Exhibit 1.01.
Equity Joint Venture Contract dated June 9, 2009 (translated from
the executed Chinese version)
Bio-bridge Science (HK) Co.,
Ltd
J R Scientific, Inc.
Beijing Boda Times Science and Trade
Co., Ltd
Beijing Zhongpu Huaxing
Biotechnology Co., Ltd
Huhhot Haibo Biologic Production
Co., Ltd
And
China Diamond Limited
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Equity Joint Venture
Contract
for the establishment and operation
of
Bio-Bridge JRS Biosciences (Beijing)
Co., Ltd
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TABLE OF CONTENTS
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Clause
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Page
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1.
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DEFINITIONS AND
INTERPRETATION
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1
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2.
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PARTIES TO THE
CONTRACT
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2
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3.
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ESTABLISHMENT
OF THE JOINT VENTURE COMPANY
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3
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4.
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OBJECTIVES AND
SCOPE OF BUSINESS
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4
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5.
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REGISTERED
CAPITAL AND TOTAL INVESTMENT
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4
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6.
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RESPONSIBILITIES OF THE PARTIES
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8
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7.
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BOARD OF
DIRECTORS AND SUPERVISOR
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8
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8.
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BUSINESS
MANAGEMENT ORGANIZATION
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14
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9.
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BUSINESS
PLACE
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15
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10.
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LABOUR
MANAGEMENT
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16
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11.
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FINANCIAL
AFFAIRS, ACCOUNTING AND INSURANCE
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17
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12.
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TAXATION
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19
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13.
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CONFIDENTIALITY
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19
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14.
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NON-COMPETITION
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20
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15.
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JOINT VENTURE
TERM AND TERMINATION
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20
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16.
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LIABILITY FOR
BREACH OF CONTRACT
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24
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17.
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FORCE
MAJEURE
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24
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18.
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SETTLEMENT OF
DISPUTES
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25
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19.
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WARRANTIES
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25
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20.
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APPLICABLE
LAW
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26
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21.
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MISCELLANEOUS
PROVISIONS
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26
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Appendices
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1.
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DEFINITIONS
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A-1
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2.
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ARTICLES OF
ASSOCIATION
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THIS EQUITY
JOINT VENTURE CONTRACT (the “ Contract ”) is made on
June 9, 2009
AMONG
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Bio-bridge
Science (HK) Co., Ltd, whose registered address is at Suit 1403
Cambridge House 26-28 Cameron Road T.S.T KLN Hong Kong (“
Party A ”);
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J R
Scientific, Inc., whose
registered address is at 1242 Commerce Avenue Woodland, CA 95776
(“ Party B ”);
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Beijing Boda
Times Science and Trade Co., Ltd, whose registered address is at Room 2006, North
Building of No. 1 Yard, Chengzi East Street, Mentougou District,
Beijing (“ Party C ”);
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Beijing
Zhongpu Huaxing Biotechnology Co., Ltd, whose registered address is at Flat 8071
Building 2-2-D, 2 Xinxi Road, Haidian District, Beijing (“
Party D ”);
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Huhhot Haibo
Biologic Production Co., Ltd, whose registered address is at the Industrial
Area of Baimiaozi Town, Tumote Zuoqi, Huhhot City, Inner Mongolia
Autonomous Region (“ Party E ”);
and
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China
Diamond Limited, whose
registered address is at 8th Floor, Gloucester Tower, The Landmark,
15 Queen's Road Central, Hong Kong (“ Party F
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Party A, Party
B, Party C, Party D, Party E and Party F will hereinafter be
referred to collectively as the “ Parties ” and
individually as a “ Party ”.
PRELIMINARY
STATEMENTS
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The Parties
have gained their reputation and status in their respective
business area, and they are willing to integrate their resources
for the purpose of achieving better development;
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Through
faithful negotiation, the Parties agree to establish an equity
joint venture company (the “ Joint Venture Company
”) in China according to the provisions of
“Chinese-Foreign Equity Joint Venture Law of PRC” and
its Implementing Regulations, and other relevant PRC laws and
regulations and this Contract so as to fulfil the strategic
objectives of the Parties.
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THE PARTIES
AGREE as
follows:
1.
DEFINITIONS AND INTERPRETATION
Unless the
provisions of this Contract otherwise provide, terms used in this
Contract shall have the meanings set out in Appendix 1.
Reference to
“days” in this Contract means calendar days unless
otherwise specified.
Unless the
context requires otherwise, in this Contract, words importing the
singular include the plural and vice versa and words importing
gender or the neuter include both genders and the
neuter.
The provision
of a Table of Contents, the division of this Contract into Clauses
and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized
in construing or interpreting this Contract.
2.
PARTIES TO THE CONTRACT
The Parties to
this Contract are set forth below:
Name : Bio-bridge Science (HK) Co., Ltd
,
Legal
Address :
Suit 1403 Cambridge House 26-28 Cameron Road T.S.T
KLN Hong Kong
Name : J R Scientific,
Inc.
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Legal
Address : 1242
Commerce Avenue Woodland, CA 95776
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Position:
President and CEO
Name : Beijing Boda Times Science and
Trade Co., Ltd
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Legal
Address : Room
2006, North Building of No. 1 Yard, Chengzi East Street, Mentougou
District, Beijing
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Name : Beijing Zhongpu Huaxing Biotechnology Co.,
Ltd
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Legal
Address : Flat
8071 Building 2-2-D, 2 Xinxi Road, Haidian District,
Beijing
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Name : Huhhot Haibo Biologic Production Co.,
Ltd
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Legal Address : the Industrial Area of Baimiaozi Town, Tumote
Zuoqi, Huhhot City, Inner Mongolia Autonomous Region
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Name : China Diamond Limited
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Legal
Address: 8th Floor, Gloucester Tower, The Landmark, 15 Queen's Road
Central, Hong Kong
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3.
ESTABLISHMENT OF THE JOINT VENTURE COMPANY
3.1
Establishment of the Joint Venture Company
3.1.1 As
soon as practical after the signing of this Contract, the Parties
shall submit to the Examination and Approval Authority an
application for official approval of the terms of this Contract,
its Appendix and such other documents as shall be required for the
establishment of the Joint Venture Company.
3.1.2 If
the terms of this Contract and its Appendix are not required to
make any major amendment by the Examination and Approval Authority
and each of the Parties has issued a written notice to the other
Parties confirming their consent of the content of the Certificate
of Approval, the Parties shall apply on behalf of the Joint Venture
Company to SAIC for the issue of a Business License to the Joint
Venture Company within one month after receipt of the Certificate
of Approval.
3.1.3 The
date of issue of the Business License shall be the date of
establishment of the Joint Venture Company (the “ Date of
Establishment ”).
3.2
Pre-commencement Expenses
3.2.1 All
pre-commencement expenses required for the formation and
establishment of the Joint Venture Company shall first be advanced
by the Parties in accordance with a budget agreed by the Parties.
The Parties shall be reimbursed for all such amounts incurred in
relation to the formation and establishment of the Joint Venture
Company from the date of signing of this Equity Joint Venture
Contract to and including the Date of Establishment from the funds
of the Joint Venture Company within three (3) months of its
establishment in accordance with a payment schedule determined by
the Board.
3.2.2 Notwithstanding
the foregoing, if this Contract terminates pursuant to Clause 5.2,
all such pre-commencement expenses incurred by the Parties as
aforesaid shall be borne by the Party which incurred the relevant
expense.
3.2.3 Notwithstanding
the foregoing, each of the Parties shall respectively bear its own
costs in relation to its own professional advisors concerning
negotiating and signing this Contract and Articles of
Association.
3.3
Name and Address of the Joint Venture Company
3.3.1 The
name of the Joint Venture Company shall be: “Bio-Bridge JRS
Biosciences (Beijing) Co., Ltd” in English, and
普瑞杰成医
药科技（北京）有限公司
in Chinese.
3.3.2 The
legal address of the Joint Venture Company is No. 7 standard
factory, Caiyuan Industrial Zone, No. 10 Caixiang East Road, Nancai
Town, Shunyi District, Beijing.
3.3.3 Subject
to relevant Chinese laws and regulations and approval by the
Examination and Approval Authority, upon resolution of the Board,
the Joint Venture Company may establish branch organizations and
offices within or outside the People’s Republic of
China.
3.4
Limited Liability Company
The form of
organization of the Joint Venture Company shall be a limited
liability equity joint venture company. The investors responsible
for paying in the registered capital of the Joint Venture Company
shall be all of the Parties. Once the Parties have paid their
respective contributions to the registered capital of the Joint
Venture Company in full (including any contributions paid towards
any increases in registered capital), no Party shall be required to
provide any further funds to the Joint Venture
Company. Creditors of the Joint Venture Company shall
have recourse only to the assets of the Joint Venture Company and
shall not seek repayment from any equity holder.
The Joint
Venture Company shall be a legal person under the laws of
China. The activities of the Joint Venture Company shall
comply with and be governed and protected by the relevant and
published Chinese laws and regulations.
4.
OBJECTIVES AND SCOPE OF
BUSINESS
The objectives
of the Parties in establishing the Joint Venture Company are to
enhance the economic co-operation and technical exchanges among the
Parties, to adopt advanced and applicable technologies and
scientific management methods, to develop, manufacture and sell
[biologic products] which shall meet the requirements of domestic
and international markets, so as to ensure satisfactory economic
efficiency and benefits for each of the Parties.
4.2
Scope of Business of the Joint Venture Company
The scope of
business of the Joint Venture Company shall be to develop,
manufacture and sell raw material and subsidiary material of
biologic products and the culture mediums and such other business
as allowed by the PRC laws and regulations (the “
Business ”).
5.
REGISTERED CAPITAL AND TOTAL
INVESTMENT
5.1
Registered Capital and Total Investment
The Joint
Venture Company’s registered capital shall be Ten Million RMB
(RMB10,000,000), and its total investment shall be Ten Million RMB
(RMB10,000,000).
5.2
Contributions to Registered Capital
5.2.1 Party
A shall contribute in cash in US dollars an amount equal to Five
Million and One Hundred Thousand RMB (RMB5,100,000), representing
fifty one percent (51%) of the registered capital. The exchange
rate to be used for calculating the amount of US dollars required
shall be the average of the buying and selling rates for US dollars
published by People’s Bank of China on the applicable
Contribution Date. Party B shall contribute in technology,
independently valued, at a value equal to One Million and Five
Hundred Thousand RMB (RMB1,500,000), representing fifteen percent
(15%) of the registered capital.
5.2.2 Party
C shall contribute in equipment, at a value equal to One Million
RMB (RMB1,000,000), representing ten percent (10%) of the
registered capital.
5.2.3 Party
D shall contribute in cash an amount of One Million RMB
(RMB1,000,000), representing ten percent (10%) of the registered
capital.
5.2.4 Party
E shall contribute in cash an amount of Thirty Hundred Thousand RMB
(RMB300,000), representing three percent (3%) of the registered
capital.
5.2.5 Party
F shall contribute in cash in US dollars an amount equal to One
Million and One Hundred Thousand RMB (RMB1,100,000), representing
eleven percent (11%) of the registered capital. The exchange rate
to be used for calculating the amount of US dollars required shall
be the average of the buying and selling rates for US dollars
published by People’s Bank of China on the same business day
as the Contribution Date.
5.2.6 Within
ninety (90) days of the issuance of a Business License to the Joint
Venture Company, by SAIC, (the initial "Contribution Date") the
Parties shall contribute not less than twenty percent (20%) of the
total amount of the registered capital, the remaining eighty
percent (80%) of the same shall be made by each of the Parties
within six (6) months of the initial Contribution Date.
5.2.7 In
the event that a Party fails to make its contribution by the
Contribution Date (or “ Defaulting Party ”), in
whole or in part, in accordance with Clause 5.2.7, in addition to
the liability under Clause 16 of this Contract, the Defaulting
Party shall also be liable to pay interest to the Joint Venture
Company on the unpaid amount from the date on which such unpaid sum
becomes due and payable until the date of the actual payment at the
rate of five percent (5%) above the one year London Interbank
Offered Rate (LIBOR) for US Dollar loans as liquidated
damages.
5.3
Conditions Precedent to the Contribution of Registered
Capital
5.3.1 The
fulfillment by the Parties of the obligations under Clause 5.2 is
subject to the following conditions (the “ Conditions
”) having been fulfilled prior to the expiry of the period
referred to in Clause 5.3.2:
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issuance by the
Examination and Approval Authority to the Joint Venture Company of
a Certificate of Approval consistent with the terms of this
Contract and its Appendixes; and
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issuance by the
SAIC to the Joint Venture of a Business License consistent with the
terms of this Contract and its Appendixes.
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5.3.2 The
Parties shall use their best efforts to procure the fulfillment of
the Conditions set out in Clause 5.3.1 above as soon as possible
and in any event before the expiry of six (6) calendar months from
signing this Contract.
5.3.3 If
the Conditions have not been fulfilled upon the expiry of the
period referred to in Clause 5.3.2, then this Contract shall
terminate automatically unless, on or prior to the expiry of that
period, the Parties have negotiated in good faith and have agreed
in writing to either (i) postpone the date for fulfillment of the
Conditions to a new date in accordance with Clause 5.3.4 or (ii)
make adjustments to this Contract.
5.3.4 If
the Parties have agreed to extend the period for fulfillment of the
Conditions in accordance with Clause 5.3.3, then the provisions of
this Clause 5.3 shall apply as if the extended period was
applicable.
5.3.5 Upon
termination of this Contract pursuant to Clause 5.3.3, all rights
and obligations of the Parties hereunder shall cease to have effect
immediately and no Party shall have any liability to any other
Parties in respect of such termination or the negotiations in
connection therewith except that termination shall not affect the
accrued rights and obligations of the Parties up to the date of
termination.
5.4
Investment Certificates
5.4.1 Promptly
after a contribution by each of the Parties of the registered
capital, an accountant registered in China shall be engaged, at the
expense of the Joint Venture Company, to verify the respective
contribution and issue a contribution verification
report. Thereupon, the Joint Venture Company shall,
within thirty (30) days after receiving the contribution
verification report, issue an investment certificate to each of the
Parties signed by the Chairman of the Board and specifying their
respective contributions to the registered capital of the Joint
Venture Company.
5.5
Assignment of Equity Interest
5.5.1 Assignment
to Affiliates
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Each of the
Parties (the “ Assigning Party ”) is hereby
granted a right to assign, at any time during the term of this
Contract, its equity interest in the Joint Venture Company’s
registered capital to one or more of its Affiliates for any
consideration it deems appropriate.
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The other
Parties (the “ Non Assigning Parties ”) shall
waive any right to pre-emptive purchase of such equity interest to
be assigned by the Assigning Party pursuant to Clause 5.5.1(a) and
shall cause the directors appointed by them to vote for any such
assignment in a duly convened Board meeting.
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The provisions
of Clause 5.5.4(a) shall apply mutatis mutandis to
the execution of documents by the Affiliate(s) of the Assigning
Party for the assumption of rights and obligations which were
originally assumed by the Assigning Party under this Contract prior
to the Assignment.
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5.5.2 Assignment
Among the Parties
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Except in the
case of Clauses 5.5.1 and 15, in the event that any Party (the
“ Selling Party ”) wishes to sell, transfer or
otherwise assign all or part of its equity interest in the Joint
Venture Company’s registered capital, the Selling Party is
obliged to offer the equity interest in question for sale to the
other Parties first, for which purpose the Selling Party shall
notify the other Parties in writing of its offer to sell, which
offer shall contain a proposed price for the equity interest (the
“ Offered Price ”) and the main terms and
conditions of the transfer which offer shall be open for acceptance
by the other Parties within thirty (30) days after receipt of the
notice in question.
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In the event
that the other Parties confirm in writing within the thirty (30)
day period referred to under Clause 5.5.2(a) above, that it shall
purchase (the “ Purchasing Party ”) all or part
of the Selling Party’s interest in the Joint Venture
Company’s registered capital, unless the Selling Party and
the Purchasing Party agree otherwise, the price for such sale and
purchase to be paid to the Selling Party shall be the price agreed
by the Selling Party and the Purchasing Party based on the Offered
Price.
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If all other
Parties decline to purchase the equity interest offered for sale by
the Selling Party within the thirty (30) day period referred to
under Clause 5.5.2(a) above (a failure to reply within said period
shall be deemed to be a declination to purchase), then the Selling
Party shall be entitled to sell the equity interest to a third
party at a price not lower than the Offered Price.
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The Parties may
assign all or any of their equity interests among
themselves.
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5.5.3 Assignment
- General
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The Selling
Party shall be responsible for ensuring that the third party will
execute all documents so that the third party shall assume such
rights and obligations as were originally assumed by the Selling
Party under this Contract prior to the assignment to the third
party of all (or, as the case may be, part) of the Selling
Party’s equity interest in the registered capital of the
Joint Venture Company. Any consent given by the Non Assigning
Parties for the assignment by the Selling Party to the third party
shall be deemed withdrawn if either of the Selling Party or the
third party does not comply with the foregoing terms of this Clause
5.5.3(a).
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An assignment
to a third party shall be completed within sixty (60) days or an
amended timeframe agreed by the Parties after receipt of the
approval of the Non Assigning Parties and the approval of the
Examination and Approval Authority.
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Details of any Assignment to be made in
accordance with this Clause 5.5 (and any amendment to this Contract
(if any) required as a result thereof) shall be submitted by the
Non Assigning Parties, the Selling or Assigning Party and the Joint
Venture Company to the Examination and Approval Authority for
approval. The Parties agree to use their respective best effects to
procure the relevant approvals as soon as practicable. Upon receipt
of the approvals of the Examination and Approval Authority and the
completion of the assignment transaction, the Joint Venture Company
shall register the change in ownership of registered capital with
the SAIC, and issue to the equity holder a new investment
certificate recording the change in ownership.
5.6
Increase of Registered Capital
5.6.1 If
the Board of the Joint Venture Company resolves to increase the
registered capital of the Joint Venture Company after the Date of
Establishment, then, unless the Parties otherwise agree, each of
the Parties shall have the right to contribute to the increased
registered capital in proportion to such Party’s percentage
share in the registered capital of the Joint Venture Company at
that time.
5.6.2 Without
prejudicing the effectiveness of Clause 5.6.1 above, if any Party
waives its right to contribute to the increased registered capital
(or any part thereof) as resolved by the Board of the Joint Venture
Company, the subscribing Parties shall have the right (but not the
obligation) to elect to contribute, or nominate one of its
Affiliates to contribute the non-subscribing Party’s share
(or part thereof) of the increase in the registered capital, in
which case the percentage share of each Party (or its Affiliate(s)
if applicable) shall be adjusted to reflect their actual
contributions to the increased registered capital of the Joint
Venture Company.
5.6.3 Details
of any increase in accordance with Clause 5.6 shall be submitted to
the Examination and Approval Authority for examination and
approval. The Parties agree to use their respective best efforts to
procure the approval by the Examination and Approval Authority of
any subscription to the increased registered capital subscribed to
in accordance with the foregoing terms of Clause 5.6. Upon receipt
of the approval of the Examination and Approval Authority, the
Joint Venture Company shall register the increase in the registered
capital with the SAIC, and the Parties shall be issued new
Certificates of Investment pursuant to Clause 5.4.
5.6.4 The
Contribution Date for the increase of the registered capital shall
be within one (1) month of the issuance of the approval of the
Examination and Approval Authority as per Clause 5.6.3.
If the
operations of the Joint Venture Company require, and subject to the
approval of the Board, the Joint Venture Company may borrow from
commercial banks or other financial institutions sufficient funds
to maintain the operations of the Joint Venture Company.
6.
RESPONSIBILITIES OF
THE PARTIES
In addition to
its other obligations under this Contract, the Parties shall
separately or jointly:
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apply for all
necessary approvals, permits, licenses and registrations required
for the establishment and operation of the Joint Venture
Company;
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assist the
Joint Venture Company in applying for and obtaining preferential
tax and customs duty reductions and exemptions and the benefit of
other investment incentives available the Joint Venture
Company;
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assist the
Joint Venture Company in all ongoing regulatory matters, including,
without limitation, renewals of all approvals, permits, licenses
and registrations;
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assist the
Joint Venture Company in opening RMB and foreign exchange bank
accounts in China;
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assist the
Joint Venture Company in relating with the relevant authorities
with respect to the supply of all utilities to the Joint Venture
Company;
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use its
extensive knowledge of the Chinese and international market in
order to provide advice to the Joint Venture Company so as to
assist in its development, and help the Joint Venture Company
establish and maintain strong, productive relations with officials
at various levels of Chinese government; and
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handle other
matters which may be entrusted to it by the Joint Venture
Company.
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7.
BOARD OF DIRECTORS AND
SUPERVISOR
7.1
Directors and Chairman
7.1.1 The
Board shall consist of eleven (11) directors, six (6) of whom shall
be appointed by Party A, and the remaining five (5) shall be
appointed by each of Party B, Party C, Party D, Party E and
Party F, respectively. The Board shall be deemed established from
the date of issue of the Business License of the Joint Venture
Company.
7.1.2 In
the event of a change in the equity percentage of the Parties in
the Joint Venture Company, the Parties shall collectively adjust
the number of their respective directors with the approval of the
Board in order to reflect the adjusted equity percentage of the
Parties following the change in equity holdings.
7.1.3 Each
director shall be appointed for a term of three (3) years. Any
director may be removed by, and may serve consecutive terms if
reappointed by, the Party which originally appointed him. The term
of appointment of the members of the initial Board shall commence
on the Date of Establishment. If a seat on the Board is
vacated by the retirement, resignation, illness, disability or
death of a director or by the removal of such director by the Party
which originally appointed him, the Party which originally
appointed such director shall appoint a successor to serve out such
director’s term within thirty (30) days and shall give notice
of such change(s) to the other Parties and the Joint Venture
Company.
7.1.4 One
director appointed by Party A shall serve as the Chairman of the
Board. The chairman shall act as the legal representative of the
Joint Venture Company and shall be responsible to convene and
preside the Board meetings and exercise such authority as shall be
authorized by the relevant Chinese laws and regulations and by the
Board. Whenever the Chairman of the Board is unable to
perform his responsibilities, he shall appoint in writing another
director to perform his duty.
7.2.1 The
Board shall be the decision-making authority of the Joint Venture
Company. The Board shall be responsible for making all
decisions of the Company, including but not limited to the
following:
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the long term
strategic plans, annual business plans, annual budgets, annual
accounts and annual financial reports of the Joint Venture
Company;
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the profit
distribution schemes, allocation of profits to the various funds
required by PRC laws and schemes for making up the losses (if any)
of the Joint Venture Company;
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any amendment
to the Articles of Association;
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any wind-up,
liquidation or dissolution of the Joint Venture Company and change
of the term of the Joint Venture Company;
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the merger of
the Joint Venture Company with another economic
organization;
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any increase in
the registered capital or, subject to Clause 5.5, assignment of any
Party’s equity interest in the Joint Venture
Company;
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the Joint
Venture Company’s expansion into any domestic or foreign city
other than that in which the Joint Venture Company commences
operations;
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the products
which the Joint Venture Company manufactures and sells from time to
time and any change in the nature of the Business of the Joint
Venture Company;
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the
appointment, remuneration, compensation, transfer and discharge of
the Senior Employees and the Management Personnel nominated by the
General Manager, and the arrangement for the remove of the Senior
Employees and the Management Personnel;
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the purchase or
lease of any real property (land and buildings);
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the purchase,
assignment, sale, lease or other disposal in any 12 month period of
any asset or property (or related group of assets or properties) of
the Joint Venture Company having a net book value in excess of an
amount to be determined at the first Board meeting and to be
reviewed by the Board from time to time;
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the creation of
mortgage, pledge, lien or any other security interest over the
foregoing assets or properties of the Joint Venture
Company;
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the borrowing
money by the Joint Venture Company from any third
person;
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the appointment
or change of external auditors, and any change in the accounting
policies of the Joint Venture Company and accounting reference date
or bank mandates;
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the
establishment of any social insurance scheme (including retirement
insurance, medical insurance, unemployment insurance, housing fund,
industrial injury insurance) in relation to the Joint Venture
Company’s employees (excluding those Personnel seconded by
any Party to the Joint Venture Company), or the making of any
contribution to any third party scheme for the provision of
retirement benefits; and the establishment of any bonus, profit
sharing or other incentive scheme for the Joint Venture
Company;
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the granting or
entering into or termination of any license agreement or
arrangement concerning any of its intellectual property rights and
policies and measures to protect the intellectual property which
the Joint Venture Company owns or is licensed to use for its
business;
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the granting of
the intellectual property owned or licensed to the Joint Venture
Company, and the execution and termination of the agreement or
arrangement relating to the intellectual property protection policy
and measurement;
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any project
incurring capital expenditure individually of One Hundred and Fifty
Thousand RMB (RMB150,000) or more, or all the projects in a quarter
incurring a total capital expenditure of Three Hundred Thousand RMB
(RMB300,000);
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the entering
into or termination of any contract with a gross value of fifteen
percent (15%) of budgeted sales for that year approved by the
latest meeting of the board of directors;
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the entering
into or termination of any long-term contracts with a duration of
three (3) years or more;
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the entering
into or termination of any contract between the Joint Venture
Company and any Affiliate of any Party;
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any expansion
of the sales market of the Joint Venture Company; and
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such other
powers and functions the Board, at its discretion, determines to
practice.
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7.2.2 The
Board may establish standing committees or ad hoc committees to be
responsible for considering and/or implementing such matters as may
be delegated to them by the Board.
7.3.1 Meetings
of the Board shall, in general, be held in Beijing, or such other
place as shall be determined by the Chairman. Meetings
of the Board may also be held by way of telephone conferencing or
video-conferencing. If a director is unable to attend he
shall appoint, in writing, a proxy to represent and vote for him at
a Board meeting. A proxy may, but need not, be a
director, and a director may serve as proxy for one or more absent
directors.
7.3.2 Each
Board meeting requires a quorum of eight (8) of all directors
present in person or by proxy, telephone or by video-conferencing
in order for the resolutions adopted by such meeting to be valid.
If a quorum is not present, the Chairman shall send notice to all
directors within forty eight (48) hours, and call a subsequent
Board meeting (the " adjourned Board Meeting ") with an
identical agenda to be convened within the following ten (10) days,
in which case each of the Parties is obliged to procure that the
directors appointed by each of them shall attend the adjourned
Board meetings so convened. If a quorum is still not present at
such an adjourned Board Meeting, then decisions adopted at the
adjourned Board Meeting shall be deemed valid.
7.3.3 At
Board meetings, each director (including the Chairman) shall have
only one vote. Issues to be determined at a Board meeting shall be
adopted by the affirmative vote of a simple (1/2) majority of the
directors present in person or by proxy, telephone or
video-conferencing at a duly constituted Board meeting, except for
issues provided in Clause 7.3.4 below.
7.3.4 If
the following issues require Board action, they shall require the
unanimous vote of the directors present at a duly constituted Board
meeting:
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modifications
or amendments to the Articles of Association;
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any increase or
decrease of registered capital of the Joint Venture
Company;
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merger or
de-merger of the Joint Venture Company; or
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termination,
dissolution or liquidation of the Joint Venture Company.
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7.3.5 In
case a resolution proposed at a Board meeting is not adopted
because the relevant majority or unanimity required has not been
achieved, and failure to adopt the proposed resolution will
materially endanger the interest of the Joint Venture Company
(a “ Deadlock ”), the Parties shall
forthwith thereafter enter into good faith negotiations to resolve
the Deadlock. If the Deadlock is not resolved within
fifteen (15) days of the relevant Board meeting, then the senior
representatives (other than the directors) of the Parties, shall,
within a further ten (10) day period thereafter, meet and attempt
to reach a solution acceptable to each Party. The resolution (if
any) reached by such senior representatives of the Parties shall be
submitted for approval forthwith to a Board meeting convened for
the purpose of approving such resolution, whereby the Parties shall
cause the directors appointed by them respectively to vote in favor
of approving such resolution within ten (10) days after a
unanimously acceptable solution is reached by the senior
representatives of the Parties. If no resolution is reached in the
manner and within the times contemplated by the foregoing terms of
this Clause, then the provisions of Clause 14.5(f) shall
apply.
7.3.6 The
Board shall convene at least one (1) meeting every
year. Upon the written request of not less than five (5)
directors, specifying the business to be discussed, the Chairman
shall convene a meeting of the Board at a convenient time and,
subject to Clause 7.3.1, location. Notwithstanding the above,
during the Joint Venture Company’s first year of operations
starting from the Date of Establishment, the Board shall convene at
least quarterly, and thereafter, the Board shall convene at such
intervals as determined by the Chairman.
7.3.7 Board
meetings shall be called by not less than fifteen (15) days prior
written notice (which shall include notification in both the
Chinese and English languages as to time, place and the agenda of
the business which is proposed to be discussed at such meeting)
given by facsimile or other electronic means to each director.
Notwithstanding the foregoing, the directors may in writing
unanimously waive the notice requirements of this Clause 7.3.7 and
consent to a Board meeting being held on shorter notice.
7.3.8 In
lieu of a Board meeting, a written resolution may be adopted by the
Board if such resolution is sent to the directors of the Board (no
less than the quorum provided in Clause 7.3.2) and signed in one or
more counterparts by these directors (which shall not be signed by
their proxies). A written resolution so adopted shall be equally
valid as a resolution adopted in a formally convened Board
meeting.
7.3.9 Minutes
and resolutions of meetings of the Board shall be signed by each
director or his/her proxies attending the meeting and the originals
thereof shall be kept in the Minutes Book of Board Meetings of the
Joint Venture Company at the Joint Venture Company’s legal
address. A copy of the minutes shall immediately be sent by
facsimile or registered post to each of the directors upon
completion of a Board meeting.
7.3.10 The
minutes of Board meetings and written resolutions of the Board
shall be recorded in Chinese. These documents shall also
be translated to English and distributed to parties who use English
as the business language.
7.3.11 Prior
to the end of each Board meeting, the directors shall determine the
date on which the next Board meeting (“ Next Board
Meeting ”) is to be held. In the event of any
change in the date on which the Next Board Meeting is to be held,
the Chairman shall give each director not less that fifteen (15)
days prior written notice of the new date for the Next Board
Meeting (unless the fifteen (15) days notice requirement is waived
in accordance with Clause 7.3.7).
The first Board
Meeting shall be convened within thirty days after the Date of
Establishment of the Joint Venture Company. The Parties agree that
at the first Board meeting of the Joint Venture Company,
resolutions shall be passed by every director voting in person or
by proxy at such meeting to approve the following
matters:
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appointment of
the first General Manager, Deputy General Manager and the Chief
Financial Officer nominated by Party A, and determination of
the respective terms of the secondment agreements for them to be
seconded by the relevant nominating Party to the Joint Venture
Company (or their contracts of employment as the case may be);
and
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subject to the
provisions of Clauses 7.2.1 and 8 and the approval by the Board,
delegation to the General Manager of the overall management of the
Joint Venture Company’s activities and the day to day
business of the Joint Venture Company, including, but not limited
to:
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execution of
the strategies adopted by the Board from time to time and
implementation of decisions in relation to the operations of the
Joint Venture Company made by the Board from time to
time;
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preparation and
implementation of all annual business plans, annual budgets and
annual accounts of the Joint Venture Company and submission of the
same to the Board for discussion and approval;
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the overall
management of Joint Venture Company's business;
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the conduct of
litigation or arbitration proceedings on behalf of the Joint
Venture Company as decided by the Board;
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responsibility
for advertising, public relations and governmental
relations;
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execution and
delivery of all contracts, agreements, documents or instruments
which may be deemed necessary for carrying on the business of the
Joint Venture Company and within the powers delegated to him/her by
the Board;
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responsibility
for ensuring compliance by the Joint Venture Company with relevant
Chinese laws and regulations and any other laws applicable to the
Joint Venture Company;
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power to
delegate such of his management powers as shall fall within the
authority of the General Manager;
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any other acts,
transactions or decisions as the Board may direct from time to
time.
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the
determination of the amount as per Clause 7.2.1(a) and (k)
above;
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appointment of
the Auditors referred to in Clause 11.4.1;
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