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EXHIBIT 10.1
MANAGEMENT OF SINO-FOREIGN JOINT VENTURE
[CHINESE CHARACTER]
UNIVERSAL SENSOR APPLICATION INC.
CONTRACT
April 12, 2005
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Table of Contents
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Chapter 1
General.................................................................
3
Chapter 2 Parties of the
Joint Venture............................................
3
Chapter 3 The Joint
Venture.......................................................
4
Chapter 4 Objective of
Joint Venture and Operation Scope .........................
4
Chapter 5 Total Registered
Capital, Investment Ratio, and Method of Investment
4
Chapter 6 Responsibilities
of Each Party .........................................
5
Chapter 7 Technology
Transfer & Valuation of Technology ..........................
6
Chapter 8 Board of
Directors .....................................................
6
Chapter 9 Management
Structure ...................................................
7
Chapter 10 Labor Management, the
Composition of Labor Union........................ 8
Chapter 11 Equipment, Raw
Material Purchase, Commodity Inspection .................
8
Chapter 12 Tax Affairs, Finance
and Allocation of Profit .......................... 9
Chapter 13 Term, Dissolution,
Liquidation of the Joint Venture..................... 10
Chapter 14 Insurance
..............................................................
10
Chapter 15 The Responsibility for
Breach of the Contract .......................... 11
Chapter 16 Force Majeure
..........................................................
11
Chapter 17 Dispute Solution
.......................................................
12
Chapter 18 Governing
Laws..........................................................
12
Chapter 19 The Effectiveness of
the Contract and Others ........................... 12
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MANAGEMENT OF FOREIGN JOINT VENTURE
[CHINESE CHARACTER]
UNIVERSAL SENSOR APPLICATION INC.
CONTRACT
CHAPTER ONE GENERAL
All parties agree to sign this joint
venture agreement to set up "UNIVERSAL
SENSOR APPLICATION INC."([CHINESE
CHARACTER]) based on the principle of
unanimous equality and benefit. This
agreement complies with "Management of
Foreign Joint Venture Enterprise Law of the
People's Republic of China" and the
Chinese relevant laws and regulations.
CHAPTER TWO PARTIES OF THE JOINT
VENTURE
Article 2.1 Parties to the Joint
Venture
Party A: [CHINESE CHARACTER] (hereinafter
"HX")
Registration: Shanghai Business
Administrative Management Bureau
Address: 14 Luo Mountain Road, Suite 260,
Lane1700, Pudong newly developed area,
Shanghai
Tel: 021-58547577
Fax: 021-58547577
Legal Representative: Hanlin Chen
Position: Chairman of board
Nationality: PRC
Party B: SENSOR SYSTEM SOLUTIONS, INC.
(hereinafter "3S")
Registration: CA, U.S.A.
Address: 45 Parker, Suite A, Irvine, CA
92618, U.S.A.
Tel: 001-949-855-6688
Fax:
001-949-855-6685
Legal Representative: Michael Young
Position: CEO
Nationality: U.S.A.
Party C: Hongkong Great Genesis Group Co.,
LTD (hereinafter
"Genesis")
Registration: Hong Kong
Address: Central, HK
Tel: 00852-25267572
Fax: 00852-25267572
Legal Representative: Hanlin Chen
Position: Chairman of board Nationality:
PRC
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CHAPTER THREE THE JOINT VENTURE
Article 3.1 All parties agree to establish
the joint venture of [CHINESE
CHARACTER] (hereinafter "USAI"), EngliSH
name "UNIVERSAL SENSOR APPLICATION
INC.".
The join venture's legal address is: No. 1
Guanshan 1st Road, Henglong Building,
Wuhan, Hubei Province, P.R.C.
USAI can establish branch offices in any
cities of China or other countries if
it's necessary. But it has to be discussed
in the board, and report to related
authorized government departments.
Article 3.2 All of activities of USAI must
comply with the laws and related
stipulations of People's Republic of China,
and its legitimate management rights
is protected by People's Republic of
China.
Article 3.3 USAI is formed by three parties
according to the Chinese law, and is
registered in China as a limited liability
company. All parties will share the
profit, risk and loss proportional to the
percentage of its investment.
CHAPTER FOUR THE OBJECTIVE OF JOINT VENTURE
AND OPERATION SCOPE
Article 4.1 USAI's business objective: To
achieve satisfactory financial returns
through funding cooperation and technology
transfer, and to introduce products
that are competitive worldwide in terms of
quality and price through advanced
technology and scientific management.
USAI's operation scope: Development,
production and sale of sensor and related
electronic products. USAI's is
targeted to produce 4 million sensors
annually with an annual sale of RMB300
millions.
CHAPTER FIVE TOTAL REGISTERED CAPITAL,
INVESTMENT RATIO, AND METHOD OF
INVESTMENT
Article 5.1 USAI's total investment is USD
14 millions, registered capital is
USD 10 millions.
All
parties agree to follow amount and ratio of investment:
Part A --
HX will invest USD 1 millions (10% of the registered capital)
Part B --
3S will invest USD 3 millions (30% of the registered capital)
Part C --
GENESIS will invest USD 6 millions (60% of the registered
capital)
Method of Investment:
HX and GENESIS will invest in cash, land
and building. Cash investment will be
done in three installments in one year. 3S
will invest with technology and
technology transfer. Refer to the appended
"Technology transfer contract". The
exchange rate between RMB and foreign
monetary is based on the foreign exchange
rate announced by the National Foreign
Exchange Administrative Bureau at the
pay-in date.
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Article 5.2 Each party should use its own
cash, assets, industrial property and
technology proprietary without collateral
claims to invest in this joint
venture. Any investment other than cash
will need valid proof.
Article 5.3 None of the parties is allowed
to, under USAI's name, take out a
loan, lease equipment or other property to
be accounted for its portion of
investment. Any party cannot use USAI's
assets or the other party's asset as
guarantee for its investment.
Article 5.4 The first installment of each
party's investment should be
transferred to USAI's account in China
within 3 months after the execution of
this agreement and obtaining the business
license for USAI. Any past due payment
will incur a 1% per month interest
penalty.
Article 5.5 All pay-in investment has to be
verified by an accountant allowed to
practice in China. USAI will issue proof of
investment based on this account's
report.
Article 5.6 If the fund is insufficient
during operation, the registered capital
can be increased according to original
ratio or a new ratio base on unanimous
agreement and with government approval.
Article 5.7 USAI cannot reduce its
registration capital during the term of the
joint venture.
Article 5.8 One party will have the first
priority to purchase the ownership of
the other party if the other party is
considering selling all or part of its
ownership.
Article 5.9 None of the parties can sell
its ownership to any other third party
at terms better than the terms offered to
the other party. Any transfer is
invalid if this requirement is not
followed.
CHAPTER SIX RESPONSIBILITIES FOR EACH
PARTY
Article 6.1 Following are responsibilities
of each party:
6.1.1 Part A-HX
(1)
Handle the whole
approval procedures about the establishment of
USAI, and deal with all of its registration procedures before
starting business.
(2)
Provide land and
factory building to USAI(or assist USAI to choose
factory location).
(3)
Before USAI
starts business, HX is responsible for dealing with the
equipment and material import examination and approval procedure
and
the declaration to Chinese customs.
(4)
Is responsible
for the production, the management and the human
resource.
(5)
Before USAI
starts business, apply visa for foreign employees, and
provide them the necessary convenient condition about working,
living and traffic transportation.
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(6)
Deal with
everything that is included in this contract as well as
other matters that USAI authorizes.
6.2.2 3S and GENESIS
(1)
Assist to handle
that USAI entrusts about purchasing the equipment
and the raw material in the international market and so on the
related matters.
(2) Responsible for the product
exporting of USAI, and provide the
related information in the market.
(3)
Send out
administrators to co-operate with HX to manage USAI
together, and also coordinate the production and management
business
of USAI.
(4)
Handle other
matters that USAI authorizes.
CHAPTER SEVEN THE TECHNOLOGY TRANSFER &
VALUATION OF TECHNOLOGY
Article 7.1 All parties must sign a
technology transfer agreement in additional
as an appendix to this contract according
to the industry ownership and the
valuation of technology, and report to
original government department to get
approval.
Article 7.2 Any contract about technology
transfer which is signed by USAI and
other companies must get approval from the
government department.
CHAPTER EIGHT BOARD OF DIRECTORS
Article 8.1 The date that business license
of USAI get approved is also the date
that the board is established.
Article 8.2 The board will be formed by 3
directors. HX, 3S and GENESIS each can
delegate one director. The chairman of the
board will be assigned by GENESIS.
The number of directors can be increased or
decreased by the approval of board
of directors.
Article 8.3 The tenure for the chairman of
board is 2 years and can be
re-delegated.
Article 8.4 The board is the highest
authority organization of USAI. It decides
all of significant matters of USAI.
Following events must get unanimous
agreement by the directors who presents in
the board meeting:
(1)
Revise bylaws of
USAI;
(2)
Dissolve
USAI;
