Period" means the period commencing from the
date of issuance of business license of the Joint Venture
Company and terminating on the date as specified in this
Agreement and Articles of Association in compliance with the
PRC laws.
13. "Yuan" means the unit of currency denominated in this
Agreement. Unless otherwise indicated, the currency means
the Renminbi ("RMB").
14. "Foreign Currency" or "Foreign Exchange" means the legal
currency, as stipulated by the laws of that foreign country,
which can be freely exchanged and transacted outside the
vicinity of China.
Clause 3 The attached appendices are an integral and non-segregated part of
this Agreement, and possess the same legal efficacy with this
Agreement.
Appendix I: List of assets and liabilities transferred from
Party A to the Joint Venture Company, and such
list should be signed by all the three Joint
Venture Parties.
Appendix II: Land use right certificate, red-lined diagram, and
the property deeds.
Appendix III: The certificates issued by the relevant
governmental authorities certifying the property
ownership documents contained in Appendix I and
Appendix II.
Appendix IV: The trademarks registration certificates of Party
B, and the relevant identification documents.
Appendix V: The documents in relation to the packing line
transferred from Party B to the Joint Venture
Company.
Appendix VI: List of assets transferred from Party C to the
Joint Venture Company, and such list should be
signed by all the three Joint Venture Parties.
CHAPTER 3 : PARTIES TO THE JOINT VENTURE
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Clause 4 The parties of this Agreement are :
Party A :
Name :Jilin Province Juetai Brewery
Legal Address :Juetai City, Jilin Province, China
Legal Representative :Mr. Sun Xxxxx Xxxx
Party B :
Name :March International Group Limited
Legal Address :23rd Floor, Hang Seng Causeway Bay Building, 00
Xxx Xx Xxxxxx, Xxxxxxxx Xxx, Xxxx Xxxx
Legal Representative :Xx. Xxxx Zi Shou
Party C :
Name :Jilin Province Xxxxxx Xxxxx Xxx Xxx Ltd.
Legal Address :No. 00 Xxxx Xxx Xxxxxx, Xxxxx Xxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxx
Legal Representative :Mr. Xx Xxx
Clause 5 In accordance with Chapter 25 of this Agreement, all Parties have
the rights and responsibilities to inform the other Parties in any
change of the legal address or the legal representative.
CHAPTER 4: ESTABLISHMENT OF THE JOINT VENTURE COMPANY
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Clause 6 All Parties have agreed to establish a Joint Venture Company in
China in accordance with the Joint Venture Law, Company Law and
other PRC Laws. The Joint Venture Company will be established as
an independent legal person under the laws of the PRC and will
subject to the jurisdiction and protection of the laws of China,
as well as the associated rights and benefits thereto.
Clause 7 Name of the Joint Venture Company :
Jilin Lianli (CBR) Brewing Company Ltd.
Legal address of the Joint Venture Company :
Juetai City, Jilin Province, China
Clause 8 All activities of the Joint Venture Company shall comply with the
legislations, regulations, orders and relevant rules prevailing in
the PRC.
Clause 9 The Joint Venture Company shall be a company with limited
liability. Parties to the Joint Venture Company shall assume
liability up to the limit of their respective capital
contributions. All Parties shall share the profit and loss and
undertake the risk according to the ratio of their capital
contribution towards the registered capital. The Joint Venture
Company shall use all its assets to undertake all the liabilities
of the Joint Venture Company.
Clause 10 Unless with written consent and agreement, all the liabilities,
responsibilities, and debts created in any forms, in any reasons,
and in any circumstances by individual Joint Venture Party shall
be borne and undertaken by such Party.
CHAPTER 5: OBJECTIVES, SCALE AND SCOPE OF BUSINESS
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Clause 11 The objectives of the Joint Venture Parties in forming the joint
venture business are :
Basing on the wishes to strengthen economic cooperation and
technology exchange, by adopting advanced but practical technique
and scientific management method, by expanding the synergy of
joint venture advantage, to improve quality of the products, to
establish the production facilities up to 30,000 metric tons
annual capacity, in order to actively explore the domestic and
international market, to continuously expand the scale of
operation, so as to increase the production capacity to 200,000
metric tons in five years, and to procure satisfactory economic
benefits for all Parties.
Clause 12 The scope of business of the Joint Venture Company is :
The production, sale, research and development and other
technology consultation activities in relation to beer, beverage
and other auxiliary products.
CHAPTER 6: TOTAL INVESTMENT, INVESTMENT RATIO AND REGISTERED CAPITAL
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Clause 13 The total investment of the Joint Venture Company is RMB
25,000,000. Party A shall contribute RMB 10,000,000, which amounts
to 40% of the total registered capital of the Joint Venture
Company. Party B shall contribute RMB 12,750,000, which amounts to
51% of the total registered capital of the Joint Venture Company.
Party C shall contribute RMB 2,250,000, which amounts to 9% of the
total registered capital of the Joint Venture Company.
Clause 14 The registered capital of the Joint Venture Company is RMB
25,000,000.
Clause 15 Party A shall contribute its existing net assets to the Joint
Venture Company as its capital contribution.
Clause 16 Party A hereby guarantees that, in pursuant to Clause 15 of this
Agreement, all the assets injected by Party A which represents its
capital contribution to the Joint Venture Company are legally
owned by Party A itself, and all these assets do not bear or
attach with any guarantees, charges or collateral of debts. In
case of any Party subsequently claims against the right or
ownership on those assets injected by Party A to the Joint Venture
Company, all such responsibilities shall be borne by Party A. The
values of the relevant assets will be deducted from the total
capital contribution by Party A. Party A shall then deduce other
means to pay up its capital contribution to the Joint Venture
Company.
Clause 17 Party B shall use its US "CBR" brandname (Chinese name :
"Lianli"), one set of bottle packing line for beer with the annual
capacity of not less than 30,000 metric tons, and the relevant
brewing technology, craftsmanship, formula, and yeast as its
capital contribution to the Joint Venture Company. The value of
the aforesaid assets is valued at RMB 12,750,000.
Clause 18 Party C shall inject the assets and the distribution networks of
its Shengyang sales office, Cheungchun sales office, Jilin sales
office and Haribun sales office into the Joint Venture Company.
The value of the aforesaid assets is valued at RMB 2,250,000.
Clause 19 Other capital required by the Joint Venture Company besides the
registered capital shall be resolved by the Joint Venture Company
through loan financing.
Clause 20 The assets injected by all the Joint Venture Parties shall be
completed within 90 days after the effective date of this
Agreement.
Clause 21 The registered capital of the Joint Venture Company cannot be
reduced at any time during the Joint Venture Period.
Clause 22 All Parties cannot withdraw their contributed capitals at any time
during the Joint Venture Period.
Clause 23 If the registered capital is increased during the Joint Venture
Period, it shall be approved and adopted by the Board of Directors
and all relevant registration procedures shall be completed.
CHAPTER 7: TRANSFERENCE OF EQUITY AND ASSETS OF THE JOINT VENTURE COMPANY,
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CHARGES, GUARANTEES, LENDING AND BORROWING FROM OUTSIDE PARTIES,
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INVESTMENTS AND LOANS
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Clause 24 After the establishment of the Joint Venture Company, if any Party
intents to transfer her portion of capital contributions or
equity, notwithstanding partially or entirely, such Party shall
report in written form to the Board of Directors as well as
communicate to the other Parties. Under the same conditions, the
other Parties have the preemptive right in acquiring such share or
equity interest. Unless all the Parties to the Joint Venture
Company forfeit the rights of acquisitions, the solicitor can
transfer her equity interest to other third parties.
After the counter-parties received the written notice, they must
reply to the soliciting party within 30 days explicitly stating
that whether they will acquire the equity interest. If no reply
was received within 30 days, it is assumed that the
counter-parties will not acquire the relevant equity interest.
All the activities in connection with the transference of equity
and assets of the Joint Venture Company, executing charges against
the assets of the Joint Venture Company, making guarantees in the
name of the Joint Venture Company, lending and borrowing from
outside parties, making investments and obtaining loans, shall be
agreed and approved by the Board of Directors. If the
representatives from any Parties executing the aforesaid
activities without the authorization from the Board of Directors,
the ultimate liability and responsibility shall be borne by that
Party.
CHAPTER 8: RESPONSIBILITIES OF THE PARTIES TO THE JOINT VENTURE
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Clause 25 All Joint Venture Parties shall accomplish their respective
responsibilities as follows:
Responsibilities of Party A:
1. To be responsible for obtaining approvals, permits, business
registrations, business licenses for establishing and
operating the Joint Venture Company from relevant
governmental authorities in China. The related expenses will
be paid by the Joint Venture Company.
2. To be responsible for negotiating with the relevant
governmental authorities in order to enable the Joint
Venture Company obtaining all the privileges as granted by
laws.
Responsibilities of Party B:
1. To assist the Joint Venture Company in the import of raw
materials, equipment, office utilities, transportation
facilities and communication devices.
2. To assist the Joint Venture Company in promoting sale and
building up sale network of its products overseas.
3. To assist the Joint Venture Company in recruiting
managerial, operational, technical and other functional
personnel from overseas.
4. To assist the Joint Venture Company in dealing with
financing activities oversea for future development.
5. To be responsible for other matters entrusted by the Joint
Venture Company.
Responsibilities of Party C:
To assist the Joint Venture Company in relation to all the
marketing and distribution affairs, and to assist both Parties A
and B to fulfill their responsibilities.
CHAPTER 9: SALE AND DISTRIBUTION OF PRODUCTS
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Clause 26 The products produced by the Joint Venture Company are mainly sold
in the China market, and progressively develop and sell to the
oversea market.
Clause 27 The trademark used by the Joint Venture Company is mainly the
"Lianli CBR" brandname. Basing on the prevailing market
conditions, the Joint Venture Company can also use other
trademarks under sublicensing arrangements.
Clause 28 The Joint Venture Company can explore other international famous
brandnames and trademarks, and employ sophisticated technologies
in order to enhance its competitive position and profitability.
CHAPTER 10: BOARD OF DIRECTORS
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Clause 29 The date of registration of the Joint Venture Company is the same
as the date of the setting up of the Board of Directors.
Clause 30 The Board of Directors is composed of five directors. Two of them
are appointed by Party A and three of them are appointed by Party
B. The chairman of the Board is appointed by Party B, and the
vice-chairman is appointed by Party A. The tenure of office of the
directors, chairman and vice-chairman is four years. The period of
the tenure of office can be extended by the appointing Party. Any
vacancy in the Board of Directors will be filled and appointed by
the designated Party. Both Parties have the right to appoint and
change their respective directors. A written notice for any
appointments or changes in directors shall be delivered 14 days in
advance to the Board of Directors.
Clause 31 The chairman who is unable to attend a meeting has to appoint an
alternative or substitute director in writing to hold the meeting.
In case of not having a written letter of entrustment, it is
assumed that the vice-chairman will be entrusted to hold the
meeting. The resolutions passed by the Board of Directors meeting
which fall within the agendas previously circulated will become
effective after signed by the chairman.
Clause 32 The chairman has to send agendas to all the directors 15 days
before the meeting in order to inform them about the topics
concerned and also the date and place where the meeting will be
held.
Clause 33 The quorum of a meeting of the Board of Directors shall be
two-thirds of the number of directors. If there are less than
two-thirds of the number of directors attend the meeting after
half an hour of the meeting commenced at the predetermined place,
then the chairman shall issue another notice to all directors in
order to inform them that the meeting will be held again after 5
days. During the second call of a meeting, if there are still less
than two-thirds of the number of directors attend the meeting,
then the meeting can commence with more than one-half of the
number of directors attend.
Clause 34 A director who is unable to attend a meeting has to appoint an
alternative or substitute director in writing. A substitute can
represent one or more than one directors to attend the meeting.
However, a director who is unable to attend a meeting and does not
appoint any person to represent him will be regarded as giving up
the vote.
Clause 35 The Board of Directors is the highest authority of the Joint
Venture Company. The following decisions shall be passed with the
unanimous agreement of all directors on the Board :
1. Amendment of the articles of association of the Joint
Venture Company.
2. Termination and dissolution of the Joint Venture Company.
3. Increase in, or transfer of, the registered capital or
equity of the Joint Venture Company.
4. Acquisition of subsidiary or amalgamation with other
economic organizations by the Joint Venture Company.
The following decisions shall be passed with the agreement of
more than one-half of the number of votes by the directors on the
Board :
1. The appointments of general manager, deputy general manager,
financial controller and other key positions.
2. The approvals of the financial budget, financial statements
and distribution of profit.
3. The approvals of important policies and system procedures of
the Joint Venture Company.
4. All other affairs that need to be decided by the Board of
Directors, except for item 1 of this Clause.
Clause 36 The chairman is stipulated by laws to be the representative of the
Joint Venture Company. If the chairman cannot fulfill his duties
due to acceptable reasons, he can temporarily entrust the
vice-chairman or other directors to represent him.
Clause 37 The Board of Directors shall hold meeting at least once a year.
The Board of Directors meeting shall be called by the chairman,
and the place of meeting in principle shall be the registered
address of the Joint Venture Company. When it is proposed by more
than one-third of the number of directors on the Board, the
chairman can call for a temporary meeting of the Board of
Directors. Minutes of the Board of Directors meetings shall be
prepared and kept safely.
CHAPTER 11: MANAGEMENT
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Clause 38 The Joint Venture Company has to establish a management team to
handle the daily affairs of the Joint Venture Company. The
management association consists of a general manager who is
appointed by the Board of Directors; two deputy general managers
who are nominated by the general manager and appointed by the
Board of Directors; and one financial controller who is appointed
by the Board of Directors. The tenure of the offices of general
manager, deputy general managers and financial controller is four
years, and can be re-elected.
Clause 39 The duty of the general manager is to execute the decisions of the
Board of Directors, and to lead the daily management activities of
the Joint Venture Company. The duty of the deputy general managers
is to assist the general manager. The duty of the financial
controller is to organize and monitor the financial operations of
the Joint Venture Company. The general manager and financial
controller are directly accountable to the Board of Directors. The
management association can employ several department managers, who
are responsible for the operations of their respective functional
departments, and accomplish the assignments from general manager
and deputy general managers. The department managers are
accountable to the general manager and deputy general managers.
Clause 40 If the general manager, deputy general managers and financial
controller have abused their positions for personal interest,
corruption, or committed severe mistakes due to negligent, they
will be laid off by the consent of the Board of Directors. The
general manager can terminate the employment of other department
managers with the approval of the Board of Directors. The Board of
Directors can also dismiss any department manager as necessary.
CHAPTER 12 : PURCHASE OF REQUIRED MATERIALS AND EQUIPMENT
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Clause 41 All the raw materials, equipment, fuels and energy, auxiliary
components, transportation facilities and office utilities needed
by the Joint Venture Company have to be preferentially procured in
China under the same conditions offered by different suppliers.
Clause 42 If the Joint Venture Company desires to purchase equipment
oversea, the Board of Directors shall discuss and agree on the
models, prices, terms and specifications of such equipment.
CHAPTER 13: FOREIGN EXCHANGE CONTROL
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Clause 43 The Joint Venture Company has to open bank accounts for RMB and
foreign currencies with Bank of China or any other banks which
have been approved by the State Exchange Administration Bureau to
transact foreign currencies. The Board of Directors of the Joint
Venture Company has to decide on the cheques issuing system. If
necessary, the Joint Venture Company can also open a foreign
exchange account overseas after obtaining approval from the Board
of Directors and permission from the State Exchange Administration
Bureau.
Clause 44 All the foreign exchange received by the Joint Venture Company has
to be deposited in the foreign exchange account and those payments
in foreign exchange shall also be paid from this account.
Clause 45 The foreign exchange has to be used by the Joint Venture Company
in according with the following sequences or as decided by the
Board of Directors:
1. Payments for the compensation of the employment of foreign
employees.
2. Principle and interest of foreign currency loan and any
other related debts that must also be paid by foreign
exchange.
3. Payments for the materials, facilities, spare parts and
services that are needed by the Joint Venture Company and
are required to be settled by foreign exchange.
4. Payments for some administrative expenses that are related
to business of the Joint Venture Company and are required to
be settled with foreign currencies.
5. To pay for the dividends distributable to Party B according
to her investment ratio.
Clause 46 The profit appropriations by the Joint Venture Company shall be
decided by the Board of Directors, and distribute to all Parties
in accordance with their respective capital contribution ratios.
Profits distributable to Party B shall have priority in utilizing
the foreign exchange for payments. If the foreign exchange is
insufficient, the remaining portion can be paid by RMB. The Joint
Venture Company shall assist Party B to convert and remit the
dividends denominated in RMB to foreign currency through the
exchange SWAP centers or banks.
CHAPTER 14: LABOR ADMINISTRATION
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Clause 47 The recruitment, hiring, dismissal, wages, labor insurance,
employees welfare, bonuses and punishments of employees of the
Joint Venture Company shall be implemented in accordance with the
Company Law, Sino-foreign Joint Venture Enterprises Employment Law
of China, Employment Law and other employment regulations
prevailing in Jilin Province. The employment policy of the Joint
Venture Company shall be determined and enacted by the Board of
Directors. The Joint Venture Company will conclude the employment
contracts with individual employees and should file the contracts
with the local labor department. The employees currently hired by
Party A will be preferentially employed by the Joint Venture
Company under the same terms and conditions. Employee not
recruited by the Joint Venture Company will be handled by the
local government and Party A, the Joint Venture Company will not
assume any responsibilities thereon.
Clause 48 Any labor disputes occur with the Joint Venture Company shall
firstly settle through bilateral negotiations. If the problems
remain to be unresolved after negotiation, either party can seek
arbitration from local or provincial labor department. If any
party is not satisfied with the arbitration results, legal
proceedings can be instituted through local court.
Clause 49 The salaries, social welfare, benefits and travelling
reimbursement standards of the senior managerial personnel
recommended by all the Joint Venture Parties shall be discussed
and ratified by the Board of Directors.
CHAPTER 15: TAXATION, FINANCIAL AND AUDITS
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Clause 50 The Joint Venture Company must pay those taxes which are
applicable to its businesses in accordance with the relevant laws
of the PRC. The Joint Venture Company can benefit from the
preferential tax treatments and concessions applicable to all the
Sino-foreign joint venture enterprises. In accordance with the
requirements of the relevant laws in the PRC, the Joint Venture
Company shall prepare and submit its financial statements and tax
information to the relevant government departments, local
financial administration bureau and local tax bureau.
Clause 51 All the staff and workers of the Joint Venture Company must pay
personal income taxes in accordance with the Personal Income Tax
Laws of the PRC.
Clause 52 In accordance with the Joint Venture Law, the Joint Venture
Company shall appropriate reserve fund, staff welfare and bonus
fund, and enterprise development fund. With reference to the
operating results of the Joint Venture Company, the Board of
Directors will decide the proportions of these funds to be
appropriated in each year.
Clause 53 The financial year of the Joint Venture Company is same as the
calendar year which is commencing on 1st January and ending on
31st December. All the vouchers, supporting records, accounting
ledgers and financial statements shall be documented in Chinese.
The Joint Venture Company shall also prepare another set of
financial statements which comply with the International
Accounting Standards in English. The first financial year of the
Joint Venture Company begins from the date of business license to
31st December of the same year. The last financial year of the
Joint Venture Company will be from 1st January to the last day of
business.
Clause 54 The financial statements of the Joint Venture Company shall be
prepared in accordance with both PRC Accounting Standards and
International Accounting Standards.
Clause 55 At the end of each fiscal year, the Joint Venture Company shall
employ China Certified Public Accountants to audit the accounts
and financial statements, and the auditors' report shall be
submitted to the Board of Directors within three months after the
year end date.
Any Parties have the right to appoint independent auditors in
China or overseas to audit the financial statements of the Joint
Venture Company. The Joint Venture Company shall assist the audit
in a cooperative manner and submit all the necessary information,
and shall pay for the audit fees accordingly.
CHAPTER 16: PROFIT APPROPRIATIONS
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Clause 56 After paying all the profit taxes, the Joint Venture Company can
distribute its profit according to the following sequence :
1. Covering all the losses of assets and properties arising
from confiscation. Settling all the tax detention monies and
penalties.
2. Offsetting any losses incurred in prior years.
3. Appropriation of statutory reserve fund.
4. Appropriation of staff welfare and bonus fund.
5. Appropriation of enterprise development fund.
6. Distribution to the Parties to the Joint Venture Company in
accordance with their respective capital contribution
ratios.
CHAPTER 17 : JOINT VENTURE PERIOD, TERMINATION AND DISSOLUTION
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Clause 57 The duration of the Joint Venture Company is 30 years.
The date of establishment of the Joint Venture Company is the
same as the date of issuance of the business license.
The Joint Venture Period can be extended if the Board of
Directors has unanimously consented and filed application to the
relevant governmental authorities at least six months before the
expiry date.
Clause 58 The Joint Venture Company will be dissolved under the following
circumstances :
1. The Joint Venture Period expired.
2. The business of the Joint Venture Company cannot continue
due to substantial loss.
3. The business cannot be operated due to one of the Parties
cannot fulfill the responsibilities as specified in this
Agreement and the Articles of Association.
4. The business of the Joint Venture Company cannot be operated
due to serious natural disasters, wars and other force
majeure.
5. In accordance with relevant laws and relevant clauses
specified in this Agreement, one of the Parties has already
acquired all the equity owned by another Parties.
6. If any policies, rules or regulations formulated by any
local government department have caused serious unfavorable
effects to the Joint Venture Company or either Parties, and
all Parties are unable to complete the required changes and
adjustments in accordance with the original terms and
conditions of the Agreement.
7. During the Joint Venture Period, if any Party to the Joint
Venture Company has been discovered in having the following
behaviors, other Parties can obtain written approvals from
relevant governmental authorities to terminate this
Agreement.
(a) If any Party violates the regulations of this Agreement
to transfer her investment in the Joint Venture
Company, either partially or entirely.
(b) In case of any Party involves in legal dispute with
third party, and the dispute is having severe effects
on the business operations of the Joint Venture
Company, the Joint Venture Company or other Parties can
request in writing to terminate this Agreement if the
dispute remains to be unresolved for more than six
months.
(c) In case of any Party seriously violates this Agreement,
the Joint Venture Company or other Parties can request
in writing for remedies. If the Party who has breached
this Agreement fails to correct the situation or
provide compensations to the suffering Parties, this
Agreement can be terminated after three months of the
written request.
Under the above circumstances, except for items 1 and 7, the
application for dissolution shall be initiated and approved by the
Board of Directors, and filed to the relevant governmental
authorities.
Clause 59 If the Joint Venture Company is dissolved due to those reasons
specified in Clause 58 above, all the assets of the Joint Venture
Company shall be estimated and valued according to guidelines set
up by the liquidation committee which is established according to
relevant rules and laws. During the assets counting and valuation,
the liquidation committee shall try his best to obtain the highest
price of the asset. If necessary, the liquidation committee shall
put the asset, either wholly or partly, for auction sale in China.
Any Party to the Joint Venture Company, either individually or
associated with other third party, can make a bid offer in the
auction sale. The proceeds from liquidation of assets will be used
to pay off the liabilities of the Joint Venture Company, including
liquidation expense, employees salaries, labor insurance, tax
liability, bank loans, debentures and other corporate debts. The
residual amount will be repaid to all Parties in accordance with
their respective capital contribution ratios.
CHAPTER 18: INSURANCE
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Clause 60 The Joint Venture Company can purchase different kinds of
insurance cover from local and overseas insurance companies. The
Board of Directors shall discuss and determine the types of
insurance to be obtained, sum insured and the period covered by
such insurance policies.
CHAPTER 19 : AMENDMENT, RECTIFICATION AND TERMINATION OF THE AGREEMENT
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Clause 61 In respect of any amendments to this Agreement or its
supplementary agreements, all Party A, Party B and Party C shall
sign on the written agreement. All the amendments will be
validated only with the approvals from relevant governmental
authorities.
If the terms of this Agreement cannot be carried out due to force
majeure or if the business of the Joint Venture Company cannot be
continued due to occurrence of substantial loss, the Board of
Directors can unanimously resolve to cease the operations of the
Joint Venture Company and terminate this Agreement. Such
termination shall obtain approvals from relevant governmental
authorities.
Clause 62 If any Party violates the regulations specified in this Agreement
or the Articles of Association, or any Party does not fulfill the
responsibilities as stipulated in this Agreement or the Articles
of Association of the Joint Venture Company, and consequentially
caused the Joint Venture Company unable to attain its business
objective, such Party is regarded as breaching of the Agreement.
Besides seeking for remedies and compensations, the other Parties
can obtain approvals from the relevant governmental authorities to
terminate this Agreement. If all the Joint Venture Parties
ultimately consent to continue the business, the Party who has
breached the Agreement shall provide remedies and compensations to
other Parties for their economic losses.
CHAPTER 20: RESPONSIBILITIES OF VIOLATION OF AGREEMENT
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Clause 63 All the three Joint Venture Parties must contribute their portions
of capital in accordance with the time schedules as specified in
this Agreement. Any Party who fails to contribute her portion of
capital will constitute a breach of this Agreement.
If any Party violates the Agreement and consequentially causes
this Agreement cannot be executed, that Party needs to compensate
for the loss of the other Parties. If all Parties violate the
Agreement, each Party has the responsibility to bear the loss
caused from the violation.
CHAPTER 21 : FORCE MAJEURE
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Clause 64 When one Party to the Joint Venture Company encounters earthquake,
typhoon, flooding, war, embargo, diplomatic cessation, chaos,
nationalization, or other unpredictable and unavoidable events,
and consequentially cause the Party unable to execute and
accomplish, that Party must inform the other Parties immediately
through telex. Within 15 days, such Party must also furnish the
evidence and information about the details of the force majeure to
other Parties, together with the reasons for unable to entirely or
partially fulfill or accomplish the Agreement or request for the
extension of period to fulfill the obligation under this
Agreement. All Parties will then discuss and negotiate the
magnitude of such unpreventable events, and determine whether the
Agreement shall be invalidated in part or as a whole, or to agree
an extension of this Agreement. All Parties and the Joint Venture
Company cannot claim for compensations for any losses caused by
force majeure.
CHAPTER 22: APPLICABLE LEGISLATION
---------------------------------------
Clause 65 The conclusion, efficacy, interpretation, execution and resolution
for dispute of this Agreement is governed by the PRC laws.
Clause 66 During the Joint Venture Period, when the prevailing laws and
regulations at the place where any of the Parties resides have
been amended or new laws and regulations have been enacted, and
such alteration will cause a substantial adverse effect on the
economic benefit of any Parties, all Parties shall immediate
discuss and negotiate with each other in order to decide on any
necessary adjustment or amendment so as to minimize any potential
loss.
Clause 67 In accordance with Rule 40 of the PRC foreign-related economic
contract laws, if the existing laws and regulations in China have
been modified or new laws and regulations have been enacted, and
such alteration will cause a substantial or adverse effect, either
directly or indirectly, to the economic benefit of the Parties or
any one party, the Agreement should continue to be effectively
implemented under the original terms and laws, as far as it is
allowed by laws and not hurting any Parties' interest. If the laws
do not permit, all Parties must discuss together in order to
minimize the potential loss to the affected Parties through
amendments on the existing Agreement and Articles of Association.
CHAPTER 23: THE RESOLUTION OF DISPUTES
---------------------------------------------
Clause 68 When there is a dispute arising from the execution of this
Agreement or related to this Agreement, all Parties should
communicate with other Parties to clarify and resolve the dispute
in a friendly manner. If all Parties fail to reach a resolution,
the dispute can be forwarded to the Beijing office of the China
International Economic & Trade Arbitration Committee and be
arbitrated in accordance with the committee's rules and
regulations. The judgements obtained from that arbitration
committee will be final and have restrictions to all Parties.
Clause 69 During the arbitration process, except for those parts involving
in the dispute, the rest of this Agreement is still valid and
executable.
CHAPTER 24: LANGUAGE
------------------------
Clause 70 This Agreement is written in Chinese with twelve original copies.
Each Party shall keep two copies. Other copies will be filed with
relevant governmental authorities.
Clause 71 This Agreement and its supplement must be approved by the
International Trade & Economic Department of the PRC or any
organization designed by that department, and will be effective
upon the date of approval.
Clause 72 When all Parties use telex or fax to circulate notices, and when
the contents of such notices involve the rights and
responsibilities of all Parties, these notices shall also be
served in written by mail. The correspondence addresses of all
Parties as specified in this Agreement are also the mailing
addresses of these Parties. The correspondence addresses or legal
addresses of all Parties, or notices of changes in correspondence
addresses or legal addresses of all Parties will be regarded as
their mailing addresses.
Clause 73 When any clauses contained in this Agreement are judged by court
or other arbitration institutes to be illegal, other clauses
contained in this Agreement are still considered to be lawful. All
Parties and the Joint Venture Company must continue to execute
other clauses in this Agreement.
Clause 74 This Agreement was signed by the representatives from Party A,
Party B and Party C on 18th October, 1999 in Juetai City, Jilin
Province, China.
Party A : Jilin Province Juetai Brewery
Representative : Mr. Sun Xxxxx Xxxx /s/
Party B : March International Group Limited.
Representative : Mr. Xx Xxxx /s/
Party C : Jilin Province Xxxxxx Xxxxx Xxx Xxx Ltd.
Representative : Mr. Xx Xxx /s/
