2.3 The production capacity in the first 12 months after the joint venture company put into operation is_________. In the second 12 months when the component parts are produced by the joint venture company itself, the production capacity is_________. With the development of production and successful operation, the variety of product may be increased to_________kinds.
Article 3 REGISTERED CAPITAL
3.1 The registered capital of the joint venture company is RMB
Yuan (equivalent to US $_________), which will be contributed by Party A and Party B equally.
Party As contribution:
Cash:
Land-use right:
Premises (to be evaluated by joint group):
Machines and equipment:
Others:
Total (accounting for 50% of the registered capital):
Party Bs contribution:
Cash (to be converted from US dollars according to the exchange rate in effect on the data this Contract becomes effective):
Technology (including technical data, know-how and trademark, to be evaluated by joint group):
Component parts supplied:
In the first 12 months:
Total (accounting for 50% of the registered capital):
3.2 The total investment shall be fully made within 12 calendar months commencing from the date on which the business license is issued to and obtained by the joint venture company. To facilitate construction of the factory premises, an initial investment is to be made in cash by Party A and Party B each amounting to RMB_____Yuan, which shall be paid within one month after the incorporation of the joint venture company (i.e. after the business license is issued and obtained). The balance of the investment, including the evaluation of property and the right to the use of land, etc. shall be fulfilled within the aforementioned 12 calendar months.
3.3 In case any party to the joint venture intends to assign all or part of its investment subscribed to a third party, consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authorities is required. When one party to the joint venture assigns all or part of its investment, the other party shall have the preemptive right to purchase.
Article 4 BOARD OF DIRECTORS
4.1 The date of registration of the joint venture company shall be the date of the establishment of the board of directors of the joint venture company.
4.2 The board of directors is composed of six directors, of which three shall be appointed by Party A, three by party B. The chairman of the board shall be appointed by Party A and its vice chairman by Party B. The term of office for the directors, chairman and vice chairman is four years. Their term of office may be renewed if continuously appointed by the relevant party.
4.3 The highest authority of the joint venture company shall be its board of directors. It shall decide all major issues concerning the joint venture company. Unanimous approval shall be required before any decisions are made on major issues. As for other matters, approval by majority or a simple majority shall be required.
4.4 The chairman of the board is the legal representative of the joint venture company. Should the chairman be unable to exercise his responsibilities for some reasons, he shall authorize the vice chairman or any other directors to represent the joint venture company temporarily.
4.5 The board of directors shall convene at least one meeting every year. The meeting shall be called and presided over by the chairman of the board. The chairman may convene an interim meeting based on a proposal made by one third of the total members of directors. Minutes of meeting shall be placed on file.
Article 5 BUSINESS MANAGEMENT OFFICE
5.1 The joint venture company shall establish a management office which shall be responsible for its daily management. It shall have a general manager, appointed by Party A, and a deputy general manager, appointed by Party B. Their terms of office are four years.
5.2 The responsibility of the general manager is to carry out the decisions of the board of directors and organize and conduct the routine work of the joint venture company. The deputy general manager shall assist the general manager in his work.
5.3 In case of graft or serious dereliction of duty on the part of the general manager and/or the deputy general manager, the board of directors shall have the power to dismiss them at any time.
Article 6 RESPONSIBILITIES OF PARTIES
Responsibilities of Party A:
6.1 To apply for and obtain the business license, to make tax registration and obtain all possible tax reductions and exemptions according to the laws of the Peoples Republic of China;
6.2 To organize construction of the factory premises, to install machinery & equipment, to settle the fundamental facilities, such as water, electricity, communication and transportation.
6.3 To obtain necessary entry visas for foreign staff and workers and provide convenience for their traveling on business in China;
6.4 To recruit Chinese staff, engineers, technicians, workers and translators;
6.5 To apply to the Bank of China or any other banks approved by the State Administration of Exchange Control for the opening of foreign currency and RMB accounts;
Responsibilities of Party B:
6.6 To expedite shipment of machinery, equipment and component parts; to provide technology and send technical personnel for installing, testing and inspecting;
6.7 To train Chinese technical personnel and workers at Party Bs plants and/or other locations agreeable to both parties according to the training programs duly agreed upon;
6.8 To solve problems concerning technology, operation and management, which may arise in the course of production.
6.9 To collect appropriate scientific and technical information as well as economic and legal information that may be of use to the normal operation of the joint venture company.
