A Joint Venture Contract 合资企业合同

A Joint Venture Contract
     合资企业合同
     (abridged)
     JOINT VENTURE CONTRACT
     between
     The AA CORPORATION
     and
     BB LIMITED
     for
     the Establishment of a Joint Venture Company
     known as
     CC CORPORATION LIMITED

     JOINT VENTURE CONTRACT is made between THE AA CORPORATION, a legal person incorporated and duly existing under the laws of the People's Republic of China (hereinafter called "Party A") on the one part; and BB LIMITED, a company incorporated and duly existing under the laws of South Korea (hereinafter called "Party B") on the other part.

WHEREAS:

     In pursuance of a Letter of Intent dated 23rd January 19.. and made between Party A and Party B (hereinafter collectively called the "Parties") in connection with their proposed cooperation in promoting and developing the foodstuffs industry in Guangdong Province and other areas in China, the Parties enter into this Contract under the principle of equality and mutual benefit and through negotiations of incorporate an equity joint venture to be known as CC CORPORATION LIMITED (hereinafter called the "Company") under the Law of the People's Republic of China on Joint Ventures Using Chinese and Foreign Investment (hereinafter called the "JV Law") and other laws and regulations promulgated by the People's Republic of China in order to promote the development of the foodstuff industry in China and to introduce advanced technical equipment and scientific management in furtherance of such objectives.

Clause 1. Names, Country / District of Registration and Legal Addresses of the Parties.
     _______________

(Omitted)

Clause 2. Names, Professions and Nationalities of the Legal Representatives of the Parties.
     _______________

(Omitted)

Clause 3. Name, Legal Address, Purpose and Scope of Business of the Company.
     _______________

3.1 Name of the company in Chinese:

3.2 Name of the company in English: CC CORPORATION LIMITED.

3.3 Legal address of the company: No…, xx Road,
     Shenzhen, Guangdong
     People's Republic of China.

3.4 The Company is a limited liability company and a legal person under the laws of the People's Republic of China. All the activities of the Company shall comply with the laws, decrees and regulations promulgated by the People's Republic of China. All the lawful rights and interests of the Company are subject to the jurisdiction and protection of the laws of the People's Republic of China.

3.5 The principal purpose for which the Company is established is to maximize the rich food resources and materials in China for the development of the foodstuffs industry and to utilize the advanced technological and managerial experience of Party B in this area and to introduce advanced technology and equipment. Having South Korea and the international markets as targets, the products are primarily for export sales. In order to raise the competitive quality of foodstuffs of Guangdong Province in the international market, the sales network of Party B in South Korea and everywhere in the world should be fully utilized with the aim of achieving a successful fulfilment of such objectives and receiving satisfactory economic profits to the mutual benefit of the Parties.

3.6 The scope of business of the Company shall initially include, but not limited to, the following:

     a. Maximizing the rich food resources and materials in China and the advanced industrial and commercial management expertise of Party B to improve the technology in connection with the raising of the quality and quantity of the products of foodstuffs industry, and introducing first grade materials and species from overseas.

     b. Bringing in from South Korea and foreign countries through the Company advanced food processing techniques and equipment, and processing of meats, vegetables, fruits, sauces, seasonings, additives drinks, icecream, etc. The products shall be marketed in China and overseas and be supported by such business and operation facilities as packaging, cold-storage and transportation.

     c. Establishing factory premises for packaging and the manufacture of containers to supply to the Company and to market the same in China and overseas.

     d. With the approval of the department in charge of the Company establishing in South Korea and overseas sales centres and network for products.

     e. In accordance with the development of the Company and to facilitate its success in the competitive markets in China and overseas, establishing information, technical consultation and training centres in Guangdong Province to promote the development of the foodstuffs industry.

     f. Engaging in compensation trade or other similar commercial arrangements with other economic entities in Guangdong Province.

     g. Undertaking such other relevant lines of business within the foodstuffs industry, whether by operating independently or by means of investment in other joint ventures or economic entities, as in the opinion of the Board of Directors (as defined below) may consider incidental to or may be conveniently carried on in conjunction with any one or more of the above lines of business.

Clause 4. Registered Capital of the Company. Investment Contributed by the Parties. Proportion of Investment and Form of Investment of the Parties.
     _______________

4.1 The registered capital of the Company shall be Renminbi … yuan (RMB ￥×××, ×××, ×××).

4.2 Party A shall contribute 30% of the registered capital of the Company in the sum of Renminbi … yuan (RMB ￥×××,×××,×××), and Party B shall contribute 70% of the registered capital of the company in the sum of Renminbi … yuan (RMB ￥×××,×××,×××).
     The investment to be contributed by Party B shall be in U.S. $ calculated in Renminbi at the median of the selling and buying exchange rates announced by the State General Administration of Exchange Control on the date of contribution.

Clause 5. Profit Distribution and Loss Sharing.
     _______________

5.1 The Parties shall distribute profits and share losses in proportion to their respective percentage of investment. The Parties shall only be liable for the indebtedness of the Company to the extent of their contributions to its registered capital.

5.2 After the payment of income tax of the Company in accordance with Income Tax Law of the People's Republic of China Concerning Joint Ventures with Chinese and Foreign Investment and other relevant laws and regulations promulgated by the People's Republic of China, the annual profits of the Company shall be distributed in accordance with the following principles:

     a. the prior appropriation for reserve fund, expansion fund for the Company and bonus and welfare fund for its staff and workers in a proportion to be decided by the Board of Directors.
     b. The amount of bonus and welfare fund in any one calendar year shall not exceed 5% of the amount of post-tax profit of the Company.

Clause 6. Obligations of the Parties.
     _______________

6.1 Party A and Party B shall use their best efforts to promote the business activities of the Company.

6.2 Without prejudice to the generality of Clause 6.1 the Parties agree to be primarily responsible for the following matters;

(Party A:)

     a. registration of the Company and application for business licence;
     b. application for preferential tax treatments of the Company conferred by laws in the form of reduction or exemption;
     c. customs declaration and import licence in respect or imported appliances, equipment and apparatus for daily and office use as well as export licence in respect of exports;
     d. application for related office of the Company;
     e. recommendation for employment of Chinese staff who shall be capable of performing their duties satisfactorily;
     f. application for entry and exit permits on behalf of the staff appointed by Party B;
     g. supply of information and data related to foods and market trends in China;
     h. establishing and maintaining regular contacts with other organizations with the foodstuffs industry in the People's Republic of China.
     i. promoting and assisting in sales of products of the Company within the People's Republic of China, and
     j. other matters delegated by the Company.

(Party B:)

     a. marketing of the products of the Company in South Korea and international markets;
     b. supply of information and data related to food and food markets in South Korea and other areas in the whole world;
     c. supply of information and data related to modern food technologies and markets available in the international markets;
     d. completion of all formalities required for registration of related business in South Korea and foreign countries when necessary;
     e. recommendation of foreign food experts or scholars who shall give courses about food production technology to the enterprises of the Company and also to other food enterprises in Guangdong Province;
     f. operation of the business of the Company, training of the key staff members of the Company and introduction of sound managerial experience;
     g. establishing and maintaining regular contacts with other organizations within the foodstuffs industry overseas; and
     h. other matters delegated by the Company.

Clause 7. Composition, Responsibilities and Authority of the Board of Directors.
     _______________

7.1 Upon the incorporation of the Company the Parties shall set up a board of directores ("Board of Directors"). The Board of Directors shall consist of eight (8) members, three (3) from Party A and five (5) from Party B. The chairman of the Board of Directors shall be appointed by Party A and the vicechairman shall be appointed by Party B. The term of office for the directors shall be four years and may be renewed with the consent of the Parties. If a director is to be replaced for any reason, the party which has appointed him shall arrange for the replacement and report to the examination and approval authority.

7.2 The Board of Directors shall be the highest authority of the Company. The members of the Board of Directors appointed by the parties shall discuss and decide all the important matters of the Company on the basis of equality and mutual benefit.

Clause 8. Responsibilities, Authority and Method of Appointment of General Manager and Deputy General Manager.
     _______________

8.1 The Company shall establish a management office which shall be responsible for the daily management of the Company. The management office shall have a general manager and a deputy manager. The general manager shall implement the management and operation policies and the decisions of the Board of Directors. During the period of recess of the Board of Directors, the general manager shall be responsible for the daily operation and management of the Company. Within the scope of authority vested in him by the Board of Directors, the general manager shall represent the Company in relation to third parties, have the right to appoint and dismiss his subordinates and exercise such other responsibilities and authority as entrusted by the Board of Directors. The deputy general manager shall assist the general manager in his work. The general manager shall consult the deputy general manager in handling important matters.

8.2 The general manager and the deputy general manager shall be appointed by the Board of Directors.

Clause 9. Right to the Use of Site.
     _______________

9.1 The Company shall apply to the department in charge of land for the right to use the site required for its operation and sign site use contract in its own name.

Clause 10. Confidentiality Agreement.
     _______________

10.1 Party A and Party B undertake not without the prior consent in writing of the other party to disclose or permit the disclosure of any confidential information or documents concerning the business of the Company, which are obtained as a result of this Contract or the implementation hereof, to any person or economic organization not otherwise authorized to receive such information and documents.

10.2 Party A and Party B agree that the Company shall implement a system for the safe custody of the confidential information and documents referred to in sub-clause 10.1 above and that it shall use its best endeavours to take all reasonable steps to minimize the risk of disclosure of such information and documents by its staff, workers and others except insofar as such disclosure is expressly permitted by the Parties.

10.3 In the event that either Party A or Party B becomes aware of any infringement of the patent, trade mark, copyright, other intellectual property of the Company or any other such matter, the party first becoming aware of the matter shall inform the same to the Company with all the relevant information in its possession and the Parties shall consult together as to the action to be taken (if any).

10.4 The Company shall take such actions or steps as either Party A or Party B deems necessary and appropriate to protect its intellectual property rights.

Clause 11. Operation Plans.
     _______________

(Omitted)

Clause 12. Foreign Exchange Control.
     _______________

12.1 All matters concerning foreign exchange of the Company shall be handled according to the Provisional Regulations for Exchange Control of the People's Republic of China and the Rules for the Implementation of Exchange Control Regulations Relating to Enterprises with Overseas Chinese Capital, Enterprises with Foreign Capital and Chinese-Foreign Joint Ventures and other relevant laws and regulations promulgated by the People's Republic of China.

12.2 With the business licence issued by the Guangdong Administrative Bureau for Industry and Commerce, the Company shall open a foreign exchange deposit account and a Renminbi deposit account with the Bank of China, Guangdong Branch or with any other bank approved by the State General Administration of Exchange Control.

12.3 All foreign exchange receipts of the Company shall be deposited in the foreign exchange deposit account and all foreign exchange payment shall be made from the foreign exchange deposit account.

12.4 The Company shall keep a balance between its foreign exchange receipts and payments. Any imbalance of foreign exchange receipts and payments of the Company shall be resolved by Party A with its foreign exchange receipts.

12.5 In order to maintain a balance between its foreign exchange receipts and payment, the Company shall be permitted to purchase finished products or raw materials China with its Renminbi profits and export such raw materials or their finished products or final commodities after treatment in the production link or processing overseas for foreign exchange.

12.6 Party B's share of Renminbi profits from the Company may be converted into foreign exchange at the official rate quoted by the State General Administration of Exchange Control and thereafter remitted abroad through the Bank of China according to the foreign exchange control regulations after the payment of all taxes due.

12.7 The Company shall obtain approval from the State General Administration of Exchange Control or its branch office to open a foreign exchange deposit account with a bank outside China or with one in South Korea, and report its foreign exchange receipts and payments and provide bank statements to the State General Administration of Exchange Control or its branch office.

12.8 The Company may apply to the Bank of China for foreign exchange loans and Renminbi loans according to its business requirements and following the Provisional Regulations for Providing Loans by the Bank of China to Chinese-Foreign Joint Ventures. The Company may also borrow foreign exchange as capital from banks outside China or from those in South Korea, provided that it shall file a report to the State General Administration of Exchange Control or its branch office.

12.9 Staff members of foreign nationality and those from South Korea employed by the Company may apply to the Bank of China for remitting all their wages and other legitimate earnings abroad after meeting their tax obligations and other financial requirements in the People's Republic of China.

Clause 13. Finance, Accounting and Tax.
     _______________

(Omitted)

Clause 14. Labour Management, Wages and Salaries, Welfare Benefits and Labour Insurance.
     _______________

(Omitted)

Clause 15. Insurance.
     _______________

(Omitted)

Clause 16. Term of Operation of the Company.
     _______________

     The term of operation of the Company shall be ten (10) years commencing from the date of issue of the business licence of the Company. Should the Parties wish to extend the term of operation, they shall authorise their respective representatives to sign an application for such extension one year prior to the expiration of the said term. The application shall be submitted to the examination and approval authority for approval six (6) months prior to the expiration of the said term. Upon approval of such extension, the Company shall go through the registration procedures to effect the necessary changes.

Clause 17. Liabilities Arising from Breach of Contract.
     _______________

17.1 Should either of the Parties fail to fulfil its obligations under this Contract, the defaulting party shall compensate the other party for all its economic losses resulting therefrom.

17.2 During the term of operation of the Company, neither Party A nor Party B shall be entitled to announce unilaterally the cancellation or termination of this Contract.

Clause 18. Methods and Procedures for Settling Disputes between the Parties.
     _______________

18.1 In the event of disputes arising from the interpretation of implementation of this Contract between the Parties, Party A and Party B shall use their best endeavours to settle such disputes through the Board of Directors by means of amicable consultation.

18.2 If the Board of the Directors cannot settle such disputes within ninety (90) days after receipt of the written request of either party to resolve the same, such dispute shall be submitted to the Foreign Economic and Trade Arbitration Commission of the China Council for the Promotion of International Trade for arbitration in accordance with its arbitration rules. The decision of such arbitration authority shall be final and binding on the Parties.

Clause 19. Text of Contract.
     _______________

19.1 This Contract is written in both the Chinese and English languages which shall have the same validity. The Parties shall each retain a copy of the Chinese version and copy of the English version of this Contract.

19.2 Any amendment or suppliment to this Contract shall be agreed upon by the Parties in writing and approved by the examination and approval authority before it becomes effective and such amendment or supplement shall be of the same validity as this Contract.

Clause 20. Validity of Contract.
     _______________

     This Contract shall come into force after it has been approved by the examination and approval authority of China.

Clause 21. Governing Law of Contract.
     _______________

     The formation, validity, interpretation and implementation of this Contract and the settlement of disputes arising therefrom shall be governed by the laws, decrees and regulations promulgated by the People's Republic of China.

     AA Corporation BB Limited
     Legal Representative: Legal Representative:
     (signed) (signed)
     _______________

     Dated this 20th day of May 19.. in Shenzhen

     Notes

1. legal person 法人
     法律用语，也叫 juridical person 或 artificial person，是自然人 (natural person) 的对称。

2. incorporate v. 组成为法定组织；（美）组成为有限公司
     incorporated company （美）股份有限公司
     美国常用过去分词 incorporated 的大写缩写 Inc. 来构成公司名称，如 Todd Stores Inc.
     incorporation n. 公司，社团；结合，合并
     to form a legal incorporation 组成一个法定社团

3. in pursuance of 依……，按……；履行，推行
     In pursuance of our promise, we are now sending you an offer by fax for sheep wool. 为了履行我们的诺言，我们现在传真向你方报盘绵羊毛。

4. letter of intent 意向书

5. Law of the People's Republic of China on Joint Venture Using Chinese and Foreign Investment 中华人民共和国中外合资经营企业法