EXHIBIT THREE: FORM OF JOINT VENTURE
AGREEMENT
JOINT VENTURE
CONTRACT
among
Beijng Huawei Ouya Architectural
Decoration And Engineering Co., Ltd.
and
China Direct Trading
Corp.
And Mr. Wang Hongkun
for the establishment
of
Beijing Huawei International
Furniture Manufacturing Co., Ltd.
TABLE OF CONTENTS
Page
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Chapter 1
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General Provisions
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3
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Chapter 2
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Parties of the Joint Venture
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5
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Chapter 3
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Establishment of the Joint Venture
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5
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Chapter 4
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Purpose, Business Scope of the Joint
Venture
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6
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Chapter 5
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Total Amount of Investment and the Registered
Capital
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6
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Chapter 6
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Representations, Warranties and Undertakings of
the Parties
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7
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Chapter 7
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Responsibilities of the Parties
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8
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Chapter 8
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Board of Directors
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9
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Chapter 9
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Operation and Management
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11
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Chapter 10
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Labor Management
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11
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Chapter 11
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Taxes, Finance and Accounting
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12
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Chapter 12
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Profit Distribution
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13
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Chapter 13
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Insurance
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14
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Chapter 14
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Force Majeure
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14
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Chapter 15
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Liability for Breach of Contract
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14
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Chapter 16
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Duration of the Joint Venture, Termination and
Liquidation
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15
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Chapter 17
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Applicable Law
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17
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Chapter 18
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Settlement of Disputes
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17
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Chapter 19
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Miscellaneous
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18
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This Joint Venture Contract
(“this Contract”) is made in Beijing, the
People’s Republic of China (“PRC”) on
,by and among the following Parties:
Party A: Beijng Huawei Ouya
Architectural Decoration And Engineering Co., Ltd.
Legal Address:
Legal Representative: Wang
Hongyu
Party B: China Direct Trading
Corp.
Legal Address: 12535 Orange
Dr. #613 Davie, Florida 33330, USA
CEO: Howard Ullman
Party C: Wang Hongkun
ID Number:
34080219680118069X
Legal Address: 1506,Building16, Ou
Lu Jing Dian, Yayun Village, Chao Yang District, Beijing
Party A and Party C jointly invested
RMB50,000,000 for the establishment of Beijing Huawei Furniture
Manufacture Company Limited (“Huawei Furniture”). Party
A contributed RMB37,330,000, amounting to 74.66% of the registered
capital of Huawei Furniture; Party C contributed 12,670,000,
amounting to 25.34% of the registered capital of Huawei Furniture.
Party A agrees to sell and Party B agrees to purchase 40% of the
registered capital of Huawei Furniture according to the terms and
conditions set out in the Share Purchase Agreement, dated April 26,
2005, which has been entered into by and between these two parties.
Huawei Furniture will change into an equity joint venture in
accordance with this Contract through the purchase.
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24.
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Chapter 1
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General Provisions
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Article 62
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Upon friendly consultation conducted in
accordance with the principles of equality and mutual benefit,
Party A, Party B and Party C have agreed to establish an equity
Joint Venture in Beijing, PRC in accordance with the Law of the PRC
on Sino-Foreign Equity Joint Ventures, the Regulations for
Implementation of the Law of the PRC on Sino-Foreign Equity Joint
Ventures and other relevant PRC laws and regulations and upon
provisions of this Contract.
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(a)
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“Affiliate” shall mean any entity,
which controls, is controlled by, or is under common control with
Party A Party B or Party C, control meaning direct or indirect
ownership of one fifty one percent (51%) of the voting or
management rights of the entity in question.
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(b)
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“Examination and Approval Authority”
shall mean the relevant government authority in charge of the
examination and approval of the establishment of the Joint Venture
in the PRC.
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(c)
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“Articles of Association” shall mean
the articles of association of the Joint Venture executed by the
Parties herein.
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(d)
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“Board of Directors” or
“Board” shall mean the board of directors of the Joint
Venture.
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(e)
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“Effective Date” shall mean the date
when this Contract and Articles of Associates are approved by the
Examination and Approval Authority.
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(f)
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“Establishment Date” shall mean the
establishment date of the Joint Venture recorded in the Joint
Venture’s business license to be issued by the
SAIC.
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(g)
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“Joint Venture Term” shall mean the
term of this Contract as set forth in Article 56 hereof, including
any extensions of such term pursuant to Article 56.
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(h)
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“PRC” shall mean the People’s
Republic of China.
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(i)
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“Each Party” or a
“Party” shall mean Party A, Party B or Party
C.
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(j)
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“Parties” shall mean Party A, Party
B and Party C.
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(k)
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“Third Party” shall mean any entity
or individual other than Party A, Party B and Party C.
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(l)
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“Joint Venture” shall mean the
Sino-foreign equity joint venture limited liability company to be
established by the Parties pursuant to the laws of the
PRC.
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(m)
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“SAIC” shall mean the State
Administration of Industry and Commerce of the PRC and local
branch(es) thereof.
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(n)
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“Renminbi” or “RMB”
shall mean the legal currency of the PRC.
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(o)
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“US Dollars” or “US$”
shall mean the legal currency of the United States of
America.
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25.
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Chapter 2
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Parties of the Joint Venture
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Article 64
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The Parties to this Contract are:
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Party A: Beijng Huawei Ouya
Architectural Decoration And Engineering Co., Ltd.
Legal Address: West to the Lai Guang
Ying Village, Lai Guang Ying County, Chao Yang District,
PRC
Telephone No.:
10-8491-6699
Fax No.: 10-8491-7778
Legal Representative: Wang
Hongkun
Position: Legal
Representative
Nationality: PRC
Party B: China Direct Trading
Corp.
Legal Address: 12535 Orange
Dr. #613 Davie, Florida 33330, USA
Telephone No.:
1-954-474-0224
Fax No.: 1-954-474-0228
Legal Representative: Howard
Ullman
Position: Chief Executive Officer
and Chairman of the Board
Nationality: American
Party C: Wang Hongkun
ID Number:
34080219680118069X
Legal Address: 1506,Building16, Ou
Lu Jing Dian, Yayun Village, Chao Yang District, Beijing
Telephone No.:
10-8491-2666
Fax No.: 10-8491-7778
Nationality: PRC
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25.1
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Chapter 3
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Establishment of the Joint Venture
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Article 65
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Establishment of the Joint Venture
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Party A, Party B and Party C hereby
agree to establish Beijing Huawei International Furniture
Manufacturing Co., Ltd. forthwith upon the Effective Date in
accordance with the Law of the PRC on Sino-Foreign Equity Joint
Ventures, other relevant PRC laws and regulations and the
provisions of this Contract and the Articles of
Association.
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Article 66
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Name and Legal address of the Joint
Venture
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Chinese Name of the Joint
Venture:
English Name of the Joint Venture:
Beijing Huawei International Furniture Manufacturing Co.,
Ltd.
Legal Address of the Joint Venture:
North to Lai Guang Ying Industry District, Chao Yang District,
Beijing, China
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Article 67
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All activities of the Joint Venture shall be
governed by the laws, regulations and rules of the PRC and this
Contract.
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Article 68
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The organization form of the Joint Venture is a
limited liability company. Each party is liable to the Joint
Venture within the limit of the capital subscribed by it and shall
share the profit and bear the risks and losses by the Parties in
proportion to their contributions to the registered
capital.
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26.
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Chapter 4
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Purpose, Business Scope of the Joint
Venture
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Article 69
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Purpose of the Joint Venture: To raise the
needed capital to expand the Joint Venture’s factories
production by building an additional million square foot factory.
Also to expand the sales of the Joint Venture into North and South
America.
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Article 70
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Business scope of the Joint Venture: Process,
manufacture the furniture, doors and windows; selling of furniture
and construction materials; service of family
decoration.
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The above business scope shall be
ultimately determined by that which is evidenced by the business
license issued by the SAIC.
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27.
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Chapter 5
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Total Amount of Investment and the Registered
Capital
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Article 71
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The total amount of investment of the Joint
Venture shall be US$15,114,873.
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Article 72
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The registered capital of the Joint Venture
shall be US$6,045,949 and invested by the Parties as
below:
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Party A shall contribute
US$2,095,525.9, amounting to 34.66% of the registered capital of
the Joint Venture; Party B shall contribute US$2,418,379.6,
amounting to 40% of the registered capital of the Joint Venture;
Party C shall contribute US$1,532,043.5, amounting to 25.34% of the
registered capital of the Joint Venture.
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Article 73
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Capital contribution made in the form of assets
of the Huawei Furniture by each Party shall be deemed to have been
completed by the relevant Party as of the date of the issuance of
the business license to the Joint Venture.
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Article 74
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Capital contribution made in cash by either
Party shall be completed within 90 days after the date of the
issuance of the business license to the Joint Venture.
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Article 75
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Any dividend, property distribution after
liquidation and other property distribution or dividend shall be
declared in proportion to their contribution that has been paid to
the registered capital before it has been completed.
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Article 76
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Each Party may transfer, sale or disposition of
all or part of its investment (equity shares) to the Joint Venture
to the Third Party, provided that such transfer shall be consented
to by the other two parties and take effect upon obtaining the
approval by the Examination and Approval Authority.
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Article 77
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When Each Party intends to transfer, sale or
disposition of all or part of its investments (equity shares) to
the Third Party, the other two parties shall have a preemptive
right to purchase such investments (equity shares) upon the same
terms and conditions.
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Article 78
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Any increase or decrease of the registered
capital of the Joint Venture shall be unanimously agreed to at a
meeting of the Board, and must be submitted to the Examination and
Approval Authority for approval. Upon such approval, the Joint
Venture shall apply to register the change in ownership with the
SAIC.
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28.
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Chapter 6
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Representations, Warranties and Undertakings of
the Parties
|
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Article 79
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Each Parties to this Contract represents,
warrants and undertakes to the other two parties as
follows:
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(a)
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Each Party is duly established and validly
existing under the laws of the country where it is
established;
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(b)
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Each Party has taken every required corporate
action and has obtained any consent, approval, authorization
necessary for the signing of this Contract and either of them
possesses full power and authority to enter into this Contract and
to perform its obligations hereunder; the representative signing
this Contract on behalf of either of them is fully
authorized;
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(c)
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This Contract when executed will constitute
legal valid and binding obligations of either of them;
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(d)
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The signing, delivering and executing of this
Contract shall not conflict with any applicable laws of the country
where it is established; and
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(e)
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The representations and warranties made by
either of them in this Contract are true and they are not
misleading.
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29.
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Chapter 7
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Responsibilities of the
Parties
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Article 80
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Responsibilities of Party A and Party
C:
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(a)
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to pay up its registered capital contribution to
the Joint Venture pursuant to the provisions of this
Contract;
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(b)
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to assist the Joint Venture to obtain the
certificate of approval, registration, business license and
relevant approvals necessary for the establishment and operation of
the Joint Venture;
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(c)
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to assist the Joint Venture to obtain reduction
and exemption of PRC taxes and the preferential treatment for the
Joint Venture and the Parties according to relevant PRC laws and
regulations from the relevant authorities;
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(d)
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to assist the Joint Venture to open Renminbi and
foreign currency account(s) at banks inside the PRC;
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(e)
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to assist the Joint Venture to recruit qualified
PRC management, and other necessary personnel;
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(f)
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to assist foreign employees to obtain necessary
visa, work permit, or travel certificate;
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(g)
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to assist the Joint Venture in selling its
products in domestic market;
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(h)
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to assist the Joint Venture with other matters
entrusted by the Joint Venture.
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Article 81
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Responsibilities of Party B:
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(a)
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to pay up its registered capital contribution to
the Joint Venture pursuant to the provisions of this
Contract;
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(b)
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to assist the Joint Venture to recruit qualified
foreign management, and other necessary personnel;
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(c)
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to assist the Joint Venture with other matters
entrusted by the Joint Venture.
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30.
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Chapter 8
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Board of Directors
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Article 82
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The Board shall be the highest authority of the
Joint Venture and empowered to decide all major issues concerning
the Joint Venture.
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Article 83
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The Board shall have the power and authority to
determine the following matters:
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(a)
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amendment to the Articles of Association of the
Joint Venture;
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(b)
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termination and dissolution of the Joint
Venture;
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(c)
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increase and decrease in the registered capital
of the Joint Venture;
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(d)
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merger or division of the Joint
Venture;
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(e)
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determining and approving major reports
submitted by the General Manager;
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(f)
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approving the annual financial statements,
annual plans for financial budget and profit distribution of the
Joint Venture;
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(g)
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approving the important by-laws and rules for
the Joint Venture;
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(h)
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appointing or dismissal of the General Manager
of t
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